EXHIBIT 1.2
CONTROLLED EQUITY OFFERING(SM)
SALES AGREEMENT
August 26, 2004
CANTOR XXXXXXXXXX & CO.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs/Ladies:
Equity Inns, Inc., a Tennessee corporation (the "Company"), confirms
its agreement (this "Agreement") with Cantor Xxxxxxxxxx & Co. ("CF&Co"), as
follows:
1. Issuance and Sale of Shares. The Company agrees that, from time to time
during the term of this Agreement, on the terms and subject to the conditions
set forth herein, it may issue and sell through CF&Co, acting as agent and/or
principal, up to 4,300,000 shares (the "Shares") of the Company's common stock,
$0.01 par value ("Common Stock"); provided, however, that with respect to "at
the market" offerings (as defined in Section 3 hereof), the aggregate gross
proceeds from shares issued and sold shall not exceed $40,000,000. The issuance
and sale of Shares through CF&Co will be effected pursuant to the Registration
Statement (as defined below) filed by the Company and declared effective by the
Securities and Exchange Commission (the "Commission").
2. Placements. Each time that the Company wishes to issue and sell Shares
hereunder (each, a "Placement"), it will notify CF&Co of the proposed terms of
such Placement. If CF&Co wishes to accept such proposed terms (which it may
decline to do for any reason in its sole discretion) or, following discussions
with the Company, wishes to accept amended terms, CF&Co will, prior to 4:30
p.m., Central time, on the Business Day next following the Business Day that the
notice is received by CF&Co, issue to the Company a written notice (a "Placement
Notice"), the form of which is attached hereto as Schedule 1, setting forth the
terms that CF&Co is willing to accept, including without limitation the number
of Shares ("Placement Shares") to be issued, the manner(s) in which sales are to
be made, the date or dates on which such sales are anticipated to be made, any
minimum price below which sales may not be made, and the capacity in which CF&Co
may act in selling Shares hereunder (as principal, agent or both). The amount of
commission, discount or other compensation, other than any expense reimbursement
arising pursuant to Section 7(h) hereunder, to be paid by the Company to CF&Co
shall be three percent (3%) of the sales price for the Shares. The terms set
forth in a Placement Notice will not be binding on the Company or CF&Co unless
and until the Company delivers written notice of its acceptance of all of the
terms of such Placement Notice (an "Acceptance"), the form of which
is attached hereto as Schedule 2; provided, however, that neither the Company
nor CF&Co will be bound by the terms of a Placement Notice unless the Company
delivers to CF&Co an Acceptance with respect thereto prior to 4:30 p.m. (New
York time) on the Business Day (as defined below) next following the Business
Day on which such Placement Notice is received by the Company. It is expressly
acknowledged and agreed that neither the Company nor CF&Co will have any
obligation whatsoever with respect to a Placement or any Placement Shares unless
and until CF&Co delivers a Placement Notice to the Company and the Company
accepts such Placement Notice by means of an Acceptance, and then only upon the
terms specified therein and herein. In the event of a conflict between the terms
of this Agreement and the terms of a Placement Notice, the terms of the
Placement Notice will control.
3. Sale of Placement Shares by CF&Co. Subject to the terms and conditions
of this Agreement, upon the Acceptance of a Placement Notice, and unless the
sale of the Placement Shares described therein has been suspended or otherwise
terminated in accordance with the terms of this Agreement, CF&Co will use its
commercially reasonable efforts consistent with its normal trading and sales
practices to sell such Placement Shares up to the amount specified, and
otherwise in accordance with the terms of such Placement Notice. CF&Co will
provide written confirmation to the Company no later than the opening of the
Trading Day next following the Trading Day on which it has made sales of
Placement Shares hereunder setting forth the number of Placement Shares sold on
such day, the compensation payable by the Company to CF&Co with respect to such
sales, and the Net Proceeds (as defined below) payable to the Company, with an
itemization of the deductions made by CF&Co (as set forth in Section 5(a)) from
the gross proceeds that it receives from such sales. CF&Co may sell Placement
Shares by any method permitted by law deemed to be an "at the market offering"
as defined in Rule 415 of the Securities Act of 1933, as amended (the "Act"),
including without limitation sales made directly on the New York Stock Exchange
(the "Exchange"), on any other existing trading market for the Common Stock or
to or through a market maker. CF&Co may also sell Placement Shares in privately
negotiated transactions. The Company acknowledges and agrees that (i) there can
be no assurance that CF&Co will be successful in selling Placement Shares, and
(ii) CF&Co will incur no liability or obligation to the Company or any other
person or entity if it does not sell Placement Shares for any reason other than
a failure by CF&Co to use its commercially reasonable efforts consistent with
its normal trading and sales practices to sell such Placement Shares as required
under this Section 3. For the purposes hereof, "Trading Day" means any day on
which Common Stock is purchased and sold on the principal market on which the
Common Stock is listed or quoted.
4. Suspension of Sales. The Company or CF&Co may, upon notice to the other
party in writing or by telephone (confirmed immediately by verifiable facsimile
transmission), suspend any sale of Placement Shares; provided, however, that
such suspension shall not affect or impair either party's obligations with
respect to any Placement Shares sold hereunder prior to the receipt of such
notice. The Company agrees that no such notice shall be effective against CF&Co
unless it is made to one of the individuals named on Schedule 3 attached hereto,
as such Schedule may be amended from time to time. CF&Co agrees that no such
notice shall be effective against the Company unless it is made to one of the
individuals named on Schedule 3 attached hereto.
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5. Settlement.
(a) Settlement of Placement Shares. Unless otherwise specified in the
applicable Placement Notice, settlement for sales of Placement Shares will occur
on the third (3rd) Business Day (or such earlier day as is industry practice for
regular-way trading) following the date on which such sales are made (each a
"Settlement Date"). The amount of proceeds to be delivered to the Company on a
Settlement Date against the receipt of the Placement Shares sold ("Net
Proceeds") will be equal to the aggregate sales price at which such Placement
Shares were sold, after deduction for (i) CF&Co's commission, discount, or other
compensation for such sales payable by the Company pursuant to Section 2 hereof
and (ii) any transaction fees imposed by any governmental or self-regulatory
organization in respect of such sales.
(b) Delivery of Placement Shares. On or before each Settlement Date,
the Company will, or will cause its transfer agent to, electronically transfer
the Placement Shares being sold by crediting CF&Co's or its designee's account
at The Depository Trust Company through its Deposit Withdrawal Agent Commission
System or by such other means of delivery as may be mutually agreed upon by the
parties hereto, and, upon receipt of such Placement Shares, which in all cases
shall be freely tradable, transferable, registered shares of Common Stock in
good deliverable form, CF&Co will deliver the related Net Proceeds in same day
funds delivered to an account designated by the Company prior to the Settlement
Date. If the Company defaults in its obligation to deliver Placement Shares on a
Settlement Date, the Company agrees that in addition to and in no way limiting
the rights and obligations set forth in Section 9(a) hereto, it will (i) hold
CF&Co harmless against any loss, claim, damage, or expense (including reasonable
legal fees and expenses of external counsel), as incurred, arising out of or in
connection with such default by the Company and (ii) pay to CF&Co any
commission, discount, or other compensation to which it would otherwise have
been entitled absent such default.
6. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, CF&Co that:
(a) The Common Stock is registered pursuant to Section 12(b) of the
Exchange Act (as hereinafter defined) and the Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the Commission (the "Commission Documents") for at least two (2) years, and all
of such filings have been made on a timely basis. The Common Stock is currently
listed on the Exchange under the trading symbol "ENN". The Company meets the
requirements of Form S-3 under the Act and the rules and regulations thereunder
("Rules and Regulations"), including but not limited to the transactions
requirements for a primary offering. The Company has filed a registration
statement on Form S-3 (Registration Statement No. 333-1117421) with respect to
an aggregate of $300,000,000 of securities of the Company, including the Shares
to be offered through CF&Co under a separate prospectus naming CF&Co as an
underwriter (as amended or supplemented, the "Registration Statement"). The
Registration Statement, including the form of prospectus in the Registration
Statement relating specifically to the Shares to be offered through CF&Co (the
"CF&Co Prospectus"), was prepared by the Company and its counsel in conformity
with the requirements of the Act and the Rules and Regulations. The CF&Co
Prospectus, together with any amendment thereto and all documents incorporated
therein by reference, are referred to herein as the "Prospectus". Any amendment
or supplement to the Registration Statement or Prospectus required by this
Agreement will be so prepared and filed by the Company, and the Company will use
its
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commercially reasonable efforts to cause it to become effective as soon as
reasonably practicable. No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that purpose has
been instituted or threatened by the Commission. Copies of all filings made by
the Company under the Act and all Commission Documents that were filed with the
Commission on or two years prior to the date of this Agreement have either been
delivered to CF&Co or made available to CF&Co on the Commission's Electronic
Data Gathering, Analysis, and Retrieval system ("XXXXX"). Any reference herein
to the Registration Statement, the Prospectus, or any amendment or supplement
thereto shall be deemed to refer to and include the documents incorporated (or
deemed to be incorporated) by reference therein, and any reference herein to the
terms "amend," "amendment" or "supplement" with respect to the Registration
Statement or Prospectus shall be deemed to refer to and include the filing after
the execution hereof of any document with the Commission deemed to be
incorporated by reference therein.
(b) Each part of the Registration Statement, when such part became or
becomes effective, and the Prospectus, on the date of filing thereof with the
Commission and at each Settlement Date, conformed or will conform with the
requirements of the Act and the Rules and Regulations; each part of the
Registration Statement, when such part became or becomes effective, did not or
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Prospectus, on the date of filing thereof with
the Commission and at each Settlement Date, did not or will not include an
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; except that the foregoing shall not apply to
statements or omissions in any such document made in reliance on information
furnished to the Company by CF&Co specifically stating that it is intended for
use in the Registration Statement, the Prospectus, or any amendment or
supplement thereto.
(c) The documents incorporated by reference in the Registration
Statement or the Prospectus, or any amendment or supplement thereto (the
"Disclosure Documents"), when they became effective under the Act or were filed
with the Commission under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as the case may be, conformed with the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder, and
none of such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform to the requirements of the Exchange
Act and the rules and regulations of the Commission thereunder and will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; except that the foregoing will not apply to statements or omissions
in any such document made in reliance on information furnished to the Company by
CF&Co specifically stating that it is intended for use in any such document.
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(d) The financial statements of the Company incorporated by reference
in the Registration Statement and Prospectus present fairly the financial
position of the Company as of the dates indicated and the results of operations
and cash flows for the Company for the periods specified, all in conformity with
generally accepted accounting principles applied on a consistent basis. The
financial statement schedules included in the Registration Statement fairly
present the information shown therein and have been compiled on a basis
consistent with the financial statements incorporated by reference in the
Registration Statement and the Prospectus. No other financial statements or
schedules are required by Form S-3 or otherwise to be included in the
Registration Statement or the Prospectus.
(e) 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, lease and operate its properties
and to conduct its business as described in the Prospectus; and the Company is
duly qualified as a foreign entity to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except where
the failure, individually or in the aggregate, to be so qualified and be in good
standing would not have a material adverse effect on (i) the consolidated
business, operations, properties, financial condition, prospects or results of
operations of the Company and its Subsidiaries (as defined below), taken as a
whole, or (ii) the ability of the Company to perform its obligations under this
Agreement and consummate the transactions contemplated hereunder (collectively,
a "Material Adverse Effect").
(f) Each of the subsidiaries of the Company listed on Schedule 4 hereto
(collectively, the "Subsidiaries", and each, individually, a "Subsidiary") has
been duly incorporated, formed or organized and is validly existing as a
corporation, limited liability company or limited partnership in good standing
under the laws of the jurisdiction of its incorporation, has corporate, limited
liability company or limited partnership power and authority to own, lease and
operate its properties and conduct its business as described in the Prospectus
and is duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to be so qualified would not have a Material
Adverse Effect. Except as set forth on Schedule 4 hereto, the Company does not
own or control, directly or indirectly, any corporation, limited partnership,
limited liability company, association or other entity and the Company's
ownership percentage of each Subsidiary is set forth on Schedule 4 hereto.
(g) Each of the Company and its Subsidiaries has good and marketable
title in fee simple to all real property and the improvements located thereon
owned by it, including with respect to the 99 hotels owned by them (the
"Hotels"), free and clear of all liens, encumbrances, claims, security
interests, restrictions and defects (collectively, "Encumbrances") except such
as (i) are described in the Prospectus, (ii) which do not materially and
adversely interfere with the Company's or any Subsidiary's use of the Hotels,
(iii) were entered into in connection with the financings described in the
Company's financial statements incorporated by reference in the Registration
Statement and Prospectus (the "Financings"), or (iv) are reflected in the title
insurance policies relating to such properties. The leases under which the
Company or any of its Subsidiaries leases real property as lessee (the "Leases")
are valid, subsisting and enforceable
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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 Company or any such
Subsidiary. 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 Company
or any Subsidiary under any of the Leases or affecting the right to the
continued possession of the leased property. Except with respect to liens
relating to the Financings, the Company and its Subsidiaries have good title to
all personal property owned by them, free and clear of all liens, security
interests, pledges, charges, encumbrances, mortgages and defects, except such as
are disclosed in the Prospectus or do not materially and adversely affect the
value of such property and do not interfere with the use made or proposed to be
made of such property by the Company and its Subsidiaries. Except as disclosed
in the Registration Statement, no person has an option or right of first refusal
to purchase all or part of any Hotel or any interest therein. Each of the Hotels
complies with all applicable codes, laws and regulations (including, without
limitation, building and zoning codes, laws and regulations and laws relating to
access to the Hotels) and except for such failures to comply that would not
individually or in the aggregate have a Material Adverse Effect. The Company
does not have knowledge of any pending or threatened condemnation proceedings,
zoning change, or other proceeding or action that will in any manner affect the
size of, use of, improvements on, construction on or access to the Hotels,
except such proceedings or actions that would not have a Material Adverse
Effect.
(h) The Company's authorized capital stock is as disclosed in the
Prospectus. As of the date hereof, the Company has 45,450,780 shares of Common
Stock issued and outstanding and 3,450,000 shares of 8.75% Series B Preferred
Stock issued and outstanding. 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 or exercisable for
capital stock of the Company.
(i) 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 Section 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.
(j) The Shares have been duly authorized and, when issued, delivered
and paid for pursuant to this Agreement, will be duly and validly issued, fully
paid and non-assessable, free and clear of all Encumbrances and will be issued
in compliance with all applicable federal and state securities laws; the capital
stock of the Company, including the Placement Shares, conforms to the
description thereof contained in the Prospectus. Neither the shareholders of the
Company nor any other person or entity has any statutory or other preemptive
rights or rights of participation or first refusal with respect to the Placement
Shares or other rights to purchase or receive any of the Shares or any other
securities or assets of the Company other than pursuant to (i) the Company's
stock incentive plans and (ii) the registration of shares issuable in connection
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with the redemption of units of partnership interest pursuant to the Second
Amended and Restated Agreement of Limited Partnership of Equity Inns
Partnership, L.P., or as otherwise disclosed in the Prospectus, and no person or
entity has the right, contractual or otherwise, to cause the Company to issue to
it, or register pursuant to the Act, any shares of capital stock or other
securities or assets of the Company upon the issuance or sale of the Placement
Shares other than pursuant to (i) the Company's stock incentive plans and (ii)
the registration of shares issuable in connection with the redemption of units
of partnership interest pursuant to the Second Amended and Restated Agreement of
Limited Partnership of Equity Inns Partnership, L.P., or as otherwise disclosed
in the Prospectus.
(k) None of the Company or any of its Subsidiaries has sustained, since
December 31, 2003, any material loss or interference with its business from
fire, explosion, flood, hurricane, accident or other calamity, whether or not
covered by insurance, or from any labor dispute or arbitrators' or court or
governmental action, order or decree; and, since the respective dates as of
which information is given in the Registration Statement and the Prospectus, and
except as otherwise stated in the Registration Statement and Prospectus, there
has not been (i) any material change in the capital stock, shares of beneficial
interests or partnership interests, as applicable, long-term debt, obligations
under capital leases or short-term borrowings of the Company or any of its
Subsidiaries, (ii) any material adverse change, or any development which could
reasonably be seen as involving a prospective Material Adverse Effect, (iii) any
liability or obligation, direct or contingent, incurred or undertaken by the
Company or any of its Subsidiaries which is material to the business or
condition (financial or other) of the Company and its Subsidiaries, taken as a
whole, except for liabilities or obligations incurred in the ordinary course of
business, (iv) any declaration or payment of any dividend or distribution of any
kind on or with respect to the capital stock, shares of beneficial interest or
partnership interests, as applicable, of the Company or any of its Subsidiaries
except as set forth in the Registration Statement, or (v) any transaction that
is material to the Company and its Subsidiaries, taken as a whole, except
transactions in the ordinary course of business or as otherwise disclosed in the
Registration Statement or the Prospectus.
(l) There is not pending or, to the knowledge of the Company,
threatened, any action, suit, proceeding, inquiry or investigation against the
Company or any of its Subsidiaries or any of their respective officers and
directors or to which the properties, assets or rights of any such entity are
subject, before or brought by any court or governmental agency or body or board
of arbitrators, which would have a Material Adverse Effect or which could
adversely affect the consummation of the transactions contemplated by this
Agreement.
(m) 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, there are no statutes or regulations applicable to the Company or
any of its Subsidiaries or certificates, permits or other authorizations from
governmental regulatory officials or bodies required to be obtained or
maintained by the Company or any of its Subsidiaries of a character required to
be disclosed in the Registration Statement or the
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Prospectus which have not been so disclosed and properly described therein. All
agreements, if any, between the Company or any of its Subsidiaries and third
parties expressly referenced in the Prospectus or attached as exhibits to the
Registration Statement are legal, valid and binding obligations of the Company
or such Subsidiary, respectively, enforceable in accordance with their
respective terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization or other laws of general applicability
relating to or affecting creditors, rights and by general equitable principles.
(n) The Company has full corporate right, power and authority to enter
into this Agreement, to issue, sell and deliver the Placement 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 9 of
this Agreement may be limited by federal or state securities laws or the public
policy underlying such laws.
(o) Neither the Company nor any of its Subsidiaries is in violation of
its respective charter, bylaws, declaration of trust, certificate of limited
partnership or partnership agreement, or limited liability company certificate
of formation or operating agreement, as the case may be, and with respect to the
Company and each of its Subsidiaries and, to the Company's knowledge, with
respect to each other party thereto, no default exists, and no event has
occurred, nor state of facts exists, which, with notice or after the lapse of
time to cure or both, would constitute a default in the due performance and
observance of any obligation, agreement, term, covenant, consideration or
condition contained in any indenture, mortgage, deed of trust, loan agreement,
note, lease or other agreement or instrument to which the Company or any of its
Subsidiaries is a party or to which any such entity or any of its properties is
subject, except as may be properly described in the Prospectus or such as in the
aggregate do not now have or will not in the future have a Material Adverse
Effect. Neither the Company nor any of its Subsidiaries is in violation of, or
in default with respect to, any statute, rule, regulation, order, judgment or
decree, except as may be properly described in the Prospectus or such as in the
aggregate do not now have and will not in the future have a Material Adverse
Effect.
(p) Neither the issuance, sale and delivery by the Company of the
Placement Shares, nor the execution, delivery and performance of this Agreement
nor the consummation of the transactions contemplated hereby by the Company,
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, bylaws, declaration of trust,
certificate of limited partnership or partnership agreement, or limited
liability company certificate of formation or operating agreement, as the case
may be, of the Company or any of its Subsidiaries; any material indenture,
mortgage, deed of trust, loan agreement, note, lease or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or to
which they, any of them, any of their respective properties or other assets or
any Hotel is subject; or, to the Company's knowledge, any applicable statute,
judgment, decree, order, rule or regulation of any court or governmental agency
or body applicable to any of the foregoing or any of their
8
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.
The Company and its Subsidiaries own, possess or have obtained all
material permits, licenses, franchises (including the franchises relating to the
Hotels), certificates, consents, orders, approvals and other authorizations of
governmental or regulatory authorities or other entities as are necessary to own
or lease, as the case may be, its respective properties and to carry on its
business as presently conducted, or as contemplated in the Prospectus to be
conducted, except where the failure to so obtain governmental licenses,
franchises, certificates, consents, orders, approvals or other authorizations
would not have a Material Adverse Effect, and neither the Company nor any of its
Subsidiaries has received any notice of proceedings relating to revocation or
modification of any such licenses, permits, franchises, certificates, consents,
orders, approvals or authorizations. No consent, approval, authorization,
permit, or order of, or filing with, any federal or state court or governmental
agency or body is required for the issue and sale of the Placement Shares and
the consummation by the Company of the transactions contemplated by this
Agreement, except the filing with the Commission of the Registration Statement
(including the Prospectus) and amendments and supplements to the Registration
Statement and Prospectus related to the issue and sale of the Placement Shares
and such consents, approvals, authorizations, registrations or qualifications as
have already been obtained or made or as may be required under state securities
or Blue Sky laws or real estate syndication laws or by the National Association
of Securities Dealers, Inc. in connection with the purchase and/or distribution
of the Shares by CF&Co.
(q) Each of the Company and the Subsidiaries maintains liability,
casualty and other insurance (subject to customary deductions and retentions)
adequate for the conduct of its respective business and with responsible
insurance companies against such risks of the types and in the amounts
customarily maintained by companies of comparable size to the Company or such
Subsidiary, as the case may be, conducting the same type of business as the
Company or such Subsidiary, as the case may be (which may include self-insurance
in comparable form to that maintained by such responsible companies); neither
the Company nor any of its Subsidiaries has received notice from any insurer or
agent of such insurer that substantial capital improvements or other
expenditures will have to be made in order to continue such insurance; all such
insurance is outstanding and in full force and effect.
(r) Except as otherwise disclosed in the Prospectus, neither the
Company nor any of its Subsidiaries has authorized or conducted or has knowledge
of the generation, transportation, storage, presence, use, treatment, disposal,
release, or other handling of any hazardous substance, hazardous waste,
hazardous material, hazardous constituent, toxic substance, pollutant,
contaminant, asbestos, radon, polychlorinated biphenyls ("PCBs"), petroleum
product or waste (including crude oil or any fraction thereof), natural gas,
liquefied gas, synthetic gas or other material defined, regulated, controlled or
potentially subject to any remediation requirement under any environmental law
(collectively, "Hazardous Materials"), on, in, under or affecting any real
property currently leased or owned or by any means controlled by the Company or
any of its Subsidiaries, including the Hotels (the "Real Property") except as in
material compliance with applicable laws; except as otherwise disclosed in the
Prospectus, to the knowledge of the Company, the Real Property and the Company's
and its Subsidiaries' operations with respect to
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the Real Property are in compliance in all material respects with all federal,
state and local laws, ordinances, rules, regulations and other governmental
requirements relating to pollution, control of chemicals, management of waste,
discharges of materials into the environment, health, safety, natural resources,
and the environment (collectively, "Environmental Laws"), and the Company and
its Subsidiaries have, and are in compliance with, all material licenses,
permits, registrations and government authorizations necessary to operate under
all applicable Environmental Laws. Except as otherwise disclosed in the
Prospectus, neither the Company nor any of its Subsidiaries has received any
written or oral notice from any governmental entity or any other person and
there is no pending or threatened claim, litigation or any administrative agency
proceeding that: (i) alleges a violation of any Environmental Laws by the
Company or any of its Subsidiaries; (ii) alleges that the Company or any of its
Subsidiaries is a liable party or a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
ss. 9601, et seq., or any state superfund law; (iii) has resulted in or could
result in the attachment of an environmental lien on any of the Real Property;
or (iv) alleges that the Company or any of its Subsidiaries is liable for any
contamination of the environment, contamination of the Real Property, damage to
natural resources, property damage, or personal injury based on their activities
or the activities of their predecessors or third parties (whether at the Real
Property or elsewhere) involving Hazardous Materials, whether arising under the
Environmental Laws, common law principles, or other legal standards.
(s) Each of the Company and its Subsidiaries owns or possesses adequate
license or other rights to use all trademarks, service marks, trade names,
copyrights, software and design licenses, trade secrets, manufacturing
processes, other intangible property rights and know-how (collectively
"Intangibles") necessary to entitle the Company and its Subsidiaries to conduct
their business now, and as proposed to be conducted or operated as described in
the Prospectus, and neither the Company nor any of its Subsidiaries has received
notice of infringement or of conflict with (and knows of no such infringement of
or conflict with) asserted rights of others with respect to any Intangibles
which could have a Material Adverse Effect.
(t) Neither the Company nor any entity that is or was a member of the
Company's controlled group (within the meaning of Section 412(n)(6) of The
Internal Revenue Code of 1986, as amended (the "Code")) has any direct,
contingent or secondary liability under Title IV of The Employee Retirement
Income Security Act of 1974 or Section 412 of the Code.
(u) On each Settlement Date and each Filing Date (as defined in Section
7(m) below), the Company shall be deemed to have confirmed (i) the accuracy and
completeness, as of such date, of each representation and warranty made by it in
this Agreement, as if each such representation and warranty were made on and as
of such date, and (ii) that the Company has complied with all of the agreements
to be performed by it hereunder at or prior to such date.
(v) PricewaterhouseCoopers LLP, who have examined and are reporting
upon the audited financial statements and schedules of the Company incorporated
by reference in the Registration Statement, are, and were during the periods
covered by their report incorporated by reference in the Registration Statement
and the Prospectus, independent public accountants within the meaning of the
Act, the Exchange Act and the respective rules and regulations of the Commission
thereunder.
10
(w) Each of the Company and any Subsidiary (to the extent not
consolidated with the Company) has filed on a timely basis all material federal,
state, local and foreign income and franchise tax returns required to be filed
through the date hereof and has paid all taxes shown as due thereon, except
where the Company or such Subsidiary is contesting such taxes in good faith and
has made adequate reserves therefor; and no tax deficiency has been asserted
against any such entity, nor does any such entity know of any tax deficiency
which is likely to be asserted against any such entity which if determined
adversely to any such entity, could have a Material Adverse Effect. All tax
liabilities are adequately provided for on the respective books of such
entities.
(x) Each of the Company and its 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 Placement Shares, as would result in a violation of
Regulation M.
(y) The Company was organized and has operated in conformity with the
requirements for qualification as a real estate investment trust under the Code
for each of its taxable years ended December 31, 1994 through December 31, 2003,
and the Company's method of operation enables it to meet the requirements for
taxation as a real estate investment trust under the Code. Equity Inns
Partnership, L.P. is treated as a partnership for federal income purposes and
not as a corporation or an association taxable as a corporation.
(z) The Company is not, and will not become as a result of the
transactions contemplated hereby, "an investment company," or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.
7. Covenants of the Company. The Company covenants and agrees with CF&Co
that:
(a) After the date of this Agreement, with regard to the filing of the
Registration Statement with the Commission, and until such Registration
Statement is declared effective, and during the period in which a prospectus
relating to the Shares is required to be delivered by CF&Co under the Act, the
Company will notify CF&Co promptly of the time when any subsequent amendment to
the Registration Statement has been filed with the Commission and has become
effective or any subsequent supplement to the Prospectus has been filed and of
any request by the Commission for any amendment or supplement to the
Registration Statement or Prospectus or for additional information; it will
prepare and file with the Commission, as soon as reasonably practicable upon
CF&Co's reasonable request, any supplements to the CF&Co Prospectus that, in
CF&Co's reasonable opinion, may be necessary or advisable in connection with the
distribution of the Shares by CF&Co (provided, however that the failure of CF&Co
to make such request shall not relieve the Company of any obligation or
liability hereunder, or affect CF&Co's right to rely on the representations and
warranties made by the Company in this Agreement); and the Company will cause
each amendment or supplement to the Prospectus to be filed with the Commission
as required pursuant to the applicable paragraph of Rule 424(b) of the Rules and
Regulations or, in the case of any document to be incorporated therein by
reference, or deemed to be incorporated therein by reference, to be filed with
the Commission as required pursuant to the Exchange Act, within the time period
prescribed.
11
(b) The Company will advise CF&Co, promptly after it receives notice or
obtains knowledge thereof, of the issuance or threatened issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement, of the suspension of the qualification of the Shares for offering or
sale in any jurisdiction, or of the initiation or threatening of any proceeding
for any such purpose.
(c) Within the time during which a prospectus relating to the Shares is
required to be delivered by CF&Co under the Act, the Company will comply with
all requirements imposed upon it by the Act and by the Rules and Regulations, as
from time to time in force, and will file on or before their respective due
dates all reports and any definitive proxy or information statements required to
be filed by the Company with the Commission pursuant to Section 13(a), 13(c),
14, 15(d) or any other provision of or under the Exchange Act. If during such
period any event occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances then existing, not misleading, or if during such period it is
necessary to amend or supplement the Registration Statement or Prospectus to
comply with the Act, the Company will promptly notify CF&Co to suspend the
offering of Shares during such period and the Company will promptly amend or
supplement the Registration Statement or Prospectus (at the expense of the
Company) so as to correct such statement or omission or effect such compliance.
(d) The Company will use its commercially reasonable efforts to cause
the Placement Shares to be listed on the Exchange and to qualify the Placement
Shares for sale under the securities laws of such jurisdictions as CF&Co
designates and to continue such qualifications in effect so long as required for
the distribution of the Shares; provided that the Company shall not be required
in connection therewith to qualify as a foreign corporation (including
registration of the Placement Shares in non-U.S. jurisdictions) or to file a
general consent to service of process in any jurisdiction.
(e) The Company will furnish to CF&Co and its counsel (at the expense
of the Company) copies of the Prospectus and all amendments and supplements to
the Prospectus that are filed with the Commission during the period in which a
prospectus relating to the Placement Shares is required to be delivered under
the Act, in each case as soon as reasonably practicable and in such quantities
as CF&Co may from time to time reasonably request and, at CF&Co's request, will
also furnish copies of the Prospectus to each exchange or market on which sales
of Placement Shares may be made.
(f) The Company will furnish to CF&Co for a period of two (2) years
from the date of this Agreement such information as reasonably requested by
CF&Co regarding the Company or its Subsidiaries.
(g) The Company will make generally available to its security holders
as soon as practicable, but in any event not later than 15 months after the end
of the Company's current fiscal quarter, an earning statement covering a
12-month period that satisfies the provisions of Section 11(a) of the Act and
Rule 158 of the Rules and Regulations.
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(h) The Company, whether or not the transactions contemplated hereunder
are consummated or this Agreement is terminated in accordance with Section 11 of
this Agreement, will pay all expenses incident to the performance of its
obligations hereunder, including, but not limited to, expenses relating to (i)
the preparation, printing and filing of the Registration Statement and each
amendment and supplement thereto, of each Prospectus and of each amendment and
supplement thereto, (ii) the preparation, issuance and delivery of the Placement
Shares, (iii) the fees and disbursements of the Company's counsel and
accountants, (iv) the qualification of the Placement Shares under securities
laws in accordance with the provisions of Section 7(d) of this Agreement,
including filing fees and any reasonable fees or disbursements of counsel for
CF&Co in connection therewith, (v) the printing and delivery to CF&Co of copies
of the Prospectus and any amendments or supplements thereto, and of this
Agreement, (vi) the fees and expenses incurred in connection with the listing or
qualification of the Placement Shares for trading on the Exchange, or (vii)
filing fees and expenses, if any, of the Commission and the National Association
of Securities Dealers, Inc. Corporate Finance Department (including the
reasonable fees and expenses of CF&Co's counsel in connection with any such
filing).
(i) The Company will use the Net Proceeds as described in the
Prospectus and shall not use such proceeds to make a loan to any employee,
officer, director or shareholder of the Company (other than loans made to new
employees as a condition of employment) (regardless of whether such loan was
authorized by the Company's Board of Directors prior to the date hereof).
(j) Without the written consent of CF&Co, which consent shall not be
unreasonably withheld, the Company will not, directly or indirectly, offer to
sell, sell, contract to sell, grant any option to sell or otherwise dispose of
any shares of Common Stock (other than the Shares offered pursuant to the
provisions of this Agreement), or securities convertible into or exchangeable or
exercisable for Common Stock, warrants or any rights to purchase or acquire,
Common Stock during the period beginning on the date on which any Acceptance of
a Placement Notice is delivered to CF&Co hereunder and ending on the fifth (5th)
Trading Day immediately following the Settlement Date with respect to Placement
Shares sold pursuant to such Placement Notice; provided, however, that such
restrictions will not be required in connection with the Company's issuance or
sale of (i) Common Stock, options to purchase shares of Common Stock or Common
Stock issuable upon the exercise of options, pursuant to any employee or
director stock option or benefits plan, stock ownership plan or dividend
reinvestment plan (but not shares subject to a waiver to exceed plan limits in
its stock purchase plan) of the Company now in effect, and (ii) Common Stock
issuable upon conversion of securities or the exercise of warrants, options or
other rights in effect or outstanding including, without limitation, units of
limited partnership interest in Equity Inns Partnership, L.P.
(k) The Company will, at any time during the term of this Agreement, as
supplemented from time to time, advise CF&Co immediately after it shall have
received notice or obtain knowledge thereof, of any information or fact that
would alter or affect any certificate or letter provided to CF&Co pursuant to
this Agreement.
(l) The Company will cooperate with any due diligence review conducted
by CF&Co or its agents, including, without limitation, providing information and
making available documents and senior corporate officers, as CF&Co may
reasonably request; provided, however, that the
13
Company shall be required to make available documents and senior corporate
officers only (i) at the Company's principal offices and (ii) during the
Company's ordinary business hours.
(m) The Company agrees that on such dates as the Rules and Regulations
shall require, the Company will (i) file a prospectus supplement with the
Commission under the applicable paragraph of Rule 424(b) under the Act (each and
every filing under Rule 424(b), a "Filing Date") disclosing all information
required by the Rules and Regulations to be set forth therein and (ii) deliver
such number of copies of each such prospectus supplement to each exchange or
market on which such sales were effected as may be required by the rules or
regulations of such exchange or market.
(n) On the date of the first Settlement Date under this Agreement and
on the next Business Day following the first day of each month during the term
of this Agreement following the date of the first Settlement Date under this
Agreement, the Company shall furnish or cause to be furnished to CF&Co forthwith
a certificate dated the date of the first Settlement Date under this Agreement
or next Business Day following the first day of each month during the term of
this Agreement following the date of the first Settlement Date under this
Agreement, as the case may be, substantially in the form attached hereto as
Exhibit 8(g) to the effect that the representations and warranties made by the
Company in this Agreement, as modified upon the reasonable request of CF&Co
based upon advice of counsel prior to the first Settlement Date, are true and
correct on such date as though made at and as of such date (except that such
statements shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such time) and that the Company has
complied with all of the obligations to be performed by it at or prior to such
date under this Agreement.
(o) On the date of the first Settlement Date under this Agreement and
each time that there is filed with the Commission the Company's Annual Report on
Form 10-K, the Company shall furnish or cause to be furnished forthwith to CF&Co
and to counsel to CF&Co a written opinion of Hunton & Xxxxxxxx LLP, counsel to
the Company ("Company Counsel"), or other counsel satisfactory to CF&Co, dated
the date of the first Settlement Date under this Agreement or the date of filing
with the Commission of such Annual Report on Form 10-K, as the case may be, in
form and substance satisfactory to CF&Co and its counsel, in substantially the
forms attached hereto as Exhibit 8(e)(1) (for the first Settlement Date), and
Exhibit 8(e)(2) (for subsequent dates), but modified as necessary to relate to
the Registration Statement and the Prospectus, as amended and supplemented to
the time of delivery of such opinion.
(p) On the date of the first Settlement Date under this Agreement and
each time that there is filed with the Commission the Company's Annual Report on
Form 10-K, the Company shall cause its independent accountants reasonably
satisfactory to CF&Co, forthwith to furnish CF&Co letters (the "Comfort
Letters"), dated the date of the first Settlement Date under this Agreement or
the date of filing with the Commission of such Annual Report on Form 10-K, as
the case may be, in form and substance satisfactory to CF&Co, (A) confirming
that they are independent public accountants within the meaning of the Act and
are in compliance with the applicable requirements relating to the qualification
of accountants under Rule 2-01 of Regulation S-X of the Commission, (B) stating,
as of such date, the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by
14
accountants' "comfort letters" to underwriters in connection with registered
public offerings (the first such letter, the "Initial Comfort Letter") and (C)
updating the Initial Comfort Letter with any information which would have been
included in the Initial Comfort Letter had it been given on such date and
modified as necessary to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the date of such letter.
(q) The Company will not, directly or indirectly, (i) take any action
designed to cause or result in, or that constitutes or might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Placement Shares
or (ii) sell, bid for, or purchase the Placement Shares, or pay anyone any
compensation for soliciting purchases of the Placement Shares other than CF&Co.
The Company acknowledges and agrees that CF&Co has informed the Company that
CF&Co may, to the extent permitted under the Act and the Exchange Act, purchase
and sell shares of Common Stock for its own account while this Agreement is in
effect provided that (i) no such purchase or sales shall take place while a
Placement Notice is in effect (except to the extent CF&Co. may engage in sales
of Placement Shares purchased or deemed purchased from the Company as a
"riskless principal" or in a similar capacity) and (ii) the Company shall not be
deemed to have authorized or consented to any such purchases or sales by CF&Co.
8. Conditions to CF&Co's Obligations. The obligations of CF&Co hereunder
with respect to a Placement will be subject to the continuing accuracy and
completeness of the representations and warranties made by the Company herein,
as modified upon the reasonable request of CF&Co based upon advice of counsel
prior to the first Settlement Date, to the due performance by the Company of its
obligations hereunder, to the completion by CF&Co of a due diligence review
satisfactory to CF&Co in its reasonable judgment, and to the continuing
satisfaction (or waiver by CF&Co in its sole discretion) of the following
additional conditions:
(a) The Registration Statement shall have become effective and shall be
available for the sale of all Placement Shares contemplated to be issued by the
Placement Notice relating to such Placement.
(b) None of the following events shall have occurred and be continuing:
(i) receipt by the Company of any request for additional information from the
Commission or any other federal or state governmental authority during the
period of effectiveness of the Registration Statement, the response to which
would require any amendments or supplements to the Registration Statement or the
Prospectus; (ii) the issuance by the Commission or any other federal or state
governmental authority of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose;
(iii) receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Placement
Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and (iv) the occurrence of any event that makes any
statement made in the Registration Statement or the Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires the making of any changes in the Registration
Statement, related prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
15
necessary to make the statements therein not misleading, and that in the case of
the Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(c) CF&Co shall not have advised the Company that the Registration
Statement or Prospectus, or any amendment or supplement thereto, contains an
untrue statement of fact that in CF&Co's opinion is material, or omits to state
a fact that in CF&Co's opinion is material and is required to be stated therein
or is necessary to make the statements therein not misleading.
(d) Except as contemplated in the Prospectus, or disclosed in the
Disclosure Documents filed with the Commission prior to the date of this
Agreement, there shall not have been any material adverse change, on a
consolidated basis, in the authorized capital stock, shares of beneficial
interests, limited liability company interests or limited partnership interests,
as applicable, of the Company and its Subsidiaries, or any Material Adverse
Effect, or any development that would reasonably be expected to cause a Material
Adverse Effect, or a downgrading in or withdrawal of the rating assigned to any
of the Company's securities by any rating organization or a public announcement
by any rating organization that it has under surveillance or review its rating
of any of the Company's securities, the effect of which, in the case of any such
action by a rating organization described above, in the reasonable judgment of
CF&Co (without relieving the Company of any obligation or liability it may
otherwise have), is so material as to make it impracticable or inadvisable to
proceed with the offering of the Placement Shares on the terms and in the manner
contemplated in the Prospectus.
(e) CF&Co shall have received the opinion of Company Counsel required
to be delivered pursuant Section 7(o) on or before the date on which such
delivery of such opinion is required pursuant to Section 7(o).
(f) CF&Co shall have received the Comfort Letter required to be
delivered pursuant to Section 7(p) on or before the date on which such delivery
of such letter is required pursuant to Section 7(p).
(g) CF&Co shall have received the certificate required to be delivered
pursuant to Section 7(n) on or before the date on which delivery of such
certificate is required pursuant to Section 7(n).
(h) The Placement Shares shall have been duly listed, subject to notice
of issuance, on the Exchange, and trading in the Common Stock shall not have
been suspended on such market.
(i) On each date on which the Company is required to deliver a
certificate pursuant to Section 7(n), the Company shall have furnished to CF&Co
such appropriate further information and documents as CF&Co may reasonably
request. All such opinions, letters and other documents will be in compliance
with the provisions hereof. The Company will furnish CF&Co with such conformed
copies of such opinions, certificates, letters and other documents as CF&Co
shall reasonably request.
16
(j) There shall not have occurred any event that would permit CF&Co to
terminate this Agreement pursuant to Section 11(a).
9. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless CF&Co, the
directors, officers, partners, employees and agents of CF&Co and each person, if
any, who (i) controls CF&Co within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, or (ii) is controlled by or is under common
control with CF&Co (a "CF&Co Affiliate") from and against any and all losses,
claims, liabilities, expenses and damages (including, but not limited to, any
and all investigative, legal and other expenses reasonably incurred in
connection with, and any and all amounts paid in settlement of, any action, suit
or proceeding between any of the indemnified parties and any indemnifying
parties or between any indemnified party and any third party, or otherwise, or
any claim asserted), as and when incurred, to which CF&Co, or any such person,
may become subject under the Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, liabilities, expenses or damages arise out of or are based, directly or
indirectly, on (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus, or (ii)
the omission or alleged omission to state in such document a material fact
required to be stated in it or necessary to make the statements in it not
misleading; provided that this indemnity agreement shall not apply to the extent
that such loss, claim, liability, expense or damage arises from the sale of the
Placement Shares pursuant to this Agreement and is caused directly by an untrue
statement or omission made in reliance on and in conformity with information
relating to CF&Co and furnished in writing to the Company by CF&Co expressly
stating that such information is intended for inclusion in any document
described in clause (a)(i) above. This indemnity agreement will be in addition
to any liability that the Company might otherwise have.
(b) CF&Co agrees to indemnify and hold harmless the Company and its
directors and each officer of the Company who signed the Registration Statement,
and each person, if any, who (i) controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act or (ii) is controlled by
or is under common control with the Company (a "Company Affiliate") against any
and all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendments thereto) or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information and relating to CF&Co furnished to the Company by CF&Co
expressly stating that such information is intended for use in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto).
(c) Any party that proposes to assert the right to be indemnified under
this Section 9 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 9, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve the
17
indemnifying party from (i) any liability that it might have to any indemnified
party otherwise than under this Section 9 and (ii) any liability that it may
have to any indemnified party under the foregoing provision of this Section 9
unless, and only to the extent that, such omission results in the forfeiture of
substantive rights or defenses by the indemnifying party. If any such action is
brought against any indemnified party and it notifies the indemnifying party of
its commencement, the indemnifying party will be entitled to participate in and,
to the extent that it elects by delivering written notice to the indemnified
party promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel reasonably satisfactory to the
indemnified party, and after notice from the indemnifying party to the
indemnified party of its election to assume the defense, the indemnifying party
will not be liable to the indemnified party for any legal or other expenses
except as provided below and except for the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with the defense.
The indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at the
expense of such indemnified party unless (1) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (2)
the indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(3) a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not, in any event, be liable for any settlement of any
action or claim effected without its written consent. No indemnifying party
shall, without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding relating to the matters contemplated by this Section
9 (whether or not any indemnified party is a party thereto), unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising or that may arise out of such
claim, action or proceeding. Notwithstanding any other provision of this Section
9(c), if at any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of counsel for
which it is entitled to reimbursement pursuant to this Section 9(c), such
indemnifying party agrees that it shall be liable for any settlement effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into, and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement; provided
18
that an indemnifying party shall not be liable for any such settlement effected
without its consent if such indemnifying party, at least five days prior to the
date of such settlement, (1) reimburses such indemnified party in accordance
with such request for the amount of such fees and expenses of counsel as the
indemnifying party believes in good faith to be reasonable and (2) provides
written notice to the indemnified party that the indemnifying party disputes in
good faith the reasonableness of the unpaid balance of such fees and expenses.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 9 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or CF&Co, the Company and
CF&Co will contribute to the total losses, claims, liabilities, expenses and
damages (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than CF&Co, such as persons who
control the Company within the meaning of the Act, officers of the Company who
signed the Registration Statement and directors of the Company, who also may be
liable for contribution) to which the Company and CF&Co may be subject in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company, on the one hand, and CF&Co, on the other hand. The relative
benefits received by the Company, on the one hand, and CF&Co, on the other hand,
shall be deemed to be in the same proportion as the total net proceeds from the
sale of Placement Shares (before deducting expenses) received by the Company
bear to the total compensation (before deducting expenses) received by CF&Co
from the sale of Placement Shares on behalf of the Company. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and CF&Co, on the other hand, with respect to the statements or omission which
resulted in such loss, claim, liability, expense or damage, or action in respect
thereof, as well as any other relevant equitable considerations with respect to
such offering. Such relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or CF&Co, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and CF&Co agree that it would not be just and
equitable if contributions pursuant to this Section 9(d) were to be determined
by pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, liability,
expense, or damage, or action in respect thereof, referred to above in this
Section 9(d) shall be deemed to include, for the purpose of this Section 9(d),
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim to the
extent consistent with Section 9(c) hereof. Notwithstanding the foregoing
provisions of this Section 9(d), CF&Co shall not be required to contribute any
amount in excess of the commissions received by it under this Agreement and no
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) will be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of this
Section 9(d), any person who controls a party to this Agreement within the
meaning of the Act, and any officers, directors, partners,
19
employees or agents of CF&Co, will have the same rights to contribution as that
party, and each officer of the Company who signed the Registration Statement
will have the same rights to contribution as the Company, subject in each case
to the provisions hereof. Any party entitled to contribution, promptly after
receipt of notice of commencement of any action against such party in respect of
which a claim for contribution may be made under this Section 9(d), will notify
any such party or parties from whom contribution may be sought, but the omission
to so notify will not relieve that party or parties from whom contribution may
be sought from any other obligation it or they may have under this Section 9(d)
except to the extent that the failure to so notify such other party materially
prejudiced the defenses of the party from whom contribution is sought. Except
for a settlement entered into pursuant to the last sentence of Section 9(c)
hereof, no party will be liable for contribution with respect to any action or
claim settled without its written consent if such consent is required pursuant
to Section 9(c) hereof.
10. Representations and Agreements to Survive Delivery. All representations
and warranties of the Company herein or in certificates delivered pursuant
hereto shall remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of CF&Co, any controlling persons, or the
Company (or any of their respective officers, directors or controlling persons),
(ii) delivery and acceptance of the Placement Shares and payment therefor or
(iii) any termination of this Agreement.
11. Termination.
(a) CF&Co shall have the right by giving twenty (20) days' notice as
hereinafter specified at any time to terminate this Agreement if (i) any
Material Adverse Effect, or any development that has actually occurred and that
is reasonably expected to cause a Material Adverse Effect has occurred which, in
the reasonable judgment of CF&Co, may materially impair the ability of CF&Co to
perform its obligations under this Agreement or any Placement Notice, (ii) the
Company shall have failed, refused or been unable, at or prior to any Settlement
Date, to perform any agreement on its part to be performed hereunder, or (iii)
any other condition of CF&Co's obligations hereunder is not fulfilled. Any such
termination shall be without liability of any party to any other party except
that the provisions of Sections 7(f), 7(h), 9, 10, 16 and 17 hereof shall remain
in full force and effect notwithstanding such termination. If CF&Co elects to
terminate this Agreement as provided in this Section 11(a), CF&Co shall provide
the required notice as specified herein.
(b) The Company shall have the right, by giving twenty (20) days'
notice as hereinafter specified, to terminate this Agreement in its sole
discretion at any time following the period of twelve (12) months after the date
of this Agreement. Any such termination shall be without liability of any party
to any other party except that the provisions of Sections 7(f), 7(h), 9, 10, 16
and 17 hereof shall remain in full force and effect notwithstanding such
termination.
(c) CF&Co shall have the right, by giving twenty (20) days' notice as
hereinafter specified, to terminate this Agreement in its sole discretion at any
time following the period of twelve (12) months after the date of this
Agreement. Any such termination shall be without liability of any party to any
other party except that the provisions of Sections 7(f), 7(h), 9, 10, 16 and 17
hereof shall remain in full force and effect notwithstanding such termination.
20
(d) This Agreement shall remain in full force and effect unless
terminated pursuant to Section 11(a), (b) or (c) above or otherwise by mutual
agreement of the parties in writing; provided that any such termination by
mutual agreement shall in all cases be deemed to provide that Sections 7(f),
7(h), 9, 10, 16 and 17 shall remain in full force and effect.
(e) Subject to the provisions of this Section 11, any termination of
this Agreement shall be effective on the date specified in such notice of
termination; provided that such termination shall not be effective until the
close of business on the date of receipt of such notice by CF&Co or the Company,
as the case may be. If such termination shall occur prior to the Settlement Date
for any sale of Placement Shares, such Placement Shares shall settle in
accordance with the provisions of this Agreement in effect prior to termination.
12. Notices. All notices or other communications required or permitted to
be given by any party to any other party pursuant to the terms of this Agreement
shall be in writing and if sent to CF&Co, shall be delivered to CF&Co at Cantor
Xxxxxxxxxx & Co., 000 Xxxx 00 Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, fax no. (212)
000-0000, Attention: ITD-Investment Banking, with a copy to Xxxxxxx Xxxxxx,
General Counsel at the same address, with a copy to Xxxxxx, Xxxxx & Xxxxxxx LLP,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, fax no. (000) 000-0000, Attention:
Xxxxxxxxxxx X. Xxxxxx; or if sent to the Company, shall be delivered to 0000
Xxxx Xxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxx, 00000, fax no. (000) 000-0000,
Attention: Xxxxxx X. Silver, with a copy to J. Xxxxxxxx Xxxxxxx at the same
address, fax no. (000) 000-0000. Each party to this Agreement may change such
address for notices by sending to the parties to this Agreement written notice
of a new address for such purpose. Each such notice or other communication shall
be deemed given (i) when delivered personally or by verifiable facsimile
transmission (with an original to follow) on or before 4:30 p.m., New York time,
on a Business Day or, if such day is not a Business Day, on the next succeeding
Business Day, (ii) on the next Business Day after timely delivery to a
nationally-recognized overnight courier and (iii) on the Business Day actually
received if deposited in the U.S. mail (certified or registered mail, return
receipt requested, postage prepaid). For purposes of this Agreement, "Business
Day" shall mean any day on which the Exchange and commercial banks in the city
of New York are open for business.
13. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company and CF&Co and their respective successors and
the affiliates, controlling persons, officers and directors referred to in
Section 9 hereof. References to any of the parties contained in this Agreement
shall be deemed to include the successors and permitted assigns of such party.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and permitted
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement. Neither party
may assign its rights or obligations under this Agreement without the prior
written consent of the other party (such consent not to be unreasonably withheld
or delayed), provided, however, that CF&Co may assign its rights and obligations
hereunder to an affiliate of CF&Co without obtaining the Company's consent.
14. Adjustments for Stock Splits. The parties acknowledge and agree that
all share related numbers contained in this Agreement shall be adjusted to take
into account any stock split, stock dividend or similar event effected with
respect to the Shares.
21
15. Entire Agreement; Amendment; Severability. This Agreement (including
all schedules and exhibits attached hereto and Placement Notices and Acceptances
issued pursuant hereto) constitutes the entire agreement and supersedes all
other prior and contemporaneous agreements and undertakings, both written and
oral, among the parties hereto with regard to the subject matter hereof. Neither
this Agreement nor any term hereof may be amended except pursuant to a written
instrument executed by the Company and CF&Co. In the event that any one or more
of the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.
16. Applicable Law; Consent to Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State of
New York without regard to the principles of conflicts of laws. Each party
hereby irrevocably submits to the non-exclusive jurisdiction of the state and
federal courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection with any transaction
contemplated hereby, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof (certified or registered mail, return
receipt requested) to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law.
17. Waiver of Jury Trial. The Company and CF&Co each hereby irrevocably
waives any right it may have to a trial by jury in respect of any claim based
upon or arising out of this agreement or any transaction contemplated hereby.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery of an executed
Agreement by one party to the other may be made by facsimile transmission.
22
If the foregoing correctly sets forth the understanding between the
Company and CF&Co, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between the
Company and CF&Co.
Very truly yours,
EQUITY INNS, INC.
By: /s/ J. Xxxxxxxx Xxxxxxx
-------------------------------------
J. Xxxxxxxx Xxxxxxx
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
ACCEPTED AS OF THE DATE
FIRST-ABOVE WRITTEN:
CANTOR XXXXXXXXXX & CO.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Xxxxxxx Xxxxxx
Executive Managing Director &
General Counsel
Signature Page To Controlled Equity Offering Sales Agreement
SCHEDULE 1
CANTOR XXXXXXXXXX & CO.
000 XXXX 00 XXXXXX
XXX XXXX, XXX XXXX 00000
Date
[SENIOR EXECUTIVE]
Equity Inns, Inc.
0000 Xxxx Xxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
VIA FACSIMILE
FORM OF PLACEMENT NOTICE
Dear _________:
This confirms our agreement to sell up to 4,300,000 shares of Common Stock, par
value $0.01 per share, of Equity Inns, Inc., a Tennessee corporation (the
"Company"), pursuant to the CONTROLLED EQUITY OFFERING(SM) Sales Agreement
executed between the Company and Cantor Xxxxxxxxxx & Co. ("CF&Co.") on August
26, 2004 (the "Agreement"). Terms used herein but not defined herein shall have
the meanings set forth in the Agreement.
Number of Shares to be Sold:
-----------------------------------------
Minimum Price Per Share at which
Shares may be Sold:
-----------------------------------------
Date(s) on which Shares may be Sold:
-----------------------------------------
Underwriting Discount/Commission
Per Share:
-----------------------------------------
Manner and capacity in which Shares
are to be Sold:
-----------------------------------------
By executing this draw down notice, the parties agree to comply with the
aforementioned agreements, and to execute the transaction as described herein:
Placements. The terms set forth in this Placement Notice will not be binding on
the Company or CF&Co unless and until the Company delivers written notice of its
acceptance of all of the terms of such Placement Notice (an "Acceptance");
provided, however, that neither the Company nor CF&Co will be bound by the terms
of a Placement Notice unless the Company delivers to CF&Co an Acceptance with
respect thereto prior to 4:30 p.m. (New York time) on the Business Day following
the Business Day on which such Placement Notice is received by the Company. In
the event of a conflict between the terms of the Agreement and the terms of a
Placement Notice, the terms of this Placement Notice will control.
Sale of Placement Shares by CF&Co. Subject to the terms and conditions of the
Agreement, upon the Acceptance of a Placement Notice, and unless the sale of the
Placement Shares described therein has been suspended or otherwise terminated in
accordance with the terms of the Agreement, CF&Co will use its commercially
reasonable efforts consistent with its normal trading and sales practices to
sell such Placement Shares up to the amount specified, and otherwise in
accordance with the terms of this Placement Notice.
CF&Co will provide written confirmation to the Company no later than the opening
of the Trading Day next following the Trading Day on which it has made sales of
Placement Shares hereunder setting forth the number of Placement Shares sold on
such day, the discounts, commissions and other compensation payable by the
Company to CF&Co with respect to such sales and the Net Proceeds (as defined
below) payable to the Company.
The Company acknowledges and agrees that (i) there can be no assurance that
CF&Co will be successful in selling Placement Shares, and (ii) CF&Co will incur
no liability or obligation to the Company or any other person or entity if it
does not sell Placement Shares for any reason other than a failure by CF&Co to
use its commercially reasonable efforts consistent with its normal trading and
sales practices to sell such Placement Shares. For the purposes hereof, "Trading
Day" means any day on which the Common Stock is purchased and sold on the
principal market on which the Common Stock is listed or quoted.
Suspension of Sales. The Company or CF&Co may, upon notice to the other party in
writing or by telephone (confirmed immediately by verifiable facsimile
transmission), suspend any sale of Placement Shares; provided, however, that
such suspension shall not affect or impair either party's obligations with
respect to any Placement Shares sold hereunder prior to the receipt of such
notice. The Company agrees that no such notice shall be effective against CF&Co
unless it is made to one of the individuals named on Schedule 3 to the Agreement
and no notice shall be effective against the Company unless it is made to one of
the individuals named on Schedule 3 to the Agreement, as such Schedule may be
amended from time to time.
Settlement of Placement Shares. Unless otherwise specified herein, settlement
for sales of Placement Shares will occur on the third (3rd) Business Day (or
such earlier day as is industry practice for regular-way trading) following the
date on which such sales are made (each, a "Settlement Date"). The amount of
proceeds to be delivered to the Company on a Settlement Date against the receipt
of the Placement Shares sold ("Net Proceeds") will be equal to the aggregate
sales price at which such Shares were sold, after deduction for (i) CF&Co's
commission, discount, or other compensation for such sales payable by the
Company pursuant to
Section 2 of the Agreement and (ii) any transaction fees imposed by any
governmental or self-regulatory organization in respect of such sales.
Delivery of Shares. On or before each Settlement Date, the Company will, or will
cause its transfer agent to, electronically transfer the Placement Shares being
sold by crediting CF&Co's or its designee's account at The Depository Trust
Company through its Deposit Withdrawal Agent Commission System or by such other
means of delivery as may be mutually agreed upon by the parties hereto, and,
upon receipt of such Placement Shares, which in all cases shall be freely
tradable, transferable, registered shares of Common Stock in good deliverable
form, CF&Co will deliver the related Net Proceeds in same day funds delivered to
an account designated by the Company prior to the Settlement Date. If the
Company defaults in its obligation to deliver Placement Shares on a Settlement
Date, the Company agrees that in addition to and in no way limiting the rights
and obligations set forth in Section 9(a) of the Agreement, it will (i) hold
CF&Co harmless against any loss, claim, damage, or expense (including reasonable
legal fees and expenses of external counsel), as incurred, arising out of or in
connection with such default by the Company and (ii) pay to CF&Co any
commission, discount, or other compensation to which it would otherwise have
been entitled absent such default.
Very truly yours,
CANTOR XXXXXXXXXX & CO
By:
----------------------------
[Insert name]
[Insert title]
SCHEDULE 2
EQUITY INNS, INC.
0000 XXXX XXXXX XXXXXXXXX
XXXXXXXXXX, XX 00000
Date
[SENIOR EXECUTIVE]
Cantor Xxxxxxxxxx & Co.
000 Xxxx 00 Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
VIA FACSIMILE
FORM OF ACCEPTANCE
This confirms our acceptance of the Placement Notice received by us on
___________, 200_ (the "Placement Notice") to sell up to ___________ shares of
our Common Stock, par value $0.01 per share, pursuant to the CONTROLLED EQUITY
OFFERING(SM) Sales Agreement executed between the Company and Cantor Xxxxxxxxxx
& Co. ("CF&Co.") on August 26, 2004 (the "Agreement"). Terms used herein but not
defined herein shall have the meanings set forth in the Agreement.
By executing this Acceptance the undersigned certifies that (i) all of the
representations and warranties contained in the Agreement are true and correct
on the date hereof as if made on the date hereof, (ii) the Board of Directors or
a duly appointed committee thereof has approved the general terms and conditions
of the Placement Notice, (iii) the Company is in full compliance with its
obligations under the Agreement and (iv) all of the conditions precedent to the
consummations of the sales contemplated by the Placement Notice have been
satisfied. The undersigned undertakes to promptly notify CF&Co in the event that
the above certification shall cease to be true and correct during any period in
which sales may be made under the Placement Notice.
ACCEPTED as of the date first-above written:
EQUITY INNS, INC.
By:
------------------------------
[Insert name]
[Insert title]
SCHEDULE 3
NOTICES TO CANTOR XXXXXXXXXX & CO.
Xxxx Xxxxxx
Xxxx X. Xxxxxx
Xxxx Xxxxx
Xxxxxxx XxXxxxxx
NOTICES TO EQUITY INNS, INC.
Xxxxxxx X. XxXxxxx, Xx.
Xxxxxx X. Silver
J. Xxxxxxxx Xxxxxxx
SCHEDULE 4
SUBSIDIARIES OF THE COMPANY
JURISDICTION OF
INCORPORATION/
NAME ORGANIZATION OWNERSHIP PERCENTAGE
---- ------------ --------------------
Equity Inns Trust (the "Trust") Maryland 100% owned by Equity
Inns, Inc. (the "REIT")
Equity Inns Services, Inc. ("Services") Tennessee 100% owned by the REIT
Equity Inns TRS Holdings, Inc. ("TRS Tennessee 100% owned by the
Holdings") Partnership
Equity Inns Partnership, L.P. (the Tennessee Approximately 97.31%
GP "Partnership") interest held by the Trust;
approximately 2.69% LP
interest held by various
limited partners
Equity Inns Partnership II, L.P. Tennessee 1% GP interest held by
the Trust; 99% LP
interest held by the
Partnership
Equity Inns/West Virginia Partnership, L.P. Tennessee 1% GP interest held by
Services; 99% LP interest
held by the Partnership
EQI Financing Corporation Tennessee 100% owned by the Trust
EQI Financing Partnership I, L.P. Tennessee Approximately 1% GP
interest held by EQI
Financing Corporation;
approximately 99%
LP interest held by
the Partnership
EQI Financing Corporation II Tennessee 100% owned by the Trust
EQI Financing Partnership II, L.P. Tennessee 1% GP interest held by
EQI Financing
Corporation II; 99%
LP interest held by
the Partnership
JURISDICTION OF
INCORPORATION/
NAME ORGANIZATION OWNERSHIP PERCENTAGE
---- ------------ --------------------
EQI/WV Financing Partnership, L.P. Tennessee 1% GP interest held by
EQI Financing
Corporation II; 99% LP
interest held by the
Partnership
EQI Financing Corporation III Tennessee 100% owned by the
Trust
EQI Financing Partnership III, L.P. Tennessee 1% GP interest held by
EQI Financing
Corporation III; 99% LP
interest held by the
Partnership
EQI Financing Corporation IV Tennessee 100% owned by the
Trust
EQI Financing Partnership IV, L.P. Tennessee 1% GP interest held by
EQI Financing
Corporation IV; 99% LP
interest held by the
Partnership
EQI Financing Corporation V Tennessee 100% owned by the
Trust
EQI Financing Partnership V, L.P. Tennessee 1% GP interest held by
EQI Financing
Corporation V; 99% LP
interest held by the
Partnership
EQI/WV Financing Corporation Tennessee 100% owned by the
Trust
EQI/WV Financing Partnership II, L.P. Tennessee 1% GP interest held by
EQI/WV Financing
Corporation; 99% LP
interest held by the
Partnership
E. Inns Orlando, Inc. Tennessee 100% owned by Services
E.I.P. Orlando, L.P. Tennessee 1% GP interest held by
E. Inns Orlando, Inc.; 99%
LP interest held by the
Partnership
JURISDICTION OF
INCORPORATION/
NAME ORGANIZATION OWNERSHIP PERCENTAGE
---- ------------ --------------------
ENN Leasing Company, Inc. Tennessee 100% owned by TRS
Holdings
ENN Leasing Company I, L.L.C. Delaware 100% owned by TRS
Holdings
ENN Leasing Company II, L.L.C. Delaware 100% owned by TRS
Holdings
ENN Leasing Company III, L.L.C. Delaware 100% owned by TRS
Holdings
ENN Leasing Company IV, L.L.C. Delaware 100% owned by TRS
Holdings
ENN Leasing Company V, L.L.C. Delaware 100% owned by TRS
Holdings
ENN KS, Inc. Kansas 100% owned by TRS
Holdings
ENN Gainesville, L.L.C. Delaware 100% owned by TRS
Holdings
ENN Tampa, L.L.C. Delaware 100% owned by TRS
Holdings
ENN Tallahassee, L.L.C. Delaware 100% owned by TRS
Holdings
ENN Asheville, L.L.C. Delaware 100% owned by TRS
Holdings
ENN Savannah, L.L.C. Delaware 100% owned by TRS
Holdings
ENN TRS, Inc. Tennessee 100% owned by TRS
Holdings
ENN TN, L.L.C. Delaware 99% owned by TRS
Holdings, 1% owned by
ENN TRS, Inc.
ENN TN I, LLC Delaware 99% owned by TRS
Holdings, 1% owned by
ENN TRS, Inc.
ENN TN II, LLC Delaware 99% owned by TRS
Holdings, 1% owned by
ENN TRS, Inc.
ENN TN IV, LLC Delaware 99% owned by TRS
Holdings, 1% owned by
ENN TRS, Inc.
ENN TN V, LLC Delaware 99% owned by TRS
Holdings, 1% owned by
ENN TRS, Inc.
JURISDICTION OF
INCORPORATION/
NAME ORGANIZATION OWNERSHIP PERCENTAGE
---- ------------ --------------------
ENN Knoxville, L.L.C. Delaware 99% owned by TRS
Holdings, 1% owned by
ENN TRS, Inc.
ENN Chattanooga, LLC Delaware 99% owned by TRS
Holdings, 1% owned by
ENN TRS, Inc.
EQI FL Corporation Tennessee 100% owned by the Trust
EQI Tallahassee, L.P. Tennessee 1% GP interest held by EQI
FL Corporation, 99% LP
interest held by the
Partnership
EQI Athens, L.P. Tennessee 1% GP interest held by EQI
FL Corporation, 99% LP
interest held by the
Partnership
EQI Gainesville, L.P. Tennessee 1% GP interest held by EQI
FL Corporation, 99% LP
interest held by the
Partnership
XxXxxxxx Hotel Group of Gainesville, Georgia 1% GP interest held by EQI
Florida, L.P. FL Corporation, 99% LP
interest held by the
Partnership
XxXxxxxx Hotel Group of Tallahassee, Georgia 1% GP interest held by EQI
Florida #3, L.P. FL Corporation, 99% LP
interest held by the
Partnership
XxXxxxxx Hotel Group of Sabal Park, Georgia 1% GP interest held by EQI
Florida, L.P. FL Corporation, 99% LP
interest held by the
Partnership
XxXxxxxx Hotel Group of Tallahassee, Georgia 1% GP interest held by EQI
Florida, L.P. FL Corporation, 99% LP
interest held by the
Partnership
XxXxxxxx Hotel Group of Asheville, Georgia 1% GP interest held by EQI
North Carolina, L.P. FL Corporation, 99% LP
interest held by the
Partnership
JURISDICTION OF
INCORPORATION/
NAME ORGANIZATION OWNERSHIP PERCENTAGE
---- ------------ --------------------
XxXxxxxx Hotel Group of Chattanooga, Georgia 1% GP interest held by EQI
Tennessee, L.P. FL Corporation, 99% LP
interest held by the
Partnership
XxXxxxxx Hotel Group of Knoxville, Georgia 1% GP interest held by EQI
Tennessee #2, L.P. FL Corporation, 99% LP
interest held by the
Partnership
XxXxxxxx Hotel Group of Savannah, Georgia 1% GP interest held by EQI
Georgia, L.P. FL Corporation, 99% LP
interest held by the
Partnership
EXHIBIT 8(G)
OFFICER CERTIFICATE
The undersigned, the duly qualified and elected [Chairman, President
and Chief Executive Officer], of ________________ ("Company"), a _________
corporation, does hereby certify in such capacity and on behalf of the Company,
pursuant to Section 7(n) of the Sales Agreement dated August 26, 2004 (the
"Sales Agreement") between the Company and Cantor Xxxxxxxxxx & Co., that to the
best of the knowledge of the undersigned.
(i) the representations and warranties of the Company in Section 6 of
the Sales Agreement are true and correct on and as of the date hereof, with the
same force and effect as if expressly made on and as of the date hereof, except
that with regard to paragraph 6(h), the Company has _____ shares of Common Stock
issued and outstanding and _____ shares of 8.75% Series B Preferred Stock issued
and outstanding as of the date hereof; and
(ii) The Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied pursuant to the Sales
Agreement at or prior to the date hereof.
By:
------------------------------
Name:
Title:
Date:
-------------------------------
