EXHIBIT 1
$150,000,000
Hospitality Properties Trust
7.00% Senior Notes due 2008
UNDERWRITING AGREEMENT
February 20, 1998
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Hospitality Properties Trust, a Maryland real estate investment trust
(the "Company"), proposes to issue and sell $150,000,000 principal amount of its
7.00% Senior Notes due 2008 (the "Securities"), to Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation (the "Underwriter"). The Securities are to be issued
pursuant to the provisions of an Indenture to be dated as of February 25, 1998
between the Company and State Street Bank and Trust Company, as Trustee (the
"Trustee") and a Supplemental Indenture to be dated as of February 25, 1998
between the Company and the Trustee (collectively, the "Indenture").
The 124 hotels described in the Prospectus referred to below as being
currently owned by the Company as of the date hereof are collectively referred
to herein as the "Current Hotels". The 11 hotels described in the Prospectus
referred to below as being proposed to be acquired by the Company as of the date
hereof are collectively referred to herein as the "Additional Hotels". It is
understood that in connection with the proposed acquisition of the Additional
Hotels, the Company has entered into purchase and sale agreements and agreements
to lease (the "Acquisition Agreements") contemplating consummation of a series
of related transactions (the "Acquisition Transactions") generally described in
the Prospectus Supplement referred to below under the captions "Summary",
"Recent Developments", "Use of Proceeds" and "The Company", pursuant to which
the Company shall (i) acquire the Additional Hotels, (ii) lease the Additional
Hotels to hotel operating companies pursuant to separate operating leases and
(iii) to the extent necessary
to finance the pending acquisitions, borrow funds under (A) the $200 million
aggregate principal amount credit facility that the Company currently maintains
with DLJ Mortgage Capital, Inc. (as more fully described in the Prospectus, the
"DLJMC Credit Facility") or a successor credit facility.
The Current Hotels and the Additional Hotels are collectively referred
to herein as the "Hotels". The Acquisition Agreements and the DLJMC Credit
Facility (and any amendments required thereto) are hereinafter collectively
referred to as the "Transaction Documents" and each singly as a "Transaction
Document". Each Transaction Document constituting an agreement is hereinafter
referred to as a "Transaction Agreement".
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 called the
"Act"), a registration statement on Form S-3 (File No. 333-43573) including a
preliminary prospectus relating to the registration of the Securities and such
other securities which may be offered from time to time by the Company, in
accordance with Rule 415 under the Act. Such registration statement (as amended,
if applicable) was declared effective by the Commission on January 15, 1998.
Such registration statement (as amended as of the date hereof) on the one hand,
and the prospectus constituting a part thereof and the prospectus supplement
relating to the offering of the Securities provided to the Underwriter by the
Company in the form first used to confirm sales of Securities (the "Prospectus
Supplement"), on the other hand, including, in each case, all documents
incorporated therein by reference pursuant to Item 12 of Form S-3 under the Act,
as from time to time amended or supplemented pursuant to the Act and the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively called the "Exchange Act"), are referred
to herein as the "Registration Statement" and the "Prospectus," respectively.
Any registration statement (including any amendment or supplement thereto or
information which is deemed a part thereof) filed by the Company under Rule
462(b) of the Act (a "Rule 462(b) Registration Statement") shall be deemed to be
part of the "Registration Statement" as defined herein and any prospectus
delivered in connection therewith (including any amendment or supplement thereto
or information which is deemed part thereof) included in such registration
statement shall be deemed to be part of the "Prospectus," as defined herein. All
references in this Agreement to financial statements and schedules and other
information which is "contained," "included," "described" or "stated" in the
Registration Statement or the Prospectus (and all other similar references)
shall be deemed to mean and include all such financial statements and schedules
and other information which is or is deemed to be incorporated by reference in
the Registration Statement or the Prospectus, as the case may be; and all
references in
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this Agreement to amendments or supplements to the Registration Statement or the
Prospectus shall be deemed to mean and include, without limitation, even though
not specifically stated, any document filed under the Exchange Act which is or
is deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be. Capitalized terms used but not otherwise defined
herein shall have the meanings given to those terms in the Prospectus.
2. Agreements to Sell and Purchase. On the basis of the representations
and warranties contained in this Agreement, and subject to its terms and
conditions, the Company agrees to issue and sell, and the Underwriter agrees to
purchase from the Company, $150,000,000 aggregate principal amount of Securities
at 99.17% of the principal amount thereof (the "Purchase Price").
3. Terms of Public Offering. The Company is advised by the Underwriter
that the Underwriter proposes (i) to make a public offering of the Securities as
soon after execution and delivery of this Agreement (and, if necessary, any
post-effective amendment to the Registration Statement) as in the Underwriter's
judgment is advisable and (ii) initially to offer the Securities upon the terms
set forth in the Prospectus.
4. Delivery and Payment. The Securities shall be represented by
definitive certificates and shall be issued in such authorized denominations and
registered in such names as the Underwriter shall request not later than two
business days prior to the Closing Date (as defined below). The Company shall
deliver the Securities to the Underwriter through the facilities of The
Depository Trust Company ("DTC"), for the account of the Underwriter, against
payment to the Company of the Purchase Price therefor by wire transfer of
Federal or other funds immediately available in New York City. The certificates
representing the Securities shall be made available for inspection not later
than 9:30 A.M., New York City time, on the business day prior to the Closing
Date at the office of DTC or its designated custodian (the "Designated Office").
The time and date of delivery and payment for the Securities shall be 9:00 A.M.,
New York City time, on February 25, 1998 or such other time on the same or such
other date as the Underwriter and the Company shall agree in writing. The time
and date of such delivery and payment are hereinafter referred to as the
"Closing Date").
The documents to be delivered on the Closing Date on behalf of the
parties hereto pursuant to Section 8 of this Agreement shall be delivered at
such place as the Underwriter shall designate and the Securities shall be
delivered at the Designated Office, all on the Closing Date.
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5. Agreements of the Company. The Company agrees with you:
(a) In respect of the offering of the Securities contemplated
hereby, to (i) prepare a Prospectus Supplement setting forth the
principal amount and terms of the Securities covered thereby and the
name of the Underwriter participating in the offering of the Securities
and such other information as the Underwriter and the Company deem
appropriate in connection with the offering of the Securities, (ii)
file the Prospectus (as defined herein to include such Prospectus
Supplement) in a form approved by you pursuant to Rule 424 under the
Act no later than the Commission's close of business on the second
business day following the date hereof and (iii) furnish copies of the
Prospectus to the Underwriter and to such dealers as you shall specify
as soon as practicable after the date of this Agreement in such
quantities as you may reasonably request.
(b) At any time when the Prospectus is required to be
delivered under the Act or the Exchange Act in connection with sales of
Securities, to advise you promptly and, if requested by you, to confirm
such advice in writing, of (i) the effectiveness of any amendment to
the Registration Statement, (ii) the transmittal to the Commission for
filing of the Prospectus or any other supplement or amendment to the
Prospectus required to be filed pursuant to the Act, (iii) the receipt
of any comments from the Commission relating to the Registration
Statement, the Prospectus, any preliminary prospectus supplement
relating to the Securities, the Prospectus Supplement or any of the
transactions contemplated by this Agreement, (iv) any request by the
Commission for post-effective amendments to the Registration Statement
or amendments or supplements to the Prospectus or for additional
information, (v) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the
suspension of qualification of the Securities for offering or sale in
any jurisdiction, or the initiation of any proceeding for such
purposes, and (vi) the happening of any event during the period
referred to in paragraph (e) below which makes any statement of a
material fact made in the Registration Statement or the Prospectus
untrue or which requires the making of any additions to or changes in
the Registration Statement or the Prospectus in order to make the
statements therein not misleading. The Company will make every
reasonable effort to prevent the issuance of any stop order and if at
any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will make
every reasonable effort to obtain the withdrawal or lifting of such
order at the earliest possible time.
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(c) To furnish to you, without charge, one signed copy of the
Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits and documents incorporated
therein by reference, and to furnish to you such number of conformed
copies of the Registration Statement as so filed and of each amendment
to it, without exhibits but including documents incorporated therein by
reference, as you may reasonably request. If applicable, the copies of
the Registration Statement and each amendment thereto furnished to the
Underwriter will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T, as promulgated by the Commission.
(d) At any time when the Prospectus is required to be
delivered under the Act or the Exchange Act in connection with sales of
Securities, not to file any amendment to the Registration Statement or
any Rule 462(b) Registration Statement or to make any amendment or
supplement to the Prospectus of which you shall not previously have
been advised or to which you or Xxxxx Xxxx & Xxxxxxxx shall reasonably
object; and to prepare and file with the Commission, promptly upon your
reasonable request, any amendment to the Registration Statement, any
Rule 462(b) Registration Statement or any amendment or supplement to
the Prospectus which may be necessary or advisable in connection with
the distribution of the Securities by you, and to use its best efforts
to cause the same to become promptly effective. If applicable, the
Prospectus and any amendments or supplements thereto furnished to the
Underwriter will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T, as promulgated by the Commission.
(e) Prior to 10:00 A.M., New York City time, on the first
business day after the date hereof and from time to time thereafter for
such period as in the opinion of Xxxxx Xxxx & Xxxxxxxx a prospectus is
required by law to be delivered in connection with sales by the
Underwriter or a dealer, to furnish to the Underwriter and any dealer
as many copies of the Prospectus (and of any amendment or supplement to
the Prospectus) and any documents incorporated therein by reference as
the Underwriter or such dealer may reasonably request.
(f) If, during the period specified in paragraph (e) above,
any event shall occur as a result of which, in the opinion of Xxxxx
Xxxx & Xxxxxxxx, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser,
not misleading, or if it is necessary to amend or supplement the
Prospectus to comply with
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any law, forthwith to prepare and file with the Commission an
appropriate amendment or supplement to the Prospectus so that the
statements in the Prospectus, as so amended or supplemented, will not
in the light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with applicable law,
and to furnish to the Underwriter and to such dealers as you shall
specify, such number of copies thereof as the Underwriter or such
dealers may reasonably request.
(g) Prior to any public offering of the Securities, (i) to
cooperate with you and Xxxxx Xxxx & Xxxxxxxx (or such other local
counsel as may be designated by you) in connection with the
registration or qualification of the Securities for offer and sale by
the Underwriter and by dealers under the state securities, Blue Sky or
real estate syndication laws of such jurisdictions as you may request,
(ii) to continue such qualification in effect so long as required for
distribution of the Securities, (iii) to file such consents to service
of process or other documents as may be necessary in order to effect
such registration or qualification and (iv) to cooperate with you and
Xxxxx Xxxx & Xxxxxxxx in connection with the review of the offering of
the Securities contemplated hereby by the National Association of
Securities Dealers, Inc. ("NASD").
(h) To make generally available to the Company's security
holders as soon as reasonably practicable but not later than sixty (60)
days after the close of the period covered thereby (or ninety (90) days
in the event the close of such period is the close of the Company's
fiscal year), an earnings statement (in form complying with the
provisions of Rule 158 under the Act) covering a period of at least
twelve (12) months after the effective date of the Registration
Statement (but in no event commencing later than ninety (90) days after
such date) which shall satisfy the provisions of Section 11(a) of the
Act, and, if required by Rule 158 of the Act, to file such statement as
an exhibit to the next periodic report required to be filed by the
Company under the Exchange Act covering the period when such earnings
statement is released.
(i) During the period of five years after the date of this
Agreement, (i) to mail as soon as reasonably practicable after the end
of each fiscal year to the record holders of the Securities a financial
report of the Company and its subsidiaries, if any, on a consolidated
basis (and a similar financial report of all unconsolidated
subsidiaries, if any), all such financial reports to include a
consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year,
together with comparable information as of the end of and for the
preceding year, certified by independent certified public
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accountants, and (ii) to make generally available as soon as
practicable after the end of each quarterly period (except for the last
quarterly period of each fiscal year) to such holders, a consolidated
balance sheet, a consolidated statement of operations and a
consolidated statement of cash flows (and similar financial reports of
all unconsolidated subsidiaries, if any) as of the end of and for such
period, and for the period from the beginning of such year to the close
of such quarterly period, together with comparable information for the
corresponding periods of the preceding year.
(j) During the period referred to in paragraph (i), to furnish
to you as soon as available a copy of each report or other publicly
available information of the Company mailed to its security holders or
filed with the Commission and such other publicly available information
concerning the Company and its subsidiaries, if any, as you may
reasonably request.
(k) During the period when the Prospectus is required to be
delivered under the Act or the Exchange Act in connection with sales of
the Securities, to file all documents required to be filed by it with
the Commission pursuant to Section 13, 14 or 15 of the Exchange Act
within the time periods required by the Exchange Act.
(l) To pay (i) all costs, expenses, fees and taxes incident to
the preparation, printing, filing and distribution under the Act of the
Registration Statement (including financial statements and exhibits),
the Prospectus, the preliminary prospectus relating to the offering
contemplated hereby (the "Preliminary Prospectus"), all documents
incorporated or to be incorporated by reference therein, and all
amendments and supplements to any of them prior to or during the period
specified in paragraph (e), (ii) all costs and expenses in connection
with the printing and delivery of the Prospectus, the Preliminary
Prospectus and all amendments or supplements thereto during the period
specified in paragraph (e), (iii) all costs and expenses related to the
transfer and delivery of the Securities to the Underwriter, including
any transfer or other taxes payable thereon, (iv) all expenses in
connection with the registration or qualification of the Securities for
offer and sale under the securities, Blue Sky or real estate
syndication laws of the several states (including in each case the fees
and disbursements of counsel for the Company or counsel for the
Underwriter relating to such registration or qualification and
memoranda relating thereto), (v) all filing fees paid to the NASD in
connection with the review and clearance of the offering of the
Securities contemplated hereby, (vi) the cost of furnishing such copies
of the Registration Statement, the Prospectus and all amendments and
supplements thereto as may be requested for use in connection with the
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offering or sale of the Securities by the Underwriter or by dealers to
whom Securities may be sold, (vii) the costs and charges of any
transfer agent, registrar and or depositary, including DTC, (viii) any
fees charged by rating agencies for the rating of the Securities and
(ix) the fees and expenses of the Trustee and the Trustee's counsel in
connection with the Indenture and the Securities.
(m) To use its best efforts to qualify for the year ended
December 31, 1998 and to continue to meet the requirements to qualify
as a real estate investment trust ("REIT") under the Internal Revenue
Code of 1986, as amended (the "Code").
(n) To apply the net proceeds of the offering of Securities
contemplated hereby substantially in accordance with the description
set forth under the caption "Use of Proceeds" in the Prospectus.
(o) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by
the Company prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Securities.
(p) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell,
contract to sell or otherwise transfer or dispose of any debt
securities of the Company or any warrants, rights or options to
purchase or otherwise acquire debt securities of the Company
substantially similar to the Securities (other than (i) the Securities
and (ii) commercial paper issued in the ordinary course of business),
without the prior written consent of the Underwriter.
(q) Not to voluntarily claim, and to actively resist any
attempts to claim, the benefit of any usury laws against the holders of
the Securities.
6. Representations and Warranties. The Company represents and warrants
to the Underwriter that:
(a) The Company meets the requirement for use of Form S-3 and
the Registration Statement has been prepared by the Company under the
provisions of the Act and has been filed with and declared effective by
the Commission.
(b) The Registration Statement has become effective (other
than any Rule 462(b) Registration Statement to be filed by the Company
after the effectiveness of this Agreement); any Rule 462(b)
Registration
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Statement filed after the effectiveness of this Agreement will become
effective no later than 10:00 P.M., New York City time, on the date of
this Agreement; and no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such
purpose are pending before or threatened by the Commission.
(c) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus,
complied or will comply when so filed in all material respects with the
Exchange Act, (ii) the Registration Statement (other than any Rule
462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement), when it initially became effective
and as of the date hereof, respectively, did not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statement therein not
misleading, (iii) the Registration Statement (other than any Rule
462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement) and the Prospectus comply and, as
amended or supplemented, if applicable, will comply in all material
respects with the Act, (iv) if the Company is required to file a Rule
462(b) Registration Statement after the effectiveness of this
Agreement, such Rule 462(b) Registration Statement and any amendments
thereto, when they become effective will not contain any 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 (B) will comply in all material respects with the Act
and (v) the Prospectus does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and
warranties set forth in this paragraph (c) do not apply to statements
or omissions in the Registration Statement or the Prospectus based upon
information relating to the Underwriter furnished to the Company in
writing by the Underwriter expressly for use therein.
(d) Each Preliminary Prospectus filed pursuant to Rule 424
under the Act, complied when so filed in all material respects with 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.
(e) The Company has been duly organized and is validly
existing as a real estate investment trust in good standing under the
laws of the State of Maryland and has the power and authority to own
the Current
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Hotels owned by it and to lease such Current Hotels to others and to
conduct its business, all as described in the Prospectus, and is duly
qualified and in good standing as a foreign trust authorized to do
business in each jurisdiction in which such Current Hotels are located
and such qualification and authorization is required.
(f) Each of the Company's subsidiaries has been duly
incorporated, is validly existing as a corporation or a real estate
investment trust, as the case may be, in good standing under the laws
of its jurisdiction of incorporation or formation, as the case may be,
and has the power and authority to own the Current Hotels owned by it
and to lease such Current Hotels to others and to conduct its business
as it is currently being conducted, and each is duly qualified and is
in good standing as a foreign corporation or a real estate investment
trust, as the case may be, 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 for the failure
of HPTCW Properties Trust, a Maryland real estate investment trust, to
be qualified in the states of Alabama, Kansas, Utah and Virginia, which
failures to be qualified, singly or in the aggregate, would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole. All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Company's subsidiaries have been
duly authorized and validly issued and are fully paid and
non-assessable, and, except for a pledge of shares of capital stock of
certain of the Company's subsidiaries in favor of DLJMC to secure the
Company's obligations under the DLJMC Credit Facility, are owned by the
Company, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature.
(g) Except for 500 common shares of beneficial interest, par
value $0.01 per share (the "Common Shares"), 250 of which are held by
Xxxx X. Xxxxxx and 250 of which are held by Xxxxx X. Xxxxxx, all of the
outstanding Common Shares of the Company have been duly authorized and
validly issued and are fully paid, non-assessable and not subject to
any preemptive or similar rights. The Company has no outstanding
Preferred Shares of Beneficial Interest. 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 Common Shares of, or
other ownership interest in, the Company except as otherwise disclosed
in the Registration Statement.
(h) The Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and has
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been duly authorized, executed and delivered by the Company and is a
valid and binding agreement of the Company, enforceable in accordance
with its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general
applicability.
(i) The Securities have been duly authorized and, on the
Closing Date, will have been validly executed and delivered by the
Company. When the Securities have been executed and authenticated in
accordance with the provisions of the Indenture and delivered to and
paid for by the Underwriter in accordance with the terms of this
Agreement, the Securities will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability.
(j) The Securities conform as to legal matters to the
description thereof contained in the Prospectus.
(k) The authorized capital of the Company, including the
Common Shares, conforms as to legal matters to the description thereof
contained in the Prospectus (or the documents incorporated therein by
reference).
(l) The Company and each of its subsidiaries is not in
violation of its Declaration of Trust, Certificate of Incorporation or
Bylaws, as the case may be, or in default in the performance of any
obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or in any other agreement,
indenture or instrument material to the conduct of the business of the
Company and its subsidiaries, taken as a whole, to which the Company or
any of its subsidiaries is a party or by which any of them or their
respective property is bound.
(m) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement
of the Company, enforceable against it in accordance with its terms,
except as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium and other laws affecting the enforceability of creditor's
rights and general principles of equity.
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(n) The execution by the Company or any of its subsidiaries of
this Agreement, the Indenture, the Securities and each Transaction
Document to which it is a party and the delivery by the Company or any
of its subsidiaries of, and the performance by the Company or any of
its subsidiaries of its obligations under, each such document to which
it is a party, as the case may be, and the consummation of the
transactions contemplated hereby and thereby will not contravene any
provision of applicable law or (i) the Declaration of Trust,
Certificate of Incorporation or Bylaws of the Company or any of its
subsidiaries, (ii) any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material to the Company and
its subsidiaries, taken as a whole, or (iii) any judgment, order or
decree of any governmental body, agency or court having jurisdiction
over the Company or any of its subsidiaries, except such as would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(o) No consent, approval, authorization or order of, or
qualification with, any governmental body or agency and no consent,
approval or authorization of any person other than the Company or any
of its subsidiaries is required for the execution, delivery or
performance by the Company or any of its subsidiaries of its
obligations under this Agreement, the Indenture, the Securities and
each Transaction Document to which it is a party or the consummation of
the transactions contemplated hereby and thereby, except such as may be
required and will be obtained on or prior to the Closing Date and such
as may be required by the securities or Blue Sky laws or real estate
syndication laws of the various states in connection with the offer and
sale of the Securities and, in the case of the performance thereof,
except as are contemplated by the express terms of such documents to
occur after the Closing Date and except (x) such as are otherwise
described in the Prospectus and (y) such that the failure to obtain
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(p) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, affairs or
business prospects of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus.
(q) There are no legal or governmental proceedings pending or,
to the knowledge of the Company after due inquiry, threatened to which
the Company or any of its subsidiaries is a party or to which any of
the Hotels is subject that are required to be described in the
Registration
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Statement or the Prospectus and are not so described or any statutes,
regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not described
or filed as required.
(r) The Company and each of its subsidiaries has, and as of
the Closing Date will have, all necessary consents, authorizations,
approvals, orders, certificates, licenses, franchises and permits of
and from, and has made, or as of the Closing Date will 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 having jurisdiction over the Company or its
properties, necessary to own, lease, license and use its properties and
assets, and to conduct its business in the manner described in the
Prospectus, except to the extent that the failure to obtain or file
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(s) To the best knowledge of the Company, each lessee of the
Current Hotels has, and as of the Closing Date will have, all permits,
licenses, approvals, certificates, franchises and authorizations of
governmental or regulatory authorities ("Approvals") as may be
necessary to lease, operate or manage the Current Hotels in the manner
described in or contemplated by the Prospectus, except for those
Approvals the absence of which would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole.
(t) The Company has received and reviewed certain
environmental reports on each Current Hotel's property, has obtained
certain representations and warranties relating to environmental
matters from the sellers of the Current Hotels set forth in purchase
agreements therefor and has conducted physical inspections of each
Current Hotel's property. Except as described in the Prospectus, (i)
the Company, and, to its knowledge, each Current Hotel's property, is,
and as of the Closing Date will be, in compliance with all applicable
federal, state and local laws and regulations relating to the
protection of human health and safety, the environment, hazardous toxic
substances and wastes, pollutants and contaminants ("Environmental
Laws"), (ii) the Company, or, to its knowledge, its lessees have
received, or as of the Closing Date will receive, all permits, licenses
or other approvals required under applicable Environmental Laws to
conduct the respective hotel businesses presently conducted at each
Current Hotel's property and (iii) the Company or, to its knowledge,
its lessees are, or as of the Closing Date will be, in compliance with
all terms and conditions of any such permit, license or approval,
except, in respect of clauses (i), (ii) and (iii), as otherwise
disclosed in the
13
Prospectus or as would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(u) To the best knowledge of the Company, except as described
in the Prospectus, there are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, remediation or closure of
properties or compliance with Environmental Laws and any potential
liabilities to third parties) that, as of the date hereof, would, or as
of the Closing Date will, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(v) The Company has received and reviewed engineering reports
on each Current Hotel's property, has obtained certain representations
and warranties from the sellers of the Current Hotels set forth in
purchase agreements therefor and has conducted physical inspections of
each Current Hotel's property. In respect of each Current Hotel, (i)
each Current Hotel is not in violation of any applicable building code,
zoning ordinance or other law or regulation, except where such
violation of any applicable building code, zoning ordinance or other
law or regulation would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole; (ii) the Company has not received notice of any proposed
material special assessment or any proposed change in any property tax,
zoning or land use laws or availability of water affecting any Current
Hotel that would have, singly or in the aggregate, a material adverse
effect on the Company and its subsidiaries, taken as a whole; (iii)
except as disclosed in the Prospectus, there does not exist any
material violation of any declaration of covenants, conditions and
restrictions with respect to any Current Hotel that would have, singly
or in the aggregate, a material adverse effect on the Company and its
subsidiaries, taken as a whole, or any state of facts or circumstances
or condition or event which could, with the giving of notice or passage
of time, or both, constitute such a violation; (iv) and the
improvements comprising any portion of each Current Hotel (the
"Improvements") are free of any and all material physical, mechanical,
structural, design and construction defects that would have, singly or
in the aggregate, a material adverse effect on the Company and its
subsidiaries, taken as a whole and the mechanical, electrical and
utility systems servicing the Improvements (including, without
limitation, all water, electric, sewer, plumbing, heating, ventilation,
gas and air conditioning) are in good condition and proper working
order and are free of defects that would have, singly or in the
aggregate, a material adverse effect on the Company and its
subsidiaries, taken as a whole.
14
(w) Subsequent to the respective dates as of which financial
information is given in the Registration Statement and the Prospectus,
(i) the Company and each subsidiary of the Company has not incurred any
material liability or obligation, direct or contingent, nor entered
into any material transaction not in the ordinary course of business,
(ii) the Company has not purchased any of its outstanding Common
Shares, nor has it declared, paid or otherwise made any dividend or
distribution of any kind on its Common Shares and (iii) there has not
been any material change in the capital, short-term debt or long-term
debt of the Company, except, in respect of clauses (i), (ii) or (iii)
above, as described in or contemplated by the Prospectus.
(x) (i) As of the Closing Date, the Company and each of its
subsidiaries will have good and marketable title in fee simple to all
real property (or good and marketable leasehold interests with respect
to the real property ground leased by the Company or its subsidiaries)
and good and marketable title to all personal property then owned by
them, in each case free and clear of all liens, encumbrances and
defects, except (w) liens or other security interests arising under the
DLJMC Credit Facility or the first mortgages on hotels owned by certain
subsidiaries of the Company pursuant to the $125,000,000 aggregate
principal amount of Hospitality Properties Mortgage Acceptance Corp.,
Series 1996-C1, Notes due December 1, 2001 (the "Mortgage Notes"), (x)
leases providing for the lease by the Company of the Current Hotels to
various tenants as described in the Prospectus, (y) such as would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole or (z) in the case of personal property located at
certain Hotels, such as are subject to equipment lease financing
arrangements which have been entered into in the ordinary course of
business and have an aggregate outstanding balance not in excess of $1
million; and (ii) real property held under ground lease by the Company
or any subsidiary is, and as of the Closing Date will be, held by it
under valid, subsisting and enforceable ground leases with such
exceptions as would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(y) The Company and its Current Hotels are, and as of the
Closing Date will be, insured in the manner described in the Prospectus
by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are customary in the businesses in
which the Company is engaged and proposes to engage and the Company has
no reason to believe that it will not be able to renew such insurance
coverage as and when such coverage expires or to obtain similar
coverage as may be necessary to continue its business at economically
viable rates.
15
(z) The assets of the Company do not constitute, and as of the
Closing Date will not constitute, "plan assets" under the Employee
Retirement Income Security Act of 1974, as amended.
(aa) The Company is, and as of the Closing Date will be,
organized to operate in a manner so as to qualify as a REIT under
Sections 856 through 860 of the Code, and the Company will elect to be
taxed as a REIT under the Code effective for the year ending December
31, 1998.
(bb) Except as provided by this Agreement, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or the
Underwriter for a brokerage commission, finders fee or other like
payment with respect to the consummation of the transactions
contemplated by this Agreement.
(cc) The financial statements of the Company and, to the
Company's knowledge, the financial statements and schedules of
portfolios of certain Hotels and lessees (consisting of separate
financial statements for HMH HPT Courtyard, Inc., HMH HPT Residence
Inn, Inc., Limited Service I Hotels, Limited Service II Hotels and
Renthotel Utah, L.C.), included in the Registration Statement and the
Prospectus fairly present the financial position of the Company and the
applicable Hotels or lessees (as set forth in such separate financial
statements), respectively, and their results of operations and changes
in financial condition, respectively, as of the dates and periods
therein specified. Such financial statements of the Company and, to the
Company's knowledge, such financial statements and schedules of such
Hotels and lessees, have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the
periods involved (except as otherwise noted therein). The selected
financial and other data set forth under the caption "Unaudited
Adjusted Pro Forma Financial Statements" in the Prospectus and under
the caption "Unaudited Adjusted Pro Forma Financial Statements" in the
Company's Current Reports on Form 8-K (the "Forms 8-K") dated December
9, 1997 and February 13, 1998 fairly present, on the basis stated in
the Prospectus or the Forms 8-K, as applicable, the information
included therein. The unaudited pro forma financial statements included
in the Registration Statement and the Prospectus comply in all material
respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X promulgated by the Commission and the pro forma
adjustments have been properly applied to the historical amounts in the
compilation of that data.
(dd) The Company and/or its subsidiaries, as applicable, has
obtained an ALTA Extended Coverage Owner's Policy of Title Insurance
16
or its local equivalent (or an irrevocable commitment to issue such a
policy) on all of the Current Hotels owned by the Company or its
subsidiaries and such title insurance is in full force and effect.
(ee) On the Closing Date after giving effect to repayment of
amounts then outstanding under the DLJMC Credit Facility on or prior to
such date, the Company will have no indebtedness for money borrowed
except (i) the Mortgage Notes and (ii) equipment financing arrangements
in respect of personal property located at certain Hotels which have
been entered into in the ordinary course of business and have an
aggregate outstanding balance not in excess of $1 million.
(ff) Xxxxxx Xxxxxxxx LLP and Xxxxxxx Xxxxxx & Xxxxxxxxx are
each independent public accountants with respect to the Company as
required by the Act.
(gg) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(hh) No holder of any security of the Company has any right to
require registration of Common Shares or any other security of the
Company.
(ii) Except as disclosed in the Prospectus, there are no
business relationships or related party transactions required to be
disclosed therein by Item 404 of Regulation S-K promulgated by the
Commission.
(jj) The Acquisition Agreements pursuant to which the Company
expects to acquire the Additional Hotels (including any Additional
Hotels which the Company may determine to acquire after the Closing
Date) are in full force and effect. The Company intends and reasonably
expects to consummate the acquisition and lease of all Additional
Hotels not owned or acquired by it as of the Closing Date as
expeditiously as possible after the Closing Date, including as and when
the construction of certain of such properties is completed.
(kk) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2)
under the Act has indicated to the Company that it is considering (i)
the downgrading, suspension or withdrawal of, or any review for a
possible change that does not indicate the direction of the possible
change in, any rating assigned to the Company or any securities of the
Company or (ii) any change in the outlook for any rating of the Company
or (ii) any securities of the Company.
17
7. Indemnification. (a) The Company agrees to indemnify and hold
harmless the Underwriter and each person, if any, who controls the Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages, liabilities and judgments
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by 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 such
losses, claims, damages, liabilities or judgments are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to the Underwriter furnished in writing to the Company by
or on behalf of the Underwriter expressly for use therein; provided that the
foregoing indemnity with respect to any preliminary prospectus shall not inure
to the benefit of the Underwriter (or to the benefit of any person controlling
the Underwriter) from whom the person asserting any such losses, claims,
damages, liabilities or judgments purchased the Securities if such untrue
statement or omission or alleged untrue statement or omission made in such
preliminary prospectus is eliminated or remedied in the Prospectus and a copy of
the Prospectus shall not have been furnished to such person at or prior to the
written confirmation of the sale of such Securities to such person.
(b) In case any action shall be brought against the Underwriter or any
person controlling the Underwriter, based upon any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement thereto
and with respect to which indemnity may be sought against the Company, the
Underwriter shall promptly notify the Company in writing and the Company shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses. The
Underwriter or any such controlling person shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the Underwriter
or such controlling person unless (i) the employment of such counsel shall have
been specifically authorized in writing by the Company, (ii) the Company shall
have failed to assume the defense and employ counsel or (iii) the named parties
to any such action (including any impleaded parties) include both the
Underwriter or such controlling person and the Company and the Underwriter or
such controlling person shall have been advised by such counsel that there may
be one or more legal defenses available to it which are different from or
additional to those available to the Company (in which case the Company shall
not have the right to assume the defense of such action on behalf of the
Underwriter or such controlling person, it being understood, however, that the
Company shall not, in
18
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) for the
Underwriter and controlling persons, which firm shall be designated in writing
by Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and that all such fees
and expenses shall be reimbursed as they are incurred). The Company shall not be
liable for any settlement of any such action effected without its written
consent but if settled with the written consent of the Company, the Company
agrees to indemnify and hold harmless the Underwriter and any such controlling
person from and against any loss or liability by reason of such settlement.
Notwithstanding the immediately preceding sentence, if in any case where the
fees and expenses of counsel are at the expense of the indemnifying party and an
indemnified party shall have requested the indemnifying party to reimburse the
indemnified party for such fees and expenses of counsel as incurred, such
indemnifying party agrees that it shall be liable for any settlement of any
action effected without its written consent if (i) such settlement is entered
into more than ten business days after the receipt by such indemnifying party of
the aforesaid request and (ii) such indemnifying party shall have failed to
reimburse the indemnified party in accordance with such request for
reimbursement prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened 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 proceeding.
(c) The Underwriter agrees to indemnify and hold harmless the Company
and its trustees or officers who sign the Registration Statement (or any person
named in the Registration Statement as having agreed to become a trustee of the
Company) and any person controlling the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to the Underwriter but only with reference
to information relating to the Underwriter furnished in writing by or on behalf
of the Underwriter expressly for use in the Registration Statement, the
Prospectus or any preliminary prospectus. In case any action shall be brought
against the Company, its trustees (or a named proposed trustee) or officers or
persons controlling the Company based on the Registration Statement, the
Prospectus or any preliminary prospectus and in respect of which indemnity may
be sought against the Underwriter, the Underwriter shall have the rights and
duties given to the Company (except that if the Company shall have assumed the
defense thereof, the Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of the Underwriter), and the
19
Company, its trustees (or a named proposed trustee) or officers and persons
controlling the Company shall have the rights and duties given to the
Underwriter, by Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each 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 and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriter on the other hand from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Underwriter in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Underwriter shall be deemed to be in the same proportion as the total
net proceeds from the offering (before deducting expenses) received by the
Company, and the total underwriting discounts and commissions received by the
Underwriter, bear to the total price to the public of the Securities, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Company and the Underwriter shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied by
the Company or the Underwriter and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph 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 or defending any such action or claim.
Notwithstanding the provisions of this Section 7, the Underwriter shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which the
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent
20
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.
8. Conditions of Underwriter's Obligations. The obligation of the
Underwriter to purchase the Securities under this Agreement is subject to the
satisfaction of each of the following conditions:
(a) All the representations and warranties set forth in Section 6 of
this Agreement shall be true and correct on the Closing Date with the same force
and effect as if made on and as of the Closing Date.
(b) At the Closing Date no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before or contemplated by
the Commission; and the Prospectus and any amendment or supplement thereto shall
have been filed with the Commission in the manner and within the time period
required by Rule 424(b) under the Act.
(c) (i) Since the date of the latest balance sheet included or
incorporated by reference in the Registration Statement and the
Prospectus, there shall not have been any material adverse change, or
any development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, affairs or
business prospects, whether or not arising in the ordinary course of
business, of the Company; (ii) since the date of the latest balance
sheet included or incorporated by reference in the Registration
Statement and the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement), there
shall not have been any change, or any development involving a
prospective material adverse change, in the capital or in the long-term
debt of the Company from that set forth in the Registration Statement
and Prospectus (other than in connection with Acquisition Transactions
described in and contemplated by the Registration Statement and the
Prospectus); (iii) the Company and its subsidiaries shall have no
liability or obligation, direct or contingent, which is material to the
Company and its subsidiaries, taken as a whole, other than those
reflected in the Registration Statement and the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement); (iv) since the date of the latest balance sheet included or
incorporated by reference in the Registration Statement and the
Prospectus, none of the Hotels owned by the Company as of the Closing
Date shall have sustained any material loss or casualty due to fire,
flood, earthquake, hurricane, tornado, accident or other calamity,
whether
21
or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree; (v) all Acquisition Agreements
relating to Additional Hotels which have been executed and delivered by
the Company on or before the Closing Date shall be in full force and
effect as of such date and the Company shall not be aware of any event,
development or circumstance which it reasonably expects will materially
delay or prevent its acquisition of the Additional Hotels in the manner
contemplated in the Prospectus; and (vi) on the Closing Date you shall
have received a certificate dated the Closing Date, signed by the
President and Chief Financial Officer of the Company, confirming the
matters set forth in paragraphs (a), (b), (c) and (k) of this Section 8
and that the Company has complied with all of the agreements and
satisfied all of the conditions herein contained and required to be
complied with or satisfied by the Company on or prior to the Closing
Date.
(d) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriter), dated the
Closing Date, of Xxxxxxxx & Worcester LLP, counsel for the Company, to
the effect that:
(i) the Company is a real estate investment trust
duly formed and validly existing under and by virtue of the
laws of the State of Maryland and is in good standing with the
State Department of Assessments and Taxation of Maryland, with
trust power to acquire and own the Hotels owned by it and to
lease such Hotels to others and to conduct its business, in
all material respects as described in the Prospectus;
(ii) each of the Company's subsidiaries has been duly
organized or formed and is validly existing (x) as a
corporation in good standing under the laws of the State of
Delaware or (y) as a real estate investment trust in good
standing under and by virtue of the laws of the State of
Maryland, as the case may be, and has the corporate power and
authority or trust power, as the case may be, to own the
Hotels owned by it and to lease such Hotels to others and to
conduct its business, in all material respects as described in
the Prospectus;
(iii) all of the outstanding shares of capital stock
of each of the Company's subsidiaries have been duly and
validly authorized and issued and are fully paid and
non-assessable, and are owned by the Company, free and clear
of any security interest, claim, lien, encumbrance or adverse
interest of any nature other than a pledge of shares of
capital stock of certain of the
22
Company's subsidiaries in favor of DLJMC to secure the
Company's obligations under the DLJMC Credit Facility;
(iv) the Securities have been duly authorized, and,
when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by
the Underwriter in accordance with the terms of this
Agreement, will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company,
enforceable in accordance with their terms;
(v) except for 500 Common Shares, 250 of which are
held by Xxxx X. Xxxxxx and 250 of which are held by Xxxxx X.
Xxxxxx, all of the outstanding Common Shares have been duly
authorized and validly issued and are fully paid;
non-assessable and not subject to any preemptive or similar
rights;
(vi) the Company has no outstanding Preferred Shares
of Beneficial Interest;
(vii) to the best of such counsel's knowledge, 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 Common Shares of, or other ownership interest in,
the Company except as otherwise disclosed in the Registration
Statement;
(viii) the Indenture has been duly qualified under
the Trust Indenture Act and has been duly authorized, executed
and delivered by the Company and is a valid and binding
agreement of the Company, enforceable in accordance with its
terms;
(ix) the authorized shares of beneficial interest of
the Company, including the Common Shares, conform as to legal
matters in all material respects to the description thereof
contained in the Prospectus (or the documents incorporated
therein by reference);
(x) the statements under the captions (A) "Summary",
"Recent Developments", "The Company-- Leases", "Management",
"Description of the Notes" and "Underwriting" in the
Prospectus Supplement and (B) "Description of Debt
Securities", "Limitation of Liability; Shareholder Liability",
"Redemption; Trustees; Business Combinations and Control Share
Acquisitions" in the Prospectus, as of the date of the
Prospectus;
23
and "Item 5. Other Events" in the Company's Current Report on
Form 8-K dated February 11, 1998; and paragraph (b) of "Item
5. Other Events" in the Company's Current Report on Form 8-K
dated November 21, 1997; "Part I. Item 2. Management's
Discussion and Analysis of Results of Operations and Financial
Condition -- Overview" and "-- Liquidity and Capital
Resources" in the Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1997; "Part II. Item 2.
Changes in Securities" in the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1997; "Item 5. Other
Events" in the Company's Current Report on Form 8-K dated May
20, 1997; "Other Information--Incentive Share Award Plan" and
"Certain Relationships and Related Transactions" in the
Company's Proxy Statement relating to the May 20, 1997 Annual
Meeting of Shareholders (incorporated by reference in the
Company's Annual Report on Form 10-K for the year ended
December 31, 1996 (the "Form 10-K")); and "Item 1. Business",
"Item 2. Properties", "Item 5. Market For Registrant's Common
Equity and Related Stockholder Matters", "Item 7. Management's
Discussion and Analysis of Results of Operations and Financial
Condition-- Overview" and "--Liquidity and Capital Resources"
in the Form 10-K, in each case as of the date of filing of
such document, insofar as such statements constitute a summary
of legal matters, documents or proceedings referred to
therein, fairly present the information called for with
respect to such legal matters, documents and proceedings;
(xi) the statements under the captions "Certain
Federal Income Tax Consequences" in the Prospectus Supplement,
as of the date of the Prospectus Supplement, and "Item 1.
Business--Taxation of the Company", "--Taxation of
Shareholders", "-- Other Tax Considerations", "-- Certain
United States Tax Considerations Non-U.S. Shareholders", "--
Federal Estate Tax", "-- Backup Withholding and Information
Reporting Requirements", "-- Other Tax Consequences" and
"--ERISA Plans, Xxxxx Plans and Individual Retirement
Accounts" in the Form 10-K, as of the date of filing of the
Form 10-K, insofar as such statements constitute a summary of
legal matters or documents referred to therein, fairly present
the information called for with respect to such legal matters,
documents and proceedings;
(xii) the Registration Statement has become effective
under the Act, the Prospectus was filed with the Commission
pursuant to Rule 424 within the applicable time period
prescribed
24
by Rule 424 and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
are, to the knowledge of such counsel, pending before or
contemplated by the Commission;
(xiii) the Company and each of its subsidiaries is
not in violation of its Declaration of Trust or Certificate of
Incorporation, as applicable, or its Bylaws and, to such
counsel's knowledge, the Company and each of its subsidiaries
is not in default in the performance of any obligation,
agreement or condition contained in any bond, debenture, note
or any other evidence of indebtedness or in any other
agreement, indenture or instrument material to the conduct of
the business of the Company and its subsidiaries, taken as a
whole, to which the Company or any of its subsidiaries is a
party or by which any of them or their respective property is
bound;
(xiv) this Agreement has been duly authorized,
executed and delivered by the Company and is a valid and
binding agreement of the Company, enforceable against it in
accordance with its terms, except as enforceability of any
indemnification or contribution provisions contained therein
may be limited under federal or state securities laws or
public policy;
(xv) each Transaction Document executed by the
Company or any of its subsidiaries as of the date of such
opinion has been duly authorized, executed and delivered by
it;
(xvi) no consent, approval, authorization or order
of, or qualification with, any United States federal,
Massachusetts, Delaware or Maryland governmental body or
agency (other than any Massachusetts, Delaware or Maryland
body or agency dealing with securities laws, as to which such
counsel need not express an opinion) which has not been
obtained is required for the execution, delivery or
performance by the Company or any of its subsidiaries of any
Transaction Document to which it is a party or the
consummation of the transactions contemplated thereby;
(xvii) to the best of such counsel's knowledge, there
are no legal or governmental proceedings pending or threatened
to which the Company or any of its subsidiaries is a party or
to which any of the Hotels is subject that are required to be
described in the Registration Statement or the Prospectus and
are not so described,
25
nor any statutes, regulations, contracts or other documents
that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as
required;
(xviii) to such counsel's knowledge, the Company or
its subsidiaries, as owners of the Current Hotels, have all
Approvals as may be necessary to own the Current Hotels in the
manner described in or contemplated by the Prospectus, except
for any such Approvals the absence of which would not, singly
or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(xix) the Company is not an "investment company" or a
company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended;
(xx) such counsel confirms as of the Closing Date its
opinions filed as Exhibit 5.1 to the Registration Statement
and Exhibit 8.1 to the Company's Current Report on Form 8-K
dated February 12, 1998;
(xxi) the Securities conform as to legal matters to
the description thereof contained in the Prospectus; and
(xxii) (1) each document, if any, filed pursuant to
the Exchange Act and incorporated by reference in the
Prospectus (except for financial statements and other
financial and statistical data and schedules as to which no
opinion need be expressed) complied as to form in all material
respects with the Exchange Act when so filed with the
Commission, (2) the Registration Statement and the Prospectus
and any supplement or amendment thereto (except for financial
statements and other financial and statistical data and
schedules as to which no opinion need be expressed) comply as
to form in all material respects with the Act, and(3) no facts
have come to such counsel's attention that would lead such
counsel to believe (A) that (except for financial statements
and other financial and statistical data and schedules, as
aforesaid, and that part of the Registration Statement that
constitutes the Statement of Eligibility (Form T-1) under the
Trust Indenture Act) the Registration Statement and the
prospectus included therein (x) at the time the Registration
Statement became effective and (y) on the date hereof,
respectively, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated
26
therein or necessary to make the statements therein not
misleading or (B) that the Prospectus, as amended or
supplemented, if applicable (except for financial statements
and other financial and statistical data and schedules, as
aforesaid) at the time it was first provided to the
Underwriter for use in connection with the offering of the
Securities and as of the Closing Date contained or contains
any untrue statement of a material fact or omitted or omits 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.
In giving such opinion with respect to the matters covered by clause
(xxii), such counsel may state that their opinion and belief are based upon
their participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and documents incorporated
therein by reference, and review and discussion of the contents thereof, but are
without independent check or verification except as specified.
In rendering their opinion, such counsel may rely on an opinion dated
the Closing Date of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP, as to matters
governed by the laws of the State of Maryland. In addition, in rendering their
opinion, such counsel may state that their opinion as to laws of the State of
Delaware is limited to the Delaware General Corporation Law.
The opinions of Xxxxxxxx & Worcester LLP and Xxxxxxx Xxxxx Xxxxxxx &
Xxxxxxxxx, LLP, described in paragraph (d) above shall be rendered to you at the
request of the Company and shall so state therein.
(e) You shall have received on the Closing Date an
opinion, dated the Closing Date, of Xxxxx Xxxx & Xxxxxxxx,
counsel for the Underwriter, as to the matters referred to in
clauses (iv), (viii), (x) (but only with respect to the
statements under the caption "Underwriting" in the Prospectus
Supplement), (xiv) (but only as to due authorization,
execution and delivery) and clause (xxii) of the foregoing
paragraph (d) (but only with respect to clauses (2), (3)(A)(y)
and (3)(B) thereof).
In giving such opinion with respect to the matters covered by clause
(xix), such counsel may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto (other than the documents incorporated
therein by reference) and review and discussion of the contents thereof
(including the documents incorporated therein by reference), but are without
independent check or verification except as specified.
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In rendering their opinion, such counsel may rely on an opinion dated
the Closing Date of Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP, as to matters
governed by the laws of the State of Maryland.
(f) You shall have received a letter dated on and as of the
Closing Date, in form and substance satisfactory to you, from Xxxxxx
Xxxxxxxx LLP, independent public accountants, with respect to certain
financial statements and certain financial information contained in or
incorporated by reference into the Registration Statement and the
Prospectus, in substantially the form and substance of the letter
delivered to you by Xxxxxx Xxxxxxxx LLP on the date of this Agreement.
(g) As soon as practicable after the issuance and sale of the
Securities hereunder, the Company shall prepay all amounts then
outstanding under the Mortgage Notes.
(h) The Securities shall have been rated "BBB--" by Standard &
Poor's Ratings Services and "Baa3" by Xxxxx'x Investors Service, Inc.
(i) The Underwriter shall have received a counterpart,
conformed as executed, of the Indenture which shall have been entered
into by the Company and the Trustee.
(j) The Company shall not have failed at or prior to the
Closing Date to perform or comply with any of the agreements herein
contained and required to be performed or complied with by the Company
at or prior to the Closing Date.
(k) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any
notice have been given of any potential or intended downgrading,
suspension or withdrawal of, or of any review (or of any potential or
intended review) for a possible change that does not indicate the
direction of the possible change in, any rating of the Company or any
securities of the Company (including, without limitation, the placing
of any of the foregoing ratings on credit watch with negative or
developing implications or under review with an uncertain direction) by
any "nationally recognized statistical rating organization" as such
term is defined for purposes of Rule 436(g)(2) under the Act,(ii) there
shall not have occurred any change, nor shall any notice have been
given of any potential or intended change, in the outlook for any
rating of the Company or any securities of the Company by any such
rating organization and (iii) no such rating organization shall have
given notice that it has assigned (or is considering assigning) a lower
rating to the Securities than that on which the Securities were
marketed.
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9. Effective Date of Agreement and Termination. This Agreement shall
become effective upon the execution of this Agreement by the parties hereto.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Company if any of the following has occurred:
(i) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, any material
adverse change or development involving a prospective material adverse
change in the condition, financial or otherwise, of the Company or the
earnings, affairs, or business prospects of the Company, whether or not
arising in the ordinary course of business, which would, in your
judgment, make it impracticable to market the Securities on the terms
and in the manner contemplated in the Prospectus,
(ii) any outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or
elsewhere that, in your judgment, is material and adverse and would, in
your judgment, make it impracticable to market the Securities on the
terms and in the manner contemplated in the Prospectus,
(iii) the suspension or material limitation of trading in
securities or other instruments on the NYSE, the American Stock
Exchange, The Chicago Board of Options Exchange, the Chicago Mercantile
Exchange, the Chicago Board of Trade or the Nasdaq National Market or
limitation on prices for securities on any such exchange or the Nasdaq
National Market,
(iv) the suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market,
(v) the enactment, publication, decree or other promulgation
of any federal or state statute, regulation, rule or order of any court
or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the
business or operations of the Company,
(vi) the declaration of a banking moratorium by either federal
or New York State authorities or
29
(vii) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which
in your opinion has a material adverse effect on the financial markets
in the United States.
10. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to Hospitality
Properties Trust, 000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: President, and
(b) if to the Underwriter, to Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate
Department, or in any case to such other address as the person to be notified
may have requested in writing.
The parties hereto agree, for purposes of Section 6(b), Section 7 and
any other provision of this Agreement, that the only information relating to the
Underwriter furnished to the Company in writing by the Underwriter expressly for
use in the Registration Statement, any preliminary prospectus, the Prospectus or
any amendment or supplement thereto is the information furnished by the
Underwriter included in the Prospectus, (i) in the legend relating to
stabilization on the inside front cover page, (ii) listing the name of the
Underwriter under the caption "Underwriting" and (iii) in the third, sixth,
seventh and eighth paragraphs and the third sentence of the fifth paragraph
under the caption "Underwriting" in the Prospectus.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, its officers and trustees and of
the Underwriter set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Securities, regardless of (i) any investigation, or statement as to the
results thereof, made by or on behalf of the Underwriter or by or on behalf of
the Company, or its officers or trustees, (ii) acceptance of the Securities and
payment for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriter because of any
failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company agrees to reimburse
the Underwriter for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by it.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriter, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term
30
"successors and assigns" shall not include a purchaser of any of the Securities
from the Underwriter merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
31
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
HOSPITALITY PROPERTIES TRUST
By /s/ Xxxxxx X. X'Xxxxx
-----------------------------
Name: Xxxxxx X. X'Xxxxx
Title: Treasurer
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By /s/ Xxxx X. Xxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
32
