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Maryland (State of jurisdiction of incorporation or organization) | 86-1062192 (I.R.S. Employer Identification No.) | |
14185 Dallas Parkway, Suite 1100 Dallas, Texas 75254 (972) 490-9600 | David A. Brooks 14185 Dallas Parkway, Suite 1100 Dallas, Texas 75254 (972) 490-9600 | |
(Address including zip code, and telephone number, including area code, of registrant’s principal executive offices) | (Name, address, including zip code, and telephone number, including area code, of agent for service) |
David Barbour
Muriel C. McFarling
Andrews Kurth LLP
1717 Main Street, Suite 3700
Dallas, Texas 75201
(214) 659-4400
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Proposed Maximum | Amount of | |||||||
Title of Each Class of Securities to be Registered | Aggregate Offering Price | Registration Fee | ||||||
Common Stock, $0.01 par value per share, Preferred Stock, $0.01 par value per share, Debt Securities, Warrants, Rights | $300,000,000(1) | $16,740 | ||||||
(1) | Pursuant to Form S-3 General Instruction II.D, only the maximum aggregate offering price for all classes of securities is presented. The proposed aggregate offering prices of each class of security will be determined from time to time by the registrant in connection with the issuance by the registrant of the securities registered hereunder. | |
(2) | The registration fee payable in connection with securities registered pursuant to this registration statement, calculated pursuant to Rule 457(o) of the Securities Act of 1933, as amended, is $16,740. The registrant currently has $1,372.96 of registration fees paid with respect to $1,000,000,000 aggregate initial offering price of securities previously registered pursuant to the registrant’s registration statement on Form S-3 (No. 333-142079) filed with the Securities and Exchange Commission on April 13, 2007 in its account with the SEC, and such amount shall be applied to the registration fees payable in connection with securities registered pursuant to this registration statement. |
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The information in this prospectus is not complete and may be changed or supplemented. We cannot sell any of the securities described in this prospectus until the registration statement that we have filed to cover the securities has become effective under the rules of the Securities and Exchange Commission. This prospectus is not an offer to sell the securities, nor is it a solicitation of an offer to buy the securities, in any state where the offer or sale is not permitted.
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• | our business and investment strategy; | ||
• | our projected operating results; | ||
• | completion of any pending transactions; | ||
• | expected liquidity needs and sources (including capital expenditures and our ability to obtain financing or raise capital); | ||
• | our understanding of our competition; | ||
• | market and industry trends; | ||
• | projected revenues and expenses; and | ||
• | the impact of technology on our operations and business. |
• | the factors discussed in this prospectus, and in the information incorporated by reference into it, including those set forth under the section titled “Risk Factors;” | ||
• | general volatility of the capital markets and the market price of our securities; | ||
• | changes in our business or investment strategy; | ||
• | availability, terms and deployment of capital; | ||
• | availability of qualified personnel; | ||
• | changes in our industry and the market in which we operate, interest rates or the general economy; and |
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• | the degree and nature of our competition. |
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Six Months Ended | ||||||||||||||||||||||||
June 30, | Year Ended December 31, | |||||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||
Ratio of earnings to fixed charges | * | 1.59 | * | 1.61 | 1.05 | 1.45 | ||||||||||||||||||
Ratio of earnings to combined fixed charges and preferred stock dividends | * | * | 1.36 | * | * | 1.29 | * | * | 1.26 |
* | For this period, earnings were less than fixed charges, and the coverage deficiency was approximately $172,466,000 for the six months ended June 30, 2009 and $756,000 for 2007. | |
** | For this period, earnings were less than fixed charges and preferred stock dividends, and the coverage deficiency was approximately $182,127,000 for the six months ended June 30, 2009, $24,746,000 for 2007 and $7,650,000 for 2005. |
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• | any person from actually or constructively owning shares of our capital stock that would result in us being “closely held” under Section 856(h) of the Code or otherwise cause us to fail to qualify as a REIT; and | ||
• | any person from transferring shares of our capital stock if such transfer would result in shares of our stock being beneficially owned by fewer than 100 persons (determined without reference to any rules of attribution). |
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• | the title and stated value of that preferred stock; | ||
• | the number of shares of that preferred stock offered, the liquidation preference per share and the offering price of that preferred stock; |
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• | the dividend rate(s), period(s) and payment date(s) or method(s) of calculation thereof applicable to that preferred stock; | ||
• | whether dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends on that preferred stock will accumulate; | ||
• | the voting rights applicable to that preferred stock; | ||
• | the procedures for any auction and remarketing, if any, for that preferred stock; | ||
• | the provisions for a sinking fund, if any, for that preferred stock; | ||
• | the provisions for redemption including any restriction thereon, if applicable, of that preferred stock; | ||
• | any listing of that preferred stock on any securities exchange; | ||
• | the terms and conditions, if applicable, upon which that preferred stock will be convertible into shares of our common stock, including the conversion price (or manner of calculation of the conversion price) and conversion period; | ||
• | a discussion of federal income tax considerations applicable to that preferred stock; | ||
• | any limitations on issuance of any series of preferred stock ranking senior to or on a parity with that series of preferred stock as to dividend rights and rights upon liquidation, dissolution or winding up of our affairs; | ||
• | in addition to those limitations described above under “DESCRIPTION OF CAPITAL STOCK — Restrictions on Ownership and Transfer,” any other limitations on actual and constructive ownership and restrictions on transfer, in each case as may be appropriate to preserve our status as a REIT; and | ||
• | any other specific terms, preferences, rights, limitations or restrictions of that preferred stock. |
• | senior to all classes or series of common stock and to all equity securities ranking junior to the preferred stock with respect to dividend rights or rights upon liquidation, dissolution or winding up of our affairs; | ||
• | on a parity with all equity securities issued by us the terms of which specifically provide that those equity securities rank on a parity with the preferred stock with respect to dividend rights or rights upon liquidation, dissolution or winding up of our affairs; and | ||
• | junior to all equity securities issued by us the terms of which specifically provide that those equity securities rank senior to the preferred stock with respect to dividend rights or rights upon liquidation, dissolution or winding up of our affairs. |
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• | the series or class of preferred stock has a cumulative dividend, and full cumulative dividends have been or contemporaneously are authorized and paid or authorized and a sum sufficient for the payment of those dividends is set apart for payment on the preferred stock of that series or class for all past dividend periods and the then current dividend period; or | ||
• | the series or class of preferred stock does not have a cumulative dividend, and full dividends for the then current dividend period have been or contemporaneously are authorized and paid or authorized and a sum sufficient for the payment of those dividends is set apart for the payment on the preferred stock of that series or class. |
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• | authorize or create, or increase the authorized or issued amount of, any class or series of stock ranking prior to that series or class of preferred stock with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up or reclassify any authorized stock into any of those shares, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any of those shares; or | ||
• | amend, alter or repeal the provisions of our charter (including articles supplementary establishing any class or series of preferred stock), whether by merger, consolidation or otherwise, so as to materially and adversely affect any right, preference, privilege or voting power of that series or class of preferred stock or the holders of the preferred stock. |
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• | the number of shares of common stock into which the preferred stock is convertible; | ||
• | the conversion price (or manner of calculation of the conversion price); | ||
• | the conversion period; | ||
• | provisions as to whether conversion will be at the option of the holders of the preferred stock or us, | ||
• | the events requiring an adjustment of the conversion price; and | ||
• | provisions affecting conversion in the event of the redemption of the preferred stock. |
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(a) | any amendment, alteration or repeal of any of the provisions of the charter or the articles supplementary creating the Series B-1 Preferred Stock that materially and adversely affects the voting powers, rights, preferences or other terms of the holders of the Series B-1 Preferred Stock; | ||
(b) | any issuance of (a) any capital stock or other equity security to which the Series B-1 Preferred Stock would be junior as to the payment of dividends or as to the distribution of assets upon liquidation, dissolution or winding up or (b) any capital stock or other equity security which has redemption rights which are more favorable in any material respect to the holder of such security than the redemption rights granted to the holders of the Series B-1 Preferred Stock; and | ||
(c) | any merger or consolidation of our company and another entity in which the we are not the surviving corporation and each holder of Series B-1 Preferred Stock does not receive shares of the surviving corporation with substantially similar rights, preferences, powers and other terms in the surviving corporation as the Series B-1 Preferred Stock have with respect to us. |
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• | the title; | ||
• | any limit on the amount that may be issued; | ||
• | whether or not we will issue the series of debt securities in global form, the terms and who the depository will be; | ||
• | the maturity date; | ||
• | the annual interest rate, which may be fixed or variable, or the method for determining the rate and the date interest will begin to accrue, the dates interest will be payable and the regular record dates for interest payment dates or the method for determining such dates; | ||
• | whether or not the debt securities will be secured or unsecured, and the terms of any secured debt; | ||
• | the terms of the subordination of any series of subordinated debt; | ||
• | the place where payments will be payable; | ||
• | our right, if any, to defer payment of interest and the maximum length of any such deferral period; | ||
• | the date, if any, after which, and the price at which, we may, at our option, redeem the series of debt securities pursuant to any optional redemption provisions; | ||
• | the date, if any, on which, and the price at which we are obligated, pursuant to any mandatory sinking fund provisions or otherwise, to redeem, or at the holder’s option to purchase, the series of debt securities; | ||
• | whether the indenture will restrict our ability to pay dividends, or will require us to maintain any asset ratios or reserves; |
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• | whether we will be restricted from incurring any additional indebtedness; | ||
• | a discussion on any material or special United States federal income tax considerations applicable to the debt securities; | ||
• | the denominations in which we will issue the series of debt securities, if other than denominations of $1,000 and any integral multiple thereof; and | ||
• | any other specific terms, preferences, rights or limitations of, or restrictions on, the debt securities. |
• | if we fail to pay interest when due and our failure continues for a number of days to be stated in the indenture and the time for payment has not been extended or deferred; | ||
• | if we fail to pay the principal, or premium, if any, when due and the time for payment has not been extended or delayed; | ||
• | if we fail to observe or perform any other covenant contained in the debt securities or the indentures, other than a covenant specifically relating to another series of debt securities, and our failure continues for a number of days to be stated in the indenture after we receive notice from the trustee or holders of at least 25% in aggregate principal amount of the outstanding debt securities of the applicable series; and | ||
• | if specified events of bankruptcy, insolvency or reorganization occur as to us. |
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• | the direction so given by the holder is not in conflict with any law or the applicable indenture; and | ||
• | subject to its duties under the Trust Indenture Act, the trustee need not take any action that might involve it in personal liability or might be unduly prejudicial to the holders not involved in the proceeding. |
• | the holder has given written notice to the trustee of a continuing event of default with respect to that series; | ||
• | the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series have made written request, and such holders have offered reasonable indemnity to the trustee to institute the proceeding as trustee; and | ||
• | the trustee does not institute the proceeding, and does not receive from the holders of a majority in aggregate principal amount of the outstanding debt securities of that series other conflicting directions within 60 days after the notice, request and offer. |
• | to fix any ambiguity, defect or inconsistency in the indenture; and | ||
• | to change anything that does not materially adversely affect the interests of any holder of debt securities of any series. |
• | extending the fixed maturity of the series of debt securities; | ||
• | reducing the principal amount, reducing the rate of or extending the time of payment of interest, or any premium payable upon the redemption of any debt securities; or | ||
• | reducing the percentage of debt securities, the holders of which are required to consent to any amendment. |
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• | register the transfer or exchange of debt securities of the series; | ||
• | replace stolen, lost or mutilated debt securities of the series; | ||
• | maintain paying agencies; | ||
• | hold monies for payment in trust; | ||
• | compensate and indemnify the trustee; and | ||
• | appoint any successor trustee. |
• | issue, register the transfer of, or exchange any debt securities of that series during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption of any debt securities that may be selected for redemption and ending at the close of business on the day of the mailing; or |
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• | register the transfer of or exchange any debt securities so selected for redemption, in whole or in part, except the unredeemed portion of any debt securities we are redeeming in part. |
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• | the aggregate number of the securities covered by the warrant; | ||
• | the designation, amount and terms of the securities purchasable upon exercise of the warrant; | ||
• | the exercise price for our debt securities, the amount of debt securities upon exercise you will receive, and a description of that series of debt securities; | ||
• | the exercise price for shares of our preferred stock, the number of shares of preferred stock to be received upon exercise, and a description of that series of our preferred stock; | ||
• | the exercise price for shares of our common stock and the number of shares of common stock to be received upon exercise; | ||
• | the expiration date for exercising the warrant; | ||
• | the minimum or maximum amount of warrants that may be exercised at any time; | ||
• | a discussion of U.S. federal income tax consequences; and | ||
• | any other material terms of the securities warrants. |
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• | the date of determining the security holders entitled to the rights distribution; | ||
• | the aggregate number of rights issued and the aggregate amount of debt securities or the number of shares of common stock or preferred stock purchasable upon exercise of the rights; | ||
• | the exercise price; | ||
• | the conditions to completion of the rights offering; | ||
• | the date on which the right to exercise the rights will commence and the date on which the rights will expire; and | ||
• | a discussion of U.S. federal income tax consequences related to the rights; and | ||
• | any other material terms of the rights. |
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• | any person who beneficially owns 10% or more of the voting power of our voting stock; or | ||
• | an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding voting stock of the corporation. |
• | 80% of the votes entitled to be cast by holders of the then outstanding shares of common stock; and | ||
• | two-thirds of the votes entitled to be cast by holders of the common stock other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or shares held by an affiliate or associate of the interested stockholder. |
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• | with respect to an annual meeting of stockholders, the only business to be considered and the only proposals to be acted upon will be those properly brought before the annual meeting: |
• | pursuant to our notice of the meeting; | ||
• | by, or at the direction of, a majority of our board of directors; or | ||
• | by a stockholder who is entitled to vote at the meeting and has complied with the advance notice procedures set forth in our bylaws; |
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• | with respect to special meetings of stockholders, only the business specified in our company’s notice of meeting may be brought before the meeting of stockholders unless otherwise provided by law; and |
• | nominations of persons for election to our board of directors at any annual or special meeting of stockholders may be made only: |
• | by, or at the direction of, our board of directors; or | ||
• | by a stockholder who is entitled to vote at the meeting and has complied with the advance notice provisions set forth in our bylaws. |
• | an act or omission of the director or officer was material to the matter giving rise to the proceeding and: |
• | was committed in bad faith; or | ||
• | was the result of active and deliberate dishonesty; |
• | the director or officer actually received an improper personal benefit in money, property or services; or | ||
• | in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. |
• | a written affirmation by the director or officer of his good faith belief that he has met the standard of conduct necessary for indemnification by the corporation; and |
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• | a written undertaking by the director or on the director’s behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the director did not meet the standard of conduct. |
• | any present or former director or officer who is made a party to the proceeding by reason of his or her service in that capacity; or | ||
• | any individual who, while a director or officer of our company and at our request, serves or has served another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or any other enterprise as a director, officer, partner or trustee and who is made a party to the proceeding by reason of his or her service in that capacity. |
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• | in connection with a merger of the operating partnership, a sale of substantially all of the assets of the operating partnership or other transaction in which the limited partners receive a certain amount of cash, securities or property; or | ||
• | in connection with a merger of us or the general partner into another entity, if the surviving entity contributes substantially all its assets to the operating partnership and assumes the duties of the general partner under the operating partnership agreement. |
• | would cause us to fail to comply with the REIT rules under the Internal Revenue Code; or | ||
• | would cause us to become a publicly-traded partnership under the Internal Revenue Code. |
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• | all expenses relating to our continuity of existence; | ||
• | all expenses relating to offerings and registration of securities; | ||
• | all expenses associated with the preparation and filing of any of our periodic reports under federal, state or local laws or regulations; |
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• | all expenses associated with our compliance with laws, rules and regulations promulgated by any regulatory body; and | ||
• | all of our other operating or administrative costs incurred in the ordinary course of its business on behalf of the partnership. |
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• | the act or omission of the indemnitee was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty; | ||
• | the indemnitee actually received an improper personal benefit in money, property or services; or | ||
• | in the case of any criminal proceeding, the indemnitee had reasonable cause to believe that the act or omission was unlawful. |
• | the general partner’s bankruptcy or dissolution or withdrawal (unless the limited partners elect to continue the partnership); | ||
• | the passage of 90 days after the sale or other disposition of all or substantially all the assets of the partnership; | ||
• | the redemption of all partnership units (other than those held by us, if any); or | ||
• | an election by us in our capacity as the sole owner of the general partner. |
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• | We will pay federal income tax on taxable income, including net capital gain, that we do not distribute to our stockholders during, or within a specified time period after, the calendar year in which the income is earned. | ||
• | Under certain circumstances, we may be subject to the “alternative minimum tax” on items of tax preference. | ||
• | We will pay income tax at the highest corporate rate on (1) net income from the sale or other disposition of property acquired through foreclosure (“foreclosure property”) that we hold primarily for sale to customers in the ordinary course of business and (2) other non-qualifying income from foreclosure property. | ||
• | We will pay a 100% tax on net income from sales or other dispositions of property, other than foreclosure property, that we hold primarily for sale to customers in the ordinary course of business. | ||
• | If we fail to satisfy the 75% gross income test or the 95% gross income test, as described below under “— Income Tests,” and nonetheless continue to qualify as a REIT because we meet other requirements, we will pay a 100% tax on (1) the gross income attributable to the greater of the amounts by which we fail the 75% and 95% gross income tests, multiplied by (2) a fraction intended to reflect our profitability. | ||
• | If we fail to distribute during a calendar year at least the sum of (1) 85% of our REIT ordinary income for such year, (2) 95% of our REIT capital gain net income for such year, and (3) any undistributed taxable income from prior periods, we will pay a 4% excise tax on the excess of this required distribution over the sum of the amount we actually distributed, plus any retained amounts on which income tax has been paid at the corporate level. | ||
• | We may elect to retain and pay income tax on our net long-term capital gain. In that case, a U.S. holder, as defined below under “—Taxation of U.S. Holders,” would be taxed on its proportionate share of our undistributed long-term capital gain (to the extent that a timely designation of such gain is made by us to the stockholder) and would receive a credit or refund for its proportionate share of the tax we paid. | ||
• | If we acquire any asset from a C corporation, or a corporation that generally is subject to full corporate-level tax, in a merger or other transaction in which we acquire a basis in the asset that is determined by reference to the C corporation’s basis in the asset, we will pay tax at the highest regular corporate rate applicable if we recognize gain on the sale or disposition of such asset during the 10-year period after we acquire such asset. The amount of gain on which we will pay tax generally is the lesser of: (1) the amount of gain that we recognize at the time of the sale or disposition; or (2) the amount of gain that we would have recognized if we had sold the asset at the time we acquired the asset. | ||
• | We will incur a 100% excise tax on transactions with a “taxable REIT subsidiary” that are not conducted on an arm’s-length basis. | ||
• | If we fail to satisfy certain asset tests, described below under “- Asset Tests” and nonetheless continue to qualify as a REIT because we meet certain other requirements, we will be subject to a tax of the greater of $50,000 or at the highest corporate rate on the income generated by the non-qualifying assets. | ||
• | We may be subject to a $50,000 tax for each failure if we fail to satisfy certain REIT qualification requirements, other than income tests or asset tests, and the failure is due to reasonable cause and not willful neglect. |
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1. | it is managed by one or more trustees or directors; | ||
2. | its beneficial ownership is evidenced by transferable shares or by transferable certificates of beneficial interest; | ||
3. | it would be taxable as a domestic corporation but for the REIT provisions of the federal income tax laws; | ||
4. | it is neither a financial institution nor an insurance company subject to special provisions of the federal income tax laws; | ||
5. | at least 100 persons are beneficial owners of its shares or ownership certificates; | ||
6. | no more than 50% in value of its outstanding shares or ownership certificates is owned, directly or indirectly, by five or fewer individuals, as defined in the federal income tax laws to include certain entities, during the last half of each taxable year; | ||
7. | it elects to be a REIT, or has made such election for a previous taxable year, and satisfies all relevant filing and other administrative requirements established by the IRS that must be met to elect and maintain REIT status; | ||
8. | it uses a calendar year for federal income tax purposes and complies with the recordkeeping requirements of the federal income tax laws; and | ||
9. | it meets certain other qualification tests, described below, regarding the nature of its income and assets and the amount of its distributions. |
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• | rents from real property; | ||
• | interest on debt secured by mortgages on real property or on interests in real property; | ||
• | dividends and gain from the sale of shares in other REITs; | ||
• | gain from the sale of real estate assets; and | ||
• | income derived from the temporary investment of new capital or “qualified temporary investment income,” that is attributable to the issuance of our stock or a public offering of our debt with a maturity |
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date of at least five years and that we receive during the one-year period beginning on the date on which we received such new capital. |
• | First, the rent must not be based, in whole or in part, on the income or profits of any person but may be based on a fixed percentage or percentages of gross receipts or gross sales. | ||
• | Second, neither we nor a direct or indirect owner of 10% or more of our shares of stock may own, actually or constructively, 10% or more of a tenant other than a TRS from whom we receive rent. | ||
• | Third, if the rent attributable to personal property leased in connection with a lease of real property exceeds 15% of the total rent received under the lease, then the portion of rent attributable to that personal property will not qualify as “rents from real property.” | ||
• | Fourth, we generally must not operate or manage our real property or furnish or render services to our tenants, other than through an “independent contractor” who is adequately compensated, from whom we do not derive revenue, and who does not, directly or through its stockholders, own more than 35% of our shares of stock, taking into consideration the applicable ownership attribution rules. However, we need not provide services through an “independent contractor,” but instead may provide services directly to our tenants, if the services are “usually or customarily rendered” in the geographic area in connection with the rental of space for occupancy only and are not considered to be provided for the tenants’ convenience. In addition, we may provide a minimal amount of “non-customary” services to the tenants of a property, other than through an independent contractor, as long as our income from the services (valued at not less than 150% of our direct cost of performing such services) does not exceed 1% of our income from the related property. Furthermore, we may own up to 100% of the stock of a TRS which may provide customary and noncustomary services to our tenants without tainting our rental income from the related properties. See “— Taxable REIT Subsidiaries.” |
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• | the property owner’s expectation of receiving a pre-tax profit from the lease; | ||
• | the intent of the parties; | ||
• | the form of the agreement; | ||
• | the degree of control over the property that is retained by the property owner, or whether the lessee has substantial control over the operation of the property or is required simply to use its best efforts to perform its obligations under the agreement; and | ||
• | the extent to which the property owner retains the risk of loss with respect to the property, or whether the lessee bears the risk of increases in operating expenses or the risk of damage to the property or the potential for economic gain or appreciation with respect to the property. |
• | the service recipient is in physical possession of the property; | ||
• | the service recipient controls the property; | ||
• | the service recipient has a significant economic or possessory interest in the property, or whether the property’s use is likely to be dedicated to the service recipient for a substantial portion of the useful life of the property, the recipient shares the risk that the property will decline in value, the recipient shares in any appreciation in the value of the property, the recipient shares in savings in the property’s operating costs, or the recipient bears the risk of damage to or loss of the property; | ||
• | the service provider bears the risk of substantially diminished receipts or substantially increased expenditures if there is nonperformance under the contract; | ||
• | the service provider uses the property concurrently to provide significant services to entities unrelated to the service recipient; and | ||
• | the total contract price substantially exceeds the rental value of the property for the contract period. |
• | the Partnerships, on the one hand, and Ashford TRSs, on the other hand, intend for their relationship to be that of a lessor and lessee, and such relationship is documented by lease agreements; | ||
• | Ashford TRSs have the right to the exclusive possession, use, and quiet enjoyment of the hotels during the term of the percentage leases; | ||
• | Ashford TRSs bear the cost of, and are responsible for, day-to-day maintenance and repair of the hotels and generally dictate how the hotels are operated, maintained, and improved; |
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• | Ashford TRSs bear all of the costs and expenses of operating the hotels, including the cost of any inventory used in their operation, during the term of the percentage leases, other than, in certain cases, real estate taxes; | ||
• | Ashford TRSs benefit from any savings in the costs of operating the hotels during the term of the percentage leases; | ||
• | Ashford TRSs generally have indemnified the Partnerships against all liabilities imposed on the Partnerships during the term of the percentage leases by reason of (1) injury to persons or damage to property occurring at the hotels, (2) Ashford TRSs’ use, management, maintenance, or repair of the hotels, (3) any environmental liability caused by acts or grossly negligent failures to act of Ashford TRSs, (4) taxes and assessments in respect of the hotels that are the obligations of Ashford TRSs, or (5) any breach of the percentage leases or of any sublease of a hotel by Ashford TRSs; | ||
• | Ashford TRSs are obligated to pay substantial fixed rent for the period of use of the hotels; | ||
• | Ashford TRSs stand to incur substantial losses or reap substantial gains depending on how successfully they operate the hotels; | ||
• | the Partnerships cannot use the hotels concurrently to provide significant services to entities unrelated to Ashford TRSs; and | ||
• | the total contract price under the percentage leases does not substantially exceed the rental value of the hotels for the term of the percentage leases. |
• | are fixed at the time the percentage leases are entered into; | ||
• | are not renegotiated during the term of the percentage leases in a manner that has the effect of basing percentage rent on income or profits; and | ||
• | conform with normal business practice. |
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• | that is acquired by a REIT as the result of such REIT having bid on such property at foreclosure, or having otherwise reduced such property to ownership or possession by agreement or process of law, after there was a default or default was imminent on a lease of such property or on an indebtedness that such property secured; | ||
• | for which the related loan or lease was acquired by the REIT at a time when the REIT had no intent to evict or foreclose or the REIT did not know or have reason to know that default would occur; and | ||
• | for which such REIT makes a proper election to treat such property as foreclosure property. |
• | on which a lease is entered into with respect to such property that, by its terms, will give rise to income that does not qualify for purposes of the 75% gross income test or any amount is received or accrued, directly or indirectly, pursuant to a lease entered into on or after such day that will give rise to income that does not qualify for purposes of the 75% gross income test; |
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• | on which any construction takes place on such property, other than completion of a building, or any other improvement, where more than 10% of the construction of such building or other improvement was completed before default became imminent; or | ||
• | which is more than 90 days after the day on which such property was acquired by the REIT and the property is used in a trade or business which is conducted by the REIT, other than through an independent contractor from whom the REIT itself does not derive or receive any income. |
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• | our failure to meet such tests is due to reasonable cause and not due to willful neglect; and | ||
• | following our identification of the failure to meet one or both gross income tests for a taxable year, a description of each item of our gross income included in the 75% or 95% gross income tests is set forth in a schedule for such taxable year filed as specified by Treasury regulations. |
• | First, at least 75% of the value of our total assets must consist of: |
• | cash or cash items, including certain receivables; | ||
• | government securities; | ||
• | interests in real property, including leaseholds and options to acquire real property and leaseholds; | ||
• | interests in mortgages on real property; | ||
• | stock in other REITs; and | ||
• | investments in stock or debt instruments during the one-year period following our receipt of new capital that we raise through equity offerings or offerings of debt with at least a five-year term. |
• | Second, of our investments not included in the 75% asset class, the value of our interest in any one issuer’s securities may not exceed 5% of the value of our total assets. | ||
• | Third, of our investments not included in the 75% asset class, we may not own more than 10% of the voting power or value of any one issuer’s outstanding securities. | ||
• | Fourth, no more than 20% for taxable years beginning before July 31, 2008, and 25% for taxable years beginning after July 30, 2008 of the value of our total assets may consist of the securities of one or more TRSs. |
• | “Straight debt” securities, which is defined as a written unconditional promise to pay on demand or on a specified date a sum certain in money if (i) the debt is not convertible, directly or indirectly, into stock, and (ii) the interest rate and interest payment dates are not contingent on profits, the borrower’s discretion, or similar factors. “Straight debt” securities do not include any securities issued by a partnership or a corporation in which we or any controlled TRS (i.e., a TRS in which we own directly or indirectly more than 50% of the voting power or value of the stock) hold non-“straight debt” securities that have an aggregate value of more than 1% of the issuer’s outstanding securities. However, “straight debt” securities include debt subject to the following contingencies: |
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• | a contingency relating to the time of payment of interest or principal, as long as either (i) there is no change to the effective yield of the debt obligation, other than a change to the annual yield that does not exceed the greater of 0.25% or 5% of the annual yield, or (ii) neither the aggregate issue price nor the aggregate face amount of the issuer’s debt obligations held by us exceeds $1 million and no more than 12 months of unaccrued interest on the debt obligations can be required to be prepaid; and | ||
• | a contingency relating to the time or amount of payment upon a default or prepayment of a debt obligation, as long as the contingency is consistent with customary commercial practice. |
• | Any loan to an individual or an estate. | ||
• | Any “section 467 rental agreement,” other than an agreement with a related party tenant. | ||
• | Any obligation to pay “rents from real property.” | ||
• | Certain securities issued by governmental entities. | ||
• | Any security issued by a REIT. | ||
• | Any debt instrument of an entity treated as a partnership for federal income tax purposes to the extent of our interest as a partner in the partnership. | ||
• | Any debt instrument of an entity treated as a partnership for federal income tax purposes not described in the preceding bullet points if at least 75% of the partnership’s gross income, excluding income from prohibited transactions, is qualifying income for purposes of the 75% gross income test described above in “—Income Tests.” |
• | we satisfied the asset tests at the end of the preceding calendar quarter; and | ||
• | the discrepancy between the value of our assets and the asset test requirements arose from changes in the market values of our assets and was not wholly or partly caused by the acquisition of one or more non-qualifying assets. |
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• | the sum of (1) 90% of our “REIT taxable income,” computed without regard to the dividends paid deduction and our net capital gain, and (2) 90% of our after-tax net income, if any, from foreclosure property; minus | ||
• | the sum of certain items of non-cash income. |
• | 85% of our REIT ordinary income for such year; | ||
• | 95% of our REIT capital gain income for such year; and | ||
• | any undistributed taxable income from prior periods, |
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• | a citizen or resident of the United States; | ||
• | a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any of its states, or the District of Columbia; | ||
• | an estate whose income is subject to U.S. federal income taxation regardless of its source; or | ||
• | any trust if (1) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a U.S. person. |
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• | is a corporation or comes within certain other exempt categories and, when required, demonstrates this fact; or | ||
• | provides a taxpayer identification number, certifies as to no loss of exemption from backup withholding, and otherwise complies with the applicable requirements of the backup withholding rules. |
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• | the percentage of our dividends that the tax-exempt trust would be required to treat as unrelated business taxable income is at least 5%; | ||
• | we qualify as a REIT by reason of the modification of the rule requiring that no more than 50% of our stock be owned by five or fewer individuals that allows the beneficiaries of the pension trust to be treated as holding our stock in proportion to their actuarial interests in the pension trust (see “— Requirements for Qualification” above); and | ||
• | either (1) one pension trust owns more than 25% of the value of our stock or (2) a group of pension trusts individually holding more than 10% of the value of our stock collectively owns more than 50% of the value of our stock. |
• | a lower treaty rate applies and the non-U.S. holder files an IRS Form W-8BEN evidencing eligibility for that reduced rate with us; or | ||
• | the non-U.S. holder files an IRS Form W-8ECI with us claiming that the distribution is effectively connected income. |
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• | is treated as a partnership under Treasury regulations, effective January 1, 1997, relating to entity classification (the “check-the-box regulations”); and | ||
• | is not a “publicly traded” partnership. |
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• | the amount of cash and the basis of any other property contributed by us to the operating partnership; | ||
• | increased by our allocable share of the operating partnership’s income and gains and our allocable share of indebtedness of the operating partnership; and | ||
• | reduced, but not below zero, by our allocable share of the operating partnership’s losses, deductions and credits and the amount of cash distributed to us, and by constructive distributions resulting from a reduction in our share of indebtedness of the operating partnership. |
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• | it is payable at least once per year; | ||
• | it is payable over the entire term of the debt security; and | ||
• | it is payable at a single fixed rate or, subject to certain conditions, based on one or more interest indices. |
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• | the debt security’s “adjusted issue price” at the beginning of the accrual period multiplied by its yield to maturity, determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period, over | ||
• | the aggregate of all qualified stated interest allocable to the accrual period. |
• | the interest on a floating rate debt security is based on more than one interest index; or |
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• | the principal amount of the debt security is indexed in any manner. |
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• | interest paid on the debt securities is not effectively connected with your conduct of a trade or business in the United States; | ||
• | you do not actually or constructively own 10% or more of the total combined voting power of all classes of our voting stock within the meaning of Section 871(h)(3) of the Code and related U.S. Treasury regulations; | ||
• | you are not a controlled foreign corporation that is related to us through stock ownership; | ||
• | you are not a bank whose receipt of interest on the debt securities is described in Section 881(c)(3)(A) of the Code; | ||
• | the interest is not considered contingent interest under Section 871(h)(4)(A) of the Code and the related U.S. Treasury regulations; and | ||
• | you provide your name and address on an IRS Form W-8BEN (or successor form), and certify, under penalty of perjury, that you are not a U.S. person or (2) you hold your debt securities through certain foreign intermediaries, and you satisfy the certification requirements of applicable U.S. Treasury regulations. Special certification rules apply to certain non-U.S. holders that are pass-through entities rather than corporations or individuals. |
• | IRS Form W-8BEN (or successor form) claiming an exemption from or reduction in the rate of withholding under the benefit of an applicable tax treaty; or | ||
• | IRS Form W-8ECI (or successor form) stating that interest paid on the debt securities is not subject to withholding tax because it is effectively connected with your conduct of a trade or business in the United States as discussed below. |
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• | that gain is effectively connected with your conduct of a trade or business in the United States and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment; or | ||
• | you are an individual who is present in the United States for 183 days or more in the taxable year of that disposition and certain other conditions are met. |
• | such person is, or is related to a person who is, actively engaged in the trade or business of operating “qualified lodging facilities” for any person unrelated to us and the TRS; | ||
• | such person does not own, directly or indirectly, more than 35% of our stock; |
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• | no more than 35% of such person is owned, directly or indirectly, by one or more persons owning 35% or more of our stock; and | ||
• | we do not directly or indirectly derive any income from such person. |
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• | to or through underwriting syndicates represented by managing underwriters; | ||
• | through one or more underwriters without a syndicate for them to offer and sell to the public; | ||
• | through dealers or agents; or | ||
• | to investors directly in negotiated sales or in competitively bid transactions. |
• | the name or names of any underwriters; | ||
• | the purchase price, the proceeds from that sale and the expected use of such proceeds; | ||
• | any underwriting discounts and other items constituting underwriters’ compensation; | ||
• | any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers; and | ||
• | any securities exchanges on which the securities may be listed. |
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• | our annual report on Form 10-K for the year ended December 31, 2008; | ||
• | our quarterly reports on Form 10-Q for the quarters ended March 31, 2009 and June 30, 2009; | ||
• | our current reports on Form 8-K filed with the SEC on January 7, 2009, January 20, 2009 (with respect to Item 8.01), January 29, 2009, March 5, 2009, April 8, 2009, April 22, 2009, June 18, 2009, July 8, 2009, September 4, 2009, September 11, 2009 and October 15, 2009; and | ||
• | the description of our common stock included in our registration statement on Form 8-A dated August 19, 2003. |
Ashford Hospitality Trust, Inc.
14185 Dallas Parkway, Suite 1100
Dallas, Texas 75254
(972) 490-9600
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SEC Registration Fee | $ | 16,740 | ||
NYSE Fees | 5,000 | |||
Printing Expenses | 100,000 | * | ||
Legal Fees and Expenses | 300,000 | * | ||
Blue Sky Fees and Expenses | 15,000 | * | ||
Accounting Fees and Expenses | 100,000 | * | ||
Trustee’s Fees and Expenses | 15,000 | * | ||
Miscellaneous | 10,000 | * | ||
TOTAL | $ | 561,740 | ||
* | Fees are estimates only. |
• | an act or omission of the director or officer was material to the matter giving rise to the proceeding and: |
— | was committed in bad faith; or | ||
— | was the result of active and deliberate dishonesty; |
• | the director or officer actually received an improper personal benefit in money, property or services; or | ||
• | in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. |
• | a written affirmation by the director or officer of his good faith belief that he has met the standard of conduct necessary for indemnification by the corporation; and | ||
• | a written undertaking by the director or on the director’s behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the director did not meet the standard of conduct. |
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• | any present or former director or officer who is made a party to the proceeding by reason of his or her service in that capacity; or | ||
• | any individual who, while a director or officer of our company and at our request, serves or has served another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or any other enterprise as a director, officer, partner or trustee of such corporation, real estate investment trust, partnership, |
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Exhibit | ||||
Number | Description of Exhibit | |||
*1.1 | Form of Underwriting Agreement | |||
4.1 | Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 on Form S-11/A, filed on August 20, 2003, No. 333-105277) | |||
*4.2 | Form of Indenture | |||
*4.3 | Form of Debt Security | |||
*4.4 | Form of Warrant Agreement | |||
*4.5 | Form of Rights Certificate | |||
4.6 | Articles of Amendment and Restatement of the Charter of the Company (incorporated by reference to Exhibit 3.1 of Form S-11 /A, filed on July 31, 2003, No. 333-105277) | |||
4.7 | Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 of Form S-11/A, filed on July 31, 2003, No. 333-105277) | |||
4.8 | Amendment No. 1 to Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2.2 to the registrant’s Form 10-K for the year ended December 31, 2003) | |||
4.9 | Articles Supplementary for Series A Cumulative Preferred Stock, dated September 15, 2004 (incorporated by reference to Exhibit 4.4 to the Registrant’s Form 8-K, dated September 21, 2004, for the event dated September 15, 2004) | |||
4.10 | Form of Certificate of Series A Cumulative Preferred Stock (incorporated by reference to Exhibit 4.4.1 to the Registrant’s Form 8-K, dated September 21, 2004, for the event dated September 15, 2004) | |||
4.11 | Articles Supplementary for Series B-1 Cumulative Convertible Redeemable Preferred Stock, dated December 28, 2004 (incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K, dated January 4, 2005, for the event dated December 28, 2004) | |||
4.12 | Articles Supplementary for Series D Cumulative Preferred Stock, dated July 17, 2007 (incorporated by reference to Exhibit 3.5 to the Registrant’s Form 8-A, filed July 17, 2007) | |||
4.13 | Form of Certificate of Series D Cumulative Preferred Stock (incorporated by reference to Exhibit 4.2 to the Registrant’s Form 8-A, filed July 17, 2007) | |||
#5.1 | Opinion of Andrews Kurth with respect to the legality of debt securities, warrants and rights being registered | |||
#5.2 | Opinion of Hogan & Hartson with respect to the legality of the common stock and preferred stock being registered | |||
#8.1 | Opinion of Andrews Kurth LLP with respect to tax matters | |||
#12.1 | Statement regarding Computation of Ratio of Earnings to Combined Fixed Charges | |||
#23.1 | Consent of Andrews Kurth (included in Exhibit 5.1 and 8.1) | |||
#23.2 | Consent of Hogan & Hartson (included in Exhibit 5.2) | |||
#23.3 | Consent of Ernst & Young LLP | |||
#24.1 | Power of Attorney (included on signature page) | |||
*25.1 | Form T-1 Statement of Eligibility of the Trustee |
* | To be filed as an exhibit to a current report of the registrant on Form 8-K in connection with the offering of securities hereunder and incorporated by reference herein. | |
# | Filed herewith. |
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(a) | The undersigned registrant hereby undertakes: |
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; | ||
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and | ||
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in this registration statement; |
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fideoffering thereof. | ||
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. | ||
(4) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: |
(i) | Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and | ||
(ii) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x), for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which the prospectus relates, and the offering of such securities at that time shall be deemed to be the initialbona fideoffering thereof;provided, however,that no |
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statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. |
(5) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, in a primary offering of securities of the registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(i) | Any preliminary prospectus or prospectus of the registrant relating to the offering required to be filed pursuant to Rule 424; | ||
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the registrant; | ||
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about an undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and | ||
(iv) | Any other communication that is an offer in the offering made by the registrant to the purchaser. |
(b) | The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fideoffering thereof. | |
(c) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. | |
(d) | The undersigned registrant hereby further undertakes that: |
(1) | For purposes of determining any liability under the Securities Act of 1933 the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective. |
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(2) | For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering thereof. |
(e) | The undersigned registrant hereby further undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Act. |
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ASHFORD HOSPITALITY TRUST, INC. | ||||
By: | /s/ David Kimichik | |||
Name: | David Kimichik | |||
Title: | Chief Financial Officer |
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Signature | Title | Date | ||
/s/ Archie Bennett, Jr. | Chairman of the Board of Directors | October 28, 2009 | ||
/s/ Montgomery J. Bennett | Chief Executive Officer and Director (Principal Executive Officer) | October 28, 2009 | ||
/s/ David Kimichik | Chief Financial Officer (Principal Financial Officer) | October 28, 2009 | ||
/s/ Mark Nunneley | Chief Accounting Officer (Principal Accounting Officer) | October 28, 2009 | ||
/s/ Benjamin J. Ansell, M.D. | Director | October 28, 2009 | ||
/s/ Thomas E. Callahan | Director | October 28, 2009 | ||
/s/ Martin L. Edelman | Director | October 28, 2009 | ||
/s/ W. Michael Murphy | Director | October 28, 2009 | ||
/s/ Philip S. Payne | Director | October 28, 2009 |
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