1
EXHIBIT 1.1
2,600,000 SHARES
EQUITY INNS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
November 25, 1997
XXXXX XXXXXX INC.
X. X. XXXXXXXX & CO.
As Representatives of the Several Underwriters
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Equity Inns, Inc., a Tennessee corporation (the "Company"), proposes
to issue and sell an aggregate of 2,600,000 shares (the "Firm Shares") of its
common stock, $0.01 par value per share (the "Common Stock"), to the several
Underwriters named in Schedule I hereto (the "Underwriters"). The Company also
proposes to sell to the Underwriters, upon the terms and conditions set forth in
Section 2 hereof, up to an additional 390,000 shares (the "Additional Shares")
of Common 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 96.4% general
partnership interest in Equity Inns Partnership, L.P. (the "Partnership"), a
Tennessee limited partnership. The Partnership currently owns 79 hotels as
described in the Prospectus (the "Current Hotels"). The Partnership has entered
into agreements (the "Acquisition Agreements") as described in the Prospectus to
acquire 12 additional hotels (such additional hotels being hereinafter referred
to as the "Acquisition Hotels;" and, together with the Current Hotels, the
"Hotels"). Other capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Registration Statement.
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The Company wishes to confirm as follows its agreement with you (the
"Representatives") and the other several Underwriters on whose behalf you are
acting, in connection with the several purchases of the Shares by the
Underwriters.
1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-3 (Registration
No. 333-26559) under the Act, including a prospectus relating to the Company's
Common Stock 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 November 25, 1997 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.
2. Agreements to Sell and Purchase. The Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each Underwriter and, upon the basis of the representations, warranties and
agreements of the Company, the Trust and the Partnership contained in this
Agreement and subject to all the terms and conditions set forth in this
Agreement, each Underwriter agrees, severally and not jointly, to purchase from
the Company, at a purchase price of
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$15.125 per Share (the "Purchase Price Per Share"), the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule I hereto (or such
number of Firm Shares increased as set forth in Section 10 hereof).
The Company also agrees, subject to all the terms and conditions set
forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company, the Trust and the
Partnership contained in this Agreement and subject to all the terms and
conditions set forth in this Agreement, the Underwriters shall have the right
to purchase from the Company, at the Purchase Price Per Share, pursuant to an
option (the "Over-allotment Option") which may be exercised at any time and
from time to time prior to 9:00 P.M., New York City time, on the 30th day after
the date of the Prospectus (or, if such 30th day shall be a Saturday or Sunday
or a holiday, on the next business day thereafter when the New York Stock
Exchange (the "NYSE") is open for trading), up to an aggregate of 390,000
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 you may determine in order to
avoid fractional shares) which bears the same proportion to the number of
Additional Shares to be purchased by the Underwriters as the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto (or
such number of Firm Shares increased as set forth in Section 10 hereof) bears
to the aggregate number of Firm Shares.
3. Terms of Public Offering. The Company has been advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after this Agreement has become effective as in
your judgment is advisable and initially to offer the Shares upon the terms set
forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of and payment for the Firm Shares shall be made at the office of
Xxxxx Xxxxxx Inc., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000, at 10:00 A.M., New
York City time, on December 1, 1997 (the "Closing Date"). The place of closing
for the Firm Shares and the Closing Date may be varied by agreement between you
and the Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the office of Xxxxx Xxxxxx
Inc. mentioned above at such time and on such date (the "Option Closing Date"),
which may be the same as the Closing Date but shall in no event be earlier than
the Closing Date nor earlier than two nor later than ten business days after
the giving of the notice hereinafter referred to, as shall be specified in a
written notice from you on behalf of the Underwriters to the Company of the
Underwriters' determination to purchase a number, specified in such notice, of
Additional Shares. The place of closing for any Additional Shares and the
Option Closing Date for such Shares may be varied by agreement between you and
the Company.
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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 you shall request prior to 9:30 A.M., New York City time, on the second
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to you on the Closing Date
or the Option Closing Date, as the case may be, against payment of the purchase
price therefor by wire transfer of immediately available funds to the Company.
5. Agreements of the Company. The Company agrees with the
several Underwriters as follows:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for a post-effective amendment to the Registration
Statement to be declared effective before the offering of the Shares may
commence, the Company will endeavor to cause such post-effective amendment to
become effective as soon as possible and will advise you promptly and, if
requested by you, will confirm such advice in writing, when such post-effective
amendment has become effective.
(b) The Company will advise you promptly and, if
requested by you, will confirm such advice in writing: of any request by the
Commission for amendment of or a supplement to the Registration Statement or
the Prospectus or for additional information; of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
of the suspension of qualification of the Shares for offering or sale in any
jurisdiction or the initiation of any proceeding for such purpose; and within
the period of time referred to in paragraph (f) below, of any change in the
Company's condition (financial or other), business, prospects, properties, net
worth or results of operations, or of the happening of any event, which makes
any statement of a material fact made in the Registration Statement or the
Prospectus (as then amended or supplemented) untrue or which requires the
making of any additions to or changes in the Registration Statement or the
Prospectus (as then amended or supplemented) in order to state a material fact
required by the Act or the regulations thereunder to be stated therein or
necessary in order to make the statements therein not misleading, or of the
necessity to amend or supplement the Prospectus (as then amended or
supplemented) to comply with the Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.
(c) The Company will furnish to you, without charge, (i)
as many signed copies of the Registration Statement as originally filed with
the Commission and of each amendment thereto, including financial statements
and all exhibits thereto as you may reasonably request, (ii) such number of
conformed copies of the Registration Statement as originally filed and of each
amendment thereto, but without exhibits, as you may reasonably request, (iii)
such number of copies
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of the Incorporated Documents, without exhibits, as you may reasonably request,
and (iv) five copies of the exhibits to the Incorporated Documents.
(d) The Company will not file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus
or, prior to the end of the period of time referred to in the first sentence in
subsection (e) below, file any document which upon filing, becomes an
Incorporated Document, of which you shall not previously have been advised or
to which, after you shall have received a copy of the document proposed to be
filed, you shall reasonably object.
(e) As soon after the execution and delivery of this
Agreement as possible and thereafter from time to time for such period as in
the opinion of counsel for the Underwriters a prospectus is required by the Act
to be delivered in connection with sales by any Underwriter or dealer, the
Company will expeditiously deliver to each Underwriter and each dealer, without
charge, as many copies of the Prospectus (and of any amendment or supplement
thereto) as you may reasonably request. Subject to the provisions of subsection
(g) below, the Company consents to the use of the Prospectus (and of any
amendment or supplement thereto) in accordance with the provisions of the Act
and with the securities or Blue Sky laws or real estate syndication laws of the
jurisdictions in the United States in which the Shares are offered by the
several Underwriters and by all dealers to whom Shares may be sold, both in
connection with the offering and sale of the Shares and for such period of time
thereafter as the Prospectus is required by the Act to be delivered in
connection with sales by any Underwriter or dealer. If during such period of
time any event shall occur that in the judgment of the Company or in the
opinion of counsel for the Underwriters is required to be set forth in the
Prospectus (as then amended or supplemented) or should be set forth therein in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary to supplement or
amend the Prospectus (or to file under the Exchange Act any document which,
upon filing, becomes an Incorporated Document) in order to comply with the Act
or any other law, the Company will forthwith prepare and, subject to the
provisions of paragraph (d) above, file with the Commission an appropriate
supplement or amendment thereto (or to such document), and will expeditiously
furnish to the Underwriters and dealers a reasonable number of copies thereof.
In the event that the Company and you, as Representatives of the several
Underwriters, agree that the Prospectus should be amended or supplemented, the
Company, if requested by you, will promptly issue a press release announcing or
disclosing the matters to be covered by the proposed amendment or supplement.
(f) The Company will cooperate with you and with counsel
for the Underwriters in connection with the registration or qualification of
the Shares for offering and sale by the several Underwriters and by dealers
under the securities or Blue Sky laws or real estate syndication laws of such
jurisdictions as you may designate and will file such consents to service of
process or other documents necessary or appropriate in order to effect such
registration or qualification; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to service of process in
suits, other
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than those arising out of the offering or sale of the Shares, in any
jurisdiction where it is not now so subject.
(g) The Company will make generally available to its
security holders a consolidated earnings statement, which need not be audited,
covering a twelve-month period commencing after the effective date of the
Registration Statement and ending not later than 15 months thereafter, as soon
as practicable after the end of such period, which consolidated earnings
statement shall satisfy the provisions of Section 11(a) of the Act.
(h) The Company will furnish to its shareholders, as
soon as practicable after the end of each respective period, annual reports
(including financial statements audited by independent public accountants) and
unaudited quarterly reports of operations for each of the first three quarters
of the fiscal year, and during the period of three years hereafter, the Company
will furnish to you concurrently with mailing or filing, a copy of each report
of the Company mailed to shareholders or filed with the Commission, and from
time to time such other information concerning the Company as you may
reasonably request.
(i) If this Agreement shall terminate or shall be
terminated after execution pursuant to any provisions hereof (otherwise than
pursuant to the second paragraph of Section 10 hereof or by notice given by you
terminating this Agreement pursuant to Section 10 or Section 11 hereof) or if
this Agreement shall be terminated by the Underwriters because of any failure
or refusal on the part of the Company to comply with the terms or fulfill any
of the conditions of this Agreement to be complied with or fulfilled by the
Company, the Company agrees to reimburse the Representatives for all reasonable
out-of-pocket expenses (including fees and expenses of counsel for the
Underwriters) incurred by you in connection with this Agreement.
(j) The Company will apply the net proceeds from the
sale of the Shares substantially in accordance with the description set forth
under the caption "Use of Proceeds" in the Prospectus.
(k) The Company will timely file the Prospectus pursuant
to Rule 424(b) under the Act and will advise you of the time and manner of such
filing.
(l) Except as provided in this Agreement, the Company
will not sell, offer to sell, solicit an offer to buy, contract to sell, grant
any option to purchase (other than shares of Common Stock or options granted
pursuant to the Company's 1994 Stock Incentive Plan or the Non-Employee
Directors' Stock Incentive Plan), or otherwise transfer or dispose of any
shares of Common Stock or any other securities convertible into, or exercisable
or exchangeable for, shares of Common Stock for a period of 90 days after the
date of the Prospectus, without the prior written consent of Xxxxx Xxxxxx Inc.;
provided, however, that the foregoing shall not prohibit the Company or the
Partnership from issuing Common Stock, units of limited partnership interest in
the Partnership ("Partnership Units") or other securities convertible into
Common Stock in connection with the acquisition of one or more hotel
properties.
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(m) The Company has furnished or will furnish to you
"lock-up" letters, in form and substance satisfactory to you, signed by each of
its current executive officers and directors named in the Prospectus.
(n) 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 Common
Stock to facilitate the sale or resale of the Shares.
(o) The Company will use its best efforts to list the
Shares on the NYSE.
6. Representations and Warranties of the Company, The Trust and
the Partnership. The Company, the Trust and the Partnership, jointly and
severally, represent and warrant to each Underwriter that:
(a) No stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no proceeding
for that purpose has been instituted or threatened by the Commission or the
securities authority of any state or other jurisdiction.
(b) The Company and the transactions contemplated by
this Agreement meet the requirements and conditions for using a registration
statement on Form S-3 under the Act, set forth in the General Instructions to
Form S-3. When the Registration Statement or any amendment thereto was declared
effective, and on the Closing Date (or the Option Closing Date, as the case may
be) it (i) contained or will contain all statements required to be stated
therein in accordance with, and complied or will comply in all material
respects with the requirements of, the Act and the rules and regulations of the
Commission thereunder and (ii) did not or will not include any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any amendment or
supplement thereto is filed with the Commission pursuant to Rule 424(b) and at
the Closing Date (or the Option Closing Date, as the case may be), the
Prospectus, as amended or supplemented at any such time, (i) contained or will
contain all statements required to be stated therein in accordance with, and
complied or will comply in all material respects with the requirements of, the
Act and the rules and regulations of the Commission thereunder and (ii) did not
or will not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
representation and warranty in this paragraph (b) does not apply to statements
in or omissions from the Registration Statement or the Prospectus made in
reliance upon and in conformity with information furnished to the Company in
writing by or on behalf of any Underwriter through you expressly for use
therein.
(c) The Incorporated Documents when they were filed (or,
if any amendment with respect to any such document was filed, when such
amendment was filed), conformed in all material respects with the requirements
of the Exchange Act and the rules and regulations thereunder, any further
Incorporated Documents so filed will, when they are filed, conform in all
material respects
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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, the Trust, the Partnership or any Hotel. The
Company will be duly qualified (at the time of the closing of the acquisition
of the Acquisition Hotels) in each jurisdiction in which the ownership or
leasing of its properties or the nature or conduct of its business requires
such qualification, except where the failure to do so would not have a material
adverse effect on the Company, the Trust, the Partnership, any Hotel or the
Acquisition Hotels. Except for the Trust, the Partnership, Equity Inns
Services, Inc., a wholly-owned subsidiary of the Company ("EISI"), Equity
Inns/West Virginia Partnership, L.P. ("EIWV"), EQI Financing Corporation
("EQIFC") and EQI Financing Partnership I, L.P. ("EQIFP), the Company does not
own or control, directly or indirectly, any corporation, association or other
entity.
(e) The Trust has been duly organized and is validly
existing as a real estate investment trust in good standing under the laws of
the State of Maryland with all requisite power and authority to own and lease
its properties and to conduct its business as now conducted. The Trust has been
duly qualified to do business and is in good standing in each other
jurisdiction in which the ownership or leasing of its properties or the nature
or conduct of its business as now conducted requires such qualification, except
where the failure to do so would not have a material adverse effect on the
Company, the Trust, the Partnership or any Hotel. The Trust will be duly
qualified (at the time of the closing of the acquisition of the Acquisition
Hotels) in each jurisdiction in which the ownership or leasing of its
properties or the nature or conduct of its business requires such
qualification, except where the failure to do so would not have a material
adverse effect on the Company, the Trust, the Partnership, any Hotel or the
Acquisition Hotels. Except for the Partnership, the Trust does not own or
control, directly or indirectly, any corporation, association or other entity.
The Trust is wholly owned by the Company.
(f) The Partnership has been duly formed and is validly
existing as a limited partnership in good standing under the Tennessee Revised
Uniform Limited Partnership Act (the "Tennessee Act") with all requisite
partnership power and authority to own and lease its properties and to conduct
its business as now conducted. The Partnership has been duly qualified or
registered to do business and is in good standing as a foreign partnership in
each other jurisdiction in which
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the ownership or leasing of its properties or the nature or conduct of its
business as now conducted requires such qualification, except where the failure
to do so would not have a material adverse effect on the Company, the Trust,
the Partnership or any Hotel. The Partnership will be duly qualified (at the
time of the closing of the acquisition of the Acquisition Hotels) in each
jurisdiction in which the ownership or leasing of its properties or the nature
or conduct of its business requires such qualification, except where the
failure to do so would not have a material adverse effect on the Company, the
Trust, the Partnership, any Hotel or the Acquisition Hotels. The Trust is the
sole general partner of the Partnership and holds approximately 96.2% of the
outstanding Partnership Units. At the Closing Date, following the contribution
of the net proceeds of the Offering to the Partnership, the Trust will be the
sole general partner of the Partnership and will be the holder of approximately
96.4% of the Partnership Units (assuming no exercise of the option to purchase
the Additional Shares).
(g) The Partnership and, to the knowledge of the
Company, the Trust and the Partnership, each of the other parties to the
Acquisition Agreements has been duly formed and is validly existing as a
corporation or partnership, as applicable, under the laws of its state of
formation. The Partnership and, to the knowledge of the Company, the Trust and
the Partnership, each of the other parties to the Acquisition Agreements has
all requisite corporate or partnership power and authority to own, lease and
operate its properties and to conduct its business as now conducted.
(h) The Company has full corporate right, power and
authority to enter into this Agreement, to issue, sell and deliver the Shares
as provided herein and to consummate the transactions contemplated herein. This
Agreement has been duly authorized, executed and delivered by the Company and
constitutes a valid and binding agreement of the Company, enforceable in
accordance with its terms, except to the extent that enforceability may be
limited by bankruptcy, insolvency, reorganization or other laws of general
applicability relating to or affecting creditors' rights, or by general equity
principles and except to the extent the indemnification and contribution
provisions set forth in Section 7 of this Agreement may be limited by federal
or state securities laws or the public policy underlying such laws.
(i) The Trust has full legal right, power and authority
to enter into this Agreement and to consummate the transactions contemplated
herein. This Agreement has been duly authorized, executed and delivered by the
Trust and constitutes a valid and binding agreement of the Trust, enforceable
in accordance with its terms, except to the extent that enforceability may be
limited by bankruptcy, insolvency, reorganization or other laws of general
applicability relating to or affecting creditors' rights, or by general equity
principles and except to the extent the indemnification and contribution
provisions set forth in Section 7 of this Agreement may be limited by federal
or state securities laws or the public policy underlying such laws.
(j) The Partnership has full partnership right, power
and authority to enter into this Agreement and to consummate the transactions
contemplated herein. This Agreement has been duly authorized, executed and
delivered on behalf of the Partnership by the Trust, as the sole general
partner of the Partnership, and constitutes a valid and binding agreement of
the Partnership
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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 (the "Partnership Agreement"), the
Consolidated Lease Amendment dated as of November 15, 1996, by and between the
Partnership and Crossroads/Memphis Partnership, L.P., as amended by First
Amendment to Consolidated Lease Amendment dated as of February 6, 1997
(together, the "Consolidated Lease Amendment") and the Second Consolidated
Lease Amendment dated as of February 6, 1997 (the "Second Consolidated Lease
Amendment") between EQI Financing Partnership I, L.P., and Crossroads/Memphis
Financing Company, L.L.C. and each of the operating leases between the Lessee
and the Partnership pursuant to which the Lessee leases the Current Hotels from
the Partnership (the "Percentage Leases") executed since the date of the
Consolidated Lease Agreement have been duly authorized, executed and delivered
by the parties thereto and constitute valid and binding agreements, enforceable
in accordance with their respective terms, except to the extent enforceability
may be limited by bankruptcy, insolvency, reorganization or other laws of
general applicability relating to or affecting creditors' rights or by general
equity principles. The leases with respect to the Acquisition Hotels (the
"Proposed Leases"), when duly authorized, executed and delivered by the parties
thereto, will constitute valid and binding agreements, enforceable in
accordance with their terms, except to the extent enforceability may be limited
by bankruptcy, insolvency, reorganization or other laws of general
applicability relating to or affecting creditors' rights or by general equity
principles. (This Agreement, the Partnership Agreement, the Consolidated Lease
Amendment, the Percentage Leases, and the Proposed Leases sometimes are
hereinafter referred to as the "Operative Documents.")
(l) The Partnership and, to the knowledge of the
Company, the Trust and the Partnership, each of the other parties to the
Acquisition Agreements has full legal right, power and authority to enter into
such agreements and to consummate the transactions contemplated thereby subject
to the terms thereof. The Acquisition Agreements have been duly authorized,
executed and delivered on behalf of the Partnership by the Trust, as general
partner of the Partnership and, to the Company's, the Trust's and the
Partnership's knowledge, the other parties thereto and constitute valid and
binding agreements, enforceable in accordance with their terms, except to the
extent enforceability may be limited by bankruptcy, insolvency, reorganization
or other laws of general applicability relating to or affecting creditors'
rights or by general equity principles.
(m) Each material consent, approval, authorization,
order, license, certificate, permit, registration, designation or filing by or
with any governmental agency or body necessary for the valid authorization,
issuance, sale and delivery of the Shares, the execution, delivery and
performance of this Agreement, the other Operative Documents and the
Acquisition Agreements and the consummation by the Company, the Trust and the
Partnership and the other parties to the Acquisition Agreements of the
transactions contemplated hereby and thereby has been made or obtained and is
in full force and effect.
(n) Neither the issuance, sale and delivery by the
Company of the Shares, nor the execution, delivery and performance of this
Agreement, the other Operative Documents or the
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Acquisition Agreements nor the consummation of the transactions contemplated
hereby and thereby by the Company, the Trust or the Partnership, as applicable,
will conflict with or result in a breach or violation of any of the terms and
provisions of, or (with or without the giving of notice or the passage of time
or both) constitute a default under the charter, by-laws, Declaration of Trust,
certificate of limited partnership or partnership agreement, as the case may
be, of the Company, the Trust or the Partnership; any indenture, mortgage, deed
of trust, loan agreement, note, lease or other agreement or instrument to which
the Company, the Trust or the Partnership is a party or to which they, any of
them, any of their respective properties or other assets or any Current Hotel
or, to the Company's knowledge, any Acquisition Hotel is subject; or any
applicable statute, judgment, decree, order, rule or regulation of any court or
governmental agency or body applicable to any of the foregoing or any of their
respective properties; or result in the creation or imposition of any lien,
charge, claim or encumbrance upon any property or asset of any of the
foregoing.
(o) The issuance of the Shares to be issued and sold to
the Underwriters hereunder has been validly authorized by the Company. When
issued and delivered against payment therefor as provided in this Agreement,
the Shares will be duly and validly issued, fully paid and nonassessable. No
statutory or other preemptive rights of shareholders exist with respect to any
of the Shares. No person or entity holds a right to require or participate in
the registration under the Act of the Shares pursuant to the Registration
Statement. Except as set forth in the Prospectus and certain agreements with
limited partners of the Partnership with respect to shares of Common Stock
issuable upon redemption of Units (copies of which have previously been
provided to you), no person holds a right to require registration under the Act
of any shares of Common Stock of the Company at any other time. No person or
entity has a right of participation or first refusal with respect to the sale
of the Shares by the Company. The form of certificates evidencing the Shares
complies with all applicable requirements of Tennessee law.
(p) The Company's authorized, issued and outstanding
capital stock is as disclosed in the Prospectus. All of the issued shares of
capital stock of the Company have been duly authorized and are validly issued,
fully paid and nonassessable. None of the issued shares of capital stock of the
Company has been issued or is owned or held in violation of any statutory or
other preemptive rights of shareholders. Except as disclosed in the Prospectus,
there is no outstanding option, warrant or other right calling for the issuance
of, and no commitment, plan or arrangement to issue, any shares of capital
stock of the Company or any security convertible into or exchangeable for
capital stock of the Company.
(q) All offers and sales of the Company's capital stock
prior to the date hereof were at all relevant times duly registered under the
Act or exempt from the registration requirements of the Act by reason of
Sections 3(b), 4(2) or 4(6) thereof and were duly registered or were issued
pursuant to an available exemption from the registration requirements under the
applicable state securities or Blue Sky laws.
(r) All of the issued shares of beneficial interest of
the Trust have been duly authorized and validly issued, are fully paid and
nonassessable. None of the issued shares of
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beneficial interest of the Trust has been issued or is owned or held in
violation of any preemptive right. There is no outstanding option, warrant or
other right calling for the issuance of, and no commitment, plan or arrangement
to issue, any shares of beneficial interest of the Trust or any security
convertible into or exchangeable for shares of beneficial interest of the
Trust. All of the outstanding shares of beneficial interest of the Trust have
been issued, offered and sold in compliance with all applicable laws
(including, without limitation, federal and state securities laws).
(s) All of the issued Partnership Units of the
Partnership have been duly and validly authorized and issued and are fully paid
and nonassessable. None of the issued Partnership Units has been issued or is
owned or held in violation of any preemptive right. At the Closing Date, such
Partnership Units will be validly issued, fully paid and nonassessable. All of
the outstanding Partnership Units have been issued, offered and sold in
compliance with all applicable laws (including, without limitation, federal and
state securities laws).
(t) The financial statements of the Company incorporated
by reference in the Registration Statement and Prospectus present fairly the
financial position of the Company as of the dates indicated and the results of
operations and cash flows for the Company for the periods specified, all in
conformity with generally accepted accounting principles applied on a
consistent basis. To the knowledge of the Company, the Partnership and the
Trust, the various financial statements of Growth Hotel Investors ("GHI") and
Growth Hotel Investors II ("GHI II") incorporated by reference in the
Registration Statement and the Prospectus present fairly the financial position
for such hotels as of the dates indicated and the results of operations and
cash flows for such hotels for the periods specified, all in conformity with
generally accepted accounting principles applied on a consistent basis. The
financial statement schedules included in the Registration Statement fairly
present the information shown therein and have been compiled on a basis
consistent with the financial statements incorporated by reference in the
Registration Statement and the Prospectus. No other financial statements or
schedules are required by Form S-3 or otherwise to be included in the
Registration Statement or the Prospectus. The unaudited pro forma financial
information (including the related notes) incorporated by reference in the
Prospectus complies as to form in all material respects to the applicable
accounting requirements of the Act and the Act Regulations, and management of
the Company believes that the assumptions underlying the pro forma adjustments
are reasonable. Such pro forma adjustments have been properly applied to the
historical amounts in the compilation of the information and such information
fairly presents with respect to the Company, the financial position, results of
operations and other information purported to be shown therein at the
respective dates and for the respective periods specified.
(u) (i) Coopers & Xxxxxxx L.L.P., 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 reports incorporated by reference in the
Registration Statement and the Prospectus, independent public accountants
within the meaning of the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder. (ii) Imowitz Xxxxxx & Co., LLP, who
have examined and are reporting upon the audited financial statements and
schedules of GHI and GHI II incorporated by reference
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in the Prospectus, are, and were during the periods covered by their reports
incorporated by reference in the Prospectus, independent public accountants
within the meaning of the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder.
(v) None of the Company, the Trust or the Partnership
has sustained, since December 31, 1996, 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, the Trust or the Partnership, (ii) any material
adverse change, or any development which could reasonably be seen as involving
a prospective material adverse change, in or affecting the business, prospects,
properties, assets, results of operations or condition (financial or other) of
the Company, the Trust or the Partnership, (iii) any liability or obligation,
direct or contingent, incurred or undertaken by the Company, the Trust or the
Partnership which is material to the business or condition (financial or other)
of such entity, except for liabilities or obligations incurred in the ordinary
course of business, (iv) any declaration or payment of any dividend or
distribution of any kind on or with respect to the capital stock, shares of
beneficial interest or partnership interests, as applicable, of the Company,
the Trust, or the Partnership or (v) any transaction that is material to the
Company, the Trust or the Partnership except transactions in the ordinary
course of business or as otherwise disclosed in the Registration Statement and
the Prospectus.
(w) The Partnership 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 are described in
the Prospectus or in connection with the Company's $250 million unsecured line
of credit (the "Line of Credit"), the collateralized mortgage bonds issued by
EQI Financing Partnership I, L.P. or the title insurance policies relating to
such properties. Upon consummation of the transactions contemplated by the
Acquisition Agreements, the Partnership will have good and marketable title in
fee simple to the Acquisition Hotels and all related real property, free and
clear of all liens, encumbrances, claims, security interests, restrictions and
defects except such as are described in the proposed title commitments for the
Acquisition Hotels or in connection with the financing of a portion of the
purchase price for the Acquisition Hotels or which do not materially adversely
affect the value of the property or the use proposed to be made of the property
by the Partnership. Neither the Company nor the Trust owns or leases any real
property as lessee. Except for the ground leases relating to the Traverse City,
Michigan Hotel, the Tinton Falls, New Jersey Hotel, the Xxxx Burnie
(Baltimore), Maryland Hotel, the Mountain Brook (Birmingham), Alabama Hotel,
the Atlanta (Northlake), Georgia Hotel, the Memphis (Sycamore), Tennessee Hotel
and the Nashville, Tennessee Hotel (collectively, the "Leases"), the
Partnership does or will not lease any real property as lessee. The Leases are
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made, and proposed to be made, of
such property, by the Partnership.
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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. The Company, the Trust and the Partnership have good title
to all personal property owned by them, free and clear of all liens, security
interests, pledges, charges, encumbrances, mortgages and defects, except such
as are disclosed in the Prospectus or do not materially and adversely affect
the value of such property and do not interfere with the use made or proposed
to be made of such property by the Company, the Trust or the Partnership.
Except as disclosed to you in writing, no person has an option or right of
first refusal to purchase all or part of any Current Hotel, any Acquisition
Hotel or any interest therein. Each of the Current 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
Current Hotels), and except for such failures to comply that would not
individually or in the aggregate have a material adverse impact on the
condition, financial or otherwise, or on the earnings, assets, business affairs
or business prospects of the Partnership, the Trust or the Company. Neither the
Company, the Trust nor the Partnership has knowledge of any pending or
threatened condemnation proceedings, zoning change, or other proceeding or
action that will in any manner affect the size of, use of, improvements on,
construction on or access to the Current Hotels, except such proceedings or
actions that would not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, assets, business affairs or
business prospects of or with respect to Current Hotel, the Partnership, the
Trust or the Company.
(x) Neither the Company, the Trust or the Partnership is
in violation of its respective charter, bylaws, declaration of trust,
certificate of limited partnership or partnership agreement, as the case may
be, and no default exists, and no event has occurred, nor state of facts
exists, which, with notice or after the lapse of time to cure or both, would
constitute a default in the due performance and observance of any obligation,
agreement, term, covenant, consideration or condition contained in any
indenture, mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument to which any such entity is a party or to which any
such entity or any of its properties is subject, except as may be properly
described in the Prospectus or such as in the aggregate do not now have or will
not in the future have a material adverse effect on the financial position,
results of operations or business of each such entity, respectively. None of
the Company, the Trust or the Partnership is in violation of, or in default
with respect to, any statute, rule, regulation, order, judgment or decree,
except as may be properly described in the Prospectus or such as in the
aggregate do not now have and will not in the future have a material adverse
effect on the financial position, results of operations or business of each
such entity, respectively.
(y) There is not pending or, to the knowledge of the
Company, the Trust, or the Partnership, threatened, any action, suit,
proceeding, inquiry or investigation against the Company, the Trust or the
Partnership or any of their respective officers and directors or to which the
properties, assets or rights of any such entity are subject, before or brought
by any court or governmental agency or body or board of arbitrators, which
could result in any material adverse change in the business, prospects,
properties, assets, results of operations or condition (financial
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or otherwise) of any such entity or which could adversely affect the
consummation of the transactions contemplated by this Agreement and the
Acquisition Agreements.
(z) The descriptions in the Registration Statement and
the Prospectus of the contracts, leases and other legal documents therein
described present fairly the information required to be shown, and there are no
contracts, leases, or other documents of a character required to be described
in the Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described or filed as required. To the
best knowledge of the Company, the Trust and the Partnership, there are no
statutes or regulations applicable to the Company, the Trust or the Partnership
or certificates, permits or other authorizations from governmental regulatory
officials or bodies required to be obtained or maintained by the Company, the
Trust or the Partnership of a character required to be disclosed in the
Registration Statement or the Prospectus which have not been so disclosed and
properly described therein. All agreements, if any, between the Company, the
Trust and the Partnership, respectively, and third parties expressly referenced
in the Prospectus are legal, valid and binding obligations of the Company, the
Trust and the Partnership, respectively, enforceable in accordance with their
respective terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization or other laws of general applicability
relating to or affecting creditors' rights and by general equitable principles.
(aa) The Company, the Trust, the Partnership or the
Lessee owns, possesses or has obtained all material permits, licenses,
franchises (including, with respect to the Partnership, the franchises relating
to the Hotels), certificates, consents, orders, approvals and other
authorizations of governmental or regulatory authorities or other entities as
are necessary to own or lease, as the case may be, its respective properties
and to carry on its business as presently conducted, or as contemplated in the
Prospectus to be conducted, and none of the Company, the Trust or the
Partnership has received any notice of proceedings relating to revocation or
modification of any such licenses, permits, franchises, certificates, consents,
orders, approvals or authorizations.
(bb) Each of the Company, the Trust and the Partnership
owns or possesses adequate license or other rights to use all trademarks,
service marks, trade names, copyrights, software and design licenses, trade
secrets, manufacturing processes, other intangible property rights and know-how
(collectively "Intangibles") necessary to entitle the Company, the Trust and
the Partnership to conduct its respective business now, and as proposed to be
conducted or operated as described in the Prospectus, and neither the Company,
the Trust or the Partnership has received notice of infringement or of conflict
with (and knows of no such infringement of or conflict with) asserted rights of
others with respect to any Intangibles which could materially and adversely
affect the business, prospects, properties, assets, results of operation or
condition (financial or otherwise) of the Company, the Trust or the
Partnership.
(cc) To the best of the Company's, the Trust's and the
Partnership's knowledge, the Company's, the Trust's and the Partnership's
system of internal accounting controls taken as a whole is sufficient to meet
the broad objectives of internal accounting control insofar as those objectives
pertain to the prevention or detection of errors or irregularities in amounts
that would be
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material in relation to the Company's, the Trust's or the Partnership's
financial statements; and, to the best of the Company's, the Trust's, and the
Partnership's knowledge, none of the Company, the Trust, the Partnership or any
employee or agent thereof, has made any payment of funds of the Company, the
Trust or the Partnership, as the case may be, or received or retained any funds
and no funds of the Company, the Trust or the Partnership, as the case may be,
have been set aside to be used for any payment, in each case in violation of
any law, rule or regulation.
(dd) Each of the Company, the Trust (to the extent not
consolidated with the Company) and the Partnership (to the extent not
consolidated with the Company) has filed on a timely basis all necessary
federal, state, local and foreign income and franchise tax returns required to
be filed through the date hereof and has paid all taxes shown as due thereon;
and no tax deficiency has been asserted against any such entity, nor does any
such entity know of any tax deficiency which is likely to be asserted against
any such entity which if determined adversely to any such entity, could
materially adversely affect the business, prospects, properties, assets,
results of operations or condition (financial or otherwise) of any such entity.
All tax liabilities are adequately provided for on the respective books of such
entities.
(ee) Each of the Company, the Trust, the Partnership, and
their officers, directors or affiliates has not taken and will not take,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in or constitute the stabilization or manipulation
of any security of the Company or to facilitate the sale or resale of the
Shares.
(ff) The Common Stock is registered pursuant to Section
12(b) of the Exchange Act and is listed on the NYSE.
(gg) The Company has not incurred any liability for a
fee, commission or other compensation on account of the employment of a broker
or finder in connection with the transactions contemplated by this Agreement
other than as contemplated hereby or as described in the Registration
Statement.
(hh) Except as otherwise disclosed in the Prospectus,
neither the Company, the Trust, the Partnership nor, to the knowledge of the
Company, the Trust, or the Partnership, any entity ("Selling Entity") from
which the Partnership acquired a Current Hotel or from which the Partnership
proposes to acquire the Acquisition Hotels has authorized or conducted or has
knowledge of the generation, transportation, storage, presence, use, treatment,
disposal, release, or other handling of any hazardous substance, hazardous
waste, hazardous material, hazardous constituent, toxic substance, pollutant,
contaminant, asbestos, radon, polychlorinated biphenyls ("PCBs"), petroleum
product or waste (including crude oil or any fraction thereof), natural gas,
liquefied gas, synthetic gas or other material defined, regulated, controlled
or potentially subject to any remediation requirement under any environmental
law (collectively, "Hazardous Materials"), on, in, under or affecting any real
property currently leased or owned (or proposed to be leased or owned) or by
any means controlled by the Company, the Trust, and the Partnership, including
the Current Hotels and the Acquisition Hotels (the "Real Property") except as
in material compliance
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with applicable laws; except as otherwise disclosed in the Prospectus, to the
knowledge of the Company, the Trust and the Partnership, the Real Property and
the Company's, the Trust's and the Partnership's and the Selling Entities'
operations with respect to the Real Property are in compliance with all
federal, state and local laws, ordinances, rules, regulations and other
governmental requirements relating to pollution, control of chemicals,
management of waste, discharges of materials into the environment, health,
safety, natural resources, and the environment (collectively, "Environmental
Laws"), and the Company, the Trust, the Partnership and the Selling Entities
have, and are in compliance with, all licenses, permits, registrations and
government authorizations necessary to operate under all applicable
Environmental Laws. Except as otherwise disclosed in the Prospectus, none of
the Company, the Trust, the Partnership, or, to the knowledge of the Company,
the Trust and the Partnership, any Selling Entity has received any written or
oral notice from any governmental entity or any other person and there is no
pending or threatened claim, litigation or any administrative agency proceeding
that: (i) alleges a violation of any Environmental Laws by the Company, the
Trust, the Partnership or any Selling Entity; (ii) alleges that the Company,
the Trust, the Partnership or any Selling Entity is a liable party or a
potentially responsible party under the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., or any state
superfund law; (iii) has resulted in or could result in the attachment of an
environmental lien on any of the Real Property; or (iv) alleges that the
Company, the Trust, the Partnership or any Selling Entity is liable for any
contamination of the environment, contamination of the Real Property, damage to
natural resources, property damage, or personal injury based on their
activities or the activities of their predecessors or third parties (whether at
the Real Property or elsewhere) involving Hazardous Materials, whether arising
under the Environmental Laws, common law principles, or other legal standards.
(ii) The Company is organized in conformity with the
requirements for qualification as a real estate investment trust under the
Internal Revenue Code of 1986, as amended (the "Code"), and the Company's
method of operation enables it to meet the requirements for taxation as a real
estate investment trust under the Code. The Partnership is treated as a
partnership for federal income purposes and not as a corporation or an
association taxable as a corporation.
(jj) None of the Company, the Trust or the Partnership
is, will become as a result of the transactions contemplated hereby, or will
conduct their respective businesses in a manner in which any such entity would
become, "an investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.
(kk) None of the appraisers which prepared appraisals of
any of the Current Hotels or the Acquisition Hotels, nor any environmental
engineering firm which prepared Phase I environmental assessment reports with
respect to the Current Hotels or the Acquisition Hotels, was employed for such
purpose on a contingent basis or has any substantial interest in the Company,
the Trust or the Partnership.
(ll) The Partnership is not currently prohibited,
directly or indirectly, from making distributions to the Trust, from repaying
to the Trust any loans or advances to the Partnership or from
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transferring any of the Partnership's property or assets to the Trust, except
as disclosed in the Prospectus and under the Line of Credit and the EQI
Financing Partnership I, L.P. agreements.
(mm) The Trust is not currently prohibited, directly or
indirectly, from making distributions to the Company, from repaying to the
Company any loans or advances to the Trust or from transferring any of the
Trust's property or assets to the Company, except as disclosed in the
Prospectus and under the Line of Credit and the EQI Financing Partnership I,
L.P. agreements.
(nn) The statements set forth in the Prospectus under the
caption "Federal Income Tax Considerations," insofar as they purport to
describe the provisions of the laws and documents referred to therein, are
accurate and complete.
(oo) The Company has complied with all provisions of
Florida Statutes Section 517.075 relating to issuers doing business with Cuba.
Any certificate signed by any officer of the Company on
behalf of the Company, or by an officer of the Trust on behalf of the Trust or
the Partnership and delivered to you or to counsel for the Underwriters shall
be deemed a representation and warranty by such entity to each Underwriter as
to the matters covered thereby.
7. Indemnification and Contribution. (a) The Company, the Trust
and the Partnership, jointly and severally, agree to indemnify and hold
harmless each of you and each other Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation) arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus or in
any amendment or supplement thereto, or arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or expenses arise
out of or are based upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom in
reliance upon and in conformity with the information relating to such
Underwriter furnished in writing to the Company by or on behalf of any
Underwriter through you expressly for use in connection therewith. The
foregoing indemnity agreement shall be in addition to any liability which the
Company, the Trust or the Partnership may otherwise have.
(b) If any action, suit or proceeding shall be brought
against any Underwriter or any person controlling any Underwriter in respect of
which indemnity may be sought against the Company, the Trust or the
Partnership, such Underwriter or such controlling person shall promptly notify
the Company, the Trust or the Partnership, and the Company, the Trust or the
Partnership shall assume the defense thereof, including the employment of
counsel and payment of all reasonable fees and expenses. Such Underwriter or
any such controlling person shall have the right to employ separate counsel in
any such action, suit or proceeding and to participate in the defense thereof,
but
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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 same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of only one separate firm of attorneys (in addition to any local
counsel), at any time for all such Underwriters and controlling persons not
having actual or potential differing interests with you or among themselves,
which firm shall be designated in writing by Xxxxx Xxxxxx Inc., and that all
such fees and expenses shall be reimbursed as they are incurred. The Company,
the Trust or the Partnership shall not be liable for any settlement of any such
action, suit or proceeding effected without its written consent, but if settled
with such written consent, or if there be a final judgment for the plaintiff in
any such action, suit or proceeding, the Company, the Trust or the Partnership
agree to indemnify and hold harmless any Underwriter, to the extent provided in
the preceding paragraph, and any such controlling person from and against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment.
(c) Each Underwriter agrees, severally and not jointly,
to indemnify and hold harmless the Company, the Trust, the Partnership, their
respective directors and officers who sign the Registration Statement, and any
person who controls the Company, the Trust or the Partnership within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the same
extent as the foregoing indemnity from the Company, the Trust and the
Partnership to each Underwriter, but only with respect to information furnished
in writing by or on behalf of such Underwriter through you expressly for use in
the Registration Statement or the Prospectus, or any amendment or supplement
thereto. If any action, suit or proceeding shall be brought against the
Company, the Trust, the Partnership or any of their respective directors, any
such officer, or any such controlling person based on the Registration
Statement or the Prospectus, or any amendment or supplement thereto, and in
respect of which indemnity may be sought against any Underwriter pursuant to
this paragraph (c), such Underwriter shall have the rights and duties given to
the Company, the Trust and the Partnership by paragraph (b) above (except that
if the Company, the Trust and the Partnership shall have assumed the defense
thereof such Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof, but the fees
and expenses of such counsel shall be at such Underwriter's expense), and the
Company, the Trust, the Partnership or their respective directors, any such
officer, and any such controlling person shall have the rights
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and duties given to the Underwriters by paragraph (b) above. The foregoing
indemnity agreement shall be in addition to any liability which the
Underwriters may otherwise have.
(d) If the indemnification provided for in this Section
7 is unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative benefits received by the
Company, the Trust and the Partnership on the one hand and the Underwriters on
the other hand from the offering of the Shares, or if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company, the Trust and the
Partnership on the one hand and the Underwriters on the other in connection
with the statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, the Trust and
the Partnership on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Shares (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters bear to the
price to public of the Shares, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault of the Company, the Trust and
the Partnership on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company, the Trust
or the Partnership on the one hand or by the Underwriters on the other hand and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
(e) The Company, the Trust, the Partnership and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by a pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities and
expenses referred to in paragraph (d) above shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating any claim
or defending any such action, suit or proceeding. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price of the Shares
underwritten by it and distributed to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective numbers of Firm Shares set forth opposite
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their names in Schedule I hereto (or such numbers of Firm Shares increased as
set forth in Section 10 hereof) and not joint.
(f) No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened action, suit or proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses
for which an indemnified party is entitled to indemnification or contribution
under this Section 7 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are incurred.
The indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company, the Trust, the Partnership and
the Underwriters set forth in this Agreement shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter, the Company, the Trust,
the Partnership, their respective directors or officers, or any person
controlling the Company or the Trust or the Partnership, acceptance of any
Shares and payment therefor hereunder, and any termination of this Agreement. A
successor to any Underwriter or any person controlling any Underwriter, or to
the Company, the Trust or the Partnership, their respective directors or
officers, or any person controlling the Company or the Trust or the
Partnership, shall be entitled to the benefits of the indemnity, contribution,
and reimbursement agreements contained in this Section 7.
8. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for a post-effective amendment to the Registration
Statement to be declared effective before the offering of the Shares may
commence, such post-effective amendment shall have become effective not later
than 5:30 P.M., New York City time, on the date hereof, or at such later date
and time as shall be consented to in writing by you, and all filings, if any,
required by Rule 424 under the Act shall have been timely made; no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceeding for that purpose shall have been instituted or, to the
knowledge of the Company or any Underwriter, threatened by the Commission, and
any request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with to your satisfaction.
(b) Subsequent to the effective date of this Agreement,
there shall not have occurred any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, net worth, or results of operations of the Company, the
Trust and the Partnership taken as a whole not contemplated by the Prospectus,
which
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in your reasonable opinion, as Representatives of the several Underwriters,
would materially, adversely affect the market for the Shares, or any event or
development relating to or involving the Company, the Trust or the Partnership
or any officer or director of the Company which makes any statement made in the
Prospectus untrue or which, in the reasonable opinion of the Company and its
counsel or the Underwriters and their counsel, requires the making of any
addition to or change in the Prospectus in order to state a material fact
required by the Act or any other law to be stated therein or necessary in order
to make the statements therein not misleading, if amending or supplementing the
Prospectus to reflect such event or development would, in your reasonable
opinion, as Representatives of the several Underwriters, materially adversely
affect the market for the Shares.
(c) You shall have received on the Closing Date, an
opinion of Hunton & Xxxxxxxx, counsel for the Company, the Trust and the
Partnership, dated the Closing Date and addressed to you, as Representatives of
the several Underwriters, to the effect that:
(i) The Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
State of Tennessee with the corporate power and authority to own and lease its
properties and to conduct its business as described in the Prospectus. To such
counsel's knowledge, except for the Trust, EISI, EIWV, EQIFC, EQIFP and the
Partnership, the Company does not own or control, directly or indirectly, any
corporation, association or other entity.
(ii) The Trust has been duly organized and is
validly existing as a real estate investment trust in good standing under the
laws of the State of Maryland with all requisite power and authority to own and
lease its properties and to conduct its business as described in the
Prospectus. The Trust is wholly owned by the Company.
(iii) The Partnership is a limited partnership
duly formed and validly existing under the Tennessee Act with the partnership
power and authority to own and lease its properties and to conduct its business
as described in the Prospectus.
(iv) The Company has the corporate power and
authority to enter into this Agreement, to issue, sell and deliver the Shares
as provided herein and to consummate the transactions contemplated herein. This
Agreement has been duly authorized by all necessary corporate action and has
been executed and delivered by the Company and, assuming due authorization,
execution and delivery by the Underwriters, constitutes a valid and binding
agreement of the Company, enforceable in accordance with its terms, except to
the extent enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other laws affecting the rights of creditors generally and by
principles of equity, whether considered at law or in equity, and except to the
extent that enforcement of the indemnification and contribution provisions set
forth in Section 7 of this Agreement may be limited by federal or state
securities laws or the public policy underlying such laws.
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(v) The Trust has the legal power and authority
to enter into this Agreement and to consummate the transactions contemplated
herein. This Agreement has been duly authorized by all necessary trust action
and has been executed and delivered by the Trust and, assuming due
authorization, execution and delivery by the Underwriters, constitutes a valid
and binding agreement of the Trust, enforceable in accordance with its terms,
except to the extent that enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other laws affecting the rights of
creditors generally and by principles of equity, whether considered at law or
in equity, and except to the extent that enforcement of the indemnification and
contribution provisions set forth in Section 7 of this Agreement may be limited
by federal or state securities laws or the public policy underlying such laws.
(vi) The Partnership has the partnership power
and authority to enter into this Agreement and to consummate the transactions
contemplated herein. This Agreement has been duly authorized by all necessary
partnership action and has been executed and delivered on behalf of the
Partnership and, assuming due authorization, execution and delivery by the
Underwriters, constitutes a valid and binding agreement of the Partnership
enforceable in accordance with its terms, except to the extent enforceability
may be limited by bankruptcy, insolvency, moratorium, reorganization or other
laws affecting the rights of creditors generally and by principles of equity,
whether considered at law or in equity, and except to the extent that
enforcement of the indemnification and contribution provisions set forth in
Section 7 of this Agreement may be limited by federal or state securities laws
or the public policy underlying such laws.
(vii) The Partnership Agreement has been duly
authorized by all necessary corporate, trust or partnership action on behalf of
the Company, the Trust and the Partnership, respectively, and has been executed
and delivered by the parties thereto and constitutes a valid and binding
agreement, enforceable in accordance with its terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other laws affecting the rights of creditors generally and by
principles of equity, whether considered at law or in equity.
(viii) The Partnership has the partnership power
and authority to enter into the Acquisition Agreements and to consummate the
transactions contemplated therein. The Acquisition Agreements have been duly
authorized, executed and delivered on behalf of the Partnership.
(ix) Each consent, approval, authorization,
order, license, certificate, permit, registration, designation or filing by or
with any governmental agency or body necessary for the valid authorization,
issuance, sale and delivery of the Shares, the execution, delivery and
performance of this Agreement and the consummation by the Company, the Trust
and the Partnership of the transactions contemplated hereby, has been made or
obtained and is in full force and effect, except such as may be necessary under
state securities or real estate syndication laws or required by the National
Association of Securities Dealers, Inc. (the "NASD") in connection with
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the purchase and distribution of the Shares by the Underwriters, as to which
such counsel need express no opinion.
(x) Neither the issuance, sale and delivery by
the Company of the Shares, nor the execution, delivery and performance of this
Agreement will (a) violate the charter, bylaws, declaration of trust,
certificate of limited partnership or partnership agreement, as the case may
be, of any such entity, as applicable; (b) constitute a default under any of
the Operative Documents or any contract or agreement filed or incorporated by
reference as an exhibit to the Registration Statement; (c) to such counsel's
knowledge, violate any applicable statute, judgment, decree, order, rule or
regulation of any court or governmental agency or body; or (d) to such
counsel's knowledge, result in the creation or imposition of any lien, charge,
claim or encumbrance upon any property or asset of any of the Company, the
Trust or the Partnership.
(xi) The issuance of the Shares to the
Underwriters hereunder has been validly authorized by the Company. When issued
and delivered against payment therefor as provided in this Agreement, the
Shares will be validly issued, fully paid and nonassessable. No statutory or,
to such counsel's knowledge, other preemptive rights of shareholders exist with
respect to any of the Shares. To such counsel's knowledge, no person or entity
holds a right to require or participate in the registration under the Act of
the Shares pursuant to the Registration Statement. To such counsel's knowledge,
no person or entity has a right of participation or first refusal with respect
to the sale of the Shares by the Company. The form of certificates evidencing
the Shares complies with all applicable requirements of Tennessee law.
(xii) The Company has authorized capital stock as
set forth in the Prospectus under the caption "Capitalization." All of the
issued shares of capital stock of the Company have been duly authorized and
validly issued, are fully paid and nonassessable. None of the issued shares of
capital stock of the Company has been issued in violation of any preemptive
rights of shareholders. All sales of the Company's capital stock prior to the
date hereof were at all relevant times duly registered under the Act or were
exempt from the registration requirements of the Act by reason of
Sections 3(b), 4(2) or 4(6) thereof and were duly registered or were issued
pursuant to an available exemption from the registration requirements of the
applicable state securities or blue sky laws, provided, however, that such
counsel need not express any opinion with respect to the registration or
availability of an exemption under applicable state securities or blue sky laws
for shares of Common Stock issued pursuant to an underwritten public offering.
To the knowledge of such counsel, except as disclosed in the Prospectus, there
is no outstanding option, warrant or other right calling for the issuance of,
and no commitment, plan or arrangement to issue, any shares of capital stock of
the Company or any security convertible into or exchangeable for capital stock
of the Company.
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(xiii) All of the issued shares of beneficial
interest of the Trust have been duly authorized and validly issued and are
fully paid and nonassessable. None of the issued shares of beneficial interest
of the Trust has been issued or is owned or held in violation of any statutory
or, to such counsel's knowledge, other preemptive right. The issuance of all of
the outstanding shares of beneficial interest of the Trust was exempt from the
registration requirements of the Act and any applicable state securities laws.
To such counsel's knowledge, there is no outstanding option, warrant or other
right calling for the issuance of, and no commitment, plan or arrangement to
issue, any shares of beneficial interest of the Trust or any security
convertible into or exchangeable for shares of beneficial interest of the
Trust.
(xiv) All of the issued Partnership Units of the
Partnership have been duly authorized and validly issued and are fully paid and
nonassessable. To such counsel's knowledge, none of the issued Partnership
Units has been issued or is owned or held in violation of any preemptive
rights. The issuance of Partnership Units to be issued to the Trust at the
Closing Date has been duly and validly authorized by the Partnership. When
issued and delivered against payment therefor as provided in the Partnership
Agreement, such Partnership Units will be duly and validly issued and fully
paid. The issuances of the outstanding Partnership Units were exempt from the
registration requirements of the Act and any applicable state securities laws.
(xv) To such counsel's knowledge and except as
described in the Prospectus, there is not pending or threatened, any action,
suit, proceeding, inquiry or investigation against the Company, the Trust or
the Partnership or any of their respective officers and directors or to which
the properties, assets or rights of any such entity are subject, which, if
determined adversely to any such entity, would in the aggregate have a material
adverse effect on the financial position, results of operations or business of
the Company.
(xvi) The descriptions in the Registration
Statement and the Prospectus of the contracts, leases and other legal documents
therein described present fairly the information required to be shown and there
are no contracts, leases or other documents known to such counsel of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement which are
not described or filed as required. There are no statutes or regulations
applicable to the Company, the Trust or the Partnership or certificates,
permits or other authorizations from governmental regulatory officials or
bodies required to be obtained or maintained by any such entity, known to such
counsel, of a character required to be disclosed in the Registration Statement
or the Prospectus which have not been so disclosed and properly described
therein.
(xvii) The Company is organized in conformity with
the requirements for qualification as a real estate investment trust ("REIT")
pursuant to Sections 856 through 860 of the Code, and the Company's method of
operation enables it to meet the requirements for qualification and taxation as
a REIT under the Code. The Partnership is treated as a partnership for federal
income purposes and not as a corporation or an association taxable as a
corporation.
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(xviii) The Registration Statement has become
effective under the Act and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceeding for that purpose has been instituted or is pending or
contemplated under the Act. Other than financial statements and other financial
and operating data and schedules contained therein, as to which counsel need
express no opinion, the Registration Statement, the Prospectus and any
amendment or supplement thereto, appear on their face to conform as to form in
all material respects with the requirements of the Act and the Act Regulations.
(xix) Such counsel has no reason to believe that
the Registration Statement, or any further amendment thereto made prior to the
Closing Date, on its effective date and as of the Closing Date, contained or
contains any untrue statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, or any amendment or
supplement thereto made prior to the Closing Date, as of its issue date and as
of the Closing Date, contained or contains any untrue statement of a material
fact or omitted or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (provided that such
counsel need express no belief regarding the financial statements and related
schedules and other financial data contained in the Registration Statement, any
amendment thereto, or the Prospectus, or any amendment or supplement thereto).
(xx) The Incorporated Documents (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) when they were filed with the Commission complied on
their face as to form in all material respects with the requirements of the
Exchange Act, and the rules and regulations of the Commission thereunder; and
nothing has come to such counsel's attention which causes them to believe that
any of such Incorporated Documents (other than the financial statements and
related schedules therein, as to which such counsel need express no belief),
when such Incorporated Documents were so filed, contained an untrue statement
of material fact or omitted to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made when such documents were so filed, not misleading.
(xxi) Neither the Company, the Trust nor the
Partnership is, or solely as a result of the consummation of the transactions
contemplated hereby will become, an "investment company," or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.
(xxii) The information in the Prospectus under the
caption "Federal Income Tax Considerations," to the extent that it constitutes
matters of law or legal conclusions, has been reviewed by such counsel, is
correct and presents fairly the information required to be disclosed therein
under the Act and the Act Regulations.
(xxiii) To such counsel's knowledge, the
conditions for use of a Registration Statement on Form S-3 set forth in the
General Instructions to Form S-3 have been satisfied with
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respect to the Company and the transactions contemplated by this Agreement and
the Registration Statement.
(xxiv) Such counsel has been advised that the
Shares have been approved for listing on the NYSE, subject to official notice
of issuance.
(d) You shall have received on the Closing Date an
opinion of King & Spalding, counsel for the Underwriters, dated the Closing
Date and addressed to you, as Representatives of the several Underwriters, with
respect to the matters referred to in clauses (iv), (xi) and (xix) of the
foregoing paragraph (c) and such other related matters as you may request.
(e) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and the
Closing Date from Coopers & Xxxxxxx L.L.P. and Imowitz Xxxxxx & Co., LLP.
independent certified public accountants, substantially in the forms heretofore
approved by you.
(f) (i) No stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there
shall not have been any change in the capital stock of the Company nor any
material increase in the consolidated short-term or long-term debt of the
Company (other than in the ordinary course of business) from that set forth or
contemplated in the Registration Statement or the Prospectus (or any amendment
or Supplement thereto); (iii) there shall not have been, since the respective
dates as of which information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), except as may otherwise be
stated in the Registration Statement and Prospectus (or any amendment or
supplement thereto), any material adverse change in the condition (financial or
other), business, prospects, properties, net worth or results of operations of
the Company, the Trust or the Partnership taken as a whole; (iv) the Company,
the Trust, and the Partnership, shall not have any liabilities or obligations,
direct or contingent (whether or not in the ordinary course of business), that
are material to the Company, the Trust, and the Partnership, taken as a whole,
other than those reflected in the Registration Statement or the Prospectus (or
any amendment or supplement thereto); and (v) all the representations and
warranties of the Company, the Trust, and the Partnership contained in this
Agreement shall be true and correct on and as of the date hereof and on and as
of the Closing Date as if made on and as of the Closing Date, and you shall
have received a certificate, dated the Closing Date and signed by the chief
executive officer and the chief financial officer of the Company and similar
officers of the Trust as general partner of the Partnership (or such other
officers as are acceptable to you), to the effect set forth in this Section
8(f) and in Section 8(g) hereof.
(g) The Company shall not have failed at or prior to the
Closing Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date.
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(h) The Shares shall have been listed or approved for
listing upon notice of issuance on the NYSE.
(i) The NASD shall not have objected to such offering,
such terms or the Underwriters' participation in the same.
(j) The Company shall have furnished or caused to be
furnished to you such further certificates and documents as you shall have
reasonably requested.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are satisfactory
in form and substance to you and your counsel in your reasonable discretion.
Any certificate or document signed by any officer of the
Company, the Trust or the general partner of the Partnership and delivered to
you, as Representatives of the Underwriters, or to counsel for the
Underwriters, shall be deemed a representation and warranty by the Company, the
Trust or the Partnership, as applicable, to each Underwriter as to the
statements made therein.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the satisfaction on and as of any
Option Closing Date of the conditions set forth in this Section 8, except that,
if any Option Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (c) through (f) shall be dated
the Option Closing Date in question and the opinions called for by paragraphs
(c) and (d) shall be revised to reflect the sale of Additional Shares.
9. Expenses. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: the preparation, printing or reproduction, and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Prospectus, and each amendment or
supplement to any of them; the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and packaging)
of such copies of the Registration Statement, the Prospectus, and all
amendments or supplements to any of them as may be reasonably requested for use
in connection with the offering and sale of the Shares; the preparation,
printing, authentication, issuance and delivery of certificates for the Shares,
including any stamp taxes in connection with the original issuance and sale of
the Shares; the reproduction and delivery of this Agreement, the preliminary
and supplemental Blue Sky Memoranda and all other agreements or documents
reproduced and delivered in connection with the offering of the Shares; the
listing of the Shares on the NYSE; the registration or qualification of the
Shares for offer and sale under the securities or Blue Sky laws or real estate
syndication laws of the several states as provided in Section 5(g) hereof
(including the reasonable fees, expenses and disbursements of counsel for the
Underwriters relating to the preparation, reproduction, and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration and
qualification); the filing fees and the fees and expenses of counsel for the
Underwriters in connection with any filings required to be made with the
NASD;the
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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 Agreement shall have become effective, it
may be terminated by the Company, by notifying you, or by you, as
Representatives of the several Underwriters, by notifying the Company.
If any one or more of the Underwriters shall fail or refuse
to purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate number of Shares which the Underwriters
are obligated to purchase on the Closing Date, each non-defaulting Underwriter
shall be obligated, severally, in the proportion which the number of Firm
Shares set forth opposite its name in Schedule I hereto bears to the aggregate
number of Firm Shares set forth opposite the names of all non-defaulting
Underwriters in Schedule I or in such other proportion as you may specify in
accordance with Section 20 of the Master Agreement Among Underwriters of Xxxxx
Xxxxxx Inc., to purchase the shares which such defaulting Underwriter or
Underwriters are obligated, but fail or refuse, to purchase. If any one or more
of the Underwriters shall fail or refuse to purchase Shares which it or they
are obligated to purchase on the Closing Date and the aggregate number of
Shares with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares which the Underwriters are obligated to purchase on
the Closing Date and arrangements satisfactory to you and the Company for the
purchase of such Shares by one or more non-defaulting Underwriters or other
party or parties approved by you and the Company are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case which does
not result in termination of this Agreement, either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any such default of any
such Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule I hereto who, with your approval and the approval of the Company,
purchases shares which a defaulting Underwriter is obligated, but fails or
refuses, to purchase.
Any notice under this Section 10 may be given by telegram,
telecopy or telephone but shall be subsequently confirmed within 24 hours by
letter.
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11. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company, by notice to the Company, if prior to the Closing
Date or any Option Closing Date (if different from the Closing Date and then
only as to the Additional Shares), as the case may be, trading in securities
generally on the NYSE, the American Stock Exchange or The Nasdaq Stock Market
shall have been suspended or materially limited, a general moratorium on
commercial banking activities in New York or Tennessee shall have been declared
by either federal or state authorities, or there shall have occurred any
outbreak or escalation of hostilities or other international or domestic
calamity, crisis or change in political, financial or economic conditions, the
effect of which on the financial markets of the United States is such as to
make it, in your reasonable judgment, impracticable or inadvisable to commence
or continue the offering of the Shares at the offering price to the public set
forth on the cover page of the Prospectus or to enforce contracts for the
resale of the Shares by the Underwriters. Notice of such termination may be
given to the Company by telegram, telecopy or telephone and shall be
subsequently confirmed within 24 hours by letter.
12. Information Furnished by the Underwriters. The statements set
forth in the last paragraph on the cover page, the stabilization legend on the
inside cover page, the list of Underwriters and their respective allotments
appearing under the caption "Underwriting" in the Prospectus and the statements
in the first, third, fifth and sixth paragraphs under the caption
"Underwriting" in the Prospectus, constitute the only information furnished by
or on behalf of the Underwriters through you as such information is referred to
in Sections 6(b) and 7 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5, 10
and 11 hereof, notice given pursuant to any provision of this Agreement shall
be in writing and shall be delivered if to the Company, the Trust or the
Partnership, at the office of the Company at Equity Inns, Inc., 0000
Xxxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxx, 00000, Attention: Xx. Xxxxxxx X.
XxXxxxx, Xx. or if to you, as Representatives of the several Underwriters, care
of Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of
the several Underwriters, the Company, the Trust and the Partnership, their
respective directors and officers, and the other controlling persons referred
to in Section 7 hereof and their respective successors and assigns, to the
extent provided herein, and no other person shall acquire or have any right
under or by virtue of this Agreement. Neither the term "successor" nor the term
"successors and assigns" as used in this Agreement shall include a purchaser
from any Underwriter of any of the Shares in his status as such purchaser.
14. Applicable Law;Counterparts. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York.
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This Agreement may be signed in various counterparts which
together constitute one and the same instrument. If signed in counterparts,
this Agreement shall not become effective unless at least one counterpart
hereof shall have been executed and delivered on behalf of each party hereto.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Partnership, the Trust and the several Underwriters.
Very truly yours,
EQUITY INNS, INC.
By: /s/ Xxxxxx X. Silver
------------------------------------------
Xxxxxx X. Silver
Executive Vice President, Secretary,
Treasurer and Chief Financial Officer
EQUITY INNS TRUST
By: /s/ Xxxxxx X. Silver
------------------------------------------
Xxxxxx X. Silver
Secretary and Treasurer
EQUITY INNS PARTNERSHIP, L.P.
By: EQUITY INNS TRUST
General Partner
By: /s/ Xxxxxx X. Silver
------------------------------------
Xxxxxx X. Silver
Secretary and Treasurer
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Confirmed as of the date first above
mentioned on behalf of themselves and the
other several Underwriters named in Schedule
I hereto.
XXXXX XXXXXX INC.
X. X. XXXXXXXX & CO.
As Representatives of the Several Underwriters
By: XXXXX XXXXXX INC.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------
Xxxx X. Xxxxxxxxx
Managing Director
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SCHEDULE I
EQUITY INNS, INC.
Number of
Underwriter Firm Shares
Xxxxx Xxxxxx Inc.......................................... 1,733,330
X.X. Xxxxxxxx & Co........................................ 866,670
---------
Total ... 2,600,000
=========
