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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT MARCH 25, 1998
RFS HOTEL INVESTORS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TENNESSEE 0-22164 62-1534743
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
850 RIDGE LAKE BOULEVARD
SUITE 220
MEMPHIS, TENNESSEE 38120
(Address and zip code of
principal executive offices)
Registrant's telephone number, including area code: (901) 767-7005
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ITEM 5. OTHER EVENTS.
This report contains as exhibits (1) the form of Underwriting Agreement
between RFS Hotel Investors, Inc., RFS Partnership, L.P., and J.C. Bradford &
Co. in connection with the sale of 547,946 shares of the Company's common stock,
$.01 par value per share, pursuant to the Company's Prospectus Supplement dated
March 25, 1998, to a base Prospectus dated July 30, 1996, included as part of a
Registration Statement on Form S-3 (No. 333-3307) filed with the Securities and
Exchange Commission on May 8, 1996 and as amended on July 23, 1996 (the
"Registration Statement") and (b) the tax opinion incorporated by reference as
Exhibit 8.1 to the Registration Statement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits.
The following exhibits are filed herewith:
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
1.1 Underwriting Agreement between RFS Hotel
Investors, Inc. RFS Partnership, L.P. and
J.C. Bradford & Co.
8.1 Opinion of Hunton & Williams as to Tax Matters
</TABLE>
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on behalf by the
undersigned thereunto duly authorized.
RFS HOTEL INVESTORS, INC.
(REGISTRANT)
BY: /S/ MICHAEL J. PASCAL
---------------------------------
MICHAEL J. PASCAL
SECRETARY, TREASURER AND
CHIEF FINANCIAL OFFICER
Date: March 26, 1998
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
- ------- -----------
<S> <C>
1.1 Underwriting Agreement between RFS Hotel Investors, Inc.,
RFS Partnership, L.P., and J.C. Bradford & Co.
8.1 Opinion of Hunton & Williams as to Tax Matters
</TABLE>
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RFS HOTEL INVESTORS, INC.COMMON STOCK
COMMON STOCK
UNDERWRITING AGREEMENT
March 25, 1998
J.C. BRADFORD & CO.
330 Commerce Street
Nashville, Tennessee 37201
Dear Sirs:
RFS Hotel Investors, Inc., a Tennessee corporation (the "Company"),
proposes to issue and sell to J.C. Bradford & Co. ("you" or the "Underwriter")
an aggregate of 547,946 shares of Common Stock, $.01 par value per share, of the
Company (the "Shares").
The Company is the sole general partner of, and the Company owns an
approximately 90.5% interest in, RFS Partnership, L.P. (the "Partnership"), a
Tennessee limited partnership. The Partnership currently owns 60 hotels and one
hotel is owned by a subsidiary of the Company as described in the Prospectus
(individually, a "Hotel," and, collectively, the "Hotels"). The Partnership
leases the Hotels to, and certian of the Hotels are operated by, certain lessees
(the "Lessees") pursuant to separate leases (the "Leases"). Other capitalized
terms used herein and not otherwise defined herein shall have the meaning set
forth in the Registration Statement.
Section 1. Representations and Warranties of the Company and the
Partnership. The Company and the Partnership jointly and severally represent and
warrant to and agree with each of the Underwriters that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"); a registration statement on
Form S-3 (Registration No. 333-3307) (the "Registration Statement"),
including a prospectus relating to the securities referred to therein, any
of which may be offered from time to time in accordance with Rule 415 under
the Act, and such amendments to such registration statement as may have
been required to the date of this Agreement, has been prepared by the
Company pursuant to and in conformity with the requirements of the Act, and
the Rules and Regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") thereunder, was filed with the
Commission under the Act and was declared effective on July 30, 1996. A
copy of the Registration Statement in the form declared effective by the
Commission has been delivered by the Company to you. A prospectus
supplement, dated the date hereof, as first filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations (the "Prospectus
Supplement"), including the prospectus contained in the Registration
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Statement dated July 30, 1996 (the "Base Prospectus") setting forth or
incorporating by reference the terms of the offering, sale and plan of
distribution of the Shares and additional information concerning the
Company the Partnership and their business has been or will be so prepared
and will be filed pursuant to Rule 424(b) of the Rules and Regulations on
or before the second business day after the date hereof (or such earlier
time as may be required by the Rules and Regulations). The term
"Registration Statement" as used herein means the Registration Statement,
as amended at the time it or any amendment thereto became effective under
the Act (the "Effective Date"), including all information contained in the
final prospectus filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations and deemed to be a part of such registration
statement as of its Effective Date pursuant to paragraph (b) of Rule 430A
of the Rules and Regulations. Any document filed by the Company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") after the
Effective Date of the Registration Statement and incorporated by reference
in the Prospectus shall be deemed to be included in the Registration
Statement and the Prospectus as of the date of such filing. The term
"Prospectus" as used herein means, collectively, the Prospectus Supplement
and the Base Prospectus supplemented by such Prospectus Supplement
(including, in the case of such prospectus, the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act as of the
date of the Prospectus Supplement and the Closing Date, as the case may
be).
(b) No order preventing or suspending the use of the Prospectus had
been issued by the Commission, and no proceedings for that purpose have
been instituted or threatened by the Commission or the state securities or
blue sky authority of any jurisdiction, and the Registration Statement at
its Effective Date, the Prospectus at its date of issue and any amendment
or supplement thereto, conformed in all material respects to the
requirements of the 1933 Act and the 1933 Act Regulations, and did not
contain any 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, in light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter expressly for use in the Registration Statement or Prospectus.
(c) The documents incorporated by reference in the Prospectus pursuant
to Item 12 of Form S-3 under the Act, at the time they were filed with the
Commission, complied in all material respects with the requirements of the
Exchange Act, and the rules and regulations adopted by the Commission
thereunder (the "1934 Act Rules and Regulations"), and, when read together
and with the other information in the Prospectus, at the time the
Registration Statement became effective and at the Closing Date, did not or
will not, as the case may be, 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.
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(d) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Tennessee
with all requisite corporate power and authority to own, lease and operate
its properties and the properties it proposes to own, lease and operate as
described in the Registration Statement and the Prospectus and to conduct
its business as now conducted and as proposed to be conducted as described
in the Registration Statement and the Prospectus. The Company has been duly
qualified to do business and is in good standing as a foreign corporation
in each other jurisdiction in which the ownership or leasing of its
properties or the nature or conduct of its business as now conducted
requires such qualification, except where the failure to do so would not
have a material adverse effect on the Company.
(e) The Partnership has been duly formed and is validly existing as a
limited partnership in good standing under the Tennessee Revised Uniform
Limited Partnership Act (the "Tennessee Act") with all requisite
partnership power and authority to own, lease and operate its properties
and the properties it proposes to own, lease and operate as described in
the Registration Statement and the Prospectus and to conduct its business
as now conducted and as proposed to be conducted as described in the
Registration Statement and the Prospectus. The Partnership has been duly
qualified or registered to do business and is in good standing as a foreign
partnership in each other jurisdiction in which the ownership or leasing of
its properties or the nature or conduct of its business as now conducted
requires such qualification, except where the failure to do so would not
have a material adverse effect on the Company. The Company is the sole
general partner of the Partnership and holds approximately 90.5% of the
outstanding Partnership units ("Units").
(f) The Company has full corporate right, power and authority to enter
into this Agreement, to issue, sell and deliver the Shares as provided
herein and to consummate the transactions contemplated herein. This
Agreement has been duly authorized, executed and delivered by the Company
and constitutes a valid and binding agreement of the Company, enforceable
in accordance with its terms, except to the extent that enforceability may
be limited by bankruptcy, insolvency, reorganization or other laws of
general applicability relating to or affecting creditors' rights, or by
general equity principles and except to the extent the indemnification
provisions set forth in Section 7 of this Agreement may be limited by
federal or state securities laws or the public policy underlying such laws.
(g) The Partnership has full partnership right, power and authority to
enter into this Agreement and to consummate the transactions contemplated
herein. This Agreement has been duly authorized, executed and delivered by
the Partnership and constitutes a valid and binding agreement of the
Partnership enforceable in accordance with its terms, except to the extent
that enforceability may be limited by bankruptcy, insolvency,
reorganization or other laws of general applicability relating to or
affecting creditors' rights, or by general equity principles and except to
the extent the indemnification provisions set forth in Section 7 of this
Agreement may be limited by federal or state securities laws or the public
policy underlying such laws.
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(h) Each of the Fourth Amended and Restated Agreement of Limited
Partnership of the Partnership (the "Partnership Agreement") and the Leases
has been duly authorized, executed and delivered by the parties thereto and
constitute valid and binding agreements, enforceable in accordance with
their respective terms, except to the extent enforceability may be limited
by bankruptcy, insolvency, reorganization or other laws of general
applicability relating to or affecting creditors' rights or by general
equity principles..
(i) Each consent, approval, authorization, order, license,
certificate, permit, registration, designation or filing by or with any
governmental agency or body necessary for the valid authorization,
issuance, sale and delivery of the Shares, the execution, delivery and
performance of this Agreement and the consummation by the Company and the
Partnership of the transactions contemplated hereby and thereby, other than
with respect to state securities or real estate syndication laws, has been
made or obtained and is in full force and effect.
(j) Neither the issuance, sale and delivery by the Company of the
Shares, nor the execution, delivery and performance of this Agreement nor
the consummation of the transactions contemplated hereby and thereby by the
Company or the Partnership as applicable, will conflict with or result in a
breach or violation of any of the terms and provisions of, or (with or
without the giving of notice or the passage of time or both) constitute a
default under, the charter, bylaws, certificate of limited partnership or
partnership agreement, as the case may be, of the Company or the
Partnership; any indenture, mortgage, deed of trust, loan agreement, note,
lease or other agreement or instrument to which the Company or the
Partnership is a party or to which they, any of them, any of their
respective properties or other assets or any Hotel is subject; or any
applicable statute, judgment, decree, order, rule or regulation of any
court or governmental agency or body applicable to any of the foregoing or
any of their respective properties; or result in the creation or imposition
of any lien, charge, claim or encumbrance upon any property or asset of any
of the foregoing.
(k) The Shares to be issued and sold to the Underwriter hereunder have
been validly authorized by the Company. When issued and delivered against
payment therefor provided in this Agreement, the Shares will be duly and
validly issued, fully paid and nonassessable. No preemptive rights of
shareholders exist with respect to any of the Shares. No person or entity
holds a right to require or participate in the registration under the 1933
Act of the Shares pursuant to the Registration Statement. No person or
entity has a right of participation or first refusal with respect to the
sale of the Shares by the Company. The form of certificates evidencing the
Shares complies with all applicable requirements of Tennessee law.
(l) The Company's authorized, issued and outstanding capital stock is
as disclosed in the Prospectus. All of the issued shares of capital stock
of the Company have been duly authorized and validly issued, are 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 preemptive
rights of shareholders. Except as disclosed in the
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Prospectus, there is no outstanding option, warrant or other right calling
for the issuance of, and no commitment, plan or arrangement to issue, any
shares of capital stock of the Company or any security convertible into or
exchangeable for capital stock of the Company.
(m) All offers and sales of the Company's capital stock prior to the
date hereof were at all relevant times duly registered under the 1933 Act
or exempt from the registration requirements of the 1933 Act by reason of
Sections 3(b), 4(2) or 4(6) thereof and, except with respect to shares
issued pursuant to an underwritten public offering, were duly registered or
the subject of an available exemption from the registration requirements of
the applicable state securities or blue sky laws.
(n) All of the issued Partnership Units of the Partnership have been
duly and validly authorized and issued and are fully paid and
nonassessable. None of the issued Partnership Units have been issued or is
owned or held in violation of any preemptive right. The Partnership Units
to be issued to the Company at the Closing Time have been duly and validly
authorized by the Partnership. At the Closing Time, such Units will be
validly issued, fully paid and nonassessable. All of the outstanding
Partnership Units have been issued, offered and sold in compliance with all
applicable laws (including, without limitation, federal and state
securities laws). The Partnership Units to be issued to the Company at the
Closing Time will be issued, offered and sold in compliance with all
applicable laws (including, without limitation, federal and state
securities laws).
(o) The financial statements of the Company included or 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. In addition, the pro forma financial
statements of the Company, and the related notes thereto, included or
incorporated by reference in the Registration Statement and the Prospectus
present fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to pro
forma financial statements and have been properly compiled on the basis
described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein. Furthermore, all
financial statements required by Rule 3-14 of Regulation S-X ("Rule 3-14")
have been included or incorporated by reference in the Registration
Statement and the Prospectus and any such financial statements are in
conformity with the requirements of Rule 3-14. No other financial
statements or schedules are required by Form S-3 or otherwise to be
included in the Registration Statement or the Prospectus.
(p) Coopers & Lybrand L.L.P., who have examined and are reporting upon
the Company's audited financial statements and schedules incorporated by
reference in the Registration Statement, are, and were during the periods
covered by their reports
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incorporated by reference in the Registration Statement and the Prospectus,
independent public accountants within the meaning of the 1933 Act, the
Exchange Act and the respective rules and regulations of the Commission
thereunder.
(q) None of the Company or the Partnership has sustained, since
December 31, 1997, any material loss or interference with its business from
fire, explosion, flood, hurricane, accident or other calamity, whether or
not covered 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 Prospectus, and except as
otherwise stated in the Registration Statement and Prospectus, there has
not been (i) any material change in the capital stock or partnership
interests, as applicable, long-term debt, obligations under capital leases
or short-term borrowings of the Company or the Partnership, (ii) any
material adverse change, or any development which could reasonably be seen
as involving a prospective material adverse change, in or affecting the
business, prospects, properties, assets, results of operations or condition
(financial or other) of the Company or the Partnership, (iii) any liability
or obligation, direct or contingent, incurred or undertaken by the Company
or the Partnership, which is material to the business or condition
(financial or other) of such entity, except for liabilities or obligations
incurred in the ordinary course of business, (iv) any declaration or
payment of any dividend or distribution of any kind on or with respect to
the capital stock or partnership interests, as applicable, of the Company
or the Partnership, or (v) any transaction that is material to the Company
or the Partnership, except transactions in the ordinary course of business
or as otherwise disclosed in the Registration Statement and the Prospectus.
(r) The Partnership has good and marketable title in fee simple to all
real property and the improvements located thereon owned by it, including
the Hotels, free and clear of all liens, encumbrances, claims, security
interests, restrictions and defects except such as are described in the
Prospectus or the title insurance policies relating to such properties or
such as do not have a material adverse effect on the Parrtnership's
ownership or use of such property. The Company does not own or lease any
real property. The Partnership has a leasehold interest in any real
property held under lease. All such leases are valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the use made, and proposed to be made, of such property, by
the Partnership. Such 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 adverse claim asserted by anyone
adverse to the rights of the Partnership under any of the leases or
affecting the right to the continued possession of the leased property. The
Company and the Partnership have good title to all personal property owned
by them, free and clear of all liens, security interests, pledges, charges,
encumbrances, mortgages and defects, except such as are disclosed in the
Prospectus or do not materially and adversely affect the value of such
property and do not interfere with the use made or proposed to be made of
such property by the Company or the Partnership. Neither the Company nor
the Partnership has knowledge of any pending or threatened condemnation
proceedings, zoning change, or
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other proceeding or action that will in any manner affect the size of, use
of, improvements on, construction on or access to the Hotels, except such
proceedings or actions that would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, assets, business
affairs or business prospects of or with respect to the Partnership or the
Company.
(s) Neither the Company nor the Partnership is in violation of its
respective charter, by-laws, certificate of limited partnership or
partnership agreement, as the case may be, and no default exists, and no
event has occurred, nor state of facts exists, which, with notice or after
the lapse of time to cure or both, would constitute a material 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 either such entity is a party or to which either such entity or
any of its properties is subject. Neither the Company nor the Partnership
is in violation of, or in default with respect to, any statute, rule,
regulation, order, judgment or decree, except as may be properly described
in the Prospectus or such as in the aggregate do not now have and will not
in the future have a material adverse effect on the financial position,
results of operations or business of each such entity, respectively.
(t) There is not pending or, to the knowledge of the Company or the
Partnership, threatened, any action, suit, proceeding, inquiry or
investigation against the Company or the Partnership or any of their
respective officers and directors or to which the properties, assets or
rights of either such entity are subject, before or brought by any court or
governmental agency or body or board of arbitrators, which could result in
any material adverse change in the business, prospects, properties, assets,
results of operations or condition (financial or otherwise) of any such
entity or which could adversely affect the consummation of the transactions
contemplated by this Agreement.
(u) 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 which are not described or filed as
required. To the best knowledge of the Company and the Partnership, there
are no statutes or regulations applicable to the Company or the Partnership
or certificates, permits or other authorizations from governmental
regulatory officials or bodies required to be obtained or maintained by the
Company or the Partnership of a character required to be disclosed in the
Registration Statement or the Prospectus which have not been so disclosed
and properly described therein. All agreements, if any, between the Company
or the Partnership, respectively, and third parties expressly referenced in
the Prospectus are legal, valid and binding obligations of the Company or
the Partnership, respectively, enforceable in accordance with their
respective terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization or other laws of general
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applicability relating to or affecting creditors' rights and by general
equitable principles.
(v) Neither the Company nor the Partnership owns any franchise
agreement (including the franchises relating to the Hotels) and neither the
Company nor the Partnership has received any notice of proceedings relating
to revocation or modification of any licenses, permits, franchises,
certificates, consents, orders, approvals or authorizations.
(w) To the best of the Company's and the Partnership's knowledge, the
Company's and the Partnership's system of internal accounting controls
taken as a whole is sufficient to meet the broad objectives of internal
accounting control insofar as those objectives pertain to the prevention or
detection of errors or irregularities in amounts that would be material in
relation to the Company's, and the Partnership's financial statements; and,
to the best of the Company's and the Partnership's knowledge, neither the
Company nor the Partnership or any employee or agent thereof, has made any
payment of funds of the Company or the Partnership, a Lessee or an
Operator, as the case may be, or received or retained any funds and no
funds of the Company, the Partnership, as the case may be, have been set
aside to be used for any payment, in each case in violation of any law,
rule or regulation.
(x) Each of the Company and the Partnership (to the extent not
consolidated with the Company) has filed on a timely basis all necessary
federal, state, local and foreign income and franchise tax returns required
to be filed through the date hereof and have paid all taxes shown as due
thereon; and no tax deficiency has been asserted against any such entity,
nor does any such entity know of any tax deficiency which is likely to be
asserted against any such entity which if determined adversely to any such
entity, could materially adversely affect the business, prospects,
properties, assets, results of operations or condition (financial or
otherwise) of such entity. All tax liabilities are adequately provided for
on the respective books of such entities.
(y) The Company and the Partnership maintain insurance (issued by
insurers of recognized financial responsibility) which each of the Company
and the Partnership deem adequate for their respective businesses, all of
which insurance is in full force and effect.
(z) Each of the Company, the Partnership, and their officers,
directors or affiliates has not taken and will not take, directly or
indirectly, any action designed to, or that might reasonably be expected
to, cause or result in or constitute the stabilization or manipulation of
any security of the Company or to facilitate the sale or resale of the
Shares.
(aa) The Shares have been approved for listing, subject to notice of
issuance, on the New York Stock Exchange.
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(bb) The Company has not incurred any liability for a fee, commission
or other compensation on account of the employment of a broker or finder in
connection with the transactions contemplated by this Agreement other than
as contemplated hereby or as described in the Registration Statement.
(cc) Except as otherwise disclosed in the Prospectus, neither the
Company nor the Partnership 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 by the Company and the Partnership, including the Hotels (the
"Real Property") except as in material compliance with applicable laws; to
the knowledge of the Company and the Partnership, the Real Property and the
Company's and the Partnership's operations with respect to the Real
Property are in compliance with all federal, state and local laws,
ordinances, rules, regulations and other governmental requirements relating
to pollution, control of chemicals, management of waste, discharges of
materials into the environment, health, safety, natural resources, and the
environment (collectively, "Environmental Laws") in all material respects,
and the Company and the Partnership have, and are in compliance with, all
licenses, permits, registrations and government authorizations necessary to
operate under all applicable Environmental Laws. Except as otherwise
disclosed in the Prospectus, neither the Company nor the Partnership 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: alleges a violation of any
Environmental Laws by the Company or the Partnership, alleges that the
Company or the Partnership 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; has
resulted in or could result in the attachment of an environmental lien on
any of the Real Property; or alleges that the Company or the Partnership 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 which, if determined adversely to to
the Company or the Partnership, could have a material adverse effect on the
Company.
(dd) The Company is organized in conformity with the requirements for
qualifications as a real estate investment trust under the Internal Revenue
Code of 1986, as amended (the "Code"), and the Company's method of
operation enables it to meet the requirements for taxation as a real estate
investment trust under the Code.
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The Partnership is treated as a partnership for federal income purposes and
not as a corporation or an association taxable as a corporation.
(ee) Neither the Company nor the Partnership is, will become as a
result of the transactions contemplated hereby, or will conduct their
respective businesses in a manner in which such entity would become, "an
investment company," or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
Any certificate signed by any officer of the Company on behalf of the
Company or the Partnership and delivered to you or to counsel for the
Underwriter shall be deemed a representation and warranty by such entity to the
Underwriter as to the matters covered thereby.
Section 2. Sale and Delivery of the Shares to the Underwriter; Closing. (a)
On the basis of the representations and warranties herein contained, and subject
to the terms and conditions herein set forth, the Company agrees to sell to the
Underwriter, and the Underwriter agrees to purchase from the Company, the Shares
at a purchase price of $17.3375 per share.
(b) Payment of the purchase price for and delivery of certificates in
definitive form representing the Shares shall be made at the offices of
J.C. Bradford & Co., 330 Commerce Street, Nashville, Tennessee 37201
("Bradford's Office") or at such other place as shall be agreed upon by the
Company and you, at 10:00 a.m., Nashville time on March 30, 1998 or at such
other time not more than three full business days thereafter as you and the
Company may determine , (such date and time of payment and delivery being
herein called the "Closing Time"). Payment for the Shares shall be made to
the Company by wire transfer of immediately available funds against
delivery to you of the Shares through the facilities of The Depository
Trust Company.
(c) The certificates for the Shares so to be delivered will be made
available to you for inspection at Bradford's Office (or such other place
as you and the Company may mutually agree upon) at least one full business
day prior to the Closing Date and will be in such names and denominations
as you may request at least one full business day prior to the Closing
Date.
(d) After the Registration Statement becomes effective, you intend to
offer and sell the Shares as set forth in the Prospectus.
Section 3. Certain Covenants of the Company and the Partnership. The
Company and the Partnership covenant and agree with the Underwriter as follows:
(a) The Company (i) has prepared or will prepare a Prospectus
Supplement setting forth the number of Shares covered thereby, the name of
the Underwriter and the number of Shares which the Underwriter has agreed
to purchase, the price at
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which the Shares are to be purchased by the Underwriter from the Company
and such other information as the Underwriter and the Company deem
appropriate in connection with the offering of the Shares, and file the
Prospectus in a form approved by you pursuant to Rule 424(b) under the Act
no later than the Commission's close of business on the second business day
following the date of the determination of the offering price of the
Shares; (ii) will not file any amendment to the Registration Statement or
supplement to the Prospectus, in either case, relating to the offering and
sale of the Shares, of which you shall not previously have been advised and
furnished with a copy or to which you shall have reasonably objected in
writing or which is not in compliance with the Rules and Regulations; and
(iii) will promptly notify you after it shall have received notice of the
time when any amendment to the Registration Statement relating to the
offering and sale of the Shares becomes effective or when any supplement to
the Prospectus relating to the offering and sale of the Shares has been
filed.
(b) The Company will advise you promptly after it shall receive notice
or obtain knowledge, of any request of the Commission for amendment of the
Registration Statement relating to the offering and sale of the Shares or
for supplement to the Prospectus relating to the offering and sale of the
Shares or for any additional information relating to the offering and sale
of the Shares, or of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement relating to the
offering and sale of the Shares or the use of the Prospectus relating to
the offering and sale of the Shares or of the institution or threatening of
any proceedings for that purpose relating to the offering and sale of the
Shares, and the Company will use its best efforts to prevent the issuance
of any such stop order preventing or suspending the use of the Prospectus
in connection with the offering and sale of the Shares and to obtain as
soon as possible the lifting thereof, if issued.
(c) The Company will cooperate with you and your counsel in
endeavoring to qualify the Shares for sale under the securities laws of
such jurisdictions as you may have designated and will make such
applications, file such documents, and furnish such information as may be
necessary for that purpose, provided the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified or required to
file such a consent or to subject itself to taxation as doing business in
any jurisdiction where it is not now so taxed. The Company will, from time
to time, file such statements, reports, and other documents, as are or may
be required to continue such qualifications in effect for so long a period
as you may reasonably request, subject to the foregoing provision.
(d) The Company will deliver to you, without charge, as many copies of
the Prospectus (including all documents incorporated by reference therein),
or as it thereafter may be amended or supplemented in connection with the
offering and sale of the Shares, as you may from time to time reasonably
request. The Company consents to the use of such Prospectus by you, both in
connection with the offering or
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<PAGE> 12
sale of the Shares and for such period of time thereafter as the Prospectus
is required by law to be delivered, and for such other purposes as may be
legally required in connection with the offering or sale of the Shares. The
Company will deliver to you at or before the Closing Date two conformed
copies of the Registration Statement and all amendments thereto, including,
upon your request, all exhibits filed therewith or incorporated by
reference therein and all documents incorporated by reference in the
Prospectus and will deliver to you such number of copies of the
Registration Statement, without exhibits, and of all amendments thereto, as
you may reasonably request.
(e) If, during the period in which a prospectus is required by law to
be delivered by an underwriter or dealer in connection with the offering
and sale of the Shares, any event shall occur as a result of which, in the
judgment of the Company or in your judgment or in the opinion of your
counsel, it becomes necessary to amend or supplement the Prospectus in
order to make the statements therein, in light of the circumstances
existing at the time the Prospectus is required to be delivered to a
purchaser, not misleading, or, if it is necessary at any time to amend or
supplement the Prospectus in connection with the offering and sale of the
Shares to comply with any law, the Company promptly will prepare and file
with the Commission an appropriate amendment to the Registration Statement
or supplement to the Prospectus so that the Prospectus as so amended or
supplemented will not, in the light of the circumstances when it is
required to be delivered, be misleading, or so that the Prospectus will
comply with law.
(f) The Company will make generally available to its shareholders and
will file in a report pursuant to the Exchange Act, as soon as it is
practicable to do so, an earnings statement in reasonable detail, which
earnings statement shall satisfy the requirements of Section 11(a) of the
Act and Rule 158 of the Rules and Regulations.
(g) The Company will apply the proceeds from the sale of the Shares as
set forth in the description under "Use of Proceeds" in the Prospectus,
which description complies in all respects with the requirements of Item
504 of Regulation S-K of the Commission.
(h) The Company will supply you with copies of all correspondence to
and from, and all documents issued to and by, the Commission in connection
with the registration of the Shares under the Act.
(i) Prior to the Closing Date, the Company will not issue any press
releases or other communications directly or indirectly and will hold no
press conference, with respect to the Company or any of its subsidiaries,
the financial condition, results of operations, business, properties,
assets or liabilities of the Company or any of its subsidiaries, or the
offering of the Shares, without your prior written consent.
(j) The Company will use its best efforts to obtain approval for, and
maintain the listing of the Shares on, the New York Stock Exchange.
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<PAGE> 13
(k) The Company and the Partnership will maintain and keep accurate
books and records reflecting their assets and maintain internal accounting
controls which provide reasonable assurance that (1) transactions are
executed in accordance with management's authorization, (2) transactions
are recorded as necessary to permit the preparation of the Company's
consolidated financial statements and to maintain accountability for the
assets of the Company and the Partnership, (3) access to the assets of the
Company and the Partnership is permitted only in accordance with
management's authorization, and (4) the recorded accounts of the assets of
the Company and the Partnership are compared with existing assets at
reasonable intervals.
(l) During any period in which a prospectus is required by law to be
delivered by an Underwriter or dealer in connection with the offering and
sale of the Shares, the Company and the Partnership will promptly file all
documents required to be filed with the Commission pursuant to Sections 13,
14 or 15(d) of the Exchange Act.
(m) The Company intends to continue to qualify, and will use its best
efforts to continue to meet the requirements to qualify, as a "real estate
investment trust" under the Code.
Section 4. Payment of Expenses. The Company will pay and bear all costs,
fees and expenses incident to the performance of its obligations under this
Agreement (excluding fees and expenses of counsel for the Underwriters except as
specifically set forth below), including (a) the preparation, printing and
filing of the Registration Statement (including financial statements and
exhibits), as originally filed and as amended, the Prospectus and any amendments
or supplements thereto, and the cost of furnishing copies thereof to the
Underwriter, (b) the preparation, printing and distribution of this Agreement,
the certificates representing the Shares and any instruments relating to any of
the foregoing, (c) the issuance and delivery of the Shares to the Underwriter,
including any transfer taxes payable upon the sale of the Shares to the
Underwriter (other than transfer taxes on resales by the Underwriter), (d) the
fees and disbursements of the Company's counsel and accountants, (e) the
qualification of the Shares under the applicable securities and real estate
syndication laws in the accordance with Section 3(c) of this Agreement,
including filing fees and fees and disbursements of counsel for the Underwriter
in connection therewith, (f) all fees and expenses relating to the authorization
of the Shares for trading on the New York Stock Exchange, (g) filing fees
relating to the review of the offering by the NASD, if any, (h) the transfer
agent's and registrar's fees and all miscellaneous expenses referred to in Item
14 of the Registration Statement, and (i) all other costs and expenses incident
to the performance of the Company's obligations hereunder that are not otherwise
specifically provided for in this section, provided, however, that you will bear
and pay the fees and expenses of your counsel (other than fees and disbursements
relating to the registration or qualification of the Shares for offering and
sale under the securities laws of the various states), your out-of-pocket
expenses, and any advertising costs and expenses incurred by you incident to the
offering of the Shares.
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<PAGE> 14
Section 5. Conditions of Underwriter's Obligations. The obligations of the
Underwriter to purchase and pay for the Shares are subject to the accuracy of
the representations and warranties of the Company and the Partnership contained
herein or in certificates of any officer of the Company and the Partnership
delivered pursuant to the provisions hereof, to the performance by the Company
and the Partnership of their obligations hereunder, and to the following further
conditions:
(a) All filings in connection with the offering and sale of the Shares
required by Rule 424 of the Rules and Regulations shall have been made. No
stop order suspending the effectiveness of the Registration Statement, as
amended from time to time, shall have been issued and no proceeding for
that purpose shall have been initiated or, to your knowledge or the
knowledge of the Company or the Partnership, threatened or contemplated by
the Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus
or otherwise in connection with the offering and sale of the Shares) shall
have been complied with to your reasonable satisfaction.
(b) You shall not have disclosed in writing to the Company, at or
prior to the Closing Time, that the Registration Statement or Prospectus or
any amendment or supplement thereto contains an untrue statement of fact
which, in the opinion of your counsel, is material, or omits to state a
fact which, in the opinion of such counsel, is material and is required to
be stated therein or is necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(c) At the Closing Time, you shall have received the opinion of Hunton
& Williams, counsel for the Company, addressed to you and dated the Closing
Time, as to the matters set forth in Schedule I attached hereto.
(d) You shall have received at the Closing Time, from Chapman and
Cutler, your counsel, such opinion or opinions, dated the Closing Time with
respect to the organization of the Company, the validity of the issuance of
the Shares, the Registration Statement, the Prospectus and other related
matters as you may reasonably require; the Company shall have furnished to
such counsel such documents as they reasonably request for the purpose of
enabling them to pass on such matters.
(e) You shall have received at or prior to the Closing Time from
Chapman and Cutler a memorandum or memoranda, in form and substance
satisfactory to you, with respect to the qualification for offering and
sale by you of the Shares under state securities or Blue Sky laws of such
jurisdictions as you may have designated to the Company.
(f) At the Closing Time, you shall have received from Coopers &
Lybrand L.L.P., a letter or letters, dated the Closing Time, in form and
substance satisfactory to you, confirming that they are independent public
accountants with respect to the Company within the meaning of the Act and
the published Rules and Regulations, and stating to the effect set forth in
Schedule II hereto.
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<PAGE> 15
(g) Except as contemplated in the Prospectus, (i) the Company shall
not have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree; and (ii) subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company, the Partnership nor any
of the Subsidiaries shall have incurred any liability or obligation, direct
or contingent, or entered into transactions, and there shall not have been
any material adverse change in the the number of outstanding shares of
common stock, in the number of outstanding Units or in the long-term debt
of the Company or the Partnership or any change in the condition (financial
or other), net worth, business, affairs, management, prospects or results
of operations of the Company or the Partnership, the effect of which, in
any such case described in clause (i) or (ii), is in your reasonable
judgment so material and adverse as to make it impracticable or inadvisable
to proceed with the offering or the delivery of the Shares being delivered
at the Closing Time on the terms and in the manner contemplated in the
Prospectus.
(h) There shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the
New York Stock Exchange or the American Stock Exchange or the establishing
on such exchanges by the Commission or by such exchanges of minimum or
maximum prices which are not in force and effect on the date hereof; (ii) a
general moratorium on commercial banking activities declared by either
federal or state authorities; (iii) the outbreak or escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war, if the effect of any such event
specified in this clause (iii) in your judgment makes it impracticable or
inadvisable to proceed with the offering or the delivery of the Shares in
the manner contemplated in the Prospectus; (iv) any calamity or crisis,
change in national, international or world affairs, act of God, change in
the international or domestic markets, or change in the existing financial,
political or economic conditions in the United States or elsewhere, if the
effect of any such event specified in this clause (iv) makes it
impracticable or inadvisable to proceed with the offering or the delivery
of the Shares in the manner contemplated in the Prospectus; or (v) the
enactment, publication, decree, or other promulgation of any federal or
state statute, regulation, rule, or order of any court or other
governmental authority, or the taking of any action by any federal, state
or local government or agency in respect of fiscal or monetary affairs, if
the effect of any such event specified in this clause (v) in your judgment
makes it impracticable or inadvisable to proceed with the offering or the
delivery of the Shares in the manner contemplated in the Prospectus.
(i) You shall have received certificates, dated the Closing Time and
signed by the Chief Executive Officer or the President and the Chief
Financial Officer of the Company stating that (i) they have examined the
Registration Statement and the Prospectus as amended or supplemented and
all documents incorporated by reference therein and nothing has come to
their attention that would lead them to believe that (i)
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<PAGE> 16
either the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or any documents incorporated by reference therein, as
of their respective effective, issue or filing dates, as the case may be,
or (ii) the Prospectus, as amended or supplemented, and when read together
with the documents incorporated by reference therein, as of the Closing
Time, contained or contains, as of such date, any untrue statement of a
material fact, or omits to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, and, that
(ii) all representations and warranties made herein by the Company and the
Partnership are true and correct in all material respects at the Closing
Time, with the same effect as if made at and as of the Closing Time, and
all agreements herein to be performed by the Company at or prior to the
Closing Time have been duly performed in all material respects.
(j) The Company and the Partnership shall not have failed, refused, or
been unable, at or prior to the Closing Time to have performed in all
material respects any agreement on their part to be performed or any of the
conditions herein contained and required to be performed or satisfied by
them at or prior to the Closing Time.
(k) The Shares shall have been approved for trading on the New York
Stock Exchange upon official notice of issuance thereof.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to you and to Chapman and Cutler, your counsel. The Company and the Partnership
will furnish you with such conformed copies of such opinions, certificates,
letters and documents as you may request.
If any of the conditions specified above in this Section 5 shall not have
been satisfied at or prior to the Closing Time or waived by you in writing, this
Agreement may be terminated by you on notice to the Company.
Section 6. Indemnification and Contribution. (a) The Company and the
Partnership will indemnify and hold harmless you and each person, if any, who
controls you within the meaning of the Act, against any losses, claims, damages
or liabilities, joint or several, to which you or such controlling person may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or in any blue sky application or other document executed by
the Company or the Partnership or based on any information furnished in writing
by the Company or the Partnership, filed in any jurisdiction in order to qualify
any or all of the Shares under the securities laws thereof ("Blue Sky
Application"), or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and will reimburse you and each such
controlling person for any legal or other expenses reasonably incurred by you or
such controlling person in connection
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<PAGE> 17
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company and the Partnership shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement or
the Prospectus, or such amendment or supplement, or any Blue Sky Application in
reliance upon and in conformity with written information furnished to the
Company by you, specifically for use in the preparation thereof; and provided,
further, that if the Prospectus contained any alleged untrue statement or
allegedly omitted to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstance under
which they were made, not misleading and such statement or omission shall have
been corrected in an amended or supplemented Prospectus, the Company and the
Partnership shall not be liable to you or controlling persons under this
subsection (a) with respect to such alleged untrue statement or alleged omission
to the extent that any such loss, claim, damage or liability of such person
results from the fact that you sold Shares to a person to whom there was not
sent or given, at or prior to the written confirmation of such sale, such
amended or supplemented Prospectus. In addition to its other obligations under
this Section 6(a), the Company and the Partnership agree that, as an interim
measure during the pendency of any claim, action, investigation, inquiry or
other proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in this Section 6(a), it will reimburse
you, in accordance with the provisions of Section 6(c), on a monthly basis for
all reasonable legal and other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the obligation of the Company and the
Partnership to reimburse you for such expenses and the possibility that such
payments might later be held to have been improper by a court of competent
jurisdiction. This indemnity agreement shall be in addition to any liabilities
which the Company and the Partnership may otherwise have.
(b) You will indemnify and hold harmless the Company and the Partnership,
each of the Company's directors, each of the Company's officers who have signed
the Registration Statement and each person, if any, who controls the Company or
the Partnership within the meaning of the Act, against any losses, claims,
damages or liabilities, joint or several, to which the Company, the Partnership
or any such director, officer or controlling person may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or any Blue Sky
Application or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Registration Statement, the Prospectus, such
amendment or supplement, or any Blue Sky Application in reliance upon and in
conformity with written information furnished to the Company by you specifically
for use in the preparation thereof; and will reimburse any legal or other
expenses reasonably incurred by the Company, the Partnership or any such
director, officer or controlling
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<PAGE> 18
person in connection with investigating or defending any such loss, claim,
damage, liability or action. In addition to your other obligations under this
Section 6(b), you agree that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in this Section 6(b), you will reimburse the Company and the
Partnership, in accordance with Section 6(c), on a monthly basis for all
reasonable legal and other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of your obligation to reimburse the Company and the Partnership
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. This indemnity
agreement shall be in addition to any liabilities which you may otherwise have.
(c) Any party which proposes to assert the right to be indemnified or
reimbursed under this Section 6 shall, within ten days after receipt of notice
of commencement of any action, suit or proceeding against such party in respect
of which a claim is to be made against an indemnifying party under this Section
6, notify each such indemnifying party of the commencement of such action, suit
or proceeding, enclosing a copy of all papers served, but the omission so to
notify such indemnifying party of any such action, suit or proceeding shall not
relieve such indemnifying party from any liability which it may have to any
indemnified party under this Section 6 unless such indemnifying party has been
materially prejudiced by such omission and such omission shall not relieve such
indemnifying party from any liability which it may have to any indemnified party
otherwise than under this Section 6. In case any such action, suit or proceeding
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses, other than reasonable costs
of investigation, subsequently incurred by such indemnified party in connection
with the defense thereof. The indemnified party shall have the right to employ
its own counsel in any such action, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the employment of
counsel by such indemnified party at the expense of the indemnifying party has
been authorized by the indemnifying party, (ii) the indemnified party shall have
been advised by such counsel in a written opinion that there may be a conflict
of interest between the indemnifying party and the indemnified party in the
conduct of the defense, or certain aspects of the defense, of such action (in
which case the indemnifying party shall not have the right to direct the defense
of such action with respect to those matters or aspects of the defense on which
a conflict exists or may exist on behalf of the indemnified party) (provided,
however, that the indemnifying party shall not be required to pay the fees and
expenses of more than one counsel for all of the indemnified parties entitled to
separate counsel pursuant to this clause (ii))or (iii) the indemnifying party
shall not in fact have employed counsel to assume the defense of such action, in
any of which events such fees and expenses to the extent reasonable and
applicable shall be borne by the indemnifying party.
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<PAGE> 19
An indemnifying party shall not be liable for any settlement of any action or
claim effected without its consent. Each indemnified party, as a condition of
such indemnity, shall cooperate in good faith with the indemnifying party in the
defense of any such action or claim.
(d) If the indemnification provided for in this Section 6 is for any
reason, other than pursuant to the terms thereof, judicially determined (by the
entry of a final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right to appeal) to be
unavailable to an indemnified party under subsection (a) or (b) above in respect
of any losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Partnership, on the one hand,
and you, on the other hand, from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault, as
applicable, of the Company and the Partnership, on the one hand, and you, on the
other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as other relevant equitable considerations. The relative benefits received
by, as applicable, the Company and the Partnership taken together and you shall
be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by you, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Partnership, on the one
hand, or you, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, the Partnership and you agree that it would not be just
and equitable if contributions pursuant to this subsection (d) were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this subsection
(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred
to above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), you shall not be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by you and sold in the offering were offered exceeds the amount of
any damages which you have otherwise paid or become liable to pay by reason of
any untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
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<PAGE> 20
Section 7. Representations, Warranties and Agreements to Survive Delivery.
The representations, warranties, indemnities, agreements and other statements of
the Company or the Partnership or their respective officers set forth in or made
pursuant to this Agreement will remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Company or any
Underwriter or controlling person, with respect to an Underwriter or the Company
or the Partnership, and will survive delivery of and payment for the Shares or
termination of this Agreement.
Section 8. Effective Date of Agreement and Termination. (a) This Agreement
shall become effective upon execution.
(b) This Agreement may be terminated by you at any time at or prior to the
Closing Date by notice to the Company if any condition specified in Section 5
hereof shall not have been satisfied on or prior to the Closing Date. Any such
termination shall be without liability of any party to any other party except as
provided in Sections 4 and 6 hereof.
If you terminate this Agreement as provided in Sections 8(b), you shall
notify the Company by telephone or telegram, confirmed by letter.
Section 9. Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered, mailed or transmitted by any standard form of telecommunication.
Notices to the Underwriter shall be directed to J.C. Bradford & Co., 330
Commerce Street, Nashville, Tennessee 37201, Attention: Mike Simpson; and
notices to the Company and the Partnership shall be directed to them at RFS
Hotel Investors, Inc., 850 Ridge Lake Boulevard, Suite 220, Memphis, Tennessee
38120, Attention: Mr. Robert M. Solmson (with a copy sent in the same manner to
Hunton & Williams, Riverfront Plaza, East Tower, 951 East Byrd Street, Richmond,
Virginia 23219, Attention: David C. Wright).
Section 10. Parties. This Agreement is made solely for the benefit of and
is binding upon the Underwriter, the Company and the Partnership and, to the
extent provided in Section 6, any person controlling the Company, the
Partnership, or the Underwriter, the officers and directors of the Company, and
their respective administrators, successors and assigns and subject to the
provisions of Section 6, no other person shall acquire or have any right under
or by virtue of this Agreement. The term "successors and assigns" shall not
include any purchaser, as such purchaser, from the Underwriter.
Section 11. Governing Law and Time. This Agreement shall be governed by the
laws of the State of Tennessee. Specified time of the day refers to Nashville,
Tennessee time. Time shall be of the essence of this Agreement.
Section 12. Counterparts. This Agreement may be executed in one or more
counterparts and when a counterpart has been executed by each party, all such
counterparts taken together shall constitute one and the same agreement.
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<PAGE> 21
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement among the Company, the Partnership
and the Underwriter in accordance with its terms
Very truly yours,
RFS HOTEL INVESTORS, INC.
By: MICHAEL J. PASCAL
-----------------------------------
Name: Michael J. Pascal
---------------------------------
Title: CFO/Secretary/Treasurer
-------------------------------
RFS PARTNERSHIP, L.P.
By: RFS HOTEL INVESTORS, INC.
General Partner
By: MICHAEL J. PASCAL
------------------------------------
Name: Michael J. Pascal
------------------------------
Title: CFO/Secretary/Treasurer
-----------------------------
Confirmed and accepted as of the date
first above written:
J.C. BRADFORD & CO.
By: CATHERINE GEMMATO-SMITH
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Name: Catherine Gemmato-Smith
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Title: Managing Director
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<PAGE> 22
SCHEDULE I
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Tennessee with the corporate power and authority to own and lease
its properties and to conduct its business as now conducted as
described in the Prospectus.
(ii) The Partnership is a limited partnership duly formed and
validly existing under the Tennessee Revised Uniform Limited
Partnership Act (the "Tennessee Act") with the partnership power and
authority to own and lease its properties and to conduct its business
as now conducted as described in the Prospectus.
(iii) The Company has the corporate power and authority to enter
into the Underwriting Agreement, to issue, sell and deliver the Shares
as provided therein and to consummate the transactions contemplated
therein. The execution and delivery of the Underwriting Agreement have
been duly authorized by all necessary corporate action on behalf of
the Company, and the Underwriting Agreement has been executed and
delivered by the Company.
(iv) The Partnership has the partnership power and authority to
enter into the Underwriting Agreement and to consummate the
transactions contemplated therein. The execution and delivery of the
Underwriting Agreement have been duly authorized by all necessary
action on behalf of the Partnership and the Underwriting Agreement has
been executed and delivered by the Company, as sole general partner of
the Partnership, on behalf of the Partnership.
(v) No consent, approval, authorization, order, license,
certificate, permit, registration, designation or filing by or with
any governmental agency or body is necessary for the valid
authorization, issuance, sale and delivery of the Shares, the
execution, delivery and performance of the Underwriting Agreement and
the consummation by the Company and the Partnership of the
transactions contemplated thereby, except such as has been made or
obtained under the Act and such as may be required under state
securities or real estate syndication laws or required by the National
Association of Securities Dealers, Inc. in connection with the
purchase and distribution of the Shares by the Underwriter, as to
which we express no opinion.
(vi) Neither the issuance, sale and delivery by the Company of
the Shares, nor the execution, delivery and performance of the
Underwriting Agreement by the Company or the Partnership will violate
the Charter, the Bylaws, the Certificate of Limited Partnership or the
Partnership Agreement.
(vii) The issuance and sale of the Shares to the Underwriter
pursuant to the Underwriting Agreement have been validly authorized by
the Company. When
<PAGE> 23
issued and delivered against payment therefor as provided in the
Underwriting Agreement, the Shares will be validly issued, fully paid
and nonassessable. No statutory, or, to our knowledge, other
preemptive rights of shareholders exist with respect to any of the
Shares. To our knowledge, no person or entity holds a right to require
or participate in the registration under the Act of the Shares
pursuant to the Registration Statement. The form of certificates
evidencing the Shares complies with all applicable requirements of
Tennessee law.
(viii) To our knowledge, except as described in the Prospectus,
there is not pending or threatened, any action, suit, proceeding,
inquiry or investigation against the Company or the Partnership or any
of the Company's officers or directors or to which the properties,
assets or rights of either such entity are subject, which, if
determined adversely to such entity, would have a material adverse
effect on the financial position, results of operations or business of
the Company.
(ix) The Company is not an "investment company," or a company
"controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
(x) The Prospectus and the documents incorporated by reference in
the Prospectus (other than the financial statements and related
schedules and the other financial data therein, as to which we express
no opinion, when they became effective or were filed with the
Commission, as the cause may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act, as
applicable and the rules and regulations of the Commission therein.
<PAGE> 1
Exhibit 8.1
March 25, 1998
RFS Hotel Investors, Inc.
850 Ridge Lake Boulevard, Suite 220
Memphis, Tennessee 38120
J.C. Bradford & Co., L.L.C.
330 Commerce Street
Nashville, Tennessee 37201
Ladies and Gentlemen:
We have acted as counsel to RFS Hotel Investors, Inc., a Tennessee
corporation (the "Company"), in connection with (i) the preparation of a
Registration Statement on Form S-3 filed with the Securities and Exchange
Commission ("SEC") on July 23, 1996 (the "Registration Statement"), (ii) the
offering and sale (the "Offering") of 547,946 shares of common stock, par value
$.01 per share, of the Company (the "Common Stock") pursuant to a prospectus
dated July 30, 1996 (the "Prospectus") and a related prospectus supplement dated
March 25, 1998 (the "Prospectus Supplement") related to the Registration
Statement, and (iii) the Company's contribution of the net proceeds of the
Offering to RFS Partnership, L.P., a Tennessee limited partnership (the
"Operating Partnership"), in exchange for an additional general partnership
interest in the Operating Partnership. You have requested our opinion regarding
certain U.S. federal income tax matters in connection with the Offering.
The Company, though the Operating Partnership and RFS Financing
Partnership, L.P., a Tennessee limited partnership (the "Subsidiary
Partnership"), owns 60 hotels and associated personal property (the "Hotels").
The Company leases all but one of those Hotels to wholly-owned subsidiaries of
Promus Hotel Corporation (the
<PAGE> 2
RFS Hotel Investors, Inc.
J.C. Bradford & Co., L.L.C.
March 25, 1998
Page 2
"Lessees") pursuant to substantially similar operating leases (the "Leases").
The Lessees operate all but four of the Hotels directly. The remaining four
Hotels are operated by independent hotel managers pursuant to substantially
similar management agreements with the Lessees (the "Management Agreements").
In connection with the opinions rendered below, we have examined the
following:
1. the Company's Second Restated Charter, as filed with the Secretary of
State of the State of Tennessee on January 31, 1995, as amended on June 27,
1996;
2. the Company's Bylaws;
3. the Fourth Amended and Restated Agreement of Limited Partnership of the
Operating Partnership, dated as of January 3, 1997 (the "Operating Partnership
Agreement"), among the Company, as general partner, and several limited
partners;
4. the Limited Partnership Agreement of the Subsidiary Partnership, dated
October 4, 1996 (the "Subsidiary Partnership Agreement"), between RFS Financing
Corporation, as general partner, and the Operating Partnership, as limited
partner;
5. the Charter of Ridge Lake General Partner, Inc. ("Ridge Lake GP"), a
corporation 100% of whose nonvoting stock is owned by the Company and 100% of
whose voting stock is owned by Robert Solmson, as filed with the Secretary of
State of Tennessee on September 24, 1997;
6. the Limited Partnership Agreement of Ridge Lake, L.P., dated September
22, 1997, between Ridge Lake GP, as general partner, and the Operating
Partnership, as limited partner;
7. the Prospectus and the Prospectus Supplement;
8. the Leases;
9. the Management Agreements; and
10. such other documents as we have deemed necessary or appropriate for
purposes of this opinion.
In connection with the opinions rendered below, we have assumed generally
that:
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RFS Hotel Investors, Inc.
J.C. Bradford & Co., L.L.C.
March 25, 1998
Page 3
1. each of the documents referred to above has been duly authorized,
executed, and delivered; is authentic, if an original, or is accurate, if a
copy; and has not been amended;
2. during its taxable year ending December 31, 1998 and subsequent taxable
years, the Company has operated and will continue to operate in such a manner
that makes and will continue to make the representations contained in a
certificate, dated the date hereof (the "Officer's Certificate"), and executed
by a duly appointed officer of the Company, true for such years;
3. the Company will not make any amendments to its organizational
documents, the Operating Partnership Agreement, or the Subsidiary Partnership
Agreement after the date of this opinion that would affect its qualification as
a real estate investment trust (a "REIT") for any taxable year;
4. each partner of the Operating Partnership and the Subsidiary Partnership
(each, a "Partner") that is a corporation or other entity has a valid legal
existence;
5. each Partner has full power, authority, and legal right to enter into
and to perform the terms of the Operating Partnership Agreement and the
Subsidiary Partnership Agreement and the transactions contemplated thereby; and
6. no action will be taken by the Company, the Operating Partnership, the
Subsidiary Partnership, or the Partners after the date hereof that would have
the effect of altering the facts upon which the opinions set forth below are
based.
In connection with the opinions rendered below, we also have relied upon
the correctness of the representations contained in the Officer's Certificate.
Based on the factual matters in the documents and assumptions set forth
above and the representations set forth in the Officer's Certificate, and
without further investigation as to such factual matters, we are of the opinion
that:
<PAGE> 4
RFS Hotel Investors, Inc.
J.C. Bradford & Co., L.L.C.
March 25, 1998
Page 4
(a) the Company qualified to be taxed as a REIT pursuant to sections
856 through 860 of the Internal Revenue Code of 1986, as amended (the
"Code"), for its taxable years ended December 31, 1993 through
December 31, 1997, and the Company's organization and current and
proposed method of operation will enable it to continue to qualify as
a REIT for its taxable year ended December 31, 1998, and in the
future;
(b) the descriptions of the law and the legal conclusions contained in
the Prospectus Supplement under the caption "Federal Income Tax
Considerations" are correct in all material respects, and the
discussions thereunder fairly summarize the federal income tax
considerations that are likely to be material to a holder of the
Common Stock; and
(c) each of the Operating Partnership and the Subsidiary Partnership
will be treated for federal income tax purposes as a partnership and
not as a corporation or an association taxable as a corporation or as
a publicly traded partnership.
We have performed no due diligence and have made no efforts to verify the
accuracy and genuineness of the documents and assumptions set forth above, and
the representations set forth in the Officer's Certificate. We will not review
on a continuing basis the Company's compliance with such documents, assumptions
or representations. Accordingly, no assurance can be given that the actual
results of the Company's operations for its 1998 and subsequent taxable years
will satisfy the requirements for qualification and taxation as a REIT.
The foregoing opinions are based on current provisions of the Code and the
Treasury regulations thereunder, published administrative interpretations
thereof, and published court decisions. The Internal Revenue Service has not
issued regulations or administrative interpretations with respect to various
provisions of the Code relating to REIT qualification. No assurance can be given
that the law will not change in a way that will prevent the Company from
qualifying as a REIT.
We hereby consent to the filing of this opinion as an exhibit to the
Company's Form 8-K, filed on March 26, 1998. We also consent to the references
to
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RFS Hotel Investors, Inc.
J.C. Bradford & Co., L.L.C.
March 25, 1998
Page 5
Hunton & Williams under the caption "Federal Income Tax Considerations" in
the Prospectus Supplement. In giving this consent, we do not admit that we are
in the category of persons whose consent is required by Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations promulgated
thereunder by the SEC.
The foregoing opinions are limited to the U.S. federal income tax matters
addressed herein, and no other opinions are rendered with respect to other
federal tax or other matters or to any issues arising under the tax laws of any
other country, or any state or locality. We undertake no obligation to update
the opinions expressed herein after the date of this letter. This opinion letter
is solely for the information and use of the addressees, and it may not be
distributed, relied upon for any purpose by any other person, quoted in whole or
in part or otherwise reproduced in any document, or filed with any governmental
agency without our express written consent.
Very truly yours,
/s/ Hunton & Williams
