Exhibit 10.1
$55,000,000
MERISTAR HOSPITALITY CORPORATION
8 3/4% Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
March 11, 1999
Xxxxxx Brothers Inc.
Bear, Xxxxxxx &Co. Inc.
c/x Xxxxxx Brothers Inc.
Three World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
MeriStar Hospitality Corporation, a Maryland corporation (the
"Company"), proposes to sell to you (the "Initial Purchasers") $55,000,000
principal amount of 8 3/4% Senior Subordinated Notes due 2007 (the "Notes"). The
Notes will be issued pursuant to an Indenture to be dated as of March 18, 1999
(the "Indenture"), between the Company and IBJ Xxxxxxxx Bank & Trust Company, as
trustee (the "Trustee"). This is to confirm the agreement concerning the
purchase of the Notes from the Company by the Initial Purchasers.
The Notes will be offered without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance on
exemptions therefrom.
In connection with the sale of the Notes, the Company has
prepared a preliminary offering memorandum (the "Preliminary Memorandum") and
will prepare a final offering memorandum (the "Memorandum") setting forth or
including a description of the terms of the Notes, the terms of the offering, a
description of the Company and any material developments relating to the Company
occurring after the date of the most recent financial statements included
therein.
1. Representations, Warranties and Agreements of the Company. The Company
represents and warrants to, and agrees with the Initial Purchasers that as of
the date hereof:
(a) The Memorandum at the date hereof, does not, and at the Closing
Date, will not, contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this Section
1(a) do not apply to statements or omissions in the Memorandum based upon
information furnished to the Company in writing by or on behalf of the
Initial Purchasers expressly for use therein. Reference herein to the
Memorandum shall be deemed to refer to and include the
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1998 Form 10-K and any other document filed by the Company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), which is
incorporated in the Memorandum by reference.
(b) It is not required by applicable law or regulation in connection
with the offer, sale and delivery of the Notes to you in the manner
contemplated by this Agreement to register the Notes under the Securities
Act or to qualify the Indenture in respect of the Notes under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act").
(c) The Company and each of its Significant Subsidiaries (as defined
in Section 14) have been duly organized and are validly existing and in
good standing under the laws of their respective jurisdictions of
organization, are duly qualified to do business and are in good standing in
each jurisdiction in which their respective ownership or lease of property
or the conduct of their respective businesses requires such qualification,
save where the failure to be so qualified would not reasonably be expected
to have a material adverse effect on the business or property of the
Company and its subsidiaries taken as a whole, and each has all power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged.
(d) The Company has an authorized capitalization as set forth in the
1998 Form 10-K, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable; all of the issued shares of capital stock, partnership
interests or limited liability membership interests, as the case may, be of
each Significant Subsidiary of the Company have been duly and validly
authorized and issued and (except for partnership interests of general
partners and except to the extent the limited liability company agreements
governing the respective limited liability companies provide otherwise) are
fully paid and non-assessable and (except for partnership interests in
MeriStar Hospitality Operating Partnership, L.P. owned by third parties)
are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims.
(e) The Indenture has been duly authorized and, when duly executed and
delivered by the proper officers of the Company (assuming due execution and
delivery by the Trustee) and delivered by the Company, will constitute a
valid and legally binding agreement of the Company enforceable against the
Company in accordance with its terms except as such enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, liquidation, moratorium or other similar laws affecting the
rights and remedies of creditors generally and except as may be subject to
general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law).
(f) This Agreement has been duly authorized, executed and delivered by
the Company and the Registration Rights Agreement has been duly authorized
and
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will be duly delivered and executed by the Company. Upon due execution
and delivery of the Registration Rights Agreement by the Company, the
Registration Rights Agreement will constitute a valid and binding agreement
of the Company, enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance or transfer, reorganization, liquidation,
moratorium or other similar laws affecting the rights and remedies of
creditors generally and except as may be subject to general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law), and except as rights to indemnity and contribution
thereunder may be limited by applicable law and public policy.
(g) Except where it would not reasonably be expected to have a
material adverse effect on the consolidated financial position,
stockholder's equity, results of operations, business or prospects of the
Company and its subsidiaries taken as a whole, (i) the execution, delivery
and performance of this Agreement, the Registration Rights Agreement, the
Indenture and the Notes, and the consummation by the Company of the
transactions contemplated herein (the "Transactions") will not conflict
with or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or any
of its Significant Subsidiaries is a party or by which the Company or any
of its Significant Subsidiaries is bound or to which any of the properties
or assets of the Company or any of its Significant Subsidiaries is subject,
(ii) nor will such actions result in any violation of the provisions of the
charter or by-laws or the limited partnership agreement or other
constituent document of the Company or any of its Significant Subsidiaries
or any statute or order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company, any of its Significant
Subsidiaries or any of their properties or assets; and (iii) except for
such consents, approvals, authorizations, registrations or qualifications
as may be required under applicable state securities laws in connection
with the purchase and distribution of the Notes by the Initial Purchasers,
and except for registration of the Exchange Offer (as defined in the
Registration Rights Agreement) under the Securities Act and applicable
state securities laws, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or body
is required for the Transactions.
(h) Neither the Company nor any of its Significant Subsidiaries has
sustained, since the date of the latest financial statements included or
incorporated by reference in the Memorandum, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Memorandum; and, since such date, there has not been
any change in the capital stock or long-term debt of the Company or any of
its Significant Subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management financial position, stockholders'
equity or results of operations of the
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Company and its subsidiaries taken as a whole, otherwise than as set forth
or contemplated in the Memorandum.
(i) The financial statements (including the related notes and
supporting schedules) included in the Memorandum present fairly the
financial condition and results of operations of the entities purported to
be shown thereby, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved.
(j) KPMG LLP, who have certified certain financial statements of the
Company, whose report is included in the Memorandum and who have delivered
the initial letter referred to in Section 7(d) hereof, are independent
public accountants as required by the Securities Act and the Rules and
Regulations during the periods covered by the financial statements on which
they reported contained in the Memorandum.
(k) There are no legal or governmental proceedings pending to which
the Company or any of its Significant Subsidiaries is a party or of which
any property or asset of the Company or any of its Significant Subsidiaries
is the subject which, if determined adversely to the Company or any of its
subsidiaries, could be expected to have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries taken
as a whole; and to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others that is required to be disclosed in the Memorandum which is not so
disclosed.
(l) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is required
to be disclosed in the Memorandum which is not so disclosed.
(m) (i) Since the date as of which information is given in the
Memorandum through the date hereof, and except as may otherwise be
disclosed in the Memorandum, the Company has not issued or granted any
securities, other than in connection with any employment contract, benefit
plan or other similar arrangement with or for the benefit of any one or
more employees, officers, directors or consultants, or in connection with a
dividend reinvestment or stock purchase plan, incurred any liability or
obligation, direct or contingent, other than liabilities and obligations
which were incurred in the ordinary course of business or entered into any
transaction not in the ordinary course of business and (ii) since the date
of the Memorandum the Company has not declared or paid any dividend on its
capital stock.
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(n) Neither the Company nor any of its Significant Subsidiaries (i) is
in violation of its charter or by-laws or limited partnership agreement or
other constituent document, (ii) is in default in any material respect, and
no event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which it
is a party or by which it is bound or to which any of its properties or
assets is subject except where it would not reasonably be expected to have
a material adverse effect on the consolidated financial position,
stockholder's equity, results of operations, business or prospects of the
Company and its subsidiaries taken as a whole, or (iii) is in violation in
any material respect of any law, ordinance, governmental rule, regulation
or court decree to which it or its properties or assets may be subject or
has failed to obtain any material license, permit, certificate, franchise
or other governmental authorization or permit necessary to the ownership of
its properties or assets or to the conduct of its business except where it
would not reasonably be expected to have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries taken
as a whole.
(o) Neither the Company nor any Significant Subsidiary is an
"investment company" within the meaning of such term under the Investment
Company Act of 1940, as amended, and the rules and regulations of the
Securities and Exchange Commission (the "Commission") thereunder.
(p) Neither the Company nor any of its affiliates (as defined in Rule
501(b) of Regulation D under the Securities Act, an "Affiliate") has
directly, or through any agent, (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of, any security (as
defined in the Securities Act) which is or will be integrated with the sale
of the Notes in a manner that would require the registration under the
Securities Act of the Notes or (ii) engaged in any form of general
solicitation or general advertising in connection with the offering of the
Notes (as those terms are used in Regulation D under the Securities Act),
or in any manner involving a public offering within the meaning of Section
4(2) of the Securities Act.
(q) The execution and delivery of the Notes and the Exchange Notes (as
defined in the Memorandum) have been duly authorized by all necessary
corporate action of the Company, and the Notes and the Exchange Notes, when
executed and authenticated in accordance with the provisions of the
Indenture and paid for in accordance with the Purchase Agreement, will
constitute the valid, binding and enforceable obligations of the Company,
entitled to the benefits of the Indenture, except as such enforceability
may be limited by bankruptcy, insolvency, fraudulent conveyance or
transfer, reorganization, liquidation, moratorium or other similar laws
affecting the rights and remedies of creditors generally and except as may
be subject to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
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(r) The Company (including American General Hospitality Corporation as
predecessor to the Company for all periods through the date of the merger
of CapStar Hotel Company into American General Hospitality Corporation but
excluding CapStar Hotel Company for any periods on or prior to the date of
such merger) is organized and has conducted its business and operations for
each of its taxable years ended December 31, 1996, December 31, 1997 and
December 31, 1998 in conformity with the requirements for qualification as
a real estate investment trust (a "REIT") under the Internal Revenue Code
of 1986, as amended (the "Code"), and commencing with its taxable year
ending December 31, 1999, the Company is organized and has conducted its
business and operations in conformity with the requirements for
qualification as a REIT under the Code and its proposed method of operation
will enable it to continue to meet the requirements for taxation as a REIT
under the Code.
2. Purchase of the Notes by the Initial Purchasers. (a) On the basis of
the representations and warranties herein contained, and subject to the terms
and conditions herein set forth, the Company agrees to sell to the several
Initial Purchasers and each of the Initial Purchasers, severally and not
jointly, agrees to purchase from the Company, the respective principal amount of
the Notes set forth opposite such Initial Purchaser's name below at a purchase
price equal to 93.125% of the principal amount of such Notes:
Initial Purchaser Principal Amount of the Notes
----------------- -----------------------------
Xxxxxx Brothers Inc. $49,500,000
Bear, Xxxxxxx & Co. Inc. 5,500,000
-----------
Total $55,000,000
===========
(b) The Company shall not be obligated to deliver any of the
Notes, except upon payment for all of the Notes to be purchased as hereinafter
provided.
3. Sale and Resale of the Notes by the Initial Purchasers. (a) You have
advised the Company that you severally, and not jointly, propose to offer the
Notes for resale upon the terms and conditions set forth in this Agreement and
in the Memorandum. Each Initial Purchaser hereby represents and warrants to, and
agrees with, the Company that it (i) is purchasing the Notes pursuant to a
private sale exempt from registration under the Securities Act, (ii) will not
solicit offers for, or offer or sell, the Notes by means of any form of general
solicitation or general advertising or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act, and (iii) will solicit
offers for the Notes only from, and will offer, sell or deliver the Notes, as
part of their initial offering, only to (A) in the case of offers inside the
United States, (1) persons whom such Initial Purchaser reasonably believes to be
qualified institutional buyers ("Qualified Institutional Buyers") as defined in
Rule 144A under the Securities Act, as such rule may be amended from time to
time ("Rule 144A") or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to such Initial Purchaser that each such
account is a Qualified Institutional Buyer, to whom notice has been
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given that such sale or delivery is being made in reliance on Rule 144A or (2)
institutional accredited investors ("Accredited Investors") as defined in Rule
501(a)(1), (2), (3) or (7) under Regulation D who execute letters of
representation in the form included as Appendix A to the Memorandum in private
sales exempt from registration under the Securities Act and (B) in the case of
offers outside the United States, to persons other than U.S. persons (as defined
in Regulation S) in accordance with Rule 903 of Regulation S.
(b) In connection with the transactions described in
subsection (a)(iii)(B) of this Section 3, each Initial Purchaser has offered and
sold the Notes, and will offer and sell the Notes, (i) as part of such Initial
Purchaser's distribution at any time and (ii) otherwise until 40 days after the
later of the commencement of the offering and the Closing Date (the "Restricted
Period"), only in accordance with Rule 903 of Regulation S. Accordingly, each
Initial Purchaser represents and agrees that, with respect to the transactions
described in subsection (a)(iii)(B) of this Section 3, neither it, nor any of
its Affiliates, nor any person acting on its or their behalf has engaged or will
engage in any directed selling efforts with respect to the Notes, and that it
and they have complied and will comply with the offering restrictions
requirements of Regulation S. Each Initial Purchaser agrees that, at or prior to
the confirmation of sale of the Notes pursuant to subsection (a)(iii)(B) of this
Section 3, it shall have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Notes from such
Initial Purchaser during the Restricted Period a confirmation or notice to
substantially the following effect:
"THE SECURITIES COVERED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF U.S.
PERSONS (I) AS PART OF THEIR DISTRIBUTION AT ANY TIME OR (II) OTHERWISE UNTIL 40
DAYS AFTER THE LATER OF THE COMMENCEMENT OF THE OFFERING AND THE TIME OF
DELIVERY OF THE SECURITIES, EXCEPT IN EITHER CASE IN ACCORDANCE WITH REGULATION
S OR RULE 144A UNDER THE SECURITIES ACT. THE TERMS USED ABOVE HAVE THE MEANING
GIVEN TO THEM BY REGULATION S."
(c) (i) You have not offered or sold and, prior to the
completion of the six months from the Closing Date, will not offer or sell any
Notes to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995; (ii) you have complied and will comply
with all applicable provisions of the Financial Services Xxx 0000 with respect
to anything done by you in relation to the Notes in, from or otherwise involving
the United Kingdom and (iii) you have only issued or passed on and will only
issue or pass on in the United Kingdom any document received by it in connection
with the issuance of the Notes to a person who is of a kind described in Article
11(3) of the Financial Services Xxx 0000 (Investments Advertisements)
(Exemptions) Order 1996 or is a person to whom such document may otherwise
lawfully be issued or passed on.
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4. Delivery of and Payment for the Notes. (a)Payment of the purchase
price for, and delivery of, the Notes shall be made at the offices of Xxxxxxx
Xxxxxxx & Xxxxxxxx, New York, New York or at such other place as shall be agreed
upon by the Company and you, at 9:30 a.m. (New York time), on March 18, 1999 or
at such other time or date as you and the Company shall determine (such date and
time of payment and delivery being herein called the "Closing Date").
(b) On the Closing Date, payment shall be made to the Company in
immediately available funds by wire transfer to such account or accounts as the
Company shall specify prior to the Closing Date or by such means as the parties
hereto shall agree prior to the Closing Date against delivery to you of the
certificates evidencing the Notes. Upon delivery, the Notes shall be registered
in such names and in such denominations as the Initial Purchasers shall request
in writing not less than two full business days prior to the Closing Date. For
the purpose of expediting the checking and packaging of certificates evidencing
the Notes, the Company agrees to make such certificates available for inspection
not later than 2:00 P.M. on the business day at least 24 hours prior to the
Closing Date.
5. Further Agreements of the Company. The Company further agrees:
(a) To furnish to you, without charge, during the period referred
to in paragraph (c) below, as many copies of the Memorandum and any
supplements and amendments thereto as you may reasonably request.
(b) Prior to making any amendment or supplement to the
Memorandum other than by filing documents under the Exchange Act which
are incorporated by reference therein, the Company shall furnish a
copy thereof to the Initial Purchasers and counsel to the Initial
Purchasers and will not effect any such amendment or supplement to
which the Initial Purchasers shall reasonably object by notice to the
Company after a reasonable period to review, which shall not in any
case be longer than three business days after receipt of such copy.
(c) If, at any time prior to completion of the distribution of
the Notes by you to purchasers, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel
for you or counsel for the Company, to amend or supplement the
Memorandum in order that the Memorandum will not include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in
light of the circumstances existing at the time it is delivered to a
purchaser, or if it is necessary to amend or supplement the Memorandum
to comply with applicable law, to promptly prepare such amendment or
supplement as may be necessary to correct such untrue statement or
omission so that the Memorandum, as so amended or supplemented, will
comply with applicable law and to furnish you such number of copies as
you may reasonably request.
(d) So long as the Notes are outstanding and are "Restricted
Securities" within the meaning of Rule 144(a)(3) under the Securities
Act during any period in
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which it is not subject to and in compliance with Section 13 or 15(d)
of the Exchange Act, to furnish to holders of the Notes and
prospective purchasers of Notes designated by such holders, upon
request of such holders or such prospective purchasers, the
information required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act.
(e) For a period of five years following the date of the
Memorandum, to furnish to the Initial Purchasers copies of all
materials furnished by the Company to its shareholders and all public
reports and all reports and financial statements furnished by the
Company to the principal national securities exchange upon which the
Notes may be listed pursuant to requirements of or agreements with
such exchange or to the Commission pursuant to the Exchange Act or any
rule or regulation of the Commission thereunder.
(f) Promptly from time to time to take such action as the Initial
Purchasers may reasonably request to qualify the Notes for offering
and sale under the securities laws of such jurisdictions as the
Initial Purchasers may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Notes.
(g) Not to offer, sell, contract to sell or otherwise dispose of
any additional securities of the Company substantially similar to the
Notes or any securities convertible into or exchangeable for or that
represent the right to receive any such similar securities, without
the consent (which consent shall not be unreasonably withheld) of the
Initial Purchasers during the period beginning from the date of this
Agreement and continuing for 180 days following the Closing Date.
(h) To use its best efforts to permit the Notes to be designated
Private Offerings, Resales and Trading through Automated Linkages
Market ("PORTAL") securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers,
Inc. relating to trading in the PORTAL Market and to permit the Notes
to be eligible for clearance and settlement through The Depository
Trust Company (the "DTC").
(i) Except following the effectiveness of the Registration
Statement (as defined in the Registration Rights Agreement), not to,
and will cause its affiliates not to, solicit any offer to buy or
offer to sell the Notes by means of any form of general solicitation
or general advertising (as those terms are used in Regulation D under
the Securities Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act.
(j) Not to, and will cause its affiliates not to, sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) in a transaction that
could be integrated with the sale of the Notes in a manner that would
require the registration under the Securities Act of the Notes.
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(k) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary of the Company shall become an
"investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder.
(l) Except as otherwise expressly permitted by its articles of
incorporation or by-laws, to continue to conduct its operations in a
manner that will meet the requirements to qualify as a REIT under the
Code and that will not subject it to registration as an "investment
company" under the Investment Company Act.
6. Expenses. The Company agrees to pay the costs incident to the
authorization, issuance, sale and delivery of the Notes and any taxes payable in
that connection; the costs incident to the printing or other production of the
Memorandum and any amendments or supplements thereto; the costs of distributing
the Memorandum and any amendments or supplements thereto; the fees and expenses
of qualifying the Notes under the securities laws of the several jurisdictions,
including the fees and expenses of Xxxxxxx Xxxxxxx & Xxxxxxxx, as provided in
Section 5(f); any fees charged by securities rating services for rating the
Notes; all fees and expenses, if any, incurred in connection with the admission
of such Notes for trading in PORTAL; the fees and expenses of the Trustee; and
all other costs and expenses incident to the performance of the obligations of
the Company.
7. Conditions to the Initial Purchasers' Obligations. The obligations
of the Initial Purchasers hereunder are subject to the accuracy, when made and
on the Closing Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its respective
obligations hereunder, and to each of the following additional terms and
conditions:
(a) No Initial Purchaser shall have discovered and disclosed to
the Company on or prior to the Closing Date that the Memorandum or any
amendment or supplement thereto contains any untrue statement of a
fact which, in the opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for
the Initial Purchasers, is material or omits to state any fact which,
in the opinion of such counsel, is material and is required to be
stated therein or is necessary to make the statements therein not
misleading.
(b) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Indenture,
the Notes, the Memorandum, and all other legal matters relating to
this Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all respects to counsel for the Initial
Purchasers, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable
them to pass upon such matters.
(c) Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx shall have furnished
to the Initial Purchasers their written opinion, as counsel to the
Company, addressed to the Initial Purchasers and dated the Closing
Date, in form and substance reasonably
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satisfactory to the Initial Purchasers, to the effect set forth in
Exhibit A hereto and to such further effect as counsel to the Initial
Purchasers may reasonably request.
(d) You shall have received on the Closing Date a letter, dated
the date hereof and the Closing Date, as the case may be, in form and
substance satisfactory to you, from KPMG LLP, independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information, including the financial information contained or
incorporated by reference in the Memorandum as identified by you,
including, without limitation, its written opinion to the effect that
commencing with its taxable year ended December 31, 1996, the Company
has been organized and operated in a manner that has enabled it to
qualify as a REIT under Sections 856 through 860 of the Code, and that
the Company's proposed method of operation will enable it to continue
to so qualify.
(e) The Company shall have furnished to the Initial Purchasers a
certificate, dated the Closing Date, of the Chairman of the Board,
President or a Vice President of the Company and the Treasurer or
Chief Financial Officer stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct in all material
respects as of the Closing Date and the Company has complied with
all its agreements contained herein; and
(ii) They have carefully examined the Memorandum and, in
their opinion (A) the Memorandum, as of its date, did not include
any untrue statement of a material fact and did not omit to state
any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, and (B) since the date of the Memorandum no event has
occurred which should have been set forth in a supplement or
amendment to the Memorandum.
(f)(i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Memorandum any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Memorandum or since such date
there shall not have been any change in the capital stock or long-term
debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries taken as
a whole, otherwise than as set forth or contemplated in the
Memorandum, the effect of which, in any such case described in clause
(i) or (ii), is, in the judgment of the Initial Purchasers, so
material and adverse as to make it impracticable or inadvisable to
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proceed with the offering or the delivery of the Notes on the terms
and in the manner contemplated in the Memorandum.
(g) Subsequent to the execution and delivery of this Agreement no
downgrading shall have occurred in the rating accorded the Notes by
any "nationally recognized statistical rating organization", as that
term is defined by the Commission for purposes of Rule 436(g)(2) of
the Rules and Regulations and no such organization shall have publicly
announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Notes.
(h) The Initial Purchasers shall have received the Registration
Rights Agreement in the form substantially identical to the
Registration Rights Agreement dated August 14, 1997 executed by the
Company.
(i) The Initial Purchasers shall have received from Xxxxxxx
Xxxxxxx & Xxxxxxxx, counsel for the Initial Purchasers, such opinion
or opinions, dated the Closing Date, with respect to such matters as
the Initial Purchasers may reasonably require, and the Company shall
have furnished to such counsel such documents and information as they
may reasonably request for the purpose of enabling them to pass upon
such matters.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Initial
Purchaser, its officers and employees and each person, if any, who controls any
Initial Purchaser within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Notes), to which such Initial
Purchaser, officer, employee or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement of a material fact contained (A) in the Preliminary Memorandum, the
Memorandum or in any amendment or supplement thereto, or (B) in any Blue Sky
application or other document prepared or executed by the Company (or based upon
any written information furnished by the Company) specifically for the purpose
of qualifying any or all of the Notes under the securities laws of any state or
other jurisdiction (any such application, document or information being
hereinafter called a "Blue Sky Application"), the omission or alleged omission
to state in the Preliminary Memorandum, the Memorandum or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading or
(iii) any act or failure to act, or any alleged act or failure to act, by any
Initial Purchaser in connection with, or relating in any manner to, the Notes or
the offering contemplated hereby, and which is included as part of or referred
to in any loss, claim, damage,
13
liability or action arising out of or based upon matters covered by clause (i)
or (ii) above (provided that the Company shall not be liable in the case of any
matter covered by this clause (iii) to the extent that it is determined in a
final judgment by a court of competent jurisdiction that such loss, claim,
damage, liability or action resulted directly from any such act or failure to
act undertaken or omitted to be taken by such Initial Purchaser through its
gross negligence or wilful misconduct), and shall reimburse each Initial
Purchaser and each officer, employee and controlling person promptly upon demand
for any legal or other expenses reasonably incurred by that Initial Purchaser,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
the Preliminary Memorandum, the Memorandum or in any such amendment or
supplement, or in any Blue Sky Application in reliance upon and in conformity
with the written information furnished to the Company by or on behalf of any
Initial Purchaser specifically for inclusion therein and described in Section
8(e) and provided further that as to the Preliminary Memorandum or Memorandum
this indemnity agreement shall not inure to the benefit of any Initial
Purchaser, its officers and employees and each person or controlling person, if
any, that on account of any loss, claim, damage, liability or action arising
from the sale of Notes to any person by that Initial Purchaser if that Initial
Purchaser failed to send or give a copy of the Memorandum, as the same may be
amended or supplemented, to that person, and the untrue statement or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact in the Preliminary Memorandum was corrected in the Memorandum, or
a supplement or amendment thereto, as the case may be. The foregoing indemnity
agreement is in addition to any liability which the Company may otherwise have
to any Initial Purchaser or to any officer, employee or controlling person of
that Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly, shall indemnify
and hold harmless the Company, its officers and employees, each of its directors
and the Trustee, and each person, if any, who controls the Company within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company, any such director or officer, or the Trustee or any controlling person
may become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement of a material fact contained (A) in the
Preliminary Memorandum, the Memorandum or in any amendment or supplement
thereto, or (B) in any Blue Sky Application or the omission or alleged omission
to state in the Preliminary Memorandum, the Memorandum or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with the written information furnished to the Company or the Trustee
by or on behalf of that Initial Purchaser specifically for inclusion therein and
described in Section 8(e), and shall reimburse the Company and any such director
or officer, or any such Trustee, or controlling person for any legal or other
expenses reasonably incurred by the Company or any such director or officer, or
any such Trustee, or any controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are
14
incurred. The foregoing indemnity agreement is in addition to any liability
which any Initial Purchaser may otherwise have to the Company or any such
director or officer, or any such Trustee, or any controlling person.
(c) Promptly after receipt by an indemnified party under this Section
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 , 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 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 . If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the indemnified party shall have the right to employ counsel to represent
jointly the indemnified party and its respective officers, employees and
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the indemnified party against the
indemnifying party under this Section if, in the reasonable judgment of the
indemnified party, it is advisable for the indemnified party and those officers,
employees and controlling persons to be jointly represented by separate counsel,
and in that event the fees and expenses of such separate counsel shall be paid
by the indemnifying party. It is understood that the indemnifying party shall
not be liable for the fees and expenses of more than one separate firm (in
addition to local counsel in each jurisdiction) for all indemnified parties in
connection with any proceeding or related proceedings. Each indemnified party,
as a condition of the indemnity agreements contained in Sections 8(a) and 8(b),
shall use its best efforts to cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall (i) without the
prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss of liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a) or 8(b) in
15
respect of any loss, claim, damage or liability, or any action in respect
thereof, referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, in such proportion as shall be appropriate to reflect
the relative benefits received by the Company on the one hand and the Initial
Purchasers on the other from the offering of the Notes or if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Initial Purchasers on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Initial
Purchasers on the other with respect to such offering shall be deemed to be in
the same proportion as the total net proceeds from the offering of the Notes
purchased under this Agreement (before deducting expenses) received by the
Company on the one hand, and the total underwriting commissions received by the
Initial Purchasers with respect to the Notes purchased under this Agreement, on
the other hand, bear to the total gross proceeds from the offering of the Notes
under this Agreement, in each case as set forth in the table on the cover page
of the Memorandum. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company on the one hand or the Initial Purchasers, on the other hand, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Initial Purchasers agree that it would not be just and equitable if
contributions pursuant to this Section 8(d) were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 8(d) shall be
deemed to include, for purposes of this Section 8(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at which
the Notes sold and distributed by it were offered to the purchasers exceeds the
amount of any damages which such Initial Purchaser has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers' obligations to contribute as provided
in this Section 8(d) are several in proportion to their respective purchase
obligations and not joint.
(e) The Initial Purchasers severally confirm that the statements with
respect to the offering of the Notes set forth in the bottom paragraph on the
cover page of, the legend concerning stabilization and over-allotment on the
inside front cover page of, and the sixth, ninth and eleventh paragraphs under
the caption "Plan of Distribution" relating to stabilization and over-allotment
in, the Preliminary Memorandum and the Memorandum are correct and constitute the
only information furnished in writing to the Company by or on behalf of the
Initial Purchasers specifically for inclusion in the Memorandum.
16
9. Termination. The obligations of the Initial Purchasers hereunder
may be terminated by it by notice given to and received by the Company prior to
delivery of and payment for the Notes if, prior to that time, 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, a banking moratorium shall have
been declared by Federal or New York State authorities, 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 there shall have occurred
such a material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial markets
in the United States shall be such) as to make it, in the judgment of the
Initial Purchasers, impracticable or inadvisable to proceed with the offering or
delivery of the Notes on the terms and in the manner contemplated in the
Memorandum.
10. Reimbursement of Initial Purchasers' Expenses. If the sale of Notes
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 7 hereof is not satisfied,
because of any termination pursuant to Section 9 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by the Initial Purchasers, the Company shall reimburse the Initial
Purchasers for the reasonable fees and expenses of its counsel and for such
other out-of-pocket expenses as shall have been incurred by it in connection
with this Agreement and the proposed purchase of the Notes, and upon demand the
Company shall pay the full amount thereof to the Initial Purchasers.
11. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by
mail, telex or facsimile transmission to Xxxxxx Brothers Inc., Three
World Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: 000-000-0000);
(b) if to the Company shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Company set forth in
the Memorandum, Attention: Chief Financial Officer (Fax:
000-000-0000).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
12. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Company,
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (x) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the officers and
employees of the Initial Purchasers and the person or persons, if any, who
control each Initial Purchaser within
17
the meaning of Section 15 of the Securities Act and (y) the indemnity agreement
of the Initial Purchasers contained in Section 8(b) of this Agreement shall be
deemed to be for the benefit of directors, officers and employees of the Company
and any person controlling the Company within the meaning of Section 15 of the
Securities Act. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 12, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
13. Survival. The respective indemnities, representations, warranties
and agreements of the Company and the Initial Purchasers contained in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Notes and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
14. Definition of the Terms "Business Day" and "Significant
Subsidiary". For purposes of this Agreement, "business day" means any day on
which the New York Stock Exchange, Inc. is open for trading and "Significant
Subsidiary" has the meaning set forth in Rule 1-02 of Regulation S-X.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York.
16. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
17. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement between the Company
and the Initial Purchasers, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
MERISTAR HOSPITALITY CORPORATION
By: /s/ Xxxx Xxxxx
-----------------------
Name: Xxxx Xxxxx
Title: Chief Financial Officer
Accepted:
XXXXXX BROTHERS INC.
BEAR, XXXXXXX & CO. INC.
By XXXXXX BROTHERS INC.
By: /s/ Xxxxxx Xxxxxxx
---------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
EXHIBIT A
FORM OF OPINION OF
COMPANY COUNSEL TO BE DELIVERED
PURSUANT TO SECTION 7(c)
(i) The Company and MeriStar Hospitality Operating Partnership, L.P.
have been duly formed and are validly existing as corporations or limited
partnerships, as the case may be, in good standing under the laws of their
respective jurisdictions of organization, and have all corporate or partnership,
as the case may be, power and authority necessary to own or hold their
respective properties and conduct the businesses in which they are engaged as
described in the Memorandum;
(ii) The Company has an authorized capitalization as set forth in the
Memorandum, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable;
and all of the issued shares of capital stock or partnership interests, as the
case may be, of MeriStar Hospitality Operating Partnership, L.P. have been duly
and validly authorized and issued and (except for partnership interests of
general partners) are fully paid, non-assessable and (except for partnership
interests in MeriStar Hospitality Operating Partnership, L.P. owned by third
parties) are owned directly or indirectly by the Company, to such counsel's
knowledge free and clear of all liens, encumbrances, or claims;
(iii) To the best of such counsel's knowledge, based solely on a review
of such counsel's internal litigation docket, and other than as set forth in the
Memorandum, there are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any property or assets
of the Company or any of its subsidiaries is the subject which could reasonably
be expected to have a Material Adverse Effect; and, to the best of such
counsel's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(iv) The Memorandum and any further amendments or supplements thereto
made by the Company prior to the Closing Date (other than the financial
statements and related schedules and statistical data therein, as to which such
counsel need express no opinion) appear on their face to be responsive in all
material respects to the requirements of the Securities Act and the Rules and
Regulations;
(v) To the best of such counsel's knowledge, there are no contracts or
other documents which are required to be described in the Memorandum which have
not been so described;
(vi) The execution and delivery of the Notes and the Exchange Notes
have been duly authorized by all necessary corporate action of the Company, and
the Notes and the
A-2
Exchange Notes, when executed and authenticated in accordance with the
provisions of the Indenture and paid for in accordance with the Purchase
Agreement, will constitute the valid, binding and enforceable obligations of the
Company, entitled to the benefits of the Indenture, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance
or transfer, reorganization, liquidation, moratorium or other similar laws
affecting the rights and remedies of creditors generally and except as may be
subject to general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law);
(vii) Each of the Purchase Agreement and the Registration Rights
Agreement has been duly authorized, executed and delivered by the Company and
the Registration Rights Agreement constitutes a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance or transfer, reorganization, liquidation, moratorium or
other similar laws affecting the rights and remedies of creditors generally and
except as may be subject to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law), and except as rights
to indemnity and contribution thereunder may be limited by applicable law and
public policy, and except that no opinion is expressed as to the enforceability
of the choice of law provision thereof;
(viii) The Indenture has been duly authorized, executed and delivered
by the Company and, assuming due authorization, executing and delivery thereof
by the Trustee, constitutes a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance
or transfer, reorganization, liquidation, moratorium or other similar laws
affecting the rights and remedies of creditors generally and except as may be
subject to general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law);
(ix) The issue and sale of the Notes being delivered on the Closing
Date by the Company, the issue and sale of the Exchange Notes, the compliance by
the Company with all of the provisions of this Agreement, the Registration
Rights Agreement and the Indenture and the consummation of the transactions
contemplated hereby and thereby, will not conflict with or result in a material
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject which breach is reasonably likely to have a Material
Adverse Effect, nor will such actions result in any violation of the provisions
of the charter, by-laws, limited partnership agreement or constituent document
of the Company or any of its Significant Subsidiaries or any statute or any
order, rule or regulation known to such counsel of any court or governmental
agency or body of the United States, the State of New York or established
pursuant to the Delaware Corporation Law having jurisdiction over the Company or
any of its subsidiaries or any of their properties or assets; except for the
registration of the Exchange Offer (as defined in the Registration Rights
Agreement) under the Securities Act and for such consents, approvals,
authorizations, registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in connection with the
purchase and distribution of the Notes by the Initial Purchasers and the
Exchange Offer, no consent approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the execution, delivery and
A-3
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby;
(x) Neither the Company nor any of its subsidiaries is an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended; and
(xi) The statements under the captions "Certain Relationships and
Related Transactions" in the Company's latest proxy statement and "Description
of Notes" in the Memorandum, insofar as such statements constitute a summary of
legal matters, documents or proceedings referred to therein are accurate 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, the Delaware Revised
Uniform Limited Partnership Act and the Maryland Corporation Law and that such
counsel is not admitted in the State of Delaware and that with respect to the
law of Maryland it is relying solely on the opinion of Xxxxxxx, Xxxxx &
Xxxxxxxxx. Such counsel shall also have furnished to the Initial Purchasers a
written statement, addressed to the Initial Purchasers and dated such Closing
Date, in form and substance satisfactory to the Initial Purchasers, to the
effect that (x) such counsel have participated in the preparation of the
Memorandum, such counsel have participated in conferences with certain officers
of the Company, the independent public accountants of the Company and other
representatives of the Company, at which the contents of the Memorandum and
related matters were discussed, and (y) based on such participation, no facts
have come to the attention of such counsel which lead them to believe that the
Memorandum (except for financial statements, schedules and other statistical
data included therein or omitted therefrom, as to which such counsel need make
no statement), as of the date thereof, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or that the Memorandum
(except for financial statements, schedules and other statistical data included
therein or omitted therefrom, as to which such counsel need make no statement)
contains any untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The foregoing statement may be qualified by a statement to the
effect that such counsel does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Memorandum except
for the statements made in the Memorandum under the caption "Description of
Notes" insofar as such statements concern legal matters.
