HERSHA HOSPITALITY TRUST (a Maryland real estate investment trust) 6,520,000 Common Shares ($0.01 Par Value) UNDERWRITING AGREEMENT
Exhibit
1.1
EXECUTION
COPY
(a
Maryland real estate investment trust)
6,520,000
Common Shares
($0.01
Par Value)
April
25,
2006
April
25,
2006
UBS
SECURITIES LLC
▇▇▇▇▇▇▇
LYNCH, PIERCE, ▇▇▇▇▇▇
&
▇▇▇▇▇ INCORPORATED
as
Representatives of the several Underwriters
c/o
UBS
SECURITIES LLC
▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies
and Gentlemen:
Hersha
Hospitality Trust, a Maryland real estate investment trust (the “Company”),
proposes to issue and sell to the several underwriters listed on Schedule A
attached hereto (the “Underwriters”),
an
aggregate of 6,520,000 (the “Firm
Shares”) of
its common shares, $ 0.01 par value (the “Common
Shares”) of
the Company. In addition, solely for the purpose of covering over-allotments,
the Company proposes to grant the Underwriters the option to purchase from
the
Company up to an additional 978,000 of its Common Shares (the “Additional
Shares”).
The
Firm Shares and the Additional Shares are hereinafter collectively referred
to
as the “Shares.”
UBS
Securities LLC and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated have
agreed to act as representatives of the several Underwriters (in such capacity,
the “Representatives”) in
connection with the offering and sale of the Shares. The Shares are described
in
the Prospectus which is referred to below.
The
Company has prepared and filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the “Act”),
with
the Securities and Exchange Commission (the “Commission”)
a
registration statement on Form “S-3” (File No. 333-113061) (the “registration
statement”),
including a prospectus, which registration statement incorporates by reference
documents which the Company has filed, or will file, in accordance with the
provisions of the Securities Exchange Act of 1934, as amended, and the rules
and
regulations thereunder (collectively, the “Exchange
Act”).
Amendments to such registration statement, if necessary or appropriate, have
been similarly prepared and filed with the Commission in accordance with the
Act. Such registration statement, as so amended, has become effective under
the
Act.
Except
where the context otherwise requires, “Registration
Statement,”
as
used herein, means the registration statement, as amended at the time of such
registration statement’s effectiveness for purposes of Section 11 of the Act, as
such section applies to the respective Underwriters (the “Effective
Time”),
including (i) all documents filed as a part thereof or incorporated or
deemed to be incorporated by reference therein, (ii) any information
contained or incorporated by reference in a prospectus filed with the Commission
pursuant to Rule 424(b) under the Act, to the extent such information is
deemed, pursuant to Rule 430B or Rule 430C under the Act, to be part of the
registration statement at the Effective Time, and (iii) any registration
statement filed to register the offer and sale of Shares pursuant to Rule
462(b) under the Act.
1
The
Company has furnished to you, for use by the Underwriters and by dealers in
connection with the offering of the Shares, copies of one or more preliminary
prospectus supplements, and the documents incorporated by reference therein,
relating to the Shares. Except where the context otherwise requires,
“Pre-Pricing
Prospectus,”
as
used herein, means each such preliminary prospectus supplement, in the form
so
furnished, including any
basic
prospectus (whether or not in preliminary form) furnished to you by the Company
and attached to or used with such preliminary prospectus supplement.
Except
where the context otherwise requires, “Basic
Prospectus,”
as
used herein, means any such basic prospectus and any basic prospectus furnished
to you by the Company and attached to or used with the Prospectus Supplement
(as
defined below).
Except
where the context otherwise requires, “Prospectus
Supplement,”
as
used herein, means the final prospectus supplement, relating to the Shares,
filed by the Company with the Commission pursuant to Rule 424(b) under the
Act
on or before the second business day after the date hereof (or such earlier
time
as may be required under the Act), in the form furnished by the Company to
you
for use by the Underwriters and by dealers in connection with the offering
of
the Shares.
Except
where the context otherwise requires, “Prospectus,”
as
used herein, means the Prospectus Supplement together with the Basic Prospectus
attached to or used with the Prospectus Supplement.
“Permitted
Free Writing Prospectuses,”
as
used herein, means the documents listed on Schedule
D
attached
hereto and each “road show” (as defined in Rule 433 under the Act), if any,
related to the offering of the Shares contemplated hereby that is a “written
communication” (as defined in Rule 405 under the Act).
“Disclosure
Package,”
as
used herein, means any Pre-Pricing Prospectus or Basic Prospectus, in either
case together with any combination of one or more of the Permitted Free Writing
Prospectuses, if any.
Any
reference herein to the registration statement, the Registration Statement,
any
Basic Prospectus, any Pre-Pricing Prospectus, the Prospectus Supplement, the
Prospectus or any Permitted Free Writing Prospectus shall be deemed to refer
to
and include the documents, if any, incorporated by reference, or deemed to
be
incorporated by reference, therein (the “Incorporated
Documents”),
including, unless the context otherwise requires, the documents, if any, filed
as exhibits to such Incorporated Documents. Any reference herein to the terms
“amend,”
“amendment”
or
“supplement”
with
respect to the Registration Statement, any Basic Prospectus, any Pre-Pricing
Prospectus, the Prospectus Supplement, the Prospectus or any Permitted Free
Writing Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act on or after the initial effective date of the
Registration Statement, or the date of such Basic Prospectus, such Pre-Pricing
Prospectus, the Prospectus Supplement, the Prospectus or such Permitted Free
Writing Prospectus, as the case may be, and deemed to be incorporated therein
by
reference.
As
used
in this Agreement, “business
day”
shall
mean a day on which the American Stock Exchange is open for trading. The terms
“herein,” “hereof,” “hereto,” “hereinafter” and similar terms, as used in this
Agreement, shall in each case refer to this Agreement as a whole and not to
any
particular section, paragraph, sentence or other subdivision of this Agreement.
The term “or,” as used herein, is not exclusive. For purposes of this Agreement,
all references to the Registration Statement, the Pre-Pricing Prospectus, the
Prospectus and any Permitted Free Writing Prospectuses or to any amendment
or
supplement thereto shall be deemed to include any copy filed with the Commission
pursuant to its Electronic Data Gathering Analysis and Retrieval System
(“▇▇▇▇▇”),
and
such copy shall be identical in content to any Prospectus delivered to the
Underwriters for use in connection with the offering of the Shares.
2
The
Company, Hersha Hospitality Limited Partnership (the “Partnership”) and
the Underwriters agree as follows:
1. Sale
and Purchase.
Upon
the basis of the representations and warranties and subject to the terms and
conditions herein set forth, the Company agrees to issue and sell to the
Underwriters and the Underwriters, acting severally and not jointly, agree
to
purchase from the Company the Firm Shares in the respective amounts set forth
on
Schedule A hereto at a purchase price of $8.505 per Share. The Company is
advised by you that the Underwriters intend (i) to make a public offering
of the Firm Shares as soon as the Representatives deem advisable after this
Agreement has been executed and delivered and (ii) initially to offer the
Firm Shares upon the terms set forth in the Prospectus. You may from time to
time increase or decrease the public offering price after the initial public
offering to such extent as you may determine.
In
addition, the Company hereby grants to the Underwriters the option to purchase,
and upon the basis of the representations and warranties and subject to the
terms and conditions herein set forth, the Underwriters shall have the right
to
purchase from the Company all or a portion of the Additional Shares as may
be
necessary to cover over-allotments made in connection with the offering of
the
Firm Shares, at the same purchase price per share to be paid by the Underwriters
to the Company for the Firm Shares. This option may be exercised by the
Underwriters at any time and from time to time on or before the thirtieth day
following the date of the Prospectus, by written notice to the Company. Such
notice shall set forth the aggregate number of Additional Shares as to which
the
option is being exercised, and the date and time when the Additional Shares
are
to be delivered (such date and time being herein referred to as the “additional
time of purchase”); provided,
however,
that
the additional time of purchase shall not be earlier than the time of purchase
(as defined below) nor earlier than the second business day after the date
on which the option shall have been exercised nor later than the tenth business
day after the date on which the option shall have been exercised.
2. Payment
and Delivery.
Payment
of the purchase price for the Firm Shares shall be made to the Company by
Federal Funds wire transfer, against delivery to the Underwriters of Firm Shares
through the facilities of The Depository Trust Company (“DTC”) for
the account of the Underwriters. Such payment and delivery shall be made at
10:00 a.m., New York City time, on April 28, 2006 (unless another time shall
be
agreed to by the Representatives and the Company). The time at which such
payment and delivery are to be made is hereinafter sometimes called
“the
time of purchase.”
Electronic transfer of the Firm Shares shall be made to the Underwriters at
the
time of purchase in such names and in such denominations as they shall
specify.
Payment
of the purchase price for the Additional Shares shall be made at the additional
time of purchase in the same manner and at the same office as the payment for
the Firm Shares. Electronic transfer of the Additional Shares shall be made
to
you at the additional time of purchase in such names and in such denominations
as you shall specify.
3
Deliveries
of the documents described in Section 6 hereof with respect to the purchase
of
the Shares shall be made at the offices of Underwriters’ Counsel and the address
of its New York office, at 9:00 a.m., New York City time, on the date of the
closing of the purchase of the Firm Shares or the Additional Shares, as the
case
may be.
3. Representations
and Warranties of the Company.
Each of
the representations and warranties made herein with respect to HHMLP (as defined
below) are made to the best of the Company’s knowledge, after due inquiry.
The Company and the Partnership, jointly and severally, represent and warrant
to
and agree with the Underwriters that:
(a) the
Company meets the requirements for use of Form S-3 under the Act. The
Registration Statement has been filed with the Commission and has been declared
effective under the Act. The Company has not received, and has no notice of,
any
order of the Commission preventing or suspending the use of the Registration
Statement, or threatening or instituting proceedings for that purpose. Any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement have been so described or filed. The
Prospectus Supplement has been or will be so prepared and will be filed pursuant
to Rule 424(b) of the Act on or before the second business day following
the date of this Agreement or on such other day as the parties may mutually
agree. Copies of the Registration Statement and the Prospectus, any such
amendments or supplements and all documents incorporated by reference therein
that were filed with the Commission on or prior to the date of this Agreement
(including one fully executed copy of the Registration Statement and each
amendment thereto for the Underwriters) have been delivered to the
Underwriters and their counsel. The Company has not distributed any offering
material in connection with the offering or sale of the Shares other than the
Registration Statement, the Prospectus or any other materials, if any, permitted
by the Act;
4
(b) the
Registration Statement complied when it became effective, complies as of the
date hereof and, as amended or supplemented, at the time of purchase, each
additional time of purchase, if any, and at all times during which a prospectus
is required by the Act to be delivered (whether physically or through compliance
with Rule 172 under the Act or any similar rule) in connection with any sale
of
Shares, will comply, in all material respects, with the requirements of the
Act;
the conditions to the use of Form S-3 in connection with the offering and sale
of the Shares as contemplated hereby have been satisfied; the Registration
Statement meets, and the offering and sale of the Shares as contemplated hereby
complies with, the requirements of Rule 415 under the Act; the Registration
Statement did not, as of the Effective Time, 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; each Pre-Pricing
Prospectus complied, at the time it was filed with the Commission, and complies
as of the date hereof, in all material respects with the requirements of the
Act; at no time during the period that begins on the earlier of the date of
such
Pre-Pricing Prospectus or the date such Pre-Pricing Prospectus was filed with
the Commission and ends at the time of purchase did or will any Pre-Pricing
Prospectus, as then amended or supplemented, include an untrue statement of
a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and at no time during such period did or will any
Pre-Pricing Prospectus, as then amended or supplemented, together with any
combination of one or more of the then issued Permitted Free Writing
Prospectuses, if any, include an untrue statement of a material fact or omit
to
state a material fact necessary in order to make the statements therein, in
the
light of the circumstances under which they were made, not misleading; each
Basic Prospectus complied or will comply, as of its date and the date it was
or
will be filed with the Commission, complies as of the date hereof (if filed
with
the Commission on or prior to the date hereof) and, at the time of purchase,
each additional time of purchase, if any, and at all times during which a
prospectus is required by the Act to be delivered (whether physically or through
compliance with Rule 172 under the Act or any similar rule) in connection with
any sale of Shares, will comply, in all material respects, with the requirements
of the Act; at no time during the period that begins on the earlier of the
date
of such Basic Prospectus or the date such Basic Prospectus was filed with the
Commission and ends at the time of purchase did or will any Basic Prospectus,
as
then amended or supplemented, include an untrue statement of a material fact
or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and at no time during such period did or will any Basic Prospectus, as then
amended or supplemented, together with any combination of one or more of the
then issued Permitted Free Writing Prospectuses, if any, include an untrue
statement of a material fact or omit to state a material fact necessary in
order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; each of the Prospectus Supplement and the
Prospectus will comply, as of the date that it is filed with the Commission,
the
date of the Prospectus Supplement, the time of purchase, each additional time
of
purchase, if any, and at all times during which a prospectus is required by
the
Act to be delivered (whether physically or through compliance with Rule 172
under the Act or any similar rule) in connection with any sale of Shares, in
all
material respects, with the requirements of the Act (in the case of the
Prospectus, including, without limitation, Section 10(a) of the Act); at no
time
during the period that begins on the earlier of the date of the Prospectus
Supplement and the date the Prospectus Supplement is filed with the Commission
and ends at the later of the time of purchase, the latest additional time of
purchase, if any, and the end of the period during which a prospectus is
required by the Act to be delivered (whether physically or through compliance
with Rule 172 under the Act or any similar rule) in connection with any sale
of
Shares did or will any Prospectus Supplement or the Prospectus, as then amended
or supplemented, include an untrue statement of a material fact or omit to
state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; at no time
during the period that begins on the date of such Permitted Free Writing
Prospectus and ends at the time of purchase did or will any Permitted Free
Writing Prospectus include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
the
light of the circumstances under which they were made, not misleading;
provided,
however,
that
the Company makes no representation or warranty in this Section 3(b)
with
respect to any statement contained in the Registration Statement, any
Pre-Pricing Prospectus, the Prospectus or any Permitted Free Writing Prospectus
in reliance upon and in conformity with information concerning an Underwriter
and furnished in writing by or on behalf of such Underwriter through you to
the
Company expressly for use in the Registration Statement, such Pre-Pricing
Prospectus, the Prospectus or such Permitted Free Writing Prospectus; each
Incorporated Document, at the time such document was filed with the Commission
or at the time such document became effective, as applicable, complied, in
all
material respects, with the requirements of the Exchange Act and did not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
5
(c) the
documents incorporated by reference in the Registration Statement, the
Prospectus or any amendment or supplement thereto, that were or are filed prior
to the time of purchase, when they became or become effective under the Act
or
were or are filed with the Commission under the Act or the Exchange Act, as
the
case may be, conformed or will conform in all material respects with the
requirements of the Act and the Exchange Act, as applicable, and did not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light
of
the circumstances under which they were made, not misleading;
(d) prior
to
the execution of this Agreement, the Company has not, directly or indirectly,
offered or sold any Shares by means of any “prospectus” (within the meaning of
the Act) or used any “prospectus” (within the meaning of the Act) in connection
with the offer or sale of the Shares, in each case other than the Preliminary
Prospectuses and the Permitted Free Writing Prospectuses, if any; the Company
has not, directly or indirectly, prepared, used or referred to any Permitted
Free Writing Prospectus except in compliance with Rules 164 and 433 under the
Act; assuming that such Permitted Free Writing Prospectus is accompanied or
preceded by the most recent Preliminary Prospectus or the Prospectus, as the
case may be, and that such Permitted Free Writing Prospectus is so sent or
given
after the Registration Statement was filed with the Commission (and after such
Permitted Free Writing Prospectus was, if required pursuant to Rule 433(d)
under
the Act, filed with the Commission), the sending or giving, by any Underwriter,
of any Permitted Free Writing Prospectus will satisfy the provisions of Rule
164
or Rule 433 (without reliance on subsections (b), (c) and (d) of Rule 164);
each
of the Preliminary Prospectuses dated April 14, 2006 is a prospectus that,
other
than by reason of Rule 433 or Rule 431 under the Act, satisfies the requirements
of Section 10 of the Act, including a price range where required by rule;
neither the Company nor the Underwriters are disqualified, by reason of
subsection (f) or (g) of Rule 164 under the Act, from using, in connection
with
the offer and sale of the Shares, “free writing prospectuses” (as defined in
Rule 405 under the Act) pursuant to Rules 164 and 433 under the Act; the Company
is not an “ineligible issuer” (as defined in Rule 405 under the Act) as of the
eligibility determination date for purposes of Rules 164 and 433 under the
Act
with respect to the offering of the Shares contemplated by the Registration
Statement; the parties hereto agree and understand that the content of any
and
all “road shows” (as defined in Rule 433 under the Act) related to the offering
of the Shares contemplated hereby is solely the property of the
Company;
(e) the
Prospectus delivered to the Underwriters for use in connection with this
offering will be identical to the versions of the Prospectus created to be
transmitted to the Commission for filing via ▇▇▇▇▇, except to the extent
permitted by Regulation S-T;
(f) no
stop
order of the Commission preventing or suspending the use of any Basic
Prospectus, any Pre-Pricing Prospectus, the Prospectus Supplement, the
Prospectus or any Permitted Free Writing Prospectus or the effectiveness of
the
Registration Statement has been issued and no proceedings for such purpose
have
been instituted or, to the Company’s knowledge, are contemplated by the
Commission;
6
(g) as
of the
dates thereof, the Company had an authorized and outstanding capitalization
as
set forth in the Registration Statement, the Pre-Pricing Prospectuses and the
Prospectus under the heading “Capitalization” in the column entitled “Actual”
(and any similar sections or information, if any, contained in any Permitted
Free Writing Prospectuses); as of the date of this Agreement, the Company has
20,379,463 Common Shares and 2,400,000 Preferred Shares outstanding; and all
of
the issued and outstanding shares of capital stock or other securities,
including the Common Shares (as of the time of purchase) of the Company
have been duly authorized and validly issued and are fully paid and
non-assessable, have been issued in compliance with all federal and state
securities laws and were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right;
(h) the
Company is and at each Closing Date will be the sole general partner of the
Partnership; as of the date hereof, the Company owns approximately 85.37% of
the
units in the Partnership, and the limited partners of the Partnership own,
in
the aggregate, approximately 14.63% of the units in the Partnership;
(i) the
Company has been duly organized and is validly existing as a real estate
investment trust in good standing under the laws of the State of Maryland,
with
full corporate power and authority to own, lease and operate its properties
and
conduct its business as described in the Registration Statement, the Pre-Pricing
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, to
execute and deliver this Agreement and to issue, sell and deliver the Shares
as
contemplated herein;
(j) the
Company is duly qualified to do business as a foreign entity and is in good
standing in each jurisdiction where the ownership or leasing of its properties
or the conduct of its business requires such qualification, except where the
failure to be so qualified and in good standing would not, individually or
in
the aggregate, have a material adverse effect on the business, properties,
financial condition, or results of operation or prospects of the Company and
the
Subsidiaries (as defined below) taken as a whole (a “Material
Adverse Effect”);
7
(k) the
Company has no subsidiaries (as defined in the Act) other than the
subsidiaries provided on Schedule B (collectively, the “Subsidiaries”);
the
Company owns, directly or indirectly, the interests in each of the Subsidiaries
as provided on Schedule B; other than the interests in the Subsidiaries and
the
development loans made in the ordinary course of business (as described in
the
Company’s Annual Report on Form 10-K for the year ended December 31, 2005, the
Disclosure Package and the Prospectus), the Company does not own, directly
or
indirectly, any shares of stock or any other equity or long-term debt securities
of any corporation or have any equity interest in any firm, partnership, limited
liability company, joint venture, association or other entity; complete and
correct copies of the organizational documents of the Company, the Partnership
and the Subsidiaries and all amendments thereto have been delivered to you,
and
no changes therein will be made subsequent to the date hereof and prior to
the
time of purchase, except as necessary to consummate the transactions
contemplated by this Agreement; each Subsidiary has been duly organized and
is
validly existing as a corporation, limited liability company, limited
partnership or trust in good standing under the laws of the jurisdiction of
its
organization, with full power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement, the Pre-Pricing Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any; each Subsidiary is duly qualified to do business
as a foreign entity and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified and in good
standing would not, individually or in the aggregate, have a Material Adverse
Effect; all of the outstanding shares of capital stock or other securities
of
each of the Subsidiaries have been duly authorized and validly issued, are
fully
paid and non-assessable and, except as disclosed in the Prospectus, the
ownership interest of the Company in each Subsidiary are owned by the Company
subject to no security interest, other encumbrance or adverse claims; except
as
disclosed in the Prospectus, no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligation into shares of capital stock or ownership interests in the
Subsidiaries are outstanding; and no waivers, consents or approvals of the
holders of any class or series of preferred units of partnership interest need
to be obtained in connection with the issuance and sale of the Shares, except
for those that have been obtained and delivered in writing to the
Representatives before the date hereof;
(l) the
Partnership has been duly organized and is validly existing as a limited
partnership in good standing under the laws of the Commonwealth of Virginia,
with full partnership power and authority to own, lease and operate its
properties and conduct its business as described in the Registration Statement
and the Prospectus and to execute and deliver this Agreement;
(m) the
Partnership is duly qualified to do business as a foreign entity and is in
good
standing in each jurisdiction where the ownership or leasing of its properties
or the conduct of its business requires such qualification, except where the
failure to be so qualified and in good standing would not, individually or
in
the aggregate, have a Material Adverse Effect;
(n) Hersha
Hospitality Management, L.P. (“HHMLP”) has
been duly organized and is validly existing as a limited partnership under
the
laws of the Commonwealth of Pennsylvania with all requisite partnership power
and authority to conduct its business as now conducted and as proposed to be
conducted, and to own, lease and operate its properties, as described in the
Registration Statement and Prospectus, and is qualified to do business and
is in
good standing as a foreign limited partnership in each other jurisdiction in
which the failure so to qualify could reasonably be expected to have a Material
Adverse Effect. HHMLP is not in violation of any provision of its partnership
agreement or other governing documents and is not in default or in breach of,
and does not know of the occurrence of any event that with the giving of notice
or the lapse of time or both would constitute a default under or breach of,
any
term or condition of any material agreement or instrument to which it is a
party
or by which any of its properties is bound, except as disclosed in the
Registration Statement and Prospectus. No consent, approval, authorization
or
order from any court, governmental agency or body is required in connection
with
the consummation by HHMLP of the transactions contemplated herein and in the
Registration Statement and Prospectus, except such as may be required by the
Act, the Exchange Act, and applicable state securities or blue sky
laws;
8
(o) the
Shares have been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and validly issued,
fully paid and non-assessable and free of statutory and contractual preemptive
rights, resale rights, rights of first refusal and similar rights;
(p) the
capital stock of the Company, including the Shares, and the units of the
Partnership conform in all material respects to the description thereof
contained in the Registration Statement, the Pre-Pricing Prospectuses, the
Prospectus and the Permitted Free Writing Prospectuses, if any, the certificates
for the Shares are in due and proper form and the holders of the Shares will
not
be subject to personal liability by reason of being such holders;
(q) this
Agreement has been duly authorized, executed and delivered by the Company and
the Partnership;
(r)
neither
the Company, the Partnership nor any of the Subsidiaries is in breach or
violation of or in default under (nor has any event occurred which with notice,
lapse of time or both would result in any breach or violation of, constitute
a
default under or give the holder of any indebtedness (or a person acting on
such
holder’s behalf) the right to require the repurchase, redemption or
repayment of all or a part of such indebtedness under) (i) its
respective charter or by-laws, or (ii) any indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of indebtedness, or
any
license, lease, contract or other agreement or instrument to which the Company,
the Partnership or any of the Subsidiaries is a party or by which any of them
or
any of their properties may be bound or affected, except with respect to
(ii) as individually or in the aggregate would not have a Material Adverse
Effect, and the execution, delivery and performance of this Agreement, the
issuance and sale of the Shares and the consummation of the transactions
contemplated hereby will not conflict with, result in any breach or violation
of
or constitute a default under (nor constitute any event which with notice,
lapse
of time or both would result in any breach or violation of or constitute a
default under) the charter or by-laws of the Company or the organizational
documents of the Partnership or any of the Subsidiaries, or any indenture,
mortgage, deed of trust, bank loan or credit agreement or other evidence of
indebtedness, or any license, lease, contract or other agreement or instrument
to which the Company, the Partnership or any of the Subsidiaries is a party
or
by which any of them or any of their respective properties may be bound or
affected, or any federal, state, local or foreign law, regulation or rule or
any
decree, judgment or order applicable to the Company, the Partnership or any
of
the Subsidiaries;
(s) during
the period of at least the last 24 calendar months prior to the date of this
Agreement, the Company has timely filed with the Commission all documents and
other material required to be filed pursuant to Sections 13, 14 and
15(d) under the Exchange Act. During the period of at least the last 36
calendar months preceding the filing of the Registration Statement, the Company
has filed all reports required to be filed pursuant to Sections 13, 14 and
15(d) under the Exchange Act. As of the date of this Agreement, the
aggregate market value of the Company’s voting stock held by nonaffiliates of
the Company was equal to or greater than $150 million;
9
(t)
no
approval, authorization, consent or order of or filing with any federal, state,
local or foreign governmental or regulatory commission, board, body, authority
or agency is required in connection with the issuance and sale of the Shares
or
the consummation by the Company or the Partnership of the transactions
contemplated hereby other than registration of the Shares under the Act, which
has been or will be effected, and any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the Shares
are
being offered by the Underwriters or under the rules and regulations of the
American Stock Exchange or National Association of Securities Dealers (the
“NASD”);
(u) except
as
set forth in the Registration Statement, each Pre-Pricing Prospectus and the
Prospectus, (i) no person has the right, contractual or otherwise, to cause
(a) the Company to issue or sell Common Shares or shares of any other
capital stock or other equity interests of the Company, or (b) the
Partnership to issue or sell to it any units or other equity interests of the
Partnership, (ii) no person has any preemptive rights, resale rights,
rights of first refusal or other rights to purchase any Common Shares or shares
of any other capital stock or other equity interests of the Company, and
(iii) except for the Underwriters, no person has the right to act as an
underwriter or as a financial advisor to the Company in connection with the
offer and sale of the Shares, in the case of each of the foregoing clauses
(i),
(ii) and (iii), whether as a result of the filing or effectiveness of the
Registration Statement or the sale of the Shares as contemplated thereby or
otherwise; except as provided on Schedule C, no person has the right,
contractual or otherwise, to cause the Company to register under the Act any
Common Shares or shares of any other capital stock or other equity interests
of
the Company, or to include any such shares or interests in the Registration
Statement or the offering contemplated thereby, whether as a result of the
filing or effectiveness of the Registration Statement or the sale of the Shares
as contemplated thereby or otherwise;
(v) each
of
the Company, the Partnership, HHMLP and the Subsidiaries has all necessary
licenses, authorizations, franchises, consents and approvals and has made all
necessary filings required under any federal, state, local or foreign law,
regulation or rule, and has obtained all necessary authorizations, consents
and
approvals from other persons, in order to conduct its respective business,
except where the failure to so have, file or obtain would not have a Material
Adverse Effect; neither the Company, the Partnership nor any of the Subsidiaries
is in violation of, or in default under, or has received notice of any
proceedings relating to revocation or modification of, any such license,
authorization, consent or approval or any federal, state, local or foreign
law,
regulation or rule or any decree, order or judgment applicable to the Company,
the Partnership or any of the Subsidiaries, except where such violation,
default, revocation or modification would not, individually or in the aggregate,
have a Material Adverse Effect;
(w) all
legal
or governmental proceedings, affiliate transactions, off-balance sheet
transactions, contracts, licenses, agreements, leases or documents of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement have
been
so described or filed as required;
(x)
there
are
no actions, suits, claims, investigations or proceedings pending or threatened
or, to the Company’s or Partnership’s knowledge, contemplated to which the
Company, the Partnership, HHMLP or any of the Subsidiaries or any of their
respective directors or officers is or would be a party or of which any of
their
respective properties is or would be subject at law or in equity, before or
by
any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency, except any such action, suit, claim,
investigation or proceeding which would not result in a judgment, decree or
order having, individually or in the aggregate, a Material Adverse Effect or
preventing consummation of the transactions contemplated hereby;
10
(y) all
agreements to which the Company, the Partnership and their respective
Subsidiaries are a party, and all agreements between or among the Company,
the
Partnership or their respective affiliates, on the one hand, and HHMLP, on
the
other hand, are legal, valid, and binding obligations of the Company, the
Partnership, HHMLP and their respective Subsidiaries enforceable in accordance
with their respective terms, except where the failure to be legal, valid,
binding and enforceable would not, individually or in the aggregate, have a
Material Adverse Effect, and except to the extent enforceability may be limited
by (i) bankruptcy, insolvency, moratorium, liquidation, reorganization, or
similar laws affecting creditors’ rights generally, regardless of whether such
enforceability is considered in equity or at law, (ii) general equity
principles and (iii) limitations imposed by federal or state securities
laws or the public policy underlying such laws regarding the enforceability
of
indemnification or contribution provisions;
(z)
KPMG
LLP,
PricewaterhouseCoopers LLP, and ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, CPAs, PC, whose
reports on the consolidated financial statements of the Company, the Partnership
and the Subsidiaries or certain material acquisitions reported on Current
Reports on Form 8-K were filed with the Commission and incorporated by reference
in the Registration Statement, the Pre-Pricing Prospectuses and the Prospectus,
as of the date of such reports, were independent registered accountants as
required by the Act;
(aa) the
audited financial statements included or incorporated in the Registration
Statement, the Pre-Pricing Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, together with the related notes and schedules,
are
accurate in all material respects and present fairly the consolidated financial
position of the Company, the Partnership and the Subsidiaries as of the dates
indicated and the consolidated results of operations and cash flows of the
Company, the Partnership and the Subsidiaries for the periods specified and
have
been prepared in compliance with the requirements of the Act and in conformity
with generally accepted accounting principles applied on a consistent basis
during the periods involved; any pro forma financial statements or data included
or incorporated in the Registration Statement, the Pre-Pricing Prospectuses,
the
Prospectus and the Permitted Free Writing Prospectuses, if any, comply with
the
requirements of Regulation S-X of the Act, and the assumptions used in the
preparation of such pro forma financial statements and data are reasonable,
the
pro forma adjustments used therein are appropriate to give effect to the
transactions or circumstances described therein and the pro forma adjustments
have been properly applied to the historical amounts in the compilation of
those
statements and data; the other financial and statistical data set forth in
the
Registration Statement, the Pre-Pricing Prospectuses, the Prospectus and the
Permitted Free Writing Prospectuses, if any, are accurately presented and
prepared on a basis consistent with the financial statements and books and
records of the Company; there are no financial statements (historical or pro
forma) that are required to be included in the Registration Statement, the
Pre-Pricing Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any, that are not included as required; and the Company, the
Partnership and the Subsidiaries do not have any material liabilities or
obligations, direct or contingent (including any off-balance sheet obligations),
not disclosed in the Registration Statement, the Pre-Pricing Prospectuses,
the
Prospectus and the Permitted Free Writing Prospectuses, if any;
11
(bb) subsequent
to the respective dates as of which information is given in the Registration
Statement, the Pre-Pricing Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, there has not been (i) any material adverse
change, or any development reasonably expected to result in a material adverse
change, in the business, properties, management, financial condition or results
of operations of the Company, the Partnership, and the Subsidiaries, taken
as a
whole, or HHMLP, (ii) except as contemplated by the Prospectus, any
transaction which is material to the Company, the Partnership and the
Subsidiaries taken as a whole, (iii) except as disclosed in the Prospectus,
any obligation, direct or contingent (including any off-balance sheet
obligations), incurred by the Company, the Partnership, HHMLP or the
Subsidiaries, which is material to the Company, the Partnership and the
Subsidiaries taken as a whole, or HHMLP, (iv) except as disclosed in the
prospectus, any material change in the capital stock, ownership interests or
outstanding indebtedness of the Company, the Partnership or the Subsidiaries
or
(v) any dividend or distribution of any kind declared, paid or made on the
capital stock of the Company;
(cc) the
Company has obtained for the benefit of the Underwriters the agreement (a
“Lock-Up
Agreement”),
in
the form set forth as Exhibit
A
hereto,
of each of the individuals listed on Schedule C;
(dd) the
Company is not and, after giving effect to the offering and sale of the Shares,
will not be an “investment company” or an entity “controlled” by an “investment
company,” as such terms are defined in the Investment Company Act of 1940, as
amended;
(ee) the
Company, the Partnership and each of the Subsidiaries has good and marketable
title to all property (real and personal) described the Registration
Statement, the Pre-Pricing Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, as being owned by each of them, free and clear
of
all liens, claims, security interests or other encumbrances except for such
as
(1) are described in the Registration Statement, the Pre-Pricing
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses,
(2) are related to financings described in the Pre-Pricing Prospectuses and
the Prospectus, or (3) that would not individually or in the aggregate have
a Material Adverse Effect; no person other than the Company and HT/CNL Metro
Hotels, L.P. has an option or right of first refusal to purchase all or part
of
any hotel owned by the Company, the Partnership or the Subsidiaries (the
“Hotels”) or
any interest therein; each Hotel complies with all applicable codes, laws,
and
regulations (including, without limitation, building and zoning codes, laws
and
regulations, and laws relating to access to hotels), except if and to the extent
disclosed in the Prospectus and except for such failures to comply that would
not individually or in the aggregate have a Material Adverse Effect; neither
the
Company nor the Partnership has knowledge of any pending or threatened
condemnation proceedings, zoning change, or other proceeding or action that
will
in any manner effect the size of, use of, improvements on, construction on,
or
access to any of the Hotels, except such proceedings or actions that would
not
have a Material Adverse Effect;
12
(ff) the
Company, the Partnership and the Subsidiaries own, or have obtained valid and
enforceable licenses for, or other rights to use, the inventions, patent
applications, patents, trademarks (both registered and unregistered),
tradenames, copyrights, trade secrets and other proprietary information
described in the Registration Statement, the Pre-Pricing Prospectus, the
Prospectus or the Permitted Free Writing Prospectuses, if any, as being owned
or
licensed by them or which are necessary for the conduct of their respective
businesses, except where the failure to own, license or have such rights would
not, individually or in the aggregate, have a Material Adverse Effect
(collectively, “Intellectual
Property”);
to
the Company’s knowledge (i) there are no third parties who have or will be
able to establish rights to any Intellectual Property, except for the ownership
rights of the owners of the Intellectual Property which is licensed to the
Company; (ii) there is no infringement by third parties of any Intellectual
Property; (iii) there is no pending or threatened action, suit, proceeding
or claim by others challenging the Company’s, the Partnership’s, or HHMLP’s,
rights in or to any Intellectual Property, and the Company and the Partnership
are unaware of any facts which could form a reasonable basis for any such claim;
(iv) there is no pending or threatened action, suit, proceeding or claim by
others challenging the validity or scope of any Intellectual Property, and
the
Company and the Partnership are unaware of any facts which could form a
reasonable basis for any such claim; (v) there is no pending or threatened
action, suit, proceeding or claim by others that the Company or the Partnership
infringes or otherwise violates any patent, trademark, copyright, trade secret
or other proprietary rights of others, and the Company and the Partnership
are
unaware of any facts which could form a reasonable basis for any such claim;
(vi) there is no patent or patent application that contains claims that
interfere with the issued or pending claims of any of the Intellectual Property;
and (vii) there is no prior art that may render any patent application
owned by the Company or the Partnership of the Intellectual Property
unpatentable that has not been disclosed to the U.S. Patent and Trademark
Office;
(gg) except
for matters which would not, individually or in the aggregate, have a Material
Adverse Effect, (i) neither the Company, the Partnership nor any of the
Subsidiaries is engaged in any unfair labor practice; (ii) there is
(A) no unfair labor practice complaint pending or, to the Company’s or the
Partnership’s knowledge after due inquiry, threatened against the Company, the
Partnership or any of the Subsidiaries before the National Labor Relations
Board, and no grievance or arbitration proceeding arising out of or under
collective bargaining agreements is pending or threatened, (B) no strike,
labor dispute, slowdown or stoppage pending or, to the Company’s or the
Partnership’s knowledge after due inquiry, threatened against the Company, the
Partnership or any of the Subsidiaries and (C) no union representation
dispute currently existing concerning the employees of the Company, the
Partnership, HHMLP or any of the Subsidiaries, and (iii) to the Company’s
knowledge after due inquiry, (A) no union organizing activities are
currently taking place concerning the employees of the Company, the Partnership,
HHMLP or any of the Subsidiaries and (B) there has been no violation of any
federal, state, local or foreign law relating to discrimination in the hiring,
promotion or pay of employees, any applicable wage or hour laws or any provision
of the Employee Retirement Income Security Act of 1974 (“ERISA”) or
the rules and regulations promulgated thereunder concerning the employees of
the
Company, the Partnership, HHMLP or any of the Subsidiaries;
13
(hh) the
Company, the Partnership, HHMLP and the Subsidiaries and their properties,
assets and operations are in compliance with, and hold all permits,
authorizations and approvals required under, Environmental Laws (as defined
below), except to the extent that failure to so comply or to hold such permits,
authorizations or approvals would not, individually or in the aggregate, have
a
Material Adverse Effect; except as would not, individually or in the aggregate,
have a Material Adverse Effect, there are no past, present or, to the Company’s
or Partnership’s knowledge after due inquiry, reasonably anticipated future
events, conditions, circumstances, activities, practices, actions, omissions
or
plans that could reasonably be expected to give rise to any material costs
or
liabilities to the Company, the Partnership, HHMLP or the Subsidiaries under,
or
to interfere with or prevent compliance by the Company, the Partnership, HHMLP
or the Subsidiaries with, Environmental Laws; except as would not, individually
or in the aggregate, have a Material Adverse Effect, neither the Company, the
Partnership, HHMLP nor any of the Subsidiaries (i) is the subject of any
investigation, (ii) has received any notice or claim, (iii) is a party
to or affected by any pending or threatened action, suit or proceeding,
(iv) is bound by any judgment, decree or order or (v) has entered into
any agreement, in each case relating to any alleged violation of any
Environmental Law or any actual or alleged release or threatened release or
cleanup at any location of any Hazardous Materials (as defined below) (as
used herein, “Environmental
Law”
means
any federal, state, local or foreign law, statute, ordinance, rule, regulation,
order, decree, judgment, injunction, permit, license, authorization or other
binding requirement, or common law, relating to health, safety or the
protection, cleanup or restoration of the environment or natural resources,
including those relating to the distribution, processing, generation, treatment,
storage, disposal, transportation, other handling or release or threatened
release of Hazardous Materials, and “Hazardous
Materials”
means
any material (including, without limitation, pollutants, contaminants, hazardous
or toxic substances or wastes) that is regulated by or may give rise to
liability under any Environmental Law);
(ii)
in
the
ordinary course of its business, the Company, the Partnership, HHMLP and each
of
the Subsidiaries conducts a periodic review of the effect of the Environmental
Laws on its business, operations and properties, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for cleanup, closure
of properties or compliance with the Environmental Laws or any permit, license
or approval, any related constraints on operating activities and any potential
liabilities to third parties);
(jj)
all
tax
returns required to be filed as of the date hereof by the Company, the
Partnership, HHMLP and each of the Subsidiaries have been timely filed (or
valid
extensions to such filings have been obtained), all such tax returns are true,
correct and complete in all material respects, and all taxes and other
assessments of a similar nature (whether imposed directly or through
withholding) including any interest, additions to tax or penalties
applicable thereto due or claimed to be due from such entities have been paid,
other than those being contested in good faith and for which adequate reserves
have been provided, except in any case in which the failure so to file such
tax
returns or pay such taxes and other assessments would not, individually or
in
the aggregate, have a Material Adverse Effect;
(kk) commencing
with the Company’s taxable year ended December 31, 1999, the Company has been
organized and operated in conformity with the requirements for qualification
and
taxation as a real estate investment trust (“REIT”) under
Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the
“Code”),
and
its proposed method of operation as described in the Prospectus will enable
it
to continue to meet the requirements for qualification and taxation as a REIT
under the Code for its taxable year ending December 31, 2006 and thereafter.
All
statements in the Prospectus regarding the Company’s qualification and taxation
as a REIT under the Code are true, correct and complete in all material
respects;
14
(ll)
the
Company, the Partnership, HHMLP and each of the Subsidiaries maintains insurance
covering its properties, operations, personnel and businesses as the Company
and
the Partnership deem adequate; such insurance insures against such losses and
risks to an extent which is in accordance with customary industry practice
to
protect the Company, the Partnership, HHMLP and the Subsidiaries and their
businesses; all such insurance is fully in force on the date hereof and will
be
fully in force at the time of purchase;
(mm)
neither
the Company, the Partnership, HHMLP nor any of the Subsidiaries has sustained
since the date of the last audited financial statements included in the
Registration Statement, the Pre-Pricing Prospectus, the Prospectus or any
Permitted Free Writing Prospectuses any loss or interference with its respective
business from fire, explosion, flood (except as would not, individually or
in
the aggregate, have a Material Adverse Effect) or other calamity, whether
or not covered by insurance, or from any labor dispute or court or governmental
action, order or decree;
(nn) except
as
disclosed in the Registration Statement, the Pre-Pricing Prospectuses, the
Prospectus or any Permitted Free Writing Prospectuses, neither the Company,
the
Partnership nor HHMLP has sent or received any communication regarding
termination of, or intent not to renew, any of the contracts or agreements
referred to or described in, or filed as an exhibit to, the Registration
Statement, and no such termination or non-renewal has been threatened by the
Company, the Partnership or, to the Company’s knowledge, any other party to any
such contract or agreement;
(oo)
except
as
disclosed in the Pre-Pricing Prospectuses, the Prospectus or any Permitted
Free
Writing Prospectuses, the Company, the Partnership, HHMLP and each of the
Subsidiaries maintains a system of internal accounting controls sufficient
to
provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles
and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences;
(pp)
the
Company has established, maintains and evaluates disclosure controls and
procedures (as such term is defined in Rule 13a-15 and 15d-15 under the Exchange
Act) and “internal
control over financial reporting”
(as
such term is defined in Rule 13a-15 and 15d-15 under the Exchange Act) in
accordance with such rules and any related rules of the Commission or the
American Stock Exchange; such disclosure controls and procedures are designed
to
ensure that material information relating to the Company, including its
consolidated subsidiaries, is made known to the Company’s Chief Executive
Officer and its Chief Financial Officer by others within those entities, and
except as disclosed in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2005, as amended, such disclosure controls and procedures
are
effective to perform the functions for which they were established; the
Company’s auditors and the Audit Committee of the Board of Directors have been
advised of: (i) any significant deficiencies in the design or operation of
internal controls which could adversely affect the Company’s ability to record,
process, summarize, and report financial data; and (ii) any fraud, whether
or not material, that involves management or other employees who have a role
in
the Company’s internal controls; and since the date of the most recent
evaluation of such disclosure controls and procedures, there have been no
significant changes in internal controls or in other factors that could
significantly affect internal controls, including any corrective actions with
regard to significant deficiencies and material weaknesses;
15
(qq) the
Company is in compliance with all presently applicable provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations promulgated thereunder
and is actively taking steps to ensure that it will be in compliance with other
applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 upon the effectiveness
of such provisions;
(rr)
the
Company has made available to you true, correct, and complete copies of all
documentation pertaining to any extension of credit in the form of a personal
loan made, directly or indirectly, by the Company to any director or executive
officer of the Company, or to any family member or affiliate of any director
or
executive officer of the Company; and since July 30, 2002, the Company has
not,
directly or indirectly, including through any subsidiary, (i) extended
credit, arranged to extend credit, or renewed any extension of credit, in the
form of a personal loan, to or for any director or executive officer of the
Company, or to or for any family member or affiliate of any director or
executive officer of the Company; or (ii) made any material modification,
including any renewal thereof, to any term of any personal loan to any director
or executive officer of the Company, or any family member or affiliate of any
director or executive officer, which loan was outstanding on July 30,
2002;
(ss)
any
statistical and market-related data included in the Registration Statement
and
the Prospectus are based on or derived from sources that the Company believes
to
be reliable and accurate;
(tt)
neither
the Company, the Partnership nor any of the Subsidiaries nor, to the Company’s
and the Partnership’s knowledge after due inquiry, any employee or agent of the
Company, the Partnership or the Subsidiaries has made any payment of funds
of
the Company, the Partnership or the Subsidiaries or received or retained any
funds in violation of any law, rule or regulation, which payment, receipt or
retention of funds is of a character required to be disclosed in the
Registration Statement or the Prospectus;
(uu) neither
the Company, the Partnership nor any of the Subsidiaries nor any of their
respective directors, officers, affiliates or controlling persons has taken,
directly or indirectly, any action designed, or which has constituted or might
reasonably be expected to cause or result in, under the Exchange Act or
otherwise, the stabilization or manipulation of the price of any security of
the
Company or the Partnership to facilitate the sale or resale of the
Shares;
(vv) to
the
Company’s knowledge after due inquiry, there are no affiliations or associations
between any member of the NASD and any of the Company’s officers, directors or
5% or greater securityholders, except as set forth in the Registration Statement
and the Prospectus;
16
(ww) the
Common Shares of the Company are registered pursuant to Section 12(b) of
the Exchange Act. The Common Shares are listed on the American Stock Exchange.
The Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Shares under the Exchange Act or
the
listing of the Common Shares or, once listed, the Shares on the American Stock
Exchange, nor has the Company received any notification that the Commission
or
the American Stock Exchange is contemplating terminating such registration
or
listing; and
(xx)
the
description of the Company’s, the Partnership’s and the Subsidiaries’
organization and current and proposed method of operation set forth in the
Basic
Prospectus under the heading “Federal Income Tax Consequences of our Status as a
REIT” and in the Pre-Pricing Prospectuses or the Prospectus Supplement under the
heading “Additional Federal Income Tax Considerations” when considered together
is an accurate and fair summary of the matters referred to therein.
In
addition, any certificate signed by any officer of the Company, the Partnership
or any of the Subsidiaries and delivered to the Underwriters or counsel for
the
Underwriters in connection with the offering of the Shares shall be deemed
to be
a representation and warranty by the Company, the Partnership or Subsidiary,
as
the case may be, as to matters covered thereby, to the
Underwriters.
4.
Certain
Covenants of the Company.
The
Company and the Partnership hereby agree:
(a) to
furnish such information as may be required and otherwise to cooperate in
qualifying the Shares for offering and sale under the securities or blue sky
laws of such states or other jurisdictions as you may designate and to maintain
such qualifications in effect so long as you may request for the distribution
of
the Shares; provided
that the
Company shall not be required to qualify as a foreign corporation or to consent
to the service of process under the laws of any such jurisdiction (except
service of process with respect to the offering and sale of the Shares); and
to
promptly advise you of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose;
(b) the
Company will prepare the Prospectus in a form approved by the Underwriters
and
file such Prospectus with the Commission pursuant to Rule 424(b) under the
Act not later than 10:00 a.m. (New York City time), on or before the second
business day following the date of this Agreement or on such other day as the
parties may mutually agree and to furnish promptly (and with respect to the
initial delivery of such Prospectus, not later than 10:00 a.m. (New York City
time) on or before the second business day following the date of this
Agreement or on such other day as the parties may mutually agree) to each
of the Underwriters copies of the Prospectus (or of the Prospectus as amended
or
supplemented if the Company shall have made any amendments or supplements
thereto after the effective date of the Registration Statement) in such
quantities and at such locations as the Underwriters may reasonably request
for
the purposes contemplated by the Act, and the Prospectus and any amendments
or
supplements thereto furnished to the Underwriters will be identical to the
version created to be transmitted to the Commission for filing via ▇▇▇▇▇, except
to the extent permitted by Regulation S-T;
17
(c) the
Company will advise the Representatives, confirming such advice in writing,
of
(i) the receipt of any comments from the Commission relating to any filing
of the Company under the Act or the Exchange Act, (ii) any request by the
Commission for amendments or supplements to the Registration Statement or the
Prospectus or for additional information with respect thereto, (iii) a
notice of institution of proceedings for, or the entry of a stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of the Prospectus, (iv) the suspension of
the qualification of the Shares for offering or sale in any jurisdiction,
(v) the initiation, threatening or contemplation of any proceedings for any
of such purposes and, if the Commission or any other governmental agency or
authority should issue any such order, the Company will make every reasonable
effort to obtain the lifting or removal of such order as soon as possible.
The
Company will advise the Representatives promptly of any proposal to amend or
supplement the Registration Statement or the Prospectus including by filing
any
documents that would be incorporated therein by reference and to file no such
amendment or supplement to which the Representatives shall object to in
writing;
(d) the
Company will advise the Representatives promptly and, if requested by the
Representatives, will confirm such advice in writing when any post-effective
amendment to the Registration Statement becomes effective under the
Act;
(e) if
necessary, to file a registration statement pursuant to Rule 462(b) under
the Act;
(f) to
advise
the Representatives promptly of the happening of any event within the time
during which a Prospectus relating to the Shares is required to be delivered
under the Act which is reasonably likely to require the making of any change
in
the Prospectus then being used, or in the information incorporated by reference
therein, so that the Prospectus would not include an untrue statement of
material fact or omit to state a material fact required to be stated therein
or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any time
to
amend or supplement the Prospectus to comply with any law. If within the time
during which a Prospectus relating to the Shares is required to be delivered
under the Act any event shall occur or condition shall exist which, in the
reasonable opinion of the Company, the Representatives or their counsel, would
require the making of any change in the Prospectus then being used, or in the
information incorporated by reference therein, so that the Prospectus would
not
include an untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in
the light of the circumstances under which they were made, not misleading,
or if
it is necessary at any time to amend or supplement the Registration Statement,
Pre-Pricing Prospectuses, Prospectus or any Permitted Free Writing Prospectuses
to comply with any law, the Company will promptly prepare and furnish to the
Representatives copies of the proposed amendment or supplement before filing
any
such amendment or supplement with the Commission and thereafter promptly
furnish, at the Company’s own expense, to the Underwriters and to dealers copies
in such quantities and at such locations as each such Underwriter may from
time
to time reasonably request of an appropriate amendment to the Registration
Statement or supplement to the Pre-Pricing Prospectus or Prospectus so that
the
Pre-Pricing Prospectus or Prospectus as so amended or supplemented will not,
in
the circumstances when it is so delivered, be misleading or so that the
Pre-Pricing Prospectus or Prospectus will comply with the law;
18
(g) to
make
generally available to its security holders, and to deliver to you, an earnings
statement of the Company (which will satisfy the provisions of Section
11(a) of the Act) covering a period of twelve months beginning after
the effective date of the Registration Statement (as defined in Rule
158(c) under the Act) as soon as is reasonably practicable after the
termination of such twelve-month period but not later than August 9,
2007;
(h) to
furnish to its shareholders as soon as practicable after the end of each fiscal
year an annual report (including a consolidated balance sheet and statements
of
income, shareholders’ equity and cash flow of the Company, the Partnership and
the Subsidiaries for such fiscal year, accompanied by a copy of the certificate
or report thereon of nationally recognized independent certified public
accountants);
(i)
to
furnish to the Underwriters a signed copy of the Registration Statement, as
initially filed with the Commission, and of all amendments thereto (including
all exhibits thereto and documents incorporated by reference therein) and
such number of conformed copies of the foregoing (other than exhibits) as
the Underwriters may reasonably request;
(j)
to
furnish to you promptly for a period of five years from the date of this
Agreement (i) copies of any reports, proxy statements, or other
communications which the Company shall send to its shareholders or shall from
time to time publish or publicly disseminate, (ii) copies of all annual,
quarterly and current reports filed with the Commission on Forms 10-K, 10-Q
and
8-K, or such other similar forms as may be designated by the Commission,
(iii) copies of documents or reports filed with any national securities
exchange on which any class of securities of the Company is listed, and
(iv) such other information as you may reasonably request regarding the
Company, the Partnership or the Subsidiaries provided
that the
obligations of this Section 4(j) shall be deemed satisfied if such filings
or reports are timely filed with the Commission and are generally available
to
the public through ▇▇▇▇▇;
(k) to
furnish to you as early as practicable prior to the time of purchase and any
additional time of purchase, as the case may be, a copy of the latest available
unaudited interim and monthly consolidated financial statements, if any, of
the
Company, the Partnership and the Subsidiaries which have been read by the
Company’s independent certified public accountants, as stated in their letter to
be furnished pursuant to Section 6(c) hereof;
(l)
to
apply
the net proceeds from the sale of the Shares in the manner set forth under
the
caption “Use of Proceeds” in the Prospectus;
19
(m) to
pay
all costs, expenses, fees and taxes in connection with (i) the preparation
and filing of the Registration Statement, each Basic Prospectus, each
Pre-Pricing Prospectus, the Prospectus Supplement, the Prospectus and each
Permitted Free Writing Prospectus, and any amendments or supplements thereto,
and the printing and furnishing of copies of each thereof to each Underwriter
and to dealers (including costs of mailing and shipment), (ii) the
registration, issue, sale and delivery of the Shares including any stock or
transfer taxes and stamp or similar duties payable upon the sale, issuance
or
delivery of the Shares to the Underwriters, (iii) the producing, word
processing and/or printing of this Agreement and any closing documents
(including compilations thereof) and the reproduction and/or printing and
furnishing of copies of each thereof to the Underwriters and (except closing
documents) to dealers (including costs of mailing and shipment),
(iv) the qualification of the Shares for offering and sale under state or
foreign laws and the determination of their eligibility for investment under
state or foreign law as aforesaid (including the legal fees and filing fees
and
other disbursements of counsel for the Underwriters) and the printing and
furnishing of copies of any blue sky surveys or legal investment surveys to
the
Underwriters and to dealers, (v) the listing of the Shares on the American
Stock Exchange, (vi) any filing for review of the public offering of the
Shares by the NASD, including the legal fees and filing fees and other
disbursements of counsel to the Underwriters, (vii) the fees and
disbursements of any transfer agent or registrar for the Shares, (viii) the
costs and expenses of the Company relating to presentations or meetings
undertaken in connection with the marketing of the offering and sale of the
Shares to prospective investors and the Underwriters’ respective sales forces,
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations, travel, lodging and other expenses
incurred by the officers of the Company and any such consultants, and the cost
of any aircraft chartered in connection with the road show, and the performance
of the Company’s and the Partnership’s other obligations hereunder;
(n) not
to
(1) sell, offer to sell, contract or agree to sell, hypothecate, pledge,
grant any option to purchase or otherwise dispose of or agree to dispose of,
directly or indirectly, any Common Shares or securities convertible into or
exchangeable or exercisable for Common Shares or warrants or other rights to
purchase or otherwise transfer the economic consequences of ownership of Common
Shares or any other securities of the Company or the Partnership that are
substantially similar to Common Shares, respectively, or (2) file or cause
to be declared effective a registration statement under the Act relating to
the
offer and sale of any Common Shares or securities convertible into or
exercisable or exchangeable for Common Shares or other rights to purchase Common
Shares or any other securities of the Company or the Partnership that are
substantially similar to Common Shares, respectively, for a period of 90 days
after the date hereof (the “Lock-Up
Period”),
without the prior written consent of the Representatives, except for the
registration of the Shares and the sales to the Underwriters pursuant to this
Agreement and the issuance of units of limited partnership interest by the
Partnership in exchange for properties; provided,
however,
that if
(a) during the period that begins on the date that is fifteen
(15) calendar days plus three (3) business days before the last day of
the Lock-Up Period and ends on the last day of the Lock-Up Period, the Company
issues an earnings release or material news or a material event relating to
the
Company occurs; or (b) prior to the expiration of the Lock-Up Period, the
Company announces that it will release earnings results during the sixteen
(16) day period beginning on the last day of the Lock-Up Period, then the
restrictions imposed by this Section 4(n) shall continue to apply until the
expiration of the date that is fifteen (15) calendar days plus three
(3) business days after the date on which the issuance of the earnings
release or the material news or material event occurs;
20
(o) to
use
its best efforts to cause the Common Shares to be listed on the American Stock
Exchange;
(p) the
Company shall use its best efforts to obtain for the benefit of the Underwriters
the agreement (a “Lock-Up
Agreement”),
in
the form set forth as Exhibit
A
hereto,
of each of the individuals listed on Schedule C;
(q) to
maintain a transfer agent and, if necessary under the jurisdiction of
incorporation of the Company, a registrar for the Common Shares;
(r) to
comply
with Rule 433(d) under the Act (without reliance on Rule 164(b) under the Act)
and with Rule 433(g) under the Act; and
(s) prior
to
the time of purchase or any additional time of purchase, as the case may be,
to
issue no press release or other communication directly or indirectly and hold
no
press conferences with respect to the Company or any Subsidiary, the financial
condition, results of operations, business, properties, assets, or liabilities
of the Company or any Subsidiary, or the offering of the Shares, without your
prior consent, unless such press release or other communication and such press
conference is in the ordinary course of business.
5. Reimbursement
of Underwriter’s Expenses.
If the
Shares are not delivered for any reason other than the termination of this
Agreement pursuant to a default by the Underwriters in their obligations
hereunder, the Company and the Partnership, jointly and severally, shall, in
addition to paying the amounts described in Section 4(m) hereof, reimburse
the Underwriters for all of their reasonable out-of-pocket expenses, including
the reasonable fees and disbursements of Underwriters’ counsel.
6. Conditions
of Underwriters’ Obligations.
The
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Company and the Partnership
on
the date hereof and at the time of purchase and, if applicable, at the
additional time of purchase, the performance by the Company and the Partnership
of their obligations hereunder and to the following additional conditions
precedent:
(a) The
Company shall furnish to you at the time of purchase and, if applicable, at
the
additional time of purchase, an opinion of Hunton & ▇▇▇▇▇▇▇▇ LLP, counsel
for the Company, addressed to the Underwriters, and dated the time of purchase
and in the form of Exhibits B-1
and
B-2,
and a
letter from Hunton & ▇▇▇▇▇▇▇▇ LLP, addressed to the Underwriters, and dated
the time of purchase and in the form of Exhibit B-3.
(b) The
Company shall furnish to you at the time of purchase and, if applicable, at
the
additional time of purchase, an opinion of Shah & ▇▇▇▇▇ LLP, counsel for
HHMLP, addressed to the Underwriters, and dated the time of purchase and in
the
form of Exhibit
C.
(c) You
shall
have received from KPMG LLP, PricewaterhouseCoopers LLP, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, P.C.
and ▇▇▇▇▇▇▇ Group, PC comfort letters dated the date of this Agreement and
the
time of purchase and addressed to the Underwriters in the form and substance
satisfactory to the Underwriters.
21
(d) You
shall
have received at the time of purchase the favorable opinion of ▇▇▇▇▇▇▇▇ Chance
US LLP, counsel for the Underwriters, dated the time of purchase in form and
substance satisfactory to you.
(e) No
Prospectus or amendment or supplement to the Registration Statement or the
Prospectus shall have been filed to which you object in writing.
(f) Prior
to
the time of purchase and, if applicable, prior to the additional time of
purchase, (i) no stop order with respect to the effectiveness of the
Registration Statement shall have been issued under the Act or proceedings
initiated under Section 8(d) or 8(e) of the Act; (ii) the
Registration Statement and all amendments thereto shall not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
(iii) none of the Pre-Pricing Prospectuses or the Prospectus and no
amendments or supplements thereto shall contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or
necessary to make the statements therein, in the light of the circumstances
under which they are made, not misleading; (iv) no Disclosure Package, and
no amendment or supplement thereto, shall include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they are
made,
not misleading; and (v) none of the Permitted Free Writing Prospectuses, if
any, shall include an untrue statement of a material fact or omit to state
a
material fact necessary in order to make the statements therein, in the light
of
the circumstances under which they are made, not misleading.
(g) Between
the time of execution of this Agreement and the time of purchase and, if
applicable, at the additional time of purchase, no material adverse change
or
any development reasonably expected to result in a material adverse change
in
the business, properties, management, financial condition or results of
operations of the Company, the Partnership and the Subsidiaries taken as a
whole
shall occur or become known.
(h) The
Company and the Partnership will, at the time of purchase and, if applicable,
at
the additional time of purchase, deliver to you a certificate of its Chief
Executive Officer and its Chief Financial Officer, in the case of the Company,
and of its general partner, in the case of the Partnership, in the form attached
as Exhibit
D
hereto.
(i)
You
shall
have received signed Lock-Up Agreements referred to in Section
3(bb) hereof.
(j)
The
Company and the Partnership shall have furnished to you such other documents
and
certificates as to the accuracy and completeness of any statement in the
Registration Statement, any Pre-Pricing Prospectus, the Prospectus or any
Permitted Free Writing Prospectus as of the time of purchase, as you may
reasonably request.
(k) The
Shares shall have been approved for listing on the American Stock
Exchange.
22
7.
Termination.
The
obligations of the Underwriters hereunder shall be subject to termination in
the
absolute discretion of the Representatives if (x) since the time of
execution of this Agreement or the earlier respective dates as of which
information is given in the Registration Statement, the Pre-Pricing
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if
any, there has been any material adverse change or any development reasonably
expected to result in a material adverse change in the business, properties,
management, financial condition or results of operations of the Company, the
Partnership, HHMLP and the Subsidiaries taken as a whole, which would, in the
Underwriter’s judgment, make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement, the Pre-Pricing Prospectuses, the
Prospectus and the Permitted Free Writing Prospectuses, if any, or
(y) since of execution of this Agreement, there shall have occurred:
(i) a suspension or material limitation in trading in securities generally
on the New York Stock Exchange, the American Stock Exchange or the NASDAQ;
(ii) a suspension or material limitation in trading in the Company’s
securities on the American Stock Exchange; (iii) a general moratorium on
commercial banking activities declared by either federal or New York State
authorities or a material disruption in commercial banking or securities
settlement or clearance services in the United States; (iv) an outbreak or
escalation of hostilities or acts of terrorism involving the United States
or a
declaration by the United States of a national emergency or war; or (v) any
other calamity or crisis or any change in financial, political or economic
conditions in the United States or elsewhere, if the effect of any such event
specified in clause (iv) or (v) in the Representatives’ judgment makes
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares on the terms and in the manner contemplated in the
Registration Statement, the Pre-Pricing Prospectuses, the Prospectus and the
Permitted Free Writing Prospectuses, if any, or (z) since the time of
execution of this Agreement, there shall have occurred any downgrading, or
any
notice or announcement shall have been given or made of (i) any intended or
potential downgrading or (ii) any watch, review or possible change that
does not indicate an affirmation or improvement in the rating accorded any
securities of or guaranteed by the Company or any Subsidiary by any “nationally
recognized statistical rating organization,” as that term is defined in Rule
436(g)(2) under the Act.
If
the
Underwriters elect to terminate this Agreement as provided in this Section
7,
the Company shall be notified promptly in writing.
If
the
sale to the Underwriters of the Shares, as contemplated by this Agreement,
is
not carried out by the Underwriters for any reason permitted under this
Agreement or if such sale is not carried out because the Company or the
Partnership shall be unable to comply with any of the terms of this Agreement,
the Company shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 4(m), 5 and 8 hereof), and the
Underwriters shall be under no obligation or liability to the Company or the
Partnership under this Agreement (except to the extent provided in Section
8
hereof).
23
8.
Indemnification
and Contribution.
(a) The
Company and the Partnership will indemnify and hold each Underwriter, its
directors, officers, employees and agents and each person, if any, who controls
it within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act
harmless from and against any and all losses, claims, liabilities, expenses
and
damages (including, but not limited to, any and all investigative, legal and
other expenses reasonably incurred in connection with, and any and all amounts
paid in settlement of, any action, suit or proceeding between any of the
indemnified parties and any indemnifying parties or between any indemnified
party and any third party, or otherwise, or any claim asserted), as and when
incurred, to which any Underwriter, or any such person may become subject under
the Act, the Exchange Act or other federal or state statutory law or regulation,
at common law or otherwise, insofar as such losses, claims, liabilities,
expenses or damages arise out of or are based on (i) any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or any amendment or supplement thereto or in any documents filed
under
the Exchange Act and deemed to be incorporated by reference into the
Registration Statement, or in any application or other document executed by
or
on behalf of the Company or any Subsidiary or based on written information
furnished by or on behalf of the Company or any Subsidiary filed in any
jurisdiction in order to qualify the Shares under the securities or blue sky
laws thereof or filed with the Commission, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make
the statements therein not misleading, (ii) any untrue statement or alleged
untrue statement of a material fact contained in the Prospectus (the term
Prospectus for the purpose of this Section 8 being deemed to include any Basic
Prospectus, any Pre-Pricing Prospectus, the Prospectus Supplement, the
Prospectus and any amendments or supplements to the foregoing), in any Permitted
Free Writing Prospectus, in any “issuer information” (as defined in Rule 433
under the Act), which “issuer information” is required to be, or is, filed with
the Commission, or in any Prospectus together with any combination of one or
more of the Permitted Free Writing Prospectuses, if any, or arises out of or
is
based upon the omission or alleged omission to state in the Prospectus or
Permitted Free Writing Prospectus a material fact required to be stated in
it or
necessary to make the statements in it, in the light of the circumstances under
which they were made, not misleading or (iii) any act or failure to act or
any alleged act or failure to act by any Underwriter in connection with, or
relating in any manner to, the Shares or the offering contemplated hereby,
and
which is included as part of or referred to in any loss, claim, damage,
liability, expense or action arising out of or based upon matters covered by
clause (i) or (ii) above (provided
that the
Company and the Partnership shall not be liable under this clause (iii) to
the extent it is finally judicially determined by a court of competent
jurisdiction that such loss, claim, damage, liability, expense or action
resulted directly from any such acts or failures to act undertaken or omitted
to
be taken by such Underwriter through its gross negligence or willful
misconduct); provided
that the
Company and the Partnership will not be liable to the extent that such loss,
claim, damage, liability, expense or action arises from the sale of the Shares
in the public offering to any person by any Underwriter and is based on an
untrue statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information relating to the Underwriter
furnished in writing to the Company by such Underwriter expressly for inclusion
in the Registration Statement or the Prospectus. This indemnity agreement will
be in addition to any liability that the Company and the Partnership might
otherwise have.
(b) Each
Underwriter, severally and not jointly, will indemnify and hold harmless the
Company and the Partnership, each person, if any, who controls the Company
and
the Partnership within the meaning of Section 15 of the Act or Section 20 of
the
Exchange Act, each director of the Company and the Partnership and each officer
of the Company who signs the Registration Statement to the same extent as the
foregoing indemnity from the Company and the Partnership to each Underwriter,
but only insofar as losses, claims, damages, liabilities, expenses or actions
arise out of or are based on any untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company by such
Underwriter expressly for use in the Registration Statement, the Pre-Pricing
Prospectuses, or the Prospectus or any Permitted Free Writing Prospectuses.
This
indemnity will be in addition to any liability that each Underwriter might
otherwise have; provided,
however,
that in
no case shall any Underwriter be liable or responsible for any amount in excess
of the underwriting discounts and commissions received by such
Underwriter.
24
(c) Any
party
that proposes to assert the right to be indemnified under this Section 8 will,
promptly after receipt of notice of commencement of any action against such
party in respect of which a claim is to be made against an indemnifying party
or
parties under this Section 8, notify each such indemnifying party of the
commencement of such action, enclosing a copy of all papers served, but the
omission so to notify such indemnifying party will not relieve it from any
liability that it may have to any indemnified party under the foregoing
provisions of this Section 8 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the indemnifying
party. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party
will
be entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of
the
commencement of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action,
with
counsel reasonably satisfactory to the indemnified party, and after notice
from
the indemnifying party to the indemnified party of its election to assume the
defense, the indemnifying party will not be liable to the indemnified party
for
any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified
party
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(i) the employment of counsel by the indemnified party has been authorized
in writing by the indemnifying party, (ii) the indemnified party has
reasonably concluded (based on advice of counsel) that there may be legal
defenses available to it or other indemnified parties that are different from
or
in addition to those available to the indemnifying party, (iii) a conflict
or potential conflict exists (based on advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in which
case the indemnifying party will not have the right to direct the defense of
such action on behalf of the indemnified party) or (iv) the
indemnifying party has not in fact employed counsel to assume the defense of
such action within a reasonable time after receiving notice of the commencement
of the action, in each of which cases the reasonable fees, disbursements and
other charges of counsel will be at the expense of the indemnifying party or
parties. It is understood that the indemnifying party or parties shall not,
in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more
than
one additional firm admitted to practice in such jurisdiction at any one time
for all such indemnified party or parties. All such fees, disbursements and
other charges will be reimbursed by the indemnifying party promptly as they
are
incurred. An indemnifying party will not be liable for any settlement of any
action or claim effected without its written consent (which consent will not
be
unreasonably withheld); provided,
however,
no
indemnifying party shall, without the prior written consent of each indemnified
party, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding relating to the matters
contemplated by this Section 8 (whether or not any indemnified party is a party
thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
or
that may arise out of such claim, action or proceeding.
25
(d) In
order
to provide for just and equitable contribution in circumstances in which the
indemnification provided for in the foregoing paragraphs of this Section 8
is
applicable in accordance with its terms but for any reason is held to be
unavailable from the Company, the Partnership or the Underwriters, then the
Company, the Partnership and the Underwriters will contribute to the total
losses, claims, liabilities, expenses and damages (including any investigative,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted,
but
after deducting any contribution received by the Company and the Partnership
from persons other than the Underwriters, such as persons who control the
Company and the Partnership within the meaning of the Act, officers of the
Company who signed the Registration Statement and directors of the Company,
who
also may be liable for contribution) to which the Company, the Partnership
and any one or more of the Underwriters may be subject in such proportion as
shall be appropriate to reflect the relative benefits received by the Company
and the Partnership on the one hand and the Underwriters on the other. The
relative benefits received by the Company and the Partnership on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Partnership bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. If, but
only
if, the allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such proportion
as is appropriate to reflect not only the relative benefits referred to in
the
foregoing sentence but also the relative fault of the Company and the
Partnership, on the one hand, and the Underwriters, on the other, with respect
to the statements or omissions which resulted in such loss, claim, liability,
expense or damage, or action in respect thereof, as well as any other relevant
equitable considerations with respect to such offering. Such relative fault
shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company and the Partnership or
the
Underwriters, the intent of the parties and their relative knowledge, access
to
information and opportunity to correct or prevent such statement or omission.
The Company, the Partnership and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 8(d) were to
be determined by pro rata allocation (even if the Underwriters were treated
as
one entity for such purposes) or by any other method of allocation which
does not take into account the equitable considerations referred to herein.
The
amount paid or payable by an indemnified party as a result of the loss, claim,
liability, expense or damage, or action in respect thereof, referred to above
in
this Section 8(d) shall be deemed to include, for purpose of this Section
8(d), any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8(d), no Underwriter shall be
required to contribute any amount in excess of the underwriting discounts and
commissions received by it and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Act) will be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters’ obligations to contribute
as provided in this Section 8(d) are several in proportion to their
respective underwriting obligations and not joint. For purposes of this Section
8(d), any person who controls a party to this Agreement within the meaning
of
the Act will have the same rights to contribution as that party, and each
officer of the Company who signed the Registration Statement will have the
same
rights to contribution as the Company, subject in each case to the provisions
hereof. Any party entitled to contribution, promptly after receipt of notice
of
commencement of any action against such party in respect of which a claim for
contribution may be made under this Section 8(d), will notify any such party
or
parties from whom contribution may be sought, but the omission so to notify
will
not relieve the party or parties from whom contribution may be sought from
any
other obligation it or they may have under this Section 8(d). No party will
be
liable for contribution with respect to any action or claim settled without
its
written consent (which consent will not be unreasonably withheld).
26
(e) The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company and the Partnership contained
in
this Agreement shall remain operative and in full force and effect regardless
of
(i) any investigation made by or on behalf of the Underwriters or by or on
behalf of the Company or the Partnership, or the Company’s officers and
directors or any persons controlling the Company or the Partnership,
(ii) acceptance of the Shares and payment therefor or (iii) any
termination of this Agreement.
9.
Representations
and Agreements to Survive Delivery.
All
representations, warranties, agreements and covenants of the Company and the
Partnership herein or in certificates delivered pursuant hereto, and the
agreements of the Underwriters contained in Section 8 hereof, shall remain
operative and in full force and effect regardless of any investigation made
by
or on behalf of any Underwriter or any controlling persons, or the Company
or
the Partnership or any of their officers, directors, or any controlling persons,
and shall survive (i) termination of this Agreement and (ii) delivery
of and payment for the Shares hereunder.
10. Information
Furnished by the Underwriters.
The
statements set forth under the sections entitled “Dealers’ Compensation” and
“Stabilization and Other Transactions” under the caption “Underwriting” in the
Prospectus Supplement constitute the only information furnished by or on behalf
of the Underwriters as such information is referred to in Sections 3 and 8
hereof.
11. Default
by One or More of the Underwriters.
If one
or more of the Underwriters shall fail at the time of purchase to purchase
the
Shares which it or they are obligated to purchase under this Agreement (the
“Defaulted
Shares”),
the
Representatives shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted Shares
in
such amounts as may be agreed upon and upon the terms herein set forth; if,
however, the Representatives shall not have completed such arrangements within
such 24-hour period, then:
(a) if
the
number of Defaulted Shares does not exceed 10% of the number of Shares to be
purchased on such date, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount thereof in
the
proportions that their respective underwriting obligations hereunder bear to
the
underwriting obligations of all non-defaulting Underwriters; or
27
(b) if
the
number of Defaulted Shares exceeds 10% of the number of Shares to be purchased
on such date, this Agreement shall terminate without liability on the part
of
any non-defaulting Underwriter.
No
action
taken pursuant to this Section 11 shall relieve any defaulting Underwriter
from
liability in respect of its default.
In
the
event of any such default which does not result in a termination of this
Agreement, the Underwriters shall have the right to postpone the time of
purchase for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents
or
arrangements. As used herein, the term “Underwriter” includes any person
substituted for an Underwriter under this Section 11.
12. No
Advisory or Fiduciary Relationship.
The
Company acknowledges and agrees that (a) the purchase and sale of the
Shares pursuant to this Agreement, including the determination of the public
offering price of the Securities and any related discounts and commissions,
is
an arm’s-length commercial transaction between the Company, on the one hand, and
the several Underwriters, on the other hand, (b) in connection with the
offering contemplated hereby and the process leading to such transaction, each
Underwriter is and has been acting solely as a principal and is not the agent
or
fiduciary of the Company, or its shareholders, creditors, employees or any
other
party, (c) no Underwriter has assumed or will assume an advisory or
fiduciary responsibility in favor of the Company with respect to the offering
contemplated hereby or the process leading thereto (irrespective of whether
such
Underwriter has advised or is currently advising the Company on other
matters) and no Underwriter has any obligation to the Company with respect
to the offering contemplated hereby except the obligations expressly set forth
in this Agreement, (d) the Underwriters and their respective affiliates may
be engaged in a broad range of transactions that involve interests that differ
from those of the Company, and (e) the Underwriters have not provided any
legal, accounting, regulatory or tax advice with respect to the offering
contemplated hereby, and the Company has consulted its own legal, accounting,
regulatory and tax advisors to the extent it deemed appropriate.
13. Notices.
Except
as otherwise herein provided, all statements, requests, notices and agreements
shall be in writing or by telegram and, if to the Underwriters, shall be
sufficient in all respects if delivered or sent to UBS Securities LLC,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇, Attention: Syndicate Department
and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate Department, and, if
to
the Company or the Partnership shall be sufficient in all respects if delivered
or sent to the Company at the offices of the Company at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇
▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
14. Governing
Law; Construction.
This
Agreement and any claim, counterclaim or dispute of any kind or nature
whatsoever arising out of or in any way relating to this Agreement
(“Claim”),
directly or indirectly, shall be governed by, and construed in accordance with,
the laws of the State of New York. The Section headings in this Agreement have
been inserted as a matter of convenience of reference and are not a part of
this
Agreement.
28
15. Submission
to Jurisdiction.
Except
as set forth below, no Claim may be commenced, prosecuted or continued in any
court other than the courts of the State of New York located in the City and
County of New York or in the United States District Court for the Southern
District of New York, which courts shall have jurisdiction over the adjudication
of such matters, and the Company and the Partnership consent to the jurisdiction
of such courts and personal service with respect thereto. The Company and the
Partnership hereby consent to personal jurisdiction, service and venue in any
court in which any Claim arising out of or in any way relating to this Agreement
is brought by any third party against the Underwriters or any indemnified party.
The Underwriters and the Company (on their own behalf and, to the extent
permitted by applicable law, on behalf of their respective shareholders and
affiliates) and the Partnership waive all right to trial by jury in any
action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. The
Company and the Partnership agree that a final judgment in any such action,
proceeding or counterclaim brought in any such court shall be conclusive and
binding upon the Company and/or the Partnership and may be enforced in any
other
courts to the jurisdiction of which the Company or the Partnership is or may
be
subject, by suit upon such judgment.
16. Parties
at Interest.
The
Agreement herein set forth has been and is made solely for the benefit of the
Underwriters, the Company and the Partnership and to the extent provided in
Section 8 hereof the controlling persons, partners, directors and officers
referred to in such section, and their respective successors, assigns, heirs,
personal representatives and executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from the Underwriter) shall acquire or have any right under or
by virtue of this Agreement.
17. Counterparts.
This
Agreement may be signed by the parties in one or more counterparts which
together shall constitute one and the same agreement among the
parties.
18. Successors
and Assigns.
This
Agreement shall be binding upon the Underwriters, the Company, the Partnership
and their successors and assigns and any successor or assign of any substantial
portion of the Company’s, the Partnership’s and any of the Underwriters’
respective businesses and/or assets.
[The
remainder of the page has been left blank intentionally.]
29
If
the
foregoing correctly sets forth the understanding between the Company, the
Partnership and the Underwriters, please so indicate in the space provided
below
for that purpose, whereupon this agreement and your acceptance shall constitute
a binding agreement between the Company, the Partnership and the Underwriters,
severally.
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Very
truly yours,
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By:
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Title:
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HERSHA
HOSPITALITY LIMITED PARTNERSHIP
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By:
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Hersha
Hospitality Trust, its sole general partner
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By:
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Title:
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Accepted
and agreed to as of the date first above written, on their behalf
and on
behalf of each of the several Underwriters named on Schedule A
hereto.
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UBS
SECURITIES LLC
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By:
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Title:
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By:
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Title:
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▇▇▇▇▇▇▇
LYNCH, PIERCE, ▇▇▇▇▇▇
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&
▇▇▇▇▇ INCORPORATED
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By:
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Title:
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