EXHIBIT 1.1
FORM OF
$125,000,000
Hospitality Properties Trust
6.85% Senior Notes due 2012
PURCHASE AGREEMENT
June 27, 2002
WACHOVIA SECURITIES, INC.
One Wachovia Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
Hospitality Properties Trust, a Maryland real estate investment trust
(the "Company"), proposes to issue and sell $125,000,000 principal amount of its
6.85% Senior Notes due 2012 (the "Securities"), to Wachovia Securities, Inc.
(the "Underwriter"). The Securities are to be issued pursuant to the provisions
of an Indenture 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 July 8, 2002 between the Company and the Trustee
(collectively, the "Indenture").
The 251 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 "Hotels."
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. 333-84064) 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 March 20, 2002. 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 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, $125,000,000 aggregate principal amount of Securities
at 99.285% 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) to offer the Securities at various prices from
time to time as 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 July 8, 2002 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".
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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.
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.
(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
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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 Hunton & 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 second
business day after the date hereof and from time to time thereafter for
such period as in the opinion of Xxxxxx & 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 Xxxxxx &
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 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 Hunton & Xxxxxxxx (or such other local counsel
as may be designated by
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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 Hunton & 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 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.
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(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),
if any, 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, 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
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, 2002 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, and the regulations and published
interpretations thereunder (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
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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 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 (A) 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
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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) 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 Hotels owned by it and to lease such 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 Hotels are located and such
qualification and authorization is required, except where the failure
to so qualify or be in good standing would not have a material adverse
effect on the Company and its subsidiaries taken as a whole.
(e) Each subsidiary of the Company has been duly incorporated,
is validly existing as a corporation, limited liability company or 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 Hotels owned by it and
to lease such 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, limited liability company or 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
where the failure to so qualify or be in good standing 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
nonassessable, and are owned by the Company, free and clear of any
security interest, claim, lien, encumbrance or adverse interest of any
nature.
(f) All of the outstanding capital shares of the Company have
been duly authorized and validly issued and are fully paid and
nonassessable, and none of such capital shares was issued in violation
of preemptive or similar rights of any security holder of the Company.
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 beneficial interest, par value $.01 per share ("Common
Shares"), of, or other ownership interest in, the Company except as
otherwise disclosed in the Registration Statement.
(g) The Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended (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 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
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availability of equitable remedies may be limited by equitable
principles of general applicability.
(h) 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.
(i) The Securities conform to the description thereof
contained in the Prospectus.
(j) The authorized capital of the Company, including the
Common Shares, conforms to the description thereof contained in the
Prospectus (or the documents incorporated therein by reference).
(k) The Company and each of its subsidiaries is not in
violation of its Declaration of Trust, Certificate of Incorporation,
Limited Liability Company Agreement, or comparable documents of
organization or formation, or Bylaws, or comparable governing
documents, 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.
(l) 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.
(m) The execution by the Company or any of its subsidiaries of
this Agreement, the Indenture and the Securities 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, Limited
Liability Company Agreement, or comparable documents of organization
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or formation, or Bylaws, or comparable governing documents, 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.
(n) 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 or the Securities 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.
(o) 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.
(p) 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 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.
(q) The Company and each of its subsidiaries owns, or
possesses adequate rights to use, all patents, trademarks, trade names,
service marks, copyrights, licenses and other rights necessary for the
conduct of their respective businesses as described in the Registration
Statement and in the Prospectus, and neither the Company nor any of its
subsidiaries has received any notice of conflict with, or infringement
of, the asserted rights of others with respect to any such patents,
trademarks, trade names, service marks, copyrights, licenses and other
such rights except for conflicts or infringements that, if proven,
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole, and neither the Company nor any of its
subsidiaries knows of any basis therefor.
(r) The Company and each of its subsidiaries has, and as of
the Closing Date will have, all necessary consents, authorizations,
approvals, orders,
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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
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 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 Hotel's property, has obtained certain
representations and warranties relating to environmental matters from
the sellers of the Hotels set forth in purchase agreements therefor and
has conducted physical inspections of each Hotel's property. Except as
described in the Prospectus, (i) the Company, and, to its knowledge,
each 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 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 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 Hotel's property, has obtained certain representations and
warranties from the sellers of the Hotels set forth in purchase
agreements therefor and has
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conducted physical inspections of each Hotel's property. In respect of
each Hotel, (i) each 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 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 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; and (iv) the improvements comprising any
portion of each 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.
(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, except as previously
publicly announced by the Company 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 (x) leases providing for the lease by the Company of
the 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
12
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 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.
(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) All material tax returns required to be filed by the
Company and each of its subsidiaries in any jurisdiction have been
timely filed, other than those filings being contested in good faith,
and all material taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due pursuant to such
returns or pursuant to any assessment received by the Company or any of
its subsidiaries have been paid, other than those being contested in
good faith and for which adequate reserves have been provided.
(bb) Commencing with the taxable year ended December 31, 1995
and through the date hereof, the Company has been and is organized in
conformity with the requirements for qualification as a REIT under the
Code, and its actual and proposed method of operation has enabled and
will enable it to meet the requirements for qualification and taxation
as a REIT under the Code. No transaction or other event has occurred
which would cause the Company to not be able to qualify as a REIT for
its current taxable year or future taxable years.
(cc) 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, finder's fee or other like
payment with respect to the consummation of the transactions
contemplated by this Agreement.
(dd) 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, LLC and CCMH Courtyard I
LLC), included in the Registration Statement and the Prospectus fairly
present the financial position of the Company and the
13
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 United States
generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise noted therein).
The unaudited pro forma financial statements included in the
Registration Statement and the Prospectus, if any, 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.
(ee) The Company and/or its subsidiaries, as applicable, has
obtained an ALTA Extended Coverage Owner's Policy of Title Insurance or
its local equivalent (or an irrevocable commitment to issue such a
policy) on all of the Hotels owned by the Company or its subsidiaries
and such title insurance is in full force and effect.
(ff) Except as otherwise disclosed in the Prospectus, since
the respective dates as of which information is given in the
Prospectus, there has been no material adverse change in the business,
operations, earnings, prospects, properties or condition (financial or
otherwise) of REIT Management & Research, LLC (the "Advisor"), whether
or not arising in the ordinary course of business, that would have a
material adverse effect on the Company and its subsidiaries, taken as a
whole. The Advisory Agreement, dated as of January 1, 1998, (the
"Advisory Agreement"), between the Company and the Advisor, has been
duly authorized, executed and delivered by the parties thereto and
constitutes the valid agreement of the parties thereto, enforceable in
accordance with its 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.
(gg) On the Closing Date, the Company will have no
indebtedness for money borrowed except (i) the Securities and $50
million of the Company's previously issued 9.125% Senior Notes due
2010, (ii) the Company's 8 1/2% Monthly Income Senior Notes due 2009,
(iii) the Company's 8 1/4% Monthly Income Senior Notes due 2005, (iv)
the Company's 7.00% Senior Notes due 2008, (v) $98 million outstanding
under the Company's revolving credit facility and (vi) 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.
(hh) The accountants who have certified the financial
statements of the Company and its subsidiaries included in the
Registration Statement and in the
14
Prospectus were at the time of such certifications independent public
accountants with respect to the Company as required by the Act.
(ii) 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.
(jj) No holder of any security of the Company has any right to
require registration of Common Shares or any other security of the
Company.
(kk) 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.
(ll) 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 any securities of the Company.
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 copies of
the Prospectus were timely delivered to the Underwriter in accordance with
Section 5 hereof 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
15
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 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 Wachovia Securities, Inc. 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
16
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 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. 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
17
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 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 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 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 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 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,
18
flood, earthquake, hurricane, tornado, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or court
or governmental action, order or decree; and (v) 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 (j) 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; each of
the Company and its subsidiaries is qualified to transact
business and is in good standing as a foreign corporation or
trust in the jurisdictions listed beside its name on a
schedule attached to such opinion.
(ii) each of the Company's subsidiaries listed on
Schedule A hereto (the "Material Subsidiaries") has been duly
organized or formed and is validly existing (A) as a
corporation in good standing under the laws of the State of
Delaware or (B) 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 and authority, 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
or beneficial interests, as the case may be, of each of the
Company's subsidiaries have been duly and validly authorized
and issued and are fully paid and nonassessable, and are owned
by the Company, free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature
within the meaning of Article 8 of the Massachusetts Uniform
Commercial Code;
(iv) the Securities have been duly authorized by all
necessary trust action, 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
19
obligations of the Company, enforceable in accordance with
their terms, except as (A) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (B) rights of acceleration and
the availability of equitable remedies may be limited by
equitable principles of general applicability.
(v) all of the issued and outstanding Common Shares
have been duly authorized and validly issued and are fully
paid, nonassessable and not subject to any preemptive or
similar rights;
(vi) except as otherwise disclosed in the
Registration Statement, 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, except as (A) the enforceability thereof may be limited
by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (B) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability;
(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-the Notes," "Description of the Notes," "Experts" and
"Underwriting" in the Prospectus Supplement and (B)
"Description of Debt Securities," "Description of Common
Shares," "Description of Preferred Shares," "Description of
Depositary Shares," "Description of Certain Provisions of
Maryland Law and of Our Declaration of Trust and Bylaws" and
in the Prospectus, as of the date of the Prospectus; and "Part
I. Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Part II. Item 2.
Changes in Securities and Use of Proceeds" in the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31,
2002, "Certain Relationships and Related Transactions" in the
Company's Proxy Statement relating to the May 7, 2002 Annual
Meeting of Shareholders (incorporated by reference in the
20
Company's Annual Report on Form 10-K for the year ended
December 31, 2001 (the "Form 10-K")); and "Items 1 and 2.
Business and Properties-The Company" and "-Principal Lease or
Management Features," "Item 5. Market For Registrant's Common
Equity and Related Shareholder Matters," "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of
Operations" in the Form 10-K, in each case as of the date of
filing of such document, in each case insofar as they purport
to summarize matters arising under Massachusetts or Maryland
law or the federal law of the United States, or provisions of
documents to which the Company is a party specifically
referred to therein, are accurate summaries of such legal
matters or provisions.
(xi) the statements under the captions "Material
Federal Income Tax Considerations" in the Prospectus
Supplement, as of the date of the Prospectus Supplement, and
"Items 1 and 2. Business and Properties-Federal Income Tax
Considerations" in the Form 10-K, as of the date of filing of
the Form 10-K, in each case insofar as they purport to
summarize matters arising under Massachusetts or Maryland law
or the federal law of the United States, or provisions of
documents to which the Company is a party specifically
referred to therein, are accurate summaries of such legal
matters or provisions.
(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 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) to such counsel's knowledge, the Company and
each of its Material Subsidiaries is not in violation of its
Declaration of Trust or Certificate of Incorporation, as
applicable, or its Bylaws and, the Company and each of its
Material 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 Material
Subsidiaries, taken as a whole, to which the Company or any of
its Material Subsidiaries is a party or by which any of them
or their respective property is bound;
(xiv) Neither the offer, sale or delivery of the
Notes, the execution, delivery or performance by the Company
of its obligations under the Notes, the Indenture, the
Supplemental Indenture and this Agreement or compliance by the
Company with the provisions thereby (A) conflicts or will
conflict or constitutes or will constitute a breach of, or a
default under, (1) the Declaration of Trust or Certificate of
21
Incorporation, or comparable documents of organization or
formation or Bylaws or comparable governing documents of the
Company or its Material Subsidiaries or (2) any material
agreement, indenture, lease or other instrument to which the
Company or its Material Subsidiaries is a party or by which
the Company or its Material Subsidiaries or any properties of
the Company or its subsidiaries is bound that is an exhibit to
the Registration Statement or which is known to such counsel,
or (B) results or will result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of
the Company or its Material Subsidiaries, pursuant to any
agreement, indenture, lease or other instrument to which the
Company is a party or by which the Company or its Material
Subsidiaries or any properties of the Company or its Material
Subsidiaries is bound (1) that is incorporated by reference or
is an exhibit to the Registration Statement or (2) which is
known to such counsel; or (C) violates or will violate (1) any
Maryland or federal law, regulation or ruling (assuming
compliance with all applicable state securities and Blue Sky
laws, regulations, rulings and orders) or (2) to such
counsel's knowledge, any judgment, injunction, order or decree
applicable to the Company or its subsidiaries or any
properties of the Company or its Material Subsidiaries.
(xv) 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 (A) the enforceability
thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (B) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability, and
(C) enforceability of any indemnification or contribution
provisions contained therein may be limited under federal or
state securities laws or public policy;
(xvi) 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, 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;
(xvii) to such counsel's knowledge, the Company or
its subsidiaries, as owners of the Hotels, have all Approvals
as may be necessary to own the 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;
22
(xviii) 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;
(xix) The Advisor (A) is a limited liability company
duly organized, validly existing and in good standing under
the laws of the State of Delaware, and (B) has the requisite
corporate power and authority to conduct its business as
described in the Prospectus and to own and operate its
material properties.
(xx) The Advisory Agreement has been duly authorized,
executed and delivered by the parties thereto and constitutes
the valid agreement of the parties thereto, enforceable in
accordance with its terms, except as (A) the enforceability
thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (B) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability and
(C) insofar as the enforceability of any indemnity and
contribution provisions contained therein may be limited under
state securities laws or public policy.
(xxi) such counsel confirms as of the Closing Date
its opinions filed as Exhibit 5.1 to the Registration
Statement and to be filed as Exhibit 8.1 to the Company's
Current Report on Form 8-K to be filed July 1, 2002;
(xxii) the Securities conform to the description
thereof contained in the Prospectus; and
(xxiii) (i) each document, if any, filed pursuant to
the Exchange Act and incorporated by reference in the
Prospectus (except for financial statements and other
financial 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 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 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 at the time the
Registration Statement became effective contained any untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading or (B) that the Prospectus,
as amended or supplemented, if applicable (except for
financial statements and other financial data and schedules,
as aforesaid)
23
as of its date 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
(xxiii), 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 giving such
opinion with respect to the good standing and foreign qualification of the
Company and its subsidiaries under the laws of the State of Delaware and State
of Maryland, such counsel may rely upon certificates of public officials.
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 Xxxxxx & Xxxxxxxx, counsel for the
Underwriter, in form and substance satisfactory to you.
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.
(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, or such other party as is
satisfactory to you, in your sole discretion, with respect to certain
financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(g) The Securities shall have been rated "BBB-" by Standard &
Poor's Ratings Services and "Baa3" by Xxxxx'x Investors Service, Inc.
(h) 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.
(i) 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.
24
(j) 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.
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 inadvisable
to proceed with the offering, sale or delivery of 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,
25
(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, Massachusetts, North Carolina or New York
State authorities or
(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 One Wachovia Center, 000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 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(c), 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 in the third paragraph and the first
sentence of the fourth 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
26
under or by virtue of this Agreement. The term "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.
27
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
HOSPITALITY PROPERTIES TRUST
By:
Name:
Title:
WACHOVIA SECURITIES, INC.
By:
Name:
Title:
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Schedule A
HPTCY Properties Trust
HPT HSD Properties Trust
HPTCW Properties Trust
HPTSHC Properties Trust
HPT TRS, Inc.
HPTMI Properties Trust
HPTMI II Properties Trust
HPTWN Properties Trust
HPTRI Properties Trust
HPT Suite Properties Trust
29
