EXHIBIT 1.1
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CONFORMED COPY
MERISTAR HOSPITALITY CORPORATION
$155,000,000 9.50% CONVERTIBLE SUBORDINATED NOTES
DUE APRIL 1, 2010
UNDERWRITING AGREEMENT
June 26, 2003
XXXXXX BROTHERS INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
MeriStar Hospitality Corporation, a Maryland corporation (the
"COMPANY"), proposes, subject to the terms and conditions stated herein, to
issue and sell $155,000,000 aggregate principal amount of 9.50% Convertible
Subordinated Notes due April 1, 2010 of the Company (the "FIRM SECURITIES") to
Xxxxxx Brothers Inc. (the "UNDERWRITER"). In addition, the Company proposes to
grant to the Underwriter an option to purchase up to an additional $15,000,000
aggregate principal amount of 9.50% Convertible Subordinated Notes due February
1, 2008 on the terms and for the purposes set forth in Section 2 (the "OPTION
SECURITIES" and together with the Firm Securities, the "SECURITIES"). This is to
confirm the agreement between the Company and the Underwriter concerning the
offer, issue and sale of the Securities as of the date first written above.
The Securities will be issued pursuant to an indenture (the "BASE
INDENTURE") to be dated as of the First Closing Date, between the Company and
U.S. Bank Trust National Association, as Trustee (the "TRUSTEE"), and a
supplemental indenture or officer's certificate establishing the Securities, to
be dated as of the First Closing Date (as defined in Section 4), between the
Company and the Trustee (the "SUPPLEMENTAL INDENTURE" and, together with the
Base Indenture, the "INDENTURE"). The Securities will be convertible into duly
and validly issued, fully paid and nonassessable shares of common stock, par
value $0.01 per share (the "COMMON STOCK"), of the Company (such shares, the
"CONVERSION SHARES") on the terms, and subject to the conditions, set forth in
the Indenture.
This Agreement and the Indenture are referred to herein collectively as
the "TRANSACTION DOCUMENTS".
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The
Company represents and warrants to and agrees with the Underwriter that:
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(a) A registration statement on Form S-3 (File No.
333-85162) has (i) been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended, and the rules
and regulations of the Securities and Exchange Commission (the
"COMMISSION") thereunder (collectively, the "SECURITIES ACT"), (ii)
been filed with the Commission under the Securities Act and (iii)
become effective under the Securities Act, and the Base Indenture has
been qualified under the Trust Indenture Act of 1939, as amended, and
the rules and regulations of the Commission thereunder (collectively,
the "TRUST INDENTURE ACT"). Copies of such registration statement (and
any amendments thereto) and all exhibits thereto have been delivered by
the Company to you. As used in this Agreement, (i) "REGISTRATION
STATEMENT" means the Registration Statement on Form S-3 (File No.
333-85162), when it became effective under the Act, and as from time to
time amended or supplemented thereafter (or if any post-effective
amendment to the Registration Statement has been filed with the
Commission prior to the execution and delivery of this Agreement, then
the time that the most recent such amendment has been declared or
become effective by the Commission); (ii) "EFFECTIVE TIME" means the
date and the time as of which such Registration Statement was declared
effective by the Commission; (iii) "EFFECTIVE DATE" means the date of
the Effective Time; (iv) "BASE PROSPECTUS" means the prospectus
(together with all documents incorporated therein by reference), dated
May 9, 2002, and included in Registration Statement No. 333-85162 ; (v)
"SUPPLEMENTAL PROSPECTUS" means the prospectus supplement (together
with all documents incorporated therein by reference), dated June 26,
2003, relating to the Securities and the Conversion Shares; (vi)
"PRELIMINARY PROSPECTUS" means any preliminary form of the Prospectus
(including any supplement thereto) which has been filed pursuant to
Rule 424 of the Rules and Regulations (as hereinafter defined) and
(vii) "Prospectus" means the Base Prospectus and the Supplemental
Prospectus relating to the Securities and the Conversion Shares, as
filed with the Commission pursuant to paragraph (b) of Rule 424 of the
rules and regulations of the Commission under the Securities Act (the
"RULES AND REGULATIONS"). Reference made herein to the Preliminary
Prospectus as amended or supplemented shall include, without
limitation, any prospectus relating to the Securities and the
Conversion Shares filed with the Commission pursuant to Rule 424 of the
Rules and Regulations which amends or supplements the Prospectus.
Reference made herein to the Registration Statement or to the
Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under
the Securities Act, as of the date of such Registration Statement or
the Prospectus, as the case may be, and any reference to any amendment
or supplement to the Registration Statement, or the Prospectus shall be
deemed to refer to and include any document filed under the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "EXCHANGE ACT") after the date
of such Preliminary Prospectus or the Prospectus, as the case may be,
and incorporated by reference in such Preliminary Prospectus or the
Prospectus, as the case may be; and any reference to any amendment to
the Registration Statement shall be
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deemed to include any annual report of the Company filed with the
Commission pursuant to Section 13(a) or 15(d) of the Exchange Act after
the Effective Time that is incorporated by reference in the
Registration Statement. The Commission has not issued any order
preventing or suspending the use of the Registration Statement, any
Preliminary Prospectus or the Prospectus.
(b) The conditions for use of Form S-3, as set forth in
the General Instructions thereto, have been satisfied.
(c) The Registration Statement, as of the Effective Date
and on the date that any post-effective amendment to the Registration
Statement becomes effective, conformed in all material respects with
the requirements of the Securities Act, the Trust Indenture Act and
Exchange Act and did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the
Prospectus, as of its date and as of the applicable Closing Date,
conformed and will conform in all material respects with the
requirements of the Securities Act and the Exchange Act and did not and
will not contain any untrue statement of a material fact or did not and
will not omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; PROVIDED that, the Company
makes no representation or warranty as to information contained in or
omitted from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information furnished to the
Company by the Underwriter specifically for inclusion therein.
(d) The documents incorporated by reference in the
Prospectus (the "INCORPORATED DOCUMENTS"), when they became effective
or were filed with the Commission, as the case may be, conformed in all
material respects to the requirements of the Securities Act and the
Exchange Act, as applicable, and none of such documents contained any
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents are
filed with the Commission will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable,
and will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which
they were made, not misleading.
(e) Each of the Company and its Significant Subsidiaries
(as defined in Section 14) has been duly organized and is validly
existing and in good standing under the laws of its jurisdiction of
organization is duly qualified to do business and is in good standing
in each jurisdiction in which its ownership or lease of
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property or the conduct of its businesses requires such qualification,
except where the failure to be so qualified could not reasonably be
expected to have a Material Adverse Effect, and has all power and
authority necessary to own, lease or hold its properties and to conduct
the businesses in which it is engaged; and none of the subsidiaries of
the Company, other than MeriStar Hospitality Operating Partnership,
L.P. ("MHOP"), is a Significant Subsidiary.
(f) The Company has an authorized capitalization as set
forth in the Prospectus, 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 Prospectus; and 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 or partnership agreements governing the
relevant companies provide otherwise) are fully paid and non-assessable
and (except for partnership interests in MHOP owned by third parties)
are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims (collectively, "LIENS"), other
than Liens under the Senior Secured Credit Agreement, dated as of
October 28, 2002, among MHOP, Societe Generale, as Administrative
Agent, XX Xxxxx Securities Corporation, as Lead Arranger and Book
Runner, Xxxxxx Brothers Inc., as Syndication Agent, Xxxxxxx Xxxxx
Barney Inc., as Documentation Agent, and the lenders named therein (the
"CREDIT AGREEMENT").
(g) Except as disclosed in the Prospectus, (i) there are
no outstanding securities convertible into or exchangeable for, or
warrants, options or rights issued by the Company to purchase, any
shares of the capital stock of the Company, (ii) there are no
statutory, contractual, preemptive or other rights to subscribe for or
to purchase any Common Stock and (iii) there are no restrictions upon
transfer of the Common Stock pursuant to the Company's certificate of
incorporation or bylaws.
(h) The Indenture has been duly authorized by the Company
and has been qualified under the Trust Indenture Act; and, when duly
executed and delivered by the Company and the Trustee, 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); and the Indenture
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conforms in all material respects to the description thereof contained
in the Prospectus.
(i) This Agreement has been duly authorized, executed and
delivered by the Company.
(j) The Securities have been duly authorized by the
Company and when the Securities are executed, authenticated and issued
in accordance with the terms of the Indenture and delivered to and paid
for by the Underwriter pursuant to this Agreement on the applicable
Closing Date, assuming due authentication of the Securities by the
Trustee, such Securities will constitute valid and legally binding
obligations of the Company entitled to the benefits of the Indenture,
enforceable against the Company in accordance with their terms, except
as such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance or transfer, reorganization, liquidation,
moratorium or other similar laws affecting 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
the Securities will conform, when issued, in all material respects to
the description thereof contained in the Prospectus.
(k) The Company has all necessary corporate power and
authority to execute, issue and deliver the Conversion Shares; the
Conversion Shares have been duly and validly authorized and reserved
for issuance upon conversion of the Securities and are free of
preemptive rights; all Conversion Shares, when issued and delivered
upon conversion of the Securities in accordance with the terms of the
Indenture, will be duly and validly authorized and issued, fully paid
and nonassessable and will be free and clear of any Liens; and the
Conversion Shares will conform, if issued, in all material respects to
the description thereof in the Prospectus.
(l) The execution, delivery and performance by the
Company of the Transaction Documents, the issuance of the Securities
and the Conversion Shares, if at all, the compliance by the Company
with all the provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby (the "TRANSACTIONS") will
not (i) 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, lease 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)
result in any violation of the provisions of the charter or by-laws or
any limited partnership agreement or other constituent document of the
Company or any of its Significant Subsidiaries or any statute or any
order, rule or regulation of any court or governmental agency or body
having
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jurisdiction over the Company or any of its Significant Subsidiaries or
any of their respective properties or assets or (iii) result in the
imposition or creation of (or the obligation to create or impose) a
Lien under any agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective properties or assets is bound. Without
limiting the generality of the foregoing, the incurrence of the
indebtedness represented by the Securities on a pro forma basis, will
not cause a breach, and the incurrence of the indebtedness would not be
reasonably expected to cause any such breach in the future, of Article
VII of the Credit Agreement, as amended waived or supplemented.
(m) No default currently exists under any indenture,
mortgage, deed of trust, loan agreement, lease 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 except
where such defaults could not reasonably be expected to have a Material
Adverse Effect.
(n) The Securities are permitted to be incurred as
"Refinancing Indebtedness" pursuant to Section 4.9 of the indenture
governing the Company's Series A and Series B 8.75% Senior Subordinated
Notes due 2007.
(o) Except (i) with respect to the registration of the
Securities and the Conversion Shares under the Securities Act and the
Exchange Act, (ii) as required by the state securities or "blue sky"
laws and (iii) for such consents, approvals, authorizations, orders,
filings or registrations which have been obtained or made, no consent,
approval, authorization or order of, or filing or registration with,
any court or governmental agency or body is required for the execution,
delivery and performance of the Transaction Documents, the issuance and
sale of the Securities and the Conversion Shares, if at all, or the
consummation of the Transactions by the Company.
(p) Neither the Company nor any of its Significant
Subsidiaries has sustained, since the date of the latest financial
statements included or incorporated by reference in the Prospectus, 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 Prospectus; 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, consolidated financial position, stockholders'
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equity or results of operations of the Company and its subsidiaries
taken as a whole, otherwise than as set forth or contemplated in the
Prospectus.
(q) The financial statements (including the related notes
and supporting schedules) filed as part of the Registration Statement
or included or incorporated by reference in the Prospectus present
fairly the financial condition, the results of operations, cash flows
and changes in the financial position of the Company and its
subsidiaries on the basis stated therein at the respective dates or for
the respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the
periods involved; the supporting schedules, if any, included or
incorporated by reference in the Preliminary Prospectus or the
Prospectus present fairly in accordance with generally accepted
accounting principles the information required to be stated therein;
and the other financial and statistical information and data set forth
in the Preliminary Prospectus and Prospectus (and any amendment or
supplement thereto) are, in all material respects, accurately presented
and prepared on a basis consistent with such financial statements and
the books and records of the Company.
(r) KPMG LLP (the "ACCOUNTANTS"), who have certified the
financial statements of the Company, whose report is incorporated by
reference in the Prospectus and who have delivered the initial letter
referred to in Section 7(g) hereof, were 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.
(s) 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 assets of the Company or any of its
Significant Subsidiaries is subject which, if determined adversely to
the Company or any of its Significant Subsidiaries, could 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 (a "MATERIAL ADVERSE EFFECT"); 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 Prospectus which is not so disclosed.
(t) No relationship, direct or indirect, exists between
or among the Company or MHOP on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or MHOP
on the other hand, which is required to be set forth in the Prospectus
which is not so set forth.
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(u) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned,
directly or indirectly, or to be owned by such person.
(v) There are no contracts, agreements or other documents
which are required to be set forth in the Prospectus or filed as
exhibits to the Registration Statement by the Securities Act which have
not been set forth in the Prospectus or filed as exhibits to the
Registration Statement.
(w) Since the date as of which information is given in
the Prospectus and except as otherwise disclosed in the Prospectus, the
Company has not (i) issued or granted any securities, including any
sales pursuant to Rule 144A , or Regulation D or S of, the Securities
Act, 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) declared or paid any dividend on any of its capital
stock.
(x) Neither the Company nor any of its Significant
Subsidiaries (i) is in violation of its charter or by-laws or limited
partnership agreement or other constituent document, (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, or (iii) is in violation in any material respect of any law,
ordinance, governmental rule, 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.
(y) Neither the Company nor any of its Significant
Subsidiaries is or, as of the applicable Closing Date after giving
effect to the issuance of the Securities and the application of the net
proceeds therefrom as set forth in the Prospectus, will be an
"investment company" within the meaning of such term under the
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Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "INVESTMENT
COMPANY ACT").
(z) Neither the Company, nor to its knowledge, any of its
Affiliates (as defined in Rule 501(b) of Regulation D, an "AFFILIATE"),
has taken, directly or indirectly, any action designed to cause or
result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price
of the Securities or the Common Stock to facilitate the sale or resale
of such securities as prohibited by Regulation M under the Securities
Act.
(aa) The Company (including American General Hospitality
Corporation as predecessor to the Company for all periods through the
date of the merger of CapStar Hotel Company into American General
Hospitality Corporation but excluding CapStar Hotel Company for any
periods on or prior to the date of such merger (each, a "PREDECESSOR
ENTITY")) was organized and conducted its business and operations for
each of its taxable years ended December 31, 1996, December 31, 1997,
December 31, 1998, December 31, 1999, December 31, 2000, December 31,
2001, and December 31, 2002 in conformity with the requirements for
qualification as a real estate investment trust (a "REIT") under the
Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (collectively, the "INTERNAL
REVENUE CODE"), and commencing with its taxable year ending December
31, 2003, the Company is organized and has conducted its business and
operations in conformity with the requirements for qualification as a
REIT under the Internal Revenue Code and its proposed method of
operation will enable it to continue to meet the requirements for
taxation as a REIT under the Internal Revenue Code.
(bb) The Company, each of its subsidiaries and each
Predecessor Entity has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and
has paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company, any of its subsidiaries or any
Predecessor Entity for which the Company would be liable which has had
(nor does the Company have any knowledge of) any tax deficiency which
would reasonably be expected to have a Material Adverse Effect; the
amounts currently set up as provisions for taxes or otherwise by the
Company and its subsidiaries on their books and records are sufficient
for the payment of all their unpaid federal, foreign, state, county and
local taxes accrued through the dates as of which they speak, and for
which the Company and its subsidiaries may be liable in their own right
or as a transferee of the assets of, or as successor to any other
corporation, association, partnership, joint venture or other entity.
(cc) The Company and each of its subsidiaries have good
and marketable title in fee simple to all real property and good and
marketable title to
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all personal property owned by them, free and clear of all liens,
encumbrances and defects, except such as are set forth in the
Prospectus or as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be
made of such property by the Company and its subsidiaries; and all
assets held under lease by the Company and its subsidiaries are held by
them under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company
and its subsidiaries.
(dd) Except as set forth in the Prospectus, the Company
and each of its subsidiaries carry, or are covered by, insurance in
such amounts and covering such risks as is adequate for the conduct of
their respective businesses and the value of their respective
properties from insurers of recognized financial responsibility and as
is customary for companies engaged in similar businesses in similar
industries. Neither the Company nor any of its subsidiaries (i) has
received notice from any insurer or agent of such insurer that
substantial capital improvements or other material expenditures will
have to be made in order to continue such insurance or (ii) has any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers at a cost that would not
reasonably be expected to have a Material Adverse Effect.
(ee) Each of the Company and its subsidiaries has such
permits, licenses, consents, exemptions, franchises, authorizations and
other approvals (each, an "AUTHORIZATION") of, and has made all filings
with and notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals,
including, without limitation, under any applicable environmental law,
ordinance, rule, regulation, order, judgment, decree or permit, as are
necessary to own, lease, license and operate its respective properties
and to conduct its business, except where the failure to have any such
Authorization or to make any such filing or notice would not reasonably
be expected to have a Material Adverse Effect; each such Authorization
is valid and in full force and effect and each of the Company and its
subsidiaries is in compliance with all the terms and conditions thereof
and with the rules and regulations of the authorities and governing
bodies having jurisdiction with respect thereto; and no event has
occurred (including, without limitation, the receipt of any notice from
any authority or governing body) which allows or, after notice or lapse
of time or both, would allow, revocation, suspension or termination of
any such Authorization or results or, after notice or lapse of time or
both, would result in any other impairment of the rights of the holder
of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company or any of its
subsidiaries, except where such failure to be valid and in full force
and effect or to be in compliance, the occurrence of any such event or
the presence of any such restriction would not reasonably be expected
to have a Material Adverse Effect.
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(ff) Except as set forth in the Prospectus, there has been
no storage, disposal, generation, manufacture, refinement,
transportation, handling or treatment of toxic wastes, medical wastes,
hazardous wastes or hazardous substances by the Company or any of its
subsidiaries (or, to the knowledge of the Company, any Predecessor
Entity for which the Company would be liable) at, upon or from any of
the property now or previously owned or leased by the Company or its
subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require
remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial
action which would not have, or could not reasonably be expected to
have a Material Adverse Effect; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of any
kind onto such property or into the environment surrounding such
property of any toxic wastes, medical wastes, solid wastes, hazardous
wastes or hazardous substances due to or caused by the Company or any
of its subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge, except for any such spill, discharge,
leak, emission, injection, escape, dumping or release which would not
have or would not reasonably be expected to have a Material Adverse
Effect; and the terms "hazardous wastes", "toxic wastes", "hazardous
substances" and "medical wastes" shall have the meanings specified in
any applicable local, state, federal and foreign laws or regulations
with respect to environmental protection.
(gg) The statements set forth in the Prospectus under the
captions "Description of Capital Stock" and "Description of the Notes"
insofar as such statements purport to summarize the provisions of the
documents or agreements referred to therein, matters of law or legal
conclusions or federal statute, laws or regulations, are accurate and
fairly present the information required to be shown.
(hh) All indebtedness of the Company that will be repaid
with the proceeds of the issuance and sale of the Securities was
incurred, and the indebtedness represented by the Securities is being
incurred, for proper purposes and in good faith and the Company was, at
the time of the incurrence of such indebtedness that will be repaid
with the proceeds of the issuance and sale of the Securities, and will
be on the applicable Closing Date (after giving effect to the
application of the proceeds from the issuance of the Securities)
solvent, and had at the time of the incurrence of such indebtedness
that will be repaid with the proceeds of the issuance and sale of the
Securities and will have on the applicable Closing Date (after giving
effect to the application of the proceeds from the issuance of the
Securities) sufficient capital for carrying on its business and was, at
the time of the incurrence of such indebtedness that will be repaid
with the proceeds of the issuance and sale of the Securities, and will
be on the applicable Closing Date (after giving effect to the
application of the proceeds from the issuance of the Securities) able
to pay its debts as they mature.
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(ii) No event has occurred nor has any circumstance arisen
which, had the Securities been issued on such Closing Date, would
constitute a default or any Event of Default under the Indenture as
summarized in the Prospectus.
(jj) The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-14 under
the Exchange Act), which (i) are designed to ensure that material
information relating to the Company, including its consolidated
subsidiaries, is made known to the Company's principal executive
officer and its principal financial officer by others within those
entities, particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared; (ii) have been
evaluated for effectiveness as of a date within 90 days prior to the
filing of the Company's most recent annual or quarterly report filed
with the Commission; and (iii) are effective in all material respects
to perform the functions for which they were established.
(kk) Based on the evaluation of its disclosure controls
and procedures, the Company is not aware of (i) any significant
deficiency in the design or operation of internal controls which could
adversely affect the Company's ability to record, process, summarize
and report financial data or any material weaknesses in internal
controls; or (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in the
Company's internal controls.
(ll) Since the date of the most recent evaluation of such
disclosure controls and procedures, there have been no significant
changes in internal controls or in other factors that could
significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
2. PURCHASE OF THE SECURITIES BY THE UNDERWRITER. On the basis of
the representations and warranties herein contained, and subject to the terms
and conditions herein set forth, the Company agrees to issue and sell the Firm
Securities to the Underwriter and the Underwriter agrees to purchase the Firm
Securities.
In addition, the Company grants to the Underwriter an option to
purchase up to $15,000,000 aggregate principal amount of Option Securities. Such
option is granted for the purpose of covering over-allotments in the sale of
Firm Securities and is exercisable as provided in Section 4 hereof.
The purchase price of both the Firm Securities and any Option
Securities shall be $967.50 per Security.
The Company shall not be obligated to deliver any of the Securities to
be delivered on any applicable Closing Date, except upon payment for all the
Securities to be purchased as hereinafter provided.
13
3. OFFERING OF SECURITIES BY THE UNDERWRITER. Upon release of the
Firm Securities, the Underwriter proposes to offer the Firm Securities for sale
upon the terms and conditions set forth in the Prospectus.
4. DELIVERY OF AND PAYMENT FOR THE SECURITIES. Delivery of and
payment for the Firm Securities shall be made at the offices of Xxxxxxx Xxxxxxx
& Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m.,
New York City time, on the third full business day following the date of this
Agreement or at such other date or place as shall be determined by agreement
between the Underwriter and the Company. This date and time are referred to
herein as the "FIRST CLOSING DATE". On the First Closing Date, the Company shall
deliver or cause to be delivered certificates representing the Firm Securities
to the Underwriter against payment to or upon the order of the Company of the
purchase price by wire transfer in immediately available funds. Upon delivery,
the Firm Securities shall be registered in such names and in such denominations
as the Underwriter shall request in writing not less than two full business days
prior to the First Closing Date. For the purpose of expediting the checking and
packaging of the certificates for the Firm Securities, the Company shall make
the certificates representing the Firm Securities available for inspection by
the Underwriter in New York, New York, not later than 2:00 p.m., New York City
time, on the business day prior to the First Closing Date.
The option granted in Section 2 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Underwriter. Such notice shall
set forth the amount (which shall be an integral multiple of $1,000 principal
amount) of Option Securities as to which the option is being exercised, the
names in which the Option Securities are to be registered, the denominations in
which the Option Securities are to be issued and the date and time, as
determined by the Underwriter, when the Option Securities are to be delivered;
PROVIDED, HOWEVER, that this date and time shall not be earlier than the First
Closing Date nor earlier than the second business day after the date on which
the option shall have been exercised nor later than the fifth business day after
the date on which the option shall have been exercised. The date and time the
Option Securities are delivered are referred to as a "OPTION CLOSING DATE" and
the First Closing Date and any Option Closing Date are sometimes each referred
to as a "CLOSING DATE".
Delivery of and payment for the Option Securities shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the
Underwriter and the Company) at 10:00 a.m., New York City time, on such Option
Closing Date. On such Option Closing Date, the Company shall deliver or cause to
be delivered the certificates representing the Option Securities to the
Underwriter against payment to or upon the order of the Company of the purchase
price by wire transfer in immediately available funds. Upon delivery, the Option
Securities shall be registered in such names and in such denominations as the
Underwriter shall request in the aforesaid written notice. For the purpose of
expediting the checking and packaging of the certificates for the Option
Securities, the Company shall make the certificates representing the Option
Securities available for inspection by the Underwriter in New York, New York,
not later than 2:00 p.m., New York City time, on the business day prior to such
Option Closing Date.
14
Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
the Underwriter hereunder.
5. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Underwriter and to file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than the Commission's close of business on
the second business day following the execution and delivery of this
Agreement; prior to making any amendment or supplement to the
Registration Statement or to the Prospectus other than by filing
documents under the Exchange Act which are incorporated by reference
therein, to furnish a copy thereof to the Underwriter and counsel to
the Underwriter and not to effect any such amendment or supplement to
which the Underwriter 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; prior to
the termination of the offering of Securities as determined by the
Underwriter, not to file any document that would be deemed to be
incorporated by reference in the final Prospectus pursuant to Item 12
of Form S-3 without delivering to the Underwriter a copy of the
document proposed to be so filed, such delivery to be made at least
twenty-four hours prior to such filing, and to consult with the
Underwriter as to any comments which the Underwriter makes in a timely
manner with respect to the document so delivered; to advise the
Underwriter, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Underwriter with copies
thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Securities; to advise the Underwriter, promptly
after it receives notice thereof, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending
or supplementing of the Registration Statement or the Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) To furnish promptly to the Underwriter and to counsel
to the Underwriter, upon the request of either, a signed copy of the
Registration Statement as originally filed with the Commission, and
each amendment thereto filed with the Commission, including all
consents and exhibits filed therewith;
15
(c) To deliver promptly to the Underwriter such number of
the following documents as the Underwriter shall reasonably request:
(i) conformed copies of the Registration Statement as originally filed
with the Commission and each amendment thereto (excluding exhibits),
(ii) each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus and (iii) any documents incorporated by
reference in the Prospectus (excluding exhibits thereto) and, if the
delivery of a prospectus is required at any time after the Effective
Time in connection with the offering or sale of the Securities or any
other securities relating thereto and if at such time any events shall
have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Securities
Act, to notify the Underwriter and, upon their request, to file such
documents and to prepare and furnish without charge to the Underwriter
and to any dealer in securities as many copies as the Underwriter may
from time to time reasonably request of an amended or supplemented
Prospectus which will correct such statement or omission or effect such
compliance;
(d) To file promptly with the Commission any amendment to
the Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the reasonable judgment of the Company or the
reasonable judgment of the Underwriter, be required by the Securities
Act or is requested by the Commission;
(e) As soon as practicable after the Effective Date, to
make generally available to the Company's security holders and to
deliver to the Underwriter an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Securities Act (including, at the option of the Company, Rule
158 of the Securities Act);
(f) Promptly from time to time, to take such action as
the Underwriter may reasonably request to qualify the Securities and
the Conversion Shares for offering and sale under the securities laws
of such jurisdictions as the Underwriter 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 Securities;
(g) For a period of five years following the First
Closing Date, to furnish to the Underwriter copies of all materials
furnished by the Company to its shareholders and all public reports and
all reports and financial statements
16
furnished by the Company to the principal national securities exchange
upon which the Common Stock may be listed pursuant to requirements of
or agreements with such exchange or to the Commission pursuant to the
Exchange Act; PROVIDED, HOWEVER, that the Company shall not be required
to provide the Underwriter with any such reports or similar forms that
have been filed with the Commission by electronic transmission pursuant
to XXXXX;
(h) For a period of 90 days from the date hereof, not to,
directly or indirectly, (1) announce an offering of, or file any
registration statement with the Commission relating to, debt or equity
securities of the Company (other than the offering contemplated by this
Agreement), offer for sale, sell, pledge or otherwise dispose of (or
enter into any transaction or device which is designed to, or could be
expected to, result in the disposition or purchase by any person at any
time in the future of) any debt or equity securities of the Company
(other than the Securities), any securities convertible into or
exchangeable for Common Stock or substantially similar securities
(other than the Securities, the Conversion Shares and Common Stock to
be issued in the ordinary course under the Company's employee benefit
plans, qualified stock option plans or other employee compensation
plans existing on the date hereof or pursuant to currently outstanding
options, warrants or rights) or debt securities of the Company or sell
or grant options, warrants or rights with respect to any shares of
Common Stock or securities convertible into or exchangeable for Common
Stock (other than the grant of options, warrants or rights pursuant to
option plans existing on the date hereof) or debt securities of the
Company or (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock or debt
securities of the Company, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or
other securities, in cash or otherwise, without the prior written
consent of the Underwriter;
(i) Not to take, directly or indirectly, any action which
is designed to stabilize or manipulate, or which constitutes or which
might reasonably be expected to cause or result in stabilization or
manipulation, of the price of any security of the Company in connection
with the offering of the Securities;
(j) To use its best efforts to cause the Securities to be
accepted for clearance and settlement through the facilities of DTC;
(k) To apply the net proceeds from the issuance of the
Securities as set forth under the caption "Use of Proceeds" in the
Prospectus;
17
(l) To take such steps as shall be necessary to ensure
that neither the Company nor any of its subsidiaries shall become an
"investment company" within the meaning of such term under the
Investment Company Act; and
(m) Except as otherwise expressly permitted by its
articles of incorporation or by-laws, to continue to conduct its
operations in a manner that will meet the requirements to qualify as a
REIT under the Internal Revenue Code.
6. EXPENSES. The Company agrees to pay the following expenses,
whether or not the transactions contemplated by this Agreement are consummated
or this Agreement is terminated:
(a) the costs incident to the authorization, issuance,
sale and delivery of the Securities and the Conversion Shares, if
applicable, and any taxes payable in that connection;
(b) the costs incident to the preparation, printing and
filing under the Securities Act of the Registration Statement, any
Preliminary Prospectus, the Prospectus, and any amendments and exhibits
thereto;
(c) the costs of distributing the Registration Statement
as originally filed and each amendment thereto and any post-effective
amendments thereto (including exhibits), any Preliminary Prospectus,
the Prospectus and any amendment or supplement to the Prospectus or any
document incorporated by reference therein, all as provided in this
Agreement;
(d) the costs of distributing the terms of any agreement
relating to the organization of the underwriting syndicate and selling
group to the members thereof, by mail, telex or other means of
communication;
(e) all expenses and fees in connection with the
application for inclusion of the Securities and the Conversion Shares
on the NYSE;
(f) the fees and expenses of qualifying the Securities
and the Conversion Shares under the securities laws of the several
jurisdictions as provided in Section 5(f) and of preparing, printing
and distributing a U.S. Blue Sky memorandum (including related fees and
expenses of counsel to the Underwriter);
(g) all costs and expenses incident to the preparation of
marketing materials used in connection with the offering of the
Securities;
18
(h) all fees and expenses incurred in connection with any
rating of the Securities;
(i) the fees and expenses (including fees and
disbursements of counsel, if applicable) of the Company, the
Accountants, the Trustee and the costs and charges of any registrar,
transfer agent, paying agent or conversion agent under the Indenture;
and
(j) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement.
7. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligations of
the Underwriter hereunder are subject to the accuracy, when made and on the
applicable Closing Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations hereunder
and to each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 5(a), no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied with.
(b) The Underwriter shall not have discovered and
disclosed to the Company prior to or on such Closing Date that the
Registration Statement, the Prospectus or any amendment or supplement
thereto, in the opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel to
the Underwriter, contains an untrue statement of any fact which is
material or omits to state a fact which is material and is required to
be stated therein or is necessary to make the statements therein not
misleading.
(c) All corporate, limited liability company and
partnership proceedings and other legal matters incident to the
authorization, form and validity of the Registration Statement, the
Prospectus, the Transaction Documents, the Securities and the
Conversion Shares and all other legal matters relating to the offering,
issuance and sale, as applicable, of the Securities and the Conversion
Shares and the transactions contemplated hereby and thereby shall be
reasonably satisfactory in all material respects to counsel to the
Underwriter; 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.
19
(d) Each of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
and Xxxxxxx, Baetjer and Xxxxxx, counsel to the Company, shall have
furnished to the Underwriter its written opinion, as counsel to the
Company, addressed to the Underwriter and dated such Closing Date, in
form and substance reasonably satisfactory to the Underwriter, to the
effect set forth in Exhibit A and Exhibit B hereto, respectively, and
to such further effect as the Underwriter may reasonably request.
(e) At the time of execution of this Agreement, the
Underwriter shall have received from the Accountants a letter or
letters, in form and substance satisfactory to the Underwriter,
addressed to the Underwriter and dated the date hereof (i) confirming
that they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission and (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information
is given in the Prospectus, as of a date not more than five days prior
to the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in connection
with registered public offerings.
(f) With respect to the letter of the Accountants
referred to in the preceding paragraph and delivered to the Underwriter
concurrently with the execution of this Agreement (the "INITIAL COMFORT
LETTER"), the Company shall have furnished to the Underwriter a letter
(the "BRING-DOWN COMFORT LETTER") of such accountants, addressed to the
Underwriter and dated such Closing Date (i) confirming that they are
independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given
in the Prospectus, as of a date not more than five days prior to the
date of the bring-down letter), the conclusions and findings of such
firm with respect to the financial information and other matters
covered by the initial letters and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letters.
(g) The Company shall have furnished to the Underwriter a
certificate, dated the applicable Closing Date, of its Chief Executive
Officer and its Chief Financial Officer, in form and substance
reasonably satisfactory to the Underwriter, stating that:
20
(i) to the best of their knowledge and after
reasonable investigation, the representations and warranties
of the Company in Section 1 of this Agreement are true and
correct in all material respects as of such Closing Date; and
the Company has complied with all its agreements and satisfied
all conditions on its part to be performed or satisfied prior
to or on such Closing Date;
(ii) the Prospectus shall have been timely filed
with the Commission in accordance with Section 5(a) of this
Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission as of the applicable
Closing Date; and any request of the Commission for inclusion
of additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with;
(iii) they have carefully examined the
Registration Statement and the Prospectus and, in their
opinion, (x)(A) the Registration Statement, as of the
Effective Date and on the date that any post-effective
amendment to the Registration Statement becomes effective,
conformed in all material respects with the requirements of
the Securities Act, the Trust Indenture Act and the Exchange
Act and did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and (B) the Prospectus, as of its date and as of
the applicable Closing Date, conformed and conforms in all
material respects with the requirements of the Securities Act
and the Exchange Act and did not and does not contain any
untrue statement of a material fact and did not and does not
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and
(y) since the date of the Prospectus, no event has occurred
which should have been set forth in a supplement or amendment
to the Registration Statement or Prospectus; and
(iv) there are no agreements or instruments to
which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound which
contain any financial or other covenant or restriction which,
as of the applicable Closing Date, limits or restricts the
Company's ability to incur the indebtedness to be represented
by the Securities or to comply with the provisions of the
Indenture. Without limiting the generality of the foregoing,
the incurrence of the indebtedness represented by the
Securities on a pro forma basis, will not cause a breach, and
the incurrence of the indebtedness would not be reasonably
expected to cause any such breach in the future, of Article
VII of the Credit Agreement, as amended waived or supplemented
to the applicable Closing Date.
21
(h) The Indenture (in form and substance reasonably
satisfactory to the Underwriter) shall have been duly executed and
delivered by the Company and the Trustee, and the Securities shall have
been duly executed and delivered by the Company and duly authenticated
by the Trustee.
(i) The Underwriter shall have received from each
executive officer and director of the Company listed on Schedule 1 of
Annex A an executed letter contemplated by Section 5(h) hereof.
(j) The Waiver to the Credit Agreement dated as of the
date hereof (the "Waiver"), in form and substance reasonably
satisfactory to the Underwriter, shall have been duly executed and
delivered by the Company, the Administrative Agent and the necessary
lenders named therein.
(k) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements incorporated by reference in the Prospectus (A) 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 Prospectus, or (B) 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, prospects,
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 Prospectus, the effect of which, in any such case
set forth in clause (A) or (B), is, in the judgment of the Underwriter,
so material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Securities
being delivered on the applicable Closing Date on the terms and in the
manner contemplated in the Prospectus and this Agreement.
(l) Subsequent to the execution and delivery of this
Agreement, (i) no downgrading shall have occurred in the rating
accorded the Company's Securities by any "nationally recognized
statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) of the Securities Act and
(ii) no such organization shall have publicly announced or informed the
Company that it has under surveillance or review, with possible
negative implications, its rating of any of the Securities.
(m) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred any of the following: (i)
trading in securities generally on the New York Stock Exchange or the
American Stock Exchange or the NASDAQ or in the over-the-counter
market, or trading in any securities of the Company on
22
any exchange or in the over-the-counter market, shall have been
suspended or the settlement of such trading generally shall have been
materially disrupted 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 state authorities of the United States, (iii) the United
States shall have become engaged in hostilities, there shall have been
a significant 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 domestic or international economic, political
or financial conditions, including without limitation as a result of
terrorist activities, or the effect of international conditions on the
financial markets in the United States shall be such, as to make it, in
the case of clause (iii) or (iv), in the judgment of the Underwriter,
impracticable or inadvisable to proceed with the public offering or
delivery of the Securities being delivered on such Closing Date on the
terms and in the manner contemplated in the Prospectus.
(n) The Underwriter shall have received from Xxxxxxx
Xxxxxxx & Xxxxxxxx LLP, counsel for the Underwriter, such opinion or
opinions, dated such Closing Date, with respect to such matters as the
Underwriter 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.
(o) The Company shall have furnished to the Underwriter
such further information, certificates and documents as the Underwriter
may reasonably request to evidence compliance with the conditions set
forth in this Section 7.
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 to the Underwriter. Each certificate signed by any officer of the
Company and delivered to the Underwriter or counsel to the Underwriter shall be
deemed to be a representation and warranty by the Company to the Underwriter as
to the matters covered thereby.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless the
Underwriter, its directors, officers and employees and each person, if
any, who controls the Underwriter 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 the Securities), to which the Underwriter or any such
23
director, 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 any Preliminary Prospectus, the Registration Statement
or the Prospectus (in each case, excluding any amendment or supplement)
or in each case, any amendment or supplement thereto, (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) filed
in any jurisdiction specifically for the purpose of qualifying any or
all of the Securities under the securities laws of any state or other
jurisdiction (such application, document or information being
hereinafter called a "BLUE SKY APPLICATION"), or (ii) the omission or
alleged omission to state in any Preliminary Prospectus, the
Registration Statement, the Prospectus, or in any amendment or
supplement thereto, in any Blue Sky Application or in any Marketing
Materials, 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 Underwriter
in connection with, or relating in any manner to, the Securities 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 under 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 Underwriter through its gross negligence
or willful misconduct), and shall reimburse the Underwriter and each
director, officer, employee and controlling person promptly upon demand
for any legal or other expenses reasonably incurred by the Underwriter,
director, 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, 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 any
Preliminary Prospectus, the Registration Statement or the Prospectus,
or in any such amendment or supplement, or in any Blue Sky Application
in reliance upon and in conformity with the written information
concerning such Underwriter furnished to the Company by the Underwriter
specifically for inclusion therein, which information consists solely
of the information specified in Section 8(c); PROVIDED, HOWEVER, that
the Company shall not be liable to the Underwriter under the indemnity
agreement in this Section 8 to the extent, but only to the extent, that
(W) such loss, claim, damage, or liability of the Underwriter results
from an untrue statement of a material fact or an omission of a
material fact contained in the Preliminary Prospectus, which untrue
statement or omission was completely corrected in the Prospectus dated
the applicable Closing Date (a "FINAL PROSPECTUS") and (X) the Company
sustains the burden of proving that the Underwriter sold Securities to
the person alleging such loss, claim, liability, expense or damage
without sending or giving,
24
at or prior to written confirmation of such sale, a copy of a Final
Prospectus and (Y) the Company had previously furnished sufficient
quantities of a Final Prospectus to the Underwriter within a reasonable
amount of time prior to such sale or such confirmation, and (Z) the
Underwriter failed to deliver a Final Prospectus, if required by law to
have so delivered it, and such delivery would have been a complete
defense against the person asserting such loss, claim, liability,
expense or damage. The foregoing indemnity agreement is in addition to
any liability which the Company may otherwise have to the Underwriter
or to any director, officer, employee or controlling person of the
Underwriter.
(b) The Underwriter shall indemnify and hold harmless the
Company, its officers and employees, each of its directors, 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 or any such director, officer 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 in any Preliminary Prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto or in any Blue
Sky Application or (ii) the omission or alleged omission to state in
any Preliminary Prospectus, the Registration Statement or the
Prospectus, 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 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 by the
Underwriter specifically for inclusion therein, which information is
described in Section 8(e), and shall reimburse the Company and any such
director, officer or controlling person for any legal or other expenses
reasonably incurred by the Company or any such director, officer 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. The foregoing indemnity agreement
is in addition to any liability which the Underwriter may otherwise
have to the Company or any such director, officer, employee or
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
which it may have to an indemnified party otherwise
25
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
Underwriter shall have the right to employ counsel to represent jointly
the Underwriter and its respective directors, 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 Underwriter
against the Company under this Section 8 if, in the reasonable judgment
of the Underwriter, it is advisable for the Underwriter, directors,
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 Company. 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. 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 the written consent of the indemnifying party 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 or liability by reason of
such settlement or judgment.
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable 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
26
proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriter on the
other from the offering of the Securities 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 Company on the one hand and the Underwriter 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 Underwriter 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
Securities purchased under this Agreement (before deducting expenses)
received by the Company, on the one hand, and the total underwriting
discounts and commissions received by the Underwriter with respect to
the Securities purchased under this Agreement, on the other hand, bear
to the total gross proceeds from the offering of the Securities under
this Agreement, as set forth in the table on the cover page of the
Prospectus. 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 or the Underwriter, 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 Underwriter 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 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 Underwriter shall not be
required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any
damages which the Underwriter has otherwise paid or becomes 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 Underwriter confirms, and the Company
acknowledges, that the statements in the tenth paragraph on the cover
page of the Prospectus and the second paragraph under the caption
"Underwriting" in the Prospectus are correct and constitute the only
information concerning the Underwriter furnished in writing to the
Company by the Underwriter specifically for inclusion in the
Registration Statement and the Prospectus.
9. TERMINATION. The obligations of the Underwriter hereunder may
be terminated by the Underwriter by notice given to and received by the Company
prior to delivery of and payment for the Securities if, prior to that time, any
of the events described in Sections
27
7(l), 7(m) or 7(n) shall have occurred or if the Underwriter shall decline to
purchase the Firm Securities for any reason permitted under this Agreement.
10. REIMBURSEMENT OF UNDERWRITER'S EXPENSES. If the sale of
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriter 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 Underwriter, the Company shall reimburse Underwriter 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 Securities, and upon demand the Company shall pay
the full amount thereof to the Underwriter.
11. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriter, shall be delivered or sent by
mail, telex or facsimile transmission to Xxxxxx Brothers Inc., 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Desk
(Fax: (000) 000-0000), with a copy, in the case of any notice pursuant
to Section 8(c), to the Director of Litigation, Office of the General
Counsel, Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000; and
with a copy to Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: D. Xxxxx Xxxxxxx, Esq. (Fax: (212)
000-0000; Telephone (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 Registration Statement, Attention: Chief Financial Officer
(Fax: (000) 000-0000; Telephone: (000) 000-0000, after July 7, 2003
(Fax: (000) 000-0000; Telephone: (000) 000-0000);
with a copy to Xxxx Xxxxx, Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, Attention: Xxxxxxx
X. Xxxxxxxx, Esq. (Fax: (000) 000-0000; Telephone: (000) 000-0000);
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to Xxxxxx Brothers
Inc., which address will be supplied to any other party hereto by Xxxxxx
Brothers Inc. upon request. 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 Underwriter, 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
28
the Company contained in this Agreement shall also be deemed to be for the
benefit of the directors, officers and employees of the Underwriter and the
person or persons, if any, who control the Underwriter within the meaning of
Section 15 of the Securities Act and (y) the indemnity agreement of the
Underwriter 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.
13. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriter 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 Securities and
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or 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. CONSENT TO JURISDICTION; FORUM SELECTION; APPOINTMENT OF AGENT
FOR SERVICE OF PROCESS; WAIVER OF JURY TRIAL.
(a) The Underwriter and the Company hereby submits to the
jurisdiction of the courts of the State of New York and the courts of
the United States of America located in the State of New York over any
suit, action or proceeding with respect to this Agreement or the
transactions contemplated hereby.
(b) Any suit, action or proceeding with respect to this
Agreement or the transactions contemplated hereby may be brought only
in the courts of the State of New York or the courts of the United
States of America located in the State of New York, located in the
Borough of Manhattan, City of New York, State of New York. Each of the
parties hereto waives any objection that it may have to the venue of
such suit, action or proceeding in any such court or that such suit,
action or proceeding in such court was brought in an inconvenient court
and agrees not to plead or claim the same.
(c) The Company hereby irrevocably appoints National
Corporate Research, Ltd. ("NCR"), 000 Xxxx 00xx Xxxxxx, Xxxxx 000, Xxx
Xxxx, Xxx Xxxx, 00000, as its authorized agent in the State of New York
upon which process may be served in any suit action, suit or
proceeding, and agrees that service of process upon such agent, and
written notice of said service to NCR by the person serving the same to
the address provided in Section 11 shall be deemed in every respect
effective service of process upon the Company in any
29
such action, suit or proceeding. The Company further agrees to take any
and all action as may be necessary to maintain such designation and
appointment of such agent in full force and effect for a period of 7
years from the date of this Agreement.
(d) Any right to trial by jury with respect to any
lawsuit, claim, action or other proceeding arising out of or relating
to this Agreement or the services to be rendered by the Underwriter
hereunder is expressly and irrevocably waived.
17. 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.
18. 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.
30
If the foregoing correctly sets forth the agreement between the Company
and the Underwriter, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
MERISTAR HOSPITALITY CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
Accepted:
XXXXXX BROTHERS INC.
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
AUTHORIZED REPRESENTATIVE
ANNEX A
[LOCK-UP LETTER AGREEMENT]
XXXXXX BROTHERS INC.
000 XXXXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
Dear Ladies and Gentlemen:
The undersigned understands that you and certain other firms propose to
enter into an underwriting agreement (the "UNDERWRITING AGREEMENT") providing
for the purchase by you of 9.50% Convertible Subordinated Notes due April 1,
2010 (the "SECURITIES") of MeriStar Hospitality Corporation, a Maryland
corporation (the "COMPANY"), which are convertible into fully paid,
nonassessable shares of common stock of the Company, par value $ 0.01 per share
(the "COMMON STOCK"), and that the Underwriter proposes to reoffer the
Securities to the public pursuant to the Underwriting Agreement (the
"OFFERING").
In consideration of the execution of the Underwriting Agreement by the
Underwriter, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Xxxxxx
Brothers Inc., the undersigned will not, directly or indirectly, (1) offer for
sale, sell, pledge or otherwise dispose of (or enter into any transaction or
device which is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any debt securities of the Company
(other than the Securities), any shares of Common Stock or any securities
convertible into or exchangeable for Common Stock or substantially similar
securities (other than the shares of Common Stock into which the Securities are
convertible and shares issued in the ordinary course pursuant to employee
benefit plans, qualified stock option plans or other employee compensation plans
existing on the date hereof or pursuant to currently outstanding options,
warrants or rights) or debt securities of the Company or sell or grant options,
warrants or rights with respect to any shares of Common Stock, securities
convertible into or exchangeable for Common Stock or substantially similar
securities (other than the grant of options, warrants or rights pursuant to
option plans existing on the date hereof) or debt securities of the Company or
(2) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of ownership
of such shares of Common Stock or debt securities of the Company, whether any
such transaction set forth in clause (1) or (2) above is to be settled by
delivery of Common Stock or other securities, in cash or otherwise, for a period
of 90 days after the date of the final prospectus relating to the Offering,
PROVIDED that, the restrictions set forth above shall not apply to (i) sales of
shares of Common Stock made to satisfy loans incurred to finance the purchase of
such shares of Common Stock, if that satisfaction is required by the lender
pursuant to margin regulations
and (ii) transfers by the undersigned for bona fide charitable contributions,
gifts and estate planning, so long as the recipient or donee is subject to a
similar restricted transfer period.
In furtherance of the foregoing, the Company and its transfer agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriter will
proceed with the Offering in reliance on this Lock-Up Letter Agreement. Whether
or not the Offering actually occurs depends on a number of factors, including
market conditions. Any Offering will only be made pursuant to an Underwriting
Agreement, the terms of which are subject to negotiation between the Company and
the Underwriter. In addition, it is understood that, if the Company notifies you
that it does not intend to proceed with the Offering, if the Underwriting
Agreement does not become effective or if the Underwriting Agreement (other than
the provisions thereof which survive termination) shall terminate or be
terminated prior to payment for and delivery of the Securities, the undersigned
will be released from our obligations under this Lock-Up Letter Agreement.
This Agreement shall be governed by, and construed in accordance with,
the laws of New York.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
[NAME]
By: _______________________________________
Name:
Dated: _______________
A-2
Schedule 1
Executive Officers and Directors
EXECUTIVE OFFICERS
------------------
Xxxx X. Xxxxxxxx
Xxxxx X. Xxxxx
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxxxx
Xxxxxxx X. Xxxxxxx
A-1
EXHIBIT A
1. The Registration Statement was declared effective under the
Securities Act and the Base Indenture was qualified under the Trust
Indenture Act as of [specify the date and time], the Prospectus was
filed with the Commission pursuant to [specify the subparagraph of Rule
424(b)] of the Securities Act on [specify the date]; and no stop order
suspending the effectiveness of the Registration Statement has been
issued and, to our knowledge, no proceeding for that purpose is pending
or threatened by the Commission.
2. All of the issued partnership interests of MHOP have been duly
and validly authorized and issued (except for partnership interests of
MHOP owned by third parties) is owned directly or indirectly by the
Company, to our knowledge, free and clear of all liens, encumbrances,
equities or claims, other than liens under the Credit Agreement.
3. Except as set forth in the Prospectus, there are no preemptive
or other rights to subscribe for or to purchase, nor any restriction
upon voting or transfer of, any Securities or Conversion Shares
pursuant to any agreement or other instrument known to such counsel to
which the Company is a party.
4. To the best of our knowledge, based solely on a review of our
internal litigation docket, and other than as set forth in the
Prospectus, 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 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 (a "Material Adverse Effect"); and, to
the best of our knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
5. The Registration Statement and the Prospectus as of their
respective effective or issue times, appear on their face to be
appropriately responsive in all material respects to the requirements
of the Act and the rules and regulations of the Commission under the
Act (the "Rules and Regulations"), except for the financial statements,
financial statement schedules and other financial data included or
incorporated by reference in or omitted from either of them and the
Form T-1, as to which such counsel need not express any opinion; and
each document filed under the Exchange Act, and incorporated by
reference in the Registration Statement and Prospectus (except for
financial statements, financial statement schedules and other financial
data included in either of them, as to which such counsel need not
express any opinion) appear on their face to be appropriately
responsive in all material respects when so filed to the requirements
of the Exchange Act and the rules and regulations under the Exchange
Act.
A-1
6. To the best of our knowledge, there are no contracts or other
documents which are required to be described in the Prospectus or filed
as exhibits to the Registration Statement by the Securities Act which
have not been so described or filed as exhibits to the Registration
Statement.
7. Assuming due authorization, execution and delivery of the
Indenture by the Trustee, the Indenture constitutes a valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforceability thereof 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).
8. When executed, issued and authenticated in accordance with
terms of the Indenture and delivered to and paid for by the Underwriter
in accordance with this Agreement, the Securities will constitute valid
and legally binding obligations of the Company entitled to the benefits
of the Indenture, and enforceable against the Company in accordance
with their terms, except as the 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).
9. The execution, delivery and performance by the Company of the
Transaction Documents, the issuance of the Securities and the
Conversion Shares, if at all, the compliance by the Company with all
the provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not (A) 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, lease 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 likely to have a Material Adverse Effect or
(B) result in any violation of the provisions of the charter or by-laws
or any limited partnership agreement or other constituent document of
the Company or any of its Subsidiaries that are organized in the State
of Delaware 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
Revised Uniform Limited Partnership Act, the Delaware General
Corporation Law or the Delaware Limited Liability Company Act having
jurisdiction over the Company or any of its subsidiaries or any of
their properties or assets.
10. No consent, approval, authorization or order of, or filing or
registration with, any Governmental Authority is required for the
execution, delivery and
A-2
performance of this Agreement or any of the other documents to be
entered into in connection with the issuance of the Securities and the
Conversion Shares by the Company and the consummation of the
transactions contemplated hereby and thereby, except for (A) the
registration of the Securities and the Conversion Shares under the
Securities Act, (B) 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 Securities by the Underwriter and (C)
such consents, approvals, authorizations, orders, filings or
registrations as have been obtained or made. For purposes of this
opinion, the term "Governmental Authority" means any legislative
judicial, administrative or regulatory body of the State of New York or
the United States of America.
11. Neither the Company nor any of its subsidiaries is required to
be registered as an "investment company" as such term is defined in the
Investment Company Act.
12. The statements made in the Prospectus under the captions
"Description of Debt Securities of MeriStar," "Description of Common
Stock of MeriStar," "Description of the Notes," the statements made
under the caption "Certain Relationships and Related Transactions" in
the Company's latest proxy statement and the statements made under the
caption "Business-Property-Management Agreements with MeriStar Hotels
and Resorts" in the Company's annual report on Form 10-K for the year
ended December 31, 2002, insofar as they purport to constitute
summaries of the Indenture, the Securities, the terms of the Common
Stock and the Conversion Shares and legal matters, documents or
proceedings referred to therein, are accurate in all material respects.
13. The statements made in the Prospectus under the caption
"Certain United States Federal Income Tax Considerations," insofar as
they purport to constitute summaries of matters of United States
federal tax law and regulations or legal conclusions with respect
thereto, constitute accurate summaries of the matters described therein
in all material respects.
In rendering such opinion, such counsel may 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 General Corporation Law of the State of
Delaware. Such opinion shall also be to the effect that such counsel has
participated in the preparation of the Registration Statement and the Prospectus
and has 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 Registration Statement and the Prospectus
and related matters were discussed and are familiar with the documents
incorporated by reference therein and, although the limitations inherent in the
independent verification of factual matters and in the role of outside counsel
are such that such counsel does not assume responsibility for, the accuracy,
completeness or fairness of the statements contained in either of them (other
than as explicitly stated in paragraphs 12 and 13 above), based upon such
participation, no facts have come to such counsel's attention that led such
counsel to believe that (a) the Registration Statement or any
A-3
amendment (except for the financial statements, financial statement schedules
and other financial data included or incorporated by reference in or omitted
from those documents and the Form T-1, as to which such counsel expresses no
such belief), at the time it became effective, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or (b) the
Prospectus or any amendment or supplement (except for the financial statements,
financial statement schedules and other financial data included or incorporated
by reference in or omitted from those documents, as to which such counsel
expresses no such belief), at the time the Prospectus was issued or on the date
of this letter, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
A-4
EXHIBIT B
1. The Company has been duly organized and is validly existing
under the laws of the State of Maryland and is in good standing with the State
Department of Assessments and Taxation of Maryland. The Company has all
corporate power to own, lease and operate its current properties and to conduct
its business substantially as described in the 10-K under the captions "The
Company" and "Business" and as described in the Prospectus.
2. Meristar Sub 6M Company ("MSM") is a general partnership duly
formed and validly existing under the laws of the State of Maryland. HCC has
partnership power to own, lease and operate its current properties and to
conduct its business substantially as now conducted.
3. The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of 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 Prospectus.
4. Each of the Transaction Documents has been duly authorized,
executed and, so far as is known to us, delivered by the Company.
5. The Securities have been duly authorized by all necessary
corporate action on the part of the Company and are free of preemptive or other
rights to subscribe for or to purchase, nor any restriction upon voting or
transfer of, any Securities pursuant to the Company's charter or by-laws.
6. The Conversion Shares have been duly authorized and validly
reserved for issuance upon conversion of the Securities and are free of
preemptive rights or other rights to subscribe for or to purchase any shares of
Common Stock; and the Conversion Shares, when so issued and delivered upon such
conversion in accordance with the terms of the Indenture, will be duly and
validly issued, fully paid and nonassessable.
7. The statements made in the Prospectus under the caption "Risk
Factors--Potential anti-takeover effect of provisions of Maryland law and our
charter and bylaws", insofar as they purport to constitute summaries of matters
of Maryland law and regulations or legal conclusions with respect thereto,
constitute accurate summaries of the matters described therein in all material
respects.
8. Neither the execution, delivery and performance of the
Transaction Documents nor the issuance of the Securities and the Conversion
Shares if at all, nor the compliance by the Company with all of the provisions
of the Transaction Documents nor the consummation of the transactions
contemplated thereby will result in any violation of (i) the provisions of the
Charter or the Bylaws, the partnership agreement of HCC or any Maryland statute
which in our experience is normally applicable both to general business
corporations which are not involved in regulated activities and to transactions
of the type contemplated by the Transaction Documents or (ii) so far as is known
to us, any order, rule or regulation of any court, governmental agency or body
established pursuant to the Maryland General Corporation Law
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having jurisdiction over the Company or any of its properties or assets. 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 the Transaction Documents by the Company and the
consummation of the transactions contemplated thereby.
In rendering such opinion, such counsel may state that the
foregoing opinion is limited to the substantive laws of the State of Maryland
and that such counsel does not express any opinion herein concerning any other
law. Such counsel expresses no opinion as to compliance with federal or state
securities laws, including the securities laws of the State of Maryland, or the
real estate syndication laws of the State of Maryland or as to federal or state
laws regarding fraudulent transfers. To the extent that any matter as to which
such counsel's opinion is expressed herein would be governed by any other
jurisdiction (other than the State of Maryland), such counsel does not express
any opinion on such matter. The opinion expressed herein is subject to the
effect of judicial decisions which may permit the introduction of parol evidence
to modify the terms or the interpretation of agreements.
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