EXHIBIT 1.1
3,000,000 SHARES
EQUITY INNS, INC.
8.75% SERIES B CUMULATIVE PREFERRED STOCK
UNDERWRITING AGREEMENT
July 10, 2003
Friedman, Billings, Xxxxxx & Co., Inc.
X.X. Xxxxxxx & Sons, Inc.
BB&T Capital Markets, a Division of Xxxxx & Xxxxxxxxxxxx, Inc.
Xxxxxx, Xxxxxxxx & Company Incorporated
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Equity Inns, Inc., a Tennessee corporation (the "Company"), proposes to
issue and sell an aggregate of 3,000,000 shares (the "Firm Shares") of its 8.75%
Series B Cumulative Preferred Stock, $.01 par value per share (the "Series B
Preferred Stock"), to the several Underwriters named in Schedule A-1 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 450,000
shares (the "Additional Shares") of Series B 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 96.8% partnership
interest in Equity Inns Partnership, L.P., a Tennessee limited partnership (the
"Partnership"), and will own 100% of the Series B Preferred Units (as defined
herein) of the Partnership. The Company, through the Partnership and its other
subsidiaries, currently owns 95 hotels (the "Hotels"). Other capitalized terms
used herein and not otherwise defined herein shall have the respective meanings
set forth in the Registration Statement (as defined herein).
The Company wishes to confirm as follows its agreement with the
Underwriters 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 the date hereof 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.
2. Agreements to Sell and Purchase. The Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell 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 $24.21875 per Share (the "Purchase Price Per
Share"), the number of Firm Shares set forth opposite
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the name of such Underwriter in Schedule A-1 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 prior to
9:00 P.M., New York City time, on the 30th day after the Closing Date (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 450,000 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 the
Underwriters may determine in order to avoid fractional shares) which bears the
same proportions 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 A-1 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 the
Underwriters 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 the Underwriters' 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
King & Spalding LLP, 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, at 10:00
A.M., New York City time, on August 11, 2003 (the "Closing Date"). The place of
closing for the Firm Shares and the Closing Date may be varied by agreement
between the Underwriters 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 King &
Spalding LLP 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 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 the Underwriters
and the Company.
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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 the Underwriters 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 the Underwriters
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 the
Underwriters 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 the Underwriters promptly and, if requested by the
Underwriters, will confirm such advice in writing, when such
post-effective amendment has become effective.
(b) The Company will advise the Underwriters promptly and,
if requested by the Underwriters, 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 (e) 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
within the time period referred to in paragraph (e) 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 the Underwriters, without
charge and upon the Underwriters' request, (i) such number of conformed
copies of the Registration Statement as originally filed and of each
amendment thereto, but without exhibits, as the Underwriters may
reasonably request, (ii) such number of copies of the Incorporated
Documents, without exhibits, as the Underwriters may reasonably
request, and (iii) one copy 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 the
Underwriters shall not previously have been advised or to which, after
the Underwriters shall have received a copy of the document proposed to
be filed, the Underwriters 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 any 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 the
Underwriters may reasonably request. Subject to the provisions of
subsection (f) 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 any 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 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 the Underwriters agree that the Prospectus
should be amended or supplemented, the Company, if requested by the
Underwriters, will promptly issue a press release announcing or
disclosing the matters to be covered by the proposed amendment or
supplement.
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(f) The Company will cooperate with the Underwriters 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 such jurisdictions as the Underwriters
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, which 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).
(i) If this Agreement shall terminate or shall be
terminated after execution 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
Underwriters for all reasonable out-of-pocket expenses (including fees
and expenses of counsel) incurred by the Underwriters 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 the Underwriters or the
Underwriters' counsel 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 B 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.
(n) Subject to the determination by the Board of Directors
of the Company to the contrary, the Company will use its best efforts
to meet the requirements to qualify as a real
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estate investment trust under the Internal Revenue Code of 1986, as
amended (the "Code") and to cause the Partnership to be treated as a
partnership for federal income tax purposes.
(o) Except as provided in this Agreement, the Company will
not offer, sell, contract to sell, pledge or otherwise dispose of any
Series B Preferred Stock or any parity or senior securities with
respect to the Series B Preferred Stock (as to dividend rights, or
rights upon liquidation, dissolution or winding up) for a period of 60
days after the date of the Prospectus Supplement, without the prior
written consent of Friedman, Billings, Xxxxxx & Co., Inc.
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 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 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
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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.
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 and its subsidiaries, taken as a whole. Except as set forth on
Exhibit 21.1 to its Form 10-K for the year ended December 31, 2002, the
Company does not own or control, directly or indirectly, any
corporation, limited partnership, limited liability company,
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 and its
subsidiaries, taken as a whole. 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 and its subsidiaries, taken as a whole. The Trust
is the sole general partner of the Partnership and holds approximately
96.8% of the outstanding units of partnership interest in the
Partnership ("Partnership
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Units"). At the Closing Date, following the contribution of the net
proceeds of the Offering to the Partnership, the issuance by the
Partnership of 3,000,000 8.75% Series B Cumulative Preferred Units (the
"Series B Preferred Units") to the Trust (assuming no exercise of the
option to purchase the Additional Shares) and the redemption by the
Partnership of the Series A Preferred Units from the Trust with such
proceeds, the Trust will be the sole general partner of the Partnership
and will be the holder of approximately 96.8% of the Partnership Units
and the holder of all of the outstanding Series B Preferred Units.
(g) Each subsidiary of the Company other than the
Partnership and the Trust has been duly incorporated or organized, as
appropriate, and is validly existing as a corporation, limited
partnership or limited liability company, as appropriate, in good
standing under the laws of the jurisdiction of its incorporation or
organization with all requisite corporate, limited partnership or
limited liability company power and authority to own and lease its
properties and to conduct its business as now conducted. Each such
subsidiary 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 and its subsidiaries, taken as a whole. The Company's ownership
percentage of each subsidiary of the Company is set forth on Schedule
A-2.
(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, to redeem the Company's 9 1/2% Series A
Preferred Stock, par value $.01 per share (the "Series A Preferred
Stock") 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.
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(j) The Partnership has full partnership right, power and
authority to enter into this Agreement, to issue, sell and deliver the
Series B Preferred Units to the Trust and to redeem all of the
outstanding Series A Preferred Units from the Trust (each as provided
in Amendment No. 2 to the Partnership Agreement (as defined herein))
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.
(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 June 25, 1998 and Amendment No. 2 to the Partnership
Agreement ("Amendment No. 2") to be effective as of the Closing Date
(the "Partnership Agreement"), the Consolidated Lease Agreements by and
between certain subsidiaries of Equity Inns TRS Holdings, Inc. (each, a
"Lessee") and the Partnership pursuant to which the Lessees lease the
Hotels from the Partnership (the "Percentage Leases") and the
management agreements with respect to each of the Hotels (the
"Management Agreements") have been (or, in the case of Amendment No. 2,
as of the Closing date will be) duly authorized, executed and delivered
by the parties thereto and constitute (or, in the case of Amendment No.
2, as of the Closing Date, will 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. (This Agreement, the Partnership Agreement and the
Percentage Leases sometimes are hereinafter referred to as the
"Operative Documents.")
(l) 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, 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 required under the Blue Sky
laws of any jurisdiction in connection with the purchase and
distribution of the Shares by the several Underwriters.
(m) Neither the issuance, sale and delivery by the Company
of the Shares, nor the execution, delivery and performance of this
Agreement nor the consummation of the transactions contemplated hereby
by the Company, the Trust or the Partnership, as
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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, partnership agreement, limited liability company
certificate of formation or operating agreement, as the case may be, of
the Company or any of its subsidiaries; any material indenture,
mortgage, deed of trust, loan agreement, note, lease or other agreement
or instrument to which the Company or any of its subsidiaries is a
party or to which they, any of them, any of their respective properties
or other assets or any Hotel is subject; or, to the Company's
knowledge, 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.
(n) 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.
(o) 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.
(p) 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.
(q) All of the issued shares of beneficial interest of the
Trust have been duly authorized and validly issued, are fully paid and
nonassessable and are held by the Company. 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
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right calling for the issuance of, and no commitment, plan or
arrangement 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. 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).
(r) 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. 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). The issuance of Series B 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 Series B Partnership Units will be duly and validly
issued and fully paid.
(s) 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. 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.
(t) PricewaterhouseCoopers LLP, who have examined and are
reporting upon the audited financial statements and schedules of the
Company incorporated by reference in the Registration Statement, are,
and were during the periods covered by their report 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.
(u) None of the Company or any of its subsidiaries has
sustained, since December 31, 2002, any material loss or interference
with its business from fire, explosion, flood, hurricane, accident or
other calamity, whether or not covered 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 or any of its subsidiaries, (ii) any material adverse
-12-
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 and its subsidiaries, taken as a
whole, (iii) any liability or obligation, direct or contingent,
incurred or undertaken by the Company or any of its subsidiaries which
is material to the business or condition (financial or other) of the
Company and its subsidiaries, taken as a whole, 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 or any of its
subsidiaries except as set forth in the Registration Statement, or (v)
any transaction that is material to the Company and its subsidiaries,
taken as a whole, except transactions in the ordinary course of
business or as otherwise disclosed in the Registration Statement or the
Prospectus.
(v) 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 Hotels, free
and clear of all liens, encumbrances, claims, security interests,
restrictions and defects except such as (i) are described in the
Prospectus, (ii) which do not materially and adversely interfere with
the Company's use of the Hotels, (iii) were entered into in connection
with the financings described in the Company's financial statements
incorporated by reference in the Registration Statement and Prospectus
(the "Financings"), or (iv) are reflected in the title insurance
policies relating to such properties. The leases under which the
Partnership leases 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 liens relating to the
Financings, the Company and its subsidiaries 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 and
its subsidiaries. Except as disclosed in the Registration Statement, no
person has an option or right of first refusal to purchase all or part
of any Hotel or any interest therein. Each of the 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 effect on the condition, financial or otherwise, or on the
earnings, assets, business affairs or business prospects of the Company
and its subsidiaries, taken as a whole. 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
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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 the Company and its subsidiaries, taken as a whole.
(w) Neither the Company nor any of its subsidiaries is in
violation of its respective charter, bylaws, declaration of trust,
certificate of limited partnership or partnership agreement, as the
case may be, and with respect to the Company and each of its
subsidiaries and, to the Company's knowledge, with respect to each
other party thereto, 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 the
Company or any of its subsidiaries 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 the Company
and its subsidiaries, taken as a whole. Neither the Company nor any of
its subsidiaries 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 the
Company and its subsidiaries, taken as a whole.
(x) 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 or any of its
subsidiaries or any of their respective officers and directors 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 would have a material adverse effect on the
business, prospects, properties, assets, results of operations or
condition (financial or otherwise) of the Company and its subsidiaries,
taken as a whole, or which could adversely affect the consummation of
the transactions contemplated by this Agreement.
(y) 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 or any of its subsidiaries or
certificates, permits or other authorizations from governmental
regulatory officials or bodies required to be obtained or maintained by
the Company or any of its subsidiaries of a character required to be
disclosed
-14-
in the Registration Statement or the Prospectus which have not been so
disclosed and properly described therein. All agreements, if any,
between the Company or any of its subsidiaries and third parties
expressly referenced in the Prospectus are legal, valid and binding
obligations of the Company or such subsidiary, 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.
(z) The Company and its subsidiaries own, possess or have
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, except where the
failure to so obtain governmental licenses, franchises, certificates,
consents, orders, approvals or other authorizations would not have a
material adverse effect on the business, prospects, properties, assets,
results of operations or conditions (financial or otherwise) of the
Company and its subsidiaries, taken as a whole, and neither the Company
nor any of its subsidiaries has received any notice of proceedings
relating to revocation or modification of any such licenses, permits,
franchises, certificates, consents, orders, approvals or
authorizations.
(aa) Each of the Company and its subsidiaries 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 and its subsidiaries to conduct their business now, and as
proposed to be conducted or operated as described in the Prospectus,
and neither the Company nor any of its subsidiaries 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 have a material adverse effect on the business,
prospects, properties, assets, results of operation or condition
(financial or otherwise) of the Company and its subsidiaries, taken as
a whole.
(bb) To the best of the Company's, the Trust's and the
Partnership's knowledge, the Company's and its subsidiaries' 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 material in relation to the
Company's financial statements; and, to the best of the Company's, the
Trust's, and the Partnership's knowledge, none of the Company or any of
its subsidiary or any employee or agent thereof, has made any payment
of funds of the Company or any of its subsidiary, as the case may be,
or received or retained any funds and no funds of the Company or any of
its subsidiaries, 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.
-15-
(cc) 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 material
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, except where the Company or such subsidiary is
contesting such taxes in good faith and has made adequate reserves
therefor; 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 have a material adverse effect on
the business, prospects, properties, assets, results of operations or
condition (financial or otherwise) of the Company and its subsidiaries,
taken as a whole. All tax liabilities are adequately provided for on
the respective books of such entities.
(dd) 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.
(ee) The Series B Preferred Stock is registered pursuant to
Section 12(b) of the Exchange Act and an application for listing the
Shares on the NYSE has been filed.
(ff) Except as otherwise disclosed in the Prospectus,
neither the Company nor any of its subsidiaries 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 by any
means controlled by the Company or any of its subsidiaries, including
the 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 and its subsidiaries' operations with
respect to the Real Property are in compliance in all material respects
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 and its
subsidiaries have, and are in compliance with, all material licenses,
permits, registrations and government authorizations necessary to
operate under all applicable Environmental Laws. Except as otherwise
disclosed in the Prospectus, neither the Company nor any of its
subsidiaries has received any written or oral
-16-
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 or any of its subsidiaries; (ii) alleges that the Company
or any of its subsidiaries 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 or any of its subsidiaries 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.
(gg) The Company was organized and has operated in
conformity with the requirements for qualification as a real estate
investment trust under the Code for each of its taxable years ended
December 31, 1994 through December 31, 2002, 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.
(hh) None of the Company, the Trust or the Partnership is,
or will become as a result of the transactions contemplated hereby, "an
investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as
amended.
(ii) 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 agreements relating to the
Financings.
(jj) 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 agreements relating to the Financings.
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 the Underwriters 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 the Underwriters and
-17-
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 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, but the
failure so to notify the indemnifying party (i) will not relieve it
from liability under paragraph (a) above unless and to the extent it
did not otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) above. 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
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
-18-
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 the all such Underwriters and controlling persons not
having actual or potential differing interests with the Underwriters or
among themselves, which firm shall be designated in writing by
Friedman, Billings, Xxxxxx & Co., 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 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 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
-19-
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 underwriting discount or
commission applicable to the Shares purchased by such Underwriter
hereunder. 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 Underwriter's obligations to contribute pursuant
to this Section 7 are several in proportion to the respective numbers
of Firm Shares set forth opposite their names in Schedule A-1 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
-20-
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 any
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 the Underwriters, 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 the
Underwriters' reasonable 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 and its subsidiaries taken as a whole not contemplated by
the Prospectus, which in the Underwriters' reasonable opinion would
materially, adversely affect the market for the Shares, or any event or
development relating to or involving the Company or any of its
subsidiaries or any officer or director of the Company which makes any
material 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
-21-
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 the Underwriters' reasonable opinion materially adversely
affect the market for the Shares.
(c) The Underwriters shall have received on the Closing
Date, an opinion of Hunton & Xxxxxxxx LLP, counsel for the Company, the
Trust and the Partnership, dated the Closing Date and addressed to the
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.
(ii) The Trust has been duly formed 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.
(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) Each subsidiary of the Company set forth on
Schedule A-3 has been duly formed and is validly existing as a
limited partnership in good standing under the laws of the
jurisdiction of its organization with the limited partnership
power and authority to own and lease its properties and to
conduct its business as described in the Prospectus.
(v) Each subsidiary of the Company set forth on
Schedule A-3 has been duly qualified as a foreign limited
partnership in each jurisdiction set forth on Schedule A-3
(such counsel being entitled to rely in respect of the opinion
in this clause with respect to certificates or verbal advice
of public officials in such jurisdictions).
(vi) The Company has the corporate power and
authority to enter into this Agreement, to issue, sell and
deliver the Shares as provided herein, to redeem the Series A
Preferred Stock 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.
-22-
(vii) 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.
(viii) The Partnership has the partnership power
and authority to enter into this Agreement, to issue, sell and
deliver the Series B Preferred Units to the Trust and to
redeem all of the outstanding Series A Preferred Units from
the Trust (each as provided in Amendment No. 2) 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.
(ix) The Partnership Agreement has been duly
authorized by all necessary corporate or trust action on
behalf of the Company and the Trust, respectively, and has
been executed and delivered by the parties thereto and
assuming the execution and delivery by the limited partners,
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.
(x) 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 and 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.
(xi) 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 contract or agreement filed or incorporated
by reference as an exhibit to the Registration Statement or
(c) to such counsel's knowledge, violate any applicable
statute, judgment, decree, order, rule or regulation of any
court or governmental agency or body applicable to the
Company.
-23-
(xii) 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.
(xiii) The Company has authorized capital stock as
set forth in the Prospectus under the caption "Capitalization"
and the Shares conform to the description thereof contained in
the Prospectus.
(xiv) All of the issued shares of beneficial
interest of the Trust have been duly authorized and validly
issued and are fully paid and nonassessable and are owned by
the Company.
(xv) The issuance of Series B 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 Series B Partnership Units
will be duly and validly issued and fully paid.
(xvi) 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 or any of its subsidiaries
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 and its subsidiaries, taken as a whole.
(xvii) 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. To
such counsel's knowledge, there are no statutes or regulations
applicable to the Company, the Trust or the Partnership or
certificates, permits or other authorizations from
governmental
-24-
regulatory officials or bodies required to be obtained or
maintained by any such entity of a character required to be
disclosed in the Registration Statement or the Prospectus
which have not been so disclosed and properly described
therein.
(xviii) The Company was organized and has operated
in conformity with the requirements for qualification and
taxation as a real estate investment trust ("REIT") pursuant
to Sections 856 through 860 of the Code for each of the
taxable years ended December 31, 1994 through 2002, and the
Company's current organization and method of operation should
permit the Company to continue to qualify 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.
(xix) 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 at
its effective date, the Prospectus and any amendment or
supplement thereto comply as to form in all material respects
with the requirements of the Act and the Act Regulations.
(xx) 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,
contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, or
that the Prospectus, or any amendment or supplement thereto
made prior to the Closing Date, as of its 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
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 included therein).
(xxi) The Incorporated Documents (other than the
financial statements and related schedules and other financial
and statistical data included therein, as to which such
counsel need express no opinion) when they were filed with the
Commission complied 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 financial
statements and related schedules and other financial and
statistical data included therein, as to which such counsel
need express no belief), when such Incorporated Documents were
so filed, contained
-25-
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.
(xxii) 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.
(xxiii) The description of the law and the legal
conclusions contained in the Prospectus under the caption
"Federal Income Tax Consequences of Our Status as a REIT," are
correct in all material respects and the discussions
thereunder fairly summarize the federal income tax
considerations that are likely to be material to a holder of
the Series B Preferred Stock.
(xxiv) 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.
(xxv) Such counsel has been advised that the
Shares have been approved for listing on the NYSE, subject to
official notice of issuance.
(d) The Underwriters shall have received on the Closing
Date an opinion of King & Spalding LLP, counsel for the Underwriters,
dated the Closing Date and addressed to the Underwriters with respect
to the matters referred to in clauses (vi), (xii) and (xx) of the
foregoing paragraph (c) and such other related matters as the
Underwriters may request.
(e) The Underwriters shall have received letters
addressed to the Underwriters and dated the date hereof and the Closing
Date from PricewaterhouseCoopers LLP, independent certified public
accountants, substantially in the forms heretofore approved by the
Underwriters.
(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 material 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),
-26-
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 and its subsidiaries taken as a whole; (iv) the Company and its
subsidiaries 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 and its subsidiaries, 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 the Underwriters 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 the Underwriters), 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 Company shall have furnished or caused to be
furnished to the Underwriters such further certificates and documents
as the Underwriters shall have reasonably requested.
(j) The Company shall have delivered a notice of
redemption to the record holders of the Series A Preferred Stock
indicating its intention to redeem 100% of the outstanding shares of
Series A Preferred Stock and shall have otherwise complied with all
applicable provisions under the Articles of Amendment to the Second
Amended and Restated Charter Designating and Fixing the Rights and
Preferences of a Series of Shares of Preferred Stock, dated June 25,
1998, to effect a redemption of all of the outstanding shares of the
Series A Preferred Stock.
(k) The Company shall have filed the Articles of
Amendment to the Second Amended and Restated Charter Designating and
Fixing the Rights and Preferences of a Series of Shares of Preferred
Stock relating to the Series B Preferred Stock, in the form provided to
the Underwriters as of the date hereof, with the Secretary of State of
the State of Tennessee.
-27-
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 the Underwriters and the Underwriters' counsel in the
Underwriters' 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
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 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 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.
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
-28-
Agreement shall have become effective, it may be terminated by the Company, by
notifying the Underwriters, or by the Underwriters by notifying the Company.
If any one of 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 A-1 hereto bears to the aggregate number of
Firm Shares set forth opposite the names of all non-defaulting Underwriters in
Schedule A-1, 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 the Underwriters and the
Company for the purchase of such Shares by one or more non-defaulting
Underwriters or other party or parties approved by the Underwriters 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 the Underwriters 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 A-1 hereto who,
with the Underwriters' 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 e-mail,
facsimile or telephone but shall be subsequently confirmed within 24 hours by
letter.
11. Termination of Agreement. This Agreement shall be subject to
termination in the Underwriters' 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 the
Company's Common Stock shall have been suspended by the Commission or the NYSE
or trading in securities generally on the NYSE shall have been suspended or
limited or minimum prices shall have been established on such Exchange, a
banking moratorium shall have been declared either by Federal or New York State
authorities or there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis the effect of which on the financial markets is such as
to make it, in the Underwriters' reasonable judgment,
-29-
impracticable or inadvisable to proceed with the offering or delivery of the
Shares as contemplated by the Prospectus (exclusive of any supplement thereto).
Notice of such termination may be given to the Company by e-mail, facsimile or
telephone and shall be subsequently confirmed within 24 hours by letter.
12. Information Furnished by the Underwriters. The statements set
forth in the fourth and seventh paragraphs under the caption "Underwriting" in
the Prospectus and in the last paragraph on the cover page of the Prospectus,
constitute the only information furnished by or on behalf of the Underwriters 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 Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxxx X. Silver or if to the
Underwriters, care of Friedman, Billings, Xxxxxx & Co., Inc., 0000 00xx Xxxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000 Attention: Xxxxx X. Xxxxxxxxx.
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.
-30-
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Partnership, the Trust and the Underwriters.
Very truly yours,
EQUITY INNS, INC.
By: /s/ Xxxxxx X. Silver
---------------------------------------
Xxxxxx X. Silver
President and Chief Operating Officer
EQUITY INNS TRUST
By: /s/ Xxxxxx X. Silver
---------------------------------------
Xxxxxx X. Silver
President and Chief Operating Officer
EQUITY INNS PARTNERSHIP, L.P.
By: EQUITY INNS TRUST
General Partner
By: /s/ Xxxxxx X. Silver
---------------------------------------
Xxxxxx X. Silver
President and Chief Operating Officer
-31-
Confirmed as of the date first above mentioned.
Friedman, Billings, Xxxxxx & Co., Inc.
X.X. Xxxxxxx & Sons, Inc.
BB&T Capital Markets, a division of Xxxxx Xxxxxxxxxxxx, Inc.
Xxxxxx, Xxxxxxxx & Company Incorporated
By: Friedman, Billings, Xxxxxx & Co., Inc.
/s/ Xxxxx X. Xxxxxxxxx
-----------------------------------------------------
Xxxxx X. Xxxxxxxxx
Senior Managing Director
SCHEDULE A-1
EQUITY INNS, INC.
NUMBER OF
UNDERWRITER SHARES
Friedman, Billings, Xxxxxx & Co., Inc. 1,350,000
X.X. Xxxxxxx & Sons, Inc. 660,000
BB&T Capital Markets, a Division of Xxxxx & Xxxxxxxxxxxx, Inc. 495,000
Xxxxxx, Xxxxxxxx & Company Incorporated 495,000
Total 3,000,000
SCHEDULE A-2
DIRECT AND INDIRECT SUBSIDIARIES OF EQUITY INNS, INC.
JURISDICTION OF
INCORPORATION/
NAME ORGANIZATION OWNERSHIP PERCENTAGE
---- --------------- --------------------
Equity Inns Trust (the "Trust") Maryland 100% owned by Equity Inns,
Inc. (the "REIT")
Equity Inns Services, Inc. ("Services") Tennessee 100% owned by the REIT
Equity Inns TRS Holdings, Inc. ("TRS Holdings") Tennessee 100% owned by the Partnership
Equity Inns Partnership, L.P. (the "Partnership") Tennessee Approximately 96.8% owned by
the Trust; approximately 3.2%
owned by various limited
partners
Equity Inns Partnership II, L.P. Tennessee 1% GP interest held by the
Trust; 99% LP interest held
by the Partnership
Equity Inns/West Virginia Partnership, L.P. Tennessee 1% GP interest held by
Services; 99% LP interest
held by the Partnership
EQI Financing Corporation Tennessee 100% owned by the Trust
EQI Financing Partnership I, L.P. Tennessee Approximate 1%-GP interest
held by EQI Financing
Corporation; approximately
99% LP interest held by the
Partnership
EQI Financing Corporation II Tennessee 100% owned by the Trust
JURISDICTION OF
INCORPORATION/
NAME ORGANIZATION OWNERSHIP PERCENTAGE
---- --------------- --------------------
EQI Financing Partnership II, L.P. Tennessee 1% GP interest held by EQI
Financing Corporation II; 99%
LP interest held by the
Partnership
EQI/WV Financing Partnership, L.P. Tennessee 1% GP interest held by EQI
Financing Corporation II; 99%
LP interest held by the
Partnership
EQI Financing Corporation III Tennessee 100% owned by the Trust
EQI Financing Partnership III, L.P. Tennessee 1% GP interest held by EQI
Financing Corporation III;
99% LP interest held by the
Partnership
EQI Financing Corporation IV Tennessee 100% owned by the Trust
EQI Financing Partnership IV, L.P. Tennessee 1% GP interest held by EQI
Financing Corporation IV; 99%
LP interest held by the
Partnership
EQI Financing Corporation V Tennessee 100% owned by the Trust
EQI Financing Partnership V, L.P. Tennessee 1% GP interest held by EQI
Financing Corporation V; 99%
LP interest held by the
Partnership
EQI/WV Financing Corporation Tennessee 100% owned by the Trust
EQI/WV Financing Partnership II, L.P. Tennessee 1% GP interest held by EQI/WV
Financing Corporation; 99% LP
interest held by the
Partnership
JURISDICTION OF
INCORPORATION/
NAME ORGANIZATION OWNERSHIP PERCENTAGE
---- --------------- --------------------
E. Inns Orlando, Inc. Tennessee 100% owned by Services
E.I.P. Orlando, L.P. Tennessee 1% GP interest held by E.
Inns Orlando, Inc.; 99% LP
interest held by the
Partnership
ENN Leasing Company, Inc. Tennessee 100% owned by TRS Holdings
ENN Leasing Company I, L.L.C. Delaware 100% owned by TRS Holdings
ENN Leasing Company II, L.L.C. Delaware 100% owned by TRS Holdings
ENN Leasing Company III, L.L.C. Delaware 100% owned by TRS Holdings
ENN Leasing Company IV, L.L.C. Delaware 100% owned by TRS Holdings
ENN Leasing Company V, L.L.C. Delaware 100% owned by TRS Holdings
ENN KS, Inc. Kansas 100% owned by TRS Holdings
ENN TN, Inc. Tennessee 100% owned by TRS Holdings
ENN TN, LLC Delaware 100% owned by TRS Holdings
ENN TN I, LLC Delaware 99% owned by TRS Holdings, 1%
owned by ENN TN, Inc.
ENN TN II, LLC Delaware 99% owned by TRS Holdings, 1%
owned by ENN TN, Inc.
ENN TN IV, LLC Delaware 99% owned by TRS Holdings, 1%
owned by ENN TN, Inc.
ENN TN V, LLC Delaware 99% owned by TRS Holdings, 1%
owned by ENN TN, Inc.
SCHEDULE A-3
SUBSIDIARIES--GOOD STANDING
AND FOREIGN QUALIFICATIONS
Equity Inns Partnership, L.P.--TN, FL, TX
EQI Financing Partnership I, L.P.--TN, FL, NC, TX
EQI Financing Partnership II, L.P.--TN
EQI Financing Partnership III, L.P.--TN
EQI Financing Partnership IV, L.P.--TN
EQI Financing Partnership V, L.P.--TN
