10,000,000 Shares
HOSPITALITY PROPERTIES TRUST
(a Maryland real estate investment trust)
Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
May 5, 1999
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
X.X. XXXXXXX & SONS, INC.
FIRST UNION CAPITAL MARKETS CORP.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
XXXXXXX XXXXX BARNEY INC.
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Hospitality Properties Trust, a Maryland real estate investment trust
(the "Company"), confirms its agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx"), Xxxxxxxxx,
Xxxxxx and Xxxxxxxx Securities Corporation, X.X. Xxxxxxx & Sons, Inc., First
Union Capital Markets Corp., Xxxx Xxxxx Xxxx Xxxxxx, Incorporated, Prudential
Securities Incorporated and Xxxxxxx Xxxxx Barney Inc. (collectively, the
"Underwriters," which term shall include any underwriter substituted as
hereinafter provided in Section 10 hereof), with respect to the sale by the
Company and the purchase by each such Underwriter, severally, of 10,000,000
common shares of beneficial interest, par value $.01 per share (the "Common
Shares"), of the Company at a purchase price of $25.4425 per Common Share and
with respect to the grant by the Company to the Underwriters of the option
described in Section 2 hereof to purchase all or any part of an additional
1,500,000 Common Shares to cover over-allotments. The aforesaid 10,000,000
Common Shares (the "Initial Shares"), together with all or any part of the
1,500,000 Common Shares subject to the option described in Section 2 hereof
(the "Option Shares"), are collectively hereinafter called the "Shares."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-43573) for the
registration of debt securities, preferred shares of beneficial interest,
depositary shares, common shares of beneficial interest and warrants under
the Securities Act of 1933, as amended (the "1933 Act"), and the offering
thereof from time to time in accordance with Rule 415 of the rules and
regulations of the
Commission under the 1933 Act (the "1933 Act Regulations"). Such
registration statement has been declared effective by the Commission on
January 15, 1998 and the Company has filed such post-effective amendments
thereto as may be required and each such post-effective amendment has been
declared effective by the Commission. Such registration statement (as so
amended, if applicable) is referred to herein as the "Registration
Statement"; and the final prospectus and the final prospectus supplement
relating to the offering of the Shares, in the form first furnished to the
Underwriters by the Company for use in connection with the offering of the
Shares, are collectively referred to herein as the "Prospectus"; provided,
however, that all references to the "Registration Statement" and the
"Prospectus" shall also be deemed to include all documents incorporated
therein by reference pursuant to the Securities Exchange Act of 1934, as
amended (the "1934 Act"), prior to the date hereof; provided, further, that
if the Company files a registration statement with the Commission pursuant to
Rule 462(b) of the 1933 Act Regulations (the "Rule 462(b) Registration
Statement"), then, after such filing, all references to "Registration
Statement" shall also be deemed to include the Rule 462(b) Registration
Statement. For purposes of this Underwriting Agreement, all references to the
Registration Statement and Prospectus, or to any amendment or supplement to
either of the foregoing shall be deemed to include any copy filed with the
Commission pursuant to its Electronic Data Gathering Analysis and Retrieval
system ("XXXXX").
All references in this Underwriting Agreement to financial statements
and schedules and other information which is "contained," "included" or
"stated" (or other references of like import) in the Registration Statement
or the Prospectus shall be deemed to mean and include all such financial
statements and schedules and other information which is incorporated by
reference in the Registration Statement or the Prospectus, as the case may
be, prior to the execution of this Underwriting Agreement; and all references
in this Underwriting Agreement to amendments or supplements to the
Registration Statement, Prospectus or preliminary prospectus shall be deemed
to mean and include the filing of any document under the 1934 Act which is
incorporated by reference in the Registration Statement or Prospectus, as the
case may be, after the execution of this Underwriting Agreement.
The 198 hotels described in the Prospectus as being currently owned by
the Company as of the date hereof are collectively referred to herein as the
"Current Hotels". The 6 hotels described in the Prospectus as being proposed
to be acquired by the Company as of the date hereof are collectively referred
to herein as the "Additional Hotels". The Current Hotels and the Additional
Hotels are collectively referred to herein as the "Hotels". It is understood
that in connection with the proposed acquisition of the Additional Hotels,
the Company has entered into purchase and sale agreements and agreements to
lease (the "Acquisition Agreements") contemplating consummation of a series
of related transactions (the "Acquisition Transactions") generally described
in the Prospectus Supplement referred to below under the caption "Recent
Developments", pursuant to which the Company shall (i) acquire the Additional
Hotels and (ii) lease the Additional Hotels to a subsidiary of Marriott
International Inc. on a combined basis.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(A) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company
represents and warrants to each of the Underwriters, as of the date hereof,
as follows:
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(1) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company meets the
requirements for use of Form S-3 under the 1933 Act. The Registration
Statement (including any Rule 462(b) Registration Statement) has become
effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement (or such Rule 462(b)
Registration Statement) has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statement (including
any Rule 462(b) Registration Statement) and any post-effective
amendments thereto (including the filing of the Company's most recent
Annual Report on Form 10-K with the Commission (the "Annual Report on
Form 10-K")) became effective and as of the date hereof, the
Registration Statement (including any Rule 462(b) Registration
Statement) and any amendments thereto complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations and did not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. At
the date of the Prospectus and at the Closing Time as defined below,
neither the Prospectus nor any amendments and supplements thereto
included or will include an untrue statement of a material fact or
omitted or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. Notwithstanding the foregoing,
the representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by the Underwriters through Xxxxxxx
Xxxxx expressly for use in the Registration Statement or the
Prospectus.
Each preliminary prospectus and prospectus filed as part of
the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and the Prospectus delivered to the Underwriters for use in
connection with the offering of the Shares will, at the time of such
delivery, be identical to any electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(2) INCORPORATED DOCUMENTS. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations") and, when read
together with the other information in the Prospectus, at the date of
the Prospectus and at the Closing Time did not and will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
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(3) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and any supporting schedules thereto included in
the Registration Statement and the Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(4) FINANCIAL STATEMENTS. The financial statements of the Company
included in the Registration Statement and the Prospectus, together with
the related schedules and notes, as well as those financial statements,
schedules and notes of any other entity included therein, present
fairly the financial position of the Company and its consolidated
subsidiaries, or such other entity, as the case may be, at the dates
indicated and the statement of operations, shareholders' equity and
cash flows of the Company and its consolidated subsidiaries, or such
other entity, as the case may be, for the periods specified. Such
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules, if any,
included in the Registration Statement and the Prospectus present
fairly in accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial
information included in the Prospectus present fairly the information
shown therein and have been compiled on a basis consistent with that of
the audited financial statements included in the Registration Statement
and the Prospectus. In addition, any pro forma financial statements of
the Company and its subsidiaries and the related notes thereto included
in the Registration Statement and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(5) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business (a "Material Adverse Effect" or a
"Material Adverse Change"), (B) there have been no transactions entered
into by the Company or any of its subsidiaries, other than those
arising in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise and (C) except for regular dividends on the Company's common
shares or preferred shares, in amounts per share that are consistent
with past practice or the applicable charter document or supplement
thereto, respectively, there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its
capital shares.
(6) GOOD STANDING OF THE COMPANY. The Company has been duly organized
and is validly existing as a real estate investment trust in good standing
under the laws of the State of Maryland and has power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform
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its obligations under, or as contemplated under, this Underwriting
Agreement. The Company is duly qualified to transact business and is in
good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify or be
in good standing would not result in a Material Adverse Effect.
(7) GOOD STANDING OF SUBSIDIARIES. Each "significant subsidiary" of
the Company (as such term is defined in Rule 1-02 of Regulation S-X
promulgated under the 0000 Xxx) (each, a "Subsidiary" and,
collectively, the "Subsidiaries"), if any, has been duly organized and
is validly existing as a corporation or a real estate investment trust,
as the case may be, in good standing under the laws of the jurisdiction
of its incorporation or formation, as the case may be, has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation or a real estate investment trust,
as the case may be, to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good standing
would not result in a Material Adverse Effect. Except as otherwise
stated in the Registration Statement and the Prospectus, all of the
issued and outstanding capital shares of each Subsidiary has been duly
authorized and is validly issued, fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity. None of the outstanding capital shares of any Subsidiary was
issued in violation of preemptive or other similar rights of any
securityholder of such Subsidiary.
(8) CAPITALIZATION. The authorized, issued and outstanding capital
shares of the Company (except for 500 Common Shares, 250 of which are held
by Xxxx X. Xxxxxx and 250 of which are held by Xxxxx X. Xxxxxx) have been
duly authorized and validly issued by the Company and are fully paid
and non-assessable (except as otherwise described in the Registration
Statement), and none of such capital shares was issued in violation of
preemptive or other similar rights of any securityholder of the
Company.
(9) AUTHORIZATION OF THIS UNDERWRITING AGREEMENT. This Underwriting
Agreement has been duly authorized, executed and delivered by the Company.
(10) AUTHORIZATION OF THE SHARES. The Shares to be issued and sold
pursuant to this Agreement have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor as provided
hereunder, will have been validly issued and will be fully paid,
non-assessable (except as otherwise described in the Registration
Statement) and free of preemptive or similar rights; there are no
outstanding subscriptions, rights, warrants, options, calls,
convertible securities, commitments of sale or liens related to or
entitling any person to purchase or otherwise to acquire any Common
Shares of, or other ownership interest in, the Company, except as
otherwise disclosed in the Registration Statement or the Prospectus and
except for awards under the Company's Incentive Share Award Plan made
in the ordinary course of business; all outstanding Common Shares,
except for shares issued pursuant to the Company's Incentive Share
Award Plan and shares issued to the Advisor (as defined below) and its
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affiliates, are listed on the New York Stock Exchange, Inc. (the
"NYSE") and the Company knows of no reason or set of facts which is
likely to result in the delisting of such Common Shares or the
inability to list the Shares; and there are no rights of holders of
securities of the Company to the registration of Common Shares or other
securities that would require inclusion of such Common Shares or other
securities in the offering of the Shares.
(11) DESCRIPTIONS OF THE SHARES. The Shares will conform in all
material respects to the statements relating thereto contained in the
Prospectus.
(12) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor any
of its subsidiaries is in violation of its declaration of trust, charter
or by-laws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which it or any of them may be bound,
or to which any of the assets, properties or operations of the Company
or any of its subsidiaries is subject (collectively, "Agreements and
Instruments"), except for such defaults that would not result in a
Material Adverse Effect. The execution, delivery and performance of
this Underwriting Agreement and any other agreement or instrument
entered into or issued or to be entered into or issued by the Company
in connection with the transactions contemplated hereby or thereby or
in the Registration Statement and the Prospectus and the consummation
of the transactions contemplated herein and in the Registration
Statement and the Prospectus (including the issuance and sale of the
Shares and the use of the proceeds from the sale of the Shares as
described under the caption "Use of Proceeds") and compliance by the
Company with its obligations hereunder and thereunder have been duly
authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any assets, properties or
operations of the Company or any of its subsidiaries pursuant to, any
Agreements and Instruments, nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or
any of its subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its subsidiaries or any of
their assets, properties or operations. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Company or
any of its subsidiaries.
(13) ABSENCE OF LABOR DISPUTE. To the knowledge of the Company, no
labor problem exists or is imminent with employees of the Company or any
of its subsidiaries that could have a Material Adverse Effect.
(14) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic
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or foreign, now pending, or to the knowledge of the Company threatened,
against or affecting the Company or any of its subsidiaries which is
required to be disclosed in the Registration Statement and the Prospectus
(other than as stated therein), or which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably be expected
to materially and adversely affect the consummation of the transactions
contemplated under the Prospectus, this Underwriting Agreement, or the
performance by the Company of its obligations hereunder. The aggregate
of all pending legal or governmental proceedings to which the Company or
any of its subsidiaries is a party or of which any of their respective
assets, properties or operations is the subject which are not described
in the Registration Statement and the Prospectus, including ordinary
routine litigation incidental to the business, could not reasonably be
expected to result in a Material Adverse Effect.
(15) ACCURACY OF EXHIBITS. There are no contracts or documents which
are required to be described in the Registration Statement, the Prospectus
or the documents incorporated by reference therein or to be filed as
exhibits thereto which have not been so described and filed as required.
(16) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or authorization,
approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the due authorization, execution
and delivery by the Company of this Underwriting Agreement or for the
performance by the Company of the transactions contemplated under the
Prospectus or this Underwriting Agreement, except such as may be
required and will be obtained at or prior to the Closing Time and such
as may be required by the securities or Blue Sky laws or real estate
syndication laws of the various states in connection with the offer and
sale of the Shares and, in the case of the performance thereof, except
as are contemplated by the express terms of such documents to occur
after the Closing Time and except (x) such as are otherwise described
in the Prospectus and (y) such that the failure to obtain would not
have a Material Adverse Effect.
(17) POSSESSION OF INTELLECTUAL PROPERTY. The Company and each of its
subsidiaries owns, or possesses adequate rights to use, all patents,
trademarks, trade names, service marks, copyrights, licenses and other
rights necessary for the conduct of their respective businesses as
described in the Registration Statement and in the Prospectus, and
neither the Company nor any of its subsidiaries has received any notice
of conflict with, or infringement of, the asserted rights of others
with respect to any such patents, trademarks, trade names, service
marks, copyrights, licenses and other such rights (other than conflicts
or infringements that, if proven, would not have a Material Adverse
Effect), and neither the Company nor any of its subsidiaries knows of
any basis therefor.
(18) POSSESSION OF LICENSES AND PERMITS. To the best knowledge of the
Company, each lessee of the Current Hotels has, and as of the Closing
Time will have, all permits, licenses, approvals, certificates,
franchises and authorizations of governmental or regulatory authorities
("Approvals") as may be necessary to lease, operate or manage
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the Current Hotels in the manner described in or contemplated by the
Prospectus, except for those Approvals the absence of which would not
have a Material Adverse Effect.
(19) TITLE TO PROPERTY. The Company and its subsidiaries have good and
marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in
each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind, except (A)
as otherwise stated in the Registration Statement and the Prospectus,
(B) in the case of personal property located at certain Hotels, such as
are subject to equipment lease financing arrangements which have been
entered into in the ordinary course of business and have an aggregate
outstanding balance not in excess of $1 million or (C) those which do
not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be made
of such property by the Company or any of its subsidiaries. All of the
leases and subleases material to the business of the Company and its
subsidiaries considered as one enterprise, and under which the Company
or any of its subsidiaries holds properties described in the
Prospectus, are in full force and effect, and neither the Company nor
any of its subsidiaries has received any notice of any material claim
of any sort that has been asserted by anyone adverse to the rights of
the Company or any of its subsidiaries under any of the leases or
subleases mentioned above, or affecting or questioning the rights of
the Company or such subsidiary to the continued possession of the
leased or subleased premises under any such lease or sublease.
(20) INVESTMENT COMPANY ACT. The Company is not, and upon the issuance
and sale of the Shares as herein contemplated and the application of the
net proceeds therefrom as described in the Prospectus will not be, an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended (the "1940 Act").
(21) ENVIRONMENTAL LAWS. The Company has received and reviewed certain
environmental reports on (which included physical inspection of the
surface of) each Current Hotel's property and has obtained certain
representations and warranties relating to environmental matters from
the sellers of the Current Hotels set forth in purchase agreements
therefor. Except as described in the Prospectus, (i) the Company, and,
to its knowledge, each Current Hotel's property, is, and as of the
Closing Time will be, in compliance with all applicable federal, state
and local laws and regulations relating to the protection of human
health and safety, the environment, hazardous or toxic substances and
wastes, pollutants and contaminants ("Environmental Laws"), (ii) the
Company, or, to its knowledge, its lessees have received, or as of the
Closing Time will receive, all permits, licenses or other approvals
required under applicable Environmental Laws to conduct the respective
hotel businesses presently conducted at each Current Hotel's property
and (iii) the Company or, to its knowledge, its lessees are, or as of
the Closing Time will be, in compliance with all terms and conditions
of any such permit, license or approval, except, in respect of clauses
(i), (ii) and (iii), as otherwise disclosed in the Prospectus or as
would not, singly or in the aggregate, have a Material Adverse Effect.
To the best knowledge of the Company, except as described in the
Prospectus, there are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, remediation or closure of
8
properties or compliance with Environmental Laws and any potential
liabilities to third parties) that, as of the date hereof, would, or as
of the Closing Time will, singly or in the aggregate, have a Material
Adverse Effect. The Company has received and reviewed engineering
reports on each Current Hotel's property, has obtained certain
representations and warranties from the sellers of the Current Hotels
set forth in purchase agreements therefor and has conducted physical
inspections of each Current Hotel's property. In respect of each
Current Hotel, (i) each Current Hotel is not in violation of any
applicable building code, zoning ordinance or other law or regulation,
except where such violation of any applicable building code, zoning
ordinance or other law or regulation would not, singly or in the
aggregate, have a Material Adverse Effect; (ii) the Company has not
received notice of any proposed material special assessment or any
proposed change in any property tax, zoning or land use laws or
availability of water affecting any Current Hotel that would have,
singly or in the aggregate, a Material Adverse Effect; (iii) except as
disclosed in the Prospectus, there does not exist any material
violation of any declaration of covenants, conditions and restrictions
with respect to any Current Hotel that would have, singly or in the
aggregate, a Material Adverse Effect, or any state of facts or
circumstances or condition or event which could, with the giving of
notice or passage of time, or both, constitute such a violation; and
(iv) the improvements comprising any portion of each Current Hotel (the
"Improvements") are free of any and all material physical, mechanical,
structural, design and construction defects that would have, singly or
in the aggregate, a Material Adverse Effect and the mechanical,
electrical and utility systems servicing the Improvements (including,
without limitation, all water, electric, sewer, plumbing, heating,
ventilation, gas and air conditioning) are in good condition and proper
working order and are free of defects that would have, singly or in the
aggregate, a Material Adverse Effect.
(22) REIT QUALIFICATION. The Company is organized in conformity with
the requirements for qualification, and, as of the date hereof the Company
operates, and as of Closing Time the Company will operate, in a manner
that qualifies the Company as a "real estate investment trust" under
the Internal Revenue Code of 1986, as amended (the "Code"), and the
rules and regulations thereunder, for 1999 and subsequent years. The
Company qualified as a real estate investment trust under the Code for
each of the taxable years ended December 31, 1995 through December 31,
1998.
(23) POSSESSION OF INSURANCE. The Company and its Current Hotels are,
and as of the Closing Time will be, insured in the manner described in
the Prospectus by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are customary in the
businesses in which the Company is engaged and proposes to engage and
the Company has no reason to believe that it or its tenants will not be
able to renew such insurance coverage as and when such coverage expires
or to obtain similar coverage as may be necessary to continue its
business at economically viable rates. The Company and/or its
subsidiaries, as applicable, has obtained an ALTA Extended Coverage
Owner's Policy of Title Insurance or its local equivalent (or an
irrevocable commitment to issue such a policy) on all of the Current
Hotels owned by the Company or its subsidiaries and such title
insurance is in full force and effect.
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(24) ACQUISITION AGREEMENTS. The Acquisition Agreements pursuant to
which the Company expects to acquire the Additional Hotels (including any
Additional Hotels which the Company may determine to acquire after the
Closing Time) are in full force and effect. The Company intends and
reasonably expects to consummate the acquisition and lease of all
Additional Hotels not owned or acquired by it as of the Closing Time as
expeditiously as possible after the Closing Time, including as and when
the construction of certain of such properties is completed.
(25) ABSENCE OF INDEBTEDNESS. At the Closing Time, the Company will
have no indebtedness for money borrowed except (i) amounts outstanding
under the Company's $300 million aggregate principal amount credit
facility (the "Credit Facility"), (ii) the Company's 7% Senior Notes due
2008, (iii) the Company's 8 1/4% Monthly Income Senior Notes due 2005,
(iv) the Company's 8% Monthly Income Senior Notes due 2009, (v)
equipment financing arrangements in respect of personal property
located at certain Current Hotels which have been entered into in the
ordinary course of business and have an aggregate outstanding balance
not in excess of $1 million, and (vi) any indebtedness as to which you
shall have given your prior written consent.
(26) GOOD STANDING OF THE ADVISOR. Except as otherwise disclosed in
the Prospectus, since the respective dates as of which information is
given in the Prospectus, there has been no material adverse change in the
business, operations, earnings, prospects, properties or condition
(financial or otherwise) of REIT Management & Research, Inc. (the
"Advisor"), whether or not arising in the ordinary course of business,
that would have a Material Adverse Effect. The Advisor (A) is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware, and (B) has the requisite corporate
power and authority to conduct its business as described in the
Prospectus and to own and operate its material properties. The Advisory
Agreement, dated as of January 1, 1998 (the "Advisory Agreement"),
between the Company and the Advisor, has been duly authorized, executed
and delivered by the parties thereto and constitutes the valid
agreement of the parties thereto, enforceable in accordance with its
terms, except as limited by (a) the effect of bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws
relating to or affecting the rights or remedies of creditors or (b) the
effect of general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(b) OFFICERS' CERTIFICATES. Any certificate signed by any officer of the
Company or any of its subsidiaries and delivered to the Underwriters or to
counsel for the Underwriters in connection with the offering of the Shares
shall be deemed a representation and warranty by the Company to the
Underwriters as to the matters covered thereby on the date of such
certificate.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
(a) SHARES. The commitments of the several Underwriters to purchase the
Shares pursuant to the terms hereof shall be deemed to have been made on the
basis of the representations, warranties and agreements herein contained and
shall be subject to the terms and conditions herein set forth.
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(b) OVER-ALLOTMENT OPTION. In addition, on the basis of the
representations and warranties herein included and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriters to purchase up to an additional 1,500,000 Shares at the purchase
price set forth on the first page of this Agreement. The option hereby
granted will expire 30 days after the date of this Agreement and may be
exercised in whole or in part from time to time only for the purpose of
covering over-allotments which may be made in connection with the offering
and distribution of the Initial Shares upon notice by the Underwriters to the
Company setting forth the number of Option Shares as to which the
Underwriters are then exercising the option and the time, date and place of
payment and delivery for such Option Shares. Any such time and date of
delivery (a "Date of Delivery") shall be determined by the Underwriters but
shall not be later than seven full business days, nor earlier than two full
business days, after the exercise of said option, nor in any event prior to
Closing Time, unless otherwise agreed upon by the Underwriters and the
Company.
(c) PAYMENT. Payment of the purchase price for, and delivery of, the
Initial Shares shall be made at the offices of Xxxxxxxx & Worcester LLP,
Boston, Massachusetts, or at such other place as shall be agreed upon by the
Underwriters and the Company, at 9:00 A.M. (Eastern time) on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given
day) business day following the date of this Agreement, or such other time
not later than ten business days after such date as shall be agreed upon by
the Underwriters and the Company (such time and date of payment and delivery
being herein called "Closing Time"). In addition, in the event that the
over-allotment option described in (b) above is exercised by the
Underwriters, payment of the purchase price for and delivery of the Option
Shares shall be made at the above-mentioned office of Xxxxxxxx & Worcester
LLP, or at such other place as shall be agreed upon by the Underwriters and
the Company on each Date of Delivery as specified in the notice to the
Company. Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery
to the Underwriters of certificates for the Shares to be purchased by them.
(d) REGISTRATION. The Shares shall be issued and registered in such
names as the Underwriters shall request not later than two business days
prior to the Closing Time or the Date of Delivery, as the case may be. The
Shares shall be made available for inspection not later than 10:00 a.m.
(Eastern Time) on the business day prior to the Closing Time or the Date of
Delivery, as the case may be, at the office of The Depository Trust Company
or its designated custodian.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each of
the Underwriters as follows:
(a) Immediately following the execution of this Agreement, the Company
will prepare a Prospectus Supplement setting forth the number of Shares
covered thereby and their terms not otherwise specified in the Prospectus,
the Underwriters' names, the price at which the Shares are to be purchased by
the Underwriters from the Company, and such other information as the
Underwriters and the Company deem appropriate in connection with the offering
of the Shares; and the Company will promptly transmit copies of the
Prospectus Supplement to the Commission for filing pursuant to Rule 424(b) of
the 1933 Act Regulations and will furnish to the Underwriters as many copies
of the Prospectus (including such Prospectus Supplement) as they shall
reasonably request.
11
(b) Until the termination of the initial offering of the Shares, the
Company will notify the Underwriters immediately, and confirm the notice in
writing, (i) of the effectiveness of any amendment to the Registration
Statement, (ii) of the transmittal to the Commission for filing of any
supplement or amendment to the Prospectus or any document to be filed
pursuant to the 1934 Act, (iii) of the receipt of any comments from the
Commission with respect to the Shares, (iv) of any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus with respect to the Shares or for additional
information relating thereto, and (v) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose. The Company will make
every reasonable effort to prevent the issuance of any such stop order and,
if any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(c) Until the termination of the initial offering of the Shares, the
Company will give the Underwriters notice of its intention to file or prepare
any post-effective amendment to the Registration Statement or any amendment
or supplement to the Prospectus (including any revised prospectus which the
Company proposes for use by the Underwriters in connection with the offering
of the Shares which differs from the prospectus on file at the Commission at
the time that the Registration Statement becomes effective, whether or not
such revised prospectus is required to be filed pursuant to Rule 424(b) of
the 1933 Act Regulations), will furnish the Underwriters with copies of any
such amendment or supplement a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file any such
amendment or supplement or use any such prospectus to which counsel for the
Underwriters shall reasonably object.
(d) The Company will deliver to the Underwriters a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
filed prior to the termination of the initial offering of the Shares
(including exhibits filed therewith or incorporated by reference therein and
the documents incorporated by reference into the Prospectus pursuant to Item
12 of Form S-3).
(e) The Company will furnish to the Underwriters, from time to time
during the period when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the Prospectus (as amended
or supplemented) as the Underwriters may reasonably request for the purposes
contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or 1934
Act Regulations.
(f) Until the termination of the initial offering of the Shares, if any
event shall occur as a result of which it is necessary, in the opinion of
counsel for the Underwriters, to amend or supplement the Prospectus in order
to make the Prospectus not misleading in the light of the circumstances
existing at the time it is delivered, the Company will either (i) forthwith
prepare and furnish to the Underwriters an amendment of or supplement to the
Prospectus or (ii) make an appropriate filing pursuant to Section 13, 14 or
15 of the 1934 Act, in form and substance reasonably satisfactory to counsel
for the Underwriters, which will amend or supplement the Prospectus so that
it will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances existing at the time it is delivered, not misleading.
12
(g) The Company will endeavor in good faith, in cooperation with the
Underwriters, to qualify the Shares for offering and sale under the
applicable securities laws and real estate syndication laws of such states
and other jurisdictions of the United States as the Underwriters may
designate; provided that, in connection therewith, the Company shall not be
required to qualify as a foreign corporation or trust or to file any general
consent to service of process. In each jurisdiction in which the Shares have
been so qualified the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for so long as required for the distribution of the Shares.
(h) The Company will make generally available to its security holders as
soon as reasonably practicable, but not later than 90 days after the close of
the period covered thereby, an earning statement of the Company (in form
complying with the provisions of Rule 158 of the 1933 Act Regulations)
covering a period of at least twelve months beginning not later than the
first day of the Company's fiscal quarter next following the effective date
of the Registration Statement. "Earning statement", "make generally
available" and "effective date" will have the meanings contained in Rule 158
of the 1933 Act Regulations.
(i) The Company will use the net proceeds received by it from the sale
of the Shares in the manner specified in the Prospectus under the caption
"Use of Proceeds" in all material respects.
(j) The Company currently intends to continue to qualify as a "real
estate investment trust" under the Code, and use its best efforts to continue
to meet the requirements to qualify as a "real estate investment trust" under
the Code.
(k) The Company will timely file any document which it is required to
file pursuant to the 1934 Act prior to the termination of the offering of the
Shares.
(l) The Company will use its best efforts to effect the listing of the
Shares on the NYSE.
(m) The Company will not, during a period of 30 days from the date of
this Agreement, without Xxxxxxx Xxxxx'x prior written consent, register,
offer, sell, contract to sell, grant any option to purchase or otherwise
dispose of any Common Shares or any securities convertible into or
exercisable or exchangeable for Common Shares, or warrants to purchase Common
Shares, other than (i) the Shares which are to be sold pursuant to this
Agreement and (ii) Common Shares issued or to be issued pursuant to the
Company's Incentive Share Award Plan.
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. The Company will pay all expenses incident to the
performance of its obligations under this Underwriting Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, issuance and delivery of the Shares
and any certificates for the Shares to the Underwriters, including any
transfer taxes and any stamp or other duties payable upon the sale, issuance
or delivery of the Shares to the Underwriters, (iii) the fees and
disbursements of the Company's counsel, accountants and other advisors or
agents, as well as their respective counsel, (iv) the qualification of the
Shares under state securities laws in accordance with the provisions of
Section 3(g) hereof, including filing fees and the reasonable
13
fees and disbursements of counsel in connection therewith and in connection
with the preparation, printing and delivery of any Blue Sky Survey, and any
amendment thereto, (v) the printing and delivery to the Underwriters of
copies of the Prospectus and any amendments or supplements thereto, (vi) the
fees and expenses incurred in connection with the listing of the Shares on
the NYSE, (vii) the filing fees incident to, and the reasonable fees and
disbursements of counsel for the Underwriters in connection with, the review,
if any, by the National Association of Securities Dealers, Inc. (the "NASD")
of the terms of the sale of the Shares and (viii) the cost of providing any
CUSIP or other identification numbers for the Shares.
(b) TERMINATION OF AGREEMENT. If this Underwriting Agreement is
terminated by the Underwriters in accordance with the provisions of Section 5
or Section 9(a)(i) hereof, the Company shall reimburse the Underwriters for
all of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The Underwriters'
obligations to purchase and pay for the Shares pursuant to the terms hereof
are subject to the accuracy of the representations and warranties of the
Company contained in Section 1 hereof or in certificates of any officer of
the Company or any of its subsidiaries delivered pursuant to the provisions
hereof, to the performance by the Company of its covenants and other
obligations hereunder, and to the following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective under
the 1933 Act and no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall have been instituted or be pending or
threatened by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the reasonable
satisfaction of counsel for the Underwriters. A prospectus containing
information relating to the description of the Shares, the specific method of
distribution and similar matters shall have been filed with the Commission in
accordance with Rule 424(b)(1), (2), (3), (4) or (5), as applicable.
(b) OPINION OF COUNSEL FOR COMPANY. At Closing Time, the Underwriters
shall have received the favorable opinion, dated as of Closing Time, of
Xxxxxxxx & Worcester, LLP, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, to the effect set forth in
Exhibit B hereto. In rendering their opinion, such counsel may rely on an
opinion dated the Closing Time of Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP, as
to matters governed by the laws of the State of Maryland. In addition, in
rendering their opinion, such counsel may state that their opinion as to laws
of the State of Delaware is limited to the Delaware General Corporation Law.
Such counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon certificates
of officers of the Company and its subsidiaries and certificates of public
officials.
(c) OPINION OF SPECIAL MARYLAND COUNSEL FOR COMPANY. At Closing Time,
the Underwriters shall have received the favorable opinion, dated as of
Closing Time, of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP, special Maryland
counsel for the Company, in form and substance satisfactory to counsel for
the Underwriters, to the effect as counsel for the Underwriters may
reasonably request.
14
(d) OPINION OF COUNSEL FOR UNDERWRITERS. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of Xxxxx & Wood LLP, counsel for the Underwriters, with respect to the
matters set forth in paragraphs (7), (8), (9), (17), and (18) of Exhibit B
and to the following effect: nothing has come to their attention that would
lead them to believe that the Registration Statement (including any Rule
462(b) Registration Statement) or any post-effective amendment thereto
(except for financial statements and supporting schedules and other financial
data included therein or omitted therefrom, as to which they make no
statement), at the time the Registration Statement (including any Rule 462(b)
Registration Statement) or any post-effective amendment thereto (including
the filing of the Company's Annual Report on Form 10-K with the Commission)
became effective, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus or any amendment
or supplement thereto (except for financial statements and supporting
schedules and other financial data included therein or omitted therefrom, as
to which they make no statement), at the time the Prospectus was issued, at
the time any such amended or supplemented prospectus was issued or at the
Closing Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In giving such opinion, such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New
York, the federal law of the United States and the General Corporation Law of
the State of Delaware, upon the opinions of counsel satisfactory to the
Underwriters and may rely on an opinion dated the Closing Time of Xxxxxxx,
Xxxxx Xxxxxxx and Xxxxxxxxx, LLP as to matters governed by the laws of the
State of Maryland. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper,
upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(e) OFFICERS' CERTIFICATE. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information
is given in the Prospectus, any Material Adverse Change and the Underwriters
shall have received a certificate of the President or a Vice President of the
Company and of the chief financial officer or chief accounting officer of the
Company, dated as of Closing Time, to the effect that (i) there has been no
Material Adverse Change, (ii) the representations and warranties in Section
1(a) are true and correct with the same force and effect as though expressly
made at and as of the Closing Time, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time, and (iv) no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted, are pending or, to the
best of such officers' knowledge, are threatened by the Commission.
(f) ADVISOR'S CERTIFICATE. At Closing Time, there shall not have been,
since the respective dates as of which information is given in the
Prospectus, any material adverse change in the business, operations,
earnings, prospects, properties or condition (financial or otherwise) of the
Advisor, whether or not arising in the ordinary course of business; and the
Underwriters shall have received, at Closing Time, a certificate of the
President or a Vice President of the Advisor evidencing compliance with this
subsection (f).
15
(g) ACCOUNTANTS' COMFORT LETTER. At the time of the execution of this
Underwriting Agreement, the Underwriters shall have received from Xxxxxx
Xxxxxxxx LLP a letter dated such date, in form and substance satisfactory to
the Underwriters, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus.
(h) BRING-DOWN COMFORT LETTER. At Closing Time, the Underwriters shall
have received from Xxxxxx Xxxxxxxx LLP a letter, dated as of Closing Time, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (g) of this Section 5, except that the specified date
referred to shall be a date not more than three business days prior to the
Closing Time.
(i) NO OBJECTION. If the Registration Statement or the offering of the
Shares has been filed with the NASD for review, the NASD shall not have
raised any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(j) ADDITIONAL DOCUMENTS. At Closing Time, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the issuance
and sale of the Shares as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Shares as herein
contemplated shall be reasonably satisfactory in form and substance to the
Underwriters and counsel for the Underwriters.
(k) DATE OF DELIVERY DOCUMENTATION. In the event the Underwriters
exercise the option described in Section 2 hereof to purchase all or any
portion of the Option Shares, the representations and warranties of the
Company included herein and the statements in any certificates furnished by
the Company hereunder shall be true and correct as of the Date of Delivery
(except those which speak as of a certain date, in which case as of such
date), and the Underwriters shall have received:
(i) A certificate of the President or a Vice President and of the
chief financial officer or chief accounting officer of the Company, dated
such Date of Delivery, confirming that their certificate delivered at
Closing Time pursuant to Section 5(e) hereof remains true as of such
Date of Delivery.
(ii) A certificate of the President or Vice President of the Advisor
confirming that his certificate delivered at Closing Time pursuant to
Section 5(f) hereof remains true as of such Date of Delivery.
(iii) The favorable opinion of Xxxxxxxx & Worcester LLP, counsel for
the Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Shares and otherwise to the same effect as the opinion required by
Section 5(b) hereof.
16
(iv) The favorable opinion of Xxxxx & Xxxx LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Shares and otherwise to the same effect as the opinion required by
Section 5(d) hereof.
(v) A letter from Xxxxxx Xxxxxxxx LLP, dated such Date of Delivery,
substantially the same in scope and substance as the letter furnished
to the Underwriters pursuant to Section 5(h) hereof.
(l) TERMINATION OF THIS AGREEMENT. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
this Underwriting Agreement may be terminated by the Underwriters by notice
to the Company at any time at or prior to the Closing Time, and such
termination shall be without liability of any party to any other party except
as provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive
any such termination and remain in full force and effect.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF UNDERWRITERS. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls each
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Underwriters), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
17
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by the Underwriters through Xxxxxxx Xxxxx expressly for use in the
Registration Statement (or any amendment thereto), or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); and
provided, further, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter, or
the benefit of any person controlling any Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto and excluding documents
incorporated or deemed to be incorporated by reference therein) was not sent
or given by or on behalf of such Underwriter to such person asserting any
such losses, claims, damages or liabilities at or prior to the written
confirmation of the sale of such Shares to such person, if required by law so
to have been delivered, and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such loss, claim, damage or
expense.
(b) INDEMNIFICATION OF COMPANY, TRUSTEES AND OFFICERS. Each Underwriter
agrees to indemnify and hold harmless the Company, its trustees, each of its
officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by the Underwriters expressly for use in the Registration Statement
(or any amendment thereto) or such preliminary prospectus or the Prospectus
(or any amendment or supplement thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party
of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it
is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. The indemnifying party shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to such
indemnified parties and payment of all fees and expenses. The indemnified
parties shall have the right to employ separate counsel in any such action
and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the indemnified parties unless (i) the
employment of such counsel shall have been specifically authorized in writing
by the indemnifying party, (ii) the indemnifying party shall have failed to
assume the defense and employ counsel or (iii) the named parties to any such
action (including any impleaded parties) include both the indemnified parties
and the indemnifying party and the indemnified parties shall have been
advised by such counsel that there may be one or more legal defenses
available to them which are different from or additional to those available
to the indemnifying party (in which case the indemnifying party shall not
have the right to assume the defense of such action on behalf of the
indemnified parties, it being understood, however, that the indemnifying
party shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the fees and
expenses of more than
18
one separate firm of attorneys (in addition to any local counsel) for the
indemnified parties, which firm shall be designed in writing by indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred). No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as
to or an admission of fault, culpability or a failure to act by or on behalf
of any indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time
an indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel, such indemnifying
party agrees that it shall be liable for any settlement of the nature
contemplated by Section 6(a)(ii) effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party
shall have received notice of the terms of such settlement at least 30 days
prior to such settlement being entered into and (iii) such indemnifying party
shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
SECTION 7. CONTRIBUTION. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute
to the aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Underwriters, on the other hand, from the
offering of the Shares pursuant hereto or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company, on the one hand, and
the Underwriters, on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the
Shares pursuant hereto shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of such Shares
(before deducting expenses) received by the Company and the total
underwriting discount received by the Underwriters, in each case as set forth
on the cover of the Prospectus, bear to the aggregate initial public offering
price of such Shares as set forth on such cover.
The relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative
19
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 7.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, the Underwriters shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by the Underwriters and
distributed to the public were offered to the public exceeds the amount of
any damages which the Underwriters have otherwise been required to pay by
reason of any such untrue or alleged untrue statement or omission or alleged
omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls each
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter,
and each trustee of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act shall have the same rights to contribution as the Company.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Underwriting Agreement or in certificates of officers of the Company or any
of its subsidiaries submitted pursuant hereto or thereto shall remain
operative and in full force and effect, regardless of any investigation made
by or on behalf of the Underwriters or controlling persons, or by or on
behalf of the Company, and shall survive delivery of and payment for the
Shares.
SECTION 9. TERMINATION.
(a) The Underwriters may terminate this Agreement, by notice to the
Company, at any time at or prior to Closing Time (i) if there has been, since
the respective dates as of which information is given in the Registration
Statement, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise or the Advisor,
whether or not arising in the ordinary course of business, which would make
it, in the Underwriters' reasonable judgment, impracticable or inadvisable to
market the Shares or enforce contracts for the sale of the Shares, (ii) if
there has occurred any material adverse change in the financial markets in
the United
20
States or any outbreak of hostilities or escalation of existing hostilities
or other calamity or crisis the effect of which on the financial markets of
the United States is such as to make it, in the Underwriters' reasonable
judgment, impracticable or inadvisable to market the Shares or enforce
contracts for the sale of the Shares, or (iii) if trading in the Company's
Common Shares has been suspended by the Commission, or if trading generally
on either the New York Stock Exchange or the American Stock Exchange has been
suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by either of
said exchanges or by order of the Commission or any other governmental
authority, or if a banking moratorium has been declared by Federal or New
York authorities.
(b) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of any party to any other party except
as provided in Section 4, and provided further that Sections 6 and 7 hereof
shall survive such termination.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more
of the Underwriters shall fail at the Closing Time to purchase the Initial
Shares which it or they are obligated to purchase hereunder (the "Defaulted
Securities"), then Xxxxxxx Xxxxx shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than
all, of the Defaulted Securities in such amounts as may be agreed upon and
upon the terms herein set forth; if, however, Xxxxxxx Xxxxx shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the Initial Shares to be purchased on such date pursuant hereto, the
non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
Initial Shares to be purchased on such date pursuant hereto, this
Underwriting Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the Company.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either Xxxxxxx Xxxxx or the Company shall have the right to
postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or the Prospectus or
in any other documents or arrangements.
21
SECTION 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to you shall
be directed to Xxxxxxx Xxxxx, World Financial Center, Xxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000-0000, attention of Tjarda van X. Xxxxxxx; and notices to the
Company shall be directed to it at 000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000,
attention of Xxxx X. Xxxxxx.
SECTION 12. PARTIES. This Underwriting Agreement shall inure to the
benefit of and be binding upon the Company and the Underwriters and its and
their respective successors. Nothing expressed or mentioned in this
Underwriting Agreement is intended or shall be construed to give any person,
firm or corporation, other than the Underwriters and the Company and their
respective successors and the controlling persons and officers and trustees
referred to in Sections 6 and 7 and their heirs and legal representatives,
any legal or equitable right, remedy or claim under or in respect of this
Underwriting Agreement or any provision herein contained. This Underwriting
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the parties hereto and their respective
successors, and said controlling persons and officers and trustees and their
heirs and legal representatives, and for the benefit of no other person, firm
or corporation. No purchaser of Shares from an Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS UNDERWRITING AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. EFFECT OF HEADINGS. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
22
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this Underwriting Agreement, along with all counterparts, will
become a binding agreement between you and the Company in accordance with its
terms.
Very truly yours,
HOSPITALITY PROPERTIES TRUST
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
Title: President
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
X.X. XXXXXXX & SONS, INC.
FIRST UNION CAPITAL MARKETS CORP.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
XXXXXXX XXXXX BARNEY INC.
By: XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By: /s/ Xxxxxxxxx Xxxx Xxxxx
---------------------------------------
Name: Xxxxxxxxx Xxxx Xxxxx
Title: Vice President
For themselves and on behalf of the several
Underwriters named in Exhibit A hereto.
23
Exhibit A
Number of
Name of Underwriter Initial Securities
--------------------- ------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated....................................... 1,428,574
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation ............ 1,428,571
X.X. Xxxxxxx & Sons, Inc........................................ 1,428,571
First Union Capital Markets Corp................................ 1,428,571
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated............................ 1,428,571
Prudential Securities Incorporated.............................. 1,428,571
Xxxxxxx Xxxxx Barney Inc........................................ 1,428,571
---------
Total........................................................... 10,000,000
----------
----------
Exhibit B
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(1) The Company is a real estate investment trust duly formed and
validly existing under and by virtue of the laws of the State of Maryland and
is in good standing with the State Department of Assessments and Taxation of
Maryland.
(2) The Company has trust power to own and lease its properties and to
conduct its business in all material respects as described in the Prospectus
and to enter into and perform its obligations under the Underwriting
Agreement.
(3) The Company is duly qualified to transact business and is in good
standing in each jurisdiction other than the State of Maryland in which the
ownership or leasing of its properties requires such qualification, except
where the failure to so qualify or be in good standing would not result in a
Material Adverse Effect.
(4) Each Subsidiary (a) is a real estate investment trust duly formed
and validly existing under and by virtue of the laws of the State of Maryland
and is in good standing with the State Department of Assessments and Taxation
of Maryland, (b) has the trust power to own and lease its properties and to
conduct its business, in all material respects as described in the
Prospectus, and (c) is duly qualified to transact business and is in good
standing in each jurisdiction other than the State of Maryland in which the
ownership or leasing of its properties requires such qualification, except
where the failure to so qualify or be in good standing would not result in a
Material Adverse Effect.
(5) Except as otherwise stated in the Registration Statement and the
Prospectus, all of the issued and outstanding capital shares of each
Subsidiary have been duly and validly authorized and issued, are fully paid
and non-assessable, and, to such counsel's knowledge, are owned by the
Company, directly or through subsidiaries, free and clear of any adverse
claim. None of such capital shares of any Subsidiary was issued in violation
of preemptive or, to such counsel's knowledge, other similar rights of any
holder (other than the Company) of capital shares of such Subsidiary.
(6) Except as otherwise set forth in the opinions expressed in paragraph
4 of the opinion of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP, set forth as
Exhibit 1 to such counsel's opinion, all the authorized, issued and
outstanding capital shares of the Company have been duly authorized and
validly issued by the Company and are fully paid and non-assessable (except
as otherwise described in the Registration Statement), and none of such
capital shares was issued in violation of preemptive or, to such counsel's
knowledge, other similar rights of any holder of capital shares of the
Company.
(7) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(8) The Shares have been duly authorized and, when issued and delivered
to the Underwriters against payment therefor in accordance with the terms of
the Underwriting Agreement, will be validly issued, fully paid and
non-assessable (except as otherwise described in the Registration Statement),
and will be free of any preemptive or, to such counsel's knowledge, other
similar rights that entitle any person (other than the Underwriters and their
successors and assigns) to acquire any Shares upon the issuance thereof by
the Company.
(9) The Shares conform in all material respects to the descriptions
thereof in the Prospectus.
(10) (a) The statements under the captions (i) "The Company - Leases"
and "Management" in the Prospectus Supplement and (ii) "Description of
Shares," "Limitation of Liability; Shareholder Liability" and "Redemption;
Trustees; Business Combinations and Control Share Acquisitions" in the
Prospectus, in each case as of the date of the Prospectus, and (b) the
statements under the captions (i) "Items 1 and 2. Business and Properties -
The Company - Principal Lease Features," "Items 1 and 2. Business and
Properties - Investment Advisor," "Item 5. Market for Registrant's Common
Equity and Related Stockholder Matters," and "Item 7. Management's Discussion
and Analysis of Results of Operations and Financial Condition - Overview" and
"Item 7. Management's Discussion and Analysis of Results of Operations and
Financial Condition - Liquidity and Capital Resources" in the Annual Report
on Form 10-K, (ii) "Other Information -Certain Relationships and Related
Transactions" in the Company's Proxy Statement relating to the May 18, 1999
Annual Meeting of Shareholders (incorporated by reference in the Form 10-K),
in each case as of the date of filing of such Incorporated Document, insofar
as such statements constitute a summary of legal matters, documents or
proceedings referred to therein, fairly present in all material respects the
information called for with respect to such legal matters, documents and
proceedings.
(11) The statements under the captions "Federal Income Tax and ERISA
Considerations" in the Prospectus Supplement, as of the date of the
Prospectus, and the statements under the captions "Federal Income Tax
Considerations" and "ERISA Plans, Xxxxx Plans and Individual Retirement
Accounts" under the caption "Items 1 and 2. Business and Properties" in the
Annual Report on Form 10-K, as of the date of filing of the Annual Report on
Form 10-K, insofar as such statements constitute a summary of legal matters
or documents referred to therein, fairly present in all material respects the
information called for with respect to such legal matters and documents.
(12) To such counsel's knowledge, except as disclosed in the Prospectus
neither the Company nor any Subsidiary is in violation of its declaration of
trust or by-laws and no default by the Company or any of the Subsidiaries
exists in the due performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument that is described or
referred to in the Registration Statement or the Prospectus or filed or
incorporated by reference as an exhibit to the Registration Statement and to
which the Company or any of its subsidiaries is a party or by which it or any
of them may be bound or to which any of the assets, properties or operations of
the Company or any Subsidiary is subject, except for such violations or
defaults which would not result in a Material Adverse Effect.
(13) The execution, delivery and performance of the Underwriting
Agreement and the consummation of the transactions contemplated in the
Underwriting Agreement and in the Registration Statement and the Prospectus
(including the issuance and sale of the Shares and the use of the proceeds
from the sale of the Shares as described under the caption "Use of Proceeds"
in the Prospectus Supplement) and compliance by the Company with its
obligations thereunder do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event under, or result in the creation or
imposition of any lien, charge or encumbrance upon any assets, properties or
operations of the Company or of any Subsidiary pursuant to, any material
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or any other agreement or instrument that is described or referred to
in the Registration Statement or the Prospectus or filed or incorporated by
reference as an exhibit to the Registration Statement and to which the
Company or any of its subsidiaries is a party or by which it or any of them
may be bound or to which any of the assets, properties or operations of the
Company or any Subsidiary is subject, nor will such action result in any
violation of the provisions of the declaration of trust or by-laws of the
Company or any Subsidiary or in any material respect any applicable law,
statute, rule, regulation, judgment, order, writ or decree, known to such
counsel, of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its subsidiaries or
any of their assets, properties or operations, in each case except as
disclosed in the Prospectus.
(14) To such counsel's knowledge, except as disclosed in the Prospectus
there is not pending or threatened any action, suit, proceeding, inquiry or
investigation to which the Company or any Subsidiary is a party or to which
the assets, properties or operations of the Company or any Subsidiary is
subject, before or by any court or government agency or body which would, if
determined adversely to the Company or such Subsidiary, result in a Material
Adverse Effect or materially and adversely affect the consummation of the
transactions contemplated under the Underwriting Agreement or the right or
ability of the Company to perform its obligations thereunder.
(15) To such counsel's knowledge, there is no contract or other document
which is required to be described in the Registration Statement or the
Prospectus that is not described therein or is required to be filed as an
exhibit to the Registration Statement which is not so filed.
(16) To such counsel's knowledge, there are no statutes or regulations
that are required to be described in the Prospectus that are not described as
required.
(17) The Registration Statement has been declared effective under the
1933 Act. Any required filing of the Prospectus pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule 424(b).
To such counsel's knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been initiated or are pending or threatened
by the Commission.
(18) The Registration Statement and the Prospectus, excluding the
documents incorporated by reference therein, and each amendment or supplement
to the Registration Statement and Prospectus, excluding the documents
incorporated by reference therein, as of their respective effective or issue
dates (other than financial statements and other financial and statistical
data and schedules, as to which such counsel need not express any opinion),
complied as to form in all material respects with the requirements of the
1933 Act.
(19) Each Incorporated Document (other than financial statements and
other financial and statistical data and schedules, as to which such counsel
need not express any opinion) complied as to form in all material respects
with the 1934 Act when filed with the Commission.
(20) No authorization, approval, consent, license, order or decree of,
or filing, registration or qualification with, any federal, Massachusetts,
Delaware or Maryland court or governmental authority or agency is necessary
or required for the due authorization, execution or delivery by the Company
of the Underwriting Agreement or for the performance by the Company of the
transactions contemplated under the Prospectus or the Underwriting Agreement,
other than those which have already been made, obtained or rendered as
applicable.
(21) The Company is not, and upon the issuance and sale of the Shares as
contemplated by the Underwriting Agreement and the application of the net
proceeds therefrom as described in the Prospectus will not be, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
(22) The Company has qualified to be taxed as a real estate investment
trust pursuant to Sections 856-860 of the Code for each of the taxable years
ended December 31, 1995 through December 31, 1998, and the Company's current
anticipated investments and its current plan of operation will enable it to
continue to meet the requirements for qualification and taxation as a real
estate investment trust under the Code; actual qualification of the Company
as a real estate investment trust, however, will depend upon the Company's
continued ability to meet, and its meeting, through actual annual operating
results and distributions, the various qualification tests imposed under the
Code.
(23) The Advisor is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, and has the
requisite corporate power and authority to conduct its business as described
in the Prospectus and to own and operate its material properties.
(24) The Advisory Agreement has been duly authorized, executed and
delivered by the parties thereto and constitutes the valid agreement of the
parties thereto, enforceable in accordance with its terms.
(25) No facts have come to such counsel's attention that would lead them
to believe that (x) the Registration Statement, as of the time it became
effective under the 1933 Act, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading or (y) the
Prospectus, as of the date of issuance thereof or at Closing Time, included
or includes an untrue statement of a material fact or omitted or omits to
state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that such counsel need not express any views as
to the financial statements and other financial and statistical data and
schedules included in the Registration Statement or the Prospectus.
Such counsel need not express any opinion as to compliance with, or
filings with or authorizations, approvals, consents, licenses, orders,
registrations, qualifications or decrees under, state securities or "Blue
Sky" laws. Such counsel's opinions with respect to the validity or
enforceability of agreements may be qualified to the extent that the
obligations, rights and remedies of parties may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
generally creditors' rights and remedies, and (ii) general principles of
equity (regardless of whether considered in a proceeding at law or in
equity), and otherwise in a manner acceptable to the Underwriters.
