EXHIBIT 1.1
3,000,000 Shares
HOSPITALITY PROPERTIES TRUST
(a Maryland real estate investment trust)
9 1/2% Series A Cumulative Redeemable
Preferred Shares of Beneficial Interest
UNDERWRITING AGREEMENT
April 7, 1999
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx Barney Inc.
X.X. Xxxxxxx & Sons, Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
Prudential Securities Incorporated
as Representatives of the several Underwriters
named in Schedule A hereto
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Hospitality Properties Trust, a Maryland real estate investment trust
(the "Company"), confirms its agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx"), Xxxxxxx Xxxxx Xxxxxx Inc.
("Salomon"), X.X. Xxxxxxx & Sons, Inc. ("X.X. Xxxxxxx"), Xxxxxx Xxxxxxx & Co.
Incorporated ("Xxxxxx") and Prudential Securities Incorporated ("Prudential"),
together with each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters" which term shall also include any underwriter
substituted for an Underwriter), for whom Xxxxxxx Lynch, Salomon, X.X. Xxxxxxx,
Xxxxxx and Prudential are acting as representatives (in such capacity, Xxxxxxx
Lynch, Salomon, X.X. Xxxxxxx, Xxxxxx and Prudential are hereinafter collectively
referred to as the "Representatives"), with respect to the issue and sale by the
Company and the purchase by each such Underwriter, severally, of the respective
numbers of 9 1/2% Series A Cumulative Redeemable Preferred Shares of Beneficial
Interest, without par value (the "Preferred Shares"), of the Company set forth
in Exhibit A hereto at a purchase price of $24.2125 per Preferred Share and with
respect to the grant by the Company to the Underwriters of the option described
in Section 2 hereof to purchase all or any part of an additional 450,000
Preferred Shares to cover over-allotments. The aforesaid 3,000,000 Preferred
Shares (the "Initial Shares"), together with all or any part of the 450,000
Preferred Shares subject to the option described in Section 2 hereof (the
"Option Shares"), are collectively hereinafter called the "Shares."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S3 (No. 33343573) for the
registration of debt securities, preferred shares of beneficial interest,
depositary shares, common shares of beneficial interest and warrants under the
Securities Act of 1933, as amended (the "1933 Act"), and the offering thereof
from time to time in accordance with Rule 415 of the rules and regulations of
the Commission under the 1933 Act (the "1933 Act Regulations"). Such
registration statement has been declared effective by the Commission on January
15, 1998 and the Company has filed such post-effective amendments thereto as may
be required and each such post-effective amendment has been declared effective
by the Commission. Such registration statement (as so amended, if applicable) is
referred to herein as the "Registration Statement"; and the final prospectus and
the final prospectus supplement relating to the offering of the Shares, in the
form first furnished to the Underwriters by the Company for use in connection
with the offering of the Shares, are collectively referred to herein as the
"Prospectus"; provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall also be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to the date hereof; provided, further,
that if the Company files a registration statement with the Commission pursuant
to Rule 462(b) of the 1933 Act Regulations (the "Rule 462(b) Registration
Statement"), then, after such filing, all references to "Registration Statement"
shall also be deemed to include the Rule 462(b) Registration Statement. For
purposes of this Underwriting Agreement, all references to the Registration
Statement and Prospectus, or to any amendment or supplement to either of the
foregoing shall be deemed to include any copy filed with the Commission pursuant
to its Electronic Data Gathering Analysis and Retrieval system ("XXXXX").
All references in this Underwriting Agreement to financial statements
and schedules and other information which is "contained," "included" or "stated"
(or other references of like import) in the Registration Statement or the
Prospectus shall be deemed to mean and include all such financial statements and
schedules and other information which is incorporated by reference in the
Registration Statement or the Prospectus, as the case may be, prior to the
execution of this Underwriting Agreement; and all references in this
Underwriting Agreement to amendments or supplements to the Registration
Statement, Prospectus or preliminary prospectus shall be deemed to mean and
include the filing of any document under the 1934 Act which is incorporated by
reference in the Registration Statement or Prospectus, as the case may be, after
the execution of this Underwriting Agreement.
The 197 hotels described in the Prospectus as being currently owned by
the Company as of the date hereof are collectively referred to herein as the
"Current Hotels". The 7 hotels described in the Prospectus as being proposed to
be acquired by the Company as of the date hereof are collectively referred to
herein as the "Additional Hotels". The Current Hotels and the Additional Hotels
are collectively referred to herein as the "Hotels". It is understood that in
connection with the proposed acquisition of the Additional Hotels, the Company
has entered into purchase and sale agreements and agreements to lease (the
"Acquisition Agreements") contemplating consummation of a series of related
transactions (the "Acquisition Transactions") generally described in the
Prospectus Supplement referred to below under the captions "Summary -- Recent
Investments," pursuant to which the Company shall (i) acquire the Additional
Hotels, and (ii) lease the Additional Hotels to a subsidiary of Marriott
International, Inc. on a combined basis.
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SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to you, as of the date hereof, as follows:
(1) Compliance with Registration Requirements. The Company
meets the requirements for use of Form S-3 under the 1933 Act. The
Registration Statement (including any Rule 462(b) Registration
Statement) has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement (or such
Rule 462(b) Registration Statement) has been issued under the 1933 Act
and no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for
additional information has been complied with.
At the respective times the Registration Statement (including
any Rule 462(b) Registration Statement) and any post-effective
amendments thereto (including the filing of the Company's most recent
Annual Report on Form 10-K with the Commission (the "Annual Report on
Form 10-K")) became effective and as of the date hereof, the
Registration Statement (including any Rule 462(b) Registration
Statement) and any amendments thereto complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations and did not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. At
the date of the Prospectus and at the Closing Time as defined below,
neither the Prospectus nor any amendments and supplements thereto
included or will include an untrue statement of a material fact or
omitted or will 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. Notwithstanding the foregoing,
the representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by you expressly for use in the
Registration Statement or the Prospectus.
Each preliminary prospectus and 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 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and the Prospectus delivered to you for use in connection
with the offering of the Shares will, at the time of such delivery, be
identical to any electronically transmitted copies thereof filed with
the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(2) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations") and, when read
together with the other information in the Prospectus, at the date of
the Prospectus and at the Closing
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Time did not and will not include an 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.
(3) Independent Accountants. The accountants who certified the
financial statements and any supporting schedules thereto included in
the Registration Statement and the Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(4) Financial Statements. The financial statements of the
Company included in the Registration Statement and the Prospectus,
together with the related schedules and notes, as well as those
financial statements, schedules and notes of any other entity included
therein, present fairly the financial position of the Company and its
consolidated subsidiaries, or such other entity, as the case may be, at
the dates indicated and the statement of operations, shareholders'
equity and cash flows of the Company and its consolidated subsidiaries,
or such other entity, as the case may be, for the periods specified.
Such financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement and the
Prospectus present fairly in accordance with GAAP the information
required to be stated therein. The selected financial data and the
summary financial information included in the Prospectus present fairly
the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in
the Registration Statement and the Prospectus. In addition, any pro
forma financial statements of the Company and its subsidiaries and the
related notes thereto included in the Registration Statement and the
Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein.
(5) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect" or a "Material Adverse Change"), (B) there
have been no transactions entered into by the Company or any of its
subsidiaries, other than those arising in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise and (C) except for regular
dividends on the Company's common shares or preferred shares, in
amounts per share that are consistent with past practice or the
applicable charter document or supplement thereto, respectively, there
has been no dividend or distribution of any kind declared, paid or made
by the Company on any class of its capital shares.
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(6) Good Standing of the Company. 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 power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under, or as contemplated under, this Underwriting
Agreement. The Company is duly qualified to transact business and is in
good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify or be
in good standing would not result in a Material Adverse Effect; and the
Articles Supplementary relating to the Preferred Shares will be in full
force and effect as of the Closing Time.
(7) Good Standing of Subsidiaries. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X promulgated under the 0000 Xxx) (each, a "Subsidiary"
and, collectively, the "Subsidiaries"), if any, has been duly organized
and is validly existing as a corporation or a real estate investment
trust, as the case may be, in good standing under the laws of the
jurisdiction of its incorporation or formation, as the case may be, has
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation or a real estate investment trust,
as the case may be, to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good standing
would not result in a Material Adverse Effect. Except as otherwise
stated in the Registration Statement and the Prospectus, all of the
issued and outstanding capital shares of each Subsidiary has been duly
authorized and is validly issued, fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity. None of the outstanding capital shares of any Subsidiary was
issued in violation of preemptive or other similar rights of any
securityholder of such Subsidiary.
(8) Capitalization. The authorized, issued and outstanding
capital shares of the Company (except for 500 common shares of
beneficial intrest, par value $0.1 per share (the "Common Shares"), 250
of which are held by Xxxx X. Xxxxxx and 250 of which are held by Xxxxx
X. Xxxxxx) have been duly authorized and validly issued by the Company
and are fully paid and non-assessable (except as otherwise described in
the Registration Statement), and none of such capital shares was issued
in violation of preemptive or other similar rights of any
securityholder of the Company.
(9) Authorization of this Underwriting Agreement. This
Underwriting Agreement has been duly authorized, executed and delivered
by the Company.
(10) Authorization of the Shares. The Shares to be issued and
sold pursuant to this Agreement have been duly authorized and, when
issued and delivered to you against payment therefor as provided
hereunder, will have been validly issued and will be fully paid,
non-assessable (except as otherwise described in the Registration
Statement) and free of preemptive or similar rights; the Preferred
Shares conform to the provisions of the
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Articles Supplementary; 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 or
the Prospectus and except for awards under the Company's Incentive
Share Award Plan made in the ordinary course of business; all
outstanding Common Shares, except for shares issued pursuant to the
Company's Incentive Share Award Plan and shares issued to the Advisor
(as defined below) and its affiliates, are listed on the New York Stock
Exchange, Inc. (the "NYSE") and the company knows of no reason or set
of facts which is likely to result in the delisting of such Common
Shares or the inability to list the Shares; and there are no rights of
holders of securities of the Company to the registration of Common
Shares or other securities that would require inclusion of such Common
Shares or other securities in the offering of the Shares.
(11) Descriptions of the Shares. The Shares will conform in
all material respects to the statements relating thereto contained in
the Prospectus.
(12) Absence of Defaults and Conflicts. Neither the Company
nor any of its subsidiaries is in violation of its declaration of
trust, charter or by-laws or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which it or any
of them may be bound, or to which any of the assets, properties or
operations of the Company or any of its subsidiaries is subject
(collectively, "Agreements and Instruments"), except for such defaults
that would not result in a Material Adverse Effect. The execution,
delivery and performance of this Underwriting Agreement and any other
agreement or instrument entered into or issued or to be entered into or
issued by the Company in connection with the transactions contemplated
hereby or thereby or in the Registration Statement and the Prospectus
and the consummation of the transactions contemplated herein and in the
Registration Statement and the Prospectus (including the issuance and
sale of the Shares and the use of the proceeds from the sale of the
Shares as described under the caption "Use of Proceeds") and compliance
by the Company with its obligations hereunder and thereunder have been
duly authorized by all necessary corporate action and do not and will
not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any assets, properties or
operations of the Company or any of its subsidiaries pursuant to, any
Agreements and Instruments, nor will such action result in any
violation of the provisions of the charter or bylaws of the Company or
any of its subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its subsidiaries or any of
their assets, properties or operations. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Company or
any of its subsidiaries.
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(13) Absence of Labor Dispute. To the knowledge of the
Company, no labor problem exists or is imminent with employees of the
Company or any of its subsidiaries that could have a Material Adverse
Effect.
(14) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or to
the knowledge of the Company threatened, against or affecting the
Company or any of its subsidiaries which is required to be disclosed in
the Registration Statement and the Prospectus (other than as stated
therein), or which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially and
adversely affect the consummation of the transactions contemplated
under the Prospectus, this Underwriting Agreement, or the performance
by the Company of its obligations hereunder. The aggregate of all
pending legal or governmental proceedings to which the Company or any
of its subsidiaries is a party or of which any of their respective
assets, properties or operations is the subject which are not described
in the Registration Statement and the Prospectus, including ordinary
routine litigation incidental to the business, could not reasonably be
expected to result in a Material Adverse Effect.
(15) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(16) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency, domestic or foreign, is necessary or required for the due
authorization, execution and delivery by the Company of this
Underwriting Agreement or for the performance by the Company of the
transactions contemplated under the Prospectus or this Underwriting
Agreement, except such as may be required and will be obtained at or
prior to the Closing Time 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 documents to occur after the Closing Time 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.
(17) Possession of Intellectual Property. 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 (other
than conflicts or infringements that, if proven, would not have a
Material Adverse Effect), and neither the Company nor any of its
subsidiaries knows of any basis therefor.
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(18) Possession of Licenses and Permits. To the best knowledge
of the Company, each lessee of the Current Hotels has, and as of the
Closing Time will have, all permits, licenses, approvals, certificates,
franchises and authorizations of governmental or regulatory authorities
("Approvals") as may be necessary to lease, operate or manage the
Current Hotels in the manner described in or contemplated by the
Prospectus, except for those Approvals the absence of which would not
have a Material Adverse Effect.
(19) Title to Property. The Company and its subsidiaries have
good and marketable title to all real property owned by the Company and
its subsidiaries and good title to all other properties owned by them,
in each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind, except (A)
as otherwise stated in the Registration Statement and the Prospectus,
(B) 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 or (C) those which do
not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be made
of such property by the Company or any of its subsidiaries. All of the
leases and subleases material to the business of the Company and its
subsidiaries considered as one enterprise, and under which the Company
or any of its subsidiaries holds properties described in the
Prospectus, are in full force and effect, and neither the Company nor
any of its subsidiaries has received any notice of any material claim
of any sort that has been asserted by anyone adverse to the rights of
the Company or any of its subsidiaries under any of the leases or
subleases mentioned above, or affecting or questioning the rights of
the Company or such subsidiary of the continued possession of the
leased or subleased premises under any such lease or sublease.
(20) Investment Company Act. The Company is not, and upon the
issuance and sale of the Shares as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "1940 Act").
(21) Environmental Laws. The Company has received and reviewed
certain environmental reports on (which included physical inspection of
the surface of) each Current Hotel's property and has obtained certain
representations and warranties relating to environmental matters from
the sellers of the Current Hotels set forth in purchase agreements
therefor. Except as described in the Prospectus, (i) the Company, and,
to its knowledge, each Current Hotel's property, is, and as of the
Closing Time 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 or 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 Time will receive, all permits, licenses or other approvals
required under applicable Environmental Laws to conduct the respective
hotel businesses presently conducted at each Current Hotel's property
and (iii) the Company or, to its knowledge, its lessees are, or as of
the Closing Time 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
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Prospectus or as would not, singly or in the aggregate, have a Material
Adverse Effect. 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 Time will, singly or in the aggregate, have
a Material Adverse Effect. The Company has received and reviewed
engineering reports on each Current Hotel's property, has obtained
certain representations and warranties from the sellers of the Current
Hotels set forth in purchase agreements therefor and has conducted
physical inspections of each Current Hotel's property. In respect of
each Current Hotel, (i) each Current Hotel is not in violation of any
applicable building code, zoning ordinance or other law or regulation,
except where such violation of any applicable building code, zoning
ordinance or other law or regulation would not, singly or in the
aggregate, have a Material Adverse Effect; (ii) the Company has not
received notice of any proposed material special assessment or any
proposed change in any property tax, zoning or land use laws or
availability of water affecting any Current Hotel that would have,
singly or in the aggregate, a Material Adverse Effect; (iii) except as
disclosed in the Prospectus, there does not exist any material
violation of any declaration of covenants, conditions and restrictions
with respect to any Current Hotel that would have, singly or in the
aggregate, a Material Adverse Effect, 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 Current Hotel (the
"Improvements") are free of any and all material physical, mechanical,
structural, design and construction defects that would have, singly or
in the aggregate, a Material Adverse Effect 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.
(22) REIT Qualification. The Company is organized in
conformity with the requirements for qualification, and, as of the date
hereof the Company operates, and as of Closing Time the Company will
operate, in a manner that qualifies the Company as a "real estate
investment trust" under the Internal Revenue Code of 1986, as amended
(the "Code"), and the rules and regulations thereunder, for 1999 and
subsequent years. The Company qualified as a real estate investment
trust under the Code for each of the taxable years ended December 31,
1995 through December 31, 1998.
(23) Possession of Insurance. The Company and its Current
Hotels are, and as of the Closing Time 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 or
its tenants 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. 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
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irrevocable commitment to issue such a policy) on all of the Current
Hotels owned by the Company or its subsidiaries and such title
insurance is in full force and effect.
(24) Acquisition Agreements. The Acquisition Agreements
pursuant to which the Company expects to acquire the Additional Hotels
(including any Additional Hotels which the Company may determine to
acquire after the Closing Time) are in full force and effect. The
Company intends and reasonably expects to consummate the acquisition
and lease of all Additional Hotels not owned or acquired by it as of
the Closing Time as expeditiously as possible after the Closing Time,
including as and when the construction of certain of such properties is
completed.
(25) Absence of Indebtedness. At the Closing Time, the Company
will have no indebtedness for money borrowed except (i) amounts
outstanding under the Company's $300 million aggregate principal amount
credit facility (the "Credit Facility"), (ii) the Company's 7% Senior
Notes due 2008, (iii) the Company's 8 1/4% Monthly Income Senior Notes
due 2005, (iv) the Company's 8 1/2% Monthly Income Senior Notes due
2009, (v) equipment financing arrangements in respect of personal
property located at certain Current Hotels which have been entered into
in the ordinary course of business and have an aggregate outstanding
balance not in excess of $1 million, and (vi) any indebtedness as to
which you shall have given your prior written consent.
(26) Good Standing of the Advisor. 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, Inc. (the "Advisor"), whether or not arising in the ordinary
course of business, that would have a Material Adverse Effect. The
Advisor (A) is a corporation 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. 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 limited by (a) the effect of
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
or other similar laws relating to or affecting the rights or remedies
of creditors or (b) the effect of general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity
or at law).
(b) Officers' Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries and delivered to you or to your counsel
in connection with the offering of the Shares shall be deemed a representation
and warranty by the Company to you as to the matters covered thereby on the date
of such certificate.
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SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Shares. Your commitment to purchase the Shares pursuant to the
terms hereof shall be deemed to have been made on the basis of the
representations, warranties and agreements herein contained and shall be subject
to the terms and conditions herein set forth.
(b) Over-allotment Option. In addition, on the basis of the
representations and warranties herein included and subject to the terms and
conditions herein set forth, the Company hereby grants an option to you to
purchase up to an additional 450,000 Shares at the purchase price set forth on
the first page of this Agreement. The option hereby granted will expire 30 days
after the date of this Agreement and may be exercised in whole or in part from
time to time only for the purpose of covering over-allotments which may be made
in connection with the offering and distribution of the Initial Shares upon
notice by you to the Company setting forth the number of Option Shares as to
which you are then exercising the option and the time, date and place of payment
and delivery for such Option Shares. Any such time and date of delivery (a "Date
of Delivery") shall be determined by you but shall not be later than seven full
business days, nor earlier than two full business days, after the exercise of
said option, nor in any event prior to Closing Time, unless otherwise agreed
upon by you and the Company.
(c) Payment. Payment of the purchase price for, and delivery of, the
Initial Shares shall be made at the offices of Xxxxxxxx & Worcester LLP, Boston,
Massachusetts, or at such other place as shall be agreed upon by you and the
Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs
after 4:30 P.M. (Eastern time) on any given day) business day following the date
of this Agreement, or such other time not later than ten business days after
such date as shall be agreed upon by you and the Company (such time and date of
payment and delivery being herein called "Closing Time"). In addition, in the
event that the over-allotment option described in (b) above is exercised by you,
payment of the underwriting price for and delivery of the Option Shares shall be
made at the above-mentioned office of Xxxxxxxx & Worcester LLP, or at such other
place as shall be agreed upon by you and the Company on each Date of Delivery as
specified in the notice to the Company. Payment shall be made to the Company by
wire transfer of immediately available funds to a bank account designated by the
Company, against delivery to you of certificates for the Shares to be purchased
by you.
(d) Registration. The Shares shall be issued and registered in such
names as you shall request not later than one business day prior to the Closing
Time or the Date of Delivery, as the case may be. The Shares shall be made
available for inspection not later than 10:00 a.m. (Eastern Time) on the
business day prior to the Closing Time or the Date of Delivery, as the case may
be, at the office of The Depository Trust Company or its designated custodian.
SECTION 3. Covenants of the Company. The Company covenants with you as
follows:
(a) Immediately following the execution of this Agreement, the Company
will prepare a Prospectus Supplement setting forth the number of Shares covered
thereby and their terms not otherwise specified in the Prospectus, your names,
the price at which the Shares are to be purchased by you from the Company, and
such other information as you and the Company deem appropriate in connection
with the offering of the Shares; and the Company will promptly
11
transmit copies of the Prospectus Supplement to the Commission for filing
pursuant to Rule 424(b) of the 1933 Act Regulations and will furnish to you as
many copies of the Prospectus (including such Prospectus Supplement) as you
shall reasonably request.
(b) Until the termination of the initial offering of the Shares, the
Company will notify you immediately, and confirm the notice in writing, (i) of
the effectiveness of any amendment to the Registration Statement, (ii) of the
transmittal to the Commission for filing of any supplement or amendment to the
Prospectus or any document to be filed pursuant to the 1934 Act, (iii) of the
receipt of any comments from the Commission with respect to the Shares, (iv) of
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus with respect to the Shares or for
additional information relating thereto, and (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose. The Company
will make every reasonable effort to prevent the issuance of any such stop order
and, if any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(c) Until the termination of the initial offering of the Shares, the
Company will give you notice of its intention to file or prepare any
posteffective amendment to the Registration Statement or any amendment or
supplement to the Prospectus (including any revised prospectus which the Company
proposes for use by you in connection with the offering of the Shares which
differs from the prospectus on file at the Commission at the time that the
Registration Statement becomes effective, whether or not such revised prospectus
is required to be filed pursuant to Rule 424(b) of the 1933 Act Regulations),
will furnish you with copies of any such amendment or supplement a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file any such amendment or supplement or use any such prospectus to
which your counsel shall reasonably object.
(d) The Company will deliver to you a conformed copy of the
Registration Statement as originally filed and of each amendment thereto filed
prior to the termination of the initial offering of the Shares (including
exhibits filed therewith or incorporated by reference therein and the documents
incorporated by reference into the Prospectus pursuant to Item 12 of Form S3).
(e) The Company will furnish to you, from time to time during the
period when the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, such number of copies of the Prospectus (as amended or supplemented)
as you may reasonably request for the purposes contemplated by the 1933 Act, the
1933 Act Regulations, the 1934 Act or 1934 Act Regulations.
(f) Until the termination of the initial offering of the Shares, if any
event shall occur as a result of which it is necessary, in the opinion of your
counsel, to amend or supplement the Prospectus in order to make the Prospectus
not misleading in the light of the circumstances existing at the time it is
delivered, the Company will either (i) forthwith prepare and furnish to you an
amendment of or supplement to the Prospectus or (ii) make an appropriate filing
pursuant to Section 13, 14 or 15 of the 1934 Act, in form and substance
reasonably satisfactory to your counsel, which will amend or supplement the
Prospectus so that it will not include an 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 existing at the time it is delivered, not
misleading.
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(g) The Company will endeavor in good faith, in cooperation with you,
to qualify the Shares for offering and sale under the applicable securities laws
and real estate syndication laws of such states and other jurisdictions of the
United States as you may designate; provided that, in connection therewith, the
Company shall not be required to qualify as a foreign corporation or trust or to
file any general consent to service of process. In each jurisdiction in which
the Shares have been so qualified the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for so long as required for the distribution of the
Shares.
(h) The Company will make generally available to its security holders
as soon as reasonably practicable, but not later than 90 days after the close of
the period covered thereby, an earning statement of the Company (in form
complying with the provisions of Rule 158 of the 1933 Act Regulations) covering
a period of at least twelve months beginning not later than the first day of the
Company's fiscal quarter next following the effective date of the Registration
Statement. "Earning statement," "make generally available" and "effective date"
will have the meanings contained in Rule 158 of the 1933 Act Regulations.
(i) The Company will use the net proceeds received by it from the sale
of the Shares in the manner specified in the Prospectus under the caption "Use
of Proceeds" in all material respects.
(j) The Company currently intends to continue to qualify as a "real
estate investment trust" under the Code, and use its best efforts to continue to
meet the requirements to qualify as a "real estate investment trust" under the
Code.
(k) The Company will timely file any document which it is required to
file pursuant to the 1934 Act prior to the termination of the offering of the
Shares.
(l) The Company will use its best efforts to effect the listing of the
Shares on the NYSE.
(m) The Company will not, during a period of 30 days from the date of
this Agreement, without Xxxxxxx Xxxxx'x prior written consent, register, offer,
sell, contract to sell, grant any option to purchase or otherwise dispose of
Preferred Shares or any securities convertible into or exercisable or
exchangeable for Preferred Shares, or warrants to purchase Preferred Shares,
other than the Shares which are to be sold pursuant to this Agreement.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Underwriting Agreement, including (i)
the preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, issuance and delivery of the Shares and any
certificates for the Shares to you, including any transfer taxes and any stamp
or other duties payable upon the sale, issuance or delivery of the Shares to
you, (iii) the fees and disbursements of the Company's counsel, accountants and
other advisors or agents, as well as their respective counsel, (iv) the
qualification of the Shares under state securities laws in accordance with the
provisions of Section 3(g) hereof, including filing fees and the reasonable fees
and disbursements of counsel in connection therewith and in connection with the
preparation, printing and delivery
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of any Blue Sky Survey, and any amendment thereto, (v) the printing and delivery
to you of copies of the Prospectus and any amendments or supplements thereto,
(vi) the fees and expenses incurred in connection with the listing of the Shares
on the NYSE, (vii) the filing fees incident to, and the reasonable fees and
disbursements of your counsel in connection with, the review, if any, by the
National Association of Securities Dealers, Inc. (the "NASD") of the terms of
the sale of the Shares and (viii) the cost of providing any CUSIP or other
identification numbers for the Shares.
(b) Termination of Agreement. If this Underwriting Agreement is
terminated by you in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse you for all of your outofpocket
expenses, including the reasonable fees and disbursements of your counsel.
SECTION 5. Conditions of Underwriters' Obligations. Your obligations to
purchase and pay for the Shares pursuant to the terms hereof are subject to the
accuracy of the representations and warranties of the Company contained in
Section 1 hereof or in certificates of any officer of the Company or any of its
subsidiaries delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall have been instituted or be pending or
threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of your counsel. A prospectus containing information relating to
the description of the Shares, the specific method of distribution and similar
matters shall have been filed with the Commission in accordance with Rule
424(b)(1), (2), (3), (4) or (5), as applicable. At Closing Time the rating
assigned by any nationally recognized statistical rating organization to any
preferred shares of the Company, as of the date hereof shall not have been
lowered since such date nor shall any such rating organization have publicly
announced that is has placed any preferred shares of the Company on what is
commonly termed a "watch list" for possible downgrading.
(b) Opinion of Counsel for Company. At Closing Time, you shall have
received the favorable opinion, dated as of Closing Time, of Xxxxxxxx &
Worcester, LLP, counsel for the Company, in form and substance satisfactory to
your counsel, to the effect set forth in Exhibit B hereto. In rendering their
opinion, such counsel may rely on an opinion dated the Closing Time of Xxxxxxx
Xxxxx Xxxxxxx & Ingersoll, 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. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(c) Opinion of Special Maryland Counsel for Company. At Closing Time,
you shall have received the favorable opinion, dated as of Closing Time, of
Xxxxxxx Xxxxx Xxxxxxx &
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Ingersoll, LLP, special Maryland counsel for the Company, in form and substance
satisfactory to your counsel, to the effect as your counsel may reasonably
request.
(d) Opinion of Counsel for Underwriters. At Closing Time, you shall
have received the favorable opinion, dated as of Closing Time, of Xxxxx & Xxxx
LLP, counsel for the Underwriters, with respect to the matters set forth in
paragraphs (7), (8), (9), (17), and (18) of Exhibit B and to the following
effect: nothing has come to their attention that would lead them to believe that
the Registration Statement (including any Rule 462(b) Registration Statement) or
any post-effective amendment thereto (except for financial statements and
supporting schedules and other financial data included therein or omitted
therefrom, as to which they make no statement), at the time the Registration
Statement (including any Rule 462(b) Registration Statement) or any
post-effective amendment thereto (including the filing of the Company's Annual
Report on Form 10K with the Commission) became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus or any amendment or supplement thereto (except for financial
statements and supporting schedules and other financial data included therein or
omitted therefrom, as to which they make no statement), at the time the
Prospectus was issued, at the time any such amended or supplemented prospectus
was issued or at the Closing Time, included or includes an 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, such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New
York, the federal law of the United States and the General Corporation Law of
the State of Delaware, upon the opinions of counsel satisfactory to you and may
rely on an opinion dated the Closing Time of Xxxxxxx, Xxxxx Xxxxxxx and
Xxxxxxxxx, LLP as to matters governed by the laws of the State of Maryland. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and its subsidiaries and certificates of public officials.
(e) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any Material Adverse Change, and you shall have
received a certificate of the President or a Vice President of the Company and
of the chief financial officer or chief accounting officer of the Company, dated
as of Closing Time, to the effect that (i) there has been no Material Adverse
Change, (ii) the representations and warranties in Section 1(a) are true and
correct with the same force and effect as though expressly made at and as of the
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to the
Closing Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted, are pending or, to the best of such officers' knowledge, are
threatened by the Commission.
(f) Advisor's Certificate. At Closing Time, there shall not have been,
since the respective dates as of which information is given in the Prospectus,
any material adverse change in the business, operations, earnings, prospects,
properties or condition (financial or otherwise) of the Advisor, whether or not
arising in the ordinary course of business; and you shall have
15
received, at Closing Time, a certificate of the President or a Vice President of
the Advisor evidencing compliance with this subsection (f).
(g) Accountants' Comfort Letter. At the time of the execution of this
Underwriting Agreement, you shall have received from Xxxxxx Xxxxxxxx LLP a
letter dated such date, in form and substance satisfactory to you, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectus.
(h) Bring-down Comfort Letter. At Closing Time, you shall have received
from Xxxxxx Xxxxxxxx LLP a letter, dated as of Closing Time, to the effect that
they reaffirm the statements made in the letter furnished pursuant to subsection
(g) of this Section 5, except that the specified date referred to shall be a
date not more than three business days prior to the Closing Time.
(i) No Objection. If the Registration Statement or the offering of the
Shares has been filed with the NASD for review, the NASD shall not have raised
any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(j) Additional Documents. At Closing Time, your counsel shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the Shares as
herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Shares as herein contemplated shall be reasonably
satisfactory in form and substance to you and your counsel.
(k) Date of Delivery Documentation. In the event you exercise the
option described in Section 2 hereof to purchase all or any portion of the
Option Shares, the representations and warranties of the Company included herein
and the statements in any certificates furnished by the Company hereunder shall
be true and correct as of the Date of Delivery (except those which speak as of a
certain date, in which case as of such date), and you shall have received:
(i) A certificate of the President or a Vice President and of
the chief financial officer or chief accounting officer of the Company,
dated such Date of Delivery, confirming that their certificate
delivered at Closing Time pursuant to Section 5(e) hereof remains true
as of such Date of Delivery, except with respect to transactions as to
which you shall have given your prior written consent.
(ii) Certificate of the President or Vice President of the
Advisor confirming that his certificate delivered at Closing Time
pursuant to Section 5(f) hereof remains true as of such Date of
Delivery.
(iii) The favorable opinion of Xxxxxxxx & Worcester LLP,
counsel for the Company, in form and substance satisfactory to your
counsel, dated such Date of Delivery, relating to the Option Shares and
otherwise to the same effect as the opinion required by Section 5(b)
hereof.
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(iv) The favorable opinion of Xxxxx & Xxxx LLP, counsel for
the Underwriters, dated such Date of Delivery, relating to the Option
Shares and otherwise to the same effect as the opinion required by
Section 5(d) hereof.
(v) A letter from Xxxxxx Xxxxxxxx LLP, dated such Date of
Delivery, substantially the same in scope and substance as the letter
furnished to you pursuant to Section 5(h) hereof.
(l) Termination of this Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
this Underwriting Agreement may be terminated by you by notice to the Company at
any time at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 6, 7 and 8 shall survive any such termination and remain
in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls each
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Underwriters), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue
17
statement or omission made in reliance upon and in conformity with written
information furnished to the Company by the Underwriters expressly for use in
the Registration Statement (or any amendment thereto), or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); and
provided, further, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter, or the
benefit of any person controlling any Underwriter, if a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto and excluding documents incorporated or deemed
to be incorporated by reference therein) was not sent or given by or on behalf
of such Underwriter to such person asserting any such losses, claims, damages or
liabilities at or prior to the written confirmation of the sale of such Shares
to such person, if required by law so to have been delivered, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage or expense.
(b) Indemnification of Company, Trustees and Officers. Each Underwriter
agrees to indemnify and hold harmless the Company, its trustees, each of its
officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the Underwriters expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. The indemnifying party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such indemnified parties
and payment of all fees and expenses. The indemnified parties 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 indemnified parties unless (i) the employment of such counsel
shall have been specifically authorized in writing by the indemnifying party,
(ii) the indemnifying party 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 indemnified parties and the indemnifying party and the
indemnified parties shall have been advised by such counsel that there may be
one or more legal defenses available to them which are different from or
additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified parties, it being understood, however, that the
indemnifying party 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
18
one separate firm of attorneys (in addition to any local counsel) for the
indemnified parties, which firm shall be designed in writing by indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred). No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (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
pursuant hereto or (ii) if the allocation provided by clause (i) 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, on the one hand, and the Underwriters, on the other hand,
in connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the Shares
pursuant hereto shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of such Shares (before deducting expenses)
received by the Company and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the Prospectus, bear to
the aggregate initial public offering price of such Shares as set forth on such
cover.
The relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative
19
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 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, the Underwriters
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Shares underwritten by the Underwriters and
distributed to the public were offered to the public exceeds the amount of any
damages which the Underwriters have otherwise been required to pay by reason of
any 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 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls each
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each trustee of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Underwriting Agreement or in certificates of officers of the Company or any of
its subsidiaries submitted pursuant hereto or thereto shall remain operative and
in full force and effect, regardless of any investigation made by or on behalf
of the Underwriters or controlling persons, or by or on behalf of the Company,
and shall survive delivery of and payment for the Shares.
SECTION 9. Termination.
(a) You may terminate this Agreement, by notice to the Company, at any
time at or prior to Closing Time (i) if there has been, since the respective
dates as of which information is given in the Registration Statement, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise or the Advisor, whether or not arising
in the ordinary course of business, which would make it, in your reasonable
judgment, impracticable or inadvisable to market the Shares or enforce contracts
for the sale of the Shares, (ii) if there has occurred any material adverse
change in the financial markets in the United States or any
20
outbreak of hostilities or escalation of existing hostilities or other calamity
or crisis the effect of which on the financial markets of the United States is
such as to make it, in the your reasonable judgment, impracticable or
inadvisable to market the Shares or enforce contracts for the sale of the
Shares, (iii) if trading in the Company's Common Shares has been suspended by
the Commission, or if trading generally on either the New York Stock Exchange or
the American Stock Exchange has been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by either of said exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by Federal
or New York authorities, or (iv) if the ratings assigned to preferred shares or
unsecured debt securities of the Company by any "nationally recognized
statistical rating organization" as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the 1933 Act, as of the date hereof shall have
been lowered since such date or if any such rating organization shall have
publicly announced that it has placed any preferred shares of the Company on
what is commonly termed a "watch list" for possible downgrading.
(b) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of any party to any other party except as
provided in Section 4, and provided further that Sections 6 and 7 hereof shall
survive such termination.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at the Closing Time to purchase the Initial
Shares which it or they are obligated to purchase hereunder (the "Defaulted
Securities"), then Xxxxxxx Xxxxx shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, Xxxxxxx Xxxxx shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the Initial Shares to be purchased on such date pursuant hereto, the
nondefaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all nondefaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
Initial Shares to be purchased on such date pursuant hereto, this
Underwriting Agreement shall terminate without liability on the part of
any nondefaulting Underwriter or the Company.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either Xxxxxxx Xxxxx or the Company shall have the right to
postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or the Prospectus or
in any other documents or arrangements.
21
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to you shall be
directed to Xxxxxxx Xxxxx, World Financial Center, North Tower, New York, New
York 102811201, attention of Tjarda van X. Xxxxxxx; and notices to the Company
shall be directed to it at 000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000, attention of
Xxxx X. Xxxxxx.
SECTION 12. Parties. This Underwriting Agreement shall inure to the
benefit of and be binding upon the Company and you and its and your respective
successors. Nothing expressed or mentioned in this Underwriting Agreement is
intended or shall be construed to give any person, firm or corporation, other
than you and the Company and its respective successors and the controlling
persons and officers and trustees referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Underwriting Agreement or any provision herein
contained. This Underwriting Agreement and all conditions and provisions hereof
are intended to be for the sole and exclusive benefit of the parties hereto and
their respective successors, and said controlling persons and officers and
trustees and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of the Shares from you shall be
deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS UNDERWRITING AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
22
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this Underwriting Agreement, along with all counterparts, will become a binding
agreement between you and the Company in accordance with its terms.
Very truly yours,
HOSPITALITY PROPERTIES TRUST
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: President
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx Barney Inc.
X.X. Xxxxxxx & Sons, Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
Prudential Securities Incorporated
By: XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By: /s/ Xxxxxxxxx Xxxx Xxxxx
Name: Xxxxxxxxx Xxxx Xxxxx
Title: Vice-President
For themselves and as Representatives of the several
Underwriters named in Schedule A hereto.
Exhibit A
Number of
Name of Underwriter Initial Securities
------------------- ------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated.................................... 519,000
Xxxxxxx Xxxxx Barney Inc. .................................. 519,000
X.X. Xxxxxxx & Sons, Inc.................................... 519,000
Xxxxxx Xxxxxxx & Co. Incorporated........................... 519,000
Prudential Securities Incorporated.......................... 519,000
ABN AMRO Incorporated....................................... 15,000
BT Alex. Xxxxx Incorporated................................. 15,000
Xxxxxx X. Xxxxx & Co. Incorporated.......................... 15,000
Bear, Xxxxxxx & Co. Inc..................................... 15,000
CIBC Xxxxxxxxxxx Corp....................................... 15,000
Credit Lyonnaise Securities (USA) Inc....................... 15,000
Xxxx Xxxxxxxx Incorporated.................................. 15,000
X.X. Xxxxxxxx & Co.......................................... 15,000
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation......... 15,000
Dresdner Kleinwort Xxxxxx North America LLC................. 15,000
EVEREN Securities, Inc...................................... 15,000
Xxxxxxxxxx & Co. Inc........................................ 15,000
J.J.B Xxxxxxxx, X.X. Xxxxx, Inc............................. 15,000
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated........................ 15,000
Xxxxxx Brothers Inc......................................... 15,000
NationsBanc Xxxxxxxxxx Securities LLC....................... 15,000
NatWest Securities Limited.................................. 15,000
Xxxxxxx Xxxxx & Associates, Inc............................. 15,000
The Xxxxxxxx-Xxxxxxxx Company, LLC.......................... 15,000
Xxxxx Capital Markets, A Division of
First Chicago Capital Markets, Inc.................... 15,000
XX Xxxxx Securities Corporation............................. 15,000
Xxxxxxxx & Co. Inc.......................................... 15,000
Sutro & Co. Incorporated.................................... 15,000
Xxxxxx Xxxxxxx Incorporated................................. 15,000
U.S. Bancorp Xxxxx Xxxxxxx Inc.............................. 15,000
Warburg Dillon Read LLC..................................... 15,000
Wheat First Union, a Division of
First Union Capital Markets Corp...................... 15,000
---------
Total....................................................... 3,000,000
=========
A-1
Exhibit B
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(1) 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.
(2) The Company has trust power to own and lease its properties and to
conduct its business in all material respects as described in the Prospectus and
to enter into and perform its obligations under the Underwriting Agreement.
(3) The Company is duly qualified to transact business and is in good
standing in each jurisdiction other than the State of Maryland in which the
ownership or leasing of its properties requires such qualification, except where
the failure to so qualify or be in good standing would not result in a Material
Adverse Effect.
(4) Each Subsidiary (a) 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, (b) has the trust power to own and lease its properties and to conduct
its business, in all material respects as described in the Prospectus, and (c)
is duly qualified to transact business and is in good standing in each
jurisdiction other than the State of Maryland in which the ownership or leasing
of its properties requires such qualification, except where the failure to so
qualify or be in good standing would not result in a Material Adverse Effect.
(5) Except as otherwise stated in the Registration Statement and the
Prospectus, all of the issued and outstanding capital shares of each Subsidiary
have been duly and validly authorized and issued, are fully paid and
non-assessable, and, to such counsel's knowledge, are owned by the Company,
directly or through subsidiaries, free and clear of any adverse claim. None of
such capital shares of any Subsidiary was issued in violation of preemptive or,
to such counsel's knowledge, other similar rights of any holder (other than the
Company) of capital shares of such Subsidiary.
(6) Except as otherwise set forth in the opinions expressed in
paragraph 4 of the opinion of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP, set forth
as Exhibit 1 to such counsel's opinion, all the authorized, issued and
outstanding capital shares of the Company have been duly authorized and validly
issued by the Company and are fully paid and non-assessable (except as otherwise
described in the Registration Statement), and none of such capital shares was
issued in violation of preemptive or, to such counsel's knowledge, other similar
rights of any holder of capital shares of the Company.
B-1
(7) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(8) The Shares have been duly authorized and, when issued and delivered
to the Underwriters against payment therefor in accordance with the terms of the
Underwriting Agreement, will be validly issued, fully paid and non-assessable
(except as otherwise described in the Registration Statement), and will be free
of any preemptive or, to such counsel's knowledge, other similar rights that
entitle any person (other than the Underwriters and their successors and
assigns) to acquire any Shares upon the issuance thereof by the Company.
(9) The Preferred Shares conform as to legal matters in all material
respects to the descriptions thereof in the Prospectus.
(10) (a) The statements under the captions (i) "The Company,"
"Management" and "Description of the Series A Preferred Shares" in the
Prospectus Supplement and (ii) "Description of Preferred Shares," "Limitation of
Liability; Shareholder Liability" and "Redemption; Trustees; Business
Combinations and Control Share Acquisitions" in the Prospectus, in each case as
of the date of the Prospectus, and (b) the statements under the captions (i)
"Items 1 and 2. Business and Properties -- The Company --Principal Lease
Features," "Items 1 and 2. Business and Properties -- Investment Advisor," "Item
5. Market for Our Common Equity and Related Stockholder Matters," and "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations --Overview" and "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations --Liquidity and Capital Resources"
in the Annual Report on Form 10-K, and (ii) "Other Information -- Certain
Relationships and Related Transactions" in the Company's Proxy Statement
relating to the May 18, 1999 Annual Meeting of Shareholders (incorporated by
reference in the Form 10-K), in each case as of the date of filing of such
Incorporated Document, insofar as such statements constitute a summary of legal
matters, documents or proceedings referred to therein, fairly present in all
material respects the information called for with respect to such legal matters,
documents and proceedings.
(11) The statements under the captions "Federal Income Tax
Considerations" in the Prospectus Supplement, as of the date of the Prospectus,
and the statements under the captions "Federal Income Tax Considerations" and
"ERISA Plans, Xxxxx Plans and Individual Retirement Accounts" under the caption
"Items 1 and 2. Business and Properties" in the Annual Report on Form 10-K, as
of the date of filing of the Annual Report on Form 10-K, insofar as such
statements constitute a summary of legal matters or documents referred to
therein, fairly present in all material respects the information called for with
respect to such legal matters and documents.
(12) To such counsel's knowledge, except as disclosed in the Prospectus
neither the Company nor any Subsidiary is in violation of its declaration of
trust or by-laws and no default by the Company or any of the Subsidiaries exists
in the due performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed or incorporated by reference
as an exhibit to the Registration Statement and to which the Company or any of
its subsidiaries is a party or by
B-2
which it or any of them may be bound or to which any of the assets, properties
or operations of the Company or any Subsidiary is subject, except for such
violations or defaults which would not result in a Material Adverse Effect.
(13) The execution, delivery and performance of the Underwriting
Agreement and the consummation of the transactions contemplated in the
Underwriting Agreement and in the Registration Statement and the Prospectus
(including the issuance and sale of the Shares and the use of the proceeds from
the sale of the Shares as described under the caption "Use of Proceeds" in the
Prospectus Supplement) and compliance by the Company with its obligations
thereunder do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or default or
Repayment Event under, or result in the creation or imposition of any lien,
charge or encumbrance upon any assets, properties or operations of the Company
or of any Subsidiary pursuant to, any material contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or any other agreement or
instrument that is described or referred to in the Registration Statement or the
Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement and to which the Company or any of its subsidiaries is a
party or by which it or any of them may be bound or to which any of the assets,
properties or operations of the Company or any Subsidiary is subject, nor will
such action result in any violation of the provisions of the declaration of
trust or by-laws of the Company or any Subsidiary or in any material respect any
applicable law, statute, rule, regulation, judgment, order, writ or decree,
known to such counsel, of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their assets, properties or operations, in each case
except as disclosed in the Prospectus.
(14) To such counsel's knowledge, except as disclosed in the Prospectus
there is not pending or threatened any action, suit, proceeding, inquiry or
investigation to which the Company or any Subsidiary is a party or to which the
assets, properties or operations of the Company or any Subsidiary is subject,
before or by any court or government agency or body which would, if determined
adversely to the Company or such Subsidiary, result in a Material Adverse Effect
or materially and adversely affect the consummation of the transactions
contemplated under the Underwriting Agreement or the right or ability of the
Company to perform its obligations thereunder.
(15) To such counsel's knowledge, there is no contract or other
document which is required to be described in the Registration Statement or the
Prospectus that is not described therein or is required to be filed as an
exhibit to the Registration Statement which is not so filed.
(16) To such counsel's knowledge, there are no statutes or regulations
that are required to be described in the Prospectus that are not described as
required.
(17) The Registration Statement has been declared effective under the
1933 Act. Any required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b). To such
counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act and no proceedings for
that purpose have been initiated or are pending or threatened by the Commission.
B-3
(18) The Registration Statement and the Prospectus, excluding the
documents incorporated by reference therein, and each amendment or supplement to
the Registration Statement and Prospectus, excluding the documents incorporated
by reference therein, as of their respective effective or issue dates (other
than financial statements and other financial and statistical data and
schedules, as to which such counsel need not express any opinion), complied as
to form in all material respects with the requirements of the 1933 Act.
(19) Each Incorporated Document (other than financial statements and
other financial and statistical data and schedules, as to which such counsel
need not express any opinion) complied as to form in all material respects with
the 1934 Act when filed with the Commission.
(20) The relative rights, preferences, interests and powers of the
Preferred Shares are set forth in the Declaration of Trust, including the
Articles Supplementary relating to the Preferred Shares, and all such provisions
relating to the Preferred Shares are valid under Title 8 of the Corporations and
Associations Article of the Annotated Code of Maryland.
(21) No authorization, approval, consent, license, order or decree of,
or filing, registration or qualification with, any federal, Massachusetts,
Delaware or Maryland court or governmental authority or agency is necessary or
required for the due authorization, execution or delivery by the Company of the
Underwriting Agreement or for the performance by the Company of the transactions
contemplated under the Prospectus or the Underwriting Agreement, other than
those which have already been made, obtained or rendered as applicable.
(22) The Company is not, and upon the issuance and sale of the Shares
as contemplated by the Underwriting Agreement and the application of the net
proceeds therefrom as described in the Prospectus will not be, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
(23) The Company has qualified to be taxed as a real estate investment
trust pursuant to Sections 856-860 of the Code for each of the taxable years
ended December 31, 1995 through December 31, 1998, and the Company's current
anticipated investments and its current plan of operation will enable it to
continue to meet the requirements for qualification and taxation as a real
estate investment trust under the Code; actual qualification of the Company as a
real estate investment trust, however, will depend upon the Company's continued
ability to meet, and its meeting, through actual annual operating results and
distributions, the various qualification tests imposed under the Code.
(24) The Advisor is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, and has the requisite
corporate power and authority to conduct its business as described in the
Prospectus and to own and operate its material properties.
(25) 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.
(26) No facts have come to such counsel's attention that would lead
them to believe that (x) the Registration Statement, as of the time it became
effective under the 1933 Act,
B-4
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading or (y) the Prospectus, as of the date of issuance thereof
or at the Closing Time, included or includes an untrue statement of a material
fact or omitted or omits 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 such counsel need not express any views as to
the financial statements and other financial and statistical data and schedules
included in the Registration Statement or the Prospectus.
Such counsel need not express any opinion as to compliance with, or
filings with or authorizations, approvals, consents, licenses, orders,
registrations, qualifications or decrees under, state securities or "Blue Sky"
laws. Such counsel's opinions with respect to the validity or enforceability of
agreements may be qualified to the extent that the obligations, rights and
remedies of parties may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting generally creditors'
rights and remedies, and (ii) general principles of equity (regardless of
whether considered in a proceeding at law or in equity), and otherwise in a
manner acceptable to the Underwriter.
B-5
