Exhibit 1.1
12,000,000 Shares
HOSPITALITY PROPERTIES TRUST
(a Maryland real estate investment trust)
7% Series C Cumulative
Redeemable
Preferred Shares
without par value
UNDERWRITING AGREEMENT
February 15, 2007
MERRILL LYNCH, PIERCE,
FENNER & SMITH
INCORPORATED
UBS SECURITIES LLC
WACHOVIA CAPITAL MARKETS, LLC
MORGAN STANLEY & CO. INCORPORATED
RBC DAIN RAUSCHER INC.
BANC OF AMERICA SECURITIES LLC
FERRIS, BAKER WATTS, INCORPORATED
JANNEY MONTGOMERY SCOTT LLC
MORGAN KEEGAN & COMPANY, INC.
OPPENHEIMER & CO. INC.
STIFEL, NICOLAUS & COMPANY, INCORPORATED
c/o Merrill Lynch,
Pierce, Fenner & Smith
Incorporated
4 World Financial Center
New York, NY 10080
as Representative of the several
Underwriters
Ladies and Gentlemen:
Hospitality Properties Trust, a
Maryland real estate investment trust (the “Company”),
confirms its agreement with Merrill Lynch, Pierce,
Fenner & Smith Incorporated (“Merrill Lynch”)
and each of the other Underwriters named in Schedule A hereto
(collectively, the “Underwriters,” which term shall
include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom Merrill Lynch is acting as
representative (in such capacity, hereinafter referred to as the
“Representative”), with respect to the issue and sale
by the Company and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers set forth in
Schedule A of the Company’s 7% Series C Cumulative
Redeemable Preferred Shares of Beneficial Interest, without par
value (the “Preferred Shares”), at a purchase price of
$24.2125 per Preferred Share and with respect to the grant by the
Company to the Underwriters of the option described in
Section 2(b) hereof to purchase all or any part of an
additional 1,800,000 Preferred Shares to cover
overallotments. The aforesaid 12,000,000 Preferred Shares (the
“Initial Shares”), together with all or any part of the
1,800,000 Preferred Shares subject to the option described in
Section 2(b) hereof (the “Option Shares”),
are collectively hereinafter called the
“Shares.”
The Company understands that the
Underwriters propose to make a public offering of the Shares as
soon as the Underwriters deem advisable after this Agreement has
been executed and delivered.
The Company has filed with the
Securities and Exchange Commission (the “Commission”)
an automatic shelf registration statement on Form S-3
(No. 333-137073), including the related prospectus, which
registration statement became effective upon filing under
Rule 462(e) of the rules and regulations of the
Commission (the “1933 Act Regulations”) under the
Securities Act of 1933, as amended (the “1933 Act”).
Such registration statement covers the registration of the Shares,
and automatically became effective under the 1933 Act upon filing
with the Commission. Promptly after execution and delivery of this
Agreement, the Company will prepare and file a prospectus relating
to the Shares in accordance with the provisions of Rule 430B
(“Rule 430B”) of the 1933 Act Regulations and
paragraph (b) of Rule 424
(“Rule 424(b)”) of the 1933 Act Regulations. Any
information included in such prospectus that was omitted from such
registration statement at the time it became effective but that is
deemed to be part of and included in such registration statement
pursuant to Rule 430B is referred to as “Rule 430B
Information.” Each prospectus used in connection with the
offering of the Shares that omitted Rule 430B Information is
herein called a “preliminary prospectus.” Such
registration statement, at any given time, including the amendments
thereto at such time, the exhibits and any schedules thereto at
such time, the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act at such time and the
documents otherwise deemed to be a part thereof or included therein
by the 1933 Act Regulations is herein called the
“Registration Statement.” The Registration
Statement at the time it originally became effective is herein
called the “Original Registration Statement.” The
final prospectus, in the form furnished to the Underwriters for use
in connection with the offering of the Shares, including the
documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act at the time of the execution of
this Agreement and any preliminary prospectuses that form a part
thereof is herein called the “Prospectus.” For
purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its
Electronic Data Gathering Analysis and Retrieval system
(“EDGAR”).
All references in this Agreement to
financial statements and schedules and other information which is
“contained,” “included” or
“stated” in the Registration Statement, any preliminary
prospectus or the Prospectus (or other references of like import)
shall be deemed to mean and include all such financial statements
and schedules and other information which are incorporated by
reference in or otherwise deemed by the 1933 Act Regulations to be
a part of or included in the Registration Statement, any
preliminary prospectus or the Prospectus, as the case may be; and
all references in this Agreement to amendments or supplements to
the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to mean and include the filing of any
document under the Securities Exchange Act of 1934 (the “1934
Act”), which is incorporated by reference in or otherwise
deemed by the 1933 Act Regulations to be a part of or included in
the Registration Statement, such preliminary prospectus or the
Prospectus, as the case may be.
The 310 hotels described in the
Prospectus as being currently owned by the Company are collectively
referred to herein as the “Hotels.” The 146
travel centers described in the Prospectus as being currently owned
by the Company are collectively referred to herein as the
“Travel Centers.”
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, the
Applicable Time referred to in Section 1(a)(1) hereof,
and as of the Closing Time referred to in
Section 2(c) hereof, and agrees with each Underwriter, as
follows:
(1) Compliance with
Registration Requirements . (i) (A) At the time
of filing the Original Registration Statement, (B) at the time
of the most recent amendment thereto, if any, for the purposes of
complying with Section 10(a)(3) of the 1933 Act (whether
such amendment was by post-effective amendment, incorporated report
filed pursuant to Section 13 or 15(d) of the 1934 Act or
form of prospectus), (C) at the time the Company or any person
acting on its behalf (within the
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meaning, for this clause only, of
Rule 163(c) of the 1933 Act Regulations) made any offer
relating to the Shares in reliance on the exemption provided by
Rule 163 of the 1933 Act Regulations
(“Rule 163”) and (D) at the date hereof, the
Company was and is a “well-known seasoned issuer” as
defined in Rule 405 of the 1933 Act Regulations
(“Rule 405”), including not having been and not
being an “ineligible issuer” as defined in
Rule 405. The Registration Statement is an “automatic
shelf registration statement,” as defined in Rule 405,
and the Shares, since their registration on the Registration
Statement, have been and remain eligible for registration by the
Company on a Rule 405 “automatic shelf registration
statement”. The Company has not received from the Commission
any notice pursuant to Rule 401(g)(2) of the 1933 Act
Regulations objecting to the use of the automatic shelf
registration statement form.
At the time of filing the Original
Registration Statement, at the earliest time thereafter that the
Company or another offering participant made a bona fide offer
(within the meaning of Rule 164(h)(2) of the 1933 Act
Regulations) of the Shares and at the date hereof, the Company was
not and is not an “ineligible issuer,” as defined in
Rule 405.
(ii) The Original
Registration Statement became effective upon filing under
Rule 462(e) of the 1933 Act Regulations
(“Rule 462(e)”) on September 1, 2006, and any
post-effective amendment thereto also became effective upon filing
under Rule 462(e). 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 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.
Any offer that is a written
communication relating to the Shares made prior to the filing of
the Original Registration Statement by the Company or any person
acting on its behalf (within the meaning, for this paragraph only,
of Rule 163(c) of the 1933 Act Regulations) has been
filed with the Commission in accordance with the exemption provided
by Rule 163 and otherwise complied with the requirements of
Rule 163, including without limitation the legending
requirement, to qualify such offer for the exemption from
Section 5(c) of the 1933 Act provided by
Rule 163.
At the respective times the Original
Registration Statement and any amendment thereto became effective,
at each deemed effective date with respect to the Underwriters
pursuant to Rule 430B(f)(2) of the 1933 Act Regulations
and at the Closing Time, the Registration Statement 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. Neither the Prospectus nor
any amendments or supplements thereto, at the time the Prospectus
or any such amendment or supplement was issued and at the Closing
Time, 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.
Any preliminary prospectus (and the
prospectus or prospectuses filed as part of the Original
Registration Statement or any amendment thereto) complied when so
filed in all material respects with the 1933 Act Regulations and
any such preliminary prospectus was and the Prospectus delivered to
the Underwriters for use in connection with this offering will be
identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
As of the Applicable Time, any
Issuer Free Writing Prospectus (as defined below) issued at or
prior to the Applicable Time, the Statutory Prospectus (as defined
below) and the information agreed to in writing by the Company and
the Underwriters as the information to be conveyed orally by the
Underwriters to purchasers of the Shares at the Applicable Time,
all considered together (collectively,
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the “General Disclosure
Package”) did not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading.
The representations and warranties
in the preceding three paragraphs shall not apply to statements in
or omissions from the Registration Statement or any
post-effective amendment thereto, any preliminary prospectus, the
Prospectus, or any amendments or supplements thereto, or the
General Disclosure Package made in reliance upon and in conformity
with information furnished to the Company by the Underwriters
through the Representative in writing expressly for use in the
Registration Statement (including the prospectus filed with the
Original Registration Statement) or any post-effective amendment
thereto, any preliminary prospectus, the Prospectus, or any
amendments or supplements thereto, or the General Disclosure
Package.
As used in this subsection and
elsewhere in this Agreement:
“Applicable Time” means
3:30 p.m. (Eastern time) on February 15, 2007 or such other
time as agreed by the Company and the Underwriters.
“Issuer Free Writing
Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 of the 1933 Act
Regulations (“Rule 433”), relating to the Shares
(including any identified on Schedule B hereto) that (i) is
required to be filed with the Commission by the Company,
(ii) is a “road show that is a written
communication” within the meaning of Rule 433(d)(8)(i),
whether or not required to be filed with the Commission or
(iii) is exempt from filing pursuant to
Rule 433(d)(5)(i) because it contains a description of
the Shares or of the offering that does not reflect the final
terms, in each case in the form filed or required to be filed with
the Commission or, if not required to be filed, in the form
retained in the Company’s records pursuant to
Rule 433(g).
“Statutory Prospectus”
as of any time means the prospectus relating to the Shares that is
included in the Registration Statement immediately prior to that
time, including the documents incorporated by reference therein and
any preliminary or other prospectus deemed to be a part
thereof.
(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, (a) at the time the
Registration Statement became effective, (b) at the earlier of
the time the Prospectus was first used and the date and time of the
first contract of sale of Shares in this offering and (c) at
the Closing Time did not and will not contain an untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(3) No Conflicting
Information in Issuer Free Writing Prospectuses . Each Issuer
Free Writing Prospectus attached to Schedule B hereto, as of its
issue date and at all subsequent times through the completion of
the public offer and sale of the Shares or until any earlier date
that the Company notified or notifies the Underwriters as described
in Section 3(a)(vi), did not, does not and will not include
any information that conflicted, conflicts or will conflict with
the information contained in the Registration Statement or the
Prospectus, including any document incorporated by reference
therein and any preliminary or other prospectus deemed to be a part
thereof that has not been superseded or modified. The foregoing
sentence does not apply to statements in or omissions from any
Issuer Free Writing Prospectus based upon and in conformity with
written information furnished to the Company by the Underwriters
through the Representative in writing specifically for use
therein.
(4) Independent
Accountants . The accounting firm that has certified the
financial statements of the Company and its subsidiaries included
or incorporated by reference in the Registration
Statement,
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the General Disclosure Package and
the Prospectus is an independent registered public accounting firm
as required by the 1933 Act, the 1933 Act Regulations, the 1934
Act, the 1934 Act Regulations and the Public Company Accounting
Oversight Board (United States).
(5) Financial
Statements . The financial statements of the Company included
or incorporated by reference in the Registration Statement, the
General Disclosure Package and the Prospectus comply as to form in
all material respects with the requirements of the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act Regulations.
Such financial statements of the Company, 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 respective periods specified. Such financial statements
have been prepared in conformity with generally accepted accounting
principles in the United States (“GAAP”) applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement, the
General Disclosure Package and the Prospectus present fairly in
accordance with GAAP for the respective periods specified the
information required to be stated therein. The selected financial
data and the summary financial information included in the
Registration Statement, the General Disclosure Package and the
Prospectus present fairly the information shown therein for the
respective periods specified and have been compiled on a basis
consistent with that of the audited financial statements included
in the Registration Statement, the General Disclosure Package 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, the General
Disclosure Package 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.
All disclosures contained in the
Registration Statement, the General Disclosure Package and the
Prospectus regarding “non-GAAP financial measures” (as
such term is defined by the rules and regulations of the
Commission) comply, in all material respects, with Regulation G of
the 1934 Act and the 1934 Act Regulations and Item 10 of Regulation
S-K under the 1933 Act, to the extent applicable.
The financial statements of
TravelCenters of America, Inc. (“TravelCenters”)
incorporated by reference in the Registration Statement, the
General Disclosure Package and the Prospectus comply as to form in
all material respects with the requirements of the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act Regulations. To
the Company’s knowledge, based upon due inquiry, such
TravelCenters financial statements, together with the related
schedule and notes present fairly the financial position of
TravelCenters and its consolidated subsidiaries at the dates
indicated and the statement of operations, shareholders’
equity and cash flows of TravelCenters and its consolidated
subsidiaries for the respective periods specified. To the
Company’s knowledge, based upon due inquiry, such
TravelCenters financial statements have been prepared in conformity
with GAAP applied on a consistent basis throughout the periods
involved. To the Company’s knowledge, based upon due inquiry,
the supporting schedule with respect to TravelCenters incorporated
by reference in the Registration Statement, the General Disclosure
Package and the Prospectus presents fairly in accordance with GAAP
for the respective periods specified the information required to be
stated therein.
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(6) No Material
Adverse Change in Business . Since the respective dates as of
which information is given in the Registration Statement, the
General Disclosure Package and the Prospectus (excluding any
documents incorporated by reference pursuant to the 1934 Act after
the date hereof), except as otherwise stated therein,
(A) there has been no material adverse change in the
condition, financial or otherwise, or in the results of operations,
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”), (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, (C) except for regular dividends on the
Company’s common shares of beneficial interest, par value
$.01 per share (the “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 have been no dividends or distributions of any
kind declared, paid or made by the Company on any class of its
capital shares and (D) there has not been (i) any
material decrease in the Company’s consolidated net worth or
(ii) any material increase in the short-term or long-term debt
(including capitalized lease obligations but excluding borrowings
under existing bank lines of credit) of the Company and its
subsidiaries, on a consolidated basis.
(7) 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 Registration Statement, the General
Disclosure Package and the Prospectus, and to enter into and
perform its obligations under, or as contemplated under, this
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.
(8) 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 1933 Act) (each, a
“Subsidiary” and, collectively, the
“Subsidiaries”), if any, has been duly organized and is
validly existing as a corporation, limited liability company,
partnership or 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,
limited liability company, partnership or trust, as the case may
be, power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration
Statement, the General Disclosure Package and the Prospectus and is
duly qualified as a foreign corporation, limited liability company,
partnership or 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, the General Disclosure Package and the
Prospectus, all of the issued and outstanding capital shares of
each Subsidiary have been duly authorized and are validly issued,
fully paid and non-assessable and are or will be 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.
(9)
Capitalization . 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, the General
Disclosure Package and the
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Prospectus), and none of such
capital shares was issued in violation of preemptive or other
similar rights of any securityholder of the Company.
(10) Authorization of this
Agreement . This Agreement has been duly authorized, executed
and delivered by the Company.
(11) 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, the General Disclosure Package and the Prospectus) and
free of preemptive or similar rights; the Articles Supplementary
relating to the Shares (the “Articles Supplementary”)
will be in full force and effect as of the Closing Time; the Shares
conform to the provisions of the Articles Supplementary; there are
no outstanding subscriptions, rights, warrants, options, calls,
convertible securities, commitments of sale or liens related to or
entitling any person to purchase or otherwise to acquire any Common
Shares of, or other ownership interest in, the Company, except as
otherwise disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus and except for awards under
the Company’s Incentive Share Award Plan made in the ordinary
course of business and shares to be issued to Reit
Management & Research LLC (the “Manager”); all
outstanding Common Shares, except for shares issued pursuant to the
Company’s Incentive Share Award Plan and shares issued to the
Manager and its affiliates, are listed on the New York Stock
Exchange, Inc. (the “NYSE”) and the Company knows
of no reason or set of facts which is likely to result in the
delisting of such Common Shares or the inability to list the
Shares; and there are no rights of holders of securities of the
Company to the registration of Common Shares or other securities
that would require inclusion of such Common Shares or other
securities in the offering of the Shares.
(12) Descriptions of the
Shares . The Shares will conform in all material respects to
the statements relating thereto contained in the Registration
Statement, the General Disclosure Package and the
Prospectus.
(13) Absence of Defaults and
Conflicts . Neither the Company nor any of its
subsidiaries is in violation of its declaration of trust, charter,
bylaws or other comparable governing document 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 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, the General Disclosure
Package and the Prospectus and the consummation of the transactions
contemplated herein and in the Registration Statement, the General
Disclosure Package 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
trust action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any assets, properties or operations of
the Company or any of its subsidiaries pursuant to, any Agreements
and Instruments, nor will such action result in any violation of
the provisions of the charter or bylaws of the Company or any of
its subsidiaries or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court,
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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.
(14) 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.
(15) Absence of Proceedings .
There is no action, suit, proceeding, inquiry or investigation
before or brought by any court or governmental agency or body,
domestic or foreign, now pending, or to the knowledge of the
Company threatened or contemplated, against or affecting the
Company or any of its subsidiaries which is required to be
disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus (other than as stated therein), or
which, if determined adversely to the Company or any of its
subsidiaries, 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 in the Registration Statement, the General Disclosure
Package and the Prospectus or under this 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, the General
Disclosure Package and the Prospectus, including ordinary routine
litigation incidental to the business, could not reasonably be
expected to result in a Material Adverse Effect.
(16) Accuracy of Exhibits .
There are no contracts or documents which are required to be
described in the Registration Statement, the General Disclosure
Package, 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.
(17) 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 Agreement or for the performance by
the Company of the transactions contemplated in the Registration
Statement, the General Disclosure Package and the Prospectus or
under this Agreement, except such as may be required and will be
obtained or made 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 Registration Statement, the General
Disclosure Package and the Prospectus or (y) such that the
failure to obtain would not have a Material Adverse
Effect.
(18) 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, the General Disclosure
Package and the Prospectus, and neither the Company nor any of its
subsidiaries has received any notice of conflict with, or
infringement of, the asserted rights of others with respect to any
such patents, trademarks, trade names, service marks, copyrights,
licenses and other such rights (other than conflicts or
infringements that, if proven, would not have a Material Adverse
Effect), and neither the Company nor any of its subsidiaries knows
of any basis therefor.
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(19) Possession of Licenses and
Permits . The Company 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 for the conduct of
its business as described in the Registration Statement, the
General Disclosure Package and the Prospectus, except for those
Approvals the absence of which would not have a Material Adverse
Effect, and to the best knowledge of the Company, each lessee of a
Hotel or Travel Center has, and as of the Closing Time will have,
all Approvals as may be necessary to lease, operate or manage each
such Hotel or Travel Center, as the case may be, 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.
(20) Title to Property . The
Company and its subsidiaries have good and marketable fee or
leasehold title to all real property owned or leased 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, the General Disclosure Package and the Prospectus,
(B) in the case of personal property located at certain
Hotels, such as are subject to purchase money, equipment lease or
similar financing arrangements which have been entered into in the
ordinary course of business 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. Except as
otherwise stated in the Registration Statement, the General
Disclosure Package and the Prospectus, 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 Registration Statement, the General Disclosure
Package and 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.
(21) 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”).
(22) Environmental Laws .
(a) Except as described in the Registration Statement, the
General Disclosure Package and the Prospectus, (i) the
Company, and, to its knowledge, each Hotel’s property, and
each Travel Center’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 or
managers, as applicable, 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 Hotel’s property and
each Travel Center’s property, and (iii) the Company or,
to its knowledge, its lessees or managers, as applicable, 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 Registration Statement, the General Disclosure Package and
the Prospectus or as would not, singly or in the aggregate, have a
Material Adverse Effect.
(b) To the best
knowledge of the Company, except as described in the Registration
Statement, the General Disclosure Package and the Prospectus, there
are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating
expenditures required for
9
clean-up, remediation or closure of
properties or compliance with Environmental Laws and any potential
liabilities to third parties) that, as of the date hereof, would,
or as of the Closing Time will, singly or in the aggregate, have a
Material Adverse Effect.
(c) In respect of
each Hotel and each Travel Center, except as disclosed in the
Registration Statement, the General Disclosure Package and the
Prospectus, (i) each Hotel and each Travel Center 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 Hotel or Travel Center that would have, singly or in
the aggregate, a Material Adverse Effect; (iii) there does not
exist any material violation of any declaration of covenants,
conditions and restrictions with respect to any Hotel or Travel
Center 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 Hotel or Travel Center
(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.
(23) 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 2007 and subsequent years. The Company qualified as
a real estate investment trust under the C
