Exhibit 1.1
12,000,000 Shares
Hospitality Properties Trust
Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
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April __, 1996
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXX XXXXXX XXXXXXXX INC.
X.X. XXXXXXX & SONS, INC.
PRUDENTIAL SECURITIES INCORPORATED
XXXXX XXXXXX INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
XxXXXXXX & COMPANY SECURITIES, INC.
As representatives of the
several underwriters
named in Schedule I hereto
c/x 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 12,000,000 common shares of beneficial
interest, par value $0.01 per share (the "Firm Shares"), to the several
underwriters named in Schedule I hereto (the "Underwriters"). The Company also
proposes to issue and sell to the several Underwriters not more than 1,800,000
additional common shares of beneficial interest, par value $0.01 per share (the
"Additional Shares"), if requested by the Underwriters as provided in Section 2
hereof. The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the "Shares". The common shares of beneficial
interest, par value $0.01 per share, of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter referred to as
the "Common Shares".
It is understood that (i) upon completion of its initial public offering of
Common Shares on August 22, 1995, the Company owned 37 hotel properties (the
"Initial Hotels") and (ii) pursuant to purchase agreements among the Company and
each of the applicable sellers (the "Additional Purchase Agreements"), the
Company (x) has recently acquired or (y) proposes to acquire substantially
contemporaneously with the Closing Date (as hereinafter defined) or as
expeditiously as possible thereafter, as the case may be, an additional 45 hotel
properties (consisting of the 18 Residence Inn by Marriott(R) hotels (the
"Residence Inn Additional Hotels"), the 16 Courtyard by Marriott(R) hotels (the
"Courtyard Additional Hotels") and the 00 Xxxxxxx Xxxxxx(X) hotels (the "Wyndham
Garden Additional Hotels") described in the Prospectus referred to below, and
collectively referred to herein as the "Additional Hotels"; the Additional
Hotels and the Initial Hotels collectively referred to herein as the "Hotels")
for an aggregate net cash purchase price of approximately $435 million. It is
further understood that in connection with the acquisition of the Additional
Hotels, the Company has entered into or will enter into, as the case may be, a
series of related transactions (together with the hotel acquisitions, the
"Acquisition Transactions") generally described in the Prospectus referred to
below under the captions "Prospectus Summary", "The Company", "Use of Proceeds",
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources -- The Company", "Business --
Lessees, Managers, Leases and Management Agreements" and "-- Purchase
Agreements", 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 (the "Additional Leases"), (iii) obtain and assign
rights arising under separate management agreements with hotel management
companies (the "Additional Management Agreements") in respect of the Residence
Inn Additional Hotels and the Courtyard Additional Hotels, (iv) to the extent
necessary to finance the pending acquisitions, borrow funds under (x) a $200
million Amended and Restated Revolving Credit Agreement dated December 29, 1995
with DLJ Mortgage Capital, Inc. ("DLJMC") (as further amended to date, the "Line
of Credit") or (y) an additional $250
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million Revolving Credit Agreement dated February 29, 1996 with DLJMC (the
"Expanded Credit Facility") and (v) with the proceeds of the offering
contemplated hereby, acquire certain of the Additional Hotels or repay all or a
portion of borrowings made under the Line of Credit and the Expanded Credit
Facility in connection with the acquisition of Additional Hotels.
The principal documents required to be executed and delivered by the
Company or its subsidiaries in order to consummate the Acquisition Transactions
(including, without limitation, this Agreement, the Additional Purchase
Agreements, the Additional Leases, the Additional Management Agreements and the
Expanded Credit Facility) are hereinafter collectively referred to as the
"Transaction Documents" and singly as a "Transaction Document". Each
Transaction Document constituting an agreement is hereinafter referred to as a
"Transaction Agreement". Capitalized terms used herein and not otherwise
defined herein have the meanings given to them in the Prospectus referred to
below under the caption "Glossary".
1. Registration Statement and Prospectus. The Company has prepared and
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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-11 (File No. 333-1433) including a
prospectus relating to the Shares, which may be amended. The registration
statement as amended at the time when it becomes effective, including a
registration statement (if any) filed pursuant to Rule 462(b) under the Act
increasing the size of the offering registered under the Act and information (if
any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Act, is hereinafter referred to as
the "Registration Statement"; and the prospectus in the form first used to
confirm sales of Shares is hereinafter referred to as the "Prospectus".
2. Agreements to Sell and Purchase. On the basis of the representations
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and warranties contained in this Agreement, and subject to its terms and
conditions, the Company agrees to issue and sell, and each Underwriter agrees,
severally and not jointly, to purchase from the Company at a price per share of
$ (the "Purchase
-----
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Price") the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto.
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 the Additional Shares and the Underwriters shall have the right to
purchase, severally and not jointly, up to 1,800,000 Additional Shares from the
Company at the Purchase Price. Additional Shares may be purchased solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. The Underwriters may exercise their right to purchase
Additional Shares in whole or in part from time to time by giving written notice
thereof to the Company within 30 days after the date of this Agreement. You
shall give any such notice on behalf of the Underwriters and such notice shall
specify the aggregate number of Additional Shares to be purchased pursuant to
such exercise and the date for payment and delivery thereof. The date specified
in any such notice shall be a business day (i) no earlier than the Closing Date,
(ii) no later than ten business days after such notice has been given and (iii)
no earlier than two business days after such notice has been given. If any
Additional Shares are to be purchased, each Underwriter, severally and not
jointly, agrees to purchase from the Company the number of Additional Shares
(subject to such adjustments to eliminate fractional shares as you may
determine) which bears the same proportion to the total number of Additional
Shares to be purchased from the Company as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I bears to the total number of
Firm Shares.
The Company hereby agrees not to, and agrees to cause its trustees and
officers not to, offer, sell, contract to sell, grant any option to purchase, or
otherwise dispose of any Common Shares or any securities convertible into or
exercisable or exchangeable for Common Shares or in any other manner transfer
all or a portion of the economic consequences associated with the ownership of
any Common Shares, except to the Underwriters pursuant to this Agreement, for a
period of 90 days after the date of the Prospectus without the prior written
consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation ("DLJSC").
Notwithstanding the foregoing, during such period the Company may issue Common
Shares pursuant to its Incentive Share Award Plan in accordance with the terms
and conditions
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of, and for the number of Common Shares authorized under, such Plan on the date
hereof.
3. Terms of Public Offering. The Company is advised by you that the
------------------------
Underwriters propose (i) to make a public offering of their respective portions
of the Shares as soon after the effective date of the Registration Statement as
in your judgment is advisable and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus.
4. Delivery and Payment. Delivery to the Underwriters of and payment for
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the Firm Shares shall be made at 10:00 A.M., New York City time, on the third or
fourth business day (unless otherwise permitted by the Commission pursuant to
Rule 15c6-1 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) (the "Closing Date") following the date of the initial public offering,
at such place as you shall designate. The Closing Date and the location of
delivery of and the form of payment for the Firm Shares may be varied by
agreement between you and the Company. Simultaneously with the payment for the
Firm Shares in New York, the Company shall have previously caused to occur, or
will cause to contemporaneously occur, closings of Acquisition Transactions in
respect of Additional Hotels with an aggregate net cash purchase price in excess
of $300 million at the offices of Xxxxxxxx & Worcester LLP in Boston,
Massachusetts.
In addition, on the Closing Date, in connection with the offering
contemplated hereby, the Company will pay a fee of $1 million to DLJSC for
financial advisory services rendered in connection with the acquisition by the
Company of the Wyndham Garden Additional Hotels; provided that in the event such
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Additional Hotels are not acquired by the Company on or prior to the Closing
Date, such fee shall be deemed to have been satisfied and shall be payable at
such time after the Closing Date as such Additional Hotels are acquired by the
Company. In addition, on the Closing Date, in connection with the establishment
of the Expanded Credit Facility and the offering contemplated hereby, the
Company will pay a combined structuring and facility fee to DLJSC as follows:
(i) $625,000 as an initial structuring fee and (ii) an amount equal to 1% of
borrowings made under the Expanded Credit Facility as an additional structuring
fee; provided that (x) the obligation set forth in clause (i) above shall be
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deemed to have been satisfied by payment by the Company to DLJSC on February 29,
1996 of $625,000 and
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(y) the obligation set forth in clause (ii) above shall be deemed to have been
satisfied by payments by the Company to DLJSC contemporaneously with borrowings
made under the Expanded Credit Facility of amounts equal to 1% of such
borrowings.
Delivery to the Underwriters of and payment for any Additional Shares to be
purchased by the Underwriters shall be made at such place as you shall designate
at 10:00 A.M., New York City time, on the date specified in the applicable
exercise notice given by you pursuant to Section 2 (an "Option Closing Date").
Any such Option Closing Date and the location of delivery of and the form of
payment for such Additional Shares may be varied by agreement between you and
the Company.
Certificates for the Shares shall be registered in such names and issued in
such denominations as you shall request in writing not later than two full
business days prior to the Closing Date or an Option Closing Date, as the case
may be. Such certificates shall be made available to you for inspection not
later than 9:30 A.M., New York City time, on the business day next preceding the
Closing Date or the applicable Option Closing Date, as the case may be.
Certificates in definitive form evidencing the Shares shall be delivered to you
on the Closing Date or the applicable Option Closing Date, as the case may be,
with any transfer taxes thereon duly paid by the Company, for the respective
accounts of the several Underwriters, against payment of the Purchase Price
therefor by wire or certified or official bank checks payable in Federal (same
day) funds to the order of the Company.
5. Agreements of the Company. The Company agrees with you:
-------------------------
(a) To use its best efforts to cause the Registration Statement to
become effective at the earliest possible time.
(b) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) when the Registration Statement has become effective
and when any post-effective amendment to it becomes effective, (ii) of any
request by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order
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suspending the effectiveness of the Registration Statement or of the
suspension of qualification of the Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purposes, and
(iv) of 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. 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, eight signed copies of the
Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and to furnish to you and each
Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
exhibits, as you may reasonably request.
(d) Not to file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective, or
to make any amendment or supplement to the Prospectus of which you shall
not previously have been advised or to which you shall reasonably object;
and to prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or supplement to the
Prospectus which may be necessary or advisable in connection with the
distribution of the Shares by you, and to use its best efforts to cause the
same to become promptly effective.
(e) Promptly after the Registration Statement becomes effective, 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 an Underwriter or a dealer, to furnish to each
Underwriter and dealer as many copies of the Prospectus (and of any
amendment or supplement to the Prospectus) as such Underwriter or dealer
may reasonably request.
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(f) If, during the period specified in paragraph (e), 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 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 law, and to furnish to each Underwriter and to such dealers as
you shall specify, such number of copies thereof as such Underwriter or
dealers may reasonably request.
(g) Prior to any public offering of the Shares, (i) to effect the
registration or qualification of the Shares for offer and sale by the
several Underwriters 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 Shares, (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 Shares
contemplated hereby by the National Association of Securities Dealers, Inc.
("NASD").
(h) To make generally available to its shareholders as soon as
reasonably practicable an earnings statement covering a period of at least
twelve months after the effective date of the Registration Statement which
shall satisfy the provisions of Section 11(a) of the Act, and to advise you
in writing when such statement has been so made available.
(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 its Common Shares a financial report of the
Company and its subsidiaries, if any, on a consolidated basis (and a
similar
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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 the holders of Common Shares 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) To pay all costs, expenses, fees and taxes incident to (i) the
preparation, printing, filing and distribution under the Act of the
Registration Statement (including financial statements and exhibits), each
preliminary prospectus and all amendments and supplements to any of them
prior to or during the period specified in paragraph (e), (ii) the printing
and delivery of the Prospectus and all amendments or supplements to it
during the period specified in paragraph (e), (iii) the printing and
delivery of this Agreement, the Preliminary and Final Blue Sky Memoranda
and all other agreements, memoranda, correspondence and other documents
printed and delivered in connection with the offering of the Shares
(including in each case any disbursements of counsel to the Company or
counsel for the Underwriters relating to such printing and delivery), (iv)
the registration or qualification of the Shares for offer and sale under
the securities, Blue Sky or real estate syndication
9
laws of the several states (including in each case the fees and
disbursements of counsel for the Company or counsel for the Underwriters
relating to such registration or qualification and memoranda relating
thereto), (v) filings and clearance with the NASD in connection with the
offering of the Shares contemplated hereby, (vi) the listing of the Shares
on the New York Stock Exchange ("NYSE") and (vii) 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 Shares by the Underwriters or by dealers to whom
Shares may be sold.
(l) To use its best efforts to maintain the listing of its Common
Shares on the NYSE for a period of five years after the Closing Date
hereunder.
(m) To use its best efforts to qualify for the year ended December
31, 1995 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 Shares contemplated
hereby substantially in accordance with the description set forth under the
caption "Use of Proceeds" in the Prospectus. In connection therewith, the
Company will use its best efforts to acquire any Additional Hotels not
owned or acquired by it as of the Closing Date as expeditiously as possible
after the Closing Date.
(o) Not to take any action prohibited by Rule 10b-6 under the Exchange
Act in connection with the distribution of the Shares contemplated hereby.
(p) 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 or any Option Closing Date, as the case may be,
and to satisfy all conditions precedent to the delivery of the Shares.
6. Representations and Warranties. The Company represents and
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warrants to each Underwriter that:
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(a) The Registration Statement has become effective; 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.
(b) (i) Each part of the Registration Statement, when such part
became effective, did not contain and each such part, as amended or
supplemented, if applicable, 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, (ii)
the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Act and (iii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will 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 (b) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
(c) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or 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.
(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 acquire and own the Hotels
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
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jurisdiction in which the Hotels are located and such qualification and
authorization is required.
(e) Each of the Company's subsidiaries has been duly incorporated, is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority to
carry on its business as it is currently being conducted and to own, lease
and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification. 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 are owned by the Company, free and clear
of any security interest, claim, lien, encumbrance or adverse interest of
any nature.
(f) All 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; and the Shares have been duly
authorized and, when issued and delivered to the Underwriters against
payment therefor as provided by this Agreement, will be validly issued,
fully paid and non-assessable, and the issuance of such Shares will not be
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.
(g) The authorized capital of the Company, including the Common
Shares, conforms as to legal matters to the description thereof contained
in the Prospectus.
(h) 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,
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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.
(i) 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.
(j) Each Transaction Document to which the Company or any of its
subsidiaries is a party (other than this Agreement and any such Transaction
Documents relating to acquisition closings for Additional Hotels to be
acquired by the Company after the Closing Date) has been or will be, as the
case may be, duly authorized, executed and delivered by the Company and
each of its subsidiaries on or prior to the Closing Date and each
Transaction Agreement (except as aforesaid) constitutes or will constitute,
as the case may be, a valid and binding agreement of the Company or the
applicable subsidiary, as the case may be, 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.
(k) The execution by the Company or any of its subsidiaries of 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 Transaction 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
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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.
(l) 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 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 Shares and, in the case of the performance thereof, except as
are contemplated by the express terms of such Transaction Document 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.
(m) 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 from that set forth in the Prospectus.
(n) 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
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Prospectus or to be filed as exhibits to the Registration Statement that
are not described or filed as required.
(o) The Company and each of its subsidiaries has, and as of the
Closing Date and after giving effect to the Acquisition Transactions
occurring on or prior to such 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 and after
giving effect to the Acquisition Transactions occurring on or prior to such
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 the properties and assets proposed to be acquired by it in the
Acquisition Transactions occurring on or prior to such date, 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.
(p) Host II, as lessee of the Initial Hotels, is not in default under
the initial leases relating thereto (the "Initial Leases") and there has
not occurred any event which, but for the passage of time or the giving of
notice or both, would constitute an event of default under such Initial
Leases. To the best knowledge of the Company, Marriott II, as manager of
the Initial Hotels, is not in default under the management agreements
relating thereto (the "Initial Management Agreements") and there has not
occurred any event which, but for the passage of time or the giving of
notice or both, would constitute an event of default under such Initial
Management Agreements.
(q) To the best knowledge of the Company, Wyndham I, Wyndham II, Host
I, Marriott I, Host II and Marriott II have, and as of the Closing Date and
after giving effect to the Acquisition Transactions occurring on or prior
to such 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
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Hotels owned by the Company on or prior to such date 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.
(r) 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 and after giving effect to the Acquisition
Transactions occurring or or prior to such 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, Wyndham I, Wyndham II, Host I,
Marriott I, Host II and Marriott II have received, or as of the Closing
Date and after giving effect to the Acquisition Transactions occurring on
or prior to such date will receive, all permits, licenses or other
approvals required under applicable Environmental Laws to conduct the
respective hotel businesses presently conducted at each such property and
(iii) the Company or, to its knowledge, Wyndham I, Wyndham II, Host I,
Marriott I, Host II and Marriott II are, or as of the Closing Date and
after giving effect to the Acquisition Transactions occurring on or prior
to such 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 or any
individual Hotel's property.
(s) 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
16
third parties) that, as of the date hereof, would, or as of the Closing
Date and after giving effect to the Acquisition Transactions occurring on
or prior to such date will, singly or in the aggregate, have a material
adverse effect on the Company or any individual Hotel's property.
(t) 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 the purchase agreements therefor and
has conducted physical inspections of each Hotel's property. (1) 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 such Hotel;
(2) 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 such Hotel; (3) 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 such Hotel, 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;
(4) 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 such Hotel 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 such Hotel; and (5) the Company has
taken reasonable steps to determine, and has determined (based on its due
diligence review, including a review of accounting records prepared by the
sellers of the Additional Hotels), that (i) each of the Residence Inn
Additional Hotels and Courtyard
17
Additional Hotels is not a "Defective Property" for purposes of Section 2.3
and Section 2.5, respectively, of the Additional Purchase Agreements
relating to such Additional Hotels and (ii) no Wyndham Garden Additional
Hotel or Hotels is a "Defective Property" for purposes of Section 2.3 of
the Additional Purchase Agreement relating to the Wyndham Garden Additional
Hotels and the Company has not terminated and, as of the Closing Date, does
not expect to terminate such agreement pursuant to such Section 2.3.
(u) Subsequent to the respective dates as of which financial
information is given in the Registration Statement and the Prospectus, (1)
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; (2) 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 (3) 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 (1), (2) or (3) above, as described in or contemplated
by the Prospectus.
(v) (1) As of the Closing Date and after giving effect to the
Acquisition Transactions occurring on or prior to such 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
Line of Credit or Expanded Credit Facility, (x) the Initial Leases and
Additional Leases, (y) such as would not have a material adverse effect on
the Company or any Hotel 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 (2) real property held under ground lease by the Company or
any subsidiary is, and as of the
18
Closing Date and after giving effect to the Acquisition Transactions
occuring on or prior to such 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 or any Hotel.
(w) The Company and its Hotels are, and as of the Closing Date and
after giving effect to the Acquisition Transactions occurring on or prior
to such date will be, insured in the manner described in the Prospectus by
insurers of recognized financial responsibility (including in the case of
Marriott I and Marriott II, certain of their affiliates) 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, except as
described in or contemplated by the Prospectus.
(x) The Company has complied with all provisions of Section 517.075
Florida Statutes (Chapter 92-198) Laws of Florida.
(y) The assets of the Company do not constitute, and as of the Closing
Date and after giving effect to the Acquisition Transactions will not
constitute, "plan assets" under the Employee Retirement Income Security Act
of 1974, as amended.
(z) The Company is, and as of the Closing Date and after giving effect
to the Acquisition Transactions 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, 1995.
(aa) 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 any Underwriter for a
brokerage commission, finders fee or other like payment with respect to the
consummation of the transactions contemplated by this Agreement.
19
(bb) The financial statements of the Company, the financial statements
and schedules of the Hotels (consisting of separate financial statements
for the Combined Residence Inn Hotels, the Combined Courtyard Hotels and
for Garden Hotels Associates Limited Partnership, a Texas limited
partnership (in respect of the Wyndham Garden Additional Hotels),
respectively) included in the Registration Statement and the Prospectus
fairly present the financial position of the Company and the applicable
Hotels (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 and schedules 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 "Selected and Pro
Forma Financial and Operating Data" in the Prospectus fairly present, on
the basis stated in the Prospectus, the information included therein. The
unaudited pro forma financial statements included in the Registration
Statement comply in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X of the Commission and the pro
forma adjustments have been properly applied to the historical amounts in
the compilation of that data.
(cc) On or prior to the Closing Date, the Company shall have
consummated Acquisition Transactions relating to Additional Hotels with an
aggregate net cash purchase price in excess of $300 million.
(dd) As of the Closing Date, the Company will have obtained an ALTA
Extended Coverage Owner's Policy of Title Insurance (or an irrevocable
commitment to issue such a policy) on all of the Additional Hotels owned or
to be owned by the Company as of the Closing Date and such title insurance
is or will be in full force and effect.
(ee) On the Closing Date after giving effect to Acquisition
Transactions occurring on or prior to such date, the Company will have no
indebtedness for money borrowed except (i) equipment financing arrangements
in respect of personal property located at certain Hotels which have been
entered into in the ordinary course of
20
business and have an aggregate outstanding balance not in excess of $1
million and (ii) borrowings outstanding under the Line of Credit and the
Expanded Credit Facility made to fund the costs of acquisition of certain
of the Additional Hotels.
(ff) The Shares have been approved for listing on the NYSE, subject to
official notice of issuance.
(gg) Except as otherwise contemplated by this Agreement, the Company
has not directly or indirectly, (i) taken any action designed to cause or
to result in, or that has constituted or which might reasonably be expected
to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares or
(ii) since the filing of the Registration Statement (A) sold, bid for,
purchased, or paid anyone any compensation for soliciting purchases of, the
Shares or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(hh) Xxxxxx Xxxxxxxx LLP and Coopers & Xxxxxxx L.L.P., are each
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 of the Commission.
(ll) The Additional Purchase 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 of all Additional Hotels not owned or
21
acquired by it as of the Closing Date (i) in the case of the Wyndham Garden
Additional Hotels, not later than April 30, 1996 and (ii) in the case of
the Additional Courtyard Hotels located in Willow Grove, Pennsylvania and
Torrance-South Bay, California, as expeditiously as possible after the
Closing Date.
7. Indemnification. (a) The Company agrees to indemnify and hold
---------------
harmless each Underwriter and each person, if any, who controls any 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 any Underwriters furnished in writing to the Company by
or on behalf of any Underwriter through you expressly for use therein; provided
--------
that the foregoing indemnity with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) from whom the person asserting any such losses,
claims, damages, liabilities or judgments purchased the Shares 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 Shares to such person.
(b) In case any action shall be brought against any Underwriter or
any person controlling such 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,
such 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.
Any Underwriter or any
22
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 such 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 such Underwriter or such
controlling person and the Company and such 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 such 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 all such
Underwriters 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 any 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
23
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) Each Underwriter agrees, severally and not jointly, 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
each Underwriter but only with reference to information relating to such
Underwriter furnished in writing by or on behalf of such Underwriter through you
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 any Underwriter, the Underwriter shall have the rights and duties given
to the Company (except that if the Company shall have assumed the defense
thereof, such 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 such 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
Underwriters on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the
24
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Underwriters 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 Underwriters 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 Underwriters, bear to the total price to the public
of the Shares, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company and the Underwriters 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 Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) 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, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 7(d) are several in
25
proportion to the respective number of Shares purchased by each of the
Underwriters hereunder and not joint.
8. Conditions of Underwriters' Obligations. The several obligations
---------------------------------------
of the Underwriters to purchase the Firm Shares under this Agreement are 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) The Registration Statement shall have become effective not later
than 5:00 P.M. (and in the case of a Registration Statement filed under
Rule 462(b) of the Act, not later than 10:00 P.M.), New York City time, on
the date of this Agreement or at such later date and time as you may
approve in writing, and 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.
(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, 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 the Acquisition
Transactions as 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; (iv) since the date of
the latest balance sheet included in the Registration
26
Statement and the Prospectus, none of the Hotels owned or to be 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 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) and (c) of this
Section 8.
(d) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of Xxxxxxxx & Worcester LLP, counsel for the Company, to the effect
that:
(i) 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 acquire and
own the Hotels owned by it and to lease such Hotels to others and to
conduct its business, all as described in the Prospectus;
(ii) each of the Company's subsidiaries has been duly organized
and is validly existing as a corporation in good standing under the
laws of the State of Delaware 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;
(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;
(iv) all 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;
27
(v) the Shares have been duly authorized, and, when issued and
delivered to the Underwriters against payment therefor as provided by
this Agreement, will have been validly issued and will be fully paid
and non-assessable, and the issuance of such Shares is 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 authorized capital of the Company, including the Common
Shares, conforms as to legal matters to the description thereof
contained in the Prospectus;
(ix) the statements under the captions "The Company",
"Management's Discussion and Analysis of Financial Condition and
Results of Operations --Liquidity and Capital Resources -- The
Company", "Business -- Lessees, Managers, Leases and Management
Agreements", "--Purchase Agreements", "-- Ground Leases" and "--
Damage, Destruction or Condemnation", "Management -- Incentive Share
Award Plan" and "--Advisors and the Advisory Agreement", "Description
of the Shares" and "Summary of the Declaration of Trust" and Items 32
and 33 of Part II of the Registration Statement, 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;
(x) the statements under the captions "Federal Income Tax
Considerations", "Certain United States Tax Considerations for Non-
U.S. Holders of Shares" and "ERISA Plans, Xxxxx Plans and Individual
Retirement Accounts" in the
28
Prospectus, 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;
(xi) the Registration Statement has become effective under the
Act and, to the best of such counsel's knowledge, no stop order
suspending its effectiveness has been issued and no proceedings for
that purpose are, to the knowledge of such counsel, pending before or
contemplated by the Commission;
(xii) the Company and each of its subsidiaries is not in
violation of its Declaration of Trust, Certificate of Incorporation or
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;
(xiii) 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;
(xiv) 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;
(xv) 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
29
dealing with securities laws, as to which such counsel need not
express an opinion) is required for the execution, delivery or
performance by the Company or any of its subsidiaries of its
obligations under each Transaction Document to which it is a party or
the consummation of the transactions contemplated thereby;
(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) and (1) to such counsel's knowledge, the Company or its
subsidiaries, as current or proposed owners of the Hotels, have all
permits, licenses, approvals, certificates, franchises and
authorizations of governmental or regulatory authorities ("Approvals")
as may be necessary to own the Hotels in the manner described in or
contemplated by the Prospectus and (2) based solely on such counsel's
participation in the acquisition by the Company of Hotels owned or to
be owned as of the date of such opinion, to such counsel's knowledge,
(x) Wyndham I, Host I and Host II, as current or proposed lessees of
such Hotels, and (y) Wyndham II, Marriott I and Marriott II, as
current and proposed managers of such Hotels, have all Approvals as
may be necessary to lease or manage, as the case may be, such Hotels
in the manner described in or contemplated by the Prospectus, except
in respect of both clause (1) and (2) above, for those Approvals the
absence of which would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(xviii) the Company is not an "investment company" or a company
"controlled" by an
30
"investment company" within the meaning of the Investment Company Act
of 1940, as amended;
(ix) such counsel confirms as of the Closing Date its opinions
filed as Exhibits 5.1 and 8.1 to the Registration Statement;
(xx) (1) the Registration Statement and the Prospectus and any
supplement or amendment thereto (except for financial statements and
schedules as to which no opinion need be expressed) comply as to form
in all material respects with the Act, and (2) such counsel believes
that (except for financial statements and schedules, as aforesaid) the
Registration Statement and the prospectus included therein at the time
the Registration Statement became effective 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 statements therein not
misleading, and that the Prospectus, as amended or supplemented, if
applicable (except for financial statements and schedules, as
aforesaid) does not contain any untrue statement of a material fact or
omit 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
(xx), 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 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 Piper & Marbury LLP as to matters governed by the laws
of the State of Maryland.
The opinions of Xxxxxxxx & Worcester LLP and Piper & Marbury LLP
described in paragraph (d) above shall be rendered to you at the request of
the Company and shall so state therein.
31
You also shall have received on the Closing Date an opinion, dated the
Closing Date, of Sherin & Lodgen, special counsel for the Company, as to
the matters referred to in clause (ix) above (but only with respect to the
statements under the caption "Business - Legal Proceedings").
(e) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters, as to
the matters referred to in clauses (v), (ix) (but only with respect to the
statements under the caption "Underwriting"), (xiii) (but only as to due
authorization, execution and delivery) and clause (xx) of the foregoing
paragraph (d).
In giving such opinion with respect to the matters covered by clause
(xx), 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 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 Piper & Marbury 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.
(f) You shall have received separate letters dated on and as of the
Closing Date, in form and substance satisfactory to you, from Xxxxxx
Xxxxxxxx LLP, independent public accountants, and Coopers & Xxxxxxx L.L.P.,
independent public accountants, respectively, with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus, each in substantially the form and substance
of the letters delivered to you by Xxxxxx Xxxxxxxx LLP and Coopers &
Xxxxxxx L.L.P., respectively, on the date of this Agreement.
(g) The Company shall have delivered to you the "lock up" agreements
specified in Section 2 hereof and
32
such agreements and certain other continuing "lock up" agreements expiring
August 16, 1997 which were entered into by HRP and Advisors with DLJSC in
August 1995 shall be in full force and effect.
(h) You and your counsel shall have received copies of current
commitments for title insurance with respect to each Additional Hotel
containing the irrevocable commitment of the issuing title insurance
company to issue an owner (or leasehold owner) policy of title insurance to
the Company with respect to each such Additional Hotel, in an amount not
less than the purchase price to be paid by the Company for the real
property comprising such Additional Hotel, insuring that the Company will
be vested with good and marketable title in fee simple to each such
Additional Hotel (or with respect to ground leased Additional Hotels
described in the Prospectus, good and marketable leasehold interests) free
and clear of all liens, encumbrances and defects, except (w) liens or
security interests arising under the Line of Credit or the Expanded Credit
Facility, (x) the Additional Leases or (y) such as would not have a
material effect on the Company.
(i) All of the Transaction Documents (other than Transaction
Documents relating to acquisition closings of Additional Hotels occurring
after the Closing Date) shall have been executed and, if applicable,
delivered contemporaneously with or prior to the sale of the Firm Shares.
(j) Acquisition Transactions relating to the acquisition of
Additional Hotels with an aggregate net cash purchase price in excess of
$300 million shall have been consummated by the Company prior to or
contemporaneously with the issuance and sale of the Firm Shares hereunder.
(k) 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.
The several obligations of the Underwriters to purchase any Additional Shares
hereunder are subject to the delivery to you on the applicable Option Closing
Date of such documents
33
as you may reasonably request with respect to the good standing of the Company,
the due authorization and issuance of such Additional Shares and other matters
related to the issuance of such Additional Shares.
9. Effective Date of Agreement and Termination. This Agreement
-------------------------------------------
shall become effective upon the later of (i) execution of this Agreement and
(ii) when notification of the effectiveness of the Registration Statement has
been released by the Commission.
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
Shares 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 Shares
on the terms and in the manner contemplated in the Prospectus, (iii) the
suspension or material limitation of trading in securities on the NYSE, the
American Stock Exchange or the NASDAQ National Market System or limitation on
prices for securities on any such exchange or National Market System, (iv) 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, (v) the declaration
of a banking moratorium by either federal or New York State authorities or (vi)
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.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the
34
Underwriters shall fail or refuse to purchase the Firm Shares or Additional
Shares, as the case may be, which it or they have agreed to purchase hereunder
on such date and the aggregate number of Firm Shares or Additional Shares, as
the case may be, which such defaulting Underwriter or Underwriters, as the case
may be, agreed but failed or refused to purchase is not more than one-tenth of
the total number of Shares to be purchased on such date by all Underwriters,
each non-defaulting Underwriter shall be obligated severally, in the proportion
which the number of Firm Shares set forth opposite its name in Schedule I bears
to the total number of Firm Shares which all the non-defaulting Underwriters, as
the case may be, have agreed to purchase, or in such other proportion as you may
specify, to purchase the Firm Shares or Additional Shares, as the case may be,
which such defaulting Underwriter or Underwriters, as the case may be, agreed
but failed or refused to purchase on such date; provided that in no event shall
--------
the number of Firm Shares or Additional Shares, as the case may be, which any
Underwriter has agreed to purchase pursuant to Section 2 hereof be increased
pursuant to this Section 9 by an amount in excess of one-ninth of such number of
Firm Shares or Additional Shares, as the case may be, without the written
consent of such Underwriter. If on the Closing Date or on an Option Closing
Date, as the case may be, any Underwriter or Underwriters shall fail or refuse
to purchase Firm Shares, or Additional Shares, as the case may be, and the
aggregate number of Firm Shares or Additional Shares, as the case may be, with
respect to which such default occurs is more than one-tenth of the aggregate
number of Shares to be purchased on such date by all Underwriters and
arrangements satisfactory to you and the Company for purchase of such Shares are
not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter and the Company.
In any such case which does not result in termination of this Agreement, either
you or the Company shall have the right to postpone the Closing Date or the
applicable Option Closing Date, as the case may be, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of any such
Underwriter under this Agreement.
35
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 any Underwriter or to you, to you c/x 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 any
Underwriter furnished to the Company in writing by such 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 Representatives included in the Prospectus, (i) in the legend relating to
stabilization on the inside front cover page, (ii) listing the names of each
Underwriter under the caption "Underwriting" and (iii) in the third 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 several Underwriters 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 Shares, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter or by or on behalf
of the Company, or its officers or trustees, (ii) acceptance of the Shares and
payment for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters 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 several Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this
36
Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include a
purchaser of any of the Shares from any of the several Underwriters 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.
37
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
HOSPITALITY PROPERTIES TRUST
By___________________________
Name:
Title:
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXX XXXXXX XXXXXXXX INC.
X.X. XXXXXXX & SONS, INC.
PRUDENTIAL SECURITIES INCORPORATED
XXXXX XXXXXX INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
XxXXXXXX & COMPANY SECURITIES, INC.
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By____________________________
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
38
SCHEDULE I
----------
Number of Firm Shares
Underwriters to be Purchased
------------ ---------------------
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
Xxxx Xxxxxx Xxxxxxxx Inc.
X.X. Xxxxxxx & Sons, Inc.
Prudential Securities Incorporated
Xxxxx Xxxxxx Inc.
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
XxXxxxxx & Company Securities, Inc.
------------
Total 12,000,000
============
39
