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EXHIBIT 1.1
2,750,000 SHARES
EQUITY INNS, INC.
9 1/2% SERIES A CUMULATIVE PREFERRED STOCK
UNDERWRITING AGREEMENT
June 23, 1998
XXXXX XXXXXX INC.
CIBC OPPENHEIMER
X.X. XXXXXXXX & CO.
XXXXXX XXXXXX & COMPANY, INC.
PRUDENTIAL SECURITIES INCORPORATED
XXXXX CAPITAL MARKETS
As Representatives of the Several Underwriters
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Equity Inns, Inc., a Tennessee corporation (the "Company"), proposes to
issue and sell an aggregate of 2,750,000 shares (the "Firm Shares") of its
9 1/2% Series A Cumulative Preferred Stock, $.01 par value per share (the
"Series A Preferred Stock"), to the several Underwriters named in Schedule I
hereto (the "Underwriters"). The Company also proposes to sell to the
Underwriters, upon the terms and conditions set forth in Section 2 hereof, up to
an additional 412,500 shares (the "Additional Shares") of Series A Preferred
Stock. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "Shares."
Upon consummation of the transactions contemplated hereby and
application of the net proceeds from the sale of the Firm Shares, the Company,
through its wholly-owned subsidiary, Equity Inns Trust, a Maryland real estate
investment trust (the "Trust"), will own an approximate 94.9% general
partnership interest in Equity Inns Partnership, L.P. (the "Partnership"), a
Tennessee limited partnership and will own 100% of the Series A Preferred Units
(as defined herein) of the Partnership. The Partnership currently owns 95 hotels
as described in the Prospectus (the "Current Hotels"). The Partnership has
entered into agreements (the "Acquisition Agreements") as described in the
Prospectus to acquire nine additional hotels (the "Acquisition Hotels") and
pursuant to the Asset Sale Agreement and Plans of Merger dated as of April 21,
1998 (the "Merger Agreement") with RFS Hotel Investors, Inc. ("RFS") will
acquire 63 additional hotels (the RFS Hotels;" together with the Acquisition
Hotels and the Current Hotels, the "Hotels"). Other capitalized terms used
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herein and not otherwise defined herein shall have the respective meanings set
forth in the Registration Statement.
The Company wishes to confirm as follows its agreement with you (the
"Representatives") and the other several Underwriters on whose behalf you are
acting, in connection with the several purchases of the Shares by the
Underwriters.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3 (Registration No. 333-48169) under
the Act, including a prospectus relating to the Company's common stock, $.01 par
value per share, and preferred stock, $.01 par value per share, and such
amendments to such registration statement as may have been required prior to the
date hereof have been filed with the Commission, and such amendments have been
similarly prepared. Such registration statement and any post-effective
amendments thereto have become effective under the Act. The Company also has
filed, or proposes to file, with the Commission pursuant to Rule 424(b) under
the Act, a prospectus supplement specifically relating to the Shares.
The term "Registration Statement" as used in this Agreement means the
registration statement (including all financial schedules and exhibits), as
amended at the time it became effective, as supplemented or amended prior to the
execution of this Agreement, including all information (if any) deemed to be a
part of such registration at the time it became effective pursuant to Rule 430A
under the Act. If it is contemplated, at the time this Agreement is executed,
that a post-effective amendment to the registration statement will be filed and
must be declared effective before the offering of the Shares may commence, the
term "Registration Statement" as used in this Agreement means the registration
statement as amended by said post-effective amendment. The term "Prospectus" as
used in this Agreement means the base prospectus in the form included in the
Registration Statement at the time it was declared effective (the "Base
Prospectus") together with the prospectus supplement relating to the offering of
the Shares dated the date hereof in the form first filed with the Commission on
or after June 15, 1998 pursuant to Rule 424(b) under the Act. Any reference in
this Agreement to the registration statement, the Registration Statement, the
Base Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of the Registration Statement or the Prospectus,
as the case may be, and any reference to any amendment or supplement to the
Registration Statement or the Prospectus shall be deemed to refer to and include
any documents filed after such date under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), which, upon filing, are incorporated by
reference therein, as required by paragraph (b) of Item 12 of Form S-3. As used
herein, the term "Incorporated Documents" means the documents which are
incorporated by reference in the Registration Statement, the Prospectus, or any
amendment or supplement thereto during the period the Prospectus is required to
be delivered in connection with the sale of the Shares by the Underwriters or
any dealer.
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2. Agreements to Sell and Purchase. The Company hereby agrees, subject
to all the terms and conditions set forth herein, to issue and sell to each
Underwriter and, upon the basis of the representations, warranties and
agreements of the Company, the Trust and the Partnership contained in this
Agreement and subject to all the terms and conditions set forth in this
Agreement, each Underwriter agrees, severally and not jointly, to purchase from
the Company, at a purchase price of $24.2125 per Share (the "Purchase Price Per
Share"), the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number of Firm Shares increased as set
forth in Section 10 hereof).
The Company also agrees, subject to all the terms and conditions set
forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company, the Trust and the
Partnership contained in this Agreement and subject to all the terms and
conditions set forth in this Agreement, the Underwriters shall have the right to
purchase from the Company, at the Purchase Price Per Share, pursuant to an
option (the "Over-allotment Option") which may be exercised at any time and from
time to time prior to 9:00 P.M., New York City time, on the 30th day after the
date of the Prospectus (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the New York Stock Exchange
(the "NYSE") is open for trading), up to an aggregate of 412,500 Additional
Shares. Additional Shares may be purchased only for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. Upon
any exercise of the Over-allotment Option, each Underwriter, severally and not
jointly, agrees to purchase from the Company the number of Additional Shares
(subject to such adjustments as you may determine in order to avoid fractional
shares) which bears the same proportion to the number of Additional Shares to be
purchased by the Underwriters as the number of Firm Shares set forth opposite
the name of such Underwriter in Schedule I hereto (or such number of Firm Shares
increased as set forth in Section 10 hereof) bears to the aggregate number of
Firm Shares.
3. Terms of Public Offering. The Company has been advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon after this Agreement has become effective as in your
judgment is advisable and initially to offer the Shares upon the terms set forth
in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of and payment for the Firm Shares shall be made at the office of
Xxxxx Xxxxxx Inc., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00
A.M., New York City time, on June 25, 1998 (the "Closing Date"). The place of
closing for the Firm Shares and the Closing Date may be varied by agreement
between you and the Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the office of Xxxxx Xxxxxx
Inc. mentioned above at such time and on such date (the "Option Closing Date"),
which may be the same as the Closing Date but shall in no event be earlier than
the Closing Date nor earlier than two nor later than ten business days after the
giving of the notice hereinafter referred to, as shall be specified in a written
notice from you on
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behalf of the Underwriters to the Company of the Underwriters' determination to
purchase a number, specified in such notice, of Additional Shares. The place of
closing for any Additional Shares and the Option Closing Date for such Shares
may be varied by agreement between you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 9:30 A.M., New York City time, on the second
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to you on the Closing Date
or the Option Closing Date, as the case may be, against payment of the purchase
price therefor by wire transfer of immediately available funds to the Company.
5. Agreements of the Company. The Company agrees with the several
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for a post-effective amendment to the Registration Statement to
be declared effective before the offering of the Shares may commence, the
Company will endeavor to cause such post-effective amendment to become effective
as soon as possible and will advise you promptly and, if requested by you, will
confirm such advice in writing, when such post-effective amendment has become
effective.
(b) The Company will advise you promptly and, if requested by
you, will confirm such advice in writing: of any request by the Commission for
amendment of or a supplement to the Registration Statement or the Prospectus or
for additional information; of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Shares for offering or sale in any jurisdiction or the
initiation of any proceeding for such purpose; and within the period of time
referred to in paragraph (f) below, of any change in the Company's condition
(financial or other), business, prospects, properties, net worth or results of
operations, or of the happening of any event, which makes any statement of a
material fact made in the Registration Statement or the Prospectus (as then
amended or supplemented) untrue or which requires the making of any additions to
or changes in the Registration Statement or the Prospectus (as then amended or
supplemented) in order to state a material fact required by the Act or the
regulations thereunder to be stated therein or necessary in order to make the
statements therein not misleading, or of the necessity to amend or supplement
the Prospectus (as then amended or supplemented) to comply with the Act or any
other law. If at any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible time.
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(c) The Company will furnish to you, without charge, (i) as
many signed copies of the Registration Statement as originally filed with the
Commission and of each amendment thereto, including financial statements and all
exhibits thereto as you may reasonably request, (ii) such number of conformed
copies of the Registration Statement as originally filed and of each amendment
thereto, but without exhibits, as you may reasonably request, (iii) such number
of copies of the Incorporated Documents, without exhibits, as you may reasonably
request, and (iv) five copies of the exhibits to the Incorporated Documents.
(d) The Company will not file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus or,
prior to the end of the period of time referred to in the first sentence in
subsection (e) below, file any document which upon filing, becomes an
Incorporated Document, of which you shall not previously have been advised or to
which, after you shall have received a copy of the document proposed to be
filed, you shall reasonably object.
(e) As soon after the execution and delivery of this Agreement
as possible and thereafter from time to time for such period as in the opinion
of counsel for the Underwriters a prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer, the Company
will expeditiously deliver to each Underwriter and each dealer, without charge,
as many copies of the Prospectus (and of any amendment or supplement thereto) as
you may reasonably request. Subject to the provisions of subsection (g) below,
the Company consents to the use of the Prospectus (and of any amendment or
supplement thereto) in accordance with the provisions of the Act and with the
securities or Blue Sky laws or real estate syndication laws of the jurisdictions
in the United States in which the Shares are offered by the several Underwriters
and by all dealers to whom Shares may be sold, both in connection with the
offering and sale of the Shares and for such period of time thereafter as the
Prospectus is required by the Act to be delivered in connection with sales by
any Underwriter or dealer. If during such period of time any event shall occur
that in the judgment of the Company or in the opinion of counsel for the
Underwriters is required to be set forth in the Prospectus (as then amended or
supplemented) or should be set forth therein in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary to supplement or amend the Prospectus (or to
file under the Exchange Act any document which, upon filing, becomes an
Incorporated Document) in order to comply with the Act or any other law, the
Company will forthwith prepare and, subject to the provisions of paragraph (d)
above, file with the Commission an appropriate supplement or amendment thereto
(or to such document), and will expeditiously furnish to the Underwriters and
dealers a reasonable number of copies thereof. In the event that the Company and
you, as Representatives of the several Underwriters, agree that the Prospectus
should be amended or supplemented, the Company, if requested by you, will
promptly issue a press release announcing or disclosing the matters to be
covered by the proposed amendment or supplement.
(f) The Company will cooperate with you and with counsel for
the Underwriters in connection with the registration or qualification of the
Shares for offering and sale by the several Underwriters and by dealers under
the securities or Blue Sky laws or real estate syndication laws of
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such jurisdictions as you may designate and will file such consents to service
of process or other documents necessary or appropriate in order to effect such
registration or qualification; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to service of process in
suits, other than those arising out of the offering or sale of the Shares, in
any jurisdiction where it is not now so subject.
(g) The Company will make generally available to its security
holders a consolidated earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as practicable
after the end of such period, which consolidated earnings statement shall
satisfy the provisions of Section 11(a) of the Act.
(h) The Company will furnish to its shareholders, as soon as
practicable after the end of each respective period, annual reports (including
financial statements audited by independent public accountants) and unaudited
quarterly reports of operations for each of the first three quarters of the
fiscal year, and during the period of three years hereafter, the Company will
furnish to you concurrently with mailing or filing, a copy of each report of the
Company mailed to shareholders or filed with the Commission, and from time to
time such other information concerning the Company as you may reasonably
request.
(i) If this Agreement shall terminate or shall be terminated
after execution pursuant to any provisions hereof (otherwise than pursuant to
the second paragraph of Section 10 hereof or by notice given by you terminating
this Agreement pursuant to Section 10 or Section 11 hereof) or if this Agreement
shall be terminated by the Underwriters because of any failure or refusal on the
part of the Company to comply with the terms or fulfill any of the conditions of
this Agreement to be complied with or fulfilled by the Company, the Company
agrees to reimburse the Representatives for all reasonable out-of-pocket
expenses (including fees and expenses of counsel for the Underwriters) incurred
by you in connection with this Agreement.
(j) The Company will apply the net proceeds from the sale of
the Shares substantially in accordance with the description set forth under the
caption "Use of Proceeds" in the Prospectus.
(k) The Company will timely file the Prospectus pursuant to
Rule 424(b) under the Act and will advise you of the time and manner of such
filing.
(l) Except as stated in this Agreement and in the Prospectus,
the Company has not taken, nor will it take, directly or indirectly, any action
designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Series A Preferred Stock to
facilitate the sale or resale of the Shares.
(m) The Company will use its best efforts to list the Shares
on the NYSE.
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6. Representations and Warranties of the Company, The Trust and
the Partnership. The Company, the Trust and the Partnership, jointly and
severally, represent and warrant to each Underwriter that:
(a) No stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no proceeding for
that purpose has been instituted or threatened by the Commission or the
securities authority of any state or other jurisdiction.
(b) The Company and the transactions contemplated by this
Agreement meet the requirements and conditions for using a registration
statement on Form S-3 under the Act, set forth in the General Instructions to
Form S-3. When the Registration Statement or any amendment thereto was declared
effective, and on the Closing Date (or the Option Closing Date, as the case may
be) it (i) contained or will contain all statements required to be stated
therein in accordance with, and complied or will comply in all material respects
with the requirements of, the Act and the rules and regulations of the
Commission thereunder and (ii) did not or will not include any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any amendment or
supplement thereto is filed with the Commission pursuant to Rule 424(b) and at
the Closing Date (or the Option Closing Date, as the case may be), the
Prospectus, as amended or supplemented at any such time, (i) contained or will
contain all statements required to be stated therein in accordance with, and
complied or will comply in all material respects with the requirements of, the
Act and the rules and regulations of the Commission thereunder and (ii) did not
or will not include any 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, not misleading. The representation
and warranty in this paragraph (b) does not apply to statements in or omissions
from the Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by or on behalf
of any Underwriter through you expressly for use therein.
(c) The Incorporated Documents when they were filed (or, if
any amendment with respect to any such document was filed, when such amendment
was filed), conformed in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder, any further Incorporated
Documents so filed will, when they are filed, conform in all material respects
with the requirements of the Exchange Act and the rules and regulations
thereunder; no such document when it was filed (or, if an amendment with respect
to any such document was filed, when such amendment was filed) contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein not
misleading; and no such further document, when it is filed, will contain an
untrue statement of a material fact or will omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading.
(d) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the state of
Tennessee with all requisite corporate power and authority to own and lease its
properties and to conduct its business as now conducted.
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The Company has been duly qualified to do business and is in good standing as a
foreign corporation in each other jurisdiction in which the ownership or leasing
of its properties or the nature or conduct of its business as now conducted
requires such qualification, except where the failure to do so would not have a
material adverse effect on the Company, the Trust, the Partnership, or any
Hotel. The Company will be duly qualified (at the time of the closing of the
acquisition of the Acquisition Hotels) in each jurisdiction in which the
ownership or leasing of its properties or the nature or conduct of its business
requires such qualification, except where the failure to do so would not have a
material adverse effect on the Company, the Trust, the Partnership, or any
Hotel. Except for the Trust, the Partnership, Equity Inns Services, Inc., a
wholly-owned subsidiary of the Company ("EISI"), Equity Inns Partnership II,
L.P. ("ENN II,L.P."), Equity Inns/West Virginia Partnership, L.P. ("EIWV"), EQI
Financing Corporation ("EQIFC") and EQI Financing Partnership I, L.P. ("EQIFP),
the Company does not own or control, directly or indirectly, any corporation,
association or other entity.
(e) The Trust has been duly organized and is validly existing
as a real estate investment trust in good standing under the laws of the State
of Maryland with all requisite power and authority to own and lease its
properties and to conduct its business as now conducted. The Trust has been duly
qualified to do business and is in good standing in each other jurisdiction in
which the ownership or leasing of its properties or the nature or conduct of its
business as now conducted requires such qualification, except where the failure
to do so would not have a material adverse effect on the Company, the Trust, the
Partnership, or any Hotel. The Trust will be duly qualified (at the time of the
closing of the acquisition of the Acquisition Hotels) in each jurisdiction in
which the ownership or leasing of its properties or the nature or conduct of its
business requires such qualification, except where the failure to do so would
not have a material adverse effect on the Company, the Trust, the Partnership,
or any Hotel. Except for the Partnership, the Trust does not own or control,
directly or indirectly, any corporation, association or other entity. The Trust
is wholly owned by the Company.
(f) The Partnership has been duly formed and is validly
existing as a limited partnership in good standing under the Tennessee Revised
Uniform Limited Partnership Act (the "Tennessee Act") with all requisite
partnership power and authority to own and lease its properties and to conduct
its business as now conducted. The Partnership has been duly qualified or
registered to do business and is in good standing as a foreign partnership in
each other jurisdiction in which the ownership or leasing of its properties or
the nature or conduct of its business as now conducted requires such
qualification, except where the failure to do so would not have a material
adverse effect on the Company, the Trust, the Partnership, or any Hotel. The
Partnership will be duly qualified (at the time of the closing of the
acquisition of the Acquisition Hotels) in each jurisdiction in which the
ownership or leasing of its properties or the nature or conduct of its business
requires such qualification, except where the failure to do so would not have a
material adverse effect on the Company, the Trust, the Partnership, or any
Hotel. The Trust is the sole general partner of the Partnership and holds
approximately 94.9% of the outstanding Partnership Units. At the Closing Date,
following the contribution of the net proceeds of the Offering to the
Partnership, the Trust will be the sole general partner of the Partnership and
will be the holder of approximately 94.9% of the
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units of limited partnership interest in the Partnership ("Partnership Units")
and the holder of 2,750,000 9 1/2% Series A Cumulative Preferred Units (the
"Series A Preferred Units") or 100% of the outstanding Series A Preferred Units
(assuming no exercise of the option to purchase the Additional Shares).
(g) The Partnership and, to the knowledge of the Company, the
Trust and the Partnership, each of the other parties to the Acquisition
Agreements and the Merger Agreement has been duly formed and is validly existing
as a corporation or partnership, as applicable, under the laws of its state of
formation. The Partnership and, to the knowledge of the Company, the Trust and
the Partnership, each of the other parties to the Acquisition Agreements and the
Merger Agreement has all requisite corporate or partnership power and authority
to own, lease and operate its properties and to conduct its business as now
conducted.
(h) The Company has full corporate right, power and authority
to enter into this Agreement, to issue, sell and deliver the Shares as provided
herein and to consummate the transactions contemplated herein. This Agreement
has been duly authorized, executed and delivered by the Company and constitutes
a valid and binding agreement of the Company, enforceable in accordance with its
terms, except to the extent that enforceability may be limited by bankruptcy,
insolvency, reorganization or other laws of general applicability relating to or
affecting creditors' rights, or by general equity principles and except to the
extent the indemnification and contribution provisions set forth in Section 7 of
this Agreement may be limited by federal or state securities laws or the public
policy underlying such laws.
(i) The Trust has full legal right, power and authority to
enter into this Agreement and to consummate the transactions contemplated
herein. This Agreement has been duly authorized, executed and delivered by the
Trust and constitutes a valid and binding agreement of the Trust, enforceable in
accordance with its terms, except to the extent that enforceability may be
limited by bankruptcy, insolvency, reorganization or other laws of general
applicability relating to or affecting creditors' rights, or by general equity
principles and except to the extent the indemnification and contribution
provisions set forth in Section 7 of this Agreement may be limited by federal or
state securities laws or the public policy underlying such laws.
(j) The Partnership has full partnership right, power and
authority to enter into this Agreement and to consummate the transactions
contemplated herein. This Agreement has been duly authorized, executed and
delivered on behalf of the Partnership by the Trust, as the sole general partner
of the Partnership, and constitutes a valid and binding agreement of the
Partnership enforceable in accordance with its terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency, reorganization or other
laws of general applicability relating to or affecting creditors' rights, or by
general equity principles and except to the extent the indemnification and
contribution provisions set forth in Section 7 of this Agreement may be limited
by federal or state securities laws or the public policy underlying such laws.
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(k) Each of the Third Amended and Restated Agreement of
Limited Partnership of the Partnership, as amended by Amendment No. 1 dated as
of the Closing Date (the "Partnership Agreement"), the Consolidated Lease
Amendment dated as of November 15, 1996 by and between the Partnership and
Crossroads/Memphis Partnership, L.P., First Amendment to Consolidated Lease
Amendment dated as of February 6, 1997 (together, the "Consolidated Lease
Amendment") and the Second Consolidated Lease Amendment dated as of February 6,
1997 (the "Second Consolidated Lease Amendment") between EQI Financing
Partnership I, L.P., and Crossroads/Memphis Financing Company, L.L.C. and each
of the operating leases between the Lessee and the Partnership pursuant to which
the Lessee leases Current Hotels from the Partnership (the "Percentage Leases")
executed since the date of the Consolidated Lease Agreement have been duly
authorized, executed and delivered by the parties thereto and constitute valid
and binding agreements, enforceable in accordance with their respective terms,
except to the extent enforceability may be limited by bankruptcy, insolvency,
reorganization or other laws of general applicability relating to or affecting
creditors' rights or by general equity principles. The leases with respect to
the Acquisition Hotels (the "Proposed Leases"), when duly authorized, executed
and delivered by the parties thereto, will constitute valid and binding
agreements, enforceable in accordance with their terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, reorganization or other
laws of general applicability relating to or affecting creditors' rights or by
general equity principles. (This Agreement, the Partnership Agreement, the
Consolidated Lease Amendment, the Percentage Leases, and the Proposed Leases
sometimes are hereinafter referred to as the "Operative Documents.")
(l) The Partnership and, to the knowledge of the Company, the
Trust and the Partnership, each of the other parties to the Acquisition
Agreements and the Merger Agreement has full legal right, power and authority to
enter into such agreements and to consummate the transactions contemplated
thereby subject to the terms thereof. The Acquisition Agreements and the Merger
Agreement have been duly authorized, executed and delivered on behalf of the
Partnership by the Trust, as general partner of the Partnership and, to the
Company's, the Trust's and the Partnership's knowledge, the other parties
thereto and constitute valid and binding agreements, enforceable in accordance
with their terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization or other laws of general applicability
relating to or affecting creditors' rights or by general equity principles.
(m) Each material consent, approval, authorization, order,
license, certificate, permit, registration, designation or filing by or with any
governmental agency or body necessary for the valid authorization, issuance,
sale and delivery of the Shares, the execution, delivery and performance of this
Agreement, the other Operative Documents, the Acquisition Agreements and the
consummation by the Company, the Trust and the Partnership and the other parties
to the Acquisition Agreements of the transactions contemplated hereby and
thereby has been made or obtained and is in full force and effect or will be
made or obtained prior to the closing of the purchase of the Acquisition Hotels
and the RFS Hotels and will be in full force and effect.
(n) Neither the issuance, sale and delivery by the Company of
the Shares, nor the execution, delivery and performance of this Agreement, the
other Operative Documents, the
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Acquisition Agreements or the Merger Agreement nor the consummation of the
transactions contemplated hereby and thereby by the Company, the Trust or the
Partnership, as applicable, will conflict with or result in a breach or
violation of any of the terms and provisions of, or (with or without the giving
of notice or the passage of time or both) constitute a default under the
charter, by-laws, Declaration of Trust, certificate of limited partnership or
partnership agreement, as the case may be, of the Company, the Trust or the
Partnership; any indenture, mortgage, deed of trust, loan agreement, note, lease
or other agreement or instrument to which the Company, the Trust or the
Partnership is a party or to which they, any of them, any of their respective
properties or other assets or any Current Hotel or, to the Company's knowledge,
any Acquisition Hotel is subject; or any applicable statute, judgment, decree,
order, rule or regulation of any court or governmental agency or body applicable
to any of the foregoing or any of their respective properties; or result in the
creation or imposition of any lien, charge, claim or encumbrance upon any
property or asset of any of the foregoing.
(o) The issuance of the Shares to be issued and sold to the
Underwriters hereunder has been validly authorized by the Company. When issued
and delivered against payment therefor as provided in this Agreement, the Shares
will be duly and validly issued, fully paid and nonassessable. No statutory or
other preemptive rights of shareholders exist with respect to any of the Shares.
No person or entity holds a right to require or participate in the registration
under the Act of the Shares pursuant to the Registration Statement. No person or
entity has a right of participation or first refusal with respect to the sale of
the Shares by the Company. The form of certificates evidencing the Shares
complies with all applicable requirements of Tennessee law.
(p) The Company's authorized, issued and outstanding capital
stock is as disclosed in the Prospectus. All of the issued shares of capital
stock of the Company have been duly authorized and are validly issued, fully
paid and nonassessable. None of the issued shares of capital stock of the
Company has been issued or is owned or held in violation of any statutory or
other preemptive rights of shareholders. Except as disclosed in the Prospectus,
there is no outstanding option, warrant or other right calling for the issuance
of, and no commitment, plan or arrangement to issue, any shares of capital stock
of the Company or any security convertible into or exchangeable for capital
stock of the Company.
(q) All offers and sales of the Company's capital stock prior
to the date hereof were at all relevant times duly registered under the Act or
exempt from the registration requirements of the Act by reason of Sections 3(b),
4(2) or 4(6) thereof and were duly registered or were issued pursuant to an
available exemption from the registration requirements under the applicable
state securities or Blue Sky laws.
(r) All of the issued shares of beneficial interest of the
Trust have been duly authorized and validly issued, are fully paid and
nonassessable. None of the issued shares of beneficial interest of the Trust has
been issued or is owned or held in violation of any preemptive right. There is
no outstanding option, warrant or other right calling for the issuance of, and
no commitment, plan or arrangement to issue, any shares of beneficial interest
of the Trust or any
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security convertible into or exchangeable for shares of beneficial interest of
the Trust. All of the outstanding shares of beneficial interest of the Trust
have been issued, offered and sold in compliance with all applicable laws
(including, without limitation, federal and state securities laws).
(s) All of the issued Partnership Units of the Partnership
have been duly and validly authorized and issued and are fully paid and
nonassessable. None of the issued Partnership Units has been issued or is owned
or held in violation of any preemptive right. At the Closing Date, such
Partnership Units will be validly issued, fully paid and nonassessable. All of
the outstanding Partnership Units have been issued, offered and sold in
compliance with all applicable laws (including, without limitation, federal and
state securities laws).
(t) The financial statements of the Company incorporated by
reference in the Registration Statement and Prospectus present fairly the
financial position of the Company as of the dates indicated and the results of
operations and cash flows for the Company for the periods specified, all in
conformity with generally accepted accounting principles applied on a consistent
basis. To the knowledge of the Company, the Partnership and the Trust, the
various financial statements of RFS incorporated by reference in the
Registration Statement and the Prospectus present fairly the financial position
for such hotels as of the dates indicated and the results of operations and cash
flows for such hotels for the periods specified, all in conformity with
generally accepted accounting principles applied on a consistent basis. The
financial statement schedules included in the Registration Statement fairly
present the information shown therein and have been compiled on a basis
consistent with the financial statements incorporated by reference in the
Registration Statement and the Prospectus. No other financial statements or
schedules are required by Form S-3 or otherwise to be included in the
Registration Statement or the Prospectus. The unaudited pro forma financial
information (including the related notes) incorporated by reference in the
Prospectus complies as to form in all material respects to the applicable
accounting requirements of the Act and the Act Regulations, and management of
the Company believes that the assumptions underlying the pro forma adjustments
are reasonable. Such pro forma adjustments have been properly applied to the
historical amounts in the compilation of the information and such information
fairly presents with respect to the Company, the financial position, results of
operations and other information purported to be shown therein at the respective
dates and for the respective periods specified.
(u) Coopers & Xxxxxxx L.L.P., who have examined and are
reporting upon the audited financial statements and schedules of the Company and
RFS incorporated by reference in the Registration Statement, are, and were
during the periods covered by their reports incorporated by reference in the
Registration Statement and the Prospectus, independent public accountants within
the meaning of the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder.
(v) None of the Company, the Trust, the Partnership or, to the
knowledge of the Company, RFS has sustained, since December 31, 1997, any
material loss or interference with its business from fire, explosion, flood,
hurricane, accident or other calamity, whether or not covered
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by insurance, or from any labor dispute or arbitrators' or court or governmental
action, order or decree; and, since the respective dates as of which information
is given in the Registration Statement and the Prospectus, and except as
otherwise stated in the Registration Statement and Prospectus, there has not
been (i) any material change in the capital stock, shares of beneficial
interests or partnership interests, as applicable, long-term debt, obligations
under capital leases or short-term borrowings of the Company, the Trust, the
Partnership or, to the knowledge of the Company, RFS, (ii) any material adverse
change, or any development which could reasonably be seen as involving a
prospective material adverse change, in or affecting the business, prospects,
properties, assets, results of operations or condition (financial or other) of
the Company, the Trust, the Partnership or, to the knowledge of the Company,
RFS, (iii) any liability or obligation, direct or contingent, incurred or
undertaken by the Company, the Trust, the Partnership or, to the knowledge of
the Company, RFS which is material to the business or condition (financial or
other) of such entity, except for liabilities or obligations incurred in the
ordinary course of business, (iv) any declaration or payment of any dividend or
distribution of any kind on or with respect to the capital stock, shares of
beneficial interest or partnership interests, as applicable, of the Company, the
Trust, or the Partnership except as set forth in the Registration Statement; or
(v) any transaction that is material to the Company, the Trust, the Partnership
or, to the knowledge of the Company, RFS except transactions in the ordinary
course of business or as otherwise disclosed in the Registration Statement and
the Prospectus.
(w) The Partnership or its subsidiaries has good and
marketable title in fee simple to all real property and the improvements located
thereon owned by it, including the Current Hotels, free and clear of all liens,
encumbrances, claims, security interests, restrictions and defects except such
as are described in the Prospectus or in connection with the Company's $250
million unsecured line of credit (the "Line of Credit"), the collateralized
mortgage bonds issued by EQI Financing Partnership I, L.P. or the title
insurance policies relating to such properties. Upon consummation of the
transactions contemplated by the Acquisition Agreements and the Merger
Agreement, the Partnership or its subsidiaries will have good and marketable
title in fee simple to the Acquisition Hotels and the RFS Hotels and all related
real property, free and clear of all liens, encumbrances, claims, security
interests, restrictions and defects except such as are described in the proposed
title commitments for the Acquisition Hotels and the RFS Hotels or in connection
with the financing of a portion of the purchase price for the Acquisition Hotels
and the RFS Hotels or which do not materially adversely affect the value of the
property or the use proposed to be made of the property by the Partnership or
its subsidiaries. Neither the Company nor the Trust owns or leases any real
property as lessee. Except for the ground leases relating to the Traverse City,
Michigan Hotel, the Tinton Falls, New Jersey Hotel, the Xxxx Burnie (Baltimore),
Maryland Hotel, the Mountain Brook (Birmingham), Alabama Hotel, the Atlanta
(Northlake), Georgia Hotel, the Memphis (Sycamore), Tennessee Hotel and the
Nashville, Tennessee Hotel (collectively, the "Leases"), the Partnership does or
will not lease any real property as lessee. The Leases are valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made, and proposed to be made, of such property, by the
Partnership. The Leases conform in all material respects to the description
thereof, if any, set forth in the Registration Statement; and no notice has been
given or material claim asserted by anyone adverse to the rights of the
Partnership under any of the Leases or affecting the right to the continued
possession of the leased property. Except with respect to the
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Line of Credit and the EQI Financing Partnership I, L.P. agreements, the
Company, the Trust and the Partnership have good title to all personal property
owned by them, free and clear of all liens, security interests, pledges,
charges, encumbrances, mortgages and defects, except such as are disclosed in
the Prospectus or do not materially and adversely affect the value of such
property and do not interfere with the use made or proposed to be made of such
property by the Company, the Trust or the Partnership. Except as disclosed in
the Registration Statement, no person has an option or right of first refusal to
purchase all or part of any Current Hotel, any Acquisition Hotel, any RFS Hotel
or any interest therein. Each of the Current Hotels and, to the Company's
knowledge, the RFS Hotels, complies with all applicable codes, laws and
regulations (including, without limitation, building and zoning codes, laws and
regulations and laws relating to access to the Hotels) and except for such
failures to comply that would not individually or in the aggregate have a
material adverse impact on the condition, financial or otherwise, or on the
earnings, assets, business affairs or business prospects of the Partnership, the
Trust, the Company or, to the knowledge of the Company, RFS. Neither the
Company, the Trust nor the Partnership has knowledge of any pending or
threatened condemnation proceedings, zoning change, or other proceeding or
action that will in any manner affect the size of, use of, improvements on,
construction on or access to the Hotels, except such proceedings or actions that
would not have a material adverse effect on the condition, financial or
otherwise, or on the earnings, assets, business affairs or business prospects of
or with respect to a Hotel, the Partnership, the Trust or the Company.
(x) Neither the Company, the Trust or the Partnership is in
violation of its respective charter, bylaws, declaration of trust, certificate
of limited partnership or partnership agreement, as the case may be, and no
default exists, and no event has occurred, nor state of facts exists, which,
with notice or after the lapse of time to cure or both, would constitute a
default in the due performance and observance of any obligation, agreement,
term, covenant, consideration or condition contained in any indenture, mortgage,
deed of trust, loan agreement, note, lease or other agreement or instrument to
which any such entity is a party or to which any such entity or any of its
properties is subject, except as may be properly described in the Prospectus or
such as in the aggregate do not now have or will not in the future have a
material adverse effect on the financial position, results of operations or
business of each such entity, respectively. None of the Company, the Trust or
the Partnership is in violation of, or in default with respect to, any statute,
rule, regulation, order, judgment or decree, except as may be properly described
in the Prospectus or such as in the aggregate do not now have and will not in
the future have a material adverse effect on the financial position, results of
operations or business of each such entity, respectively.
(y) There is not pending or, to the knowledge of the Company,
the Trust, or the Partnership, threatened, any action, suit, proceeding, inquiry
or investigation against the Company, the Trust, the Partnership or any of their
respective officers and directors or, to the knowledge of the Company, RFS or to
which the properties, assets or rights of any such entity are subject, before or
brought by any court or governmental agency or body or board of arbitrators,
which could result in any material adverse change in the business, prospects,
properties, assets, results of operations or condition (financial or otherwise)
of any such entity or which could adversely affect the
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consummation of the transactions contemplated by this Agreement, the Acquisition
Agreements and the Merger Agreement.
(z) The descriptions in the Registration Statement and the
Prospectus of the contracts, leases and other legal documents therein described
present fairly the information required to be shown, and there are no contracts,
leases, or other documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required. To the best
knowledge of the Company, the Trust and the Partnership, there are no statutes
or regulations applicable to the Company, the Trust or the Partnership or
certificates, permits or other authorizations from governmental regulatory
officials or bodies required to be obtained or maintained by the Company, the
Trust or the Partnership of a character required to be disclosed in the
Registration Statement or the Prospectus which have not been so disclosed and
properly described therein. All agreements, if any, between the Company, the
Trust and the Partnership, respectively, and third parties expressly referenced
in the Prospectus are legal, valid and binding obligations of the Company, the
Trust and the Partnership, respectively, enforceable in accordance with their
respective terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization or other laws of general applicability
relating to or affecting creditors' rights and by general equitable principles.
(aa) The Company, the Trust, the Partnership or the Lessee
owns, possesses or has obtained all material permits, licenses, franchises
(including, with respect to the Partnership, the franchises relating to the
Hotels), certificates, consents, orders, approvals and other authorizations of
governmental or regulatory authorities or other entities as are necessary to own
or lease, as the case may be, its respective properties and to carry on its
business as presently conducted, or as contemplated in the Prospectus to be
conducted, and none of the Company, the Trust or the Partnership has received
any notice of proceedings relating to revocation or modification of any such
licenses, permits, franchises, certificates, consents, orders, approvals or
authorizations.
(bb) Each of the Company, the Trust, the Partnership or, to
the knowledge of the Company, RFS owns or possesses adequate license or other
rights to use all trademarks, service marks, trade names, copyrights, software
and design licenses, trade secrets, manufacturing processes, other intangible
property rights and know-how (collectively "Intangibles") necessary to entitle
the Company, the Trust and the Partnership to conduct its respective business
now, and as proposed to be conducted or operated as described in the Prospectus,
and neither the Company, the Trust or the Partnership has received notice of
infringement or of conflict with (and knows of no such infringement of or
conflict with) asserted rights of others with respect to any Intangibles which
could materially and adversely affect the business, prospects, properties,
assets, results of operation or condition (financial or otherwise) of the
Company, the Trust or the Partnership.
(cc) To the best of the Company's, the Trust's and the
Partnership's knowledge, the Company's, the Trust's and the Partnership's system
of internal accounting controls taken as a whole is sufficient to meet the broad
objectives of internal accounting control insofar as those objectives pertain to
the prevention or detection of errors or irregularities in amounts that would be
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material in relation to the Company's, the Trust's or the Partnership's
financial statements; and, to the best of the Company's, the Trust's, and the
Partnership's knowledge, none of the Company, the Trust, the Partnership or any
employee or agent thereof, has made any payment of funds of the Company, the
Trust or the Partnership, as the case may be, or received or retained any funds
and no funds of the Company, the Trust or the Partnership, as the case may be,
have been set aside to be used for any payment, in each case in violation of any
law, rule or regulation.
(dd) Each of the Company, the Trust (to the extent not
consolidated with the Company) and the Partnership (to the extent not
consolidated with the Company) has filed on a timely basis all necessary
federal, state, local and foreign income and franchise tax returns required to
be filed through the date hereof and has paid all taxes shown as due thereon;
and no tax deficiency has been asserted against any such entity, nor does any
such entity know of any tax deficiency which is likely to be asserted against
any such entity which if determined adversely to any such entity, could
materially adversely affect the business, prospects, properties, assets, results
of operations or condition (financial or otherwise) of any such entity. All tax
liabilities are adequately provided for on the respective books of such
entities.
(ee) Each of the Company, the Trust, the Partnership, and
their officers, directors or affiliates has not taken and will not take,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in or constitute the stabilization or manipulation
of any security of the Company or to facilitate the sale or resale of the
Shares.
(ff) The Series A Preferred Stock is registered pursuant to
Section 12(b) of the Exchange Act and an application for listing the Series A
Preferred Stock on the NYSE has been filed.
(gg) The Company has not incurred any liability for a fee,
commission or other compensation on account of the employment of a broker or
finder in connection with the transactions contemplated by this Agreement other
than as contemplated hereby or as described in the Registration Statement.
(hh) Except as otherwise disclosed in the Prospectus, neither
the Company, the Trust, the Partnership nor, to the knowledge of the Company,
the Trust, or the Partnership, any entity ("Selling Entity") from which the
Partnership acquired a Current Hotel or from which the Partnership proposes to
acquire the Acquisition Hotels or the RFS Hotels has authorized or conducted or
has knowledge of the generation, transportation, storage, presence, use,
treatment, disposal, release, or other handling of any hazardous substance,
hazardous waste, hazardous material, hazardous constituent, toxic substance,
pollutant, contaminant, asbestos, radon, polychlorinated biphenyls ("PCBs"),
petroleum product or waste (including crude oil or any fraction thereof),
natural gas, liquefied gas, synthetic gas or other material defined, regulated,
controlled or potentially subject to any remediation requirement under any
environmental law (collectively, "Hazardous Materials"), on, in, under or
affecting any real property currently leased or owned (or proposed to be leased
or owned) or by any means controlled by the Company, the Trust, and the
Partnership, including the
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Current Hotels, the Acquisition Hotels and the RFS Hotels (the "Real Property")
except as in material compliance with applicable laws; except as otherwise
disclosed in the Prospectus, to the knowledge of the Company, the Trust and the
Partnership, the Real Property and the Company's, the Trust's and the
Partnership's and the Selling Entities' operations with respect to the Real
Property are in compliance with all federal, state and local laws, ordinances,
rules, regulations and other governmental requirements relating to pollution,
control of chemicals, management of waste, discharges of materials into the
environment, health, safety, natural resources, and the environment
(collectively, "Environmental Laws"), and the Company, the Trust, the
Partnership and the Selling Entities have, and are in compliance with, all
licenses, permits, registrations and government authorizations necessary to
operate under all applicable Environmental Laws. Except as otherwise disclosed
in the Prospectus, none of the Company, the Trust, the Partnership, or, to the
knowledge of the Company, the Trust and the Partnership, any Selling Entity has
received any written or oral notice from any governmental entity or any other
person and there is no pending or threatened claim, litigation or any
administrative agency proceeding that: (i) alleges a violation of any
Environmental Laws by the Company, the Trust, the Partnership or any Selling
Entity; (ii) alleges that the Company, the Trust, the Partnership or any Selling
Entity is a liable party or a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
ss. 9601, et seq., or any state superfund law; (iii) has resulted in or could
result in the attachment of an environmental lien on any of the Real Property;
or (iv) alleges that the Company, the Trust, the Partnership or any Selling
Entity is liable for any contamination of the environment, contamination of the
Real Property, damage to natural resources, property damage, or personal injury
based on their activities or the activities of their predecessors or third
parties (whether at the Real Property or elsewhere) involving Hazardous
Materials, whether arising under the Environmental Laws, common law principles,
or other legal standards.
(ii) The Company is organized in conformity with the
requirements for qualification as a real estate investment trust under the
Internal Revenue Code of 1986, as amended (the "Code"), and the Company's method
of operation enables it to meet the requirements for taxation as a real estate
investment trust under the Code. The Partnership is treated as a partnership for
federal income purposes and not as a corporation or an association taxable as a
corporation.
(jj) None of the Company, the Trust or the Partnership is,
will become as a result of the transactions contemplated hereby, or will conduct
their respective businesses in a manner in which any such entity would become,
"an investment company," or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
(kk) None of the appraisers which prepared appraisals of any
of the Current Hotels or the Acquisition Hotels, nor any environmental
engineering firm which prepared Phase I environmental assessment reports with
respect to the Current Hotels or the Acquisition Hotels was employed for such
purpose on a contingent basis or has any substantial interest in the Company,
the Trust or the Partnership.
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(ll) The Partnership is not currently prohibited, directly or
indirectly, from making distributions to the Trust, from repaying to the Trust
any loans or advances to the Partnership or from transferring any of the
Partnership's property or assets to the Trust, except as disclosed in the
Prospectus and under the Line of Credit and the EQI Financing Partnership I,
L.P. agreements.
(mm) The Trust is not currently prohibited, directly or
indirectly, from making distributions to the Company, from repaying to the
Company any loans or advances to the Trust or from transferring any of the
Trust's property or assets to the Company, except as disclosed in the Prospectus
and under the Line of Credit and the EQI Financing Partnership I, L.P.
agreements.
(nn) The statements set forth in the Prospectus under the
caption "Federal Income Tax Considerations," insofar as they purport to describe
the provisions of the laws and documents referred to therein, are accurate and
complete.
Any certificate signed by any officer of the Company on behalf
of the Company, or by an officer of the Trust on behalf of the Trust or the
Partnership and delivered to you or to counsel for the Underwriters shall be
deemed a representation and warranty by such entity to each Underwriter as to
the matters covered thereby.
7. Indemnification and Contribution. (a) The Company, the Trust and the
Partnership, jointly and severally, agree to indemnify and hold harmless each of
you and each other Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages, liabilities
and expenses (including reasonable costs of investigation) arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus or in any amendment or
supplement thereto, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or expenses arise out of or are based upon
any untrue statement or omission or alleged untrue statement or omission which
has been made therein or omitted therefrom in reliance upon and in conformity
with the information relating to such Underwriter furnished in writing to the
Company by or on behalf of any Underwriter through you expressly for use in
connection therewith. The foregoing indemnity agreement shall be in addition to
any liability which the Company, the Trust or the Partnership may otherwise
have.
(b) If any action, suit or proceeding shall be brought against
any Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company, the Trust or the Partnership, such
Underwriter or such controlling person shall promptly notify the Company, the
Trust or the Partnership, and the Company, the Trust or the Partnership shall
assume the defense thereof, including the employment of counsel and payment of
all reasonable fees and expenses. Such Underwriter or any such controlling
person shall have the right to employ separate counsel in any such action, suit
or proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or such
controlling
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person unless the Company, the Trust or the Partnership have agreed in writing
to pay such fees and expenses, the Company, the Trust or the Partnership, have
failed to assume the defense and employ counsel, or the named parties to any
such action, suit or proceeding (including any impleaded parties) include both
such Underwriter or such controlling person and the Company, the Trust or the
Partnership and such Underwriter or such controlling person shall have been
advised by its counsel that representation of such indemnified party and the
Company, the Trust or the Partnership by the same counsel would be inappropriate
under applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or potential
differing interests between them (in which case the Company, the Trust or the
Partnership shall not have the right to assume the defense of such action, suit
or proceeding on behalf of such Underwriter or such controlling person). It is
understood, however, that the Company, the Trust or the Partnership shall, in
connection with any one such action, suit or proceeding or separate but
substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel), at any time for all such
Underwriters and controlling persons not having actual or potential differing
interests with you or among themselves, which firm shall be designated in
writing by Xxxxx Xxxxxx Inc., and that all such fees and expenses shall be
reimbursed as they are incurred. The Company, the Trust or the Partnership shall
not be liable for any settlement of any such action, suit or proceeding effected
without its written consent, but if settled with such written consent, or if
there be a final judgment for the plaintiff in any such action, suit or
proceeding, the Company, the Trust or the Partnership agree to indemnify and
hold harmless any Underwriter, to the extent provided in the preceding
paragraph, and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Trust, the Partnership, their
respective directors and officers who sign the Registration Statement, and any
person who controls the Company, the Trust or the Partnership within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company, the Trust and the Partnership to
each Underwriter, but only with respect to information furnished in writing by
or on behalf of such Underwriter through you expressly for use in the
Registration Statement or the Prospectus, or any amendment or supplement
thereto. If any action, suit or proceeding shall be brought against the Company,
the Trust, the Partnership or any of their respective directors, any such
officer, or any such controlling person based on the Registration Statement or
the Prospectus, or any amendment or supplement thereto, and in respect of which
indemnity may be sought against any Underwriter pursuant to this paragraph (c),
such Underwriter shall have the rights and duties given to the Company, the
Trust and the Partnership by paragraph (b) above (except that if the Company,
the Trust and the Partnership shall have assumed the defense thereof such
Underwriter shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and expenses of
such counsel shall be at such Underwriter's expense), and the Company, the
Trust, the Partnership or their respective directors, any such officer, and any
such controlling person shall have the rights
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and duties given to the Underwriters by paragraph (b) above. The foregoing
indemnity agreement shall be in addition to any liability which the Underwriters
may otherwise have.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative benefits received by the
Company, the Trust and the Partnership on the one hand and the Underwriters on
the other hand from the offering of the Shares, 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, the Trust and the Partnership
on the one hand and the Underwriters on the other in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, the Trust and the Partnership on
the one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Shares (before
deducting expenses) received by the Company and the total underwriting discounts
and commissions received by the Underwriters bear to the price to public of the
Shares, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company, the Trust and the Partnership on
the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, the Trust or the Partnership on
the one hand or by the Underwriters on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(e) The Company, the Trust, the Partnership and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by a pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities and expenses
referred to in paragraph (d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating any claim or defending
any such action, suit or proceeding. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price of the Shares underwritten by it and
distributed to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such 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 Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7 are several in proportion to the respective numbers
of Firm Shares set forth opposite
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their names in Schedule I hereto (or such numbers of Firm Shares increased as
set forth in Section 10 hereof) and not joint.
(f) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 7 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company, the Trust, the Partnership and
the Underwriters set forth in this Agreement shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter, the Company, the Trust,
the Partnership, their respective directors or officers, or any person
controlling the Company or the Trust or the Partnership, acceptance of any
Shares and payment therefor hereunder, and any termination of this Agreement. A
successor to any Underwriter or any person controlling any Underwriter, or to
the Company, the Trust or the Partnership, their respective directors or
officers, or any person controlling the Company or the Trust or the Partnership,
shall be entitled to the benefits of the indemnity, contribution, and
reimbursement agreements contained in this Section 7.
8. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for a post-effective amendment to the Registration Statement to
be declared effective before the offering of the Shares may commence, such
post-effective amendment shall have become effective not later than 5:30 P.M.,
New York City time, on the date hereof, or at such later date and time as shall
be consented to in writing by you, and all filings, if any, required by Rule 424
under the Act shall have been timely made; no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceeding for that purpose shall have been instituted or, to the knowledge of
the Company or any Underwriter, threatened by the Commission, and any request of
the Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to your
satisfaction.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred any change, or any development involving a prospective
change, in or affecting the condition (financial or other), business,
properties, net worth, or results of operations of the Company, the Trust and
the Partnership taken as a whole not contemplated by the Prospectus, which
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in your reasonable opinion, as Representatives of the several Underwriters,
would materially, adversely affect the market for the Shares, or any event or
development relating to or involving the Company, the Trust or the Partnership
or any officer or director of the Company which makes any statement made in the
Prospectus untrue or which, in the reasonable opinion of the Company and its
counsel or the Underwriters and their counsel, requires the making of any
addition to or change in the Prospectus in order to state a material fact
required by the Act or any other law to be stated therein or necessary in order
to make the statements therein not misleading, if amending or supplementing the
Prospectus to reflect such event or development would, in your reasonable
opinion, as Representatives of the several Underwriters, materially adversely
affect the market for the Shares.
(c) You shall have received on the Closing Date, an
Opinion of Hunton & Xxxxxxxx, counsel for the Company, the Trust and the
Partnership, dated the Closing Date and addressed to you, as Representatives of
the several Underwriters, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Tennessee with the corporate power and authority to own and lease its
properties and to conduct its business as described in the Prospectus. To such
counsel's knowledge, except for the Trust, EISI, ENN II, L.P., EIWV, EQIFC,
EQIFP and the Partnership, the Company does not own or control, directly or
indirectly, any corporation, association or other entity.
(ii) The Trust has been duly organized and is validly
existing as a real estate investment trust in good standing under the laws of
the State of Maryland with all requisite power and authority to own and lease
its properties and to conduct its business as described in the Prospectus. The
Trust is wholly owned by the Company.
(iii) The Partnership is a limited partnership duly
formed and validly existing under the Tennessee Act with the partnership power
and authority to own and lease its properties and to conduct its business as
described in the Prospectus.
(iv) The Company has the corporate power and
authority to enter into this Agreement, to issue, sell and deliver the Shares as
provided herein and to consummate the transactions contemplated herein. This
Agreement has been duly authorized by all necessary corporate action and has
been executed and delivered by the Company and, assuming due authorization,
execution and delivery by the Underwriters, constitutes a valid and binding
agreement of the Company, enforceable in accordance with its terms, except to
the extent enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other laws affecting the rights of creditors generally and by
principles of equity, whether considered at law or in equity, and except to the
extent that enforcement of the indemnification and contribution provisions set
forth in Section 7 of this Agreement may be limited by federal or state
securities laws or the public policy underlying such laws.
-22-
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(v) The Trust has the legal power and authority to
enter into this Agreement and to consummate the transactions contemplated
herein. This Agreement has been duly authorized by all necessary trust action
and has been executed and delivered by the Trust and, assuming due
authorization, execution and delivery by the Underwriters, constitutes a valid
and binding agreement of the Trust, enforceable in accordance with its terms,
except to the extent that enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other laws affecting the rights of
creditors generally and by principles of equity, whether considered at law or in
equity, and except to the extent that enforcement of the indemnification and
contribution provisions set forth in Section 7 of this Agreement may be limited
by federal or state securities laws or the public policy underlying such laws.
(vi) The Partnership has the partnership power and
authority to enter into this Agreement and to consummate the transactions
contemplated herein. This Agreement has been duly authorized by all necessary
partnership action and has been executed and delivered on behalf of the
Partnership and, assuming due authorization, execution and delivery by the
Underwriters, constitutes a valid and binding agreement of the Partnership
enforceable in accordance with its terms, except to the extent enforceability
may be limited by bankruptcy, insolvency, moratorium, reorganization or other
laws affecting the rights of creditors generally and by principles of equity,
whether considered at law or in equity, and except to the extent that
enforcement of the indemnification and contribution provisions set forth in
Section 7 of this Agreement may be limited by federal or state securities laws
or the public policy underlying such laws.
(vii) The Partnership Agreement has been duly
authorized by all necessary corporate, trust or partnership action on behalf of
the Company, the Trust and the Partnership, respectively, and has been executed
and delivered by the parties thereto and constitutes a valid and binding
agreement, enforceable in accordance with its terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other laws affecting the rights of creditors generally and by
principles of equity, whether considered at law or in equity.
(viii) The Partnership has the partnership power and
authority to enter into the Acquisition Agreements and the Merger Agreement and
to consummate the transactions contemplated therein. The Acquisition Agreements
and the Merger Agreement have been duly authorized, executed and delivered on
behalf of the Partnership.
(ix) Each consent, approval, authorization, order,
license, certificate, permit, registration, designation or filing by or with any
governmental agency or body necessary for the valid authorization, issuance,
sale and delivery of the Shares, the execution, delivery and performance of this
Agreement and the consummation by the Company, the Trust and the Partnership of
the transactions contemplated hereby, has been made or obtained and is in full
force and effect, except such as may be necessary under state securities or real
estate syndication laws or required by the National Association of Securities
Dealers, Inc. (the "NASD") in connection with the purchase and distribution of
the Shares by the Underwriters, as to which such counsel need express no
opinion.
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(x) Neither the issuance, sale and delivery by the
Company of the Shares, nor the execution, delivery and performance of this
Agreement will (a) violate the charter, bylaws, declaration of trust,
certificate of limited partnership or partnership agreement, as the case may be,
of the Company, the Trust or the Partnership; (b) constitute a default under any
of the Operative Documents or any contract or agreement filed or incorporated by
reference as an exhibit to the Registration Statement; (c) to such counsel's
knowledge, violate any applicable statute, judgment, decree, order, rule or
regulation of any court or governmental agency or body; or (d) to such counsel's
knowledge, result in the creation or imposition of any lien, charge, claim or
encumbrance upon any property or asset of any of the Company, the Trust or the
Partnership.
(xi) The issuance of the Shares to the Underwriters
hereunder has been validly authorized by the Company. When issued and delivered
against payment therefor as provided in this Agreement, the Shares will be
validly issued, fully paid and nonassessable. No statutory or, to such counsel's
knowledge, other preemptive rights of shareholders exist with respect to any of
the Shares. To such counsel's knowledge, no person or entity holds a right to
require or participate in the registration under the Act of the Shares pursuant
to the Registration Statement. To such counsel's knowledge, no person or entity
has a right of participation or first refusal with respect to the sale of the
Shares by the Company. The form of certificates evidencing the Shares complies
with all applicable requirements of Tennessee law.
(xii) The Company has authorized capital stock as
set forth in the Prospectus under the caption "Capitalization." All of the
issued shares of capital stock of the Company have been duly authorized and
validly issued, are fully paid and nonassessable. None of the issued shares of
capital stock of the Company has been issued in violation of any preemptive
rights of shareholders. All sales of the Company's capital stock prior to the
date hereof were at all relevant times duly registered under the Act or were
exempt from the registration requirements of the Act by reason of Sections 3(b),
4(2) or 4(6) thereof and were duly registered or were issued pursuant to an
available exemption from the registration requirements of the applicable state
securities or blue sky laws, provided, however, that such counsel need not
express any opinion with respect to the registration or availability of an
exemption under applicable state securities or blue sky laws for shares of
preferred stock issued pursuant to an underwritten public offering. To the
knowledge of such counsel, except as disclosed in the Prospectus, there is no
outstanding option, warrant or other right calling for the issuance of, and no
commitment, plan or arrangement to issue, any shares of capital stock of the
Company or any security convertible into or exchangeable for capital stock of
the Company.
(xiii) All of the issued shares of beneficial
interest of the Trust have been duly authorized and validly issued and are fully
paid and nonassessable. None of the issued shares of beneficial interest of the
Trust has been issued or is owned or held in violation of any statutory or, to
such counsel's knowledge, other preemptive right. The issuance of all of the
outstanding shares of beneficial interest of the Trust was exempt from the
registration requirements of the Act and any applicable state securities laws.
To such counsel's knowledge, there is no outstanding option, warrant or other
right calling for the issuance of, and no commitment, plan or arrangement
-24-
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to issue, any shares of beneficial interest of the Trust or any security
convertible into or exchangeable for shares of beneficial interest of the Trust.
(xiv) All of the issued Partnership Units of the
Partnership have been duly authorized and validly issued and are fully paid and
nonassessable. To such counsel's knowledge, none of the issued Partnership Units
has been issued or is owned or held in violation of any preemptive rights. The
issuance of Series A Preferred Partnership Units to be issued to the Trust at
the Closing Date has been duly and validly authorized by the Partnership. When
issued and delivered against payment therefor as provided in the Partnership
Agreement, such Partnership Units will be duly and validly issued and fully
paid. The issuances of the outstanding Partnership Units were exempt from the
registration requirements of the Act and any applicable state securities laws.
(xv) To such counsel's knowledge and except as
described in the Prospectus, there is not pending or threatened, any action,
suit, proceeding, inquiry or investigation against the Company, the Trust or the
Partnership or any of their respective officers and directors or to which the
properties, assets or rights of any such entity are subject, which, if
determined adversely to any such entity, would in the aggregate have a material
adverse effect on the financial position, results of operations or business of
the Company.
(xvi) The descriptions in the Registration
Statement and the Prospectus of the contracts, leases and other legal documents
therein described present fairly the information required to be shown and there
are no contracts, leases or other documents known to such counsel of a character
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement which are not described or
filed as required. There are no statutes or regulations applicable to the
Company, the Trust or the Partnership or certificates, permits or other
authorizations from governmental regulatory officials or bodies required to be
obtained or maintained by any such entity, known to such counsel, of a character
required to be disclosed in the Registration Statement or the Prospectus which
have not been so disclosed and properly described therein.
(xvii) The Company is organized in conformity with
the requirements for qualification as a real estate investment trust ("REIT")
pursuant to Sections 856 through 860 of the Code, and the Company's method of
operation enables it to meet the requirements for qualification and taxation as
a REIT under the Code. The Partnership is treated as a partnership for federal
income purposes and not as a corporation or an association taxable as a
corporation.
(xviii) The Registration Statement has become
effective under the Act 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 has been instituted or is pending or contemplated
under the Act. Other than financial statements and other financial and operating
data and schedules contained therein, as to which counsel need express no
opinion, the Registration Statement, the Prospectus and any amendment or
supplement thereto, appear on their face to conform as to form in all material
respects with the requirements of the Act and the Act Regulations.
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(xix) Such counsel has no reason to believe that
the Registration Statement, or any further amendment thereto made prior to the
Closing Date, on its effective date and as of the Closing Date, contained or
contains any untrue statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, or any amendment or
supplement thereto made prior to the Closing Date, as of its issue date and as
of the Closing Date, contained or contains any untrue statement of a material
fact or omitted or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (provided that such
counsel need express no belief regarding the financial statements and related
schedules and other statistical and financial data contained in the Registration
Statement, any amendment thereto, or the Prospectus, or any amendment or
supplement thereto).
(xx) The Incorporated Documents (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) when they were filed with the Commission complied on
their face as to form in all material respects with the requirements of the
Exchange Act, and the rules and regulations of the Commission thereunder; and
nothing has come to such counsel's attention which causes them to believe that
any of such Incorporated Documents (other than the statistical and financial
statements and related schedules therein, as to which such counsel need express
no belief), when such Incorporated Documents were so filed, contained an untrue
statement of material fact or omitted to state a material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made when such documents were so filed, not misleading.
(xxi) Neither the Company, the Trust nor the
Partnership is, or solely as a result of the consummation of the transactions
contemplated hereby will become, subject to registration as an "investment
company" under the Investment Company Act of 1940, as amended.
(xxii) The information in the Prospectus under the
caption "Federal Income Tax Considerations," to the extent that it constitutes
matters of law or legal conclusions, has been reviewed by such counsel, is
correct and presents fairly the information required to be disclosed therein
under the Act and the Act Regulations.
(xxiii) To such counsel's knowledge, the conditions
for use of a Registration Statement on Form S-3 set forth in the General
Instructions to Form S-3 have been satisfied with respect to the Company and the
transactions contemplated by this Agreement and the Registration Statement.
(xxiv) Such counsel has been advised that the Shares
have been approved for listing on the NYSE, subject to official notice of
issuance.
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(d) You shall have received on the Closing Date an opinion of
King & Spalding, counsel for the Underwriters, dated the Closing Date and
addressed to you, as Representatives of the several Underwriters, with respect
to the matters referred to in clauses (iv), (xi) and (xix) of the foregoing
paragraph (c) and such other related matters as you may request.
(e) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and the
Closing Date from Coopers & Xxxxxxx L.L.P., independent certified public
accountants, substantially in the forms heretofore approved by you.
(f) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any change in the capital stock of the Company nor any material
increase in the consolidated short-term or long-term debt of the Company (other
than in the ordinary course of business) from that set forth or contemplated in
the Registration Statement or the Prospectus (or any amendment or Supplement
thereto); (iii) there shall not have been, since the respective dates as of
which information is given in the Registration Statement and the Prospectus (or
any amendment or supplement thereto), except as may otherwise be stated in the
Registration Statement and Prospectus (or any amendment or supplement thereto),
any material adverse change in the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company, the
Trust or the Partnership taken as a whole; (iv) the Company, the Trust, and the
Partnership, shall not have any liabilities or obligations, direct or contingent
(whether or not in the ordinary course of business), that are material to the
Company, the Trust, and the Partnership, taken as a whole, other than those
reflected in the Registration Statement or the Prospectus (or any amendment or
supplement thereto); and (v) all the representations and warranties of the
Company, the Trust, and the Partnership contained in this Agreement shall be
true and correct on and as of the date hereof and on and as of the Closing Date
as if made on and as of the Closing Date, and you shall have received a
certificate, dated the Closing Date and signed by the chief executive officer
and the chief financial officer of the Company and similar officers of the Trust
as general partner of the Partnership (or such other officers as are acceptable
to you), to the effect set forth in this Section 8(f) and in Section 8(g)
hereof.
(g) The Company shall not have failed at or prior to the
Closing Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date.
(h) The Shares shall have been listed or approved for listing
upon notice of issuance on the NYSE.
(i) The NASD shall not have objected to such offering, such
terms or the Underwriters' participation in the same.
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(j) The Company shall have furnished or caused to be furnished
to you such further certificates and documents as you shall have reasonably
requested.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are satisfactory
in form and substance to you and your counsel in your reasonable discretion.
Any certificate or document signed by any officer of the
Company, the Trust or the general partner of the Partnership and delivered to
you, as Representatives of the Underwriters, or to counsel for the Underwriters,
shall be deemed a representation and warranty by the Company, the Trust or the
Partnership, as applicable, to each Underwriter as to the statements made
therein.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the satisfaction on and as of any
Option Closing Date of the conditions set forth in this Section 8, except that,
if any Option Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (c) through (f) shall be dated
the Option Closing Date in question and the opinions called for by paragraphs
(c) and (d) shall be revised to reflect the sale of Additional Shares.
9. Expenses. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of its
obligations hereunder: the preparation, printing or reproduction, and filing
with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Prospectus, and each amendment or
supplement to any of them; the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and packaging)
of such copies of the Registration Statement, the Prospectus, and all amendments
or supplements to any of them as may be reasonably requested for use in
connection with the offering and sale of the Shares; the preparation, printing,
authentication, issuance and delivery of certificates for the Shares, including
any stamp taxes in connection with the original issuance and sale of the Shares;
the reproduction and delivery of this Agreement, the preliminary and
supplemental Blue Sky Memoranda and all other agreements or documents reproduced
and delivered in connection with the offering of the Shares; the listing of the
Shares on the NYSE; the registration or qualification of the Shares for offer
and sale under the securities or Blue Sky laws or real estate syndication laws
of the several states as provided in Section 5(g) hereof (including the
reasonable fees, expenses and disbursements of counsel for the Underwriters
relating to the preparation, reproduction, and delivery of the preliminary and
supplemental Blue Sky Memoranda and such registration and qualification); the
filing fees and the fees and expenses of counsel for the Underwriters in
connection with any filings required to be made with the NASD; the
transportation and other expenses incurred by or on behalf of the Company's
representatives in connection with presentations to prospective purchasers of
the Shares; the fees and expenses of the Company's accountants and the fees and
expenses of counsel (including local and special counsel) for the Company.
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10. Effective Date of Agreement. This Agreement shall become effective:
upon the execution and delivery hereof by the parties hereto; or if, at the time
this Agreement is executed and delivered, it is necessary for a post-effective
amendment to the Registration Statement to be declared effective before the
offering of the Shares may commence, when notification of the effectiveness of
or such post-effective amendment has been released by the Commission. Until such
time as this Agreement shall have become effective, it may be terminated by the
Company, by notifying you, or by you, as Representatives of the several
Underwriters, by notifying the Company.
If any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate number of Shares which the Underwriters are
obligated to purchase on the Closing Date, each non-defaulting Underwriter shall
be obligated, severally, in the proportion which the number of Firm Shares set
forth opposite its name in Schedule I hereto bears to the aggregate number of
Firm Shares set forth opposite the names of all non-defaulting Underwriters in
Schedule I or in such other proportion as you may specify in accordance with
Section 20 of the Master Agreement Among Underwriters of Xxxxx Xxxxxx Inc., to
purchase the shares which such defaulting Underwriter or Underwriters are
obligated, but fail or refuse, to purchase. If any one or more of the
Underwriters shall fail or refuse to purchase Shares which it or they are
obligated to purchase on the Closing Date and the aggregate number of Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares which the Underwriters are obligated to purchase on
the Closing Date and arrangements satisfactory to you and the Company for the
purchase of such Shares by one or more non-defaulting Underwriters or other
party or parties approved by you and the Company are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case which does
not result in termination of this Agreement, either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any such default of any such
Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule I hereto who, with your approval and the approval of the Company,
purchases shares which a defaulting Underwriter is obligated, but fails or
refuses, to purchase.
Any notice under this Section 10 may be given by telegram,
telecopy or telephone but shall be subsequently confirmed within 24 hours by
letter.
11. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company, by notice to the Company, if prior to the Closing
Date or any Option Closing Date (if different from the Closing Date and then
only as to the Additional Shares), as the case may be, trading in securities
generally on the NYSE, the American Stock Exchange or The Nasdaq Stock Market
shall have been suspended or
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materially limited, a general moratorium on commercial banking activities in New
York or Tennessee shall have been declared by either federal or state
authorities, or there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in your reasonable
judgment, impracticable or inadvisable to commence or continue the offering of
the Shares at the offering price to the public set forth on the cover page of
the Prospectus or to enforce contracts for the resale of the Shares by the
Underwriters. Notice of such termination may be given to the Company by
telegram, telecopy or telephone and shall be subsequently confirmed within 24
hours by letter.
12. Information Furnished by the Underwriters. The statements set forth
in the penultimate sentence of the third paragraph of the cover page and the
last paragraph on the cover page, the stabilization legend on the inside cover
page, the list of Underwriters and their respective allotments appearing under
the caption "Underwriting" in the Prospectus and the statements in the first,
third, fifth and last paragraphs under the caption "Underwriting" in the
Prospectus, constitute the only information furnished by or on behalf of the
Underwriters through you as such information is referred to in Sections 6(b) and
7 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5, 10 and
11 hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered if to the Company, the Trust or the Partnership,
at the office of the Company at Equity Inns, Inc., 0000 Xxxxxxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxxxx, 00000, Attention: Xx. Xxxxxxx X. XxXxxxx, Xx. or if to you,
as Representatives of the several Underwriters, care of Xxxxx Xxxxxx Inc., 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Manager, Investment
Banking Division.
This Agreement has been and is made solely for the benefit of
the several Underwriters, the Company, the Trust and the Partnership, their
respective directors and officers, and the other controlling persons referred to
in Section 7 hereof and their respective successors and assigns, to the extent
provided herein, and no other person shall acquire or have any right under or by
virtue of this Agreement. Neither the term "successor" nor the term "successors
and assigns" as used in this Agreement shall include a purchaser from any
Underwriter of any of the Shares in his status as such purchaser.
14. Applicable Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which
together constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Partnership, the Trust and the several Underwriters.
Very truly yours,
EQUITY INNS, INC.
By: /s/ Xxxxxx X. Silver
--------------------------------------
Xxxxxx X. Silver
President, Chief Operating Officer,
Treasurer and Chief Financial Officer
EQUITY INNS TRUST
By: /s/ Xxxxxx X. Silver
--------------------------------------
Xxxxxx X. Silver
Secretary and Treasurer
EQUITY INNS PARTNERSHIP, L.P.
By: EQUITY INNS TRUST
General Partner
By: /s/ Xxxxxx X. Silver
--------------------------------------
Xxxxxx X. Silver
Secretary and Treasurer
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Confirmed as of the date first above
mentioned on behalf of themselves and the
other several Underwriters named in Schedule
I hereto.
XXXXX XXXXXX INC.
CIBC OPPENHEIMER
X. X. XXXXXXXX & CO.
XXXXXX XXXXXX & COMPANY, INC.
PRUDENTIAL SECURITIES INCORPORATED
XXXXX CAPITAL MARKETS
As Representatives of the Several Underwriters
By: XXXXX XXXXXX INC.
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------
Xxxxxxx Xxxxxxxx
Managing Director
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SCHEDULE I
EQUITY INNS, INC.
Number of
Underwriter Firm Shares
----------- -----------
Xxxxx Xxxxxx Inc................................................................ 500,000
CIBC Oppenheimer................................................................ 450,000
X.X. Xxxxxxxx & Co.............................................................. 450,000
Xxxxxx Xxxxxx & Company, Inc.................................................... 450,000
Prudential Securities Incorporated.............................................. 450,000
Xxxxx Capital Markets........................................................... 450,000
----------
Total....................................... 2,750,000
==========
