Exhibit 1.1
5,000,000 Shares
HOSPITALITY PROPERTIES TRUST
(a Maryland real estate investment trust)
Common Shares of Beneficial
Interest
par value $.01 per share
UNDERWRITING AGREEMENT
February 13, 2007
MERRILL LYNCH, PIERCE, FENNER &
SMITH
INCORPORATED
MORGAN STANLEY & CO.
INCORPORATED
RBC CAPITAL MARKETS CORPORATION
UBS SECURITIES LLC
WACHOVIA CAPITAL MARKETS, LLC
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 of common
shares of beneficial interest, par value $.01 per share (the
“Common Shares”), of the Company at a purchase price of
$45.5248 per Common 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 750,000 Common Shares to cover
overallotments. The aforesaid 5,000,000 Common Shares (the
“Initial Shares”), together with all or any part of the
750,000 Common 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
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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 as of the date
hereof 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 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.
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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 included in Schedule D, all considered
together (collectively, 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:
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“Applicable Time” means
9:15 a.m. (Eastern time) on February 13, 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, the General Disclosure Package and the
Prospectus is an
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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
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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.
(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 or registered offerings
of securities from the Company’s currently effective
registration statement on Form S-3, 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 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
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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 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; 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.
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(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, 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
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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.
(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
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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
11
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 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 Code for each of the taxable years ended December
31, 1995 through December 31, 2006.
(24)
Possession of Insurance . The Company and its Hotels
and Travel Centers are, and as of the Closing Time will be,
insured in the manner described in the Registration Statement, the
General Disclosure Package and 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
12
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
Hotels and Travel Centers owned by the Company or its subsidiaries
and such title insurance is in full force and effect.
(25)
Disclosure Controls . The Company has established and
maintains disclosure controls and procedures and internal control
over financial reporting (as such terms are defined in Rule 13a-15
and 15d-15 under the 1934 Act) in accordance with the rules and
regulations under the Sarbanes-Oxley Act of 2002 (the
“Sarbanes-Oxley Act”) and the 1934 Act. Such disclosure
controls and procedures (a) are designed to ensure that material
information relating to t
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