EXHIBIT 1.1
PURCHASE AGREEMENT
This Purchase Agreement (this "Agreement"), dated as of October 7,
2003, is by and among Xxxxx & Steers Capital Management, Inc. ("Xxxxx &
Steers"), the client accounts of Xxxxx & Steers, as set forth on Schedule A
hereto (each a "Purchaser" and collectively, the "Purchasers"), and Equity Inns,
Inc. (the "Seller").
WHEREAS, the Purchasers desire to purchase from Seller, and Seller
desires to issue and sell to the Purchasers, 287,500 shares of 8.75% Series B
Cumulative Preferred Stock, $0.01 par value per share (the "Preferred Shares"),
and 2,000,000 shares of Common Stock, par value $0.01 per share (the "Common
Shares" and collectively with the Preferred Shares, the "Shares") of Seller;
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:
1. Purchase and Sale. Subject to the terms and conditions hereof, the
Purchasers hereby agree to purchase from Seller, and Seller agrees to
issue and sell to the Purchasers, the Preferred Shares at a price per
share of $25.00 for an aggregate purchase price of $7,187,500.00 and
the Common Shares at a price per share of $7.55 for an aggregate
purchase price of $15,100,000.00 (collectively, the "Purchase Price").
2. Representations and Warranties of Purchaser. Each Purchaser represents
and warrants to Seller that:
(a) Due Authorization. This Agreement has been duly authorized,
executed and delivered by such Purchaser and constitutes a
legal, valid and binding agreement of such Purchaser, or of
Xxxxx & Steers on behalf of such Purchaser, enforceable
against such Purchaser in accordance with its terms except as
may be limited by (i) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to
or affecting the rights or remedies of creditors or (ii) the
effect of general principles of equity, whether enforcement is
considered in a proceeding in equity or at law and discretion
of the court before which any proceeding therefor may be
brought.
(b) Prospectus and Prospectus Supplement. Such Purchaser has
received a copy of Seller's Prospectus dated April 21, 1998,
and Prospectus Supplement dated October 7, 2003 (collectively,
the "Prospectus").
(c) Not a Party in Interest; Disqualified Person. With respect to
Seller, such Purchaser is not a "party in interest" as such
phrase is used in the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or a "disqualified person" as
such phrase is used in the Internal Revenue Code of 1986, as
amended ("Code").
1
(d) Not a Prohibited Transaction. The purchase of the Shares from
Seller will not give rise to a nonexempt "prohibited
transaction" under ERISA or the Code.
3. Representations and Warranties of Seller. Seller represents and
warrants to each Purchaser that:
(a) Due Authorization. This Agreement has been duly authorized,
executed and delivered by Seller and constitutes a legal,
valid and binding agreement of Seller, enforceable against
Seller in accordance with its terms except as may be limited
by (i) the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the
rights or remedies of creditors or (ii) the effect of general
principles of equity, whether enforcement is considered in a
proceeding in equity or at law and the discretion of the court
before which any proceeding therefor may be brought.
(b) Organization and Authority. Seller has been duly organized and
is validly existing in good standing under the laws of
Tennessee, with full power and authority to own or lease and
occupy its properties and conduct its business as described in
the Prospectus.
(c) Issuance of the Shares. The Shares have been duly and validly
authorized and, when issued and delivered pursuant to this
Agreement, will be fully paid and nonassessable and will be
listed, subject to notice of issuance, on the New York Stock
Exchange effective as of the Closing (as defined in Paragraph
5 of this Agreement).
(d) Absence of Conflicts. The execution, delivery and performance
of this Agreement and the consummation of transactions
contemplated herein do not and will not result in the creation
or imposition of any lien, charge or encumbrance upon any
property or assets of the Seller.
4. Representation and Warranty of Xxxxx & Steers. Xxxxx & Steers hereby
represents and warrants to Seller that it is duly organized and validly
existing in good standing under the laws of its jurisdiction of
organization, that it has been duly authorized to act as investment
adviser on behalf of each Purchaser, and that it has the power and
authority to enter into this Agreement on behalf of each Purchaser.
5. Conditions to Obligations of the Parties. The obligations of the
parties hereto to effect the transactions contemplated by this
Agreement shall be subject to the satisfaction or waiver at or prior to
the Closing of the following conditions:
(a) each of the representations and warranties of the parties
hereto shall be true and correct in all respects as of the
Closing;
(b) at Closing (as defined below), the Purchaser shall have
received the opinion of counsel to the Seller (the substance
of which shall consist of the opinion delivered to the New
York Stock Exchange in connection with the application listing
the
2
Shares) and a certificate of the officers of the Seller in
form and substance reasonably satisfactory to the Purchaser,
both dated as of the Closing.
6. Closing. The transactions contemplated hereby shall be consummated on
October 10, 2003 (such time and date of payment and delivery being
herein called the "Closing") on a delivery versus payment basis in
accordance with the "DTC ID System" through Xxxxxxxx & Company, Inc.,
or any appropriate affiliate thereof (with each party to pay a
commission of $0.01 per Share to Xxxxxxxx & Company, Inc.).
7. Governing Law. This Agreement shall be construed in accordance with and
governed by the substantive laws of the State of New York.
8. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject mater hereof and
may be amended only in a writing that is executed by each of the
parties hereto.
9. Counterparts. This Agreement may be executed in separate counterparts,
each of which shall be deemed an original, and all of which together
shall be deemed to constitute one and the same instrument.
3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
EQUITY INNS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
XXXXX & STEERS CAPITAL MANAGEMENT, INC., on
behalf of itself and on behalf of the
Purchasers specified on Schedule A
By: /s/ Xxxx. X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
4
SCHEDULE A
Common Stock
Name of Client Number of Shares
-------------- ----------------
Xxxxx & Steers Equity Income Fund, Inc. 1,349,300
Fairfax County Uniformed Retirement System 8,500
North Shore-Long Island Jewish Health System, Inc. 12,300
North Shore-Long Island Jewish
Health System Cash Balance Plan 4,800
New York State Teachers' Retirement System 128,100
University of Mass. Foundation Inc. 7,400
Associated Electric Gas Insurance Services 39,100
Land America Title Insurance Corporation 20,600
United Mine Workers of America 1974 Pension Trust 80,600
New York Community Trust 14,300
Cornell University 35,600
Xxxxx & Steers Special Equity Fund, Inc. 48,000
New York Blood Center 20,200
Jewish Federation of Cleveland 6,200
Berkley Regional Insurance Company 225,000
Series B Cumulative Preferred Stock
Berkley Regional Insurance Company 60,000
New York State Teachers' Retirement System 41,500
Xxxxx & Steers Premium Income Realty Fund, Inc. 180,000
University of Mass. Foundation Inc. 6,000
5
