Exhibit 1.3.6
ASHFORD HOSPITALITY TRUST, INC.
(a
Maryland corporation)
8,000,000 Shares of 8.45% Series D Cumulative Preferred
Stock
(Liquidation Preference $25 Per Share)
(Par Value $.01 Per Share)
UNDERWRITING AGREEMENT
July 11, 2007
WACHOVIA
CAPITAL MARKETS, LLC
330 South College Street
Charlotte, North Carolina 28288
MERRILL
LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
4 World Financial Center
New York, New York 10080
MORGAN
STANLEY & CO. INCORPORATED
1585 Broadway
New York, New York 10036
as Representatives of the several Underwriters
named in Schedule I
hereto
Ladies
and Gentlemen:
Ashford Hospitality Trust, Inc., a
Maryland corporation (the “ Company ”), and
Ashford Hospitality Limited Partnership, a Delaware limited
partnership (the “ Operating Partnership ”),
each confirms its agreement with each of the Underwriters listed on
Schedule I hereto (collectively, the “
Underwriters ,” which term shall include any
underwriter substituted as provided in Section 8 hereof), for
whom Wachovia Capital Markets, LLC, Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan
Stanley & Co. Incorporated, are acting as Representatives (in
such capacity, the “ Representatives ”), with
respect to the sale by the Company of 8,000,000 shares (the “
Shares ”) of the Company’s 8.45% Series D
Cumulative Preferred Stock (liquidation preference $25 per share),
par value $.01 per share (the “ Series D Stock
”), and the purchase by the Underwriters, acting severally
and not jointly, of the respective number of shares of
Series D Stock set forth opposite the names of the
Underwriters in Schedule I hereto.
The Company will contribute the net
proceeds from each sale of the Shares to the Operating Partnership
and, in exchange therefor, at the Closing Time (as defined herein)
of each such sale the Operating Partnership will issue to the
Company a number of units of preferred limited partnership interest
in the Operating Partnership equal to the number of Shares sold and
having an aggregate liquidation preference equal to the aggregate
liquidation preference of the
Shares
and having terms substantially equivalent to the economic terms of
the Shares (the “ Series D Units ”).
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
”), a registration statement on Form S-3
(No. 333-142079), covering the registration of the Shares
under the Securities Act of 1933, as amended (the “
Securities Act ”). The registration statement is
effective under the Securities Act, and the rules and regulations
thereunder (the “ Securities Act Regulations ”).
No post-effective amendment to the registration statement has been
filed as of the date of this Agreement. Promptly after execution
and delivery of this Agreement, the Company will prepare and file a
prospectus in accordance with the provisions of Rule 430B of the
Securities Act (“ Rule 430B ”) and
paragraph (b) of Rule 424 (“ Rule 424(b)
”) of the Securities 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 Shares that omitted Rule 430B Information is
herein called a “preliminary prospectus.” Such
registration statement, at any given time, including the amendments
thereto to such time, the exhibits and any schedules thereto at
such time, the documents incorporated by reference thereto pursuant
to Item 12 of Form S-3 under the Securities Act at such time
and the documents otherwise deemed to be a part thereof or included
therein by the Securities Act Regulations, and the Rule 430B
Information is herein called the “ Registration
Statement .” The final prospectus in the form first
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
Securities Act at the time of execution of this Agreement and the
base prospectus dated April 13, 2007 (the “ Base
Prospectus ”), including the documents incorporated by
reference therein, is herein called the “ Prospectus
.”
The Company, the Operating
Partnership and the Underwriters agree as follows:
1. Sale and Purchase
:
Upon the basis of the warranties and
representations and other terms and conditions herein set forth, at
the purchase price per share of $24.2125, the Company agrees to
sell to the Underwriters the Shares, and each Underwriter agrees,
severally and not jointly, to purchase from the Company the number
of Shares set forth in Schedule I opposite such
Underwriter’s name, plus any additional number of Shares that
such Underwriter may become obligated to purchase pursuant to the
provisions of Section 8 hereof, subject in each case, to such
adjustments among the Underwriters as the Representatives in their
sole discretion shall make to eliminate any sales or purchases of
fractional shares.
2. Payment and Delivery
:
The Shares to be purchased by each
Underwriter hereunder, in definitive form, and in such authorized
denominations and registered in such names as the Representatives
may request upon at least 48 hours’ prior notice to the
Company shall be delivered by or on behalf of the Company to the
Representatives, including, at the option of the Representatives,
through the facilities of The Depository Trust Company (“
DTC ”) for the account of such Underwriter, against
payment by or on behalf of such Underwriter of the purchase price
therefor by wire transfer of
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Federal
(same-day) funds to the account specified in writing to the
Representatives by the Company upon at least 48 hours’ prior
notice. The Company will cause the certificates representing the
Shares to be made available for checking and packaging at least 24
hours prior to the Closing Time (as defined below) with respect
thereto at the office of Wachovia Capital Markets, LLC, 301 South
College Street, Charlotte, North Carolina 28288, or at the office
of DTC or its designated custodian, as the case may be (the “
Designated Office ”). The time and date of such
delivery and payment shall be 9:30 a.m., New York City time, on the
fifth business day after the date hereof (unless another time and
date shall be agreed to by the Representatives and the Company).
The time at which such payment and delivery and delivery of the
Shares are actually made is hereinafter sometimes called the
“ Closing Time .”
3. Representations and
Warranties of the Company and the Operating Partnership : The
Company and the Operating Partnership, jointly and severally,
represent and warrant to the Underwriters as of the date hereof,
the Applicable Time referred to in Section 3(p) hereof, as of the
Closing Time referred to in Section 2 hereof, that:
(a) (i) at the time of the
initial filing of the Registration Statement, (ii) at the time
of the most recent amendment thereto, if any, for purposes of
complying with Section 10(a)(3) of the Securities Act (whether
such amendment was by post-effective amendment, incorporated report
filed pursuant to Sections 13 or 15(d) of the Exchange Act or
form of prospectus) and (iii) at the date hereof, the Company
was and is a “well-known seasoned issuer” as defined in
Rule 405 of the Securities 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,
that initially became effective within three years of the date
hereof, 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 Securities Act Regulations objecting to the use of the
automatic shelf registration statement form, and the Company has
not otherwise ceased to be eligible to use the automatic shelf
registration statement form;
(b) the Company has an
authorized capitalization of 200 million shares of common
stock, par value $.01 per share (the “ Common Stock
”), and 50 million shares of preferred stock, par value
$.01 per share (including the Series D Stock, the “
Preferred Stock ”) and an outstanding capitalization
as set forth in the General Disclosure Package and the Prospectus;
the outstanding shares of capital stock or, as applicable
partnership or membership interests, of the Company and each
subsidiary of the Company, including the Operating Partnership and
its subsidiaries (each, a “ Subsidiary ” and
collectively, the “ Subsidiaries ”), have been
duly and validly authorized and issued and are fully paid and, with
respect to shares of capital stock, membership interests and
limited partnership interests, non-assessable (except to the extent
such non-assessability may be affected by Section 17-607 of
the Delaware Revised Uniform Limited Partnership Act or
Section 18-607 of the Delaware Limited Liability Company Act),
and, except as disclosed in Exhibit A to the Agreement of
Limited Partnership of the Operating Partnership (the “
Partnership Agreement ”), all of the outstanding
shares of capital stock or partnership or membership interests of
the Subsidiaries are directly or indirectly owned of record and
beneficially by the Company, free and clear of any pledge, lien,
encumbrance, security interest or other claim, except for security
interests in favor of lenders created pursuant to or in connection
with loan documents disclosed in the General Disclosure Package (as
defined below) or the Prospectus, and, except as disclosed in the
General Disclosure Package and the Prospectus and pursuant to
registration rights agreements entered into in connection with
acquisitions disclosed in the General Disclosure Package and the
Prospectus, there are no outstanding (i) securities or
obligations of the Company or any of the Subsidiaries convertible
into or exchangeable or redeemable for any capital stock or
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other
equity interests of the Company or any such Subsidiary,
(ii) warrants, rights or options to subscribe for or purchase
from the Company or any such Subsidiary any such capital stock or
other equity interests or any such convertible or exchangeable
securities or obligations, or (iii) obligations of the Company or
any such Subsidiary to issue any shares of capital stock or other
equity interests, any such convertible or exchangeable or
redeemable securities or obligation, or any such warrants, rights
or options;
(c) each of the Company and the
Subsidiaries (all of which Subsidiaries are named in Schedule
II hereto) has been duly incorporated or organized and is
validly existing as a corporation, limited partnership or limited
liability company, as applicable, in good standing under the laws
of its respective jurisdiction of incorporation or organization
with full corporate or other power and authority to own its
respective properties and to conduct its respective businesses as
described in the General Disclosure Package and the Prospectus and,
in the case of each of the Company and the Operating Partnership,
to execute and deliver this Agreement and to consummate the
transactions contemplated herein;
(d) each of the Company and the
Subsidiaries is duly qualified or licensed and is in good standing
in each jurisdiction in which the nature or conduct of its business
requires such qualification or license and in which the failure,
individually or in the aggregate, to be so qualified or licensed
could reasonably be expected to have a material adverse effect on
the assets, business, operations, earnings, properties or condition
(financial or otherwise) of the Company and the Subsidiaries taken
as a whole (a “ Material Adverse Effect ”);
except as disclosed in the Prospectus and the General Disclosure
Package, no Subsidiary is prohibited or restricted, directly or
indirectly, from paying dividends to the Company, or from making
any other distribution with respect to such Subsidiary’s
capital stock or other equity interests or from repaying to the
Company or any other Subsidiary any amounts that may from time to
time become due under any loans or advances to such Subsidiary from
the Company or such other Subsidiary, or from transferring any such
Subsidiary’s property or assets to the Company or to any
other Subsidiary; other than as disclosed in the Prospectus and the
General Disclosure Package, the Company does not own, directly or
indirectly, any capital stock or other equity securities of any
other corporation or any ownership interest in any partnership,
joint venture or other association;
(e) the Partnership Agreement
has been duly and validly authorized, executed and delivered by or
on behalf of the partners of the Operating Partnership and
constitutes a valid and binding agreement of the parties thereto,
enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights
generally or by general principles of equity;
(f) (i) Ashford OP Limited
Partner, LLC (the “ Limited Partner ”) is a
holder of units of common limited partnership interest (the “
Units ”) representing a majority limited partnership
ownership interest in the Operating Partnership and such units of
preferred limited partnership interest in the Operating Partnership
as described in the General Disclosure Package and the Prospectus,
(ii) Ashford OP General Partner, LLC (the “ General
Partner ”) is the holder of the sole general partner
interest in the Operating Partnership, and (iii) the Company
owns a 100% membership interest in the General Partner and in the
Limited Partner, except for security interests in favor of lenders
created pursuant to or in connection with loan documents disclosed
in the General Disclosure Package or the Prospectus;
(g) the Company and the
Subsidiaries are in compliance with all applicable federal, state,
local or foreign laws, regulations, rules, decrees, judgments and
orders, including those relating to transactions with affiliates,
except where any failures to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect;
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(h) neither the Company nor any
Subsidiary is in breach of or in default under (nor has any event
occurred which with notice, lapse of time, or both would constitute
a breach of, or default under) its respective organizational
documents, or in the performance or observance of any obligation,
agreement, covenant or condition contained in any license,
indenture, mortgage, deed of trust, loan or credit agreement or
other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them or their respective
properties is bound, except for such breaches or defaults that,
individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect;
(i) the execution, delivery and
performance of this Agreement and consummation of the transactions
contemplated herein will not (i) conflict with, or result in
any breach of, or constitute a default under (nor constitute any
event which with notice, lapse of time, or both would constitute a
breach of, or default under), (A) any provision of the
organizational documents of the Company or any Subsidiary, or
(B) any provision of any license, indenture, mortgage, deed of
trust, loan or credit agreement or other agreement or instrument to
which the Company or any Subsidiary is a party or by which any of
them or their respective assets or properties may be bound or
affected, or under any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to
the Company or any Subsidiary, except in the case of this clause
(B) for such breaches or defaults that, individually or in the
aggregate, could not reasonably be expected to have a Material
Adverse Effect; or (ii) result in the creation or imposition
of any lien, charge, claim or encumbrance upon any property or
asset of the Company or any Subsidiary;
(j) this Agreement has been duly
authorized, executed and delivered by the Company and the Operating
Partnership and is a legal, valid and binding agreement of the
Company and the Operating Partnership enforceable in accordance
with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting
creditors’ rights generally, and by general equitable
principles, and except to the extent that the indemnification and
contribution provisions of Section 9 hereof may be limited by
federal or state securities laws and public policy considerations
in respect thereof;
(k) no approval, authorization,
consent or order of or filing with any federal, state, local or
foreign governmental or regulatory commission, board, body,
authority or agency or any other third party is required in
connection with the Company’s or the Operating
Partnership’s execution, delivery and performance of this
Agreement, their consummation of the transactions contemplated
herein or the Company’s sale and delivery of the Shares,
other than (i) such as have been obtained, or will have been
obtained at the Closing Time, under the Securities Act and the
Securities Exchange Act of 1934 (the “ Exchange Act
”), (ii) such approvals as have been obtained in
connection with the approval of the listing of the Shares on the
New York Stock Exchange, (iii) any necessary qualification
under the securities or blue sky laws of the various state
jurisdictions in which the Shares are being offered by the
Underwriters, and (iv) such approvals, authorizations,
consents or orders or filings, the absence of which could not
reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate;
(l) articles supplementary to
the Company’s charter establishing the terms of the
Series D Stock (the “ Articles Supplementary
”) will be, by the Closing Time, duly authorized and executed
by the Company and accepted for record by the Maryland State
Department of Assessments and Taxation and effective under the
Maryland General Corporation Law;
(m) each of the Company and the
Subsidiaries has all necessary licenses, authorizations, consents
and approvals and has made all necessary filings required under any
federal, state, local or foreign law, regulation or rule, and has
obtained all necessary
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authorizations, consents and approvals from other persons, required
in order to conduct their respective businesses as described in the
General Disclosure Package and the Prospectus, except to the extent
that any failure to have any such licenses, authorizations,
consents or approvals, to make any such filings or to obtain any
such authorizations, consents or approvals could not, individually
or in the aggregate, reasonably be expected to have a Material
Adverse Effect; neither the Company nor any of the Subsidiaries is
in violation of, in default under, or has received any notice
regarding a possible violation, default or revocation of any such
license, authorization, consent or approval or any federal, state,
local or foreign law, regulation or rule or any decree, judgment or
order applicable to the Company or any of the Subsidiaries, the
effect of which could reasonably be expected to result in a
Material Adverse Effect; and no such license, authorization,
consent or approval contains a materially burdensome restriction
that is not adequately disclosed in the General Disclosure Package
and the Prospectus; neither the Company nor any of the Subsidiaries
is required by any applicable law to obtain accreditation or
certification from any governmental agency or authority in order to
provide the products and services that it currently provides or
that it proposes to provide as set forth in the General Disclosure
Package and the Prospectus except to the extent that any failure to
have such accreditation or certification could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse
Effect;
(n) the Company and the
transactions contemplated by this Agreement meet the requirements
for the use of Form S-3 under the Securities Act; pursuant to Rule
462(e) of the Securities Act Regulations, the Registration
Statement became effective under the Securities Act upon filing; no
stop order suspending the effectiveness of the Registration
Statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are threatened by the
Commission, and, to the knowledge of the Company, the Company has
complied to the Commission’s satisfaction with any request on
the part of the Commission for additional information;
(o) at the respective times the
Registration Statement and any post-effective amendments thereto
became effective, at the deemed effective date with respect to the
Underwriters pursuant to Rule 430B(f)(2) of the Securities Act
Regulations, at the date of this Agreement and at the Closing Time,
the Registration Statement and any amendments or supplements
thereto complied and will comply, in all material respects with the
requirements of the Securities Act and the Securities 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; the Prospectus and any further amendments or
supplements thereto, at the time the Prospectus or such amendment
or supplement was issued, at the date hereof, at the time of filing
pursuant to Rule 424(b) and at the Closing Time, complied and will
comply, in all material respects with the requirements of the
Securities Act and the Securities 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, in the light of the circumstances
under which they were made, not misleading; and each preliminary
prospectus and the prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment or
supplement thereto or filed pursuant to Rule 424 of the
Securities Act Regulations, complied when so filed in all material
respects with the Securities Act and the Securities Act
Regulations; at the earliest time after the filing of the
Registration Statement that the Company or another offering
participant made a bona fide offer (within the meaning of
Rule 164(h)(2) of the Securities 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; no
offer that was a written communication relating to the Shares was
made prior to the initial filing of the Registration Statement by
the Company or any person acting on its behalf (within the meaning,
for this clause only, of Rule 163(c) of the Securities Act
Regulations);
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(p) as of the Applicable Time
(as defined below), neither (x) the Issuer General Use Free
Writing Prospectus(es) (as defined below) issued at or prior to the
Applicable Time, the Statutory Prospectus (as defined below) and
the information, provided in oral or written form, included on
Schedule III hereto, all considered together
(collectively, the “ General Disclosure Package
”), nor (y) any individual Issuer Limited Use Free
Writing Prospectus, when considered together with the General
Disclosure Package, included an untrue statement of a material fact
or omitted 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;
as used
in this subsection and elsewhere in this Agreement:
“ Applicable Time
” means 4:30 p.m. (Eastern time) on July 11, 2007, or
such other time as agreed by the Company and the
Representatives;
“ Issuer Free Writing
Prospectus ” means any “issuer free writing
prospectus,” as defined in Rule 433 of the Securities
Act Regulations (“ Rule 433 ”), relating to
the Shares 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);
“ Issuer General Use Free
Writing Prospectus ” means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective
investors, as evidenced by its being specified in
Schedule IV hereto;
“ Issuer Limited Use Free
Writing Prospectus ” means any Issuer Free Writing
Prospectus that is not an Issuer General Use Free Writing
Prospectus;
“ Statutory Prospectus
” means the prospectus relating to the Shares that is
included in the Registration Statement as of the Applicable Time,
including any document incorporated by reference therein and any
preliminary or other prospectus deemed to be a part thereof;
each Issuer Free Writing Prospectus,
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 issuer notified or notifies the
Representatives as described in Section 4(j), 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;
provided that the representations and
warranties in Sections 3(o) and 3(p) hereof shall not apply to
statements in or omissions from the Registration Statement, the
Prospectus or any Issuer Free Writing Prospectus made in reliance
upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly
for use therein;
(q) each document incorporated
by reference in the General Disclosure Package or the Prospectus
(the “ Incorporated Documents ”), when it became
effective or was filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the
Securities Act and the Securities Act Regulations or the Exchange
Act and the Exchange Act
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Regulations, as applicable, and none of such documents contained or
will contain an untrue statement of a material fact or omitted or
will omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and,
when read together with the other information in the Prospectus,
(i) at the time the Registration Statement became effective,
(ii) 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 (iii) at the Closing Time, each such
incorporated document did not or will not, as the case may be,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading; the Company has given the
Representatives notice of any filings made pursuant to the Exchange
Act or Exchange Act filings within 48 hours prior to the Applicable
Time;
(r) any preliminary prospectus
was and the Prospectus delivered to the Underwriters for use in
connection with this offering will be identical to the respective
version of any preliminary prospectus or Prospectus created to be
transmitted to the Commission under the Securities Act for filing
via the Electronic Data Gathering Analysis and Retrieval System
(“ EDGAR ”), except to the extent permitted by
Regulation S-T;
(s) there are no actions, suits,
proceedings, inquiries or investigations pending or, to the
knowledge of the Company, threatened against the Company or any
Subsidiary or any of their respective officers and directors or to
which the properties, assets or rights of any such entity are
subject, at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board,
body, authority, arbitral panel or agency, where in any such case
(i) there is a reasonable possibility that such action, suit or
proceeding will be determined adversely to the Company or such
Subsidiary and (ii) if so determined adversely, could
reasonably be expected to result in a judgment, decree, award or
order having a Material Adverse Effect;
(t) the financial statements,
including the related supporting schedules and notes thereto,
included in (or incorporated by reference into) the General
Disclosure Package or the Prospectus present fairly the
consolidated financial position of the entities to which such
financial statements relate (the “ Covered Entities
”) as of the dates indicated and the consolidated results of
operations and changes in financial position and cash flows of the
Covered Entities for the periods specified; such financial
statements have been prepared in conformity with generally accepted
accounting principles as applied in the United States and on a
consistent basis during the periods involved and in accordance with
Regulation S-X promulgated by the Commission; the financial
data in the General Disclosure Package and the Prospectus fairly
present the information shown therein and have been compiled on a
basis consistent with the financial statements included in the
General Disclosure Package and the Prospectus; no other financial
statements or supporting schedules are required to be included in
the General Disclosure Package or the Prospectus; the unaudited pro
forma financial information (including the related notes) included
in the General Disclosure Package and the Prospectus complies as to
form in all material respects with the applicable accounting
requirements of the Securities Act and the Securities Act
Regulations, and management of the Company believes that the
assumptions underlying the pro forma adjustments are reasonable;
such pro forma adjustments have been properly applied to the
historical amounts in the compilation of the information and such
information fairly presents with respect to the Company and the
Subsidiaries, the financial position, results of operations and
other information purported to be shown therein at the respective
dates and for the respective periods specified; no other pro forma
financial information is required to be included in the General
Disclosure Package or the Prospectus; all disclosures contained in
the General Disclosure Package or the Prospectus regarding
“non-GAAP financial measures” (as such term is defined
by the rules and regulations of the Commission) comply with
Regulation G of the Exchange Act and
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the
Exchange Act Regulations and Item 10 of Regulation S-K
under the Securities Act, to the extent applicable;
(u) Ernst & Young LLP, whose
reports on the consolidated financial statements of the Company and
the Subsidiaries and the predecessor are filed with the Commission
as part of the General Disclosure Package and the Prospectus or are
incorporated by reference therein and any other accounting firm
(including PricewaterhouseCoopers LLP, KPMG LLP and Beers &
Cutler PLLC) that has certified Company or predecessor financial
statements (including financial statements of acquired properties)
and delivered its reports with respect thereto, are, and were
during the periods covered by their reports, registered independent
public accountants as and to the extent required by the Securities
Act, the Securities Act Regulations, the Exchange Act and the
Exchange Act Regulations;
(v) subsequent to the respective
dates as of which information is given in the General Disclosure
Package and the Prospectus, and except as may be otherwise stated
in the General Disclosure Package and the Prospectus, there has not
been (i) any change, or any development or event that
reasonably could be expected to result in a change, that has or
reasonably could be expected to have a Material Adverse Effect,
whether or not arising in the ordinary course of business,
(ii) any transaction that is material to the Company and the
Subsidiaries taken as a whole entered into or agreed to be entered
into by the Company or any of the Subsidiaries, (iii) any
obligation, contingent or otherwise, directly or indirectly
incurred by the Company or any Subsidiary that is material to the
Company and Subsidiaries taken as a whole or (iv) except for
regular quarterly dividends on the Common Stock and Preferred
Stock, and regular quarterly distributions on the Units, preferred
units, including the Series D Units, of limited partnership
interest in the Operating Partnership (“ Preferred
Units ”) and the Class B Common Partnership Units in
the Operating Partnership (the “ Class B Units
”), any dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock or by the
Operating Partnership on any of its partnership interests;
(w) the Shares conform in all
material respects to the description thereof contained in the
General Disclosure Package and the Prospectus;
(x) there are no persons with
registration or other similar rights to have any equity or debt
securities, including securities that are convertible into or
exchangeable or redeemable for equity securities, registered
pursuant to the Registration Statement or otherwise registered by
the Company or the Operating Partnership under the Securities Act
except for those registration or similar rights that have been
waived or that are inapplicable with respect to the offering
contemplated by this Agreement;
(y) the Shares have been duly
authorized and, when issued and duly delivered against payment
therefor as contemplated by this Agreement, will be validly issued,
fully paid and non-assessable, free and clear of any pledge, lien,
encumbrance, security interest or other claim, and the issuance and
sale of the Shares by the Company is not subject to preemptive or
other similar rights arising by operation of law, under the
organizational documents of the Company or under any agreement to
which the Company or any Subsidiary is a party or otherwise;
(z) at or before the Closing
Time, the Shares will have been registered under Section 12(b) of
the Exchange Act and approved for listing on the New York Stock
Exchange, subject to official notice of issuance;
- 9 -
(aa) the Company has not taken,
and will not take, directly or indirectly, any action that is
designed to or that has constituted or that might reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or
resale of the Shares;
(bb) neither the Company nor any
of its affiliates (i) is required to register as a
“broker” or “dealer” in accordance with the
provisions of the Exchange Act or the Exchange Act Regulations, or
(ii) directly, or indirectly through one or more
intermediaries, controls or has any other association with (within
the meaning of Article I of the By-laws of the National
Association of Securities Dealers, Inc. (the “ NASD
”)) any member firm of the NASD;
(cc) the Company has not relied
upon the Representatives or legal counsel for the Representatives
for any legal, tax or accounting advice in connection with the
offering and sale of the Shares;
(dd) any certificate signed by
any officer of the Company or any Subsidiary delivered to the
Representatives or to counsel for the Underwriters pursuant to or
in connection with this Agreement shall be deemed a representation
and warranty by the Company to each Underwriter as to the matters
covered thereby;
(ee) except as described in the
General Disclosure Package and the Prospectus, neither the Company
nor any Subsidiary has sold or issued any securities during the
six-month period preceding the date of the Prospectus, including
any sales pursuant to Rule 144A under, or Regulations D or S
of, the Securities Act, other than shares issued pursuant to
employee benefit plans, qualified stock options plans or other
employee compensation plans or pursuant to outstanding options,
rights or warrants, that would not be required to be integrated
with the sale of the Shares;
(ff) the form of certificate
used to evidence the Series D Stock complies in all material
respects with all applicable statutory requirements, with any
applicable requirements of the organizational documents of the
Company and the requirements of the New York Stock Exchange;
(gg) all of the mezzanine loans
of which the Company is the owner, directly or indirectly (the
“ Mezzanine Loans ”), and all of the
participation interests in loans of which the Company is the owner,
directly or indirectly (the “ Participation Interests
,” and such loans, together with the Mezzanine Loans,
collectively are referred to hereinafter as the “
Loans ”), are set forth or described in the General
Disclosure Package and the Prospectus; the Company is the sole
owner and holder of the Mezzanine Loans and Participation
Interests, and has not sold, assigned, hypothecated or otherwise
encumbered such Mezzanine Loans and Participation Interests, except
as set forth in the General Disclosure Package and the Prospectus;
to the Company’s knowledge, there is no offset, defense,
counterclaim or right to rescission with respect to any of the
notes or any of the other loan documents; neither the Company nor,
to the knowledge of the Company, any other party has given or
received a written notice of default under any Loans and, to the
Company’s knowledge, no event exists which, with the giving
of notice or the passing of time, or both, would constitute an
event of default thereunder; the Company has not subordinated its
interest in the loans to which the Participation Interests relate
to any other party except as set forth in the General Disclosure
Package and the Prospectus;
(hh) the Company and the
Subsidiaries have good and indefeasible title in fee simple to, or
a valid leasehold interest in, all real property described in the
General Disclosure Package and the Prospectus, and good title to
all personal property owned by them, in each case free and
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clear of
all liens, security interests, pledges, charges, encumbrances,
encroachments, restrictions, mortgages and defects, except such as
are disclosed in the General Disclosure Package and the Prospectus
or such as do not materially and adversely affect the value of such
property and do not interfere with the use made or proposed to be
made of such property by the Company and the Subsidiaries; any real
property, improvements, equipment and personal property held under
lease by the Company or any Subsidiary are held under valid,
existing and enforceable leases, with such exceptions as are
disclosed in the General Disclosure Package and the Prospectus or
are not material and do not interfere with the use made or proposed
to be made of such real property, improvements, equipment and
personal property by the Company or such Subsidiary; the Company or
a Subsidiary has obtained an owner’s or leasehold title
insurance policy, from a title insurance company licensed to issue
such policy, on any real property owned in fee or leased, as the
case may be, by the Company or any Subsidiary, that insures the
Company’s or the Subsidiary’s fee or leasehold
interest, as the case may be, in such real property, which policies
include only commercially reasonable exceptions, and with coverages
in amounts at least equal to amounts that are generally deemed in
the Company’s industry to be commercially reasonable in the
markets where the Company’s properties are located, or a
lender’s title insurance policy insuring the lien of its
mortgage securing the real property with coverage equal to the
maximum aggregate principal amount of any indebtedness held by the
Company or a Subsidiary and secured by the real property;
(ii) all real property owned or
leased by the Company or a Subsidiary is free of material
structural defects and all building systems contained therein are
in good working order in all material respects, subject to ordinary
wear and tear or, in each instance, the Company has created an
adequate reserve to effect reasonably required repairs, maintenance
and capital expenditures; to the knowledge of the Company and the
Operating Partnership, water, storm water, sanitary sewer,
electricity and telephone service are all available at the property
lines of such property over duly dedicated streets or perpetual
easements of record benefiting such property; except as described
in the General Disclosure Package and the Prospectus, to the
knowledge of the Company and the Operating Partnership, there is no
pending or threatened special assessment, tax reduction proceeding
or other action that, individually or in the aggregate, could
reasonably be expected to increase or decrease the real property
taxes or assessments of any of such property, that, individually or
in the aggregate, could reasonably be expected to have a Material
Adverse Effect;
(jj) the mortgages and deeds of
trust encumbering any real property owned in fee or leased by the
Company or a Subsidiary (i) are not convertible (in the
absence of foreclosure) into an equity interest in the Real
Property or in the Company, the Operating Partnership or any
Subsidiary, and none of the Company, the Operating Partnership or
the Subsidiaries hold a participating interest therein,
(ii) except as set forth in the General Disclosure Package and
the Prospectus, are not and will not be cross-defaulted to any
indebtedness other than indebtedness of the Company or any of the
Subsidiaries, and (iii) are not and will not be
cross-collateralized to any property not owned by the Company, the
Operating Partnership or any of the Subsidiaries;
(kk) the descriptions in the
General Disclosure Package and the Prospectus of the legal or
governmental proceedings, contracts, leases and other legal
documents therein described present fairly the information required
to be shown, and there are no legal or governmental proceedings,
contracts, leases, or other documents of a character required to be
described in the General Disclosure Package or the Prospectus or to
be filed as exhibits to the Registration Statement that are not
described or filed as required; all agreements between the Company
or any of the Subsidiaries and third parties expressly referenced
in the General Disclosure Package and the Prospectus are legal,
valid and binding obligations of the Company or one or more of the
Subsidiaries, enforceable in accordance with their respective
terms, except to the extent
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enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting
creditors’ rights generally and by general equitable
principles and, to the knowledge of the Company and the Operating
Partnership, no party is in breach or default under any such
agreements;
(ll) the Company and each
Subsidiary owns or possesses adequate licenses or other rights to
use all patents, trademarks, service marks, trade names,
copyrights, software and design licenses, trade secrets,
manufacturing processes, other intangible property rights and
know-how (collectively, “ Intangibles ”)
necessary to entitle the Company and each Subsidiary to conduct its
business as described in the General Disclosure Package and the
Prospectus, and neither the Company nor any Subsidiary has received
notice of infringement of or conflict with (and the Company knows
of no such infringement of or conflict with) asserted rights of
others with respect to any Intangibles that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect;
(mm) the Company, the Operating
Partnership and the Subsidiaries have established and maintain
disclosure controls and procedures (as such term is defined in
Rule 13a-15 and 15d-15 under the Exchange Act); such
disclosure controls and procedures are designed to ensure that
material information relating to the Company and its Subsidiaries,
is made known to the Company’s Chief Executive Officer and
its Chief Financial Officer by others within those entities, and
such disclosure controls and procedures are effective to perform
the functions for which they were established; the Company, the
Operating Partnership and the Subsidiaries have established and
maintain internal control over financial reporting (as such term is
defined in Rule 13a-15 and 15d-15 under the Exchange Act);
such internal control over financial reporting is designed to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles, including providing reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or
disposition of the Company’s assets that could have a
material effect on the financial statements; the Company’s
auditors and the Audit Committee of the Board of Directors have
been advised of: (i) any significant deficiencies and material
weaknesses in the design or operation of internal controls which
could adversely affect the Company’s ability to record,
process, summarize, and report financial data; and (ii) any
fraud, whether or not material, that involves management or other
employees who have a role in the Company’s internal controls;
since the date of the most recent evaluation of such disclosure
controls and procedures, there have been (i) no material
weakness in the Company’s internal control over financial
reporting (whether or not remediated) and (ii) no significant
changes in internal controls or in other factors that could
significantly affect internal controls, including any corrective
actions with regard to significant deficiencies;
(nn) there is and has been no
failure on the part of the Company or any of the Company’s
directors or officers, in their capacities as such, to comply in
all material respects with any provision of the Sarbanes-Oxley Act
of 2002 and the rules and regulations promulgated in connection
therewith, including Section 402 related to loans and
Sections 302 and 906 related to certifications;
(oo) the Registration Statement
is not the subject of a pending proceeding or examination under
Section 8(d) or 8(e) of the Securities Act, and the Company is not
the subject of a pending proceeding under Section 8A of the
Securities Act in connection with the offering of the Shares;
(pp) each of the Company, the
Operating Partnership and the Subsidiaries has filed on a timely
basis (including in accordance with any applicable extensions) all
necessary federal,
- 12 -
state,
local and foreign income and franchise tax returns required to be
filed through the date hereof or have properly requested extensions
thereof, and have paid all taxes shown as due thereon, and if due
and payable, any related or similar assessment, fine or penalty
levied against the Company, the Operating Partnership or any of the
Subsidiaries; no tax deficiency has been asserted against any such
entity, and the Company and the Subsidiaries do not know of any tax
deficiency that is likely to be asserted against any such entity
that, individually or in the aggregate, if determined adversely to
any such entity, could reasonably be expected to have a Material
Adverse Effect; all tax liabilities are adequately provided for on
the respective books of the Company and the Subsidiaries;
(qq) each of the Company and the
Subsidiaries maintains insurance (issued by insurers of recognized
financial responsibility) of the types and in the amounts generally
deemed adequate for their respective businesses and consistent with
insurance coverage maintained by similar companies in similar
businesses, including, but not limited to, insurance covering real
and personal property owned or leased by the Company and the
Subsidiaries against theft, damage, destruction, environmental
liabilities, acts of vandalism, terrorism, earthquakes, flood and
all other risks customarily insured against, all of which insurance
is in full force and effect;
(rr) neither the Company nor any
of the Subsidiaries is in violation, or has received notice of any
violation with respect to, any applicable environmental, safety or
similar law, regulation or rule applicable to the business of the
Company or any of the Subsidiaries; the Company and the
Subsidiaries have received all permits, licenses or other approvals
required of them under applicable federal and state occupational
safety and health and environmental laws, regulations and rules to
conduct their respective businesses, and the Company and the
Subsidiaries are in compliance with all terms and conditions of any
such permit, license or approval, except any such violation of law,
regulation or rule, failure to receive required permits, licenses
or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals that individually
or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect;
(ss) neither the Company nor any
Subsidiary is in violation of or has received notice of any
violation with respect to any federal or state law, regulation or
rule relating to discrimination in the hiring, termination,
promotion, employment or pay of employees, nor any applicable
federal or state wages and hours law, nor any state law, regulation
or rule precluding the denial of credit due to the neighborhood in
which a property is situated, the violation of any of which,
individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect;
(tt) the Company and each of the
Subsidiaries are in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder (“ ERISA
”); no “reportable event” (as defined in ERISA)
has occurred with respect to any “pension plan” (as
defined in ERISA) for which the Company or any of the Subsidiaries
would have any material liability; the Company and each of the
Subsidiaries have not incurred and do not expect to incur material
liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “pension plan”
or (ii) Section 412 or 4971 of the Internal Revenue Code
of 1986, as amended, including the regulations and published
interpretations thereunder (“ Code ”); and each
“pension plan” for which the Company or any of its
Subsidiaries would have any material liability that is intended to
be qualified under Section 401(a) of the Code is so qualified in
all material respects and nothing has occurred, whether by action
or by failure to act, that would cause the loss of such
qualification;
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(uu) neither the Company nor any
of the Subsidiaries nor, to the Company’s knowledge, any
officer or director purporting to act on behalf of the Company or
any of the Subsidiaries has at any time (i) made any payment
outside the ordinary course of business to any investment officer
or loan broker or person charged with similar duties of any entity
to which the Company or any of the Subsidiaries sells or from which
the Company or any of the Subsidiaries buys loans or servicing
arrangements for the purpose of influencing such agent, officer,
broker or person to buy loans or servicing arrangements from or
sell loans to the Company or any of the Subsidiaries, or (ii)
engaged in any transactions, maintained any bank account or used
any corporate funds except for transactions, bank accounts and
funds which have been and are reflected in the normally maintained
books and records of the Company and the Subsidiaries;
(vv) there are no outstanding
loans or advances or guarantees of indebtedness by the Company or
any of the Subsidiaries to or for the benefit of any of the
officers or directors of the Company or any of the Subsidiaries or
any of the members of the families of any of them;
(ww) neither the Company nor any
of the Subsidiaries nor, to the knowledge of the Company or the
Operating Partnership, any employee or agent of the Company or any
of the Subsidiaries, has made any payment of funds of the Company
or of any Subsidiary or received or retained any funds in violation
of any law, rule or regulation or of a character required to be
disclosed in the General Disclosure Package or the
Prospectus;
(xx) all securities issued by
the Company, any of the Subsidiaries or any trusts established by
the Company or any Subsidiary, have been issued and sold in
compliance with (i) all applicable federal and state
securities laws and the laws of the applicable jurisdiction of
incorporation of the issuing entity, except as, individually or in
the aggregate, could not reasonably be expected to have a Material
Adverse Effect, and (ii) to the extent applicable to the
issuing entity, the requirements of the New York Stock
Exchange;
(yy) except as otherwise
disclosed in the General Disclosure Package and the Prospectus, (i)
none of the Operating Partnership, the Company, any of the
Subsidiaries nor, to the knowledge of the Operating Partnership and
the Company, any other owners of the property at any time or any
other party has at any time, handled, stored, treated, transported,
manufactured, spilled, leaked, or discharged, dumped, transferred
or otherwise disposed of or dealt with, Hazardous Materials (as
hereinafter defined) on, in, under, to or from any real property
leased, owned or controlled, including any real property underlying
any loan held or to be held by the Company or the Subsidiaries
(collectively, the “ Real Property ”), other
than by any such action taken in compliance with all applicable
Environmental Statutes (hereinafter defined) or by the Operating
Partnership, the Company, any of the Subsidiaries or any other
party in connection with the ordinary use of residential, retail or
commercial properties owned by the Operating Partnership;
(ii) the Operating Partnership and the Company do not intend
to use the Real Property or any subsequently acquired properties
for the purpose of using, handling, storing, treating,
transporting, manufacturing, spilling, leaking, discharging,
dumping, transferring or otherwise disposing of or dealing with
Hazardous Materials other than by any such action taken in
compliance with all applicable Environmental Statues or by the
Operating Partnership, the Company, any of the Subsidiaries or any
other party in connection with the ordinary use of residential,
retail or commercial properties owned by the Operating Partnership;
(iii) none of the Operating Partnership, the Company, nor any
of the Subsidiaries knows of any seepage, leak, discharge, release,
emission, spill, or dumping of Hazardous Materials into waters on
or adjacent to the Real Property or any other real property owned
or occupied by any such party, or ont
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