EXHIBIT 1
5,000,000 Shares
CAPSTAR HOTEL COMPANY
Common Stock
(Par Value $.01 Per Share)
UNDERWRITING AGREEMENT
March __, 1997
XXXXXX BROTHERS INC.
BT SECURITIES CORPORATION
XXXXXXX, SACHS & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
XXXXXXXXXX SECURITIES
XXXXX XXXXXX INC.
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
CapStar Hotel Company, a Delaware corporation (the "Company") proposes to
sell an aggregate of 5,000,000 shares (the "Firm Stock") of the Company's Common
Stock, par value $.01 per share (the "Common Stock"). In addition, the Company
proposes to grant to the Underwriters named in Schedule 1 hereto (the
"Underwriters") an option to purchase up to an additional 750,000 shares of the
Common Stock on the terms and for the purposes set forth in Section 2 (the
"Option Stock"). The Firm Stock and the Option Stock, if purchased, are
hereinafter collectively called the "Stock." This is to confirm the agreement
concerning the purchase of the Stock from the Company by the Underwriters named
in Schedule 1 hereto (the "Underwriters").
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 (the "Operating Partnership"), and the Operating Partnership 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, "CapStar Management"), and their
respective subsidiaries, including twelve owned hotel properties or interests
therein and management agreements with a total of 48 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.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY AND THE
OPERATING PARTNERSHIP. The Company and the Operating Partnership, jointly and
severally, represent, warrant and agree that:
(a) A registration statement on Form S-1 (333-22073), and amendments
thereto, with respect to the Stock 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 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 5(a) 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
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Regulations; and "Prospectus" means such final prospectus, as
first filed with the Commission pursuant to paragraph (1) or (4)
of Rule 424(b) of the Rules and Regulations. Any 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 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.
(c) The Company and each of its subsidiaries (as defined in Section
15) and each Predecessor Entity 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
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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;
(d) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are
fully paid and non-assessable and conform to the description
thereof contained in the Prospectus; and all of the shares of
Common Stock (other than the Stock 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 Bankers Trust Company and/or any of its
affiliates to secure indebtedness.
(e) The unissued shares of the Stock to be issued and sold by the
Company to the Underwriters hereunder have been duly and validly
authorized and, when issued and delivered against payment
therefor as provided herein will be duly and validly issued,
fully paid and non-assessable; and the Stock will conform to the
descriptions thereof contained in the Prospectus.
(f) The partnership interests of the Operating Partnership ("Units")
transferred to the Company and CapStar Sub in connection with the
Formation Transactions, have been duly authorized for issuance by
the Operating Partnership, at the closing of the Formation
Transactions were the only Units outstanding and are validly
issued and fully paid, and, except as otherwise described in the
Prospectus, are the only Units outstanding.
(g) This Agreement has been duly authorized, executed and delivered
by the Company and the Operating Partnership.
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(h) The execution, delivery and performance of this Agreement by the
Company and the Operating Partnership, the consummation of the
transactions contemplated hereby 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 or any Predecessor Entity
is a party or by which the Company or any of its subsidiaries or
any Predecessor Entity is bound or to which any of the property
or assets of the Company or any of its subsidiaries or any
Predecessor Entity 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 Predecessor Entity or any statute or
any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company, any of its
subsidiaries or any Predecessor Entity or any of their properties
or assets; and except for the registration of the Stock under the
Securities 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 Stock 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 by the Company or the Operating
Partnership, the consummation of the transactions contemplated
hereby.
(i) 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 Stock
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;
(j) 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 Partnership pursuant to the Operating
Partnership's Agreement of Limited Partnership, as restated and
amended, or any agreement or other instrument to which the
Company is a party;
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(k) 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.
(l) 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.
(m) None of the Company, any of its subsidiaries or any Predecessor
Entity 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,
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 Partnership, any
subsidiary of the Company or any Predecessor Entity, 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 Partnership 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 Partnership 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
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Operating Partnership, or any increase in the indebtedness of the
Company, the Operating Partnership or any subsidiary.
(n) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement
or included 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.
(o) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company and the Predecessor Entities, whose
reports appear in the Prospectus and who have delivered the
initial letter referred to in Section 7(f) hereof, are
independent public accountants as required by the Securities Act
and the Rules and Regulations.
(p) The Company and each of its 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; 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 (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 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
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such title insurance policy will continue to be in full force and
effect immediately following the consummation of the Offering.
(q) 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.
(r) Each of the Company, its subsidiaries and the Predecessor
Entities 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, business or prospects of the
Company and its subsidiaries (a "Material Adverse Effect"), and
none of the Company, any of its subsidiaries or any Predecessor
Entity 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.
(s) The Company, each of its subsidiaries and each Predecessor Entity
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.
(t) There are no legal or governmental proceedings pending to which
the Company, any of its subsidiaries or any Predecessor Entity 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.
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(u) 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.
(v) No relationship, direct or indirect, exists between or among the
Company, the Operating Partnership, any subsidiary of the
Company, or any Predecessor Entity, 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 Partnership, on the other hand, which is required to be
described in the Prospectus which is not so described.
(w) 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, its subsidiaries or any Predecessor Entity or, to the
best knowledge of the Company, threatened against any of them,
(ii) no material strike, labor dispute, slowdown or stoppage
pending against the Company, its subsidiaries or any Predecessor
Entity nor, to the best knowledge of the Company, threatened
against the Company, its subsidiaries or any Predecessor Entity
which might be expected to have a Material Adverse Effect.
(x) None of the Company, any subsidiary or any Predecessor Entity 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.
(y) The Company, its subsidiaries and each Predecessor Entity 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, any of its
subsidiaries or any Predecessor Entity would have any
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liability; the Company, its subsidiaries and each Predecessor
Entity 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, any of
its subsidiaries or any Predecessor Entity 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.
(z) The Company, each of its subsidiaries and each Predecessor Entity
has filed all federal, state and local income and franchise tax
returns required to be filed through the date hereof and has paid
all taxes due thereon, and no tax deficiency has been determined
adversely to the Company, any of its subsidiaries or any
Predecessor Entity 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.
(aa) 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.
(ab) The Company, its subsidiaries, and the Predecessor Entities (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
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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.
(ac) None of the Company, any of its subsidiaries or any Predecessor
Entity 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.
(ad) None of the Company, any of its subsidiaries or any Predecessor
Entity, or any director, officer, agent, employee or other person
associated with or acting on behalf of the Company, any of its
subsidiaries or any Predecessor Entity, 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.
(ae) 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
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hazard to human health, safety, natural resources, industrial
hygiene or the environment or which cause or threaten to cause a
nuisance by the Company, any of its subsidiaries, or any
Predecessor Entity (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, its subsidiaries or any Predecessor Entity
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.
(af) Neither the Company nor any subsidiary is, or will be as a result
of the offer and sale of the Stock 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.
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2. PURCHASE OF THE STOCK BY THE UNDERWRITERS. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 5,000,000 shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in Schedule 1 hereto. Each
Underwriter shall be obligated to purchase from the Company that number of
shares of the Firm Stock which represents the same proportion of the number of
shares of the Firm Stock to be sold by the Company as the number of shares of
the Firm Stock set forth opposite the name of such Underwriter in Schedule 1
represents of the total number of shares of the Firm Stock to be purchased by
all of the Underwriters pursuant to this Agreement. The respective purchase
obligations of the Underwriters with respect to the Firm Stock shall be rounded
among the Underwriters to avoid fractional shares, as the Representatives may
determine.
In addition, the Company grants to the Underwriters an option to purchase
up to 750,000 shares of Option Stock. Such option is granted solely for the
purpose of covering over-allotments in the sale of Firm Stock and is exercisable
as provided in Section 4 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set opposite the name of such Underwriters in Schedule 1
hereto. The respective purchase obligations of each Underwriter with respect to
the Option Stock shall be adjusted by the Representatives so that no Underwriter
shall be obligated to purchase Option Stock other than in 100 share amounts.
The price of both the Firm Stock and any Option Stock shall be $____ per share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on the First Delivery Date or the Second Delivery Date (as hereinafter
defined), as the case may be, except upon payment for all the Stock to be
purchased on such Delivery Date as provided herein.
3. OFFERING OF STOCK BY THE UNDERWRITERS. Upon authorization by the
Representatives of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
4. DELIVERY OF AND PAYMENT FOR THE STOCK. Delivery of and payment for
the Firm Stock shall be made at the offices of Xxxxxx Brothers Inc. at 10:00
A.M., New York City time, on the fourth full business day following the date of
this Agreement or at such other date or place as shall be determined by
agreement between the Representatives and the Company. This date and time are
sometimes referred to as the "First Delivery Date." On the First Delivery Date,
the Company shall deliver or cause to be delivered certificates representing the
Firm Stock to the Representatives for the account of each Underwriter against
payment to or upon
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the order of the Company of the purchase price by wire transfer of federal
(same-day) funds to an account or accounts previously designated in writing to
Xxxxxx Brothers Inc. by the Company. Time shall be of the essence, and delivery
at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. Upon delivery, the
Firm Stock shall be 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 First Delivery Date. For the purpose of expediting the checking
and packaging of the certificates for the Firm Stock, the Company shall make the
certificates representing the Firm Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this Agreement
the option granted in Section 2 may be exercised by written notice being given
to the Company by the Representatives. Such notice shall set forth the
aggregate number of shares of Option Stock as to which the option is being
exercised, the names in which the shares of Option Stock are to be registered,
the denominations in which the shares of Option Stock are to be issued and the
date and time, as determined by the Representatives, when the shares of Option
Stock 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 shares of Option Stock 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 Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at
such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on the
Second Delivery Date. On the Second Delivery Date, the Company shall deliver
or cause to be delivered the certificates representing the Option Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer of federal
(same-day) funds to an account or accounts previously designated in writing to
Xxxxxx Brothers Inc. by the Company. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a
further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Option Stock shall be registered in such names and in such
denominations as the Representatives shall request in the aforesaid written
notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Stock, the Company shall make the certificates
representing the Option Stock available for inspection by the Representatives
in
00
Xxx Xxxx, Xxx Xxxx, not later than 2:00 P.M., New York City time, on the
business day prior to the Second Delivery Date.
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
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 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 Stock for
offering or sale in any jurisdiction, of the initiation or threatening
of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal;
(b) To furnish promptly to 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) and (ii) each Preliminary
Prospectus, the
15
Prospectus and any amended or supplemented Prospectus; 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 Stock 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 in order to comply with the Securities Act, to notify the
Representatives and, upon their request, 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 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 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 days 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);
16
(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 Stock 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 Stock,
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 Stock and shares 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 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 Executive Investors I, L.L.C.,
CapStar Executive Investors II, L.L.C., CapStar GP Corp., CapStar
Hotels, Inc., Xxxxxx Hotels, Inc., New CapStar Group I, L.L.C., New
CapStar Group II, L.L.C., Xxxx X. Xxxxxxxx, [and] Xxxxx X. XxXxxxxx
[and Xxxxxx X. Xxxxxx] 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
17
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 Stock 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 apply the net proceeds from the sale of the Stock being sold by the
Company as set forth in the Prospectus; and
(l) 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 Stock 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 Stock; (f) any applicable
listing or other fees; (g) the fees and expenses of qualifying the Stock under
the securities laws of the several jurisdictions as provided in Section 5(h) and
of preparing, printing and distributing a Blue Sky Memorandum (including related
fees and expenses of counsel to the Underwriters); and (h) all other costs and
expenses incident to the performance of the obligations of the Company under
this Agreement; provided that, except as provided in this Section 6 and in
Section 11 the Underwriters shall pay their own costs and expenses, including
the costs and expenses of their counsel, any transfer taxes on the Stock which
they may sell and the expenses of advertising any offering of the Stock made by
the Underwriters.
18
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 contained
herein, to the performance by the Company 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 7(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) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Stock, 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 shall have furnished to such
counsel all documents and information that they may reasonably request
to enable them to pass upon such matters.
(d) 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 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
19
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 Stock 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 all of the shares of Common Stock
(other than the Stock to be offered and sold by the Company to the
Underwriters hereunder) that are outstanding were offered and sold in
transactions registered pursuant to or 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
Bankers Trust Company and/or any of its affiliates 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, encumbrances, or
claims except for liens in favor of Xxxxxx Brothers Holdings, Inc.
and/or any of its affiliates to secure indebtedness;
20
(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
Stock 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 Partnership pursuant to the Operating
Partnership's Agreement of Limited Partnership, as amended, 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;
21
(viii) To the best of such counsel's knowledge, there are no
contracts or other documents which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement by the
Securities Act or by the Rules and Regulations which have not been
described or filed as exhibits to the Registration Statement;
(ix) This Agreement has been duly authorized, executed and
delivered by the Company;
(x) The amended and restated Agreement of Limited Partnership
of the Operating Partnership has been duly authorized, executed and
delivered by the Company and CapStar Sub and constitutes the valid and
binding agreement of each such party, enforceable against each such
party 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 such agreement is considered in a proceeding in equity or
at law), and except as rights to indemnity and contribution thereunder
may be limited by applicable law and public policy;
[(xi) The Registration Rights Agreements have been duly
authorized, executed and delivered by the Company and constitute the
valid and binding agreement of the Company, enforceable against the
Company in accordance with their terms, except as such enforceability
may be limited by bankruptcy, insolvency, fraudulent conveyance or
transfer, reorganization, liquidation, moratorium or other similar
laws affecting the rights and remedies of creditors generally and
except as may be subject to general principles of equity (regardless
of whether such agreement is considered in a proceeding in equity or
at law), and except as rights to indemnity and contribution thereunder
may be limited by applicable law and public policy, and except that no
opinion is expressed as to the enforceability of the choice of law
provisions thereof;]
(xii) The issue and sale of the shares of Stock being delivered
on such Delivery Date by the Company and the compliance by the Company
and the Operating Partnership with all of the provisions of this
Agreement and the
22
consummation of the transactions contemplated hereby 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 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 Stock
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 Stock 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
by the Company and the consummation of the transactions contemplated
hereby;
(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;
23
(xv) The Operating Partnership 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 "Certain Relationships
and Related Transactions" and "Description of Capital Stock" in 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 (ii) in giving the opinions referred to in
Section 7(d)(i) (solely with regard to organization and qualification
of the Company's subsidiaries), Section 7(d)(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
24
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 Stock and concern legal matters.
(e) 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 Stock, 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.
(f) 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.
(g) With respect to the letter of KPMG Peat Marwick referred to in clause
(f) hereof and delivered to the Representatives concurrently with the
execution of this Agreement (the "initial letter"), the Company shall
have furnished to the
25
Representatives a letter (the "bring-down letter") 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 letter (or, with respect to
matters involving changes or developments since the respective dates
as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of
the bring-down letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered by the
initial letter and (iii) confirming in all material respects the
conclusions and findings set forth in the initial letter.
(h) 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(i) 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
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.
(i) (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
26
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 Stock being delivered on
such Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(j) 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
Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(k) 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
27
such title insurance policy will continue to be in full force and
effect immediately following the consummation of the Offering.
(l) The New York Stock Exchange, Inc. shall have approved the Stock for
listing, subject only to official notice of issuance and evidence of
satisfactory distribution.
[(m) 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 the Company, its subsidiaries
and the Predecessor Entities hold and after consummation of the
Highgate Acquisition (as defined in the Prospectus) will continue to
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 Partnership, 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 Stock), 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 Stock under the securities
laws of any state or other jurisdiction (any such application,
document or information being hereinafter called a "Blue Sky
28
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
Stock 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 Partnership 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
Partnership 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. The foregoing
indemnity agreement is in addition to any liability which the Company
or the Operating Partnership 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,
29
from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any
such director, officer or controlling person may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained (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 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
30
therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under
this Section 8 for any legal or other expenses subsequently incurred
by the indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that the
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, the
Operating Partnership 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, the Operating Partnership. 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), 8(b) or 8(c) in respect of any
loss, claim, damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall,
31
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 Partnership on the
one hand and the Underwriters on the other from the offering of the
Stock 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
Partnership 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 Partnership 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 Stock purchased under this Agreement (before
deducting expenses) received by the Company and the Operating
Partnership on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the shares of
the Stock purchased under this Agreement, on the other hand, bear to
the total gross proceeds from the offering of the shares of the Stock
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 and the Operating
Partnership or the Underwriters, the intent of the parties and their
relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. 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
Partnership and information supplied by the Company shall also be
deemed to have been supplied by the Operating Partnership. The
Company, the Operating Partnership 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
32
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 Stock
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 Stock 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.
8. 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 Stock
which the defaulting Underwriter agreed but failed to purchase on such Delivery
Date in the respective proportions which the number of shares of the Firm Stock
set opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Stock on such Delivery Date if the total number
of shares of the Stock which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total number of shares
of the Stock to be purchased on such Delivery Date, and any remaining
non-defaulting
33
Underwriter shall not be obligated to purchase more than 110% of the number of
shares of the Stock 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 Stock 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 Stock) 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 Schedule 1 hereto 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 Stock 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.
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(i) or 7(j), shall have occurred or if the
Underwriters shall decline to purchase the Stock for any reason permitted under
this Agreement.
11. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) the Company shall
fail to tender the Stock 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 Stock, and upon demand the Company shall pay the full amount thereof to the
Representatives. If
34
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 11(d), to the Director of Litigation, Office of the General
Counsel, Xxxxxx Brothers Inc., 0 Xxxxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, XX 00000;
(b) if to the Company or to the Operating Partnership, 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 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 13, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
35
14. SURVIVAL. The respective indemnities, representations, warranties and
agreements of the Company, the Operating Partnership 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
Stock 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" AND "SUBSIDIARY." For purposes
of this Agreement, (a) "business day" means any day on which York Stock
Exchange, Inc. is open for trading and (b) "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.
36
If the foregoing correctly sets forth the agreement Operating Partnership
among the Company, the Operating Partnership and the Underwriters, please
indicate your acceptance in the space provided for that purpose below.
Very truly yours,
CapStar Hotel Company
By:
-----------------------------------
Xxxx X. Xxxxxxxx, President and Chief
Executive Officer
CapStar Management Company, L.P.
By:
-----------------------------------
CapStar GP Corp., its general partner
By:
-----------------------------------
Xxxx X. Xxxxxxxx, President
Accepted:
XXXXXX BROTHERS INC.
BT SECURITIES CORPORATION
XXXXXXX, SACHS & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
XXXXXXXXXX SECURITIES
XXXXX XXXXXX INC.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By Xxxxxx Brothers Inc.
By:
------------------------------
Authorized Representative
37
SCHEDULE 1
Number of
Underwriters Shares
------------- ----------
Xxxxxx Brothers Inc. . . . . . . . . ________
BT Securities Corporation . . . . . ________
Xxxxxxx, Sachs & Co. . . . . . . . . ________
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated . . . . . . . ________
Xxxxxxxxxx Securities . . . . . . . ________
Xxxxx Xxxxxx Inc. . . . . . . . . . ________
Total
========
38
