EXHIBIT 10.108
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (the "Agreement") is made as of the 8th day of
September, 2000, by and between APPLE SUITES, INC., a Virginia corporation (the
"Company"), and FIRST UNION NATIONAL BANK, a national banking association (the
"Lender").
STATEMENT OF PURPOSE
The Company has requested the Lender to extend to the Company a loan to
refinance existing debt and the Lender has agreed to do so on the terms and
subject to the conditions set forth herein. All capitalized terms not otherwise
defined herein are defined in Paragraph 10 hereof.
Now, therefore, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
AGREEMENT
1. Credit Facility.
1(a) Loan. Subject to the conditions set forth herein, the Lender agrees
that it shall advance $10,000,000.00 (the "Loan") to the Company at closing. No
amount repaid by the Company prior to the Maturity Date may be reborrowed by the
Company.
1(b) Interest Rate. The Loan shall bear interest at the Applicable Prime
Rate unless the Company elects to have the Loan bear interest at the Applicable
LIBOR Rate as permitted herein.
1(c) Payment of Interest. The Company shall pay to the Lender interest on
the Loan from the date hereof to but not including the date of payment. Interest
payable while the Loan is a Prime Rate Loan shall be payable monthly, in
arrears, as provided in Paragraph 2(m) below, and interest payable while the
Loan is a LIBOR Loan shall be payable at the end of the applicable Interest
Period.
1(d) Interest Conversion and Continuation.
(1) The Company may elect at the end of any then current Interest Period to
convert the Loan from a LIBOR Loan to a Prime Rate Loan by delivering a
duly-executed, irrevocable Notice of Conversion to the Lender at least one
Business Day prior to the proposed date of such conversion. The Company may
elect at any time to convert a Prime Rate Loan to a LIBOR Loan by delivering a
duly-executed, irrevocable Notice of Conversion to the Lender at least three (3)
LIBOR Business Days prior to the proposed date of such conversion. The Loan may
not be converted from a Prime Rate Loan to a LIBOR Loan if an Event of
Default or Potential Default has occurred and is continuing on the day occurring
three LIBOR Business Days prior to the date of the conversion requested by the
Company or on the date of conversion.
(2) If the Loan is a LIBOR Loan, then Company may elect to continue the
Loan as a LIBOR Loan following the end of the applicable Interest Period if the
Company delivers a duly-executed, irrevocable Notice of Continuation to the
Lender at least three LIBOR Business Days prior to the proposed date of such
continuation; provided, however, that a LIBOR Loan may not be continued as such
when any Event of Default or Potential Default has occurred and is continuing on
the day occurring three (3) LIBOR Business Days prior to the proposed date of
such continuation or on the date of conversion, but shall be automatically
converted to a Prime Rate Loan at the end of the Interest Period, and the Lender
shall notify the Company promptly that such automatic conversion will occur. If
the Company shall fail to give notice as provided above, the Company shall be
deemed to have elected to convert the Loan from a LIBOR Loan to a Prime Rate
Loan at the end of the applicable Interest Period.
1(e) Funding. The Lender shall be entitled to fund the Loan in any manner
it may determine in its sole discretion, but all calculations and transactions
hereunder shall be conducted as though the Lender actually funds the Loan
through the purchase in London of offshore dollar deposits in the amount of the
Loan.
2. Miscellaneous Lending Provisions.
2(a) Use of Proceeds. The proceeds of the Loan shall be used by the Company
solely for the purpose of refinancing existing debt.
2(b) Note. The obligations of the Company to repay the Loan shall be
evidenced by a note payable to the order of the Lender in the form attached
hereto as Exhibit A (the "Note").
2(c) Repayment of Principal. Subject to the prepayment requirements of
Paragraph 2(k) below, the Company shall pay the then principal amount of the
Loan and any accrued and unpaid interest on the Maturity Date.
2(d) Inability to Determine Rate. If the Lender determines (which
determination shall be conclusive and binding upon the Company, provided such
determination is made on a reasonable basis) that by reason of circumstances
affecting the London interbank eurodollar market adequate and reasonable means
do not exist for ascertaining the LIBOR Rate for any Interest Period, then the
Lender shall forthwith give facsimile notice of such determination, confirmed in
writing, to the Company. If such notice is given: (1) and the Loan was to have
been converted to a LIBOR Loan shall, then, subject to the provisions
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hereof, the Loan shall be continued as a Prime Rate Loan; or (2) and the Loan is
a LIBOR Loan, then the Loan shall be converted on the last day of the then
current Interest Period to a Prime Rate Loan. Until such notice has been
withdrawn by the Lender, the Company shall not have the right to convert a Prime
Rate Loan to a LIBOR Loan or to continue a LIBOR Loan as such. The Lender shall
withdraw such notice in the event that the circumstances giving rise thereto no
longer obtain and that adequate and reasonable means exist for ascertaining the
LIBOR Rate, and following withdrawal of such notice by the Lender, the Company
shall have the right to convert the Loan from a Prime Rate Loan to a LIBOR Loan
or to continue the Loan as a LIBOR Loan in accordance with the terms and
conditions of this Agreement.
2(e) Illegality. Notwithstanding any other provisions herein, if any law,
regulation, treaty or directive or any change therein or in the interpretation
or application thereof, shall make it unlawful for any Lender to make or
maintain the Loan as a LIBOR Loan as contemplated by this Agreement, the Lender
shall forthwith give facsimile notice to the Company of such illegality, and
upon giving such notice, if the Loan is then outstanding as a LIBOR Loan, then
it shall be converted automatically to a Prime Rate Loan at the end of the
respective Interest Period or within such earlier period as required by law. In
the event of a conversion of the Loan from a LIBOR Loan to a Prime Rate Loan
prior to the end of its applicable Interest Period, the Company hereby agrees to
promptly pay Lender, upon demand, the amounts required pursuant to Paragraph
2(h) below, it being agreed and understood that such conversion shall constitute
a prepayment for all purposes hereof. If subsequently Lender determines that the
cause of such illegality has ceased to exist, Lender will notify the Company by
facsimile notice, and the Company may request that the Loan be converted to a
LIBOR Loan as provided in Paragraph 1(d)(1) above.
2(f) Requirements of Law; Increased Costs. In the event that any change
subsequent to the date hereof in any applicable law, order, regulation, treaty
or directive issued by any central bank or other Governmental Authority, or in
the governmental or judicial interpretation or application thereof, or
compliance by any Lender with any request or directive (whether or not having
the force of law) by any central bank or other Governmental Authority:
(1) subjects Lender to any tax of any kind whatsoever with respect to this
Agreement or the Loan made hereunder, or change the basis of taxation of
payments to any Lender of principal, fee, interest or any other amount payable
hereunder (except for change in the rate of tax on the overall net income of
such Lender);
(2) imposes, modifies or holds applicable any reserve, capital requirement,
special deposit, compulsory loan or similar requirements against assets held by,
or deposits or other liabilities in or for the account of, advances or loans by,
or other credit extended by, or any other acquisition of funds by, any office of
Lender which are not otherwise included in the determination of the LIBOR Rate
or the Prime Rate; or
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(3) imposes on Lender any other condition;
and the result of any of the foregoing is to increase the cost to Lender of
making, renewing or maintaining the Loan or to reduce any amount receivable in
respect thereof or to reduce the rate of return on the capital of such Lender or
any Person controlling such Lender, then, in any such case, the Company shall,
subject to the provisions hereof pay to the Lender within 15 days (the "15 day
period") of written demand made by the Lender, any additional amounts necessary
to compensate Lender for such additional cost or reduced amounts receivable or
rate of return as determined by Lender with respect to this Agreement or the
Loan made hereunder. If Lender becomes entitled to claim any additional amounts
pursuant to this Paragraph 2(c), it shall promptly notify the Company of the
event by reason of which it has become so entitled. A certificate as to any
additional amounts payable pursuant to the foregoing sentence containing the
calculation thereof in reasonable detail submitted by Lender to the Company
shall be conclusive in the absence of manifest error. The provisions hereof
shall survive the termination of this Agreement and payment of the outstanding
Loan and all other amounts payable hereunder.
2(g) Funding. The Lender shall be entitled to fund all or any portion of
the Loan in any manner it may determine in its sole discretion,. If the Company
elects to have the Loan bear interest at the Applicable LIBOR Rate, then all
calculations and transactions hereunder shall be conducted as though such Lender
actually funds the Loan as a LIBOR Loan through the purchase in London of
offshore dollar deposits in the amount of the Loan in maturities corresponding
to the applicable Interest Period.
2(h) Funding Indemnification -- Prepayment. In addition to all other
payment obligations hereunder, in the event the Loan is a LIBOR Loan and is
prepaid prior to the last day of the applicable Interest Period, whether
following a voluntary prepayment or a mandatory prepayment, the Company shall
immediately pay to the Lender an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of the Loan
so prepaid to the last day of the applicable Interest Period at the applicable
rate of interest hereunder while the Loan is a LIBOR Loan over (ii) the interest
component of the amount the Lender would have bid in the London interbank market
for dollar deposits of leading banks of amounts comparable to such principal
amount repaid and maturities comparable to such period, as reasonably determined
by Lender, together with an additional amount compensating Lender for losses and
expenses incurred by Lender in connection with such prepayment, including,
without limitation, such as may arise out of a re-employment of funds obtained
by Lender and from fees payable to terminate the deposits from which such funds
were obtained, such losses, and expenses and the method of calculation thereof
being set forth in reasonable detail and a statement delivered to the Company by
Lender. Under no circumstances shall Lender have any obligation to remit monies
to the Company upon prepayment while the Loan is a LIBOR Loan even under
circumstances which do not result in the necessity of the payment by the Company
of any amount hereunder. The provisions hereof shall survive termination of this
Agreement and payment of the Loan and all amounts payable hereunder.
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2(i) Funding Indemnification -- Default or Failure to Continue or Convert.
In addition to all other payment obligations hereunder, in the event the Company
shall fail to continue or to make a conversion of the Loan to a LIBOR Loan after
the Company has given notice thereof as provided in Paragraph 1(d) above, or if
the Lender is not obligated to do so due to the existence of an Event of Default
or Potential Default, then the Company shall immediately pay to the Lender an
additional amount compensating the Lender for losses and expenses incurred by
the Lender in connection with such failure to continue or convert the Loan to a
LIBOR Loan, or the occurrence of an Event of Default or Potential Default
including, without limitation, such as may arise out of re-employment of funds
obtained by the Lender and from fees payable to terminate the deposits from
which such funds were obtained, such losses and expenses to be of the type
customarily assessed for failures to convert or continue the Loan to a LIBOR
Loan, and such losses and expenses and the method of calculation thereof being
set forth in reasonable detail in a statement delivered to the Company by the
Lender. The provisions hereof shall survive termination of this Agreement and
payment of the Loan and all other amounts payable hereunder.
2(j) Computations. All computations of interest and fees payable hereunder
shall be based upon a year of 360 days for the actual number of days elapsed.
2(k) Prepayments.
(1) The Company may voluntarily prepay the Loan (including a LIBOR Loan,
subject to paragraph 2(h))in whole or in part at any time.
(2) The Company shall make mandatory prepayments of principal in an amount
equal to seventy-five percent (75%) of all Equity Proceeds (the "Mandatory
Equity Payments"). Mandatory Equity Payments shall be due and payable to Lender
no later than the next business day following the Company's receipt of any
Equity Proceeds.
(3) The Company shall pay all interest accrued but unpaid concurrently with
the prepayment of any principal.
2(l) Commitment Fees. The Company shall pay the following fees: (i) an
initial fee of equal to three-quarters percent (.75%) of the Loan amount shall
be paid at closing and (ii) a fee equal to one-quarter percent (.25%) of the
then outstanding balance on the Mid-Term Date shall be paid no later than the
second Business Day following the Mid-Term Date.
2(m) Interest and Fee Billing and Payment. The Lender shall (1) while the
Loan is a Prime Rate Loan, on or before the fifth Business Day of each month,
and (2) while the Loan is a LIBOR Loan, on the last day of the applicable
Interest Period, deliver to the Company an interest and fee billing for the
immediately preceding month or Interest Period, as the case may be, which
billing shall set forth interest accrued and payable on the Loan and fees
payable hereunder for such period and which billing shall be payable, in the
case of a billing delivered pursuant to subparagraph (1) above, no later than
the second Business
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Day following receipt thereof by the Company and, in the case of a billing
delivered pursuant to subparagraph (2) above, on the last day of the applicable
Interest Period. In the alternative, the Company may, within one (1) Business
Day following receipt of such billing by the Company, authorize the Lender by
telephone (which authorization shall be promptly followed by a written
confirmation thereof) to debit the Company's accounts maintained with the Lender
for the amount of such accrued interest and fees payable.
2(n) Nature and Place of Payments. All payments made on account of the
Obligations shall be made without set-off or counterclaim in lawful money of the
United States of America in immediately available same day funds, free and clear
of and without deduction for any taxes, fees or other charges of any nature
whatsoever imposed by any taxing authority upon the Lender and if received by
the Lender by 2:00 p.m. (Charlotte, North Carolina time) such payment will be
credited on the Business Day received. If a payment is received after 2:00 p.m.
(Charlotte, North Carolina time) by the Lender, such payment will be credited on
the next succeeding Business Day and interest thereon shall be payable at the
then applicable rate until credited. If any payment required to be made by the
Company hereunder becomes due and payable on a day other than a Business Day,
the due date thereof shall be extended to the next succeeding Business Day and
interest thereon shall be payable at the then applicable rate during such
extension.
2(o) Post-Maturity Interest. Any Obligations not paid when due (whether at
stated maturity, upon acceleration or otherwise) shall bear interest from the
date due until paid in full at a per annum rate equal to four percent (4%) above
the then applicable interest rate, or, if such Obligations do not otherwise bear
interest, four percent (4%) above the Applicable Prime Rate.
3. Pledge Agreement; Guaranties; Additional Documents.
3(a) Pledge Agreement and Financing Statements. Repayment of the Loan shall
be secured by a first priority security interest in the Collateral. To effect
such lien, the Company shall execute and deliver to the Lender a pledge
agreement in the form of that attached hereto as Exhibit B (the "Pledge
Agreement"), pursuant to which the Company shall pledge, assign and grant to the
Lender a perfected, first priority security interest in and lien upon the
Collateral.
3(b) Intentionally Deleted.
3(c) Further Documents. The Company agrees to execute and deliver and to
cause to be executed and delivered to the Lender from time to time such
confirmation and supplementary security agreements, financing statements and
other documents, instruments and agreements as the Lender may reasonably
require, which are in the Lender's judgment necessary or desirable to obtain for
the Lender the benefit of the Credit Documents and the Collateral. The Company
also hereby authorizes the Lender to execute and file, on behalf of the Company,
all financing statements which are in the Lender's judgment necessary or
desirable to obtain for the Lender the benefit of the Credit Documents and the
Collateral.
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4. Conditions to Making of the Loan.
As conditions precedent to the Lender's obligation to make the Loan
hereunder:
4(a) The Company shall have delivered to the Lender, in form and substance
satisfactory to the Lender and its counsel each of the following:
(1) A duly executed copy of this Agreement;
(2) A duly executed copy of the Note;
(3) A duly executed copy of the Pledge Agreement;
(4) The originals of all documents required to be delivered to Lender
pursuant to the Pledge Agreement;
(5) Duly executed copies of all financing statements and other documents,
instruments and agreements, properly executed, deemed necessary or appropriate
by the Lender, in its reasonable discretion, to obtain for the Lender a
perfected, first priority security interest in and lien upon the Collateral;
(6) Such credit applications, financial statements, authorizations and such
information concerning the Company and its businesses, operations and conditions
(financial and otherwise) as the Lender may reasonably request;
(7) Certified copies of resolutions of the Board of Directors of the
Company approving the execution and delivery of the Credit Documents, the
performance of the Obligations thereunder and the consummation of the
transactions contemplated thereby;
(8) A certificate of the Secretary or an Assistant Secretary of the Company
certifying the names and true signatures of the officers of the Company
authorized to execute and deliver the Credit Documents;
(9) A copy of the Articles of Incorporation of the Company certified by the
Secretary or an Assistant Secretary of the Company as of the date of this
Agreement as being accurate and complete;
(10) A copy of the Bylaws of the Company certified by the Secretary or an
Assistant Secretary of the Company as of the date of this Agreement as being
accurate and complete;
(11) A certificate of the Secretary of State of the State of Virginia,
certifying as of a recent date that the Company is in good standing;
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(12) An opinion of counsel for the Company substantially in the form of
Exhibit C attached hereto and covering such other matters as the Lender may
reasonably request; and
(13) An estoppel or comfort letter (a "Comfort Letter") from any franchisor
with which the Company or any of its Affiliates has entered into a Franchise
Agreement relating to hotels operated by such Affiliates in form and substance
satisfactory to Lender.
4(b) All acts and conditions (including, without limitation, the obtaining
of any necessary regulatory approvals and the making of any required filings,
recordings or registrations) required to be done and performed and to have
happened precedent to the execution, delivery and performance of the Credit
Documents and to constitute the same legal, valid and binding obligations,
enforceable in accordance with their respective terms, shall have been done and
performed and shall have happened in due and strict compliance with all
applicable laws.
4(c) All documentation, including, without limitation, documentation for
corporate and legal proceedings in connection with the transactions contemplated
by the Credit Documents shall be satisfactory in form and substance to the
Lender and its counsel, and all legal and financial due diligence on the Company
and its operation and conditions shall be completed and shall be satisfactory to
Lender and its counsel.
4(d) All fees required to be paid on or before the date hereof pursuant to
Paragraph 2(l) above shall have been paid prior to (or will be paid concurrently
with) the making of the Loan hereunder.
4(e) Each of the following real estate-secured loans (each, a "Conduit
Loan" and collectively, the "Conduit Loans"), to be made by the Lender to
Subsidiaries of the Company, shall have closed or shall close contemporaneously
with the Loan:
(1) Loan Number 00-0000000, to be secured by a hotel property known as
Homewood Suites located at 0000 Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx 00000;
(2) Loan Number 00-0000000, to be secured by a hotel property known as
Homewood Suites located at 000 Xxxxxxxxxx Xxxxxxx, Xxxxxxxx, Xxxxxxx 00000;
(3) Loan Number 00-0000000, to be secured by a hotel property known as
Homewood Suites located at 0000 Xxxx Xxxxxxx XX, Xxxxxxx, Xxxxxxx 00000;
(4) Loan Number 00-0000000, to be secured by a hotel property known as
Homewood Suites located at 0000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000;
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(5) Loan Number 00-0000000, to be secured by a hotel property known as
Homewood Suites located at 00000 Xxxxx Xxxxx Xxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxx
00000;
(6) Loan Number 00-0000000, to be secured by a hotel property known as
Homewood Suites located at 000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000;
(7) Loan Number 00-0000000, to be secured by a hotel property known as
Homewood Suites located at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxx, Xxxxx 00000;
(8) Loan Number 00-0000000, to be secured by a hotel property known as
Homewood Suites located at 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000;
(9) Loan Number 00-0000000, to be secured by a hotel property known as
Homewood Suites located at 0000 Xxx Xxxxxxx Xxxxx, Xxxxx, Xxxxx 00000;
(10) Loan Number 00-0000000, to be secured by a hotel property known as
Homewood Suites located at 000 Xxxx Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxx 00000; and
(11) Loan Number 00-0000000, to be secured by a hotel property known as
Homewood Suites located at 0000 Xxxxxxxx Xxxxx, Xxxx Xxxxx, Xxxxxxxx 00000.
5. Representations and Warranties of the Company.
The Company represents and warrants to the Lender that:
5(a) Corporate Existence; Compliance with Law. The Company: (1) is duly
organized, validly existing and in good standing as a corporation under the laws
of Virginia and is qualified to do business in each other jurisdiction where its
ownership of property or conduct of business requires such qualification and
where failure to qualify could have a material adverse effect on the Company or
its property or business or on the ability of the Company to pay or perform the
Obligations, (2) has the corporate power and authority and the legal right to
own and operate its property and to conduct business in the manner in which it
does and proposes so to do, and (3) is in compliance with all Requirements of
Law and Contractual Obligations, the failure to comply with which could have a
material adverse effect on the business, operations, assets or financial or
other condition of the Company.
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5(b) Corporate Power; Authorization; Enforceable Obligations The Company
has the corporate power and authority and the legal right to execute, deliver
and perform the Credit Documents and has taken all necessary corporate action to
authorize the execution, delivery and performance of the Credit Documents. The
Credit Documents have been duly executed and delivered on behalf of the Company
and constitute legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their respective terms, subject to the
effect of applicable bankruptcy and other similar laws affecting the rights of
creditors generally and the effect of equitable principles whether applied in an
action at law or a suit in equity.
5(c) Financial Condition. The financial statements which have been
furnished to the Lender, are complete and correct and have been prepared to
present fairly, in accordance with GAAP, the financial condition of the Pledgor
at such dates and the results of its operations and changes in financial
position for the fiscal periods then ended.
5(d) Ownership of Collateral. Pledgor is and will be the sole lawful owner
of all Collateral. Pledgor has full right and title in and to the Collateral,
free and clear of any lien, security interest, pledge, mortgage, adverse claim
or right, charge or encumberance.
5(e) Contrary Agreements. Pledgor has not made, nor will it at any time
without obtaining the prior written consent of Pledgee make, any agreement which
prohibits or restricts the pledging or creation of liens upon the Collateral, or
which creates a lien on the Collateral prior to the Pledge interest herein
provided in favor of Pledgee.
5(f) No Legal Bar. The execution, delivery and performance of the Credit
Documents, the borrowing hereunder and the use of the proceeds thereof, will not
violate any Requirement of Law or any Contractual Obligation of the Pledgor the
violation of which could have a material adverse effect on the business,
operations, assets or financial or other condition of the Pledgor or on the
Collateral.
5(g) Consents, etc. No consent, approval, authorization of, or
registration, declaration or filing with, any Governmental Authority is required
on the part of the Pledgor in connection with the execution and delivery of the
Credit Documents (other than filings to perfect the security interests granted
by it) or the performance of or compliance with the terms, provisions and
conditions hereof or thereof.
5(h) Investment Companies Act. 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.
5(i) Federal Reserve Board Regulations. The Company is not engaged, and
will not engage, principally or as one of its important activities, in the
business of extending credit for the purpose of "purchasing" or "carrying" any
"margin stock" within
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the respective meanings of such terms under Regulation U. No part of the
proceeds of the Loan issued hereunder will be used, directly or indirectly, for
"purchasing" or "carrying" "margin stock" as so defined or for any purpose which
violates, or which would be inconsistent with, the provisions of the Regulations
of the Board of Governors of the Federal Reserve System.
5(j) Subsidiaries. The attached Schedule II is a complete listing of any
and all Subsidiaries of the Company.
5(k) Franchise Agreements. To the extent of the Company's actual control
and knowledge, the Company shall, or shall cause its Affiliates to (i) operate
its or their hotels in accordance with the terms of any Franchise Agreements in
effect as of the date hereof (each, a "Franchise Agreement" and collectively,
the "Franchise Agreements"); (ii) promptly perform and observe (or cause to be
performed or observed) all of the covenants required to be performed and
observed by it or them under the Franchise Agreements and do all things
necessary to preserve and to keep unimpaired its material rights thereunder;
(iii) promptly notify the Lender of any event of default under the Franchise
Agreements of which it or they are aware; (iv) promptly deliver to the Lender a
copy of each financial statement, business plan, capital expenditures plan,
notice, report and estimate received by it or them under the Franchise
Agreements; and (v) promptly enforce the performance and observance of all of
the covenants required to be performed and observed by the franchisor under the
Franchise Agreements. To the extent of the Company's actual control and
knowledge, without Lender's prior consent, the Company shall not and shall not
permit the lessee under any percentage lease or any manager to: (i) surrender,
terminate or cancel any Franchise Agreement; (ii) reduce or consent to the
reduction of the term of any Franchise Agreement; (iii) increase or consent to
the increase of the amount of any charges under any Franchise Agreement; (iv)
otherwise modify, change, supplement, alter or amend, or waive or release any of
its rights and remedies under, any Franchise Agreement or (v) suffer or permit
the occurrence of continuance a default beyond any applicable cure period under
any Franchise Agreement (or any successor franchise agreement with a national
hotel chain approved by the Lender) if such default permits the franchiser to
terminate or cancel any Franchise Agreement (or any successor franchise
agreement with a national hotel chain approved by the Lender).
6. Affirmative Covenants. The Company hereby covenants and agrees with the
Lender that, as long as any Obligations remain unpaid, the Company shall:
6(a) Payment of Indebtedness. Pay or otherwise satisfy at or before
maturity or before it becomes delinquent or accelerated, as the case may be, all
its Indebtedness (including taxes), except Indebtedness being contested in good
faith by appropriate proceedings and for which provision is made to the
satisfaction of the Lender for the payment thereof in the event any Company is
found to be obligated to pay such Indebtedness and which Indebtedness is
thereupon promptly paid by such Company.
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6(b) Maintenance of Existence and Properties. Maintain its corporate
existence and obtain and maintain all rights, privileges, licenses, approvals,
franchises, properties and assets necessary or desirable in the normal conduct
of its business.
6(c) Inspection of Property; Books and Records; Audits.
(1) Keep proper books of record and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and
(2) Permit: (i) representatives of the Lender, to (A) visit and inspect any
of its properties and examine and make abstracts from any of its books and
records at any reasonable time and as often as may reasonably be desired by the
Lender, (but, prior to the occurrence of an Event of Default, only upon not less
than two Business Days' prior notice), and (B) discuss the business, operations,
properties and financial and other condition of the Company with officers and
employees of the Company, and with the independent certified public accountants
of the Company, and (ii) representatives of the Lender to conduct periodic
operational audits of the Company's business and operations of the Company.
(3) Prepare and deliver to Lender, for each calendar month, beginning with
the calendar month in which closing occurs, on or before the tenth (10th) day of
the following month, monthly unaudited balance sheets, certified to be true and
correct by the Chief Financial Officer of the Company.
6(d) Notices. Promptly give written notice to the Lender of:
(1) The occurrence of any Potential Default or Event of Default known to
responsible management personnel of the Company and the proposed method of cure
thereof;
(2) Any litigation or proceeding affecting the Company which could have a
material adverse effect on the business, operations, property, or financial or
other condition of the Company;
(3) A material adverse change known to responsible management personnel of
the Company in the business, operations, property or financial or other
condition of any Company;
(4) A default under the terms of any Indebtedness to which the Company is a
party (whether or not such default gives rise to the right of the affected
lender to accelerate such Indebtedness); and
(6) Any violation of any Requirements of Law or Contractual Obligations to
which the Company may be subject or a party.
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6(e) Expenses. Pay all reasonable out-of-pocket costs and expenses
(including fees and disbursements of legal counsel): (1) of the Lender incident
to the preparation, negotiation and administration of the Credit Documents,
including with respect to or in connection with any waiver or amendment thereof
or thereto, (2) of the Lender associated with any periodic audits conducted
pursuant to Paragraph 6(c)(2)(ii) above, and (3) of the Lender incident to the
enforcement of payment of the Obligations, whether by judicial proceedings or
otherwise, including, without limitation, in connection with bankruptcy,
insolvency, liquidations reorganization moratorium or other similar proceedings
involving the Company or a "workout" of the Obligations. The obligations of the
Company under this Paragraph 6(e) shall survive payment of all other
Obligations.
6(f) Credit Documents. Comply with and observe all terms and conditions of
the Credit Documents.
6(g) Insurance. Obtain and maintain insurance with responsible companies in
such amounts and against such risks as are usually carried by corporations
engaged in similar businesses similarly situated, including, without limitation,
errors and omissions coverage and fidelity coverage in form and substance
acceptable to the Lender, and furnish the Lender on request full information as
to all such insurance, and to provide within five (5) days after receipt,
certificates or other documents evidencing the renewal of each such policy.
6(h) Distributions During Default. Upon the occurrence of any Event of
Default, and for so long as any such Event of Default in ongoing, the Company
shall make no dividends or distributions to any equity holder.
7. Negative Covenants. The Company hereby agrees that, as long as any
Obligations remain unpaid, the Company shall not at any time, directly or
indirectly:
7(a) Consolidation and Merger; Change of Business. Liquidate or dissolve or
enter into any consolidation or merger or enter into any partnership, joint
venture, syndicate or other combination or make any change in the nature of its
business as presently conducted.
7(b) Sale of Assets. Sell, lease, assign, transfer or otherwise dispose of
any of its assets (other than obsolete or worn out property), whether now owned
or hereafter acquired, other than in the ordinary course of business as
currently conducted and at fair market value. In no event, however, shall the
Company dispose of any asset or assets with a fair market value, individually or
in the aggregate, equal to or greater than $1,000,000.00, without the prior
written consent of Lender.
7(c) Additional Indebtedness. Incur any additional Indebtedness other than
trade payables incurred in the ordinary course of business.
13
8. Events of Default. Upon the occurrence of any of the following events
(an "Event of Default"):
8(a) The Company shall fail to pay principal or interest on the Loan or any
fee payable pursuant to Paragraph 2(l) above when due; or
8(b) Any representation or warranty made or deemed made by the Company in
any Credit Document or in connection with any Credit Document shall be
inaccurate or incomplete in any material respect on or as of the date made or
deemed made; or
8(c) The Company shall fail to maintain its corporate existence or shall
default in the observance or performance of any covenant or agreement contained
in Paragraphs 6 and 7; or
8(d) Xxxxx X. Xxxxxx is no longer serving as Chairman of the Board and
President of the Company; or
8(e) The Company shall fail to observe or perform any other term or
provision contained in the Credit Documents and such failure shall continue for
thirty (30) days; or
8(f) The Company shall default in any payment of principal of or interest
on any Indebtedness in the aggregate principal amount of $100,000 or more (and
without regard for the dollar amount of the defaulted payment), or any other
event shall occur, the effect of which is to permit such Indebtedness to be
declared or otherwise to become due prior to its stated maturity; or
8(g) (1) The Company shall commence any case, proceeding or other action
(i) relating to bankruptcy, insolvency, reorganization or relief of debtors,
seeking to have an order for relief entered with respect to the Company, or
seeking to adjudicate the Company a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to the Company or its debts, or (ii)
seeking appointment of a receiver, trustee, custodian or other similar official
for the Company or for all or any substantial part of the assets of the Company,
or the Company shall make a general assignment for the benefit of its creditors;
or (2) there shall be commenced against the Company any case, proceeding or
other action of a nature referred to in clause (1) above which (i) results in
the entry of an order for relief or any such adjudication or appointment, or
(ii) remains undismissed, undischarged or unbonded for a period of sixty (60)
days; or (3) there shall be commenced against the Company any case, proceeding
or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or substantially all of the assets of
either of them which results in the entry of an order for any such relief which
shall not have been vacated, discharged, stayed, satisfied or bonded pending
appeal within sixty (60) days from the entry thereof; or (4) the Company shall
take any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in (other than in connection with a final settlement), any of the
acts set forth
14
in clauses (1), (2) or (3) above; or (5) the Company shall generally not, or
shall be unable to, or shall admit in writing its inability to pay its debts as
they become due;
8(h) One or more judgments or decrees in an aggregate amount in excess of
$100,000 shall be entered against the Company and all such judgments or decrees
shall not have been vacated, discharged, stayed, satisfied or bonded pending
appeal within sixty (60) days from the entry thereof; or
8(i) The borrowers under the Conduit Loans shall fail to observe or perform
any term or provision with respect to any Conduit Loan or shall default in any
payment of principal of or interest on any Conduit Loan or any other event shall
occur, the effect of which is to permit any such Conduit Loan to be declared or
otherwise to become due prior to its stated maturity;
THEN:
(1) Automatically upon the occurrence of an Event of Default under
Paragraph 8(g) above; and
(2) In all other cases, at the option of the Lender;
the principal balance of outstanding Loan and interest accrued but unpaid
thereon shall become immediately due and payable, without demand upon or
presentment to the Company, which are expressly waived by the Company.
9. Miscellaneous Provisions.
9(a) Assignment. The Company may not assign its rights or obligations under
this Agreement without the prior written consent of the Lender. Subject to the
foregoing, all provisions contained in this Agreement or any document or
agreement referred to herein or relating hereto shall inure to the benefit of
the Lender, and its successors and assigns, and shall be binding upon the
Company, and its successors and assigns.
9(b) Amendment. Neither this Agreement nor any of the other Credit
Documents may be amended or terms or provisions hereof or thereof waived unless
such amendment or waiver is in writing and signed by the Lender and the Company.
9(c) Cumulative Rights; No Waiver. The rights, powers and remedies of the
Lender under the Credit Documents are cumulative and in addition to all rights,
powers and remedies provided under any and all agreements among the Company and
the Lender relating hereto, at law, in equity or otherwise. Any delay or failure
by the Lender to exercise any right, power or remedy shall not constitute a
waiver thereof by the Lender, and no single or partial exercise by the Lender of
any right, power or remedy shall preclude other or further exercise thereof or
any exercise of any other rights, powers or remedies.
15
9(d) Entire Agreement. This Agreement and the documents and agreements
referred to herein embody the entire agreement and understanding between the
parties hereto and supersede all prior agreements and understandings relating to
the subject matter hereof and thereof.
9(e) Survival. All representations, warranties, covenants and agreements on
the part of the Company contained in the Credit Documents shall survive the
termination of this Agreement and shall be effective until the Obligations are
paid and performed in full or longer as expressly provided herein.
9(f) Notices. All notices given by any party to the others under the Credit
Documents shall be in writing unless otherwise provided for herein, delivered
personally or by depositing the same in the United States mail, registered, with
postage prepaid, addressed to the party at the address set forth on Schedule I
attached hereto. Any party may change the address to which notices are to be
sent by notice of such change to each other party given as provided herein. Such
notices shall be effective on the date received or, if mailed, on the third
Business Day following the date mailed.
9(g) Governing Law/Waiver of Jury Trial. This Agreement shall be governed
by and construed in accordance with the laws of the State of North Carolina. TO
THE EXTENT PERMITTED BY LAW, THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THE
CREDIT DOCUMENTS. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER
ENTERING INTO THE CREDIT DOCUMENTS.
9(h) Counterparts. This Agreement and the other Credit Documents may be
executed in any number of counterparts, all of which together shall constitute
one agreement.
9(i) Binding Arbitration. Upon demand of any party hereto, whether made
before or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to the Note or any other
Credit Document ("Disputes"), between or among parties to the Note or any other
Credit Document shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include, without limitation,
tort claims, counterclaim, claims brought as class actions, claims arising from
Credit Documents executed in the future, or claims concerning any aspect of the
past, present or future relationships arising out of or connected with the
Credit Documents. Arbitration shall be conducted under and governed by the
Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules") of the
American Arbitration Association and Title 9 of the U.S. Code. All arbitration
hearings shall be conducted in Charlotte, North Carolina. The expedited
procedures set forth in Rule 51, et seq. of the Arbitration Rules shall be
applicable to claims of less than $1,000,000. All applicable statutes of
limitation shall apply to any
16
Dispute. A judgment upon the award may be entered in any court having
jurisdiction. The panel from which all arbitrators are selected shall be
comprised of licensed attorneys. The single arbitrator selected for expedited
procedure shall be a retired judge from the highest court of general
jurisdiction, state or federal, of the state where the hearing will be
conducted. Notwithstanding the foregoing, this paragraph shall not apply to any
hedging arrangement that is a Credit Document.
10. Definitions. For purposes of this Agreement, the terms set forth below
shall have the following meanings:
"Affiliate" shall mean, as to any Person, any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with, such Person. "Control" as used herein means the power to direct the
management and policies of such Person.
"Agreement" shall mean this Agreement, as the same may be amended, extended
or replaced from time to time.
"Applicable LIBOR Rate" shall mean, with respect to a LIBOR Loan, the rate
per annum (rounded upward, if necessary, to the next higher 1/32 of one percent
(.03125%)) calculated in accordance with the following formula:
Applicable LIBOR Rate = LR + LIBOR Spread
-----
1-LRP
where:
LR = LIBOR Rate; and
LRP = LIBOR Reserve Percentage.
"Applicable Prime Rate" shall mean the Prime Rate plus the Prime Rate
Spread.
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
on which banks in Charlotte, North Carolina are authorized or obligated to close
their regular banking business.
"Collateral" shall have the meaning given such term in the Pledge
Agreement.
"Company" shall have the meanings given such terms in the introductory
paragraph hereof.
"Contractual Obligation" as to any Person shall mean any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its property is bound.
17
"Credit Documents" shall mean this Agreement, the Note, the Pledge
Agreement, the Guaranties and each other document, instrument and agreement
executed by the Company in connection herewith, as any of the same may be
amended, extended or replaced from time to time.
"Equity Proceeds" shall mean any and all sums invested in the Company
(including dividend reinvestment) on or after the date hereof in the nature of
equity including, without limitation, common and preferred stock (whether or nor
convertible into common stock), options or warrants to acquire stock, and
subordinated debt (whether or not convertible into stock).
"Event of Default" shall have the meaning set forth in Paragraph 8 above.
"Franchise Agreement" shall have the meaning set forth in Paragraph 5
above.
"GAAP" shall mean generally accepted accounting principles in the United
States of America in effect from time to time.
"Governmental Authority" shall mean any nation or government, any state or
other political subdivision thereof, or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Indebtedness" of any Person shall mean all items of indebtedness which, in
accordance with GAAP and practices thereof, would be included in determining
liabilities as shown on the liability side of a statement of condition of such
Person as of the date as of which indebtedness is to be determined, including:
without limitation, all obligations for money borrowed, all amounts for which
such Person may be obligated under gestation or other repurchase facilities, and
shall also include all indebtedness and liabilities of others assumed or
guaranteed by such Person or in respect of which such Person is secondarily or
contingently liable (other than by endorsement of instruments in the course of
collection) whether by reason of any agreement to acquire such indebtedness or
to supply or advance sums or otherwise.
"Interest Period" shall mean with respect to the Loan while it is a LIBOR
Loan, the period commencing on the date hereof and ending one month, two months,
or three months thereafter, as designated in the Company's written request to
the Lender; provided, however, that (a) any Interest Period which would
otherwise end on a day which is not a LIBOR Business Day shall be extended to
the next succeeding LIBOR Business Day unless by such extension it would fall in
another calendar month, in which case such Interest Period shall end on the
immediately preceding LIBOR Business Day; (b) any Interest Period applicable to
the Loan while it is a LIBOR Loan which begins on a day for which there is no
numerically corresponding day in the calendar month during which such Interest
Period is to end shall, subject to the provisions of clause (a) hereof, end on
the last day of such calendar month; and (c) no such Interest Period shall
extend beyond either the Mid-Term Date or the Maturity Date.
"Lender" shall have the meaning given such term in the introductory
paragraph hereof.
18
"LIBOR Business Day" shall mean a Business Day upon which commercial banks
in London, England and New York, New York are open for domestic and
international business (including dealings in United States dollars).
"LIBOR Loan" shall mean the Loan at such time as it is bearing interest at
the Applicable LIBOR Rate.
"LIBOR Rate" shall mean, with respect to a LIBOR Loan, the rate obtained on
page 3750 of the Telerate as being the rate at which deposits in immediately
available U.S. dollars having a maturity equal to the applicable Interest Period
for such LIBOR Loan are offered to or by reference banks in the London interbank
market, as determined by the Lender at the opening of business on a two (2) day
forward commitment basis.
"LIBOR Reserve Percentage" shall mean for any day, that percentage
expressed as a decimal, which is in effect on such day, as specified by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum aggregate reserve requirement (including all basis,
supplemental, marginal and other reserves) which is imposed on eurocurrency
liabilities.
"LIBOR Spread" shall mean: (a) from the date hereof and up to and including
the Mid-Term Date, two percent (2.00%) and (b) from the day immediately
following the Mid-Term Date and up to and including the Maturity Date, three and
one-half percent (3.50%).
"Lien" shall mean any security interest, mortgage, pledge, lien, claim on
property, charge or encumbrance (including any conditional sale or other title
retention agreement), any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction.
"Loan" shall have the meaning given such term in Paragraph 1(a) above.
"Maturity Date" shall mean March 8, 2001, as such date may be extended from
time to time in writing by the Lender, in its sole discretion.
"Mid-Term Date" shall mean the ninetieth (90th) day following the date of
this Agreement.
"Note" shall mean have the meaning given such term in Paragraph 2(b)
hereof.
"Notice of Continuation" shall mean a notice identical in form in substance
to Exhibit D hereto.
"Notice of Conversion" shall mean a notice identical in form in substance
to Exhibit E hereto.
"Obligations" shall mean any and all debts, obligations and liabilities of
the Company to the Lender (whether now existing or hereafter arising, voluntary
or involuntary, whether or not
19
jointly owed with others, direct or indirect, absolute or contingent, liquidated
or unliquidated, and whether or not from time to time decreased or extinguished
and later increased, created or incurred), arising out of or related to the
Credit Documents.
"Person" shall mean any corporation, natural person, firm, joint venture,
partnerships, trust, unincorporated organization or Governmental Authority.
"Potential Default" shall mean an event which but for the lapse of time or
the giving of notice, or both, would constitute an Event of Default.
"Prime Rate" shall mean a rate per annum equal to the rate announced from
time to time by the Lender to be its "Prime Rate" as such "Prime Rate" may
change from time to time, said changes to occur on the first date the "Prime
Rate" changes; it being understood that the "Prime Rate" is the rate announced
by the Lender from time to time as its "Prime Rate" and is not necessarily the
lowest interest rate charged by the Lender to its customers.
"Prime Rate Loan" shall mean the Loan at such time as it is bearing
interest at the Applicable Prime Rate.
"Prime Rate Spread" shall mean: (a) from the date hereof and up to and
including the Mid-Term Date, one-quarter percent (0.25%) and (b) from the day
immediately following the Mid-Term Date and up to and including the Maturity
Date, one percent (1.00%).
"Requirements of Law" shall mean, as to any Person, the Articles or
Certificate of Incorporation and Bylaws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or a final
and binding determination of an arbitrator or a determination of a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
"Subsidiary" shall mean any corporation, partnership or joint venture more
than fifty percent (50%) of the stock or other ownership interest of which
having by the terms thereof ordinary voting power to elect the board of
directors, managers or trustees of such corporation, partnership or joint
venture (irrespective of whether or not at the time stock of any other class or
classes of such corporation, partnership or joint venture shall have or might
have voting power by reason of the happening of any contingency) shall, at the
time as of which any determination is being made, be owned, either directly or
through Subsidiaries.
[THE REMAINDER OF THIS PAGE WAS LEFT BLANK INTENTIONALLY]
20
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and sealed as of the day and year first above written.
APPLE SUITES, INC., a Virginia corporation
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
-----------------------------
Title Chief Executive Officer
-----------------------------
FIRST UNION NATIONAL BANK, a national
banking association
By: /s/ Xxxx X. Schissal
-------------------------------
Name: Xxxx X. Schissal
-----------------------------
Title: Director
-----------------------------
21
LIST OF SCHEDULES AND EXHIBITS
Schedule I Addresses
Schedule II Subsidiaries
Exhibit A Form of Promissory Note
Exhibit B Form of Pledge Agreement
Exhibit C Form of Opinion
Exhibit D Form of Notice of Continuation
Exhibit E Form of Notice of Conversion
SCHEDULE I
ADDRESSES
LENDER COMPANY
First Union National Bank Apple Suites, Inc.
Xxx Xxxxx Xxxxx Xxxxxx, XX-0000 000 Xxxx Xxxx Xxxxxx
000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxx, Xxxxxxxx 00000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000 Attention: X.X. Xxxxxxx, Xx.
Attention: Xxxx Xxxxxxxx Telephone No.: (000) 000-0000
Telephone No.: (000) 000-0000 Telecopy No.: (000) 000-0000
Telecopy No.: (000) 000-0000
SCHEDULE II
SUBSIDIARIES OF APPLE SUITES, INC.
1. Apple Suites General, Inc. (Wholly-Owned)
2. Apple Suites LP, Inc. (Wholly-Owned)
3. Apple Suites SPE I, Inc. (Wholly-Owned)
4. Apple Suites SPE II, Inc. (Wholly-Owned)
5. Apple Suites Pennsylvania Business Trust (Apple Suites, Inc. is sole Trustee
and sole Beneficiary)
6. Apple Suites REIT Limited Partnership (Indirect Wholly-Owned Subsidiary)
EXHIBIT A
[Included in Exhibit 10.109]
EXHIBIT B
[Included in Exhibit 10.110]
EXHIBIT C
[ LEGAL OPINION OMITTED ]
EXHIBIT D
FORM OF NOTICE OF CONTINUATION
[Date](1)
First Union National Bank, as Lender to
the Credit Agreement referred to below,
One First Xxxxx Xxxxxx, XX0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
Ladies and Gentlemen:
The undersigned, APPLE SUITES, INC., a Virginia corporation (the
"Company"), refers to the Credit Agreement, dated as of ______________, 2000
(the "Credit Agreement"), among the Company and First Union National Bank.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement. The undersigned hereby
gives you notice pursuant to Section 1(d)(2) of the Credit Agreement that it
requests to maintain the Loan as a LIBOR Loan under the Credit Agreement, and in
that connection sets forth below the terms on which such continuation is
requested to be made:
Date of proposed continuation(1)
(which is a Business Day) _________________________
Interest Period __________________________
_______________________
(1) The notice of continuation must be received by Lender, by hand, telecopier
or telex not later than 11:00 a.m. (Charlotte, North Carolina time), three
Business Days prior to a proposed continuation.
Upon acceptance by Company of the continuation of the LIBOR Loan requested
in this notice, the undersigned shall be deemed to have represented and
warranted that no Event of Default has occurred and is continuing.
APPLE SUITES, INC.,
a Virginia corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
EXHIBIT E
FORM OF NOTICE OF CONVERSION
[Date](1)
First Union National Bank, as Lender to
the Credit Agreement referred to below,
One First Xxxxx Xxxxxx, XX0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
Ladies and Gentlemen
The undersigned, APPLE SUITES, INC., a Virginia corporation (the
"Company"), refers to the Credit Agreement, dated as of _______________, 2000
(the "Credit Agreement"), among the Company and First Union National Bank.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement. The undersigned hereby
gives you notice pursuant to Section 1(d)(1) of the Credit Agreement that it
requests a conversion of the Loan under the Credit Agreement, and in that
connection sets forth below the terms on which such conversion is requested to
be made:
(i) Date of proposed conversion(1)
(which is a Business Day) ________________________________
(ii) Type of Loan being converted(2) ________________________________
(iv) Type of Loan outstanding(2)
Loan is being converted into ________________________________
(v) Interest Period ________________________________
_________________________
(1) The notice of conversion must be received by the Lender (i) in the case of a
proposed conversion to consist of LIBOR Loan, by hand, telecopier or telex not
later than 11:00 a.m. (Charlotte, North Carolina time), three LIBOR Business
Days prior to a proposed conversion and (ii) in the case of a proposed
conversion to consist of Prime Rate Loan, by hand, telecopier or telex not later
than 11:00 a.m. (Charlotte, North Carolina time), on the first Business Day
prior to the date of a proposed conversion.
(2) LIBOR Loan or Prime Rate Loan.
Upon acceptance by the Company of the conversion of the Loan requested in
this notice, the undersigned shall be deemed to have represented and warranted
that no Event of Default has occurred and is continuing.
APPLE SUITES, INC.,
a Virginia corporation
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
