Exhibit 10.11
CAPSTAR HOTEL COMPANY
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(Debt Securities)
September 22, 1997
From time to time, CapStar Hotel Company, a Delaware corporation (the
"Company"), may enter into one or more underwriting agreements that provide for
the sale of designated securities to the several underwriters named therein.
The standard provisions set forth herein may be incorporated by reference in any
such underwriting agreement (an "Underwriting Agreement"). The Underwriting
Agreement, including the provisions incorporated therein by reference, is herein
sometimes referred to as this Agreement. Unless otherwise defined herein, terms
defined in the Underwriting Agreement are used herein as therein defined.
At or prior to August 23, 1996, the Company completed a series of
transactions described under the heading "The Formation Transactions" in that
certain prospectus dated August 20, 1996, relating to the initial public
offering of 9,250,000 shares of Common Stock of the Company (the "IPO
Prospectus"). As part of these transactions, the Company and CapStar LP
Corporation ("CapStar Sub") became the sole partners of CapStar Management
Company, L.P., as governed by an amended and restated Agreement of Limited
Partnership, as amended ("CapStar Management"), and CapStar Management was
restructured to own, directly or indirectly, all of the properties and other
assets previously owned, directly or indirectly, by EquiStar Hotel Investors,
L.P. and CapStar Management Company, L.P. (as constituted as of August 20, 1996,
"Predecessor CapStar Management"), and their respective subsidiaries, including
owned hotel properties or interests therein and management agreements with
hotels. As used herein the term "Formation Transactions" shall mean the
occurrence of all the events described in the IPO Prospectus under the heading
"The Formation Transactions," the execution of acquisition agreements for the
Additional Hotels (as defined in the IPO Prospectus) and the other transactions
related thereto, and the term "Predecessor Entities" shall mean the subsidiaries
of EquiStar Hotel Investors, L.P. together with CapStar Management and its
subsidiaries for all periods prior to the consummation of the Formation
Transactions. Subsequent to consummation of the Formation Transactions, CapStar
Management was restructured such that all of the Company's assets are currently
held indirectly by and operated through CapStar Management and CapStar
Management II, L.P. (CapStar Management II" and, together with CapStar
Management, the "Operating Partnerships"), the Company's subsidiary operating
partnerships.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY AND THE
OPERATING PARTNERSHIPS. The Company and the Operating Partnerships, jointly and
severally, represent, warrant and agree that:
(a) A registration statement on Form S-3 (333-34253), and amendments
thereto, with respect to the Offered Securities has (i) been prepared
by the
Company in conformity with the requirements of the United States
Securities Act of 1933 (the "Securities Act") and the rules and
regulations (the "Rules and Regulations") of the United States
Securities and Exchange Commission (the "Commission") thereunder, (ii)
been filed with the Commission under the Securities Act and (iii)
become effective under the Securities Act. Copies of such
registration statement and the amendments thereto have been delivered
by the Company to you as the representatives (the "Representatives")
of the Underwriters. As used in this Agreement, "Effective Time"
means the date and the time as of which such registration statement,
or the most recent post-effective amendment thereto, if any, was
declared effective by the Commission; "Effective Date" means the date
of the Effective Time; "Preliminary Prospectus" means each prospectus
included in such registration statement, or amendments thereof, before
it became effective under the Securities Act and any prospectus filed
with the Commission by the Company with the consent of the
Representatives pursuant to Rule 424(a) of the Rules and Regulations;
"Registration Statement" means such registration statement, as amended
at the Effective Time, including any documents incorporated by
reference therein at such time and all information contained in the
final prospectus filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations in accordance with Section 6 hereof and
deemed to be a part of the registration statement as of the Effective
Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; "Base Prospectus" means the prospectus included in the
Registration Statement; "Prospectus Supplement" means the prospectus
supplement filed with, transmitted for filing to, or promptly
hereafter filed with or transmitted for filing to, the Commission,
specifically relating to the Offered Securities; and "Prospectus"
means such final prospectus, consisting of the Base Prospectus and
together with the Prospectus Supplement, as first filed with the
Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the
Rules and Regulations. Reference made herein to any Preliminary
Prospectus 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
Preliminary Prospectus or the Prospectus, as the case may be, and any
reference to any amendment or supplement to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any document
filed under the United States Securities Exchange Act of 1934 (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
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. Any
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registration statement (including any amendment or supplement thereto
or information which is deemed part thereof) filed by the Company to
register additional shares of Common Stock of the Company under Rule
462(b) of the Securities Act ("Rule 462(b) Registration Statement")
shall be deemed a part of the Registration Statement. Any prospectus
(including any amendment or supplement thereto or information which is
deemed to part thereof) included in a Rule 462(b) Registration
Statement and any term sheet as contemplated by Rule 434 of the Rules
and Regulations (a "Term Sheet") shall be deemed to be part of the
Prospectus. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to
the requirements of the Securities Act and the Rules and Regulations
and do not and will not, as of the applicable effective date (as to
the Registration Statement and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided that
no representation or warranty is made as to (i) 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 through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein or (ii) to that part of
the Registration Statement that constitutes the Statement of
Eligibility (Form T-1) under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), of the Trustee.
(c) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements the
Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
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; and any further documents so filed
and incorporated by reference in the Prospectus, when such documents
become effective or are filed with Commission, as the case may be,
will conform in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state
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a material fact required to be stated therein or necessary to make the
statements therein not misleading.
(d) The Company and each of its subsidiaries (as defined in Section 15)
have been duly organized and are validly existing as corporations,
general or limited partnerships or limited liability companies, as the
case may be, in good standing under the laws of their respective
jurisdictions of organization, are duly qualified to do business and
are in good standing as foreign corporations, limited partnerships or
limited liability companies, as the case may be, in each jurisdiction
in which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification,
and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are
engaged.
(e) 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 any shares of Common Stock and any
Debt Securities (other than the Offered Securities to be offered and
sold by the Company hereunder) that are outstanding or will be issued
on or prior to the First Delivery Date were or will be offered and
sold in compliance with all applicable laws (including, without
limitation, federal and state securities laws); and all of the issued
shares of capital stock, partnership interests or limited liability
company membership interests, as the case may be, of each subsidiary
of the Company have been duly and validly authorized and issued and
(except for partnership interests of general partners and except to
the extent the limited liability company agreements governing the
respective limited liability companies provide otherwise) are fully
paid and non-assessable and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims
except for liens in favor of the lenders under the Company's senior
secured credit facility (the "1997 Credit Facility") with Xxxxxx
Brothers Holdings, Inc., BankBoston, N.A., Bankers Trust Company and
Xxxxx Fargo Bank, N.A., as agents (the "Banks") to secure
indebtedness.
(f) All of the shares of the Company's Common Stock, par value $.01 per
share (the "Common Stock"), issuable upon conversion of the Offered
Securities have been duly and validly authorized and reserved for
issuance upon such conversion and, when issued and delivered in
accordance with the terms of the Indenture, will be duly and validly
issued fully paid and non-assessable; and the Offered Securities and
the Common Stock issued upon conversion of the Offered Securities will
conform to the description thereof contained in the Prospectus.
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(g) The partnership interests of the Operating Partnerships ("Units") have
been duly authorized for issuance by the respective Operating
Partnerships, are validly issued and fully paid, and, except as
otherwise described in the Prospectus (or the materials incorporated
by reference therein), are the only Units outstanding.
(h) This Agreement has been duly authorized, executed and delivered by the
Company and the Operating Partnerships.
(i) The Indenture pursuant to which the Offered Securities are to be
issued has been duly qualified under the Trust Indenture Act and has
been duly authorized, executed and delivered by the Company and is a
valid and binding agreement of the Company, enforceable in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally or the effect of general principles of equity, including the
possible unavailability of specific performance or injunctive relief,
whether considered in a proceeding in equity or at law.
(j) The Offered Securities have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Underwriters in accordance with
the terms of this Agreement, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company
enforceable in accordance with their terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws relating to or affecting creditors' rights generally or
the effect of general principals of equity, including the possible
unavailability of specific performance or injunctive relief, whether
considered in a proceeding in equity or at law.
(k) The execution, delivery and performance of this Agreement, the
Indenture and the Offered Securities by the Company and the Operating
Partnerships and the consummation of the transactions contemplated
hereby, and thereby, will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its
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, nor will such actions
result in any violation of the provisions of the charter, by-laws,
partnership agreement or operating agreement of the Company, any of
its subsidiaries or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties or
assets; and except for the registration of the Offered Securities
under the Securities
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Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and applicable state securities
laws in connection with the purchase and distribution of the Offered
Securities by the Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any such court or
governmental agency or body or any other person is required for the
execution, delivery and performance of this Agreement, the Indenture
or the Offered Securities by the Company or the Operating
Partnerships, the consummation of the transactions contemplated hereby
and thereby.
(l) Except as set forth in the Prospectus, there are no preemptive or
other rights to subscribe for or to purchase, nor any restriction upon
the voting or transfer of, any unissued shares of the Offered
Securities to be issued and sold by the Company to the Underwriters
hereunder pursuant to the Company's charter or by-laws or any
agreement or other instrument.
(m) Except as set forth in the Prospectus, there will be no preemptive or
other rights to subscribe for or to purchase, nor any restriction upon
the voting of, any of the partnership interests in the Operating
Partnerships pursuant to the Operating Partnerships' respective
Agreements of Limited Partnership, as restated and amended (as
applicable), or any agreement or other instrument to which the Company
is a party.
(n) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person
granting such person the right (other than rights which have been
waived or satisfied) to require the Company to file a registration
statement under the Securities Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Securities Act.
(o) Except as described in the Prospectus, the Company has not sold or
issued any shares of Common Stock during the six-month period
preceding the date of the Prospectus, including any sales pursuant to
Rule 144A under, or Regulations D or S of, the Securities Act, other
than shares issued pursuant to employee benefit plans, qualified stock
options plans or other employee compensation plans or pursuant to
outstanding options, rights or warrants.
(p) None of the Company or any of its subsidiaries has sustained, since
the date of the latest audited financial statements included in the
Prospectus, any material loss or interference with its business from
fire, explosion,
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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, other than as set forth or contemplated in the
Prospectus, (i) there has been no material adverse change in the
financial condition, results of operation or business of the Company,
the Operating Partnerships or any subsidiary of the Company, whether
or not arising in the ordinary course of business, (ii) no material
casualty loss or material condemnation or other material adverse event
with respect to any Property has occurred, (iii) there have been no
transactions or acquisition agreements entered into by the Company,
the Operating Partnerships or any subsidiary of the Company other than
those in the ordinary course of business, which are material with
respect to such entity, (iv) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock or by the Operating Partnerships with
respect to its partnership interests and (v) there has been no change
in the capital stock of the Company or the partnership interests of
the Operating Partnerships, or any increase in the indebtedness of the
Company, the Operating Partnerships or any subsidiary.
(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 and results of operations of the entities
purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved, except as otherwise stated herein.
(r) KPMG Peat Marwick LLP, who have certified certain financial statements
of the Company and the Predecessor Entities, whose reports appear in
the Prospectus or is incorporated by reference therein and who have
delivered the initial letter referred to in Section 7(g) hereof, are
independent public accountants as required by the Securities Act and
the Rules and Regulations; and Wertheim & Company, King Xxxxxxx &
Xxxxxxx P.C., Coopers & Xxxxxxx L.L.P., Xxxx Frankfort Xxxxx & Xxxx,
P.C., Pinksen, Xxxxxxxx & Company and Xxxxxxx Xxxx Xxxxxxx PC, each of
whose report appears in the Prospectus or is incorporated by reference
therein, were independent accountants as required by the Securities
Act and the Rules and Regulations during the periods covered by the
financial statements on which they reported contained or incorporated
in the Prospectus.
(s) With respect to Owned Hotels (as defined in the Prospectus), other
than the Owned Hotels in which the Company has acquired less than all
of the ownership interest (the "Joint Venture Properties"), the
Company and its
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subsidiaries have or will have on the First Delivery Date good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as
are described in the Prospectus or such 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; with respect to the Joint Venture Properties, the
Company and its subsidiaries that currently own interests in the Joint
Venture Properties have or will have on the First Delivery Date good
and marketable title to such ownership interests and the respective
entities owning the Joint Venture Properties have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property owned by them, in each case free and clear of
all liens, encumbrances and defects except such as are described in
the Prospectus or such 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 real property and buildings held under lease by
the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Prospectus or 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. There shall be
issued and outstanding with respect to each of the Owned Hotels an
ALTA form of owner's title insurance policy (or local equivalent with
respect to those Owned Hotels located in jurisdictions where an ALTA
form of owner's title insurance policy is not available) insuring the
fee simple estate of the applicable subsidiary of the Company in the
Owned Hotel owned by such subsidiary in an amount at least equal to
the acquisition price of such Owned Hotel and each such title
insurance policy will continue to be in full force and effect
immediately following the consummation of the Offering.
(t) 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 and as is customary for companies engaged in
similar businesses in similar industries.
(u) Each of the Company and its subsidiaries possesses such certificates,
authorizations or permits issued by the appropriate state, federal or
foreign regulatory agencies or bodies necessary to conduct the
business now operated by them, except where the failure to possess
such certificates, authorizations or permits would not have a material
adverse effect on the consolidated financial position, stockholders'
equity, results of operations,
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business or prospects of the Company and its subsidiaries (a "Material
Adverse Effect"), and none of the Company or any of its subsidiaries
has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling, or finding, would have a Material Adverse Effect.
(v) The Company and/or each of its subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service xxxx
registrations, franchises, copyrights and licenses necessary for the
conduct of their respective businesses and have no reason to believe
that the conduct of their respective businesses will conflict with,
and have not received any notice of any claim of conflict with, any
such rights of others.
(w) 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, any of its subsidiaries or any Predecessor
Entity is the subject which could reasonably be expected to have 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.
(x) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
(y) 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 or by the Rules and Regulations which
have not been described in the Prospectus or filed as exhibits to the
Registration Statement.
(z) No relationship, direct or indirect, exists between or among the
Company, the Operating Partnerships, any subsidiary of the Company, on
the one hand, and the directors, officers, stockholders of the
Company, or customers or suppliers of the Company, or customers or
suppliers of the Operating Partnerships, on the other hand, which is
required to be described in the Prospectus which is not so described.
(aa) There is (i) no material unfair labor practice complaint pending
against the Company, its subsidiaries or any Predecessor Entity nor,
to the best knowledge of the Company, threatened against any of them
before the National Labor Relations Board or any state or local labor
relations board, and no significant grievance or significant
arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Company or its
subsidiaries or, to the best knowledge of the Company,
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threatened against any of them, (ii) no material strike, labor
dispute, slowdown or stoppage pending against the Company or its
subsidiaries nor, to the best knowledge of the Company, threatened
against the Company or its subsidiaries which might be expected to
have a Material Adverse Effect.
(ab) None of the Company or any subsidiary has violated any safety or
similar law applicable to its business nor any federal, state or local
law relating to discrimination in the hiring, promotion or pay of
employees nor any applicable federal or state wages and hours laws
which in each case might result in a Material Adverse Effect.
(ac) The Company and each of its subsidiaries are in compliance in all
material respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) for which the Company or any
of its subsidiaries would have any liability; the Company and its
subsidiaries have not incurred and do not expect to incur liability
under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of
the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code"); and
each "pension plan" for which the Company or any of its subsidiaries
would have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects
and nothing has occurred, whether by action or by failure to act,
which would cause the loss of such qualification.
(ad) The Company and each of its subsidiaries 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 which has had (nor does the
Company have any knowledge of) any tax deficiency which, if determined
adversely to the Company, any of its subsidiaries or any Predecessor
Entity, might 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.
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(ae) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in
the Prospectus, the Company and its subsidiaries have not (i) issued
or granted any securities, (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 its capital stock.
(af) The Company and its subsidiaries (i) make and keep accurate books and
records and (ii) maintain internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance
with management's authorization, (B) transactions are recorded as
necessary to permit preparation of their financial statements and to
maintain accountability for their assets, (C) access to their books,
records and accounts is permitted only in accordance with management's
authorization and (D) the reported accountability for their assets is
compared with existing assets at reasonable intervals.
(ag) None of the Company or any of its subsidiaries is, or will be, (i) in
violation of its charter, by-laws, partnership agreement or operating
agreement, (ii) in default in any material respect, and no event has
or will have 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 or (iii) in violation
of any law, ordinance, governmental rule, regulation or court decree
to which it or its property or assets may be subject or has or will
have failed to obtain any material license, permit, certificate,
franchise or other governmental authorization or permit necessary to
the ownership of its property or to the conduct of its business, which
violation or failure could reasonably be expected to have a Material
Adverse Effect.
(ah) None of the Company or any of its subsidiaries, or any director,
officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries, has used any
corporate, partnership or limited liability company funds for any
unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful
payment to any foreign or domestic government official or employee
from corporate funds; violated or is in violation of any provision of
the Foreign Corrupt Practices Act of 1977; or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
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(ai) There has been no storage, disposal, generation, manufacture,
refinement, installation, transportation, handling or treatment of
toxic wastes, medical wastes, hazardous wastes, petroleum or petroleum
products (including crude oil or any fraction thereof), hazardous
substances or any other substances which pose a hazard to human
health, safety, natural resources, industrial hygiene or the
environment or which cause or threaten to cause a nuisance by the
Company or any of its subsidiaries (or, to the knowledge of the
Company, by any of their predecessors in interest or by any other
entity) at, upon or from any of the property now or previously owned
or leased by the Company or its subsidiaries except to the extent
commonly used in the normal operations of such property, in violation
of any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit or which would require investigation, monitoring,
removal action, corrective action, remedial action or other response
action ("response action") under any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit, except for any
violation or response action which would not have, or could not be
reasonably likely to have, singularly or in the aggregate with all
such violations and response actions, a Material Adverse Effect; there
has been no material spill, discharge, leak, emission, injection,
escape, dumping or release or threatened release of any kind onto such
property or into the environment surrounding such property of any
toxic wastes, medical wastes, solid wastes, hazardous wastes,
petroleum or petroleum products (including crude oil or any fraction
thereof), hazardous substances or any other substances which pose a
hazard to human health, safety, natural resources, industrial hygiene
or the environment or which cause or threaten to cause a nuisance,
except for any such spill, discharge, leak, emission, injection,
escape, dumping or release or threatened release which would not have
or would not be reasonably likely to have, singularly or in the
aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings, releases and threatened releases, a
Material Adverse Effect; and the terms "hazardous wastes," "solid
wastes," "toxic wastes," "hazardous substances," "petroleum,"
"petroleum products" and "medical wastes" shall have the meanings
specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(aj) Neither the Company nor any subsidiary is, or will be as a result of
the offer and sale of the Offered Securities hereunder, an "investment
company" within the meaning of such term under the Investment Company
Act of 1940 and the rules and regulations of the Commission
thereunder.
2. PUBLIC OFFERING. The Company is advised by the Representatives that
the Underwriters propose to make a public offering of their respective portions
of the Offered Securities as soon after this Agreement has been entered into as
in the Representatives' judgment
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is advisable. The terms of the public offering of the Offered Securities are
set forth in the Prospectus.
3. PURCHASE AND DELIVERY. Payment for the Offered Securities shall be
made by certified or official bank check or checks payable to the order of the
Company in New York Clearing House funds (same day funds) at the time and place
set forth in the Underwriting Agreement, upon delivery to the Representatives
for the respective accounts of the several Underwriters of the Offered
Securities, registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the date of delivery, with any transfer taxes payable in connection
with the transfer of the Offered Securities to the Underwriter duly paid.
4. OFFERING OF OFFERED SECURITIES BY THE UNDERWRITERS. Upon
authorization by the Representatives of the release of the Offered Securities,
the several Underwriters propose to offer the Offered Securities for sale upon
the terms and conditions set forth in the Prospectus.
5. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees:
(a) To prepare the Prospectus in a form approved by the Representatives
and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than Commission's close of business on the
second business day following the execution and delivery of this
Agreement or, if applicable, such earlier time as may be required by
Rule 430A(a)(3) under the Securities Act; to make no further amendment
or any supplement to the Registration Statement or to the Prospectus
prior to the last Delivery Date except as permitted herein; to advise
the Representatives, 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 Representatives
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 Offered Securities; to advise the
Representatives, 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 Offered
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
13
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 each of the Representatives and to counsel for
the Underwriters 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;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request:
(i) conformed copies of the Registration Statement as originally filed
with the Commission and each amendment thereto (in each case excluding
exhibits other than this Agreement, the Indenture, the computation of
the ratio of earnings to fixed charges and the computation of per
share earnings), (ii) each Preliminary Prospectus, the Prospectus and
any amended or supplemented Prospectus and (iii) any document
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 Offered 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 or the Exchange Act, to
notify the Representatives and, upon their request, to file such
document and to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many copies as the Representatives
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 judgment of the Company or the Representatives, be
required by the Securities Act or requested by the Commission;
(e) To the extent practicable, prior to filing with the Commission any
amendment to the Registration Statement or supplement to the
Prospectus, any document incorporated by reference in the Prospectus
or any Prospectus pursuant to Rule 424 of the Rules and Regulations,
and to the extent not practicable, immediately thereafter, to furnish
a copy thereof to
14
the Representatives and counsel for the Underwriters and to consult
with the Representatives prior to the filing;
(f) As soon as practicable after the Effective Date, but in any event not
later than 410 or, if the fourth quarter following the fiscal quarter
that includes the Effective Date is the last fiscal quarter of the
Company's fiscal year, 455 days after the end of the Company's current
fiscal quarter, to make generally available to the Company's security
holders and to deliver to the Representatives an earning statement of
the Company and its subsidiaries (which need not be audited) complying
with Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158);
(g) Until the earlier of the expiration of the period of five years
following the Effective Date and the date on which the Company ceases
to be subject to the reporting requirements of the Exchange Act, to
furnish to the Representatives copies of all materials furnished by
the Company to its shareholders and all public reports and all reports
and financial statements furnished by the Company to the principal
national securities exchange upon which the Common Stock may be listed
pursuant to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of
the Commission thereunder;
(h) Promptly from time to time to take such action as the Representatives
may reasonably request to qualify the Offered Securities and the
Common Stock issuable upon conversion of the Offered Securities for
offering and sale under the securities laws of such jurisdictions as
the Representatives 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 Offered Securities, provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(i) Except as described in the Prospectus, for a period of 180 days from
the date of the Prospectus, not to, directly or indirectly, offer for
sale, sell 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 shares of
Common Stock (other than the shares of Common Stock issuable upon
conversion of the Offered Securities and shares of Common Stock issued
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
sell or grant options, rights or warrants with respect to any shares
of Common Stock (other than the grant
15
of options pursuant to option plans existing on the date hereof),
without the prior written consent of Xxxxxx Brothers Inc.; and to
cause each of CapStar GP Corp., CapStar Hotels, Inc., Xxxxxx Hotels,
Inc., Xxxx X. Xxxxxxxx, Xxxxx X. XxXxxxxx, Xxxx Xxxxx, Xxxx X.
Xxxxxxx, and Xxxxx Xxxxxxxxxx to furnish to the Representatives, prior
to the First Delivery Date, a letter or letters, in form and substance
satisfactory to counsel for the Underwriters, pursuant to which each
such person shall agree not to, directly or indirectly, offer for
sale, sell 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 shares of
Common Stock for a period of 180 days from the date of the Prospectus,
without the prior written consent of Xxxxxx Brothers Inc.;
(j) Prior to the Effective Date, to apply for the listing of the Offered
Securities on the New York Stock Exchange, Inc. and to use its best
efforts to complete that listing, subject only to official notice of
issuance and evidence of satisfactory distribution, prior to the First
Delivery Date;
(k) To use its best efforts to complete the listing of the Common Stock
issuable upon conversion of the Offered Securities on the New York
Stock Exchange, Inc. prior to the initial issuance of such Common
Stock;
(l) To apply the net proceeds from the sale of the Offered Securities
being sold by the Company as set forth in the Prospectus; and
(m) To take such steps as shall be necessary to ensure that neither the
Company nor any subsidiary shall become an "investment company" within
the meaning of such term under the Investment Company Act of 1940 and
the rules and regulations of the Commission thereunder.
6. EXPENSES. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Offered Securities 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 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 thereof (including, in each case, exhibits), any
Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus, all as provided in this Agreement; (d) the costs of producing and
distributing this Agreement and any other related documents in connection with
the offering, purchase, sale and delivery of the stock; (e) the fees (including
reasonable attorneys' fees) and expenses incident to securing any required
review by the National Association of Securities Dealers, Inc. of the terms of
sale of the Offered Securities; (f) any applicable listing or other fees; (g)
the fees and expenses of qualifying the Offered Securities under the securities
laws of the several jurisdictions as provided in Section 6(h) and of preparing,
printing and distributing a Blue Sky Memorandum (including related fees and
expenses of counsel to the Underwriters); (h) any fees charged by rating
agencies for the
16
rating of the Offered Securities; and (i) all other costs and expenses incident
to the performance of the obligations of the Company and the Selling Stockholder
under this Agreement; provided that, except as provided in this Section 8 and in
Section 13 the Underwriters shall pay their own costs and expenses, including
the costs and expenses of their counsel, any transfer taxes on the Offered
Securities which they may sell and the expenses of advertising any offering of
the Offered Securities made by the Underwriters.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company and the
Selling Stockholder contained herein, to the performance by the Company and the
Selling Stockholder of their 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) No Underwriter shall have discovered and disclosed to the Company on
or prior to such Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of Xxxxx & Xxxxxxx L.L.P.,
counsel for the Underwriters, is material or omits to state a fact
which, in the opinion of such counsel, is material and is required to
be stated therein or is necessary to make the statements therein not
misleading.
(c) Subsequent to the execution and delivery of the Underwriting Agreement
and prior to the First Delivery Date, there shall not have occurred
any downgrading, nor shall any notice have been given of any intended
or potential downgrading, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
of the Securities Act.
(d) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Offered
Securities, the Registration Statement and the Prospectus, and all
other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material
respects to counsel for the Underwriters, and the Company and the
Selling Stockholder shall have furnished to such counsel all documents
and information that they may reasonably request to enable them to
pass upon such matters.
17
(e) Xxxx, Weiss, Rifkind, Xxxxxxx and Xxxxxxxx shall have furnished to the
Representatives their written opinion, as counsel to the Company,
addressed to the Underwriters and dated such Delivery Date, in form
and substance reasonably satisfactory to the Representatives, to the
effect that:
(i) The Company and each of its significant subsidiaries have
been duly formed and are validly existing as corporations, limited
partnerships or limited liability companies, as the case may be, in
good standing under the laws of their respective jurisdictions of
organization, are duly qualified to do business and are in good
standing as foreign corporations, limited partnerships or limited
liability companies, as the case may be, in each jurisdiction in which
their respective ownership or lease of property or the conduct of
their respective businesses (as set forth in certificates of officers
of the Company upon which such counsel is relying without independent
investigation) requires such qualification and have all corporate,
partnership or limited liability company, as the case may be, power
and authority necessary to own or hold their respective properties and
conduct the businesses in which they are engaged as described in the
Prospectus;
(ii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company (including the shares of Offered Securities being delivered on
such Delivery Date) 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 any shares of Common Stock
and any Debt Securities (other than the Offered Securities to be
offered and sold by the Company to the Underwriters hereunder) that
are outstanding were offered and sold in transactions exempt from the
registration requirements of the Securities Act and in compliance with
all applicable provisions of the General Corporation Law of the State
of Delaware (the "Delaware Corporation Law") and all of the issued
shares of capital stock, partnership interests or limited liability
company membership interests, as the case may be, of each subsidiary
of the Company (other than Leperq Atlanta Renaissance Partners, L.P.
(the "Atlanta Partnership")) have been duly and validly authorized and
issued and (except for partnership interests of general partners and
except to the extent the limited liability company agreements
governing the respective limited liability companies provide
otherwise) are fully paid, non-assessable and are owned directly or
indirectly by the Company, to such counsel's knowledge free and clear
of all liens, encumbrances, or claims except for liens in favor of the
lenders under the 1997 Credit Facility to secure indebtedness; with
respect to the general and limited partnership interests of the
Atlanta Partnership held by the Company, such interests are owned
directly or indirectly by the Company, to such counsel's knowledge
free and clear of all liens,
18
encumbrances, or claims except for liens in favor of _______________
to secure indebtedness;
(iii) Except as set forth in the Prospectus, there are no
preemptive or other rights to subscribe for or to purchase, nor any
restriction upon the voting or transfer of, any unissued shares of the
Offered Securities to be issued and sold by the Company to the
Underwriters hereunder pursuant to the Company's charter or by-laws or
any agreement or other instrument known to such counsel;
(iv) Except as set forth in the Prospectus, there are no
preemptive or other rights to subscribe for or to purchase, nor any
restriction upon the voting or transfer of, any of the partnership
interests in the Operating Partnerships pursuant to the Operating
Partnerships' respective Agreements of Limited Partnership, as amended
and restated (as applicable), or, to such counsel's knowledge, any
agreement or other instrument to which the Company is a party;
(v) To the best of such counsel's knowledge, based solely on a
review of such counsel's internal litigation docket, and other than as
set forth in the 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 be expected to have a
Material Adverse Effect; and, to the best of such counsel's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(vi) The Registration Statement was declared effective under the
Securities Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to the subparagraph
of Rule 424(b) of the Rules and Regulations specified in such opinion
on the date specified therein and, to the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose is
pending or threatened by the Commission;
(vii) The Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Company prior to
such Delivery Date (other than the financial statements and related
schedules and statistical data therein, as to which such counsel need
express no opinion) comply as to form in all material respects with
the requirements of the Securities Act and the Rules and Regulations;
(viii) To the best of such counsel's knowledge, there are no
contracts or other documents which are required to be described in the
19
Prospectus or filed as exhibits to the Registration Statement by the
Securities Act or by the Rules and Regulations which have not been
described or filed as exhibits to the Registration Statement;
(ix) The execution and delivery of the Offered Securities has
been duly authorized by all necessary corporate action of the Company,
and the Offered Securities, when executed and authenticated in
accordance with the provisions of the Indenture and paid for in
accordance with this Agreement, will constitute valid, binding and
enforceable obligations of the Company, entitled to the benefits of
the Indenture, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, liquidation, moratorium or other similar laws
affecting the rights and remedies of creditors generally and except as
may be subject to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
(x) The Indenture has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution
and delivery thereof by the Trustee, constitutes a valid and legally
binding agreement of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, liquidation, moratorium or other similar laws
affecting the rights and remedies of creditors generally and except as
may be subject to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
(xi) This Agreement has been duly authorized, executed and
delivered by the Company;
(xii) The issue and sale of the Offered Securities being
delivered on such Delivery Date by the Company and the compliance by
the Company and the Operating Partnerships with all of the provisions
of this Agreement, the Indenture and the Offered Securities, and the
consummation of the transactions contemplated hereby, and thereby,
will not conflict with or result in a material breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject which breach is
reasonably likely to have a Material Adverse Effect, nor will such
actions result in any violation of the provisions of the charter,
by-laws, limited partnership agreement or operating agreement of the
Company or any of its subsidiaries or any
20
statute or any order, rule or regulation known to such counsel of any
court or governmental agency or body of the United States, the State
of New York or established pursuant to the Delaware Corporation Law
having jurisdiction over the Company or any of its subsidiaries or any
of their properties or assets; except for the registration of the
Offered Securities under the Securities Act and 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 Offered
Securities by the Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery
and performance of this Agreement, the Indenture and the Offered
Securities by the Company and the consummation of the transactions
contemplated hereby, and thereby;
(xiii) Except as set forth in the Prospectus, to the best of
such counsel's knowledge, there are no contracts, agreements or
understandings between the Company and any person granting such person
the right (other than rights which have been waived or satisfied) to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Securities Act;
(xiv) Neither the Company nor any of its subsidiaries is an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended;
(xv) The Operating Partnerships each will be treated as a
partnership, and not as an "association" or "publicly traded
partnership" taxable as a corporation, for federal income tax
purposes; and
(xvi) The statements under the captions "Description of
Capital Stock" and "Description of Debt Securities" in the Prospectus,
and "Certain Relationships and Related Transactions" incorporated into
the Prospectus, insofar as such statements constitute a summary of
legal matters, documents or proceedings referred to therein are
correct in all material respects.
In rendering such opinion, such counsel may (i) state that their
opinion is limited to matters governed by the Federal laws of the
United States of America, the laws of the State of New York and the
Delaware Corporation Law and that such counsel is not admitted in the
State of Delaware; and
21
(ii) in giving the opinions referred to in Section 7(e)(i) (solely
with regard to organization and qualification of the Company's
significant subsidiaries), Section 7(e)(ii) (solely with regard to
capital stock, partnership interests or limited liability company
membership interests, as the case may be, of subsidiaries of the
Company being duly and validly authorized and issued and fully paid
and non-assessable), state that they are relying on an opinion or
opinions of other counsel as to such matters, provided that the
Underwriters shall have received such opinion or opinions, in form and
substance satisfactory to Underwriter's counsel, of other counsel
reasonably acceptable to Underwriters' counsel. Such counsel shall
also have furnished to the Representatives a written statement,
addressed to the Underwriters and dated such Delivery Date, in form
and substance satisfactory to the Representatives, to the effect that
(x) in connection with the preparation of the Registration Statement
and the Prospectus, such counsel have participated in conferences with
certain officers and other representatives of the Company, at which
the contents of the Registration Statement and the Prospectus and
related matters were discussed, and (y) based on such participation,
no facts have come to the attention of such counsel which lead them to
believe that the Registration Statement (except for financial
statements and schedules and other statistical data included therein
or omitted therefrom, as to which such counsel need make no
statement), as of the Effective Date, contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein
not misleading, or that the Prospectus (except for financial
statements and schedules and other statistical data included therein
or omitted therefrom, as to which such counsel need make no statement)
contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading. The foregoing statement may be
qualified by a statement to the effect that such counsel does not
assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement or the
Prospectus except for the statements made in the Prospectus under the
caption "Description of Capital Stock," insofar as such statements
relate to the Offered Securities and concern legal matters.
(f) The Representatives shall have received from Xxxxx & Xxxxxxx L.L.P.,
counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Offered
Securities, the Registration Statement, the Prospectus and other
related matters as the Representatives may reasonably require, and the
Company shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such
matters.
22
(g) At the time of execution of this Agreement, the Representatives shall
have received from KPMG Peat Marwick a letter, in form and substance
satisfactory to the Representatives, addressed to the Underwriters 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, (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.
(h) With respect to the letters of KPMG Peat Marwick referred to in clause
(g) hereof and delivered to the Representatives concurrently with the
execution of this Agreement (the "initial letters"), the Company shall
have furnished to the Representatives letters (the "bring-down
letters") of such accountants, addressed to the Underwriters and dated
such Delivery 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 letters
(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 letters), the conclusions and findings of
such firms with respect to the financial information and other matters
covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.
(i) The Company shall have furnished to the Representatives a certificate,
dated such Delivery Date, of its Chairman of the Board, its President
or a Vice President and its chief financial officer stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery Date;
the Company has complied with all its agreements contained herein; and
the conditions set forth in Sections 7(a) and 7(j) have been
fulfilled; and
(ii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue
statement of a material fact and did not omit to state a material fact
23
required to be stated therein or necessary to make the statements
therein not misleading, and (B) since the Effective Date no event has
occurred which should have been set forth in a supplement or amendment
to the Registration Statement or the Prospectus.
(j) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus 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 (ii) since such date there shall not have been
any change in the capital stock or long-term debt of the Company or
any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is, in the judgment of the
Representatives, so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of
the Offered Securities being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(k) 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 in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have
been declared by Federal or state authorities, (iii) the United States
shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall
have been a declaration of a national emergency or war by the United
States or (iv) there shall have occurred such a material adverse
change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the
United States shall be such) as to make it, in the judgment of a
majority in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the
Offered Securities being delivered on such Delivery Date on the terms
and in the manner contemplated in the Prospectus.
24
(l) There shall be issued and outstanding with respect to each of the
Owned Hotels (as defined in the Prospectus) an ALTA form of owner's
title insurance policy (or local equivalent with respect to those
Owned Hotels located in jurisdictions where an ALTA form of owner's
title insurance is not available) insuring the fee simple estate of
the applicable subsidiary of the Company in the Owned Hotel owned by
such subsidiary in an amount at least equal to the acquisition price
of such Owned Hotel and each such title insurance policy will continue
to be in full force and effect immediately following the consummation
of the Offering.
(m) The New York Stock Exchange, Inc. shall have approved the Offered
Securities for listing, subject only to official notice of issuance
and evidence of satisfactory distribution.
(n) The Representatives shall have received the written opinion or
opinions or other certification in form and substance acceptable to
Underwriter's counsel, of other counsel reasonably acceptable to
Underwriter's counsel to the effect that with regard to the Owned
Hotels (as defined in the Prospectus), the Company and/or its
subsidiaries hold all state food, beverage and liquor licenses
necessary or required for such corporations, partnerships and limited
liability companies to conduct their business as currently conducted
in each state.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and the Operating Partnerships, jointly and severally,
shall indemnify and hold harmless each Underwriter, its officers and
employees and each person, if any, who controls any 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 Offered
Securities), to which that Underwriter, 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 or in any
amendment or supplement thereto or (B) in any blue sky application or
other document prepared or executed by the Company (or based upon any
written information furnished by the Company) specifically for the
purpose of qualifying any or all of the Offered Securities under the
securities laws of
25
any state or other jurisdiction (any such application, document or
information being hereinafter called a "Blue Sky Application"), (ii)
the omission or alleged omission to state in 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 or (iii) any act or failure to act
or any alleged act or failure to act by any Underwriter in connection
with, or relating in any manner to, the Offered 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 and the Operating Partnerships 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
acts or failures to act undertaken or omitted to be taken by such
Underwriter through its gross negligence or willful misconduct), and
shall reimburse each Underwriter and each such officer, employee or
controlling person promptly upon demand for any legal or other
expenses reasonably incurred by that Underwriter, 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 and the Operating Partnerships 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 written
information concerning such Underwriter furnished to the Company
through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein, or the Statement of Eligibility
and Qualification (Form T-1) under the Trust Indenture Act of the
Trustee. The foregoing indemnity agreement is in addition to any
liability which the Company or the Operating Partnerships may
otherwise have to any Underwriter or to any officer, employee or
controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and hold
harmless the Company, its officers and employees, each of its
directors (including any person who, with his or her consent, is named
in the Registration Statement as about to become a director of the
Company), 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
26
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 or in any amendment or supplement thereto, or (B) 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 in each
case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon
and in conformity with written information concerning such Underwriter
furnished to the Company through the Representatives by or on behalf
of that Underwriter specifically for inclusion therein, 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 any Underwriter may otherwise have to
the Company, the Selling Stockholders 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 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,
27
however, that the Representatives shall have the right to employ
counsel to represent jointly the Representatives and those other
Underwriters and their respective officers, employees and controlling
persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Underwriters against
the Company or the Operating Partnerships under this Section 8 if, in
the reasonable judgment of the Representatives, it is advisable for
the Representatives and those Underwriters, officers, employees and
controlling persons to be jointly represented by separate counsel, and
in that event the fees and expenses of one such separate counsel shall
be paid by the Company and the Operating Partnerships. 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 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 to or insufficient to hold harmless an
indemnified party under Section 8(a) or (b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred
to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Operating Partnerships on the one hand
and the Underwriters on the other from the offering of the Offered
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 and the Operating
Partnerships on the one hand and the Underwriters 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 and the Operating Partnerships on the one hand
and the Underwriters 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 Offered Securities purchased under this Agreement
(before deducting expenses) received by the Company and the Operating
Partnerships,
28
on the one hand, and the total underwriting discounts and commissions
received by the Underwriters with respect to the shares of the Offered
Securities purchased under this Agreement, on the other hand, bear to
the total gross proceeds from the offering of the shares of the
Offered Securities under this Agreement, in each case 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,
the Operating Partnerships or the Underwriters, the intent of the
parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. For
purposes of the preceding two sentences, the net proceeds deemed to be
received by the Company shall be deemed to be also for the benefit of
the Operating Partnerships and information supplied by the Company
shall also be deemed to have been supplied by the Operating
Partnerships. The Company, the Operating Partnerships and the
Underwriters further agree that it would not be just and equitable if
contributions pursuant to this Section were to be determined by pro
rata allocation (even if the Underwriters were treated as one entity
for such purpose) 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), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Offered Securities underwritten by it and distributed to the public
was offered to the public exceeds the amount of any damages which such
Underwriter has otherwise paid or become liable to pay by reason of
any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 8(d) are several in proportion to their
respective underwriting obligations and not joint.
(e) The Underwriters severally confirm and the Company acknowledges that
the statements with respect to the public offering of the Offered
29
Securities by the Underwriters set forth on the cover page of, the
legend concerning over-allotments on the inside front cover page of
and the concession and reallowance figures appearing under the caption
"Underwriting" in, the Prospectus are correct and constitute the only
information concerning such Underwriters furnished in writing to the
Company by or on behalf of the Underwriters specifically for inclusion
in the Registration Statement and the Prospectus.
9. DEFAULTING UNDERWRITERS. If, on either Delivery Date, any Underwriter
defaults in the performance of its obligations under this Agreement, the
remaining non-defaulting Underwriters shall be obligated to purchase the Offered
Securities which the defaulting Underwriter agreed but failed to purchase on
such Delivery Date in the respective proportions which the principal amount of
Offered Securities set opposite the name of each remaining non-defaulting
Underwriter in the Underwriting Agreement bears to the total number of shares of
the Firm Stock set opposite the names of all the remaining non-defaulting
Underwriters in principal amount of Offered Securities; provided, however, that
the remaining non-defaulting Underwriters shall not be obligated to purchase any
of the Offered Securities on such Delivery Date if the total number of shares of
the Offered Securities which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total principal amount
of Offered Securities to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the principal amount of Offered Securities which it agreed to purchase on such
Delivery Date pursuant to the terms of Section 2. If the foregoing maximums are
exceeded, the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representatives who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the Offered Securities to be purchased on such Delivery Date.
If the remaining Underwriters or other underwriters satisfactory to the
Representatives do not elect to purchase the shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to the Second Delivery Date, the obligation of
the Underwriters to purchase, and of the Company to sell, the Option Offered
Securities) shall terminate without liability on the part of any non-defaulting
Underwriter or the Company, except that the Company will continue to be liable
for the payment of expenses to the extent set forth in Sections 6 and 11. As
used in this Agreement, the term "Underwriter" includes, for all purposes of
this Agreement unless the context requires otherwise, any party not listed in
the Underwriting Agreement who, pursuant to this Section 9, purchases Firm Stock
which a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If
other underwriters are obligated or agree to purchase the Offered Securities of
a defaulting or withdrawing Underwriter, either the Representatives or the
Company may postpone the Delivery Date for up to seven full business days in
order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
30
10. TERMINATION. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
prior to delivery of and payment for the Firm Stock if, prior to that time, any
of the events described in Sections 7(j) or 7(k), shall have occurred or if the
Underwriters shall decline to purchase the Offered Securities for any reason
permitted under this Agreement.
11. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) the Company shall
fail to tender the Offered Securities for delivery to the Underwriters by reason
of any failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company is
not fulfilled, the Company will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
the Underwriters in connection with this Agreement and the proposed purchase of
the Offered Securities, and upon demand the Company shall pay the full amount
thereof to the Representatives. If this Agreement is terminated pursuant to
Section 9 by reason of the default of one or more Underwriters, the Company
shall not be obligated to reimburse any defaulting Underwriter on account of
those expenses.
12. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission to Xxxxxx Brothers Inc., Three World Financial
Center, New York, New York 10285, Attention: Syndicate Department
(Fax: 000-000-0000), 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., Three World Financial Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000;
(b) if to the Company or to the Operating Partnerships, shall be delivered
or sent by mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: Xxxx X.
Xxxxxxxx (Fax: 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 the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx Brothers Inc. on behalf of the
Representatives.
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
to the benefit of and be binding upon the Underwriters, the Company, and their
respective
31
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations, warranties,
indemnities and agreements of the Company contained in this Agreement shall also
be deemed to be for the benefit of the person or persons, if any, who control
any Underwriter within the meaning of Section 15 of the Securities Act and (B)
the indemnity agreement of the Underwriters contained in Section 8(b) of this
Agreement shall be deemed to be for the benefit of directors of the Company,
officers of the Company who have signed the Registration Statement 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 15, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
14. SURVIVAL. The respective indemnities, representations, warranties and
agreements of the Company, the Operating Partnerships and the Underwriters
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Offered Securities and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any of them or any person controlling any
of them.
15. DEFINITION OF THE TERMS "BUSINESS DAY," "SIGNIFICANT SUBSIDIARY" AND
"SUBSIDIARY." For purposes of this Agreement, (a) "business day" means any day
on which York Stock Exchange, Inc. is open for trading, (b) "significant
subsidiary" has the meaning set forth in Regulation S-X of the Commission and
(c) "subsidiary" has the meaning set forth in Rule 405 of the Rules and
Regulations.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the state of New York without regard to the
principles of conflicts of laws thereof.
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.
32
UNDERWRITING AGREEMENT
October 9, 1997
CapStar Hotel Company
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, XX 00000
Dear Sirs:
We (the "Representatives") are acting on behalf of the underwriter or
underwriters (including ourselves) named below (such underwriter or underwriters
being herein called the "Underwriters"), and we understand that CapStar Hotel
Company, a Delaware corporation (the "Company"), proposes to issue and sell
$150,000,000 aggregate initial offering price of 4.75% Convertible Subordinated
Notes due 2004 (the "Debt Securities"). The Debt Securities, together with the
Option Debt Securities (defined below), are also referred to herein as the
"Offered Securities." The Offered Securities will be issued pursuant to the
provisions of an Indenture dated as of October 15, 1997 (the "Indenture")
between the Company and First Trust of New York, National Association, as
Trustee (the "Trustee").
In addition, we understand that the Company has granted to the Underwriters
an option to purchase up to $22,500,000 principal amount of Debt Securities (the
"Option Debt Securities"). Such option has been granted solely for the purpose
of covering over-allotments in the sale of Debt Securities and is exercisable as
provided below. Option Debt Securities shall be purchased severally for the
account of the Underwriters in proportion to the principal amount of Debt
Securities set opposite the name of such Underwriters in the table below. The
respective purchase obligations of each Underwriter with respect to the Option
Debt Securities shall be adjusted by the Representatives so that no Underwriter
shall be obligated to purchase Option Debt Securities other than in principal
amounts that are integral multiples of $1,000.
Subject to the terms and conditions set forth or incorporated by reference
herein, the Company hereby agrees to sell and the Underwriters agree to
purchase, severally and not jointly, the respective principal amounts of Debt
Securities, plus accrued interest, if any, from October 16, 1997 to the date of
payment and delivery:
Principal
Name Amount
---- ------------
Xxxxxx Brothers Inc. 25,000,000
BT Xxxx Xxxxx Incorporated 25,000,000
Xxxxxxx, Xxxxx & Co. 25,000,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated 25,000,000
NationsBanc Xxxxxxxxxx Securities, Inc. 25,000,000
Xxxxx Xxxxxx Inc. 25,000,000
------------
Total $150,000,000
------------
------------
The Underwriters will pay for the Debt Securities upon delivery at the
offices of Xxxxx & Xxxxxxx L.L.P., Washington, D.C. at 10:00 a.m., New York time
on October 16, 1997, or at such time, not later than 5:00 p.m., (New York time)
on October 17, 1997, and place, as shall be designated by the Representatives.
The time and date of such payment and delivery are hereinafter referred to as
the First Delivery Date.
At any time on or before the thirtieth day after the date of this Agreement
the option to purchase Option Debt Securities granted above may be exercised by
written notice being given to the Company by the Representatives. Such notice
shall set forth the aggregate principal amount of Option Debt Securities as to
which the option is being exercised, the names in which the Option Debt
Securities are to be registered, the denominations in which the Option Debt
Securities Stock are to be issued and the date and time, as determined by the
Representatives, when the Option Debt Securities are to be delivered; provided,
however, that this date and time shall not be earlier than the First Delivery
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
Debt Securities are delivered are sometimes referred to as the "Second Delivery
Date" and the First Delivery Date and the Second Delivery Date are sometimes
each referred to as a "Delivery Date". Delivery of and payment for the Option
Debt Securities shall be made at the place specified above for the delivery of
the Debt Securities (or at such other place as shall be determined by agreement
between the Representatives and the Company) at 10:00 A.M., New York City time,
on the Second Delivery Date.
The Offered Securities shall have the terms set forth in the Prospectus
dated September 10, 1997, and the Prospectus Supplement dated October 9, 1997,
including the following:
2
TERMS OF OFFERED SECURITIES
Maturity Date: October 15, 2004
Interest Rate: 4.75% per annum payable in arrears
Interest Payment Dates: April 15 and October 15 commencing April 15, 1998
(Interest accrues from October 16, 1997)
Form and Denomination: The Offered Securities will be issued in fully
registered form, without coupons, in denominations of $1,000 principal
amount and multiples thereof.
Conversion: Each Offered Securities will be convertible, at the option of
the holder, at any time after 90 days following the latest date of original
issuance thereof through maturity, unless previously redeemed or otherwise
purchased by the Company, into Common Stock at the conversion rate of
23.2558 shares per $1,000 principal amount of the Offered Securities (the
"Conversion Rate"). The Conversion Rate will be subject to adjustment upon
the occurrence of certain events affecting the Common Stock.
Subordination: The Offered Securities will be subordinated to all existing
and future Senior Indebtedness (as defined in the Indenture) and pari passu
with the Company's Indebtedness (as defined in the Indenture) that is not
Senior Indebtedness.
Redemption by Company: The Offered Securities are not redeemable by the
Company prior to October 15, 2000. Subject to the foregoing, the Offered
Securities will be redeemable on at least 30 days, notice at the option of
the Company, in whole or in part, at any time, at a Redemption Price as set
forth in the Indenture together with accrued and unpaid interest to the
date of the redemption.
Change of Control: Upon the occurrence of any Change of Control (as
defined in the Indenture) in the Company occurring prior to the maturity of
the Offered Securities, each holder shall have the right, at such holder's
option, to require the Company to purchase all or any part (provided that
the principal amount is $1,000 or an integral multiple thereof) of such
holder's Offered Securities at a Redemption Price equal to 100% of the
principal amount thereof, together with accrued and unpaid interest up to
the Change in Control Purchase Date (as defined in the Indenture), subject
to adjustment in certain circumstances.
All provisions contained in the document entitled CapStar Hotel Company
Underwriting Agreement Standard Provisions (Debt Securities) dated September 22,
1997, a copy of which is attached hereto, are herein incorporated by reference
in their entirety and shall be deemed to be a part of this Agreement to the same
as if such provisions had been set forth in full herein, except that if (i) any
terms defined in such document is otherwise defined herein, the definition set
forth herein shall control, (ii) all references in such document to a type of
security that is not an Offered Security shall not be deemed to be a part of
this Agreement, and (iii) all
3
references in such document to a type of agreement that has not been entered
into in connection with the transactions contemplated hereby shall not be deemed
to be a part of this Agreement.
4
Please confirm your agreement by having an authorized officer sign a copy
of this Agreement in the space set forth below.
Very truly yours,
Acting severally on behalf of themselves
and the several Underwriters named herein
By: Xxxxxx Brothers Inc.
BT Alex, Xxxxx Incorporated
Xxxxxxx, Sachs & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
NationsBanc Xxxxxxxxxx Securities, Inc.
Xxxxx Xxxxxx Inc.
By: Xxxxxx Brothers Inc.
By:
-----------------------------
Name:
Title:
Accepted, October 9, 1997
CapStar Hotel Company
By:
-----------------------------
Xxxx Xxxxxxxx
President and Chief Executive Officer
