Exhibit 10.1
$100,000,000
CAPSTAR HOTEL COMPANY
8.75% SENIOR SUBORDINATED NOTES DUE 2007
PURCHASE AGREEMENT
August 14, 1997
Xxxxxx Brothers Inc.
Three World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
CapStar Hotel Company, a Delaware corporation (the "Company"),
proposes to sell to you (the "Initial Purchaser") $100,000,000 8.75% Senior
Subordinated Notes due 2007 (the "NOTES"). The Notes will be issued pursuant to
an Indenture to be dated as of August 19, 1997 (the "INDENTURE"), between the
Company and IBJ Xxxxxxxx Bank & Trust Company, as trustee (the "TRUSTEE"). This
is to confirm the agreement concerning the purchase of the Notes from the
Company by the Initial Purchaser.
The Notes will be offered without being registered under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), in reliance on
exemptions therefrom.
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum (the "PRELIMINARY MEMORANDUM") and will prepare
a final offering memorandum (the "MEMORANDUM") setting forth or including a
description of the terms of the Notes, the terms of the offering, a description
of the Company and any material developments relating to the Company occurring
after the date of the most recent financial statements included therein.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The
Company represents and warrants to, and agrees with the Initial Purchaser
that as of the date hereof:
(a) The Memorandum at the date hereof, does not, and at the
Closing Date, will not, contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, except that the representations and warranties set
forth in this Section 1(a) do not apply to statements or omissions in
the Memorandum based upon information furnished to the Company in
writing by or on behalf of the Initial Purchaser expressly for use
therein. Reference herein to the Memorandum shall be deemed to refer
to and include any document filed by the Company under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), which is
incorporated in the Memorandum by reference.
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(b) It is not required by applicable law or regulation in
connection with the offer, sale and delivery of the Notes to you in
the manner contemplated by this Agreement to register the Notes under
the Securities Act or to qualify the Indenture in respect of the Notes
under the Trust Indenture Act of 1939, as amended (the "TRUST
INDENTURE ACT").
(c) The Company and each of its Significant Subsidiaries (as
defined in Section 14) have been duly organized and are validly
existing and in good standing under the laws of their respective
jurisdictions of organization, are duly qualified to do business and
are in good standing in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
businesses requires such qualification, save where the failure to be
so qualified would not reasonably be expected to have a material
adverse effect on the business or property of the Company and its
subsidiaries taken as a whole, and each has all power and authority
necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged.
(d) The Company has an authorized capitalization as set forth in
the Memorandum, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description thereof
contained, or incorporated by reference, in the Memorandum; all of the
issued shares of capital stock, partnership interests or limited
liability membership interests, as the case may, be of each
Significant Subsidiary of the Company have been duly and validly
authorized and issued and (except for partnership interests of general
partners and except to the extent the limited liability company
agreements governing the respective limited liability companies
provide otherwise) are fully paid and non-assessable and (except for
partnership interests in CapStar Management Company, L.P. and CapStar
Management Company II, L.P. owned by third parties) are owned directly
or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(e) The Indenture has been duly authorized and, when duly
executed and delivered by the proper officers of the Company (assuming
due execution and delivery by the Trustee) and delivered by the
Company, will constitute a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its terms
except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance or transfer, reorganization,
liquidation, moratorium or other similar laws affecting the rights and
remedies of creditors generally and except as may be subject to
general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law).
(f) This Agreement has been duly authorized, executed and
delivered by the Company and the Registration Rights Agreement has
been duly authorized and will be duly delivered and executed by the
Company.
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(g) Except where it would not reasonably be expected to have a
material adverse effect on the consolidated financial position,
stockholder's equity, results of operations, business or prospects of
the Company and its subsidiaries taken as a whole, (i) the execution,
delivery and performance of this Agreement, the Registration Rights
Agreement, the Indenture and the Notes, and the consummation by the
Company of the transactions contemplated herein (the "TRANSACTIONS")
will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its Significant
Subsidiaries is a party or by which the Company or any of its
Significant Subsidiaries is bound or to which any of the properties or
assets of the Company or any of its Significant Subsidiaries is
subject, (ii) nor will such actions result in any violation of the
provisions of the charter or by-laws of the Company or any of its
Significant Subsidiaries or any statute or order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Company, any of its Significant Subsidiaries or any of their
properties or assets; and (iii) except for such consents, approvals,
authorizations, registrations or qualifications as may be required
under applicable state securities laws in connection with the purchase
and distribution of the Notes by the Initial Purchaser, and except for
registration of the Exchange Offer (as defined in the Registration
Rights Agreement) under the Securities Act and applicable state
securities laws, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or
body is required for the Transactions.
(h) Neither the Company nor any of its Significant Subsidiaries
has sustained, since the date of the latest quarterly financial
statements included or incorporated by reference in the Memorandum,
any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Memorandum; and, since such date, there has not been any change in the
capital stock or long-term debt of the Company or any of its
Significant Subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Memorandum.
(i) The financial statements (including the related notes and
supporting schedules) included in the Memorandum present fairly the
financial condition and results of operations of the entities
purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved.
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(j) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company, whose report is included in the Memorandum
and who have delivered the initial letter referred to in Section 7(e)
hereof, are independent public accountants as required by the
Securities Act and the Rules and Regulations during the periods
covered by the financial statements on which they reported contained
in the Memorandum.
(k) There are no legal or governmental proceedings pending to
which the Company or any of its Significant Subsidiaries is a party or
of which any property or asset of the Company or any of its
Significant Subsidiaries is the subject which, if determined adversely
to the Company or any of its subsidiaries, could be expected to have a
material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or prospects of
the Company and its subsidiaries taken as a whole; and to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others that
is required to be disclosed in the Memorandum which is not so
disclosed.
(l) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be disclosed in the Memorandum which is not so
disclosed.
(m) Since the date as of which information is given in the
Memorandum through the date hereof, and except as may otherwise be
disclosed in the Memorandum, the Company has not (i) issued or granted
any securities, other than in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of
any one or more employees, officers, directors or consultants, or in
connection with a dividend reinvestment or stock purchase plan,(ii)
incurred any liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course
of business,(iii) entered into any transaction not in the ordinary
course of business or (iv)in the case of the Company, declared or paid
any dividend on its capital stock.
(n) Neither the Company nor any of its Significant Subsidiaries
(i) is in violation of its charter or by-laws, (ii) is in default in
any material respect, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained
in any material indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is
bound or to which any of its properties or assets is subject except
where it would not reasonably be expected to have a material adverse
effect on the consolidated financial position, stockholder's equity,
results of operations, business or prospects of the Company and its
subsidiaries taken as a whole, or (iii) is in violation in any
material respect of any law, ordinance, governmental rule,
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regulation or court decree to which it or its properties or assets may
be subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit
necessary to the ownership of its properties or assets or to the
conduct of its business except where it would not reasonably be
expected to have a material adverse effect on the consolidated
financial position, stockholders' equity, results of operations,
business or prospects of the Company and its subsidiaries taken as a
whole.
(o) Neither the Company nor any Significant Subsidiary is an
"INVESTMENT COMPANY" within the meaning of such term under the
Investment Company Act of 1940, as amended, and the rules and
regulations of the Securities and Exchange Commission (the
"COMMISSION") thereunder.
(p) Neither the Company nor any of its affiliates (as defined in
Rule 501(b) of Regulation D under the Securities Act, an "AFFILIATE")
has directly, or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act) which is or will be
integrated with the sale of the Notes in a manner that would require
the registration under the Securities Act of the Notes or (ii) engaged
in any form of general solicitation or general advertising in
connection with the offering of the Notes (as those terms are used in
Regulation D under the Securities Act), or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities
Act.
2. PURCHASE OF THE NOTES BY THE INITIAL PURCHASER. (a) On the basis
of the representations and warranties herein contained, and subject to the terms
and conditions herein set forth, the Company agrees to sell to you and you agree
to purchase from the Company, $100,000,000 aggregate principal amount of the
Notes at a purchase price equal to 97.116% of the principal amount of such
Notes.
(b) The Company shall not be obligated to deliver any of the Notes,
except upon payment for all of the Notes to be purchased as hereinafter
provided.
3. SALE AND RESALE OF THE NOTES BY THE INITIAL PURCHASER. (a) You
have advised the Company that you propose to offer the Notes for resale upon the
terms and conditions set forth in this Agreement and in the Memorandum. You
hereby represent and warrant to, and agree with, the Company that you (i) are
purchasing the Notes pursuant to a private sale exempt from registration under
the Securities Act, (ii) will not solicit offers for, or offer or sell, the
Notes by means of any form of general solicitation or general advertising or in
any manner involving a public offering within the meaning of Section 4(2) of the
Securities Act, and (iii) will solicit offers for the Notes only from, and will
offer, sell or deliver the Notes, as part of their initial offering, only to
(A) in the case of offers inside the United States, (1) persons whom you
reasonably believe to be qualified institutional buyers ("QUALIFIED
INSTITUTIONAL BUYERS") as defined in Rule 144A under the Securities Act, as such
rule may be amended from time to time ("RULE 144A") or, if any such person is
buying for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to you that each
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such account is a Qualified Institutional Buyer, to whom notice has been given
that such sale or delivery is being made in reliance on Rule 144A or (2)
institutional accredited investors ("ACCREDITED INVESTORS") as defined in Rule
501(a)(1), (2), (3) or (7) under Regulation D who execute letters of
representation in the form included as Appendix A to the Memorandum in private
sales exempt from registration under the Securities Act and (B) in the case of
offers outside the United States, to persons other than U.S. persons (as defined
in Regulation S) in accordance with Rule 903 of Regulation S.
(b) In connection with the transactions described in subsection
(a)(iii)(B) of this Section 3, you have offered and sold the Notes, and will
offer and sell the Notes, (i) as part of your distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the offering and
the Closing Date (the "RESTRICTED PERIOD"), only in accordance with Rule 903 of
Regulation S. Accordingly, the Initial Purchaser represents and agrees that,
with respect to the transactions described in subsection (a)(iii)(B) of this
Section 3, neither it, nor any of its Affiliates, nor any person acting on its
or their behalf has engaged or will engage in any directed selling efforts with
respect to the Notes, and that it and they have complied and will comply with
the offering restrictions requirements of Regulation S. It agrees that, at or
prior to the confirmation of sale of the Notes pursuant to subsection
(a)(iii)(B) of this Section 3, it shall have sent to each distributor, dealer or
person receiving a selling concession, fee or other remuneration that purchases
Notes from the Initial Purchaser during the Restricted Period a confirmation or
notice to substantially the following effect:
"THE SECURITIES COVERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS
(I) AS PART OF THEIR DISTRIBUTION AT ANY TIME OR (II) OTHERWISE UNTIL 40 DAYS
AFTER THE LATER OF THE COMMENCEMENT OF THE OFFERING AND THE TIME OF DELIVERY OF
THE SECURITIES, EXCEPT IN EITHER CASE IN ACCORDANCE WITH REGULATION S OR RULE
144A UNDER THE SECURITIES ACT. THE TERMS USED ABOVE HAVE THE MEANING GIVEN TO
THEM BY REGULATION S."
(c) (i) You have not offered or sold and, prior to the completion of
the six months from the Closing Date, will not offer or sell any Notes to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Xxx 0000 with respect to
anything done by it in relation to the Notes in, from or otherwise involving the
United Kingdom and (iii) it has only issued or passed on and will only issue or
pass on in the United Kingdom any document received by it in connection with the
issuance of the Notes to a person who is of a kind described in Article 11(3) of
the Financial Services Xxx 0000 (Investments Advertisements)(Exemptions) Order
1996 or is a person to whom such document may otherwise lawfully be issued or
passed on.
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4. DELIVERY OF AND PAYMENT FOR THE NOTES. (a) Payment of the purchase
price for, and delivery of, the Notes shall be made at the offices of Xxxxxxx
Xxxxxxx & Xxxxxxxx, New York, New York or at such other place as shall be agreed
upon by the Company and you, at 9:30 a.m. (New York time), on August 19, 1997 or
at such other time or date as you and the Company shall determine (such date and
time of payment and delivery being herein called the "CLOSING DATE").
(b) On the Closing Date, payment shall be made to the Company in
immediately available funds by wire transfer to such account or accounts as the
Company shall specify prior to the Closing Date or by such means as the parties
hereto shall agree prior to the Closing Date against delivery to you of the
certificates evidencing the Notes. Upon delivery, the Notes shall be
registered in such names and in such denominations as the Initial Purchaser
shall request in writing not less than two full business days prior to the
Closing Date. For the purpose of expediting the checking and packaging of
certificates evidencing the Notes, the Company agrees to make such certificates
available for inspection not later than 2:00 P.M. on the business day at least
24 hours prior to the Closing Date.
5. FURTHER AGREEMENTS OF THE COMPANY. The Company further agrees:
(a) To furnish to you, without charge, during the period referred
to in paragraph (c) below, as many copies of the Memorandum and any
supplements and amendments thereto as you may reasonably request.
(b) Prior to making any amendment or supplement to the
Memorandum other than by filing documents under the Exchange Act which
are incorporated by reference therein, the Company shall furnish a
copy thereof to the Initial Purchaser and counsel to the Initial
Purchaser and will not effect any such amendment or supplement to
which the Initial Purchaser shall reasonably object by notice to the
Company after a reasonable period to review, which shall not in any
case be longer than three business days after receipt of such copy.
(c) If, at any time prior to completion of the distribution of
the Notes by you to purchasers, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel
for you or counsel for the Company, to amend or supplement the
Memorandum in order that the Memorandum will not include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in
light of the circumstances existing at the time it is delivered to a
purchaser, or if it is necessary to amend or supplement the Memorandum
to comply with applicable law, to promptly prepare such amendment or
supplement as may be necessary to correct such untrue statement or
omission so that the Memorandum, as so amended or supplemented, will
comply with applicable law and to furnish you such number of copies as
you may reasonably request.
(d) So long as the Notes are outstanding and are "RESTRICTED
SECURITIES" within the meaning of Rule 144(a)(3) under the Securities
Act during any period
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in which it is not subject to and in compliance with Section 13 or
15(d) of the Exchange Act, to furnish to holders of the Notes and
prospective purchasers of Notes designated by such holders, upon
request of such holders or such prospective purchasers, the
information required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act.
(e) For a period of five years following the date of the
Memorandum, to furnish to the Initial Purchaser copies of all
materials furnished by the Company to its shareholders and all public
reports and all reports and financial statements furnished by the
Company to the principal national securities exchange upon which the
Notes may be listed pursuant to requirements of or agreements with
such exchange or to the Commission pursuant to the Exchange Act or any
rule or regulation of the Commission thereunder.
(f) Promptly from time to time to take such action as the
Initial Purchaser may reasonably request to qualify the Notes for
offering and sale under the securities laws of such jurisdictions as
the Initial Purchaser may request and to comply with such laws so as
to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Notes.
(g) Not to offer, sell, contract to sell or otherwise dispose of
any additional securities of the Company substantially similar to the
Notes or any securities convertible into or exchangeable for or that
represent the right to receive any such similar securities, without
the consent (which consent shall not be unreasonably withheld) of the
Initial Purchaser during the period beginning from the date of this
Agreement and continuing for 180 days following the Closing Date.
(h) To use its best efforts to permit the Notes to be designated
Private Offerings, Resales and Trading through Automated Linkages
Market ("PORTAL") securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers,
Inc. relating to trading in the PORTAL Market and to permit the Notes
to be eligible for clearance and settlement through The Depository
Trust Company (the "DTC").
(i) Except following the effectiveness of the Registration
Statement (as defined in the Registration Rights Agreement), not to,
and will cause its affiliates not to, solicit any offer to buy or
offer to sell the Notes by means of any form of general solicitation
or general advertising (as those terms are used in Regulation D under
the Securities Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act.
(j) Not to, and will cause its affiliates not to, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of
any security (as defined in the Securities Act) in a transaction that
could be integrated with the sale of the
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Notes in a manner that would require the registration under the
Securities Act of the Notes.
(k) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary of the Company shall become an
"INVESTMENT COMPANY" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder.
6. EXPENSES. The Company agrees to pay (i) the costs incident to the
authorization, issuance, sale and delivery of the Notes and any taxes payable in
that connection;(ii) the costs incident to the printing or other production of
the Memorandum and any amendments or supplements thereto;(iii) the costs of
distributing the Memorandum and any amendments or supplements thereto;(iv) the
fees and expenses of qualifying the Notes under the securities laws of the
several jurisdictions, including the fees and expenses of Xxxxxxx Xxxxxxx &
Xxxxxxxx, as provided in Section 5(f);(v) any fees charged by securities rating
services for rating the Notes;(vi) all fees and expenses, if any, incurred in
connection with the admission of such Notes for trading in PORTAL;(vii) the fees
and expenses of the Trustee; and (viii) all other costs and expenses incident to
the performance of the obligations of the Company.
7. CONDITIONS TO THE INITIAL PURCHASER'S OBLIGATIONS. The obligations
of the Initial Purchaser hereunder are subject to the accuracy, when made and on
the Closing Date, of the representations and warranties of the Company contained
herein, to the performance by the Company of its respective obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Initial Purchaser shall not have discovered and
disclosed to the Company on or prior to the Closing Date that the
Memorandum or any amendment or supplement thereto contains any untrue
statement of a fact which, in the opinion of Xxxxxxx Xxxxxxx &
Xxxxxxxx, counsel for the Initial Purchaser, is material or omits to
state any fact which, in the opinion of such counsel, is material and
is required to be stated therein or is necessary to make the
statements therein not misleading.
(b) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the
Indenture, the Notes, the Memorandum, and all other legal matters
relating to this Agreement and the transactions contemplated hereby
shall be reasonably satisfactory in all respects to counsel for the
Initial Purchaser, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request
to enable them to pass upon such matters.
(c) Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx shall have
furnished to the Initial Purchaser their written opinion, as counsel
to the Company, addressed to the Initial Purchaser and dated the
Closing Date, in form and substance reasonably satisfactory to the
Initial Purchaser, to the effect set forth in Exhibit A hereto and to
such further effect as counsel to the Initial Purchaser may reasonably
request.
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(d) You shall have received on the Closing Date a letter, dated
the date hereof and the Closing Date, as the case may be, in form and
substance satisfactory to you, from KPMG Peat Marwick LLP, independent
public accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information, including the financial information contained or
incorporated by reference in the Memorandum as identified by you.
(e) The Company shall have furnished to the Initial Purchaser a
certificate, dated the Closing Date, of the Chairman of the Board,
President or a Vice President of the Company and the Treasurer or
Chief Financial Officer stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct in all material
respects as of the Closing Date and the Company has complied with
all its agreements contained herein; and
(ii) They have carefully examined the Memorandum and, in
their opinion (A) the Memorandum, as of its date, did not include
any untrue statement of a material fact and did not omit to state
any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, and (B) since the date of the Memorandum no event has
occurred which should have been set forth in a supplement or
amendment to the Memorandum.
(f)(i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Memorandum any
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Memorandum or (ii) since such
date there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Memorandum, the effect of which, in any such case
described in clause (i) or (ii), is, in the judgment of the Initial
Purchaser, so material and adverse as to make it impracticable or
inadvisable to proceed with the offering or the delivery of the Notes
on the terms and in the manner contemplated in the Memorandum.
(g) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Notes by any
"NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION", as that term is
defined by the Commission for purposes of Rule 436(g)(2) of the Rules and
Regulations and (ii) no such organization
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shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the Notes.
(h) The Initial Purchaser shall have received on the date hereof the
Registration Rights Agreement executed by the Company.
(i) The Initial Purchaser shall have received from Xxxxxxx Xxxxxxx &
Xxxxxxxx, counsel for the Initial Purchaser, such opinion or opinions,
dated the Closing Date, with respect to such matters as the Initial
Purchaser may reasonably require, and the Company shall have furnished to
such counsel such documents and information as they may reasonably request
for the purpose of enabling them to pass upon such matters.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchaser.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless the Initial
Purchaser, its officers and employees and each person, if any, who controls the
Initial Purchaser within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Notes), to which the Initial
Purchaser, officer, employee or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon,(i) any untrue statement or alleged
untrue statement of a material fact contained (A) in the Preliminary Memorandum,
the Memorandum or in any amendment or supplement thereto, or (B) in any Blue Sky
application or other document prepared or executed by the Company (or based upon
any written information furnished by the Company) specifically for the purpose
of qualifying any or all of the Notes under the securities laws of any state or
other jurisdiction (any such application, document or information being
hereinafter called a "BLUE SKY APPLICATION"),(ii) the omission or alleged
omission to state in the Preliminary Memorandum, the Memorandum or in any
amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading or (iii) any act or failure to act, or any alleged act or failure
to act, by the Initial Purchaser in connection with, or relating in any manner
to, the Notes or the offering contemplated hereby, and which is included as part
of or referred to in any loss, claim, damage, liability or action arising out of
or based upon matters covered by clause (i) or (ii) above (PROVIDED that the
Company shall not be liable in the case of any matter covered by this clause
(iii) to the extent that it is determined in a final judgment by a court of
competent jurisdiction that such loss, claim, damage, liability or action
resulted directly from any such act or failure to act undertaken or omitted to
be taken by the Initial Purchaser through its gross negligence or wilful
misconduct), and shall reimburse the Initial Purchaser and each officer,
employee and controlling person promptly upon demand for any legal or other
expenses reasonably incurred by the Initial Purchaser, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; PROVIDED,
12
HOWEVER, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in the Preliminary Memorandum, the Memorandum or in any
such amendment or supplement, or in any Blue Sky Application in reliance upon
and in conformity with the written information furnished to the Company by or on
behalf of the Initial Purchaser specifically for inclusion therein and described
in Section 8(e) and PROVIDED FURTHER that as to the Preliminary Memorandum or
Memorandum this indemnity agreement shall not inure to the benefit of the
Initial Purchaser, its officers and employees and each person or controlling
person, if any, that on account of any loss, claim, damage, liability or action
arising from the sale of Notes to any person by the Initial Purchaser if the
Initial Purchaser failed to send or give a copy of the Memorandum, as the same
may be amended or supplemented, to that person, and the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact in the Preliminary Memorandum was corrected in the
Memorandum, or a supplement or amendment thereto, as the case may be. The
foregoing indemnity agreement is in addition to any liability which the Company
may otherwise have to the Initial Purchaser or to any officer, employee or
controlling person of the Initial Purchaser.
(b) The Initial Purchaser shall indemnify and hold harmless the
Company, its officers and employees, each of its directors and the Trustee, and
each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company, any such
director or officer, or the Trustee or any controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon,(i) any untrue
statement or alleged untrue statement of a material fact contained (A) in the
Preliminary Memorandum, the Memorandum or in any amendment or supplement
thereto, or (B) in any Blue Sky Application or (ii) the omission or alleged
omission to state in the Preliminary Memorandum, the Memorandum or in any
amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with the written information furnished to the Company or
the Trustee by or on behalf of the Initial Purchaser specifically for inclusion
therein and described in Section 8(e), and shall reimburse the Company and any
such director or officer, or any such Trustee, or controlling person for any
legal or other expenses reasonably incurred by the Company or any such director
or officer, or any such Trustee, or any controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which the Initial Purchaser
may otherwise have to the Company or any such director or officer, or any such
Trustee, or any controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have under this Section 8 except to the extent it
has been materially prejudiced by such failure and, PROVIDED FURTHER, that
the failure to notify the indemnifying party shall not relieve it from any
liability
13
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice
from the indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not be liable
to the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; PROVIDED, HOWEVER, that
the indemnified party shall have the right to employ counsel to represent
jointly the indemnified party and its respective officers, employees and
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the indemnified party against the
indemnifying party under this Section 8 if, in the reasonable judgment of the
indemnified party, it is advisable for the indemnified party and those officers,
employees and controlling persons to be jointly represented by separate counsel,
and in that event the fees and expenses of such separate counsel shall be paid
by the indemnifying party. It is understood that the indemnifying party shall
not be liable for the fees and expenses of more than one separate firm (in
addition to local counsel in each jurisdiction) for all indemnified parties in
connection with any proceeding or related proceedings. Each indemnified party,
as a condition of the indemnity agreements contained in Sections 8(a) and 8(b),
shall use its best efforts to cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall (i) without
the prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss of liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or 8(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof,(i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Initial Purchaser on the other
from the offering of the Notes or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the
14
Company on the one hand and the Initial Purchaser on the other with respect to
the statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Initial Purchaser on the other with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Notes purchased under this Agreement (before deducting expenses) received
by the Company on the one hand, and the total underwriting commissions received
by the Initial Purchaser with respect to the Notes purchased under this
Agreement, on the other hand, bear to the total gross proceeds from the offering
of the Notes under this Agreement, in each case as set forth in the table on the
cover page of the Memorandum. The 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 on the one hand or the Initial Purchaser, on the other
hand, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchaser 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 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, damage or
liability, or action in respect thereof, referred to above in this Section 8(d)
shall be deemed to include, for purposes 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), the Initial Purchaser shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Notes sold and distributed by it were offered to the purchasers exceeds the
amount of any damages which the Initial Purchaser has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The Initial Purchaser confirms that the statements with respect
to the offering of the Notes set forth in the bottom paragraph on the cover page
of, the legend concerning stabilization and over-allotment on the inside front
cover page of, and the sixth, ninth and eleventh paragraphs under the caption
"Plan of Distribution" relating to stabilization and over-allotment in, the
Preliminary Memorandum and the Memorandum are correct and constitute the only
information furnished in writing to the Company by or on behalf of the Initial
Purchaser specifically for inclusion in the Memorandum.
9. TERMINATION. The obligations of the Initial Purchaser hereunder
may be terminated by it by notice given to and received by the Company prior to
delivery of and payment for the Notes if, prior to that time,(i) trading in
securities generally on the New York Stock Exchange or the American Stock
Exchange or in the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market, shall have been
suspended or minimum prices shall have been established on any such exchange or
such market by the Commission, by such exchange or by any other regulatory body
or governmental authority having jurisdiction,(ii) a banking moratorium shall
have been declared by Federal or New York State authorities,(iii) the United
States shall have become engaged in hostilities, there
15
shall have been an escalation in hostilities involving the United States or
there shall have been a declaration of a national emergency or war by the United
States or (iv) there shall have occurred such a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States shall be
such) as to make it, in the judgment of the Initial Purchaser, impracticable or
inadvisable to proceed with the offering or delivery of the Notes on the terms
and in the manner contemplated in the Memorandum.
10. REIMBURSEMENT OF INITIAL PURCHASER'S EXPENSES. If the sale of
Notes provided for herein is not consummated because any condition to the
obligations of the Initial Purchaser set forth in Section 7 hereof is not
satisfied, because of any termination pursuant to Section 9 hereof or because of
any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by the Initial Purchaser, the Company shall reimburse the Initial
Purchaser for the reasonable fees and expenses of its counsel and for such other
out-of-pocket expenses as shall have been incurred by it in connection with this
Agreement and the proposed purchase of the Notes, and upon demand the Company
shall pay the full amount thereof to the Initial Purchaser.
11. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a)if to the Initial Purchaser, shall be delivered or sent by
mail, telex or facsimile transmission to Xxxxxx Brothers Inc., Three
World Financial Center, New York, New York 10285, Attention:
Syndicate Department (Fax: 000-000-0000);
(b)if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Memorandum, Attention: Chief Financial Officer (Fax: 000-000-0000).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchaser, the Company,
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (x) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the officers and
employees of the Initial Purchaser and the person or persons, if any, who
control the Initial Purchaser within the meaning of Section 15 of the Securities
Act and (y) the indemnity agreement of the Initial Purchaser contained in
Section 8(b) of this Agreement shall be deemed to be for the benefit of
directors, officers and employees of the Company and any person controlling the
Company within the meaning of Section 15 of the Securities Act. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to in this Section 12, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
16
13. SURVIVAL. The respective indemnities, representations, warranties
and agreements of the Company and the Initial Purchaser contained in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Notes and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
14. DEFINITION OF THE TERMS "BUSINESS DAY" AND "SIGNIFICANT
SUBSIDIARY". For purposes of this Agreement,(a) "BUSINESS DAY" means any day on
which the New York Stock Exchange, Inc. is open for trading and (b) "SIGNIFICANT
SUBSIDIARY" has the meaning set forth in Rule 1-02 of Regulation S-X.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF NEW YORK.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
17. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing corectly sets forth the agreement between the
Company and thd Initial Purchase, please indicate your acceptance in the
space provided for that purpose below.
Very truly yours,
CAPSTAR HOTEL COMPANY
By: /s/ Xxxx Xxxxx
-------------------------
Name: Xxxx Xxxxx
Title: Chief Financial Officer
Accepted:
XXXXXX BROTHERS INC.
By: /s/ Xxxxxxx Xxxxx
--------------------------
Name: Xxxxxxx Xxxxx
Title: Associate
EXHIBIT A
FORM OF OPINION OF
COMPANY COUNSEL TO BE DELIVERED
PURSUANT TO SECTION 7(c)
(i) The Company, CapStar Management Company, L.P., CapStar
Management Company II, L.P., CapStar LP Corporation, CapStar General Corp.
and CapStar Limited Corp. have been duly formed and are validly existing as
corporations or limited partnerships, as the case may be, in good standing
under the laws of their respective jurisdictions of organization, are duly
qualified to do business and are in good standing as foreign corporations or
limited partnerships, as the case may be, in each jurisdiction in which their
respective ownership or lease of property or the conduct of their respective
businesses (as set forth in certificates of officers of the Company upon
which such counsel is relying without independent investigation) requires
such qualification, except where the failure to be so qualified would not
have a material adverse effect on the consolidated financial position,
stockholders equity, results of operations, business or prospects of the
Company and its subsidiaries taken as a whole (a "Material Adverse Effect"),
and have all corporate or partnership, as the case may be, power and
authority necessary to own or hold their respective properties and conduct
the businesses in which they are engaged as described in the Memorandum;
(ii) The Company has an authorized capitalization as set forth in
the Memorandum, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Memorandum; and all of the issued shares of capital stock or partnership
interests, as the case may be, of CapStar Management Company, L.P., CapStar
Management Company II, L.P., CapStar LP Corporation, CapStar General Corp.
and CapStar Limited Corp. have been duly and validly authorized and issued
and (except for partnership interests of general partners) are fully paid,
non-assessable and (except for partnership interests in CapStar Management
Company, L.P. and CapStar Management Company II, L.P. owned by third parties)
are owned directly or indirectly by the Company, to such counsel's knowledge
free and clear of all liens, encumbrances, or claims;
(iii) To the best of such counsel's knowledge, based solely on a
review of such counsel's internal litigation docket, and other than as set forth
in the Memorandum, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any property
or assets of the Company or any of its subsidiaries is the subject which could
be expected to have a Material Adverse Effect; and, to the best of such
counsel's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(iv) The Memorandum and any further amendments or supplements
thereto made by the Company prior to the Closing Date (other than the financial
statements and related
A-2
schedules and statistical data therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the requirements of the
Securities Act and the Rules and Regulations;
(v) To the best of such counsel's knowledge, there are no contracts
or other documents which are required to be described in the Memorandum which
have not been so described;
(vi) The execution and delivery of the Notes and the Exchange Notes
have been duly authorized by all necessary corporate action of the Company, and
the Notes and the Exchange Notes, when executed and authenticated in accordance
with the provisions of the Indenture and paid for in accordance with the
Purchase Agreement, will constitute the valid, binding and enforceable
obligations of the Company, entitled to the benefits of the Indenture, except as
such enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance or transfer, reorganization, liquidation, moratorium or other similar
laws affecting the rights and remedies of creditors generally and except as may
be subject to general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law);
(vii) Each of the Purchase Agreement and the Registration Rights
Agreement has been duly authorized, executed and delivered by the Company and
each constitutes a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, liquidation, moratorium or other similar laws affecting the
rights and remedies of creditors generally and except as may be subject to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law), and except as rights to indemnity and
contribution thereunder may be limited by applicable law and public policy, and
except that no opinion is expressed as to the enforceability of the choice of
law provision thereof;
(viii) The Indenture has been duly authorized, executed and
delivered by the Company and, assuming due authorization, executing and delivery
thereof by the Trustee, constitutes a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance or transfer, reorganization, liquidation, moratorium or other similar
laws affecting the rights and remedies of creditors generally and except as may
be subject to general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law);
(ix) The issue and sale of the Notes being delivered on the Closing
Date by the Company, the issue and sale of the Exchange Notes, the compliance by
the Company with all of the provisions of this Agreement, the Registration
Rights Agreement and the Indenture and the consummation of the transactions
contemplated hereby and thereby, will not conflict with or result in a material
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject which breach is reasonably likely to have a Material
Adverse Effect, nor will such actions result in any violation of the provisions
of the charter,
A-3
by-laws, limited partnership agreement or operating agreement of the Company or
any of its subsidiaries or any statute or any order, rule or regulation known to
such counsel of any court or governmental agency or body of the United States,
the State of New York or established pursuant to the Delaware Corporation Law
having jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets; except for the registration of the Exchange Offer (as
defined in the Registration Rights Agreement) under the Securities Act and for
such consents, approvals, authorizations, registrations or qualifications as may
be required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Notes by the Initial
Purchaser and the Exchange Offer, no consent approval, authorization or order
of, or filing or registration with, any such court or governmental agency or
body is required for the execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated hereby;
(x) Neither the Company nor any of its subsidiaries is an
"INVESTMENT COMPANY" as such term is defined in the Investment Company Act of
1940, as amended; and
(xi) The statements under the captions "Certain Relationships and
Related Transactions" and "Description of Notes" in the Memorandum, insofar as
such statements constitute a summary of legal matters, documents or proceedings
referred to therein are correct in all material respects.
In rendering such opinion, such counsel may (i) state that their
opinion is limited to matters governed by the Federal laws of the United States
of America, the laws of the State of New York and the Delaware Corporation Law
and that such counsel is not admitted in the State of Delaware; Such counsel
shall also have furnished to the Initial Purchaser a written statement,
addressed to the Initial Purchaser and dated such Closing Date, in form and
substance satisfactory to the Initial Purchaser, to the effect that (x) in
connection with the preparation of the Memorandum, such counsel have
participated in conferences with certain officers of the Company, the
independent public accountants of the Company and other representatives of the
Company, at which the contents of the Memorandum and related matters were
discussed, and (y) based on such participation, no facts have come to the
attention of such counsel which lead them to believe that the Memorandum (except
for financial statements, schedules and other statistical data included therein
or omitted therefrom, as to which such counsel need make no statement), as of
the date thereof, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or that the Memorandum (except for financial statements,
schedules and other statistical data included therein or omitted therefrom, as
to which such counsel need make no statement) contains any untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The foregoing statement may be
qualified by a statement to the effect that such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Memorandum except for the statements made in the Memorandum
under the captions "Certain Relationships and Related Transactions" and
"Description of Notes" insofar as such statements concern legal matters.
