EXHIBIT 99.9
HERSHA HOSPITALITY TRUST
(a Maryland real estate investment trust)
2,500,000 Common Shares
($0.01 Par Value)
UNDERWRITING AGREEMENT
April 20, 2004
UNDERWRITING AGREEMENT
April 20, 2004
UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
CNL Hospitality Partners, L.P. (the "Selling Stockholder"), a
shareholder of Hersha Hospitality Trust, a Maryland real estate investment trust
(the "Company"), proposes to sell to UBS Securities LLC (the "Underwriter"), an
aggregate of 2,500,000 shares (the "Firm Shares") of common shares, $ 0.01 par
value (the "Common Stock"), of the Company. In addition, solely for the purpose
of covering over allotments, the Selling Stockholder proposes to grant to the
Underwriter the option to purchase from the Selling Stockholder up to an
additional 316,460 shares of Common Stock (the "Additional Shares"). The Firm
Shares and the Additional Shares are hereinafter collectively sometimes referred
to as the "Shares." The Shares are described in the Prospectus which is referred
to below.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File No. 333-113227), as
amended, including a base prospectus, relating to the Shares, which incorporates
by reference documents which the Company has filed or will file in accordance
with the provisions of the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (collectively, the "Exchange Act"). The Company
has prepared a prospectus supplement (the "Prospectus Supplement") to the base
prospectus included as part of such registration statement setting forth the
terms of the offering, sale and plan of distribution of the Shares and
additional information concerning the Company and its business and the Selling
Stockholder. The Company has furnished to you, for use by the Underwriter and by
dealers, copies of one or more preliminary prospectuses, containing the base
prospectus included as part of such registration statement, as supplemented by a
preliminary Prospectus Supplement, and including the documents incorporated in
such base prospectus by reference (each a "Preliminary Prospectus"), relating to
the Shares. Except where the context otherwise requires, such registration
statement, as amended when it became effective, including all documents filed as
part thereof or incorporated by reference therein, and including any information
contained in a Prospectus (as defined below) subsequently filed with the
Commission pursuant to Rule 424(b) under the Act and also including any other
registration statement filed pursuant to Rule 462(b) under the Act,
collectively, are herein called the "Registration Statement," and the base
prospectus, including all documents incorporated therein by reference, included
in the Registration Statement, as supplemented by the Prospectus Supplement, in
the form filed by the Company with the Commission pursuant to Rule 424(b) under
the Act on or before the second business day following the date of this
Underwriting Agreement (the "Agreement") (or on such other day as the parties
may mutually agree), is herein called the "Prospectus." As used herein,
"business day" shall mean a day on which the New York Stock Exchange is open for
trading. Any reference herein to the Registration Statement, the Prospectus, any
Preliminary Prospectus or any amendment or supplement thereto shall be deemed to
refer to and include the documents incorporated by reference therein, and any
reference herein to the terms "amend," "amendment" or "supplement" with respect
to the Registration Statement, the Prospectus or any Preliminary Prospectus
shall be deemed to refer to and include the filing after the execution hereof of
any document with the Commission deemed to be incorporated by reference therein.
For purposes of this Agreement, all references to the Registration Statement,
the Prospectus, any Preliminary Prospectus or to any amendment or supplement
thereto shall be deemed to include any copy filed with the Commission pursuant
to its Electronic Data Gathering Analysis and Retrieval System ("XXXXX"), and
such copy shall be identical in content to any Prospectus or Preliminary
Prospectus delivered to the Underwriter for use in connection with the offering
of the Shares. As used herein, "business day" shall mean a day on which the New
York Stock Exchange is open for trading.
The Company, Hersha Hospitality Limited Partnership (the
"Partnership"), the Selling Stockholder and the Underwriter agree as follows:
1. Sale and Purchase. Upon the basis of the representations and warranties
and subject to the terms and conditions herein set forth, the Selling
Stockholder agrees to sell to the Underwriter and the Underwriter agrees to
purchase from the Selling Stockholder the Firm Shares at a purchase price of
$10.00 per Share. The Company and the Selling Stockholder are advised by the
Underwriter that it intends (i) to make a public offering of the Firm Shares as
soon as the Underwriter deems advisable after this Agreement has been executed
and delivered and (ii) initially to offer the Firm Shares upon the terms set
forth in the Prospectus. You may from time to time increase or decrease the
public offering price after the initial public offering to such extent as you
may determine.
In addition, the Selling Stockholder hereby grants to the Underwriter
the option to purchase, and upon the basis of the representations and warranties
and subject to the terms and conditions herein set forth, the Underwriter shall
have the right to purchase from the Selling Stockholder, all or a portion of the
Additional Shares as may be necessary to cover over-allotments made in
connection with the offering of the Firm Shares, at the same purchase price per
share to be paid by the Underwriter to the Selling Stockholder for the Firm
Shares. This option may be exercised by the Underwriter at any time and from
time to time on or before the thirtieth day following the date of the
Prospectus, by written notice to the Selling Stockholder. Such notice shall set
forth the aggregate number of Additional Shares as to which the option is being
exercised, and the date and time when the Additional Shares are to be delivered
(such date and time being herein referred to as the "additional time of
purchase"); provided, however, that the additional time of purchase shall not be
earlier than the time of purchase (as defined below) nor earlier than the second
business day after the date on which the option shall have been exercised nor
later than the tenth business day after the date on which the option shall have
been exercised.
2. Payment and Delivery. Payment of the purchase price for the Firm Shares
shall be made to the Selling Stockholder by Federal Funds wire transfer of
immediately available funds to one or more bank accounts designated by the
Selling Stockholder against delivery to the Underwriter of
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the Firm Shares through the facilities of The Depository Trust Company ("DTC")
for the account of the Underwriter. Such payment and delivery shall be made at
10:00 A.M., New York City time, on April 23, 2004 (unless another time shall be
agreed to by the Underwriter, the Selling Stockholder and the Company). The time
at which such payment and delivery are to be made is hereinafter sometimes
called "the time of purchase." Electronic transfer of the Firm Shares shall be
made to you at the time of purchase in such names and in such denominations as
you shall specify.
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner and at the same office as
the payment for the Firm Shares. Electronic transfer of the Additional Shares
shall be made to you at the additional time of purchase in such names and in
such denominations as you shall specify.
Deliveries of the documents described in Section 7 hereof with respect
to the purchase of the Shares shall be made at the offices of Underwriter's
Counsel and the address of its New York office, at 9:00 A.M., New York City
time, on the date of the closing of the purchase of the Firm Shares or the
Additional Shares, as the case may be.
3. I. Representations and Warranties of the Company. Each of the
representations and warranties made herein with respect to the Lessee are made
to the best of the Company's knowledge, after due inquiry. The Company and the
Partnership, jointly and severally, represent and warrant to and agree with the
Underwriter that:
(a) the Company meets the requirements for use of Form S-3 under the
Act. The Registration Statement has been filed with the Commission and has
been declared effective under the Act. The Company has not received, and
has no notice of, any order of the Commission preventing or suspending the
use of the Registration Statement, or threatening or instituting
proceedings for that purpose. Any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement
have been so described or filed. The Prospectus Supplement has been or will
be so prepared and will be filed pursuant to Rule 424(b) of the Act on or
before the second business day following the date of this Agreement or on
such other day as the parties may mutually agree. The Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act. Copies of the Registration
Statement, the Preliminary Prospectus and the Prospectus, any such
amendments or supplements and all documents incorporated by reference
therein that were filed with the Commission on or prior to the date of this
Agreement (including one fully executed copy of each of the Registration
Statement and of each amendment thereto for the Underwriter) have been
delivered to the Underwriter and their counsel. The Company has not
distributed any offering material in connection with the offering or sale
of the Shares other than the Registration Statement, the Preliminary
Prospectus, the Prospectus or any other materials, if any, permitted by the
Act;
(b) each part of the Registration Statement, when such part became or
becomes effective or was or is filed with the Commission, and the
Prospectus and any amendment or
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supplement thereto, on the date of filing thereof with the Commission and
at the time of purchase and any additional times of purchase, conformed or
will conform in all material respects with the requirements of the Act.
Each part of the Registration Statement, when such part became or becomes
effective or was or is filed with the Commission, did not or 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. The Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at the time
of purchase and any additional times of purchase, did not or will not
include an untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
foregoing shall not apply to statements in, or omissions from, any such
document in reliance upon, and in conformity with, written information
concerning the Underwriter that was furnished in writing to the Company by
the Underwriter, on behalf of the Underwriter, specifically for use in the
preparation thereof. The last Preliminary Prospectus distributed in
connection with the offering of the Shares did not, as of its date, and
does not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading;
(c) the documents incorporated by reference in the Registration
Statement, the Prospectus or any amendment or supplement thereto, when they
became or become effective under the Act or were or are filed with the
Commission under the Act or the Exchange Act, as the case may be, conformed
or will conform in all material respects with the requirements of the Act
and the Exchange Act, as applicable, and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(d) the Preliminary Prospectus was, and the Prospectus delivered to the
Underwriter for use in connection with this offering will be, identical to
the versions of the Preliminary Prospectus and Prospectus, respectively,
created to be transmitted to the Commission for filing via XXXXX, except to
the extent permitted by Regulation S-T;
(e) no stop order of the Commission preventing or suspending the use of
any Preliminary Prospectus or the effectiveness of the Registration
Statement has been issued and no proceedings for such purpose have been
instituted or, to the Company's knowledge are contemplated by the
Commission;
(f) as of the date of this Agreement, the Company has an authorized and
outstanding capitalization as set forth in the Prospectus Supplement under
the heading "Capitalization" and all of the issued and outstanding shares
of capital stock, including the Common Stock, of the Company have been duly
authorized and validly issued and are fully paid and non-assessable, have
been issued in compliance with all federal and state securities
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laws and were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right;
(g) the Company is and at each Closing Date will be the sole general
partner of the Partnership; the Company owns approximately 85.2% of the
units in the Partnership, and the limited partners of the Partnership own,
in the aggregate, approximately 14.8% of the units in the Partnership;
(h) 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, with full corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement and the Prospectus, and to execute and deliver this
Agreement;
(i) the Company is duly qualified to do business as a foreign entity
and is in good standing in each jurisdiction where the ownership or leasing
of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified and in good
standing would not, individually or in the aggregate, have a material
adverse effect on the business, properties, financial condition, or results
of operation or prospects of the Company and the Subsidiaries (as
hereinafter defined) taken as a whole (a "Material Adverse Effect");
(j) the Company has no subsidiaries (as defined in the Act) other than
the subsidiaries provided on Schedule A (collectively, the "Subsidiaries");
the Company owns, directly or indirectly, the interests in each of the
Subsidiaries as provided on Schedule A; other than the interests in the
Subsidiaries, the Company does not own, directly or indirectly, any shares
of stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any firm, partnership, limited
liability company, joint venture, association or other entity; complete and
correct copies of the organizational documents of the Company, the
Partnership and the Subsidiaries and all amendments thereto have been
delivered to you, and no changes therein will be made subsequent to the
date hereof and prior to the time of purchase; each Subsidiary has been
duly organized and is validly existing as a corporation, limited liability
company, limited partnership or trust in good standing under the laws of
the jurisdiction of its organized, with full power and authority to own,
lease and operate its properties and to conduct its business as described
in the Registration Statement and the Prospectus; each Subsidiary is duly
qualified to do business as a foreign entity and is in good standing in
each jurisdiction where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the
failure to be so qualified and in good standing would not, individually or
in the aggregate, have a Material Adverse Effect; all of the outstanding
shares of capital stock of each of the Subsidiaries which are corporations
have been duly authorized and validly issued, are fully paid and
non-assessable and, except as disclosed in the Prospectus, the ownership
interest of the Company in each Subsidiary are owned by the Company subject
to no security interest, other encumbrance or adverse claims; and, except
as disclosed in the Prospectus, no options, warrants or other rights
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to purchase, agreements or other obligations to issue or other rights to
convert any obligation into shares of capital stock or ownership interests
in the Subsidiaries are outstanding;
(k) the Partnership has been duly organized and is validly existing as
a limited partnership in good standing under the laws of the Commonwealth
of Virginia, with full partnership power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement and the Prospectus and to execute and deliver this
Agreement;
(l) the Partnership is duly qualified to do business as a foreign
entity and is in good standing in each jurisdiction where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified and in good
standing would not, individually or in the aggregate, have a Material
Adverse Effect on the Partnership;
(m) Hersha Hospitality Management, L.P. (the "Lessee") has been duly
organized and is validly existing as a limited partnership under the laws
of the Commonwealth of Pennsylvania with all requisite partnership power
and authority to conduct its business as now conducted and as proposed to
be conducted, and to own, lease and operate its properties, as described in
the Registration Statement and Prospectus, and is qualified to do business
and is in good standing as a foreign limited partnership in each other
jurisdiction in which the failure so to qualify could reasonably be
expected to have a Material Adverse Effect on the Lessee. The Lessee is not
in violation of any provision of its partnership agreement or other
governing documents and is not in default or in breach of, and does not
know of the occurrence of any event that with the giving of notice or the
lapse of time or both would constitute a default under or breach of, any
term or condition of any material agreement or instrument to which it is a
party or by which any of its properties is bound, except as disclosed in
the Registration Statement and Prospectus. No consent, approval,
authorization or order from any court, governmental agency or body is
required in connection with the consummation by the Lessee of the
transactions contemplated herein and in the Registration Statement and
Prospectus, except such as may be required by the Act, the Exchange Act,
and applicable state securities or blue sky laws;
(n) the Shares have been duly and validly authorized and validly
issued, fully paid and non-assessable and free of statutory and contractual
preemptive rights, resale rights, rights of first refusal and similar
rights;
(o) the capital stock of the Company, including the Shares, and the
units of the Partnership conform in all material respects to the
description thereof contained in the Registration Statement and the
Prospectus and the certificates for the Shares are in due and proper form
and the holders of the Shares will not be subject to personal liability by
reason of being such holders;
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(p) this Agreement has been duly authorized, executed and delivered by
the Company and the Partnership;
(q) neither the Company, the Partnership nor any of the Subsidiaries is
in breach or violation of or in default under (nor has any event occurred
which with notice, lapse of time or both would result in any breach or
violation of, constitute a default under or give the holder of any
indebtedness (or a person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a part of such
indebtedness under) (i) its respective charter or by-laws, or (ii) any
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which the Company, the Partnership or any of the
Subsidiaries is a party or by which any of them or any of their properties
may be bound or affected, except with respect to (ii) as individually or in
the aggregate would not have a Material Adverse Effect, and the execution,
delivery and performance of this Agreement, the consummation of the
transactions contemplated hereby will not conflict with, result in any
breach or violation of or constitute a default under (nor constitute any
event which with notice, lapse of time or both would result in any breach
or violation of or constitute a default under) the charter or by-laws of
the Company or the organizational documents of the Partnership or any of
the Subsidiaries, or any indenture, mortgage, deed of trust, bank loan or
credit agreement or other evidence of indebtedness, or any license, lease,
contract or other agreement or instrument to which the Company, the
Partnership or any of the Subsidiaries is a party or by which any of them
or any of their respective properties may be bound or affected, or any
federal, state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company, the Partnership or any of the
Subsidiaries;
(r) during the period of at least the last 24 calendar months prior to
the date of this Agreement, the Company has timely filed with the
Commission all documents and other material required to be filed pursuant
to Sections 13, 14 and 15(d) under the Exchange Act. During the period of
at least the last 36 calendar months preceding the filing of the
Registration Statement, the Company has filed all reports required to be
filed pursuant to Sections 13, 14 and 15(d) under the Exchange Act. As of
the date of this Agreement, the aggregate market value of the Company's
voting stock held by nonaffiliates of the Company was equal to or greater
than $150 million;
(s) no approval, authorization, consent or order of or filing with any
federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency is required in connection with the
consummation by the Company or the Partnership of the transactions
contemplated hereby other than registration of the Shares under the Act,
which has been or will be effected, and any necessary qualification under
the securities or blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriter or under the rules and
regulations of the American Stock Exchange or NASD;
(t) except as set forth in the Registration Statement and the
Prospectus, (i) no person has the right, contractual or otherwise, to cause
(a) the Company to issue or sell to it
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any shares of Common Stock or shares of any other capital stock or other
equity interests of the Company, or (b) the Partnership to issue or sell to
it any units or other equity interests of the Partnership, (ii) no person
has any preemptive rights, resale rights, rights of first refusal or other
rights to purchase any shares of Common Stock or shares of any other
capital stock or other equity interests of the Company, and (iii) no person
has the right to act as an underwriter or as a financial advisor to the
Company in connection with the offer and sale of the Shares, in the case of
each of the foregoing clauses (i), (ii) and (iii), whether as a result of
the filing or effectiveness of the Registration Statement or the sale of
the Shares as contemplated thereby or otherwise; except as provided on
Schedule B, no person has the right, contractual or otherwise, to cause the
Company to register under the Act any shares of Common Stock or shares of
any other capital stock or other equity interests of the Company, or to
include any such shares or interests in the Registration Statement or the
offering contemplated thereby, whether as a result of the filing or
effectiveness of the Registration Statement or the sale of the Shares as
contemplated thereby or otherwise;
(u) each of the Company, the Partnership, the Lessee and the
Subsidiaries has all necessary licenses, authorizations, franchises,
consents and approvals and has made all necessary filings required under
any federal, state, local or foreign law, regulation or rule, and has
obtained all necessary authorizations, consents and approvals from other
persons, in order to conduct its respective business, except where the
failure to so have, file or obtain would not have a Material Adverse
Effect; neither the Company, the Partnership nor any of the Subsidiaries is
in violation of, or in default under, or has received notice of any
proceedings relating to revocation or modification of, any such license,
authorization, consent or approval or any federal, state, local or foreign
law, regulation or rule or any decree, order or judgment applicable to the
Company, the Partnership or any of the Subsidiaries, except where such
violation, default, revocation or modification would not, individually or
in the aggregate, have a Material Adverse Effect;
(v) all legal or governmental proceedings, affiliate transactions,
off-balance sheet transactions, contracts, licenses, agreements, leases or
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required;
(w) there are no actions, suits, claims, investigations or proceedings
pending or threatened or, to the Company's or Partnership's knowledge,
contemplated to which the Company, the Partnership, the Lessee or any of
the Subsidiaries or any of their respective directors or officers is or
would be a party or of which any of their respective properties is or would
be subject at law or in equity, before or by any federal, state, local or
foreign governmental or regulatory commission, board, body, authority or
agency, except any such action, suit, claim, investigation or proceeding
which would not result in a judgment, decree or order having, individually
or in the aggregate, a Material Adverse Effect or preventing consummation
of the transactions contemplated hereby;
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(x) all agreements between or among the Company, the Partnership and
the Lessee and their respective Subsidiaries, respectively, are legal,
valid, and binding obligations of the Company, the Partnership and the
Lessee and their respective Subsidiaries, respectively, enforceable in
accordance with their respective terms, except to the extent enforceability
may be limited by (i) bankruptcy, insolvency, moratorium, liquidation,
reorganization, or similar laws affecting creditors' rights generally,
regardless of whether such enforceability is considered in equity or at
law, (ii) general equity principles and (iii) limitations imposed by
federal or state securities laws or the public policy underlying such laws
regarding the enforceability of indemnification or contribution provisions;
(y) Xxxxxxx, Xxxxxx & Xxxxxxxxx, CPAs, PC and Xxxxx Xxxxxxxx, P.C.,
whose reports on the consolidated financial statements of the Company, the
Partnership and the Subsidiaries is incorporated into the Registration
Statement and the Prospectus, are independent public accountants as
required by the Act;
(z) the audited financial statements included or incorporated in the
Registration Statement and the Prospectus, together with the related notes
and schedules, are accurate in all material respects and present fairly the
consolidated financial position of the Company, the Partnership and the
Subsidiaries as of the dates indicated and the consolidated results of
operations and cash flows of the Company, the Partnership and the
Subsidiaries for the periods specified and have been prepared in compliance
with the requirements of the Act and in conformity with generally accepted
accounting principles applied on a consistent basis during the periods
involved; any pro forma financial statements or data included or
incorporated in the Registration Statement and the Prospectus comply with
the requirements of Regulation S-X of the Act and the assumptions used in
the preparation of such pro forma financial statements and data are
reasonable, the pro forma adjustments used therein are appropriate to give
effect to the transactions or circumstances described therein and the pro
forma adjustments have been properly applied to the historical amounts in
the compilation of those statements and data; the other financial and
statistical data set forth in the Registration Statement and the Prospectus
are accurately presented and prepared on a basis consistent with the
financial statements and books and records of the Company; there are no
financial statements (historical or pro forma) that are required to be
included in the Registration Statement and the Prospectus that are not
included as required; and the Company, the Partnership and the Subsidiaries
do not have any material liabilities or obligations, direct or contingent
(including any off-balance sheet obligations), not disclosed in the
Registration Statement and the Prospectus;
(aa) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
(i) any material adverse change, or any development reasonably expected to
result in a material adverse change, in the business, properties,
management, financial condition or results of operations of the Company,
the Partnership, and the Subsidiaries, taken as a whole, or the Lessee,
(ii) except as contemplated by the Prospectus, any transaction which is
material to the Company, the Partnership and the Subsidiaries taken as a
whole, (iii) except as disclosed in the prospectus,
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any obligation, direct or contingent (including any off-balance sheet
obligations), incurred by the Company, the Partnership, the Lessee or the
Subsidiaries, which is material to the Company, the Partnership and the
Subsidiaries taken as a whole, or the Lessee, (iv) except as disclosed in
the prospectus, any material change in the capital stock, ownership
interests or outstanding indebtedness of the Company, the Partnership or
the Subsidiaries or (v) any dividend or distribution of any kind declared,
paid or made on the capital stock of the Company;
(bb) the Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(cc) the Company, the Partnership and each of the Subsidiaries has good
and marketable title to all property (real and personal) described the
Registration Statement and in the Prospectus as being owned by each of
them, free and clear of all liens, claims, security interests or other
encumbrances except for such liens, security interests and encumbrances
related to debt financing as provided on Schedule C or that would not
individually or in the aggregate have a Material Adverse Effect; no person
other than the Company and HT/CNL Metro Hotels, L.P. has an option or right
of first refusal to purchase all or part of any hotel owned by the Company,
the Partnership or the Subsidiaries (the "Hotels") or any interest therein;
each Hotel complies with all applicable codes, laws, and regulations
(including, without limitation, building and zoning codes, laws and
regulations, and laws relating to access to hotels), except if and to the
extent disclosed in the Prospectus and except for such failures to comply
that would not individually or in the aggregate have a Material Adverse
Effect; neither the Company nor the Partnership has knowledge of any
pending or threatened condemnation proceedings, zoning change, or other
proceeding or action that will in any manner effect the size of, use of,
improvements on, construction on, or access to any of the Hotels, except
such proceedings or actions that would not have a Material Adverse Effect;
(dd) the Company, the Partnership and the Subsidiaries own, or have
obtained valid and enforceable licenses for, or other rights to use, the
inventions, patent applications, patents, trademarks (both registered and
unregistered), tradenames, copyrights, trade secrets and other proprietary
information described in the Registration Statement and the Prospectus as
being owned or licensed by them or which are necessary for the conduct of
their respective businesses, except where the failure to own, license or
have such rights would not, individually or in the aggregate, have a
Material Adverse Effect (collectively, "Intellectual Property"); to the
Company's knowledge (i) there are no third parties who have or will be able
to establish rights to any Intellectual Property, except for the ownership
rights of the owners of the Intellectual Property which is licensed to the
Company; (ii) there is no infringement by third parties of any Intellectual
Property; (iii) there is no pending or threatened action, suit, proceeding
or claim by others challenging the Company's, the Partnership's rights, or
the Lessee's in or to any Intellectual Property, and the Company and the
Partnership are unaware of any facts which could form a reasonable basis
for any such claim; (iv) there is no pending or threatened action, suit,
proceeding or claim by others challenging the validity or scope of any
Intellectual Property, and the Company and the Partnership are unaware of
any facts which could form a reasonable basis for any such claim; (v) there
is no pending or threatened action, suit, proceeding or claim by others
that the Company or the Partnership infringes or otherwise violates any
patent, trademark, copyright, trade secret or other proprietary rights of
others, and the Company and the Partnership are unaware of any facts which
could form a reasonable basis for any such
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claim; (vi) there is no patent or patent application that contains claims
that interfere with the issued or pending claims of any of the Intellectual
Property; and (vii) there is no prior art that may render any patent
application owned by the Company or the Partnership of the Intellectual
Property unpatentable that has not been disclosed to the U.S. Patent and
Trademark Office;
(ee) except for matters which would not, individually or in the
aggregate, have a Material Adverse Effect, (i) neither the Company, the
Partnership nor any of the Subsidiaries is engaged in any unfair labor
practice; (ii) there is (A) no unfair labor practice complaint pending or,
to the Company's or the Partnership's knowledge after due inquiry,
threatened against the Company, the Partnership or any of the Subsidiaries
before the National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under collective bargaining agreements is
pending or threatened, (B) no strike, labor dispute, slowdown or stoppage
pending or, to the Company's or the Partnership's knowledge after due
inquiry, threatened against the Company, the Partnership or any of the
Subsidiaries and (C) no union representation dispute currently existing
concerning the employees of the Company, the Partnership, the Lessee or any
of the Subsidiaries, and (iii) to the Company's knowledge after due
inquiry, (A) no union organizing activities are currently taking place
concerning the employees of the Company, the Partnership, the Lessee or any
of the Subsidiaries and (B) there has been no violation of any federal,
state, local or foreign law relating to discrimination in the hiring,
promotion or pay of employees, any applicable wage or hour laws or any
provision of the Employee Retirement Income Security Act of 1974 ("ERISA")
or the rules and regulations promulgated thereunder concerning the
employees of the Company, the Partnership, the Lessee or any of the
Subsidiaries;
(ff) the Company, the Partnership, the Lessee and the Subsidiaries and
their properties, assets and operations are in compliance with, and hold
all permits, authorizations and approvals required under, Environmental
Laws (as defined below), except to the extent that failure to so comply or
to hold such permits, authorizations or approvals would not, individually
or in the aggregate, have a Material Adverse Effect; except as would not,
individually or in the aggregate, have a Material Adverse Effect, there are
no past, present or, to the Company's or Partnership's knowledge after due
inquiry, reasonably anticipated future events, conditions, circumstances,
activities, practices, actions, omissions or plans that could reasonably be
expected to give rise to any material costs or liabilities to the Company,
the Partnership, the Lessee or the Subsidiaries under, or to interfere with
or prevent compliance by the Company, the Partnership, the Lessee or the
Subsidiaries with, Environmental Laws; except as would not, individually or
in the aggregate, have a Material Adverse Effect, neither the Company, the
Partnership, the Lessee nor any of the Subsidiaries (i) is the subject of
any
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investigation, (ii) has received any notice or claim, (iii) is a party to
or affected by any pending or threatened action, suit or proceeding, (iv)
is bound by any judgment, decree or order or (v) has entered into any
agreement, in each case relating to any alleged violation of any
Environmental Law or any actual or alleged release or threatened release or
cleanup at any location of any Hazardous Materials (as defined below) (as
used herein, "Environmental Law" means any federal, state, local or foreign
law, statute, ordinance, rule, regulation, order, decree, judgment,
injunction, permit, license, authorization or other binding requirement, or
common law, relating to health, safety or the protection, cleanup or
restoration of the environment or natural resources, including those
relating to the distribution, processing, generation, treatment, storage,
disposal, transportation, other handling or release or threatened release
of Hazardous Materials, and "Hazardous Materials" means any material
(including, without limitation, pollutants, contaminants, hazardous or
toxic substances or wastes) that is regulated by or may give rise to
liability under any Environmental Law);
(gg) in the ordinary course of its business, the Company, the
Partnership, the Lessee and each of the Subsidiaries conducts a periodic
review of the effect of the Environmental Laws on its business, operations
and properties, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for cleanup, closure of
properties or compliance with the Environmental Laws or any permit, license
or approval, any related constraints on operating activities and any
potential liabilities to third parties);
(hh) all tax returns required to be filed as of the date hereof by the
Company, the Partnership, the Lessee and each of the Subsidiaries have been
filed or valid extension to such filing have been obtained, and all taxes
and other assessments of a similar nature (whether imposed directly or
through withholding) including any interest, additions to tax or penalties
applicable thereto due or claimed to be due from such entities have been
paid, other than those being contested in good faith and for which adequate
reserves have been provided;
(ii) commencing with the Company's taxable year ended December 31,
1999, the Company was organized and has operated in conformity with the
requirements for qualification and taxation as a real estate investment
trust ("REIT") under Sections 856 through 860 of the Internal Revenue Code
of 1986, as amended (the "Code"), and its proposed method of operations
will enable it to continue to meet the requirements for qualification and
taxation as a REIT. All statements in the Prospectus regarding the
Company's qualification as a REIT are true, complete and correct in all
material respects;
(jj) the Company, the Partnership, the Lessee and each of the
Subsidiaries maintains insurance covering its properties, operations,
personnel and businesses as the Company and the Partnership deem adequate;
such insurance insures against such losses and risks to an extent which is
in accordance with customary industry practice to protect the Company, the
Partnership, the Lessee and the Subsidiaries and their businesses; all such
insurance is fully in force on the date hereof and will be fully in force
at the time of purchase;
-12-
(kk) neither the Company, the Partnership, the Lessee nor any of the
Subsidiaries has sustained since the date of the last audited financial
statements included in the Registration Statement and the Prospectus any
loss or interference with its respective business from fire, explosion,
flood (except as would not, individually or in the aggregate, have a
Material Adverse Effect) or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree;
(ll) except as disclosed in the Registration Statement and Prospectus,
neither the Company, the Partnership nor the Lessee has sent or received
any communication regarding termination of, or intent not to renew, any of
the contracts or agreements referred to or described in, or filed as an
exhibit to, the Registration Statement, and no such termination or
non-renewal has been threatened by the Company, the Partnership or, to the
Company's knowledge, any other party to any such contract or agreement;
(mm) the Company, the Partnership, the Lessee and each of the
Subsidiaries maintains a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and
to maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect
to any differences;
(nn) the Company has established, maintains and evaluates disclosure
controls and procedures (as such term is defined in Rule 13a-15 and 15d-15
under the Exchange Act) in accordance with such rules and any related rules
of the Commission or the American Stock Exchange; such disclosure controls
and procedures are designed to ensure that material information relating to
the Company, including its consolidated subsidiaries, is made known to the
Company's Chief Executive Officer and its Chief Financial Officer by others
within those entities, and such disclosure controls and procedures are
effective to perform the functions for which they were established; the
Company's auditors and the Audit Committee of the Board of Directors have
been advised of: (i) any significant deficiencies in the design or
operation of internal controls which could adversely affect the Company's
ability to record, process, summarize, and report financial data; and (ii)
any fraud, whether or not material, that involves management or other
employees who have a role in the Company's internal controls; and since the
date of the most recent evaluation of such disclosure controls and
procedures, there have been no significant changes in internal controls or
in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies
and material weaknesses;
(oo) the Company is in compliance with all presently applicable
provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations
promulgated thereunder (the "Xxxxxxxx-Xxxxx Act") and is actively taking
steps to ensure that it will be in compliance with
-13-
other applicable provisions of the Xxxxxxxx-Xxxxx Act upon the
effectiveness of such provisions;
(pp) the Company has provided you true, correct, and complete copies of
all documentation pertaining to any extension of credit in the form of a
personal loan made, directly or indirectly, by the Company to any director
or executive officer of the Company, or to any family member or affiliate
of any director or executive officer of the Company; and since July 30,
2002, the Company has not, directly or indirectly, including through any
subsidiary: (i) extended credit, arranged to extend credit, or renewed any
extension of credit, in the form of a personal loan, to or for any director
or executive officer of the Company, or to or for any family member or
affiliate of any director or executive officer of the Company; or (ii) made
any material modification, including any renewal thereof, to any term of
any personal loan to any director or executive officer of the Company, or
any family member or affiliate of any director or executive officer, which
loan was outstanding on July 30, 2002;
(qq) any statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from
sources that the Company believes to be reliable and accurate;
(rr) neither the Company, the Partnership nor any of the Subsidiaries
nor, to the Company's and the Partnership's knowledge after due inquiry,
any employee or agent of the Company, the Partnership or the Subsidiaries
has made any payment of funds of the Company, the Partnership or the
Subsidiaries or received or retained any funds in violation of any law,
rule or regulation, which payment, receipt or retention of funds is of a
character required to be disclosed in the Registration Statement or the
Prospectus;
(ss) neither the Company, the Partnership nor any of the Subsidiaries
nor any of their respective directors, officers, affiliates or controlling
persons has taken, directly or indirectly, any action designed, or which
has constituted or might reasonably be expected to cause or result in,
under the Exchange Act or otherwise, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Shares;
(tt) to the Company's knowledge after due inquiry, there are no
affiliations or associations between any member of the NASD and any of the
Company's officers, directors or 5% or greater securityholders, except as
set forth in the Registration Statement and the Prospectus;
In addition, any certificate signed by any officer of the Company, the
Partnership or any of the Subsidiaries and delivered to the Underwriter or
counsel for the Underwriter in connection with the offering of the Shares shall
be deemed to be a representation and warranty by the Company, the Partnership or
Subsidiary, as the case may be, as to matters covered thereby, to the
Underwriter.
II. Representations and Warranties of the Selling Stockholder. The
Selling Stockholder represents and warrant to and agrees with the Underwriter
that:
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(a) the Selling Stockholder now is and at the time of delivery of the
Shares will be, the lawful owner of the Shares and has and, at the time of
delivery thereof, will have valid and marketable title to such Shares, and
upon delivery of and payment for such Shares, the Underwriter will acquire
valid and marketable title to the Shares free and clear of any claim, lien,
encumbrance, security interest, community property right, restriction on
transfer or other defect in title;
(b) the Selling Stockholder has and at the time of delivery of such
Shares will have, full legal right, partnership authority, power and
capacity, and any approval required by law (other than those imposed by the
Act and the securities or blue sky laws of certain jurisdictions), to sell,
assign, transfer and deliver such Shares in the manner provided in this
Agreement;
(c) this Agreement has been duly executed and delivered by the Selling
Stockholder and is a legal, valid and binding agreement of the Selling
Stockholder enforceable in accordance with its terms, and the execution
thereof does 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 under, or result in the creation or imposition of any lien, charge
or encumbrance upon the Shares or any property or assets of the Selling
Stockholder pursuant to any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, license, lease or other agreement or
instrument to which the Selling Stockholder is a party or by which the
Selling Stockholder may be bound, or to which any of the property or assets
of the Selling Stockholder is subject, nor will such action result in any
violation of the provisions of the limited partnership agreement of the
Selling Stockholder, or any applicable treaty, law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Selling Stockholder or any of its properties;
(d) the Selling Stockholder has not taken, and will not take, directly
or indirectly, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares;
(e) no filing with, or consent, approval, authorization, order,
registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign, is necessary or required for the
performance by the Selling Stockholder of its obligations hereunder or in
connection with the sale and delivery of the Shares hereunder or the
consummation of the transactions contemplated by this Agreement, except
such as may have previously been made or obtained or as may be required
under the Act or the Exchange Act or state securities laws;
(f) as of the date of this Agreement and until the latest of the time
of purchase or the termination of the offering of the Shares, the
Registration Statement and Prospectus, and any supplements or amendments
thereto as relate to such Selling Stockholder do not and will
-15-
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; and
(g) the sale of the Shares pursuant to this Agreement is not prompted
by any information concerning the Company which is not set forth in the
Prospectus.
4. Certain Covenants of the Company. The Company and the Partnership
hereby agree:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states or other jurisdictions as you
may designate and to maintain such qualifications in effect so long as you
may request for the distribution of the Shares; provided that the Company
shall not be required to qualify as a foreign corporation or to consent to
the service of process under the laws of any such jurisdiction (except
service of process with respect to the offering and sale of the Shares);
and to promptly advise you of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose;
(b) the Company will prepare the Prospectus in a form approved by the
Underwriter and file such Prospectus with the Commission pursuant to Rule
424(b) under the Act not later than 10:00 A.M. (New York City time), on or
before the second business day following the date of this Agreement or on
such other day as the parties may mutually agree and to furnish promptly
(and with respect to the initial delivery of such Prospectus, not later
than 10:00 A.M. (New York City time) on or before the second business day
following the date of this Agreement or on such other day as the parties
may mutually agree) to the Underwriter copies of the Prospectus (or of the
Prospectus as amended or supplemented if the Company shall have made any
amendments or supplements thereto after the effective date of the
Registration Statement) in such quantities and at such locations as the
Underwriter may reasonably request for the purposes contemplated by the
Act, and the Prospectus and any amendments or supplements thereto furnished
to the Underwriter will be identical to the version created to be
transmitted to the Commission for filing via XXXXX, except to the extent
permitted by Regulation S-T.
(c) the Company will advise the Underwriter, confirming such advice in
writing, of (i) the receipt of any comments from the Commission relating to
any filing of the Company under the Act or the Exchange Act, (ii) any
request by the Commission for amendments or supplements to the Registration
Statement or the Prospectus or for additional information with respect
thereto, (iii)a notice of institution of proceedings for, or the entry of a
stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any Preliminary Prospectus or
the Prospectus, (iv) the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, (v) the initiation, threatening or
contemplation of any proceedings for any of such purposes and, if the
Commission or any other governmental agency or authority should issue any
such order, the Company will make every reasonable effort to obtain the
lifting or removal of such order as
-16-
soon as possible. The Company will advise the Underwriter promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus including by filing any documents that would be incorporated
therein by reference and to file no such amendment or supplement to which
the Underwriter shall object to in writing.
(d) the Company will advise the Underwriter promptly and, if requested
by the Underwriter, will confirm such advice in writing when any
post-effective amendment to the Registration Statement becomes effective
under the Act.
(e) if necessary, to file a registration statement pursuant to Rule
462(b) under the Act;
(f) to advise the Underwriter promptly of the happening of any event
within the time during which a Prospectus relating to the Shares is
required to be delivered under the Act which is reasonably likely to
require the making of any change in the Prospectus then being used, or in
the information incorporated by reference therein, so that the Prospectus
would not include an untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend or
supplement the Prospectus to comply with any law. If within the time during
which a Prospectus relating to the Shares is required to be delivered under
the Act any event shall occur or condition shall exist which, in the
reasonable opinion of the Company, the Underwriter or their counsel, would
require the making of any change in the Prospectus then being used, or in
the information incorporated by reference therein, so that the Prospectus
would not include an untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend or
supplement the Prospectus to comply with any law, the Company will promptly
prepare and furnish to the Underwriter copies of the proposed amendment or
supplement before filing any such amendment or supplement with the
Commission and thereafter promptly furnish, at the Company's own expense,
to the Underwriter and to dealers copies in such quantities and at such
locations as the Underwriter may from time to time reasonably request of an
appropriate amendment to the Registration Statement or supplement to the
Prospectus so that the Prospectus as so amended or supplemented will not,
in the circumstances when it is so delivered, be misleading or so that the
Prospectus will comply with the law;
(g) to make generally available to its security holders, and to deliver
to you, an earnings statement of the Company (which will satisfy the
provisions of Section 11(a) of the Act) covering a period of twelve months
beginning after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Act) as soon as is reasonably practicable
after the termination of such twelve-month period but not later than March
31, 2005;
-17-
(h) to furnish to its shareholders as soon as practicable after the end
of each fiscal year an annual report (including a consolidated balance
sheet and statements of income, shareholders' equity and cash flow of the
Company, the Partnership and the Subsidiaries for such fiscal year,
accompanied by a copy of the certificate or report thereon of nationally
recognized independent certified public accountants);
(j) to furnish to the Underwriter a signed copy of the Registration
Statement, as initially filed with the Commission, and of all amendments
thereto (including all exhibits thereto and documents incorporated by
reference therein) and such number of conformed copies of the foregoing
(other than exhibits) as the Underwriter may reasonably request;
(k) to furnish to you promptly and, upon request, to each of the other
Underwriter for a period of five years from the date of this Agreement (i)
copies of any reports, proxy statements, or other communications which the
Company shall send to its stockholders or shall from time to time publish
or publicly disseminate, (ii) copies of all annual, quarterly and current
reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such
other similar forms as may be designated by the Commission, (iii) copies of
documents or reports filed with any national securities exchange on which
any class of securities of the Company is listed, and (iv) such other
information as you may reasonably request regarding the Company, the
Partnership or the Subsidiaries provided that the obligations of this
Section 4(k) shall be deemed satisfied is such filings are report are
timely filed with the Commission and are generally available to the public
through XXXXX;
(l) to furnish to you as early as practicable prior to the time of
purchase and any additional time of purchase, as the case may be, a copy of
the latest available unaudited interim and monthly consolidated financial
statements, if any, of the Company, the Partnership and the Subsidiaries
which have been read by the Company's independent certified public
accountants, as stated in their letter to be furnished pursuant to Section
7(b) hereof;
(m) to apply the net proceeds from the sale of the Shares in the manner
set forth under the caption "Use of Proceeds" in the Prospectus;
(n) to pay all costs, expenses, fees and taxes in connection with (i)
the preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and any amendments or supplements thereto, and
the printing and furnishing of copies of each thereof to the Underwriter
and to dealers (including costs of mailing and shipment), (ii) the
registration, sale and delivery of the Shares (excluding any stock or
transfer taxes and stamp or similar duties payable upon the sale, delivery
of the Shares to the Underwriter, which will be the obligation of the
Selling Shareholder), (iii) the producing, word processing and/or printing
of this Agreement and any closing documents (including compilations
thereof) and the reproduction and/or printing and furnishing of copies of
each thereof to the Underwriter and (except closing documents) to dealers
(including costs of mailing and shipment), (iv) the qualification of the
Shares for offering and sale under state or
-18-
foreign laws and the determination of their eligibility for investment
under state or foreign law as aforesaid (including the legal fees and
filing fees and other disbursements of counsel for the Underwriter) and the
printing and furnishing of copies of any blue sky surveys or legal
investment surveys to the Underwriter and to dealers, (v) the listing of
the Shares on the American Stock Exchange, (vi) any filing for review of
the public offering of the Shares by the NASD, including the legal fees and
filing fees and other disbursements of counsel to the Underwriter, (vii)
the fees and disbursements of any transfer agent or registrar for the
Shares, (viii) the costs and expenses of the Company relating to
presentations or meetings undertaken in connection with the marketing of
the offering and sale of the Shares to prospective investors and the
Underwriter's sales forces, including, without limitation, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations, travel, lodging and other expenses incurred by the officers
of the Company and any such consultants, and the cost of any aircraft
chartered in connection with the road show, and the performance of the
Company's and the Partnership's other obligations hereunder;
(o) not to sell, offer to sell, contract or agree to sell, hypothecate,
pledge, grant any option to purchase or otherwise dispose of or agree to
dispose of, directly or indirectly, any Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock or
warrants or other rights to purchase Common Stock or any other securities
of the Company that are substantially similar to Common Stock, or file or
cause to be declared effective a registration statement under the Act
relating to the offer and sale of any shares of Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock or other
rights to purchase Common Stock or any other securities of the Company that
are substantially similar to Common Stock for a period of 90 days after the
date hereof (the "Lock-Up Period"), without the prior written consent of
the Underwriter, except for (i) the registration of the Shares and the
sales to the Underwriter pursuant to this Agreement, (ii) issuances of
Common Stock upon the exercise of options or warrants disclosed as
outstanding in the Registration Statement and the Prospectus, (iii) the
issuance of employee stock options not exercisable during the Lock-Up
Period pursuant to stock option plans described in the Registration
Statement and the Prospectus, (iv) the issuance of up to 10,000,000 units
of limited partnership interest in the Partnership in connection with the
acquisition of hotel properties, provided that the recipient of such units
of limited partnership agrees in writing, prior to the issuance, with the
Underwriter to be bound by the terms of this section and (v) the issuance
of shares of Common Stock pursuant to any dividend reinvestment component
of the Company's dividend reinvestment plan;
(p) to use its best efforts to cause the Common Stock to be listed on
the American Stock Exchange; and
(q) the Company shall use its best efforts to obtain for the benefit of
the Underwriter the agreement (a "Lock-Up Agreement"), in the form set
forth as Exhibit A hereto, of each of the individuals listed on Schedule D;
-19-
(r) to maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar for the Common
Stock.
5. Certain Covenants of the Company and the Selling Stockholder. The
Company and the Selling Stockholder agree with the Underwriter as follows:
(a) not to sell, offer to sell, contract or agree to sell, hypothecate,
pledge, grant any option to purchase or otherwise dispose of or agree to
dispose of, directly or indirectly, any Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock or
warrants or other rights to purchase Common Stock or any other securities
of the Company that are substantially similar to Common Stock, during the
Lock-Up Period, without the prior written consent of the Underwriter,
except for the offer and sale of the Shares to the Underwriter pursuant to
this Agreement.
(b) The Selling Stockholder agrees to furnish to the Company and the
Underwriter such information regarding the Selling Stockholder and the
distribution of the Shares as is required to be delivered under the Act
likely to require the making of any change in the Prospectus then being
used, or the information incorporated by referenced therein, so that the
Prospectus would not include an untrue statement of material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading or if it is necessary at any time to amend or
supplement the Prospectus as to comply with any law.
6. Reimbursement of Underwriter's Expenses. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to a default by the Underwriter in its obligations hereunder, the Company and
the Partnership, jointly and severally, shall, in addition to paying the amounts
described in Section 4(n) hereof, reimburse the Underwriter for all of its
reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of its counsel; provided, however that if the Shares are not
delivered to the Underwriter in accordance with this Agreement as a result of a
default by the Selling Stockholder in its obligations hereunder, then the
Selling Stockholder shall be responsible for reimbursing the Underwriter for all
of its reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of its counsel.
7. Conditions of Underwriter's Obligations. The several obligations of the
Underwriter hereunder are subject to the accuracy of the representations and
warranties on the part of the Company, the Partnership and the Selling
Stockholder on the date hereof, at the time of purchase and, if applicable, at
the additional time of purchase, the performance by the Company, the Partnership
and the Selling Stockholder of their obligations hereunder and to the following
additional conditions precedent:
(a) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Hunton &
Xxxxxxxx LLP, counsel for the
-20-
Company, addressed to the Underwriter, and dated the time of purchase or
the additional time of purchase, as the case may be, with reproduced copies
for each of the other Underwriter and in form and substance satisfactory to
Xxxxxxxx Chance US LLP, counsel for the Underwriter, as provided in Exhibit
C.
(b) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Shah & Xxxxx,
counsel for the Lessee, addressed to the Underwriter, and dated the time of
purchase or the additional time of purchase, as the case may be, with reproduced
copies for each of the other Underwriter and in form and substance satisfactory
to Xxxxxxxx Chance US LLP, counsel for the Underwriter, stating that:
(i) The Lessee has been duly formed and is validly existing as a
limited partnership under the laws of the Commonwealth of Pennsylvania
with the partnership power and authority to conduct its business as
described in the Prospectus. The Lessee is not in violation of any
provision of its certificate of limited partnership, partnership
agreement or other governing documents. The Lessee is not in default
under or in breach of, or subject to any event that with the giving of
notice or the lapse of time or both would constitute a default under or
breach of, any term or condition of any material agreement or
instrument to which the Lessee is a party or by which any of its
properties is bound, except as disclosed in the Prospectus.
(ii) The Lessee owns, possesses or has obtained such permits as
are necessary to own or lease the properties owned by the Company or
itsSubsidiaries and to carry on its businesses in the manner described
in the Prospectus; the Lessee has fulfilled and performed all of its
obligations with respect to all such permits, and no event has occurred
that allows, or after notice or lapse of time or both would allow,
revocation or modification thereof or would result in any other
impairment of the rights of the holder of any such permit to the extent
the same would have a Material Adverse Effect on the Lessee.
(iii) The execution, delivery, and performance of this Agreement,
the compliance with the terms and provisions hereof and the
consummation of the transactions contemplated herein and in the
Registration Statement and Prospectus, do not and will not:
A. violate or constitute a breach of or default
under the certificate of limited partnership,
partnership agreement or other governing
documents of the Lessee;
B. result in a breach of, or constitute a default
under, any contract that was filed, or the form
of which was filed, as an exhibit to the
Registration Statement;
-21-
C. to such counsel's knowledge, violate any
applicable statute, rule or regulation, order of
any court or any federal, state, or local
governmental authority or agency binding on the
Lessee or any of their respective businesses,
investments, properties, assets or Hotels;
D. to such counsel's knowledge, result in the
creation or imposition of any lien, charge,
claim, or encumbrance upon any property or asset
of any of the foregoing.
(iv) To the knowledge of such counsel, the Lessee is not in
violation of, or in default with respect to, any statute, rule,
regulations, order, judgment, or decree, except as may be properly
described in the Prospectus or such as in the aggregate do not now have
and will not in the future have a materially adverse effect on the
financial position, results of operations, or business of the Lessee.
(v) To such counsel's knowledge, neither the Company nor any of
the Subsidiaries is in material breach or material violation of or in
material default under (nor has any event occurred which with notice,
lapse of time, or both would result in any material breach or material
violation of, or constitute a material default under any indenture,
mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which the Company or any of the Subsidiaries
is a party or by which any of them or any of their respective
properties may be bound or affected;
(vi) To such counsel's knowledge, except as described in the
Prospectus, there is not pending, threatened or contemplated, any
action, suit, proceeding, inquiry or investigation before or by any
court or any federal, state or local governmental authority or agency
to which the Lessee or any of its officers, directors or partners are
or may be a party, or to which any of the properties, assets or rights
of any such entity or person may be subject, which, if determined
adversely to the Lessee, (A) could reasonably be expected to have a
material adverse effect on the financial position, results of
operations, business or material assets of the Lessee, or (B) that
could reasonably be expected to adversely affect the consummation of
the transactions contemplated by this Agreement.
(c) The Selling Stockholder shall furnish to you at the time of
purchase and any additional time of purchase, an opinion of Xxxxxxxxx
Xxxxxxx, LLP, counsel for the Selling Stockholder, addressed to the
Underwriter, and dated the time of purchase or the additional time of
purchase, as the case may be, and in form and substance satisfactory to
Xxxxxxxx Chance US LLP, counsel for the Underwriter, stating that:
(i) this Agreement has been duly executed and delivered by or on
behalf of the Selling Stockholder;
-22-
(ii) the Selling Stockholder has full legal right and power, and
has obtained any authorization or approval required by law (other than
those imposed by the Act and the securities or blue sky laws of certain
jurisdictions), to sell, assign, transfer and deliver the Shares in the
manner provided in the Agreement;
(iii) upon delivery to the Underwriter of such Shares against
payment therefor, assuming that the Underwriter does not have notice of
any adverse claims with respect to the Shares within the meaning of
Section 8-105 of the Uniform Commercial Code as in effect on the date
hereof in the State of New York (the "UCC"), the Underwriter will
acquire such Shares free of any adverse claims within the meaning of
Section 8-303 of the UCC;
(iv) the delivery to the Underwriter of such Shares against
payment therefor will pass valid and marketable title of the Shares to
the Underwriter, free and clear of any lien or security interest, and
to our knowledge, any claim, encumbrance, community property right,
restriction on transfer or other defect in title;
(v) the execution of the Agreement does not and will not, whether
with or without the giving of notice or passage of time or both, result
in any violation of the provisions of the limited partnership agreement
of the Selling Stockholder;
(vi) the Selling Stockholder has been duly authorized to execute
and deliver on behalf of the Selling Stockholder the Agreement and any
other document reasonably necessary in connection with the transactions
contemplated thereby and to deliver the Shares; and
(vii) nothing has come to our attention which indicates that the
statements in the Prospectus under the caption "Selling Shareholder",
contained a misstatement of a material fact or omitted to state a
material fact required to be stated therein, or necessary to make the
statements contained therein, not misleading.
(d) You shall have received from Xxxxx Xxxxxxxx, P.C. and Xxxxxxx
Xxxxxx & Xxxxxxxxx, CPAs, PC letters dated, respectively, the date of this
Agreement, the time of purchase and, if applicable, the additional time of
purchase, and addressed to the Underwriter in the forms heretofore approved
by the Underwriter.
(e) You shall have received at the time of purchase and, if applicable,
at the additional time of purchase, the favorable opinion of Xxxxxxxx
Chance US LLP, counsel for the Underwriter, dated the time of purchase or
the additional time of purchase, as the case may be, in form and substance
satisfactory to you.
-23-
(f) No Prospectus or amendment or supplement to the Registration
Statement or the Prospectus shall have been filed to which you object in
writing.
(g) Prior to the time of purchase and, if applicable, the additional
time of purchase, (i) no stop order with respect to the effectiveness of
the Registration Statement shall have been issued under the Act or
proceedings initiated under Section 8(d) or 8(e) of the Act; (ii) the
Registration Statement and all amendments thereto shall 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; and (iii) the Prospectus and all amendments or supplements
thereto shall not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
are made, not misleading.
(h) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, no
material adverse change or any development reasonably expected to result in
a material adverse change in the business, properties, management,
financial condition or results of operations of the Company, the
Partnership and the Subsidiaries taken as a whole shall occur or become
known.
(i) The Company and the Partnership will, at the time of purchase and,
if applicable, at the additional time of purchase, deliver to you a
certificate of its Chief Executive Officer and its Chief Financial Officer,
in the case of the Company, and of its general partner, in the case of the
Partnership, in the form attached as Exhibit B hereto.
(j) You shall have received signed Lock-up Agreements referred to in
Section 4(q) hereof.
(k) The Company, the Partnership and the Selling Stockholder shall have
furnished to you such other documents and certificates as to the accuracy
and completeness of any statement in the Registration Statement and the
Prospectus as of the time of purchase and, if applicable, the additional
time of purchase, as you may reasonably request.
(l) The Shares shall have been approved for listing on the American
Exchange.
(m) The Selling Stockholder will at the time of purchase and at the
additional time of purchase, as the case may be, deliver to you a
certificate to the effect that the representations and the warranties of
the Selling Stockholder as set forth in this Agreement are true and correct
as of each such date.
8. Termination. The obligations of the Underwriter hereunder shall be
subject to termination in the absolute discretion of the Underwriter if (x)
since the time of execution of this Agreement or the earlier respective dates as
of which information is given in the Registration Statement and the Prospectus,
there has been any material adverse change or any development reasonably
expected to result in a material adverse change in the business, properties,
management, financial condition or results of operations of the Company, the
Partnership, the Lessee and the
-24-
Subsidiaries taken as a whole, which would, in the Underwriter's judgment, make
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares on the terms and in the manner contemplated in the
Registration Statement and the Prospectus, or (y) since of execution of this
Agreement, there shall have occurred: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange, the American
Stock Exchange or the NASDAQ; (ii) a suspension or material limitation in
trading in the Company's securities on the American Stock Exchange; (iii) a
general moratorium on commercial banking activities declared by either federal
or New York State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States; (iv) an
outbreak or escalation of hostilities or acts of terrorism involving the United
States or a declaration by the United States of a national emergency or war; or
(v) any other calamity or crisis or any change in financial, political or
economic conditions in the United States or elsewhere, if the effect of any such
event specified in clause (iv) or (v) in the Underwriter's judgment makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares on the terms and in the manner contemplated in the Registration
Statement and the Prospectus, or (z) since the time of execution of this
Agreement, there shall have occurred any downgrading, or any notice or
announcement shall have been given or made of (i) any intended or potential
downgrading or (ii) any watch, review or possible change that does not indicate
an affirmation or improvement in the rating accorded any securities of or
guaranteed by the Company or any Subsidiary by any "nationally recognized
statistical rating organization," as that term is defined in Rule 436(g)(2)
under the Act.
If the Underwriter elects to terminate this Agreement as provided in
this Section 8, the Company and the Selling Stockholder shall be notified
promptly in writing.
If the sale to the Underwriter of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriter for any reason permitted under
this Agreement or if such sale is not carried out because the Company, the
Partnership or the Selling Stockholder, as the case may be, shall be unable to
comply with any of the terms of this Agreement, the Company or the Selling
Stockholder, as the case may be, shall not be under any obligation or liability
under this Agreement (except to the extent provided in Sections 4(n), 6 and 9
hereof), and the Underwriter shall be under no obligation or liability to the
Company, the Partnership or the Selling Stockholder under this Agreement (except
to the extent provided in Section 9 hereof) or to one another hereunder.
9. Indemnity and Contribution.
(a) The Company and the Partnership, jointly and severally,
agree to indemnify, defend and hold harmless the Underwriter, its partners,
directors and officers, and any person who controls the Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and
the successors and assigns of all of the foregoing persons, from and
against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, any the
Underwriter or any such person may incur under the Act, the Exchange Act,
the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by
26
the Company) or in a Prospectus (the term Prospectus for the purpose of
this Section 9 being deemed to include any Preliminary Prospectus, the
Prospectus, including any documents filed under the Exchange Act and deemed
to be incorporated by reference therein, and the Prospectus as amended or
supplemented by the Company), or arises out of or is based upon any
omission or alleged omission to state a material fact required to be stated
in either such Registration Statement or such Prospectus or necessary to
make the statements made therein not misleading, except insofar as any such
loss, damage, expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact
contained in and in conformity with information concerning the Underwriter
furnished in writing by or on behalf of the Underwriter through you to the
Company expressly for use in such Registration Statement or such Prospectus
or arises out of or is based upon any omission or alleged omission to state
a material fact in connection with such information required to be stated
in such Registration Statement or such Prospectus or necessary to make such
information not misleading, or (ii) any untrue statement or alleged untrue
statement of any material fact contained in any audio or visual materials
provided by the Company or the Partnership or based upon written
information furnished by or on behalf of the Company or the Partnership
including, without limitation, slides, videos, films or tape recordings
used in connection with the marketing of the Shares.
If any action, suit or proceeding (each, a "Proceeding") is brought
against an Underwriter or any such person in respect of which indemnity may
be sought against the Company or the Partnership pursuant to the foregoing
paragraph, the Underwriter or such person shall promptly notify the Company
in writing of the institution of such Proceeding and the Company shall
assume the defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all fees
and expenses; provided, however, that the omission to so notify the Company
shall not relieve the Company or the Partnership from any liability which
the Company or the Partnership may have to the Underwriter or any such
person or otherwise, unless and to the extent such failure to so notify
results in the forfeiture of substantive rights or defenses by the Company
or the partnership. Such Underwriter or such person shall have the right to
employ its or their own counsel in any such case, but the fees and expenses
of such counsel shall be at the expense of the Underwriter or of such
person unless the employment of such counsel shall have been authorized in
writing by the Company or the Partnership in connection with the defense of
such Proceeding or the Company shall not have, within a reasonable period
of time in light of the circumstances, employed counsel to have charge of
the defense of such Proceeding or such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or
them which are different from, additional to or in conflict with those
available to the Company or the Partnership (in which case the Company
shall not have the right to direct the defense of such Proceeding on behalf
of the indemnified party or parties), in any of which events such fees and
expenses shall be borne by the Company and paid as incurred (it being
understood, however, that the Company shall not be liable for the expenses
of more than one separate counsel (in addition to any local counsel) in any
one Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding).
The Company and the Partnership shall not be liable for any settlement of
any Proceeding effected without their written consent but if settled with
the written consent of the Company or the Partnership, the Company and the
Partnership agree to indemnify and hold harmless the Underwriter and any
such person from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if
27
at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall not have
fully reimbursed the indemnified party in accordance with such request
prior to the date of such settlement and (iii) such indemnified party shall
have given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such Proceeding and does not include an admission of fault,
culpability or a failure to act, by or on behalf of such indemnified party.
(b) The Selling Stockholder agrees to indemnify, defend and hold
harmless the Underwriter, its partners, directors and officers, and any
person who controls the Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, and the successors and assigns of
all of the foregoing persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which
the Underwriter or any such person may incur under the Act, the Exchange
Act, the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in conformity
with information concerning the Selling Stockholder.
(c) The Underwriter agrees to indemnify, defend and hold harmless the
Company, the Partnership and the Selling Stockholder, their directors and
officers, and any person who controls the Company or the Partnership within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and
the successors and assigns of all of the foregoing persons, from and
against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, the Company,
the Partnership, the Selling Stockholder or any such person may incur under
the Act, the Exchange Act, the common law or otherwise, insofar as such
loss, damage, expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact
contained in and in conformity with information concerning the Underwriter
furnished in writing by or on behalf of the Underwriter to the Company
expressly for use in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus, or arises out of or is based upon any omission
or alleged omission to state a material fact in connection with such
information required to be stated in such Registration Statement or such
Prospectus or necessary to make such information not misleading.
If any Proceeding is brought against the Company, the Partnership or
the Selling Stockholder or any such person in respect of which indemnity
may be sought against the Underwriter pursuant to the foregoing paragraph,
the Company, the Partnership or such person shall promptly
28
notify the Underwriter in writing of the institution of such Proceeding and
the Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to
so notify the Underwriter shall not relieve the Underwriter from any
liability which the Underwriter may have to the Company, the Partnership,
the Selling Stockholder or any such person or otherwise. The Company, the
Partnership, the Selling Stockholder or such person shall have the right to
employ its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Company, the Partnership, the
Selling Stockholder or such person unless the employment of such counsel
shall have been authorized in writing by the Underwriter in connection with
the defense of such Proceeding or the Underwriter shall not have, within a
reasonable period of time in light of the circumstances, employed counsel
to defend such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them
which are different from or additional to or in conflict with those
available to the Underwriter (in which case the Underwriter shall not have
the right to direct the defense of such Proceeding on behalf of the
indemnified party or parties, but the Underwriter may employ counsel and
participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of the Underwriter), in any of which events
such fees and expenses shall be borne by the Underwriter and paid as
incurred (it being understood, however, that the Underwriter shall not be
liable for the expenses of more than one separate counsel (in addition to
any local counsel) in any one Proceeding or series of related Proceedings
in the same jurisdiction representing the indemnified parties who are
parties to such Proceeding). No Underwriter shall be liable for any
settlement of any such Proceeding effected without the written consent of
the Underwriter but if settled with the written consent of the Underwriter,
the Underwriter agrees to indemnify and hold harmless the Company, the
Partnership, the Selling Stockholder and any such person from and against
any loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for
any settlement of any Proceeding effected without its written consent if
(i) such settlement is entered into more than 60 business days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and (iii)
such indemnified party shall have given the indemnifying party at least 30
days' prior notice of its intention to settle. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such Proceeding.
(d) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a), (b) and (c) of
this Section 9 or insufficient to hold an indemnified party harmless in
respect of any losses, damages, expenses, liabilities or claims referred to
therein, then each applicable indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, damages, expenses, liabilities or claims (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company and
the Selling
29
Stockholder on the one hand and the Underwriter on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company, the Partnership and
the Selling Stockholder on the one hand and of the Underwriter on the other
in connection with the statements or omissions which resulted in such
losses, damages, expenses, liabilities or claims, as well as any other
relevant equitable considerations. The relative benefits received by the
Company, the Partnership and the Selling Stockholder on the one hand and
the Underwriter on the other shall be deemed to be in the same respective
proportions as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the
Selling Stockholder and the total underwriting discounts and commissions
received by the Underwriter, bear to the aggregate public offering price of
the Shares. The relative fault of the Company, the Partnership and the
Selling Stockholder on the one hand and of the Underwriter on the other
shall be determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company, the
Partnership, the Selling Stockholder or by the Underwriter and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable
by a party as a result of the losses, damages, expenses, liabilities and
claims referred to in this subsection shall be deemed to include any legal
or other fees or expenses reasonably incurred by such party in connection
with investigating, preparing to defend or defending any Proceeding.
(e) The Company, the Partnership, the Selling Stockholder and the
Underwriter agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in subsection (d) above. Notwithstanding the
provisions of this Section 9, the Underwriter 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 Underwriter and distributed to the
public were offered to the public exceeds the amount of any damage which
the Underwriter has otherwise been required to pay by reason of such untrue
statement or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriter's
obligation to contribute pursuant to this Section 9 are several in
proportion to their respective underwriting commitments and not joint.
(f) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties and representations of the Company,
the Partnership and the Selling Stockholder contained in this Agreement
shall remain in full force and effect regardless of any investigation made
by or on behalf of the Underwriter, its partners, directors or officers or
any person (including each partner, officer or director of such person) who
controls the Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, or by or on behalf of the Company, the
Partnership, the Selling Stockholder, their directors or officers or any
person who controls the Company, the Partnership or the Selling Stockholder
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act, and shall survive any termination of this Agreement or the sale and
delivery of the Shares. The Company, the Partnership, the Selling
Stockholder and the
30
Underwriter agree promptly to notify each other of the commencement of any
Proceeding against it and, in the case of the Company, against any of the
Company's officers or directors in connection with the sale of the Shares,
or in connection with the Registration Statement or the Prospectus.
10. Information Furnished. The statements set forth in the first
paragraph under the caption "Underwriting - Commissions and Discounts" and under
the caption "Underwriting - Price Stabilization Short Positions" in the
Prospectus constitute the only information furnished by or on behalf of the
Underwriter as such information is referred to in Sections 3 and 9 hereof.
11. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriter, shall be sufficient in all respects if delivered or sent to UBS
Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000, and, if to the
Company or the Partnership shall be sufficient in all respects if delivered or
sent to the Company at the offices of the Company at 000 Xxxxxxxx Xxxxx, Xxx X,
Xxx Xxxxxxxxxx, XX 00000, Attention: Xxxxxx X. Xxxxxx, and, if to the Selling
Stockholder shall be sufficient in all respects if delivered or sent to the
Selling Stockholder at the offices of the Selling Stockholder at CNL Hospitality
Partners, LP, CNL Center at City Commons, 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxx 00000-0000, Attention: Xxxxx Xxxxxxxxxx.
12. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no Claim may
be commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company, the
Partnership and the Selling Stockholder consent to the jurisdiction of such
courts and personal service with respect thereto. The Company, the Partnership
and the Selling Stockholder hereby consent to personal jurisdiction, service and
venue in any court in which any Claim arising out of or in any way relating to
this Agreement is brought by any third party against the Underwriter or any
indemnified party. The Underwriter and the Company (on its behalf and, to the
extent permitted by applicable law, on behalf of its stockholders and
affiliates), the Partnership and the Selling Stockholder (on its behalf and, to
the extent permitted by applicable law, on behalf of its partners and
affiliates) waive all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. The Company, the Partnership and the
Selling Stockholder agree that a final judgment in any such action, proceeding
or counterclaim brought in any such court shall be conclusive and binding upon
the Company, the Partnership and/or the Selling Stockholder and may be enforced
in any other courts to the jurisdiction of which the Company, the Partnership or
the Selling Stockholder is or may be subject, by suit upon such judgment.
31
14. Parties at Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriter, the Company, the Partnership and
the Selling Stockholder and to the extent provided in Section 9 hereof the
controlling persons, partners, directors and officers referred to in such
section, and their respective successors, assigns, heirs, personal
representatives and executors and administrators. No other person, partnership,
association or corporation (including a purchaser, as such purchaser, from the
Underwriter) shall acquire or have any right under or by virtue of this
Agreement.
15. Counterparts. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
16. Successors and Assigns. This Agreement shall be binding upon the
Underwriter, the Company, the Partnership, the Selling Stockholder and their
successors and assigns and any successor or assign of any substantial portion of
the Company's, the Partnership's, the Selling Stockholder's and the
Underwriter's respective businesses and/or assets.
17. Miscellaneous. UBS, an indirect, wholly owned subsidiary of UBS AG,
is not a bank and is separate from any affiliated bank, including any U.S.
branch or agency of UBS AG. Because UBS is a separately incorporated entity, it
is solely responsible for its own contractual obligations and commitments,
including obligations with respect to sales and purchases of securities.
Securities sold, offered or recommended by UBS are not deposits, are not insured
by the Federal Deposit Insurance Corporation, are not guaranteed by a branch or
agency, and are not otherwise an obligation or responsibility of a branch or
agency.
32
If the foregoing correctly sets forth the understanding between the
Company, the Partnership, the Selling Stockholder and the Underwriter, please so
indicate in the space provided below for that purpose, whereupon this agreement
and your acceptance shall constitute a binding agreement between the Company,
the Partnership, the Selling Stockholder and the Underwriter, severally.
Very truly yours,
HERSHA HOSPITALITY TRUST
By:
---------------------------------------------
Title:
HERSHA HOSPITALITY LIMITED PARTNERSHIP
By: Hersha Hospitality Trust, its sole
general partner
By:
--------------------------------------
Title:
CNL HOSPITALITY PARTNERS, L.P.
By: CNL Hospitality GP Corp., its sole
general partner
By:
--------------------------------------
Title:
33
Accepted and agreed to as of the
date first above written.
By: UBS SECURITIES LLC
By:
---------------------------
Title:
By:
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Title:
34
SCHEDULE A
SUBSIDIARIES
STATE OF
NAME OF ENTITY OWNERSHIP FORMATION
-------------- --------- ---------
Hersha Hospitality Trust NA MD
Hersha Hospitality Limited Partnership ("HHLP") NA VA
Hersha Hospitality, LLC ("HH LLC") 100% BY HHLP VA
Hersha Hospitality Limited Liability Company Carlisle 100% BY HHLP XX
Xxxxxx Hospitality Limited Liability Company Danville 100% BY HHLP XX
Xxxxxx Hospitality Limited Liability Company Duluth I 100% BY HHLP XX
Xxxxxx Hospitality Limited Liability Company Duluth 100% BY HHLP DE
II
Hersha Hospitality Limited Liability Company Hershey 100% BY HHLP XX
Xxxxxx Hospitality Limited Liability Company New 100% BY HHLP DE
Columbia
Hersha Hospitality Limited Liability Company New 100% BY HHLP DE
Cumberland,
Hersha Hospitality Limited Liability Company Newnan 100% BY HHLP XX
Xxxxxx Hospitality Limited Liability Company 100% BY HHLP DE
Peachtree
Hersha Hospitality Limited Liability Company 100% BY HHLP DE
Selinsgrove
Hersha Hospitality Limited Liability Company West 100% BY HHLP DE
Hanover,
HHLP Valley Forge Associates 99% BY HHLP PA
1% BY HH LLC
944 Associates 99% BY HHLP PA
1% by Hersha Hospitality Limited Liability
CompanyCarlisle
1244 Associates 99% by HHLP PA
1% by Hersha Hospitality Limited Liability
CompanyNew Cumberland
2144 Associates Hershey 99% by HHLP PA
1% by Hersha Hospitality Limited Liability
CompanyHershey
2144 Associates New Columbia 99% by HHLP PA
1% by Hersha Hospitality Limited Liability
CompanyNew Columbia
2144 Associates Selinsgrove 99% by HHLP PA
1% by Hersha Hospitality Limited Liability
CompanySelinsgrove
2444 Associates 99% by HHLP PA
1% by Hersha Hospitality Limited Liability
CompanyWest Hanover
2844 Associates 99% by HHLP PA
1% by HH LLC
3044 Associates 99% by HHLP and PA
1% by HH LLC
3144 Associates 99% by HHLP PA
1% by HH LLC
3544 Associates 99% by HHLP PA
1% by HH LLC
5644 Duluth I Associates 99% by HHLP PA
1% by Hersha Hospitality Limited Liability
CompanyDuluth I
5744 Duluth II Associates 99% by HHLP PA
1% by Hersha Hospitality Limited Liability
CompanyDuluth II
5844 Newnan Associates 99% by HHLP PA
1% by Hersha Hospitality Limited Liability
CompanyNewnan
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5944 Peachtree Associates 99% by HHLP PA
1% by Hersha Hospitality Limited Liability
CompanyPeachtree
5544 JFK III Associates 99% by HHLP PA
1% by HH LLC
Metro Two Hotel, LLC 100% by HHLP FL
HT/CNL Metro Hotels, LP 33.33% by HHLP DE
66.67% by CNL Hospitality Partners, LP
Chelsea Grand East, LLC 100% by HT / CNL Metro Hotels, LP NY
44 New England Management Company 100% by HHLP DE
HHM Leasehold Interests, Inc. 99% by Hersha Hospitality Management LP DE
1% by HHLP
Hersha CNL TRS, Inc. 100% by HT / CNL Metro Hotels, LP DE
PRA Glastonbury, LLC 40% by HHLP CT
Hersha PRA TRS, Inc. 40% by HHLP DE
44 Framingham Associates, LLC 100% by HHLP MA
44 Hartford Associates, LLC 100% by HHLP CT
Xxxxx Hospitality Associates, LLC 55% by HHLP MA
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Schedule B -- Holders of Registration Rights
None.
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Schedule C -- Properties Encumbered by Liens Relating to Financing
Property Lender
Hampton Inn
Carlisle Lehman Brothers
Danville Xxxxxx Brothers
Selinsgrove Xxxxxx Brothers
Hershey Waypoint Bank
Newnan GECC
Peachtree City GECC
Holiday Inn
Harrisburg Xxxxxx Brothers
Holiday Inn Express
Hershey Lehman Brothers
New Columbia Xxxxxx Brothers
Duluth Xxxxxx Brothers
Long Island City, NY GE Capital
Doubletree Club
Jamaica, NY GE Capital
Comfort Inn/Suites
Harrisburg Xxxxxx Brothers
Duluth Xxxxxx Brothers
Mainstay Suites/Sleep Inn
Valley Forge, PA Royal Bank
Mainstay Suites
Frederick MD Peoples Bank
Line of Credit Sovereign Bank
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Schedule D
A. Lock Up Letters
1. From Trustees and Officers
(a) Xxxx X. Xxxx
(b) Xxx X. Xxxx
(c) Xxxxxx X. Xxxxxx
(d) Xxxx X. Xxxx
(e) Xxxxx X. Xxxxx
(f) Xxxxx X. Xxxxxx
(g) X.X. Xxxxx
(h) Xxxxxxx X. Xxxxx
(i) Xxxxxx X. Xxxxxx
(j) Xxxx X. Xxxxx
(k) Xxxxxx X. Xxxxxxx
(l) Xxxxxxx Xxxx, Xx.
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Exhibit A
HERSHA HOSPITALITY TRUST
Common Shares
($ 0.01 Par Value)
April 7, 2004
UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in connection
with the proposed Underwriting Agreement (the "Underwriting Agreement") to be
entered into by Hersha Hospitality Trust (the "Company"), a certain selling
shareholder and you, with respect to the public offering (the "Offering") of
Common Shares, par value $ 0.01 per share, of the Company (the "Common Stock")
by the selling shareholder.
In order to induce you to enter into the Underwriting Agreement, the
undersigned agrees that for a period of 90 days after the date of the final
prospectus relating to the Offering the undersigned will not, without the prior
written consent of the Underwriter, (i) sell, offer to sell, contract or agree
to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose
of or agree to dispose of, directly or indirectly, or file (or participate in
the filing of) a registration statement with the Securities and Exchange
Commission (the "Commission") in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder with
respect to, any Common Stock or any other series of common stock of the Company
(the "Common Stock") or any securities convertible into or exercisable or
exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock, (ii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or warrants or other rights to purchase Common Stock, whether any
such transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, or (iii) publicly announce an intention to
effect any transaction specified in clause (i) or (ii). The foregoing sentence
shall not apply to (a) bona fide gifts, provided the recipient thereof agrees in
writing with the Underwriter to be bound by the terms of this Lock-Up Letter
Agreement or (b) dispositions to any trust for the direct or indirect benefit of
the undersigned and/or the immediate family of the undersigned, provided that
such trust agrees in writing with the Underwriter to be bound by the terms of
this Lock-Up Letter Agreement.
In addition, the undersigned further agrees that, for a period of 90
days after the date of the final prospectus relating to the Offering, the
undersigned will not, without the prior written consent of the Underwriter, make
any demand for, or exercise any right with respect to, the registration of
Common Stock of the Company or any securities convertible into or exercisable or
exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock.
If (i) the Company or the selling shareholder notifies you in writing
that it does not intend to proceed with the Offering or (ii) for any reason the
Underwriting Agreement shall be terminated prior to the time of purchase (as
defined in the Underwriting Agreement), this Lock-Up Letter Agreement shall be
terminated and the undersigned shall be released from its obligations hereunder.
Yours very truly,
---------------------------------
Name:
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Exhibit B
Officers' Certificate
1. The Registration Statement has become effective under the Act and no stop
order suspending the effectiveness of the Registration Statement or
preventing or suspending the use of the Prospectus has been issued, and no
proceedings for that purpose have been instituted or are pending or, to
their knowledge, threatened under the Act
2. They have reviewed the Registration Statement and the Prospectus.
3. The representations and warranties of the Company and the Partnership as
set forth in this Agreement are true and correct as of the time of purchase
and, if applicable, the additional time of purchase.
4. The Company and the Partnership have performed all of their obligations
under this Agreement as are to be performed at or before the time of
purchase and at or before the additional time of purchase, as the case may
be.
5. The conditions set forth in paragraphs (h) and (i) of Section 7 of this
Agreement have been met.
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Exhibit C
Based upon the subject to the foregoing, we are of the opinion that:
1. The Partnership is a limited partnership duly formed and validly existing
under the laws of the Commonwealth of Virginia, with full partnership power and
authority to execute the Underwriting Agreement and enter into the transactions
contemplated thereby and to own its properties and conduct its business as
described in the Final Prospectus.
2. The Partnership is qualified to transact business as a foreign partnership
and is in good standing in New Jersey and Pennsylvania.
3. The Company is the sole general partner of the Partnership.
4. The Company is qualified to transact business as a foreign entity and is in
good standing under the laws of Pennsylvania.
5. The Underwriting Agreement has been duly authorized by all necessary
partnership action and has been duly executed and delivered by the Partnership.
6. The execution and delivery of the Underwriting Agreement by the Company and
the Partnership does not, and the performance by the Company and the Partnership
of the transactions contemplated by the Underwriting Agreement will not:
(a) violate or constitute a breach under the Certificate of
Limited Partnership of the Partnership or the Partnership
Agreement;
(b) violate or constitute a breach under any agreement that was
filed, or the form of which was filed, as an exhibit to the
Registration Statement;
(c) violate any laws of the Commonwealth of Virginia or the
federal laws of the United States applicable to the
Partnership or, to our knowledge, any judgment, decree or
order binding on the Company or the Partnership or any of
their investments or properties; or
(d) to our knowledge, result in the creation or imposition of any
lien, charge, encumbrance on or security interest in, any
assets of the Company or the Partnership pursuant to laws of
the Commonwealth of Virginia or the federal laws of the United
States applicable to the Partnership or any judgment, decree
or order binding on the Company or the Partnership or any of
their properties or any agreement filed as an exhibit to the
Registration Statement or describe therein.
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7. The Common Shares, including the Shares, have been approved for listing on
the American Stock Exchange, subject to final notice of issuance.
8. The Registration Statement has become effective under the Act and, to our
knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued and not withdrawn and no proceedings for that purpose
have been instituted or are pending or contemplated under the Act.
9. The Prospectus was filed pursuant to Rule 424(b)(4) within the time period
specified under the Act.
10. No filing with, notice to, or consent, approval, authorization or order of
any court or governmental agency or body or official is required to be made in
connection with the execution, delivery and performance of the Underwriting
Agreement by the Company or the Partnership, other than the registration of the
shares pursuant to the Act; provided however that the foregoing opinion does not
address the state securities or blue sky laws of the various jurisdictions in
which the Shares have or are being offered by the Underwriters.
11. To our knowledge, neither the Company, the Partnership, HT/CNL Metro Hotels,
LP or 44 New England Management Company is in breach or violation of, or in
default under (nor has any event occurred which with notice, lapse of time, or
both would result in a breach or violation of, or constitute a default under),
its respective declaration of trust, certificate of limited partnership,
partnership agreement, articles of incorporation or bylaws, as applicable.
12. To our knowledge, there is no action, suit or proceeding before any court or
administrative body pending or threatened against or affecting the Company or
the Partnership or any of their respective officers, trustees or properties,
which would be required to be described in the Registration Statement or
Prospectus but are not so described.
13. The Company is not, and after giving effect to the transactions contemplated
by the Underwriting Agreement will not be, an "investment company" or a company
controlled by an investment company within the meaning of the Investment Company
Act of 1940, as amended.
14. The information contained in the Prospectus under the headings "CNL
Strategic Alliance" and "Operating Partnership Agreement," insofar as such
information purports to be a summary of documents referred to therein or of the
laws of the Commonwealth of Virginia, and any other statement purporting to be
descriptions of the laws of the Commonwealth of Virginia (a) have been reviewed
by us and are correct in all material respects, and (b) fairly present the
information required by the rules and regulations promulgated under the Act.
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15. To our knowledge, except as disclosed on Schedule C to the Underwriting
Agreement, no person has the right, pursuant to the terms of any contract,
agreement or other instrument described in or filed as an exhibit to the
Registration Statement or otherwise known to us, to cause the Company to
register under the Act any shares of Common Stock or shares of any other capital
stock or other equity interest of the Company, or to include any such shares or
interest in the Registration Statement or the offering contemplated thereby,
whether as a result of the filing or effectiveness of the Registration Statement
or the sale of the Shares as contemplated thereby or otherwise.
16. The Company is a real estate investment trust duly formed and existing under
and by virtue of the laws of the State of Maryland and is in good standing with
the SDAT. The Company has trust power to (i) own, lease and operate its
properties and conduct its business as described in the Registration Statement
and (ii) execute and deliver the Underwriting Agreement.
17. The Underwriting Agreement has been duly authorized, executed and, so far as
is known to us, delivered on behalf of the Company.
18. The Shares have been duly authorized and, when and if delivered against
payment therefor in accordance with the Pricing Committee Resolutions and the
Underwriting Agreement, will be validly issued, fully paid and nonassessable.
19. The authorized, issued and outstanding shares of beneficial interest of the
Company are as set forth in the line items "Preferred Shares," Class A Common
Shares" and "Class B Common Shares" under the caption "Capitalization" in the
Prospectus (except for subsequent issuances (or forfeitures) pursuant to the
Underwriting Agreement or pursuant to employee benefit plans or the exercise of
options referred to in the Prospectus or the documents incorporated by reference
therein).
20. All of the issued and outstanding shares of beneficial interest of the
Company (the "Outstanding Shares") have been duly authorized and validly issued,
are fully paid and nonassessable and no holders of Outstanding Shares are
entitled to preemptive or other rights to subscribe for the Shares arising under
the Maryland REIT Law or the Declaration of Trust or Bylaws.
21. No holders of the Shares are entitled to preemptive or other rights to
subscribe for shares of the Company arising under the Maryland REIT Law or the
Declaration of Trust or Bylaws.
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22. The certificates evidencing the Shares are in due and proper form, and no
personal liability will attach, under the laws of the State of Maryland, to
holders of the Shares for any debt or obligation of the Company solely as a
result of their status as shareholders of the Company.
23. The shares of beneficial interest of the Company, including the Shares,
conform to the description thereof contained in the Registration Statement.
24. The execution, delivery and performance of the Underwriting Agreement by the
Company and the consummation by the Company of the transactions contemplated
thereby,do not and will not conflict with, result in any breach or violation of,
or constitute a default under (or constitute any event which with notice, lapse
of time or both would result in any breach or violation of, or constitute a
default under) the Declaration of Trust or Bylaws or any statute, regulation or
rule of the State of Maryland applicable to the Company or any of its
subsidiaries.
25. The statements set forth in the Prospectus under the captions "Description
of Shares of Beneficial Interest" and "Certain Provisions of Maryland and Law
and of Our Declaration of Trust and Bylaws," insofar as they purport to
constitute a summary of the terms of the Company's common shares of beneficial
interest (the "Common Shares") and laws related thereto, fairly summarize such
terms and applicable law, and the Common Shares conform in all material respects
as to legal matters to the description thereof contained in the Registration
Statement, except that no opinion is expressed concerning the priority of the
Class A Common Shares, including the Shares, over units of partnership interest
in the Operating Partnership with respect to distributions.
We have participated in various conferences with the officers and other
representatives of the Company and representatives of Xxxxxxx Xxxxxx & Xxxxxxxxx
CPAs, PC, the Company's independent certified public accountants. In some
conferences you and your counsel also participated. At those conferences, the
contents of the Registration Statement and Prospectus and related matters were
discussed and revised. Since the dates of those conferences, we have inquired of
certain officers whether there has been any material change in the affairs of
the Company.
Because of the inherent limitations in the independent verification of factual
matters, and the character of determinations involved in the preparation of
registration statements under the Securities Act, we are not passing upon, and
do not assume any responsibility for, and make no representation that we have
independently verified, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or Prospectus except as stated in
paragraph 25 of Part I above. We do not express any opinion or belief as to the
financial
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statements, related schedules or other financial and statistical information
contained or incorporated by reference in the Registration Statement or
Prospectus. However, subject to the foregoing, on the basis of our participation
in the conferences referred to above and our examination of the documents
referred to herein, we advise you that (a) in our opinion, the Registration
Statement, when it became effective, and the Prospectus, as of its date and as
of the date hereof, and the filings incorporated by reference in the
Registration Statement as of the date they were declared effective, (other than
the financial statements and other financial or statistical data included
therein or incorporated by reference, as to which we express no opinion) comply
as to form in all material respects with the requirements of the Act and the
rules and regulations promulgated thereunder; and (b) we do not know of any
affiliate transactions, off-balance sheet transactions, or material agreements
of a character required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration Statement that are not
described or filed as required. Further, nothing has come to our attention that
leads us to believe that the Registration Statement, when it became effective,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading; or that the Prospectus, as of its date and as of the
date hereof, contained or contains any untrue statement of a material fact or
omitted or omits to state any material fact required to be stated therein or
necessary to make the statements, in light of the circumstances under which they
were made, not misleading.
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