EXHIBIT 10.1
SECOND AMENDED AND RESTATED
SECURED REVOLVING CREDIT AGREEMENT
DATED AS OF JUNE 20, 2005
AMONG
EQUITY INNS PARTNERSHIP, L.P.,
EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P.
AND
EQUITY INNS PARTNERSHIP II, L.P.,
AS BORROWER
AND
JPMORGAN CHASE BANK, N.A.,
AS ADMINISTRATIVE AGENT,
JPMORGAN SECURITIES, INC.,
AS CO-LEAD ARRANGER/SOLE BOOK MANAGER,
CALYON NEW YORK BRANCH,
AS SYNDICATION AGENT AND CO-LEAD ARRANGER
AMSOUTH BANK,
BANK OF AMERICA, N.A.
SUNTRUST BANK
EACH AS DOCUMENTATION AGENT
AND
UNION PLANTERS BANK, N.A.,
U.S. BANK NATIONAL ASSOCIATION
FIFth third BANK, N.A.,
AS LENDERS
SECURED REVOLVING CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED SECURED REVOLVING CREDIT AGREEMENT is
entered into as of June 20, 2005 by and among the following:
EQUITY INNS PARTNERSHIP, L.P., a Tennessee limited partnership having its
principal place of business at c/o Equity Inns, Inc., 0000 Xxxx Xxxxx Xxxxxxxxx,
Xxxxxxxxxx, Xxxxxxxxx 00000 ("Operating Partnership"), the sole general partner
of which is Equity Inns Trust;
EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P., a Tennessee limited
partnership having its principal place of business c/o Equity Inns, Inc., 0000
Xxxx Xxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000 ("EIP/WV"), the sole general
partner of which is Equity Inns Services, Inc., a Tennessee corporation which is
wholly owned by Equity Inns, Inc.;
EQUITY INNS PARTNERSHIP II, L.P., a Tennessee limited partnership having
its principal place of business c/o Equity Inns, Inc., 0000 Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000 ("Equity II"), the sole general partner
of which is Equity Inns Trust and the sole limited partner of which is the
Operating Partnership (the Operating Partnership, EIP/WV and Equity II being
referred to herein collectively as the "Borrower");
JPMORGAN CHASE BANK, N.A. ("JPMorgan"), (successor by merger to Bank One,
NA (main office Chicago, Illinois)) a national bank organized under the laws of
the United States of America having an office at 000 Xxxxx Xxxxxxxx, 0xx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000; as Administrative Agent ("Administrative Agent") for
the Lenders (as defined below);
JPMORGAN SECURITIES, INC. ("JPMS"). as Co-Lead Arranger/Sole Book Manager;
CALYON NEW YORK BRANCH ("Calyon"), the New York branch of a French banking
corporation, having an office at 1301 Avenue of the Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000, as Syndication Agent ("Syndication Agent") and Co-Lead Arranger
AMSOUTH BANK ("AmSouth"), a state banking corporation, having an office at
0000 Xxxxx Xxxxxx Xxxxx, XxXxxxx Xxxxx Xxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxxxxxx
00000, as Documentation Agent;
BANK OF AMERICA, N.A. ("B of A") having an office at 000 Xxxx Xxxxxx, 00xx
xxxxx, Xxxxxx, Xxxxx 00000, as Documentation Agent ("Documentation Agent");
SUNTRUST BANK, ("Suntrust") having an office at 0000 Xxxxx Xxxxxxxxx 0xx
Xxxxx, Xxxxxx, Xxxxxxxx 00000, as Documentation Agent;
UNION PLANTERS BANK N.A. ("Union Planters") having an office at X.X. Xxx
000, Xxxxxxx, Xxxxxxxxx 00000;
U.S. BANK NATIONAL ASSOCIATION ("US Bank") having an office at 000 Xxxxx
XxXxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000; and
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FIFTH THIRD BANK, N.A. ("Fifth Third"), a state banking corporation,
having an office at 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000.
RECITALS
A. The Borrower is primarily engaged in the business of acquiring,
developing and owning premium limited service, premium extended stay and all
suite and full service hotel properties.
B. The Borrower, the Administrative Agent, and certain other lenders have
previously entered into an Amended and Restated Secured Revolving Credit
Agreement dated as of June 11, 2003 (the "Existing Agreement").
C. Borrower desires to modify the terms under the Existing Agreement to
provide, among other things, for an extension of the Maturity Date, and an
increase of the Aggregate Commitment.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree to amend and restate the Existing
Agreement in its entirety as follows:
Article I.
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1. Definitions. As used in this Agreement, the following terms
have the meanings set forth below:
"ABR Applicable Margin" means, as of any date with respect to any Adjusted
Alternate Base Rate Advance, the Applicable Margin in effect for such Adjusted
Alternate Base Rate Advance as determined in accordance with Section 2.6 hereof.
"Adjusted Alternate Base Rate" means a floating interest rate equal to the
Alternate Base Rate plus the ABR Applicable Margin changing when and as the
Alternate Base Rate and ABR Applicable Margin changes.
"Adjusted Alternate Base Rate Advance" means an Advance that bears
interest at the Adjusted Alternate Base Rate.
"Adjusted EBITDA" means, for any period, EBITDA adjusted to deduct from
EBITDA the sum of (a) the Agreed FF&E Reserve for all Properties of the
Consolidated Group during such period plus (b) the Consolidated Group Pro Rata
Share of four percent (4%) of gross room revenue for all Properties of
Investment Affiliates during such period.
"Adjusted LIBOR Rate" means, with respect to a LIBOR Advance for any day
during the relevant LIBOR Interest Period, the sum of (i) the quotient of (a)
the Base LIBOR Rate applicable to such LIBOR Interest Period, divided by (b) one
minus the Reserve Requirement (expressed as a decimal) applicable to such LIBOR
Interest Period, plus the LIBOR Applicable Margin in effect on such day.
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"Adjusted Net Operating Income" means, with respect to any Property, Net
Operating Income for such Property less four percent (4%) of gross room revenues
for such Property.
"Administrative Agent" means JPMorgan, acting as agent for the Lenders in
connection with the transactions contemplated by this Agreement, and its
successors in such capacity.
"Advance" means a loan to the Borrower hereunder by one or more of the
Lenders pursuant to Section 2.1 hereof, whether such Advances are from time to
time, Adjusted Alternate Base Rate Advances, LIBOR Advances or Swingline Loans.
"Affiliate" means any Person directly or indirectly controlling,
controlled by or under direct or indirect common control with any other Person.
A Person shall be deemed to control another Person if the controlling Person
owns ten percent (10%) or more of any class of voting securities of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Aggregate Commitment" means, as of any date, the sum of all of the
Lenders' then current Commitments, which on the Agreement Effective Date shall
be $125,000,000 subject to Borrower's right to reduce the Aggregate Commitment
pursuant to Section 2.17 or to increase the Aggregate Commitment pursuant to
Section 2.18.
"Agreed FF&E Reserve" means, with respect to any period and Property, 4%
of gross room revenues for the Consolidated Group during such period.
"Agreement" means this Amended and Restated Secured Revolving Credit
Agreement and all amendments, modifications and supplements hereto.
"Agreement Effective Date" shall mean June 20, 2005.
"Allocated Facility Amount" means, at any time, the sum of all then
outstanding Advances (including all Swingline Loans) and the then Facility
Letter of Credit Obligations.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Commitment Fee Percentage" means, as of any date, the
percentage then in effect pursuant to the chart shown in Section 2.6.
"Applicable Margin" means the applicable margins set forth in the table in
Section 2.6 used to calculate the interest rate applicable to the various types
of Advances, which may vary from time to time in the manner set forth in Section
2.6.
"Appraisal" shall mean an appraisal commissioned by the Administrative
Agent, and acceptable to the Administrative Agent and Required Lenders, in
compliance with the Financial Institutions Reform, Recovery and Enforcement Act
of 1989, as amended, and the regulations promulgated thereunder ("FIRREA") and
with the Uniform Standards of Professional Appraisal Practice.
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"Appraisal Summary" shall mean a limited scope appraisal summary updating
the results of an Appraisal provided pursuant to the Existing Agreement.
"Appraised Value" shall mean the "as-is" appraised value of a Property as
shown on an Appraisal, or if more recent, an Appraisal Summary.
"Approved Management Agreement" means a management agreement with a tenant
under a Permitted Operating Lease which (i) will not have an adverse effect upon
the Collateral or the execution of which shall not result in a Default or an
Event of Default, (ii) contains terms which are commercially reasonable and
standard in the industry, (iii) is with any or all of the following management
companies or their Affiliates: Interstate Hotels & Resorts, Inc., Hilton Hotels
Corporation, Hyatt Corporation, XxXxxxxx Hotel Group, Hospitality Group, Inc.,
Gateway Lodging Co. Inc., Innkeepers Hospitality Trust, d.b.a. Island
Hospitality, Inc., Mississippi Management, Inc., Xxxxxx Hospitality Management
LLC, Waterford Hotel Group, Inc., Marriott International and any entity created
for the purposes of hotel management which was formed by individuals who as of
the Agreement Effective Date are directors and officers of Equity Inns, provided
such officers and directors continue to own a majority of the ownership
interests in such entity and have effective management control of such entity,
except that if there is a change in corporate ownership of any of the foregoing
named management companies, then upon notice from the Required Lenders such
company can be removed from the list of approved management companies for future
transactions unless it continues to be owned by one of the other companies on
the list of approved management companies, and (iv) unless such requirement has
been otherwise waived by the Administrative Agent, is subject to a
lender-manager agreement with the Administrative Agent having the subordination
provisions attached hereto as Exhibit P and made a part hereof and/or other
provisions which are reasonably satisfactory to the Administrative Agent in form
and substance regarding the subordination of such management agreement.
"Arrangers" means JPMS and Calyon, collectively.
"Assignment of Contracts" means an Amended and Restated Assignment of
Contracts in the form of Exhibit O attached hereto and made a part hereof,
assigning the agreements relating to the Collateral.
"Assumed Debt Amount" is defined in Section 9.11 hereof.
"Base LIBOR Rate": means, with respect to a LIBOR Advance for the relevant
Interest Period, the applicable British Bankers' Association LIBOR rate for
deposits in U.S. dollars as reported by any generally recognized financial
information service as of 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period, and having a maturity equal to such
Interest Period, provided that, if no such British Bankers' Association LIBOR
rate is available to the Agent, the applicable Base LIBOR Rate for the relevant
Interest Period shall instead be the rate determined by the Agent to be the rate
at which JPMorgan or one of its Affiliate banks offers to place deposits in U.S.
dollars with first class banks in the London interbank market at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, in the approximate amount of JPMorgan's relevant LIBOR Advance
and having a maturity equal to such Interest Period.
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"Borrower" means, collectively the Operating Partnership, Equity II and
EIP/WV, on a joint and several basis, along with their respective permitted
successors and assigns.
"Borrowing Base" means, as of any date, the aggregate Collateral Pool
Asset Values of each then-current Collateral Pool Asset.
"Borrowing Base Availability" means, as of any date, the lesser of: (a)
62.5% of the Borrowing Base; or (b) the sum of (i) an amount which, if it were
the Allocated Facility Amount, would produce the Included Collateral Pool Debt
Service Coverage Ratio of 1.75 plus (ii) 62.5% of the aggregate Collateral Pool
Asset Values of any Excluded Properties and Properties Under Development,
subject to the limitations set forth in the definition of Eligible Property and
Section 8.15.
"Borrowing Date" means a Business Day on which an Advance is made to the
Borrower.
"Borrowing Notice" is defined in Section 2.11(a) hereof.
"Business Day" means a day, other than a Saturday, Sunday or holiday, on
which banks are open for business in Chicago, Illinois, New York, New York and,
where such term is used in reference to the selection or determination of the
Adjusted LIBOR Rate, in London, England.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person which is not a corporation
and any and all warrants or options to purchase any of the foregoing.
"Cash Equivalents" shall mean (i) short term obligations of, or fully
guaranteed by, the United States of America, (ii) commercial paper rated A 1 or
better by Standard and Poor's Corporation or P 1 or better by Xxxxx'x Investors
Service, Inc., or (iii) certificates of deposit issued by and time deposits with
commercial banks (whether domestic or foreign) having capital and surplus in
excess of $100,000,000.
"Code" means the Internal Revenue Code of 1986 as amended from time to
time, or any replacement or successor statute, and the regulations promulgated
thereunder from time to time.
"Collateral" means all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by any
Security Document including, without limitation, the Collateral Pool Assets.
"Collateral Pool Assets" means the collective reference to the Initial
Collateral Pool Assets and any other Properties added as "Collateral Pool
Assets" from time to time under Section 2.20 hereof, provided that the term
"Collateral Pool Assets" as of any date shall not include any Collateral Pool
Asset which has been previously released from the applicable Mortgage under the
procedure set forth in Section 2.19(c) hereof (and not subsequently added as a
"Collateral Pool Asset" under Section 2.20).
"Collateral Pool Asset Value" means, as of any date, for each Included
Collateral Pool Asset the most recent Appraised Value, unless the Borrower has
owned such Collateral Pool Asset for less than a year, in which case Collateral
Pool Asset Value shall be the lesser of the all-
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in acquisition cost of such Property or the Appraised Value. For the Excluded
Properties and Properties Under Development, the Collateral Pool Asset Value
will be the lesser of (i) the Total Cost of such Property, or (ii) the
"stabilized" appraised value of such Property as established by an Appraisal or
if more recent, the Appraisal Summary for such Property, based upon
stabilization assumptions and projections approved by the Administrative Agent.
"Commitment" means the obligation of each Lender, subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties herein, to make Advances not exceeding in the aggregate the amount
set forth opposite its signature below, or the amount stated in any subsequent
amendment hereto.
"Commitment Fee" is defined in Section 2.7.
"Compliance Certificate" is defined in Section 8.2(v).
"Consolidated Group" means the Borrower, the Guarantors and any other
subsidiary partnerships or entities of any of them which are required under GAAP
to be consolidated with the Borrower and the Guarantors for financial reporting
purposes and does not include Investment Affiliates.
"Consolidated Group Pro Rata Share" means, with respect to any Investment
Affiliate, the percentage of the total equity ownership interests held by the
Consolidated Group in the aggregate, in such Investment Affiliate, determined by
calculating the greater of (i) the percentage of the issued and outstanding
stock, partnership interests or membership interests in such Investment
Affiliate held by the Consolidated Group in the aggregate and (ii) the
percentage of the total book value of such Investment Affiliate that would be
received by the Consolidated Group in the aggregate, upon liquidation of such
Investment Affiliate after repayment in full of all Indebtedness of such
Investment Affiliate.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with all or any of the entities in the Consolidated Group, are
treated as a single employer under Sections 414(b) or 414(c) of the Code.
"Debt Service" means for any period, (a) Interest Expense for such period
plus (b) the aggregate amount of regularly scheduled principal payments of
Indebtedness (excluding optional prepayments and balloon principal payments due
on maturity in respect of any Indebtedness) required to be made during such
period by the Consolidated Group plus (c) the Consolidated Group Pro Rata Share
of all such regularly scheduled principal payments required to be made during
such period by any Investment Affiliate (other than Excluded Investment
Affiliates) on Indebtedness (excluding optional prepayments and balloon
principal payments due on maturity in respect of any Indebtedness) taken into
account in calculating Interest Expense, without duplication.
"Default" means an event which, with notice or lapse of time or both,
would become an Event of Default.
"Default Rate" means with respect to any Advance, a rate equal to the
interest rate applicable to such Advance plus four percent (4%) per annum.
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"Defaulting Lender" means any Lender which fails or refuses to perform its
obligations under this Agreement within the time period specified for
performance of such obligation, or, if no time frame is specified, if such
failure or refusal continues for a period of five Business Days after written
notice from the Administrative Agent; provided that if such Lender cures such
failure or refusal, such Lender shall cease to be a Defaulting Lender.
"Dollars" and "$" mean United States Dollars.
"EBITDA" means (a) net income applicable to common shareholders as
reported by the Consolidated Group in accordance with GAAP (reduced to eliminate
any income from Investment Affiliates), for the most recent four full fiscal
quarters unless otherwise specified, as adjusted by (i) excluding Preferred
Stock Expense, (ii) excluding gains and losses from property sales, property
write-downs, debt or equity restructurings and adjusting for the non-cash effect
of straight-lining of rents, (iii) excluding the effect of discontinued
operations, (iv) excluding the effect of income taxes, (v) excluding the effect
of minority interests, (vi) adding back Interest Expense, (vii) straight-lining
various ordinary operating expenses which are payable less frequently than
monthly (e.g. real estate taxes and Ground Lease Expense) (viii) adding back
depreciation, amortization and all non-cash items, and plus (b) the Consolidated
Group Pro Rata Share of such income (adjusted as described above) of any
Investment Affiliate (other than Excluded Investment Affiliates), provided that
no item of income or expense shall be included more than once in such
calculation even if it falls within more than one of the foregoing categories.
If a Property has been acquired during the period for which EBITDA is being
determined (the "Measurement Period"), then EBITDA will be adjusted to reflect
an annualized EBITDA for such Property based on the applicable period of the
time during the Measurement Period the Property was owned by the Consolidated
Group and up to twelve months pre-acquisition (so that the total Measurement
Period is twelve months). If a Property has been sold during such Measurement
Period, EBITDA shall be adjusted to exclude any Net Operating Income from such
Property from the calculation of EBITDA.
"Effective Date" means each Borrowing Date and, if no Borrowing Date has
occurred in the preceding calendar month, the first Business Day of each
calendar month.
"EIP/WV" means Equity Inns/West Virginia Partnership, L.P., a Tennessee
limited partnership.
"Eligible Property" shall mean any Property for which each of the
following requirements listed in clauses (i) through (xiv) below is met with
respect to such Property. The Borrower shall establish and certify that each of
these requirements has been met when the Borrower seeks to have a Property that
is not one of the Initial Collateral Pool Assets included as a Collateral Pool
Asset pursuant to Section 2.20.
(i) such Property is located in the continental United States,
(ii) a certificate of occupancy or similar evidence of governmental
approval, if available, has been issued with respect to all occupied
portions of such Property,
(iii) there exist no material title flaws affecting the
marketability of the Property,
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(iv) there exist no material structural flaws with respect to such
Property as determined by a structural inspection by an architect or
engineer engaged by (or acceptable to) the Administrative Agent on behalf
of the Lenders, provided that any such inspection shall either be
addressed to and for the benefit of the Administrative Agent and the
Lenders or provide that the Administrative Agent and the Lenders may rely
on such inspection,
(v) such Property is free of any material contamination or other
material violation of Environmental Laws as determined by a phase I
environmental report acceptable to the Administrative Agent,
(vi) there exist no Liens on such Property, other than Liens
securing this Facility and those Permitted Liens described in Subsections
(i), (ii), (iii), (iv) and (vii) of Section 9.6,
(vii) such Property is operated as one of the following: a Hampton
Inn, Holiday Inn, a Homewood Suites, a Hyatt, a Residence Inn, an
AmeriSuites, or a hotel, resort or inn in the Marriott, Hilton, Choice
Hotels, or Starwood line,
(viii) the average occupancy of such Property for the most recent
period of 12 consecutive months for which financial results have been
delivered to the Administrative Agent at the time it is added to the
Collateral Pool shall have been at least 60%, unless it is a Property
Under Development, or an Excluded Property; and
(ix) such Property has been in operation for no less than 24 months,
unless such Property is an Excluded Property or a Property Under
Development, provided such Property Under Development meets the
requirements of Section 8.3.
"Environmental Indemnity" means an Indemnity Agreement in the form of
Exhibit A, relating to possible environmental liabilities associated with the
Collateral Pool Assets.
"Environmental Laws" means any and all Federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
requirements of any Governmental Authority having jurisdiction over any member
of the Consolidated Group or any Investment Affiliate, or their respective
assets, and regulating or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any time
hereafter be in effect, in each case to the extent the foregoing are applicable
to the operations of such member of the Consolidated Group or Investment
Affiliate, or any of their respective assets or Properties.
"Equity Inns" means Equity Inns, Inc., a Tennessee corporation.
"Equity II" means Equity Inns Partnership II, L.P., a Tennessee limited
partnership.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and regulations promulgated thereunder from time to time.
"Event of Default" means any event set forth in Article X hereof.
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"Excluded Investment Affiliate" means Investment Affiliates whose assets
and liabilities shall be excluded from the calculations of the Consolidated
Group's compliance with the financial covenants of this Agreement so long as the
following conditions are met: (i) the Consolidated Group Pro Rata Share of any
such Investment Affiliate is less than 20%; (ii) the Consolidated Group does not
have voting control of, or the ability to otherwise direct the actions of, such
Investment Affiliate; (iii) no Indebtedness of such Investment Affiliate is
recourse to, or guaranteed by, any member of the Consolidated Group; and (iv)
the aggregate book value in accordance with GAAP of the Consolidated Group's
investment in all Excluded Investment Affiliates does not exceed the difference
between $35,000,000 and the amount of the Borrowing Base attributable to
Properties Under Development.
"Excluded Property" means a Collateral Pool Asset that has been completed
but has been in operation for less than 24 months.
"Existing Agreement" means that certain Secured Revolving Credit Agreement
dated as of October 26, 2000 by and between the Borrower, the Administrative
Agent and certain of the other Lenders.
"Facility" means the secured revolving credit facility described in
Section 2.1.
"Facility Letter of Credit" means a Letter of Credit issued pursuant to
Article III of this Agreement, including any Letter of Credit issued pursuant to
Article III of the Existing Agreement which remains outstanding at the Agreement
Execution Date.
"Facility Letter of Credit Fee" is defined in Section 3.8.
"Facility Letter of Credit Obligations" means, as at the time of
determination thereof, all liabilities, whether actual or contingent, of the
Borrower with respect to Facility Letters of Credit, including the sum of (a)
the Reimbursement Obligations and (b) the aggregate undrawn face amount of the
then outstanding Facility Letters of Credit.
"Facility Letter of Credit Sublimit" means $20,000,000.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"FF&E" means fixtures, furniture and equipment located at the Properties.
"FF&E Deficiency" means the amount, if any, by which 4% of the gross room
revenues of the Consolidated Group during the preceding four fiscal quarters, on
a rolling basis, exceeds the actual expenditures by the Consolidated Group for
FF&E replacements or capital items at the Consolidated Group's Properties during
the same period.
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"Fixed Charges" means, for any period, the sum of (i) Debt Service for
such period plus (ii) Preferred Stock Expense of the Guarantors for such period
plus (iii) Ground Lease Expense for such period.
"Funds From Operations" means for any period, net income applicable to
common shareholders as reported by the Consolidated Group in accordance with
GAAP (reduced to eliminate any income from Investment Affiliates), as adjusted
by (i) excluding gains and losses from property sales, property write-downs,
debt or equity restructurings and adjusting for the non-cash effect of
straight-lining of rents, (ii) excluding the effect of income taxes, (iii)
excluding the effect of minority interests, (iv) straight-lining various
ordinary operating expenses which are payable less frequently than monthly (e.g.
real estate taxes and Ground Lease Expense, (v) adding back real estate-related
depreciation and amortization, and (vi) excluding the effect of all non-cash
items. Annualized Funds from Operations for such Person will be calculated for
the four most recent fiscal quarters for which financial results are available.
"GAAP" means generally accepted accounting principles in the United States
of America consistent with those utilized in preparing the audited financial
statements of the Consolidated Group required hereunder, without adjustment
under FASB SAB 101.
"Ground Lease Expense" means, for any period, all payments due from any
member of the Consolidated Group under a lease of land underlying a Property for
such period.
"Guarantee Obligation" means, as to any Person (the "guaranteeing
person"), any obligation (determined without duplication) of (a) the
guaranteeing person or (b) another Person (including, without limitation, any
bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counter indemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the maximum stated
amount of the primary obligation relating to such Guarantee Obligation (or, if
less, the maximum stated liability set forth in the instrument embodying such
Guarantee Obligation), provided, that in the absence of any such stated amount
or stated liability, the amount of such Guarantee Obligation shall be such
guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith.
"Guarantors" means collectively, Equity Inns Trust, a Maryland real estate
investment trust, Equity Inns Services, Inc., a Tennessee corporation and Equity
Inns.
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"Guaranty" means the Amended and Restated Guaranty executed by the
Guarantors in the form attached hereto as Exhibit D.
"Included Collateral Pool Assets" means, as of any date, all Collateral
Pool Assets which are not Excluded Properties or Properties Under Development as
of such date.
"Included Collateral Pool Debt Service Coverage Ratio" means, as of any
date, for a specified Allocated Facility Amount, the ratio of (a) the aggregate
Adjusted Net Operating Income of all Included Collateral Pool Assets for the
most recent four (4) consecutive fiscal quarters for which financial statements
have been delivered to the Administrative Agent to (b) the greater of (x) the
aggregate interest that would have accrued on such specified Allocated Facility
Amount, for the most recent four (4) consecutive fiscal quarters at an interest
rate equal to the average interest rate under the Facility for such period or
(y) the annual principal and interest payments that would be required to fully
amortize a loan in a principal amount equal to such specified Allocated Facility
Amount if paid in equal monthly installments over a period of 25 years at an
interest rate equal to the higher of 6.75%, and the yield as of the last
Business Day of the most recently completed fiscal quarter on those obligations
of the U.S. Treasury having a maturity date closest to a date 10 years after
such fiscal quarter end, plus 2.50% per annum.
"Indebtedness" of any Person at any date means without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade liabilities and other accounts payable, and accrued expenses
incurred in the ordinary course of business and payable in accordance with
customary practices), to the extent such obligations constitute indebtedness for
the purposes of GAAP, (c) any other indebtedness of such Person which is
evidenced by a note, bond, debenture or similar instrument, (d) all obligations
of such Person under financing leases and capital leases, (e) all obligations of
such Person in respect of acceptances issued or created for the account of such
Person, (f) all Guarantee Obligations of such Person (excluding in any
calculation of consolidated indebtedness of such Person, Guarantee Obligations
of such Person in respect of primary obligations of any of its Subsidiaries),
(g) all reimbursement obligations of such Person for letters of credit and other
contingent liabilities, (h) all liabilities secured by any Lien (other than
Liens for taxes not yet due and payable) on any property owned by such Person
even though such Person has not assumed or otherwise become liable for the
payment thereof, (i) any repurchase obligation or liability of such Person or
any of its Subsidiaries with respect to accounts or notes receivable sold by
such Person or any of its Subsidiaries, and (j) such Person's pro rata share of
debt in Investment Affiliates (other than Excluded Investment Affiliates) and
any loans where such Person is liable as a general partner.
"Initial Collateral Pool Assets" means the Properties described on
Schedule 1 attached hereto and made a part hereof which shall be included as
Collateral under the Loan Documents as of the Agreement Effective Date.
"Insolvency" means insolvency as defined in the United States Bankruptcy
Code, as amended. "Insolvent" when used with respect to a Person, shall refer to
a Person who satisfies the definition of Insolvency.
"Interest Expense" all interest expense of the Consolidated Group
determined in accordance with GAAP plus (i) capitalized interest not covered by
an interest reserve from a loan
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facility, plus (ii) the allocable portion (based on liability) of any accrued or
paid interest incurred on any obligation for which any member of the
Consolidated Group is wholly or partially liable under repayment, interest
carry, or performance guarantees, or other relevant liabilities, plus (iii) the
Consolidated Group Pro Rata Share of any accrued or paid interest incurred on
any Indebtedness of any Investment Affiliate (other than Excluded Investment
Affiliates), whether recourse or non recourse, provided that no expense shall be
included more than once in such calculation even if it falls within more than
one of the foregoing categories.
"Interest Period" means a LIBOR Interest Period.
"Investment Affiliate" means any Person in which any member of the
Consolidated Group, directly or indirectly, has an ownership interest, whose
financial results are not consolidated under GAAP with the financial results of
the Consolidated Group on the consolidated financial statements of the
Consolidated Group.
"Issuance Date" is defined in Section 3.4(a)(2).
"Issuance Notice" is defined in Section 3.4(c).
"Issuing Bank" means, with respect to each Facility Letter of Credit, the
Lender which issues such Facility Letter of Credit. JPMorgan shall be the sole
Issuing Bank.
"JPMorgan" means JPMorgan Chase Bank, N.A.
"Lenders" means JPMorgan and the other Persons executing this Agreement in
such capacity, or any Person which subsequently executes and delivers any
amendment hereto in such capacity and each of their respective permitted
successors and assigns. Where reference is made to "the Lenders" in any Loan
Document it shall be read to mean "all of the Lenders" unless the context
requires otherwise.
"Lending Installation" means any U.S. office of any Lender authorized to
make loans similar to the Advances described herein.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Letter of Credit Collateral Account" is defined in Section 3.9.
"Letter of Credit Request" is defined in Section 3.4(a).
"LIBOR Advance" means an Advance that bears interest at the Adjusted LIBOR
Rate.
"LIBOR Applicable Margin" means, as of any date with respect to any LIBOR
Advance, the Applicable Margin in effect for such LIBOR Advance as determined in
accordance with Section 2.6 hereof.
"LIBOR Interest Period" means, with respect to a LIBOR Advance, a period
of one, two, three or six months, as selected in advance by the Borrower.
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"Lien" means any mortgage, pledge, security interest, encumbrance, lien,
charge or easement of any kind (including, without limitation, any conditional
sale or other title retention agreement or lease in the nature thereof, any
filing or agreement to file a financing statement as debtor under the Uniform
Commercial Code on any property leased to any Person under a lease which is not
in the nature of a conditional sale or title retention agreement, or any
subordination agreement in favor of another Person).
"Limited Recourse Guaranty" means a guaranty in the form of Exhibit C
attached hereto executed by each entity other than a Borrower that owns a
Collateral Pool Asset.
"Loan" means, with respect to a Lender, such Lender's portion of any
Advance.
"Loan Documents" means this Agreement, the Notes, the Guaranty, the
Limited Recourse Guaranties, the Environmental Indemnity Agreement and the
Security Documents and any and all other agreements or instruments required
and/or provided to Lenders hereunder or thereunder, as any of the foregoing may
be amended from time to time.
"Loan Parties" the Borrower, the Guarantors and each other Affiliate of
the Borrower which is a party to a Loan Document.
"Margin Stock" has the meaning ascribed to it in Regulation U of the Board
of Governors of the Federal Reserve System.
"Material Adverse Effect" means, with respect to any matter, that such
matter in the Required Lenders' good faith judgment may (x) materially and
adversely affect the business, properties, condition or results of operations of
the Consolidated Group taken as a whole, or (y) constitute a non-frivolous
challenge to the validity or enforceability of any material provision of any
Loan Document against any obligor party thereto.
"Material Adverse Financial Change" shall be deemed to have occurred if
the Required Lenders, in their good faith judgment, determine that a material
adverse financial change has occurred which could prevent timely repayment of
any Advance hereunder or materially impair Borrower's ability to perform its
obligations under any of the Loan Documents.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
radon, polychlorinated biphenyls and urea formaldehyde insulation.
"Maturity Date" means June 20, 2008 (subject to extension in accordance
with Section 2.22) or such earlier date on which the principal balance of the
Facility and all other sums due in connection with the Facility shall be due as
a result of the acceleration of the Facility.
"Monetary Default" means any Default involving Borrower's failure to pay
any of the Obligations when due.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
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"Mortgage Amendments" means amendments to each of the existing Mortgages,
substantially in form of Exhibit N as modified to conform to local law
requirements.
"Mortgages" means the collective reference to the deeds of trust and
mortgages previously recorded against the Initial Collateral Pool Assets, as
amended by the Mortgage Amendments, together with any deeds of trust and
mortgages on Properties added to Collateral hereafter pursuant to Section 2.20
hereof, each of which shall be substantially in the form attached hereto as
Exhibit N and made a part hereof, conformed as required by the Administrative
Agent to applicable local law, as such documents may be hereafter amended and/or
restated from time to time.
"Net Cash Proceeds" is defined in Section 9.11 hereof.
"Net Operating Income" means, with respect to any Property, for any
period, all income attributable to such Property less all expenses directly
related to such Property (except for any expenditures for FF&E replacement and
capital improvements), such as real estate taxes, ground lease payments, base
management fees and franchise fees, adding back depreciation, amortization and
interest expense with respect to such Property for such period, and, if such
period is less than a year, adjusted by straight lining various expenses which
are payable less frequently than monthly during every such period (e.g. real
estate taxes, ground lease payments and insurance).
"Note" means the promissory note (or amended and restated promissory note)
payable to the order of each Lender in the amount of such Lender's maximum
Commitment in the form attached hereto as Exhibit B (collectively, the "Notes").
"Obligations" means the Advances, the Facility Letter of Credit
Obligations and all accrued and unpaid fees and all other obligations of
Borrower to the Administrative Agent or any or all of the Lenders arising under
this Agreement or any of the other Loan Documents.
"Operating Partnership" means Equity Inns Partnership, L.P., a Tennessee
limited partnership.
"Owner" means, as of any date, each of the Wholly Owned Subsidiaries and
entities comprising the Borrower that own a Property included as a Collateral
Pool Asset.
"Participants" is defined in Section 13.2.1 hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Percentage" means, with respect to each Lender, the applicable percentage
of the then-current Aggregate Commitment represented by such Lender's
then-current Commitment.
"Permitted Liens" are defined in Section 9.6 hereof.
"Permitted Operating Lease" means a lease between one of the Borrowers or
a Wholly Owned Subsidiary and a taxable Wholly-Owned Subsidiary (provided such
taxable Wholly-Owned Subsidiary has entered into an Approved Management
Agreement for the management of
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the hotel covered by such Permitted Operating Lease) on substantially the same
lease form as currently in effect for the Collateral Pool Assets.
"Person" means an individual, a corporation, a limited or general
partnership, an association, a joint venture or any other entity or
organization, including a governmental or political subdivision or an agent or
instrumentality thereof.
"Plan" means an employee benefit plan as defined in Section 3(3) of ERISA,
whether or not terminated, as to which the Borrower or any member of the
Controlled Group may have any liability.
"Preferred Stock" means, for any Person, any preferred stock issued by
such Person.
"Preferred Stock Expense" means, for any period for any Person, the
aggregate dividend payments due to the holders of Preferred Stock of such
Person, whether payable in cash or in kind, and whether or not actually paid
during such period.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced by JPMorgan or its parent from time to time (which is not necessarily
the lowest rate charged to any customer), changing when and as such prime rate
changes.
"Property" means any real estate asset owned by a member of the
Consolidated Group or an Investment Affiliate and operated as a premium limited
service, premium extended stay or premium all suite or full service hotel
property.
"Property Under Development" means a Property under development (in
accordance with GAAP) on which construction of the hotel has commenced but which
has not been substantially completed and occupied and which is subject to a
Permitted Operating Lease and an Approved Management Agreement that will be
effective upon opening.
"Purchasers" is defined in Section 13.3.1 hereof.
"Qualified Officer" means, with respect to any entity, the president, the
vice president, the treasurer, the chief financial officer, the chief accounting
officer or the controller of such entity if it is a corporation or of such
entity's general partner if it is a partnership.
"Rate Option" means the Adjusted Alternate Base Rate or the Adjusted LIBOR
Rate. The Rate Option in effect on any date shall always be the Adjusted
Alternate Base Rate unless the Borrower has properly selected the Adjusted LIBOR
Rate pursuant to Section 2.11 hereof.
"Recourse Indebtedness" means, with respect to any Person, Indebtedness
for borrowed money, whether as a maker or a guarantor, other than non-recourse
secured Indebtedness which limits the liability of the maker thereof to its
interest in the Properties given for such indebtedness, subject only to those
customary "carve-outs" to non-recourse status required by institutional mortgage
lenders.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official
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interpretation of said Board of Governors relating to reserve requirements
applicable to member banks of the Federal Reserve System.
"Reimbursement Obligations" means at any time, the aggregate liabilities
of the Borrower to the Lenders, the Issuing Bank and the Administrative Agent in
respect of all payments or disbursements made by the Lenders, the Issuing Bank
and the Administrative Agent under or in respect of the Facility Letters of
Credit, and which have not been repaid by Borrower.
"REMIC Loan" means that certain $88,000,000 issuance of mortgage bonds by
the REMIC Partnership pursuant to the terms of an Indenture dated as of February
6, 1997.
"REMIC Partnership" means EQI Financing Partnership I, L.P., the borrower
under the REMIC Loan which has as its sole limited partner, holding 99% of the
partnership interests therein, the Operating Partnership and as its sole general
partner, holding 1% of the partnership interests therein, EQI Financing
Corporation which is wholly owned by Equity Inns Trust.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable Event regardless of the issuance of any such waivers in accordance
with either Section 4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means, as of any date, those Lenders holding, in the
aggregate, more than two thirds (2/3) of the then current Aggregate Commitment
or, if the Aggregate Commitment has been terminated, Lenders holding, in the
aggregate, more than two-thirds (2/3) of the aggregate unpaid principal amount
of the outstanding Advances.
"Reserve Requirement" means, with respect to a LIBOR Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"S&P" means Standard & Poor's Ratings Group and its successors.
"Security Agreement" means an Amended and Restated Security Agreement in
the form attached hereto as Exhibit _.
"Security Documents" means the collective reference to the Mortgages, the
Security Agreement, the Guarantees, UCC Financing Statements, Assignment of
Contracts, and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any asset or assets of any Person to
secure the obligations and liabilities of the Borrower hereunder and under any
of the other Loan Documents or to secure any guarantee of any such obligations
and liabilities.
"Subsidiary" means as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation,
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partnership or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more intermediaries,
or both, by such Person, and provided such corporation, partnership or other
entity is consolidated with such Person for financial reporting purposes under
GAAP.
"Supermajority Lenders" means, as of any date, those Lenders holding, in
the aggregate, more than eighty percent (80%) of the then current Aggregate
Commitment or, if the Aggregate Commitment has been terminated, Lenders holding,
in the aggregate, more than eighty percent (80%) of the aggregate unpaid
principal amount of the outstanding Advances.
"Swingline Advances" means, as of any date, collectively, all Swingline
Loans then outstanding under this Facility.
"Swingline Commitment" means the obligation of the Swingline Lender to
make Swingline Loans not exceeding $10,000,000, which is included in, and is not
in addition to, the Swingline Lender's total Commitment hereunder.
"Swingline Lender" shall mean JPMorgan, in its capacity as a Lender.
"Swingline Loan" means a loan made by the Swingline Lender pursuant to
Section 2.16 hereof.
"Tangible Net Worth" means "net worth", as determined in accordance with
GAAP, less intangible assets included in such net worth, less equity investment
in Excluded Investment Affiliates, plus accumulated depreciation.
"Total Cost" means, as of any date, (a) if the Property is owned by the
Consolidated Group, the sum of (i) the book value under GAAP of such Property
plus (ii) all accumulated depreciation on such Property previously reflected on
the Consolidated Group's financial statements, in accordance with GAAP, or (b)
if such Property is owned by an Investment Affiliate, the sum of (i) the
Consolidated Group Pro Rata Share of the book value under GAAP of such Property
plus (ii) the Consolidated Group Pro Rata Share of all depreciation on such
Property previously reflected on the Investment Affiliate's financial
statements, in accordance with GAAP.
"Total Indebtedness" means, as of any date, the sum of (i) all
Indebtedness of the Consolidated Group in existence on such date plus (ii) the
Consolidated Group Pro Rata Share of all Indebtedness of any Investment
Affiliate (other than Excluded Investment Affiliates), to the extent not
included in the Indebtedness described in clause (i), without duplication.
"Transferee" is defined in Section 13.4 hereof.
"Wholly Owned Subsidiary" means a Subsidiary which is 100% owned, directly
or indirectly, by one or more of the entities comprising the Borrower.
The foregoing definitions shall be equally applicable to both the singular
and the plural forms of the defined terms.
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Section 1.2. Financial Standards. All financial computations required of a
Person under this Agreement shall be made, and all financial information
required under this Agreement shall be prepared, in accordance with GAAP, except
that if any Person's financial statements are not audited, such Person's
financial statements shall be prepared in accordance with the same sound
accounting principles utilized in connection with the financial information
submitted to Lenders with respect to such Person or the Properties of such
Person in connection with this Agreement and shall be certified by an authorized
representative of such Person.
Article II.
THE FACILITY
Section 2.1. The Facility; Limitations on Borrowing. Subject to the terms
and conditions of this Agreement and in reliance upon the representations and
warranties of the Borrower and the Guarantors contained herein, Lenders agree
(x) to make Advances through the Administrative Agent to Borrower from time to
time prior to the Maturity Date and (y) to issue Facility Letters of Credit
under Article III of this Agreement, provided that the making of any such
Advance or the issuance of such Facility Letter of Credit will not:
(i) cause the then current Allocated Facility Amount to exceed
the then-current Aggregate Commitment; or
(ii) cause the then current Allocated Facility Amount to
exceed the then-current Borrowing Base Availability; or
(iii) cause the then current outstanding Swingline Advances to
exceed the Swingline Commitment; or
(iv) cause the then outstanding Facility Letters of Credit
Obligations to exceed the Facility Letter of Credit Sublimit.
The Advances may be ratable Adjusted Alternate Base Rate Advances, ratable LIBOR
Advances or non pro rata Swingline Loans. Except as provided in Sections 2.16
and 2.18 hereof, each Lender shall fund its Percentage of each such Advance and
no Lender will be required to fund any amounts which when aggregated with such
Lender's Percentage of (i) all other Advances then outstanding, (ii) all
Swingline Advances and (iii) all Facility Letter of Credit Obligations would
exceed such Lender's then current Commitment. This facility ("Facility") is a
revolving credit facility and, subject to the provisions of this Agreement, the
Borrower may request Advances hereunder, repay such Advances and reborrow
Advances at any time prior to the Maturity Date. Unless and until the
Administrative Agent is otherwise advised in writing to the contrary by all of
the entities comprising the Borrower, all Loans shall be deemed to be requested
by the Operating Partnership and shall be funded directly to the Operating
Partnership and EIP/WV and Equity II each irrevocably authorizes the
Administrative Agent to honor requests for Advances made by the Operating
Partnership and to fund such Loans directly to the Operating Partnership.
Section 2.2. Maturity Date. The Facility created by this Agreement, and
the Commitment of each Lender to lend hereunder, shall terminate on the Maturity
Date, unless sooner terminated in accordance with the terms of this Agreement.
Any outstanding Advances
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not previously repaid and all other unpaid Obligations shall be paid in full by
the Borrower on the Maturity Date.
Section 2.3. Requests for Advances; Responsibility for Advances. Ratable
Advances shall be made available to Borrower by Administrative Agent in
accordance with Section 2.1 and Section 2.11(a) hereof. The obligation of each
Lender to fund its Percentage of each ratable Advance shall be several and not
joint.
Section 2.4. Evidence of Credit Extensions. The Advances of each Lender
outstanding at any time shall be evidenced by the Notes. Each Note executed by
the Borrower shall be in a maximum principal amount equal to each Lender's
Percentage of the current Aggregate Commitment. Each Lender shall record
Advances and principal payments thereof on the schedule attached to its Note or,
at its option, in its records, and each Lender's record thereof shall be
conclusive absent Borrower furnishing to such Lender conclusive and irrefutable
evidence of an error made by such Lender with respect to that Lender's records.
Notwithstanding the foregoing, the failure to make, or an error in making, a
notation with respect to any Advance shall not limit or otherwise affect the
obligations of Borrower hereunder or under the Notes to pay the amount actually
owed by Borrower to Lenders.
Section 2.5. Ratable and Non Ratable Loans. Each Advance hereunder shall
consist of Loans made from the several Lenders ratably in proportion to their
Percentages, except for Swingline Loans which shall be made by the Swingline
Lender in accordance with Section 2.16. The ratable Advances may be Adjusted
Alternate Base Rate Advances, LIBOR Advances or a combination thereof, selected
by the Borrower in accordance with Sections 2.10 and 2.11.
Section 2.6. Applicable Margins and Fees. The ABR Applicable Margin, the
LIBOR Applicable Margin and the Applicable Commitment Fee Percentage to be used
in calculating the interest rate applicable to different types of Advances and
the Commitment Fee shall vary from time to time in accordance with the ratio of
Total Indebtedness to EBITDA:
LIBOR Applicable Applicable Commitment
Ratio of Total Indebtedness to EBITDA Margin ABR Applicable Margin Fee Percentage
------------------------------------- ---------------- --------------------- ---------------------
Less than 4.5x 1.625% 0.625% 0.25%
4.5x or over, but less than 5.00x 2.00% 1.00% 0.30%
5.00x or over, but less than 5.25x 2.25% 1.25% 0.35%
5.25x or over, but less than 5.50x 2.50% 1.50% 0.50%
5.50X or over, but less than 5.75x 3.00% 2.00% 0.60%
The Applicable Margins and Applicable Commitment Fee Percentage will
change quarterly upon delivery of a compliance certificate in the form of
attached hereto, reflecting the ratio of Total Indebtedness to EBITDA as of the
last day of the preceding fiscal quarter as disclosed on the financial
statements for such fiscal quarter delivered to the Lenders.
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Section 2.7. Commitment Fee. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee (the
"Commitment Fee") from the Agreement Effective Date to and including the
Maturity Date, calculated at the then current per annum Applicable Commitment
Fee Percentage (calculated for actual days elapsed on the basis of a 360 day
year) on the daily unborrowed portion of such Lender's Commitment (which is
equal to the difference between (a) such Lender's Commitment on such day and (b)
the then outstanding Loans owed to such Lender plus the Lender's Percentage of
any outstanding and undrawn Facility Letters of Credit) payable quarterly in
arrears on the last day of each calendar quarter hereafter beginning June 30,
2005 and ending on the Maturity Date. Notwithstanding the foregoing, all accrued
Commitment Fees shall be payable on the effective date of any termination of the
obligations of the Lenders to make Loans hereunder. The Swingline Commitment
shall be treated in the same fashion as the other Commitments for purposes of
calculating the Commitment Fees and only the actual Swingline Loans outstanding
on any day shall be included in the aggregate amount of outstanding Loans owed
to the Swingline Lender on such day.
Section 2.8. Other Fees.
(a) The Borrower agrees to pay all fees payable to the
Administrative Agent and JPMorgan Securities, Inc. pursuant to the Borrower's
prior letter agreement with them.
(b) The Borrower also agrees to pay the fees described in Section
3.8 below with respect to any Facility Letters of Credit.
Section 2.9. Minimum Amount of Each Advance. Each LIBOR Advance shall be
in the minimum amount of $2,000,000 (and in multiples of $100,000 if in excess
thereof), each Adjusted Alternate Base Rate Advance shall be in the minimum
amount of $1,000,000 (and in multiples of $100,000 if in excess thereof) and
each Swingline Advance shall be in the minimum amount of $50,000 (and in
multiples of $25,000 if in excess thereof), provided, however, that any Adjusted
Alternate Base Rate Advance may be in the amount of the unused Aggregate
Commitment.
Section 2.10. Interest.
(a) The outstanding principal balance under the Notes shall bear
interest from time to time at a rate per annum equal to:
(i) the Adjusted Alternate Base Rate; or
(ii) at the election of Borrower with respect to all or
portions of the Obligations, the Adjusted LIBOR Rate.
(b) All interest shall be calculated for actual days elapsed on the
basis of a 360-day year. Interest accrued on each Adjusted Alternate Base Rate
Advance, LIBOR Advance and Swingline Loan shall be payable in arrears from time
to time on each of (i) the first day of each calendar month, commencing with the
first such date to occur after the date hereof, (ii) the Maturity Date, and
(iii) the effective date of any termination of the Aggregate Commitment in full
pursuant to Section 2.17. Interest shall not be payable for the day of any
payment on the amount paid if payment is received by Administrative Agent prior
to noon (Chicago time).
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If any payment of principal or interest under the Notes shall become due on a
day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a payment of principal, such
extension of time shall be included in computing interest due in connection with
such payment; provided that for purposes of Section 10.1 hereof, any payments of
principal described in this sentence shall be considered to be "due" on such
next succeeding Business Day.
Section 2.11. Selection of Rate Options and LIBOR Interest Periods.
(a) Borrower, from time to time, may select the Rate Option and, in the
case of each LIBOR Advance, the commencement date (which shall be a Business
Day) and the length of the LIBOR Interest Period applicable to each LIBOR
Advance. Borrower shall give Administrative Agent irrevocable notice (a
"Borrowing Notice") not later than 11:00 a.m. (Chicago time) (i) at least one
Business Day prior to an Adjusted Alternate Base Rate Advance, (ii) at least
three (3) Business Days prior to a ratable LIBOR Advance, and (iii) not later
than 11:00 a.m. (Chicago time) on the Borrowing Date for each Swingline Loan,
specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the type of Advance selected, and
(iv) in the case of each LIBOR Advance, the LIBOR Interest
Period applicable thereto.
The Borrower shall also deliver together with each Borrowing Notice the
compliance certificate required in Section 5.2 and otherwise comply with the
conditions set forth in Section 5.2 for Advances. Administrative Agent shall
provide each Lender by facsimile with a copy of each Borrowing Notice and
compliance certificate by 3:00 p.m. on the same Business Day it is received.
Not later than noon (Chicago time) on each Borrowing Date, each Lender
shall make available its Loan or Loans, in funds immediately available in
Chicago to the Administrative Agent. Administrative Agent will promptly make the
funds so received from the Lenders available to the Borrower.
(b) Administrative Agent shall, as soon as practicable after receipt
of a Borrowing Notice, determine the Adjusted LIBOR Rate applicable to the
requested ratable LIBOR Advance and inform Borrower and Lenders of the same.
Each determination of the Adjusted LIBOR Rate by Administrative Agent shall be
conclusive and binding upon Borrower in the absence of manifest error.
(c) If Borrower shall prepay a LIBOR Advance other than on the last
day of the LIBOR Interest Period applicable thereto, Borrower shall be
responsible to pay all amounts due to Lenders as required by Section 4.4 hereof.
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(d) As of the end of each LIBOR Interest Period selected for a
ratable LIBOR Advance, the interest rate on the LIBOR Advance will become the
Adjusted Alternate Base Rate, unless Borrower has once again selected a LIBOR
Interest Period in accordance with the timing and procedures set forth in
Section 2.11(g).
(e) The right of Borrower to select the Adjusted LIBOR Rate for an
Advance pursuant to this Agreement is subject to the availability to Lenders of
a similar option. If Administrative Agent determines that (i) deposits of
Dollars in an amount approximately equal to the LIBOR Advance for which the
Borrower wishes to select the Adjusted LIBOR Rate are not generally available at
such time in the London interbank eurodollar market, or (ii) the rate at which
the deposits described in subsection (i) herein are being offered will not
adequately and fairly reflect the costs to Lenders of maintaining an Adjusted
LIBOR Rate on an Advance or of funding the same in such market for such LIBOR
Interest Period, or (iii) reasonable means do not exist for determining an
Adjusted LIBOR Rate, or (iv) the Adjusted LIBOR Rate would be in excess of the
maximum interest rate which Borrower may by law pay, then in any of such events,
Administrative Agent shall so notify Borrower and Lenders and such Advance shall
bear interest at the Adjusted Alternate Base Rate. Notwithstanding the
foregoing, the Lenders shall not be obligated to match fund their LIBOR
Advances.
(f) In no event may Borrower elect a LIBOR Interest Period which
would extend beyond the Maturity Date. Unless Lenders agree thereto, in no event
may Borrower have more than ten (10) different LIBOR Interest Periods for LIBOR
Advances outstanding at any one time.
(g) Conversion and Continuation.
(i) Borrower may elect from time to time, subject to the other
provisions of this Section 2.11, to convert all or any part of a ratable
Advance into any other type of Advance; provided that any conversion of a
ratable LIBOR Advance shall be made on, and only on, the last day of the
LIBOR Interest Period applicable thereto.
(ii) Adjusted Alternate Base Rate Advances shall continue as
Adjusted Alternate Base Rate Advances unless and until such Adjusted
Alternate Base Rate Advances are converted into ratable LIBOR Advances
pursuant to a Conversion/Continuation Notice from Borrower in accordance
with Section 2.11(g)(iv). Ratable LIBOR Advances shall continue until the
end of the then applicable LIBOR Interest Period therefor, at which time
each such Advance shall be automatically converted into an Adjusted
Alternate Base Rate Advance unless the Borrower shall have given the
Administrative Agent a Conversion/Continuation Notice in accordance with
Section 2.11(g)(iv) requesting that, at the end of such LIBOR Interest
Period, such Advance either continue as an Advance of such type for the
same or another LIBOR Interest Period.
(iii) Notwithstanding anything to the contrary contained in
Sections 2.11(g)(i) or (g)(ii), no Advance may be converted into a LIBOR
Advance or continued as a LIBOR Advance (except with the consent of the
Required Lenders) when any Monetary Default or Event of Default has
occurred and is continuing.
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(iv) The Borrower shall give the Administrative Agent
irrevocable notice (a "Conversion/Continuation Notice") of each conversion
of an Advance or continuation of a LIBOR Advance not later than 11:00 a.m.
(Chicago time) on the Business Day immediately preceding the date of the
requested conversion, in the case of a conversion into an Adjusted
Alternate Base Rate Advance, or 11:00 a.m. (Chicago time) at least three
(3) Business Days prior to the date of the requested conversion or
continuation, in the case of a conversion into or continuation of a
ratable LIBOR Advance, specifying: (1) the requested date (which shall be
a Business Day) of such conversion or continuation; (2) the amount and
type of the Advance to be converted or continued; and (3) the amounts and
type(s) of Advance(s) into which such Advance is to be converted or
continued and, in the case of a conversion into or continuation of a
ratable LIBOR Advance, the duration of the LIBOR Interest Period
applicable thereto.
Section 2.12. Method of Payment. All payments of the Obligations hereunder
shall be made, without set off, deduction, or counterclaim, in immediately
available funds to Administrative Agent at Administrative Agent's address
specified herein, or at any other Lending Installation of Administrative Agent
specified in writing by Administrative Agent to Borrower, by noon (local time)
on the date when due and shall be applied ratably by Administrative Agent among
Lenders. Each payment delivered to Administrative Agent for the account of any
Lender shall be delivered promptly by Administrative Agent to such Lender in the
same type of funds that Administrative Agent received at its address specified
herein or at any Lending Installation specified in a notice received by
Administrative Agent from such Lender. Administrative Agent is hereby authorized
to charge the account of Borrower maintained with JPMorgan for each payment of
principal, interest and fees as it becomes due hereunder. Amounts paid to or
held by the Administrative Agent for the payment of Loans shall not be deemed
paid to a Lender until the Business Day that such amounts are received by such
Lender. If amounts are received by the Administrative Agent from the Borrower
prior to the applicable times stated herein and the Administrative Agent fails
to make a Lender's portion of such amount available to such Lender by close of
business on such Business Day, the Borrower shall have no obligation to pay any
further interest on such payment and the Administrative Agent shall pay to such
Lender interest on such payment to the date paid to such Lender by the
Administrative Agent at a rate per annum equal to the then current Federal Funds
Effective Rate.
Section 2.13. Default. Notwithstanding the foregoing, during the
continuance of a Monetary Default or an Event of Default, Borrower shall not
have the right to request a LIBOR Advance, select a new LIBOR Interest Period
for an existing ratable LIBOR Advance or convert any Adjusted Alternate Base
Rate Advance to a ratable LIBOR Advance. During the continuance of a Monetary
Default or an Event of Default, at the election of the Required Lenders, by
notice to Borrower, outstanding Advances shall bear interest at the applicable
Default Rates until such Monetary Default or Event of Default ceases to exist or
the Obligations are paid in full.
Section 2.14. Lending Installations. Each Lender may book its Advances at
any Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or telex
notice to the Administrative Agent and Borrower, designate a Lending
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Installation through which Advances will be made by it and for whose account
payments are to be made.
Section 2.15. Non Receipt of Funds by Administrative Agent. Unless
Borrower or a Lender, as the case may be, notifies Administrative Agent prior to
the date on which it is scheduled to make payment to Administrative Agent of (i)
in the case of a Lender, an Advance, or (ii) in the case of Borrower, a payment
of principal, interest or fees to the Administrative Agent for the account of
the Lenders, that it does not intend to make such payment, Administrative Agent
may assume that such payment has been made. Administrative Agent may, but shall
not be obligated to, make the amount of such payment available to the intended
recipient in reliance upon such assumption. If such Lender or Borrower, as the
case may be, has not in fact made such payment to Administrative Agent, the
recipient of such payment shall, on demand by Administrative Agent, repay to
Administrative Agent the amount so made available together with interest thereon
in respect of each day during the period commencing on the date such amount was
so made available by Administrative Agent until the date Administrative Agent
recovers such amount at a rate per annum equal to (i) in the case of payment by
a Lender, the Federal Funds Effective Rate (as determined by Administrative
Agent) for such day or (ii) in the case of payment by Borrower, the interest
rate applicable to the relevant Advance.
Section 2.16. Swingline Loans. In addition to the other options available
to Borrower hereunder, up to $10,000,000 of the Swingline Commitment shall be
available for Swingline Loans subject to the following terms and conditions.
Swingline Loans shall be made available for same day borrowings provided that
notice is given in accordance with Section 2.11 hereof. All Swingline Loans
shall bear interest at the Adjusted Alternate Base Rate and shall be deemed to
be Adjusted Alternate Base Rate Advances. In no event shall the Swingline Lender
be required to fund a Swingline Loan if it would increase the total aggregate
outstanding Loans by Swingline Lender hereunder plus its Percentage of Facility
Letter of Credit Obligations to an amount in excess of such Lender's Commitment.
No Swingline Loan may be made to repay a Swingline Loan, but Borrower may repay
Swingline Loans from subsequent pro rata Advances hereunder. If any Swingline
Loan is not so repaid, upon request of the Swingline Lender made to all the
Lenders, which request must be given not later than the fifth (5th) Business Day
after such a Swingline Loan was made, each Lender irrevocably agrees to purchase
its Percentage of any Swingline Loan made by the Swingline Lender regardless of
whether the conditions for disbursement are satisfied at the time of such
purchase, including the existence of an Event of Default hereunder provided that
Swingline Lender did not have knowledge of such Event of Default at the time the
Swingline Loan was made and provided further that no Lender shall be required to
have total outstanding Loans plus its Percentage of Facility Letters of Credit
exceed its Commitment. Such purchase shall take place on the date of the request
by Swingline Lender so long as such request is made by noon (Chicago time),
otherwise on the Business Day following such request. All requests for purchase
shall be in writing. From and after the date it is so purchased, each such
Swingline Loan shall, to the extent purchased, (i) be treated as a Loan made by
the purchasing Lenders and not by the selling Lender for all purposes under this
Agreement and the payment of the purchase price by a Lender shall be deemed to
be the making of a Loan by such Lender and shall constitute outstanding
principal under such Lender's Note, and (ii) shall no longer be considered a
Swingline Loan except that all interest accruing on or attributable to such
Swingline Loan for the period prior to the date of such purchase shall be paid
when due by the Borrower to the Administrative Agent for the benefit of the
Swingline Lender and all such amounts accruing on or attributable to such Loans
for the period from and after the
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date of such purchase shall be paid when due by the Borrower to the
Administrative Agent for the benefit of the purchasing Lenders. If prior to
purchasing its Percentage of a Swingline Loan one of the events described in
Section 10.10 shall have occurred and such event prevents the consummation of
the purchase contemplated by preceding provisions, each Lender will purchase an
undivided participating interest in the outstanding Swingline Loan in an amount
equal to its Percentage of such Swingline Loan. From and after the date of each
Lender's purchase of its participating interest in a Swingline Loan, if the
Swingline Lender receives any payment on account thereof, the Swingline Lender
will distribute to such Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's participating interest was outstanding and
funded); provided, however, that in the event that such payment was received by
the Swingline Lender and is required to be returned to the Borrower, each Lender
will return to the Swingline Lender any portion thereof previously distributed
by the Swingline Lender to it. If any Lender fails to so purchase its Percentage
of any Swingline Loan, such Lender shall be deemed to be a Defaulting Lender
hereunder.
Section 2.17. Voluntary Reduction of Aggregate Commitment Amount. Upon at
least five (5) days prior irrevocable written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent, Borrower shall have
the right, without premium or penalty, to terminate the Aggregate Commitment in
whole or in part provided that (a) Borrower may not reduce the Aggregate
Commitment below the Allocated Facility Amount at the time of such requested
reduction, and (b) any such partial termination shall be in the minimum
aggregate amount of Two Million Dollars (U.S. $2,000,000) or any integral
multiple of Two Million Dollars (U.S. $2,000,000) in excess thereof. Any partial
termination of the Aggregate Commitment shall be applied pro rata to reduce each
Lender's Commitment, including, unless otherwise agreed in writing by the
Swingline Lender, to reduce the Swingline Commitment by a percentage equal to
the percentage reduction in the Aggregate Commitment.
Section 2.18. Increase in Aggregate Commitment. The Borrower shall also
have the right from time to time to increase the Aggregate Commitment up to a
maximum of $175,000,000 by either adding new entities as Lenders (subject to the
Administrative Agent's prior written approval of the identity of such new
entities) or obtaining the agreement, which shall be at such Lender's or
Lenders' sole discretion, of one or more of the then current Lenders to increase
its or their Commitments. Such increases shall be evidenced by the execution and
delivery of an Amendment Regarding Increase in the form of Exhibit L attached
hereto by the Borrower, the Administrative Agent and the new bank or existing
Lender providing such additional Commitment, a copy of which shall be forwarded
to each Lender by the Administrative Agent promptly after execution thereof. On
the effective date of each such increase in the Aggregate Commitment, the
Borrower and the Administrative Agent shall cause the new or existing Lenders
providing such increase, by either funding more than its or their Percentage of
new ratable Advances made on such date or purchasing shares of outstanding
ratable Loans held by the other Lenders or a combination thereof, to hold its or
their Percentage of all ratable Advances outstanding at the close of business on
such day. The Lenders agree to cooperate in any required sale and purchase of
outstanding ratable Advances to achieve such result. In no event shall the
Aggregate Commitment exceed $175,000,000 without the approval of all of the
Lenders.
Section 2.19. Optional Prepayments; Mandatory Prepayments; Release of
Properties.
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(a) The Borrower may, upon at least one (1) Business Day's notice to
the Administrative Agent, prepay the Advances, which notice shall specify the
date and amount of prepayment and whether the prepayment is of Adjusted
Alternate Base Rate Advances, LIBOR Advances, Swingline Loans or a combination
thereof, and if a combination thereof, the amount allocable to each; provided,
however, that (i) any partial prepayment under this Subsection shall be in an
amount not less than $1,000,000 or a whole multiple of $100,000 in excess
thereof; (ii) any LIBOR Advance prepaid on any day other than the last day of
the applicable LIBOR Interest Period must be accompanied by any amounts payable
pursuant to Section 4.4; and (iii) each prepayment under this subsection shall
include all interest accrued on the amount of principal prepaid through the date
of prepayment. Upon receipt of any such notice the Administrative Agent shall
promptly notify each Lender thereof. If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified therein,
together with any amounts payable pursuant to Section 4.4.
(b) If on any Business Day the Allocated Facility Amount exceeds the
then-current Borrowing Base Availability or the then current Aggregate
Commitment, then, without notice or demand, the Borrower shall make a mandatory
prepayment of the Loans in an amount equal to such excess no later than thirty
days following such Business Day. The failure of the Borrower make any
prepayment as required under this subsection shall constitute an Event of
Default under this Agreement. Each prepayment required to be made under this
subsection shall include all interest accrued on the amount of principal prepaid
through the date of prepayment and any amounts payable pursuant to Section 4.4.
Provided no Default or Event of Default has occurred and is continuing on the
date that the Borrower shall make a mandatory prepayment pursuant to this
subsection, the Borrower shall have the right to direct whether such prepayment
shall be of Adjusted Alternate Base Rate Advances, LIBOR Advances, Swingline
Loans or a combination thereof, and, if a combination thereof, the amount
allocable to each.
(c) The Borrower shall have the right at any time and from time to
time, on five (5) Business Days prior written notice to the Administrative
Agent, to obtain a release of any Collateral Pool Asset from the applicable
Mortgage by repaying on the date of such release such amount as may be required
for it to provide the Compliance Certificate referenced below taking into
account the release, provided (i) no Default or Event of Default has occurred
and is continuing or shall occur upon the release of such Collateral Pool Asset
and (ii) Borrower has provided a Compliance Certificate in the form of Exhibit I
hereto signed by a Qualified Officer of the Operating Partnership and Equity
Inns certifying to Borrower's continued compliance with all of the financial and
other material covenants under the Loan Documents after the removal of such
Collateral Pool Asset and, to the extent necessary, repayment of any Advances.
Section 2.20. Procedures for Addition of Collateral Pool Assets.
(a) The Borrower may propose to include additional Properties as
Collateral Pool Assets by sending written proposals for inclusion to the
Administrative Agent along with (i) the items listed on Schedule 2, (ii) a
request for Administrative Agent to order an Appraisal of the proposed
additional Property and the other items, such as additional Loan Documents,
needed to finalize the addition of such Property to the Collateral Pool Assets
as shown on Schedule 3, (iii) evidence that the qualifications required under
the definition of "Eligible Property" are met, (iv) a request that the Required
Lenders evaluate and approve the Appraisal and Appraised Value of such Property
(applicable for all Properties) and (v) that the Required
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Lenders evaluate and approve the Property for inclusion in the Collateral
(applicable if (A) the Appraised Value of such Property, when combined with the
aggregate Appraised Values of all other Properties added to the Collateral after
the date of this Agreement pursuant to this Section, is greater than
$75,000,000, or (B) the interest of the Owner of such Property is the tenant's
interest under a ground lease or any other estate less than fee simple title).
Items (i)-(iii) above shall be immediately forwarded to the Lenders by the
Administrative Agent if their approval is required under item (iv).
Administrative Agent (and the Lenders, as the case may be) shall endeavor to
utilize all of the due diligence reports obtained by Borrower from third party
providers and certified to the Lenders by the third party providers and not
require new reports (except for the Appraisals), but the Administrative Agent
and the Lenders reserve the right to require independent reports if the
Borrower's report was prepared by a third-party provider not reasonably
satisfactory or if the Administrative Agent or the Lenders in good faith believe
the report furnished contains an inaccuracy or is not current or is incomplete
in any material respect. If all items required by Schedule 2 and the preceding
sentence accompany or precede the written proposal, the written proposal shall
so indicate. If all items required by Schedule 2 do not accompany or precede the
written proposal, the Borrower shall accompany the last item required by
Schedule 2 with a letter notifying the Administrative Agent that it has
completed delivery of all items required by Schedule 2. The relevant time
periods for acceptance or rejection by the Administrative Agent and/or the
Required Lenders shall commence upon the later of (1) receipt of the completed
Appraisal by both the Administrative Agent and the Lenders and (2) receipt by
the Administrative Agent of the proposal and all items required by Schedule 2.
When both items (1) and (2) above have been delivered, the Administrative Agent
shall immediately notify Borrower and the relevant time periods for acceptance
or rejection shall commence. For purposes of this Section 2.20, Borrower may
begin the process of including an additional Collateral Pool Asset if Borrower
has a binding contract to purchase such Property provided that Borrower shall
have consummated the purchase of such Property on or before the date such
Property is included in the Collateral.
(b) The Administrative Agent shall have fifteen (15) Business Days
after the Administrative Agent has actually received the completed Appraisal as
well as Borrower's proposal and all items set forth in Schedule 2 with respect
to a proposed Collateral Pool Asset pursuant to this Section to notify the
Borrower in writing as to whether the proposed Collateral Pool Asset is an
Eligible Property that is satisfactory to the Administrative Agent pursuant to
Section 2.20(a) above. The failure of the Administrative Agent to respond to the
Borrower's request within such fifteen Business Day period shall be deemed to be
a denial that such proposed Collateral Pool Asset qualifies as an Eligible
Property that is satisfactory to the Administrative Agent. The Lenders shall
have fifteen (15) Business Days after they have actually received the completed
Appraisal and other documents to which they are entitled pursuant to Section
2.20(a) above (it being acknowledged that this period will run substantially
concurrently with Administrative Agent's review period in light of
Administrative Agent's obligation under Section 2.20(a) to immediately forward
those items to the Lenders) to notify the Administrative Agent (who shall notify
the Borrower after all responses from the Lenders are received or deemed
received) as to (i) whether the Appraisal and Appraised Value are satisfactory,
or (ii) whether the Appraisal and Appraised Value are satisfactory and whether
the proposed Eligible Property otherwise is approved as a Collateral Pool Asset,
if the Required Lenders' approval is required as to the latter pursuant to
Section 2.20(a) above. The failure of any Lender to respond to the Borrower's
request within such fifteen Business Day period shall be deemed to be an
approval of the Appraisal and consent to the inclusion of such Eligible
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Property in the Collateral. If the proposed Collateral Pool Asset is deemed by
the Administrative Agent to be an Eligible Property and is approved by the
Administrative Agent in the manner aforesaid, and the Appraisal and Appraised
Value are approved (or deemed approved) by the Required Lenders, that Property
shall be automatically approved for inclusion in the Collateral without the need
for any further approval by the other Lenders. If the proposed Collateral Pool
Asset is an Eligible Property but was not approved by the Administrative Agent,
Borrower may by written notice to the Administrative Agent request that it
nevertheless be included in the Collateral pursuant to the procedure set forth
in Section 2.20(c). Upon the approval by the Administrative Agent (and the
Required Lenders, if required) for inclusion of an Eligible Property in the
Collateral and the satisfaction of all requirements listed in Schedule 3 with
respect thereto, such Eligible Property shall be added to the Collateral as a
Collateral Pool Asset. The Administrative Agent shall supply, at the written
request of any Lender, copies of any of the documents described on Schedule 2
and 3 to such Lender.
(c) With respect to any Property requested to be included as a
Collateral Pool Asset which does not qualify under Section 2.20(b) due to the
Administrative Agent's failure to approve such Property, the Borrower may
request that such Property be included as a Collateral Pool Asset
notwithstanding such failure, by written notice to the Administrative Agent to
be forwarded to the Lenders. Such proposed Collateral Pool Asset shall be
included if and only if (i) such Property qualifies in all respects as an
Eligible Property, and (ii) the Required Lenders in their sole discretion
approve the Borrower's request that such proposed Collateral Pool Asset be
included. Lenders shall respond to the Administrative Agent and the failure of
any Lender to respond in writing to the Borrower's request within fifteen (15)
Business Days of receipt of the Borrower's request for such Property to be
included in the Collateral, together with delivery of such of the items set
forth in Schedule 2 as a Lender may request, shall be deemed to be approval by
such Lender of the Borrower's request to include such Property in the
Collateral. The Administrative Agent shall promptly notify the Borrower in
writing if the Required Lenders approve the Borrower's request for such Eligible
Property to be included in the Collateral.
Section 2.21. Application of Moneys Received. All moneys collected or
received by the Administrative Agent on account of the Facility directly or
indirectly, shall be applied in the following order of priority:
(i) to the payment of all reasonable costs incurred in the
collection of such moneys of which the Administrative Agent shall have
given notice to the Borrower;
(ii) to the reimbursement of any yield protection due to any
of the Lenders in accordance with Section 4.1;
(iii) to the payment of any fee due pursuant to Section 3.8(b)
in connection with the issuance of a Facility Letter of Credit to the
Issuing Bank, to the payment of the Commitment Fee and Facility Letter of
Credit Fee to the Lenders, if then due, and to the payment of all fees to
the Administrative Agent;
(iv) to payment of the full amount of interest and principal
on the Swingline Loans (provided that if Swingline Lender has not
requested the other Lenders to purchase their applicable Percentages of
the any outstanding Swingline Loans within twenty (20) Business Days
following a Default, then principal and interest due on such
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Swingline Loans shall be of equal priority with principal and interest due
in connection with other Loans);
(v) first to interest until paid in full and then to principal
for all Lenders (other than Defaulting Lenders) in accordance with the
respective Percentages of the Lenders;
(vi) any other sums due to the Administrative Agent or any
Lender under any of the Loan Documents; and
(vii) to the payment of any sums due to each Defaulting Lender
as their respective Percentages appear (provided that Administrative Agent
shall have the right to set-off against such sums any amounts due from
such Defaulting Lender).
Section 2.22. Extension of Maturity Date. Borrower shall have one (1)
option to extend the Maturity Date for a period of one year, upon satisfaction
of the following conditions precedent:
(a) Borrower shall provide Administrative Agent with written notice
of Borrower's intent to exercise such extension option not more than ninety (90)
and not less than thirty (30) days prior to the existing Maturity Date;
(b) As of the date of Borrower's delivery of notice of its intent to
exercise the extension option, and as of the Maturity Date, no Default or Event
of Default shall have occurred and be continuing, and Borrower shall so certify
in writing; and
(c) On or before the original Maturity Date, Borrower shall pay to
Administrative Agent for the benefit of the Lenders an extension fee in an
amount equal to 0.20% of the Aggregate Commitment.
Article III.
THE LETTER OF CREDIT SUBFACILITY
Section 3.1. Obligation to Issue. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of the
Borrower herein set forth, the Issuing Bank hereby agrees to issue for the
account of either of the entities comprising the Borrower, one or more Facility
Letters of Credit in accordance with this Article III, from time to time during
the period commencing on the Agreement Effective Date and ending on a date one
Business Day prior to the Maturity Date.
Section 3.2. Types and Amounts. The Issuing Bank shall not have any
obligation to:
(i) issue any Facility Letter of Credit if the aggregate
maximum amount then available for drawing under Letters of Credit issued
by such Issuing Bank, after giving effect to the Facility Letter of Credit
requested hereunder, shall exceed any limit imposed by law or regulation
upon such Issuing Bank;
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(ii) issue any Facility Letter of Credit if, after giving
effect thereto, (1) the then applicable Allocated Facility Amount would
exceed the then current Aggregate Commitment, (2) the then applicable
Allocated Facility Amount would exceed the then current Borrowing Base
Availability, or (3) the Facility Letter of Credit Obligations would
exceed the Facility Letter of Credit Sublimit; or
(iii) issue any Facility Letter of Credit having an expiration
date, or containing automatic extension provision to extend such date, to
a date which is a Business Day immediately preceding the Maturity Date.
Section 3.3. Conditions. In addition to being subject to the satisfaction
of the conditions contained in Article V hereof, the obligation of the Issuing
Bank to issue any Facility Letter of Credit is subject to the satisfaction in
full of the following conditions:
(i) the Borrower shall have delivered to the Issuing Bank at
such times and in such manner as the Issuing Bank may reasonably prescribe
such documents and materials as may be reasonably required pursuant to the
terms of the proposed Facility Letter of Credit (it being understood that
if any inconsistency exists between such documents and the Loan Documents,
the terms of the Loan Documents shall control) and the proposed Facility
Letter of Credit shall be reasonably satisfactory to the Issuing Bank as
to form and content;
(ii) as of the date of issuance, no order, judgment or decree
of any court, arbitrator or governmental authority shall purport by its
terms to enjoin or restrain the Issuing Bank from issuing the requested
Facility Letter of Credit and no law, rule or regulation applicable to the
Issuing Bank and no request or directive (whether or not having the force
of law) from any governmental authority with jurisdiction over the Issuing
Bank shall prohibit or request that the Issuing Bank refrain from the
issuance of Letters of Credit generally or the issuance of the requested
Facility Letter or Credit in particular; and
(iii) there shall not exist any Default or Event of Default.
Section 3.4. Procedure for Issuance of Facility Letters of Credit.
(a) Borrower shall give the Issuing Bank and the Administrative
Agent at least three (3) Business Days' prior written notice of any requested
issuance of a Facility Letter of Credit under this Agreement (a "Letter of
Credit Request"), a copy of which shall be sent immediately to all Lenders
(except that, in lieu of such written notice, the Borrower may give the Issuing
Bank and the Administrative Agent telephonic notice of such request if confirmed
in writing by delivery to the Issuing Bank and the Administrative Agent (i)
immediately (A) of a telecopy of the written notice required hereunder which has
been signed by an authorized officer, or (B) of a telex containing all
information required to be contained in such written notice and (ii) promptly
(but in no event later than the requested date of issuance) of the written
notice required hereunder containing the original signature of an authorized
officer); such notice shall be irrevocable and shall specify:
(1) the stated amount of the Facility Letter of Credit requested
(which stated amount shall not be less than $50,000);
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(2) the effective date (which day shall be a Business Day) of
issuance of such requested Facility Letter of Credit (the
"Issuance Date");
(3) the date on which such requested Facility Letter of Credit is
to expire;
(4) the purpose for which such Facility Letter of Credit is to be
issued;
(5) the Person for whose benefit the requested Facility Letter of
Credit is to be issued; and
(6) any special language required to be included in the Facility
Letter of Credit.
At the time such request is made, the Borrower shall also provide the
Administrative Agent and the Issuing Bank with a copy of the form of the
Facility Letter of Credit that the Borrower is requesting be issued. Such
notice, to be effective, must be received by such Issuing Bank and the
Administrative Agent not later than 2:00 p.m. (Chicago time) on the last
Business Day on which notice can be given under this Section 3.4(a).
(b) Subject to the terms and conditions of this Article III and
provided that the applicable conditions set forth in Article V hereof have been
satisfied, the Issuing Bank shall, on the Issuance Date, issue a Facility Letter
of Credit on behalf of the Borrower in accordance with the Letter of Credit
Request and the Issuing Bank's usual and customary business practices unless the
Issuing Bank has actually received (i) written notice from the Borrower
specifically revoking the Letter of Credit Request with respect to such Facility
Letter of Credit, (ii) written notice from a Lender, which complies with the
provisions of Section 3.6(a), or (iii) written or telephonic notice from the
Administrative Agent stating that the issuance of such Facility Letter of Credit
would violate Section 3.2.
(c) The Issuing Bank shall give the Administrative Agent (who shall
promptly notify Lenders) and the Borrower written or telex notice, or telephonic
notice confirmed promptly thereafter in writing, of the issuance of a Facility
Letter of Credit (the "Issuance Notice").
(d) The Issuing Bank shall not extend or amend any Facility Letter
of Credit unless the requirements of this Section 3.4 are met as though a new
Facility Letter of Credit was being requested and issued.
Section 3.5. Reimbursement Obligations; Duties of Issuing Bank.
(a) The Issuing Bank shall promptly notify the Borrower and the
Administrative Agent (who shall promptly notify Lenders) of any draw under a
Facility Letter of Credit. Any such draw shall not be deemed to be a default
hereunder but shall constitute an Advance of the Facility in the amount of the
Reimbursement Obligation with respect to such Facility Letter of Credit and
shall bear interest from the date of the relevant drawing(s) under the pertinent
Facility Letter of Credit at a rate selected by Borrower in accordance with
Section 2.11 hereof; provided that if a Monetary Default or an Event of Default
exists at the time of any such drawing(s), then the Borrower shall reimburse the
Issuing Bank for drawings under a Facility Letter of Credit issued by the
Issuing Bank no later than the next succeeding Business Day after
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the payment by the Issuing Bank and until repaid such Reimbursement Obligation
shall bear interest at the Default Rate.
(b) Any action taken or omitted to be taken by the Issuing Bank
under or in connection with any Facility Letter of Credit, if taken or omitted
in the absence of willful misconduct or gross negligence, shall not put the
Issuing Bank under any resulting liability to any Lender or, provided that such
Issuing Bank has complied with the procedures specified in Section 3.4 and such
Lender has not given a notice contemplated by Section 3.6(a) that continues in
full force and effect, relieve that Lender of its obligations hereunder to the
Issuing Bank. In determining whether to pay under any Facility Letter of Credit,
the Issuing Bank shall have no obligation relative to the Lenders other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered in compliance, and that they appear to comply on
their face, with the requirements of such Letter of Credit.
Section 3.6. Participation.
(a) Immediately upon issuance by the Issuing Bank of any Facility
Letter of Credit in accordance with the procedures set forth in Section 3.4,
each Lender shall be deemed to have irrevocably and unconditionally purchased
and received from the Issuing Bank, without recourse, representation or
warranty, an undivided interest and participation equal to such Lender's
Percentage in such Facility Letter of Credit (including, without limitation, all
obligations of the Borrower with respect thereto) and all related rights
hereunder and under the Guaranty and other Loan Documents; provided that a
Letter of Credit issued by the Issuing Bank shall not be deemed to be a Facility
Letter of Credit for purposes of this Section 3.6 if the Issuing Bank shall have
received written notice from any Lender on or before the Business Day prior to
the date of its issuance of such Letter of Credit that one or more of the
conditions contained in Section 5.2 is not then satisfied, and in the event the
Issuing Bank receives such a notice it shall have no further obligation to issue
any Facility Letter of Credit until such notice is withdrawn by that Lender or
the Issuing Bank receives a notice from the Administrative Agent that such
condition has been effectively waived in accordance with the provisions of this
Agreement. Each Lender's obligation to make further Loans to Borrower (other
than any payments such Lender is required to make under subparagraph (b) below)
or to purchase an interest from the Issuing Bank in any subsequent letters of
credit issued by the Issuing Bank on behalf of Borrower shall be reduced by such
Lender's Percentage of the undrawn portion of each Facility Letter of Credit
outstanding.
(b) In the event that the Issuing Bank makes any payment under any
Facility Letter of Credit and the Borrower shall not have repaid such amount to
the Issuing Bank pursuant to Section 3.7 hereof, the Issuing Bank shall promptly
notify the Administrative Agent, which shall promptly notify each Lender of such
failure, and each Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of the Issuing Bank the amount of such
Lender's Percentage of the unreimbursed amount of such payment, and the
Administrative Agent shall promptly pay such amount to the Issuing Bank.
Lender's payments of its Percentage of such Reimbursement Obligation as
aforesaid shall be deemed to be a Loan by such Lender and shall constitute
outstanding principal under such Lender's Note. The failure of any Lender to
make available to the Administrative Agent for the account of the Issuing Bank
its Percentage of the unreimbursed amount of any such payment shall not relieve
any other Lender of its obligation hereunder to make available to the
Administrative Agent for the account
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of such Issuing Bank its Percentage of the unreimbursed amount of any payment on
the date such payment is to be made, but no Lender shall be responsible for the
failure of any other Lender to make available to the Administrative Agent its
Percentage of the unreimbursed amount of any payment on the date such payment is
to be made. Any Lender which fails to make any payment required pursuant to this
Section 3.6(b) shall be deemed to be a Defaulting Lender hereunder.
(c) Whenever the Issuing Bank receives a payment on account of a
Reimbursement Obligation, including any interest thereon, the Issuing Bank shall
promptly pay to the Administrative Agent and the Administrative Agent shall
promptly pay to each Lender which has funded its participating interest therein,
in immediately available funds, an amount equal to such Lender's Percentage
thereof.
(d) Upon the request of the Administrative Agent or any Lender, the
Issuing Bank shall furnish to such Administrative Agent or Lender copies of any
Facility Letter of Credit to which the Issuing Bank is party and such other
documentation as may reasonably be requested by the Administrative Agent or
Lender.
(e) The obligations of a Lender to make payments to the
Administrative Agent for the account of the Issuing Bank with respect to a
Facility Letter of Credit shall be absolute, unconditional and irrevocable, not
subject to any counterclaim, set off, qualification or exception whatsoever
other than a failure of any such Issuing Bank to comply with the terms of this
Agreement relating to the issuance of such Facility Letter of Credit, and such
payments shall be made in accordance with the terms and conditions of this
Agreement under all circumstances.
Section 3.7. Payment of Reimbursement Obligations.
(a) The Borrower agrees to pay to the Administrative Agent for the
account of the Issuing Bank the amount of all Advances for Reimbursement
Obligations, interest and other amounts payable to the Issuing Bank under or in
connection with any Facility Letter of Credit when due, irrespective of any
claim, set off, defense or other right which the Borrower may have at any time
against any Issuing Bank or any other Person, under all circumstances, including
without limitation any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower may have at any time against a beneficiary named
in a Facility Letter of Credit or any transferee of any Facility Letter of
Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, the Issuing Bank, any Lender, or any other Person,
whether in connection with this Agreement, any Facility Letter of Credit,
the transactions contemplated herein or any unrelated transactions
(including any underlying transactions between the Borrower and the
beneficiary named in any Facility Letter of Credit);
(iii) any draft, certificate or any other document presented
under the Facility Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect of any statement therein being
untrue or inaccurate in any respect;
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(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents; or
(v) the occurrence of any Default or Event of Default.
(b) In the event any payment by the Borrower received by the Issuing
Bank or the Administrative Agent with respect to a Facility Letter of Credit and
distributed by the Administrative Agent to the Lenders on account of their
participations is thereafter set aside, avoided or recovered from the
Administrative Agent or Issuing Bank in connection with any receivership,
liquidation, reorganization or bankruptcy proceeding, each Lender which received
such distribution shall, upon demand by the Administrative Agent, contribute
such Lender's Percentage of the amount set aside, avoided or recovered together
with interest at the rate required to be paid by the Issuing Bank or the
Administrative Agent upon the amount required to be repaid by the Issuing Bank
or the Administrative Agent.
Section 3.8. Compensation for Facility Letters of Credit.
(a) The Borrower shall pay to the Administrative Agent, for the
ratable account of the Lenders (including the Issuing Bank), based upon the
Lenders' respective Percentages, a per annum fee (the "Facility Letter of Credit
Fee") as a percentage of the face amount of each Facility Letter of Credit equal
to the LIBOR Applicable Margin in effect from time to time while such Facility
Letter of Credit is outstanding. The Facility Letter of Credit Fee relating to
any Facility Letter of Credit shall be due and payable in arrears in equal
installments on the first Business Day of each month following the issuance of
such Facility Letter of Credit and, to the extent any such fees are then due and
unpaid, on the Maturity Date or any other earlier date that the Obligations are
due and payable in full. The Administrative Agent shall promptly remit such
Facility Letter of Credit Fees, when paid, to the other Lenders in accordance
with their Percentages thereof. The Borrower shall not have any liability to any
Lender for the failure of the Administrative Agent to promptly deliver funds to
any such Lender and shall be deemed to have made all such payments on the date
the respective payment is made by the Borrower to the Administrative Agent,
provided such payment is received by the time specified in Section 2.12 hereof.
(b) The Issuing Bank also shall have the right to receive solely for
its own account an issuance fee of one eighth of one percent (0.125%) of the
face amount of each Facility Letter of Credit, payable by the Borrower on the
Issuance Date for each such Facility Letter of Credit. The Issuing Bank shall
also be entitled to receive its reasonable out of pocket costs and the Issuing
Bank's standard charges of issuing, amending and servicing Facility Letters of
Credit and processing draws thereunder.
Section 3.9. Letter of Credit Collateral Account. The Borrower hereby
agrees that it will, until the Maturity Date, maintain a special collateral
account (the "Letter of Credit Collateral Account") at the Administrative
Agent's office at the address specified pursuant to Article XV, in the name of
the Borrower but under the sole dominion and control of the Administrative
Agent, for the benefit of the Lenders, and in which the Borrower shall have no
interest other than as set forth in Section 11.1. The Letter of Credit
Collateral Account shall hold the deposits the Borrower is required to make
after an Event of Default on account of any outstanding Facility Letters of
Credit as described in Section 11.1. In addition to the foregoing,
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the Borrower hereby grants to the Administrative Agent, for the benefit of the
Lenders, a security interest in and to the Letter of Credit Collateral Account
and any funds that may hereafter be on deposit in such account, including income
earned thereon. The Lenders acknowledge and agree that the Borrower has no
obligation to fund the Letter of Credit Collateral Account unless and until so
required under Section 11.1 hereof.
Article IV.
CHANGE IN CIRCUMSTANCES
Section 4.1. Yield Protection. the adoption of or change in any law or any
governmental or quasi governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law), or any interpretation
thereof, or the compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending Installation
to any tax, duty, charge or withholding on or from payments due from
Borrower (excluding federal and state taxation of the overall net income
of any Lender or applicable Lending Installation), or changes the basis of
such taxation of payments to any Lender in respect of its Advances, its
interest in the Facility Letters of Credit or other amounts due it
hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended
by, any Lender or any applicable Lending Installation (other than reserves
and assessments taken into account in determining the interest rate
applicable to LIBOR Advances), or
(iii) imposes any other condition, and the result is to
increase the cost of any Lender or any applicable Lending Installation of
making, funding or maintaining the Loans or reduces any amount receivable
by any Lender or any applicable Lending Installation in connection with
the Loans, or requires any Lender or any applicable Lending Installation
to make any payment calculated by reference to the amount of the Loans
held, Letters of Credit issued or participated in or interest received by
it, by an amount deemed material by such Lender,
then, within fifteen (15) days of demand by such Lender, Borrower shall pay such
Lender that portion of such increased expense incurred or reduction in an amount
received which such Lender determines is attributable to making, funding and
maintaining its Advances and its Commitment.
Section 4.2. Changes in Capital Adequacy Regulations. If a Lender
determines the amount of capital required or expected to be maintained by such
Lender, any Lending Installation of such Lender or any corporate entity
controlling such Lender with respect to this Facility is increased as a result
of a Change (as defined below), then, within fifteen (15) days of demand by such
Lender, Borrower shall pay such Lender the amount necessary to compensate for
any shortfall in the rate of return on the portion of such increased capital
which such Lender determines is attributable to this Agreement, its Advances,
its interest in the Facility Letters of
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Credit, or its obligation to make Advances hereunder or participate in or issue
Facility Letters of Credit hereunder (after taking into account such Lender's
policies as to capital adequacy). "Change" means (i) any change after the date
of this Agreement in the Risk Based Capital Guidelines (as defined below) or
(ii) any adoption of or change in any other law, governmental or quasi
governmental rule, regulation, policy, guideline, interpretation, or directive
(whether or not having the force of law) after the date of this Agreement which
affects the amount of capital required or expected to be maintained by any
Lender or any Lending Installation or any corporation controlling any Lender.
"Risk Based Capital Guidelines" means (i) the risk based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards",
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
Section 4.3. Availability of LIBOR Advances. If any Lender determines that
maintenance of any of its LIBOR Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation or directive of any Governmental
Authority having jurisdiction, the Administrative Agent shall suspend by written
notice to Borrower the availability of LIBOR Advances from such Lender and
require any LIBOR Advances to be converted to Adjusted Alternate Base Rate
Advances, or if the Required Lenders determine that (i) deposits of a type or
maturity appropriate to match fund LIBOR Advances are not available, the
Administrative Agent shall suspend by written notice to Borrower the
availability of LIBOR Advances with respect to any LIBOR Advances made after the
date of any such determination, or (ii) an interest rate applicable to a LIBOR
Advance does not accurately reflect the cost of making a LIBOR Advance, and, if
for any reason whatsoever the provisions of Section 4.1 are inapplicable, the
Administrative Agent shall suspend by written notice to Borrower the
availability of LIBOR Advances with respect to any LIBOR Advances made after the
date of any such determination.
Section 4.4. Funding Indemnification. If any payment to Lenders of a
ratable LIBOR Advance occurs on a date which is not the last day of the
applicable Interest Period, whether because of acceleration, prepayment or
otherwise, or a ratable LIBOR Advance is not made on the date specified by
Borrower for any reason other than default by one or more of the Lenders,
Borrower will indemnify each Lender for any loss or cost incurred by such Lender
resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain the ratable LIBOR
Advance.
Section 4.5. Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its LIBOR Advances to reduce any liability of
Borrower to such Lender under Sections 4.1 and 4.2 or to avoid the
unavailability of a LIBOR Advance, so long as such designation is not
disadvantageous to such Lender. Each Lender shall deliver a written statement of
such Lender as to the amount due, if any, under Sections 4.1, 4.2 or 4.4 hereof.
Such written statement shall set forth in reasonable detail the calculations
upon which such Lender determined such amount and shall be final, conclusive and
binding on Borrower in the absence of manifest error. Determination of amounts
payable under such Sections in connection with a LIBOR Advance shall be
calculated as though each Lender funded its LIBOR Advance through the purchase
of a deposit of the type and maturity corresponding to the deposit used as a
reference in determining
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the Adjusted LIBOR Rate applicable to such Advance, whether in fact that is the
case or not. Unless otherwise provided herein, the amount specified in the
written statement shall be payable within ten (10) days after receipt by
Borrower of the written statement. The obligations of Borrower under Sections
4.1, 4.2 and 4.4 hereof shall survive payment of the Obligations and termination
of this Agreement. Without in any way affecting the Borrower's obligation to pay
compensation actually claimed by a Lender under this Article IV or the
restrictions on the availability of LIBOR Advances under Section 4.3, the
Borrower shall have the right to replace any Lender which has demanded such
compensation or restricted such availability provided that Borrower notifies
such Lender that it has elected to replace such Lender and notifies such Lender
and the Administrative Agent of the identity of the proposed replacement Lender
not more than six (6) months after the date of such Lender's most recent demand
for compensation under this Article IV or most recent determination under
Section 4.3. The Lender being replaced shall assign its Percentage of the
Aggregate Commitment and its rights and obligations under this Facility to the
replacement Lender in accordance with the requirements of Section 13.3 hereof
and the replacement Lender shall assume such Percentage of the Aggregate
Commitment and the related obligations under this Facility prior to the Maturity
Date to be extended, all pursuant to an assignment agreement substantially in
the form of Exhibit K hereto. The purchase by the replacement Lender shall be at
par (plus all accrued and unpaid interest and any other sums owed to such Lender
being replaced hereunder) which shall be paid to the Lender being replaced upon
the execution and delivery of the assignment.
Article V.
CONDITIONS PRECEDENT
Section 5.1. Conditions Precedent to Closing. The Lenders shall not be
required to make the initial Advance hereunder, nor shall the Issuing Bank be
required to issue the initial Facility Letter of Credit hereunder, unless (i)
the Borrower shall have paid all fees then due and payable to the Lenders, and
the Administrative Agent hereunder, (ii) all of the conditions set forth in
Section 5.2 are satisfied, and (iii) the Borrower shall have furnished to the
Administrative Agent, in form and substance satisfactory to the Administrative
Agent and their counsel and with sufficient copies for the Lenders, the
following:
(a) Certificates of Limited Partnership/Incorporation. A copy of the
Certificate of Limited Partnership for each entity comprising the Borrower and a
copy of the articles of incorporation of Equity Inns and the trust documents of
Equity Inns Trust, each certified by the appropriate Secretary of State or
equivalent state official.
(b) Agreements of Limited Partnership/Bylaws. A copy of the
Agreement of Limited Partnership for each entity comprising the Borrower and a
copy of the bylaws of each of the Guarantors, including all amendments thereto,
each certified by the Secretary or an Assistant Secretary of such entity as
being in full force and effect on the Agreement Effective Date.
(c) Good Standing and Foreign Qualification Certificates. A
certified copy of a certificate from the Secretary of State or equivalent state
official of the states where each entity comprising the Borrower and the
Guarantors are organized, dated as of the most recent practicable date, showing
the good standing or partnership qualification (if issued) of (i) each entity
comprising Borrower, and (ii) the Guarantors, and a certified copy of a
certificate from the
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Secretary of State or equivalent state official of the states where the Initial
Collateral Pool Assets are located, dated as of the most recent practicable
date, showing the qualification to transact business in said states by the
entities which own such Initial Collateral Pool Assets.
(d) Resolutions. A copy of a resolution or resolutions and adopted
by the Board of Directors of the general partner of each entity comprising the
Borrower, certified by the Secretary or an Assistant Secretary thereof as being
in full force and effect on the Agreement Effective Date, authorizing the
Advances provided for herein and the execution, delivery and performance of the
Loan Documents by such general partner to be executed and delivered by it
hereunder on behalf of itself and Borrower, together with a similar resolution
for each of the Guarantors.
(e) Incumbency Certificate. A certificate, signed by the Secretary
or an Assistant Secretary of the general partner of each entity comprising the
Borrower and dated the Agreement Effective Date, as to the incumbency, and
containing the specimen signature or signatures, of the Persons authorized to
execute and deliver the Loan Documents to be executed and delivered by it and
Borrower hereunder, together with a similar resolution for each of the
Guarantors.
(f) Loan Documents. Originals of the Loan Documents (in such
quantities as the Lenders may reasonably request), including the Mortgage
Amendments for all Initial Collateral Pool Assets, duly executed by authorized
officers of the appropriate entity.
(g) Opinion of Tennessee Counsel. A written opinion, from Tennessee
outside counsel for the Borrower and the Guarantors which counsel is reasonably
satisfactory to Administrative Agent, in form and substance acceptable to the
Administrative Agent.
(h) Opinion of Illinois Counsel. A written opinion, from Illinois
outside counsel for the Borrower and the Guarantors in form and substance
satisfactory to Administrative Agent.
(i) Opinion of Local Counsel. A written opinion from counsel in the
state where a Collateral Pool Asset is located, in form and substance
satisfactory to Administrative Agent, covering the form of Mortgage Amendment
and any material changes in local law since the time their opinion was issued
pursuant to the Existing Agreement.
(j) Financial and Related Information. The following information:
(i) A certificate, signed by an officer of the general
partners of each entity comprising the Borrower, stating that on the
Agreement Effective Date no Default or Event of Default has occurred and
is continuing and that all representations and warranties of the Borrower
contained herein are true and correct in all material respects as of the
Agreement Effective Date as and to the extent set forth herein;
(ii) The most recent financial statements of the Consolidated
Group and a certificate from a Qualified Officer of Equity Inns that no
change in the Consolidated Group's financial condition that would have a
Material Adverse Effect has occurred since December 31, 2004;
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(iii) A compliance certificate in the form attached hereto as
Exhibit I calculating the applicable status of Borrower's financial
covenants hereunder as of the Agreement Effective Date;
(iv) Written money transfer instructions, in substantially the
form of Exhibit H hereto, addressed to the Administrative Agent and signed
by a Qualified Officer, together with such other related money transfer
authorizations as the Administrative Agent may have reasonably requested;
and
(k) Other Evidence as any Lender May Require. Such other evidence as
any Lender may reasonably request to establish the compliance with the financial
covenants under this Agreement, the consummation of the transactions
contemplated hereby, the taking of all necessary actions in any proceedings in
connection herewith and compliance with the other conditions set forth in this
Agreement.
(l) Actions to Perfect Liens. The Administrative Agent shall have
received evidence in form and substance satisfactory to it that all filings,
recordings, registrations and other actions, including, without limitation the
recording of all Mortgage Amendments on all Properties included in the Initial
Collateral Pool and the filing of all UCC 1 financing statements, necessary or,
in the opinion of the Administrative Agent, desirable to perfect or continue the
Liens created by the Security Documents shall have been completed.
(m) Surveys. If there has been any new construction at a Collateral
Pool Asset since the date of the Existing Agreement, the Administrative Agent
shall have received a survey for each Property in the Initial Collateral Pool
hereunder either (i) certified to the Administrative Agent or (ii) recertified
to the Administrative Agent. For all other Properties, Borrower shall provide a
certificate of the Borrower that no material changes in the location or
configuration of the improvements on the Properties subject to the Mortgages
have occurred since the date of the initial survey, and which is in all other
respects reasonably satisfactory to the Administrative Agent.
(n) Title Insurance Policy. The Administrative Agent shall have
received in respect of each Initial Collateral Pool Asset hereunder a title
policy (or policies) or a date down endorsement to the title policy issued
pursuant to the Existing Agreement, showing no exceptions to title other than
those permitted under the Mortgages, except such as may be approved by the
Administrative Agent, naming the Administrative Agent for the benefit of the
Lenders as the insured under such policy and containing such "tie-in", revolving
credit and other endorsements as may be available in the applicable jurisdiction
and as the Administrative Agent may require. The Administrative Agent shall have
received evidence satisfactory to it that all premiums in respect of any
endorsements, and all charges for mortgage recording tax, if any, have been
paid.
(o) Flood Insurance. If any portion of any buildings located on any
Property in the Initial Collateral Pool is located in an area identified as a
special flood hazard area by the Federal Emergency Management Agency or other
applicable agency, the Administrative Agent shall have received (i) a policy of
flood insurance which (A) covers any parcel of improved real property which is
encumbered by any Mortgage and (B) is written in an amount not less than the
outstanding principal amount of the indebtedness secured by such Mortgage which
is reasonably
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allocable to such real property or the maximum limit of coverage made available
with respect to the particular type of property under the Act, whichever is
less, and (ii) confirmation that the Borrower has received the notice required
pursuant to Section 208(e)(3) of Regulation H of the Board of Governors of the
Federal Reserve System. To the extent any Property included in the Initial
Collateral Pool is not located in an area identified as a special flood hazard
area by the Federal Emergency Management Agency or other agency, the
certification of the survey of such Property to be delivered pursuant to clause
(m) above shall include confirmation of such fact.
(p) Copies of Documents. The Administrative Agent shall have
received a copy of all recorded documents with respect to the Initial Collateral
Pool Assets referred to, or listed as exceptions to title in, the title policy
or policies referred to in Section 4.1(n) and a copy, certified by such parties
as the Administrative Agent may deem appropriate, of all other documents
affecting the Properties covered by each Mortgage, including without limitation
copies of any ground leases on any of such Properties.
(q) Lien Searches. The Administrative Agent shall have received the
results of a recent search by a Person satisfactory to the Administrative Agent,
of the Uniform Commercial Code, judgment and tax lien filings which may have
been filed with respect to personal property of the Borrower, any other Loan
Party and the results of such search shall be satisfactory to the Administrative
Agent.
(r) Insurance. The Administrative Agent shall have received evidence
in form and substance satisfactory to it that all of the requirements of Section
3 of each of the Mortgages shall have been satisfied.
(s) Borrowing Notice. The Administrative Agent shall have received a
Borrowing Notice in accordance with Section 2.11 hereunder.
(t) Appraisals. The Administrative Agent shall have received current
Appraisal Summaries which shall indicate the Collateral Pool Asset Value for
each of the Initial Collateral Pool Assets.
(u) Environmental Report/Certification. If requested by
Administrative Agent because it has determined in good faith that there are
environmental questions with respect to a Collateral Pool Asset, the
Administrative Agent shall have received, at the Borrower's expense, a detailed
report and certification (or updated report and recertification) for such
Property in the Initial Collateral Pool prepared by a consultant acceptable to
Administrative Agent, which shall include, inter alia, a certification that such
consultant has obtained and examined the list of prior owners and tenants, and
has made an on site physical examination of the relevant Property and
improvements thereon, and a visual observation of the surrounding areas, and
disclosing the extent of past or present Materials of Environmental Concern
activities or the presence of Materials of Environmental Concern.
(v) Leases and Estoppels. The Administrative Agent shall have
received (i) in the case of all Initial Collateral Pool Assets which are subject
to a ground lease, estoppel letters from the ground lessor thereunder in form
and substance satisfactory to the Administrative Agent, and (ii) in the case of
all Permitted Operating Leases and tenants thereunder, (A) tenant estoppel
certificates in form and substance acceptable to the Administrative Agent, and
(B) upon
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request of the Administrative Agent current, certified financial statements of
the tenant and of any guarantor of its obligations.
(w) Subordination of Permitted Operating Leases. The Administrative
Agent shall have received fully executed copies of all Permitted Operating
Leases affecting the Initial Collateral Pool Assets and shall have, on behalf of
the Lenders, entered into subordination agreements with the tenants thereunder
substantially in the form attached hereto as Exhibit Q and made a part hereof
reasonably satisfactory to the Administrative Agent in form and substance
regarding the subordination of the Permitted Operating Leases relating to the
Initial Collateral Pool Assets.
Section 5.2. Conditions Precedent to Subsequent Advances and Issuance.
Advances after the initial Advance and issuances of Facility Letters of Credit
shall be made from time to time as requested by Borrower, and the obligation of
each Lender to make any Advance (including Swingline Loans) and of the Issuing
Bank to issue Facility Letters of Credit is subject to the following terms and
conditions:
(a) prior to each such Advance or issuance no Default or Event of
Default shall have occurred and be continuing under this Agreement or any of the
Loan Documents and, if required by Administrative Agent, Borrower shall deliver
a certificate of Borrower to such effect;
(b) The representations and warranties contained in Article VI and
VII are true and correct as of such borrowing date, Issuance Date, or date of
conversion and/or continuation as and to the extent set forth therein, except to
the extent any such representation or warranty is stated to relate solely to an
earlier date, in which case such representation or warranty shall be true and
correct on and as of such earlier date; and
(c) The following conditions of Section 5.1 shall have been and
remain satisfied as of the date of the advance: (j)(i), (j)(iii) and (j)(iv).
Subject to the last grammatical paragraphs of Article VI and VII hereof,
each Borrowing Notice, Letter of Credit Request, and Conversion/Continuation
Notice shall constitute a representation and warranty by the Borrower that the
conditions contained in Sections 5.2(a) and (b) have been satisfied.
Article VI.
REPRESENTATIONS AND WARRANTIES
Each of the entities comprising the Borrower hereby represents and
warrants that:
Section 6.1. Existence. Operating Partnership is a limited partnership
duly organized and existing under the laws of the State of Tennessee, with its
principal place of business in the State of Tennessee and EIP/WV is a limited
partnership duly organized and existing under the laws of the State of
Tennessee, with its principal place of business in the State of Tennessee and
each of the Operating Partnership and EIP/WV is duly qualified as a foreign
limited partnership, properly licensed (if required), in good standing and has
all requisite authority to conduct its business in each jurisdiction in which it
owns Properties and, except where the failure to be so
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qualified or to obtain such authority would not have a Material Adverse Effect,
in each other jurisdiction in which its business is conducted. Each of the
Subsidiaries of the entities comprising the Borrower is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and has all requisite authority to conduct its business in each jurisdiction in
which it owns Property, and except where the failure to be so qualified or to
obtain such authority would not have a Material Adverse Effect, in each other
jurisdiction in which it conducts business.
Section 6.2. Corporate/Partnership Powers. The execution, delivery and
performance of the Loan Documents required to be delivered by Borrower hereunder
are within the partnership authority of such entities and the corporate or trust
powers of the general partners of such entities, have been duly authorized by
all requisite action, and are not in conflict with the terms of any
organizational instruments of such entity, or any instrument or agreement to
which any of the entities comprising the Borrower is a party or by which either
of the entities comprising the Borrower or any of their respective assets may be
bound or affected.
Section 6.3. Power of Officers. The officers of the general partner of
each of the entities comprising the Borrower executing the Loan Documents
required to be delivered by such entities hereunder have been duly elected or
appointed and were fully authorized to execute the same at the time each such
agreement, certificate or instrument was executed.
Section 6.4. Government and Other Approvals. No approval, consent,
exemption or other action by, or notice to or filing with, any governmental
authority is necessary in connection with the execution, delivery or performance
of the Loan Documents required hereunder.
Section 6.5. Solvency.
(i) Immediately after the Agreement Effective Date and
immediately following the making of each Loan and after giving effect to
the application of the proceeds of such Loans, (a) the fair value of the
assets of each entity comprising the Borrower and its Subsidiaries on a
consolidated basis, at a fair valuation, will exceed the debts and
liabilities, subordinated, contingent or otherwise, of the such entity and
its Subsidiaries on a consolidated basis; (b) the present fair saleable
value of the Properties of each entity comprising the Borrower and its
Subsidiaries on a consolidated basis will be greater than the amount that
will be required to pay the probable liability of such entity and its
Subsidiaries on a consolidated basis on their debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) each entity comprising the Borrower and
its Subsidiaries on a consolidated basis will be able to pay their debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each entity comprising
the Borrower and its Subsidiaries on a consolidated basis will not have
unreasonably small capital with which to conduct the businesses in which
they are engaged as such businesses are now conducted and are proposed to
be conducted after the date hereof.
(ii) Neither of the entities comprising the Borrower intends
to, or to permit any of its Subsidiaries to, incur debts beyond its
ability to pay such debts as they mature, taking into account the timing
of and amounts of cash to be received by it or any
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such Subsidiary and the timing of the amounts of cash to be payable on or
in respect of its Indebtedness or the Indebtedness of any such Subsidiary.
Section 6.6. Compliance With Laws. There is no judgment, decree or order
or any law, rule or regulation of any court or governmental authority binding on
the entities comprising the Borrower or any of their Subsidiaries which would be
contravened by the execution, delivery or performance of the Loan Documents
required hereunder.
Section 6.7. Enforceability of Agreement. This Agreement is the legal,
valid and binding agreement of each of the entities comprising the Borrower, and
the Notes when executed and delivered will be the legal, valid and binding
obligations of such entities, enforceable against such entities in accordance
with their respective terms, and the Loan Documents required hereunder, when
executed and delivered, will be similarly legal, valid, binding and enforceable
except to the extent that such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting the
rights of creditors generally.
Section 6.8. Title to Property. To the best of Borrower's knowledge after
due inquiry, the Consolidated Group and the Investment Affiliates have good and
marketable title to their Properties and assets reflected in the financial
statements as owned by them free and clear of Liens except for the Permitted
Liens. The execution, delivery or performance of the Loan Documents required to
be delivered by the Borrower hereunder will not result in the creation of any
Lien on the Properties. No consent to the transactions contemplated hereunder is
required from any ground lessor or mortgagee or beneficiary under a deed of
trust or any other party except as has been delivered to the Lenders.
Section 6.9. Litigation. There are no suits, arbitrations, claims,
disputes or other proceedings (including, without limitation, any civil,
criminal, administrative or environmental proceedings), pending or, to the best
of Borrower's knowledge, threatened against or affecting the Borrower or any of
their Properties, the adverse determination of which individually or in the
aggregate would have a Material Adverse Effect on the Borrower and/or any of
their Properties and/or would cause a Material Adverse Financial Change of
Borrower or materially impair the Borrower's ability to perform its obligations
hereunder or under any instrument or agreement required hereunder, except as
disclosed on Schedule 6.9 hereto, or otherwise disclosed to Lenders in
accordance with the terms hereof.
Section 6.10. Events of Default. No Default or Event of Default has
occurred and is continuing or would result from the incurring of obligations by
the Borrower under any of the Loan Documents or any other document to which
Borrower is a party.
Section 6.11. Investment Company Act of 1940. Borrower is not and will by
such acts as may be necessary continue not to be, an investment company within
the meaning of the Investment Company Act of 1940.
Section 6.12. Public Utility Holding Company Act. The Borrower is not a
"holding company" or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company," or of a "subsidiary company" of a "holding
company," within the definitions of the Public Utility Holding Company Act of
1935, as amended.
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Section 6.13. Regulation U. The proceeds of the Advances will not be used,
directly or indirectly, to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock.
Section 6.14. No Material Adverse Financial Change. To the best knowledge
of Borrower, there has been no Material Adverse Financial Change in the
condition of Borrower since the date of the financial and/or operating
statements most recently submitted to the Lenders.
Section 6.15. Financial Information. All financial statements furnished to
the Lenders by or at the direction of the Borrower and all other financial
information and data furnished by the Borrower to the Lenders are complete and
correct in all material respects as of the date thereof, and such financial
statements have been prepared in accordance with GAAP and fairly present the
consolidated financial condition and results of operations of the Borrower as of
such date. The Borrower has no contingent obligations, liabilities for taxes or
other outstanding financial obligations which are material in the aggregate,
except as disclosed in such statements, information and data.
Section 6.16. [Intentionally Omitted].
Section 6.17. ERISA. (i) Borrower is not an entity deemed to hold "plan
assets" within the meaning of ERISA or any regulations promulgated thereunder of
an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject
to Title I of ERISA or any plan within the meaning of Section 4975 of the Code,
and (ii) the execution of this Agreement and the transactions contemplated
hereunder do not give rise to a prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code.
Section 6.18. Taxes. All required tax returns have been filed by Borrower
with the appropriate authorities except to the extent that extensions of time to
file have been requested, granted and have not expired or except to the extent
such taxes are being contested in good faith and for which adequate reserves, in
accordance with GAAP, are being maintained.
Section 6.19. Environmental Matters. Except as disclosed in Schedule 6.19,
each of the following representations and warranties is true and correct in all
material respects except to the extent that the facts and circumstances giving
rise to any such failure to be so true and correct, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:
(i) To the knowledge of the Borrower, the Properties of
Borrower, its Subsidiaries, and Investment Affiliates do not contain any
Materials of Environmental Concern in amounts or concentrations which
constitute a violation of, or could reasonably give rise to liability
under, Environmental Laws.
(ii) Borrower has not received any written notice alleging
that any or all of the Properties of Borrower and its Subsidiaries and
Investment Affiliates and all operations at the Properties are not in
compliance with all applicable Environmental Laws. Further, Borrower has
not received any written notice alleging the existence of any
contamination at or under such Properties in amounts or concentrations
which constitute a violation of any Environmental
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Law, or any violation of any Environmental Law with respect to such
Properties for which Borrower, its Subsidiaries or Investment Affiliates
is or could be liable.
(iii) Neither Borrower nor any of its Subsidiaries or
Investment Affiliates has received any written notice of non-compliance,
liability or potential liability regarding Environmental Laws with regard
to any of the Properties, nor does it have knowledge that any such notice
will be received or is being threatened.
(iv) To the knowledge of Borrower during the ownership of the
Properties by any or all of Borrower, its Subsidiaries and Investment
Affiliates, Materials of Environmental Concern have not been transported
or disposed of from the Properties of Borrower and its Subsidiaries and
Investment Affiliates in violation of, or in a manner or to a location
which could reasonably give rise to liability of Borrower, any Subsidiary,
or any Investment Affiliate under, Environmental Laws, nor during the
ownership of the Properties by any or all of Borrower, its Subsidiaries
and Investment Affiliates have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of such
Properties in violation of, or in a manner that could give rise to
liability of Borrower, any Subsidiary or any Investment Affiliate under,
any applicable Environmental Laws.
(v) No judicial proceedings or governmental or administrative
action is pending, or, to the knowledge of Borrower, threatened, under any
Environmental Law to which Borrower, any of its Subsidiaries, or any
Investment Affiliate, is named as a party with respect to the Properties
of such entity, nor are there any consent decrees or other decrees,
consent orders, administrative order or other orders, or other
administrative or judicial requirements outstanding under any
Environmental Law with respect to such Properties for which Borrower, its
Subsidiaries, or any Investment Affiliate is or could be liable.
(vi) To the knowledge of Borrower during the ownership of the
Properties by any or all of Borrower, its Subsidiaries and Investment
Affiliates, there has been no release or threat of release of Materials of
Environmental Concern at or from the Properties of Borrower and its
Subsidiaries and Investment Affiliates, or arising from or related to the
operations of such entity in connection with the Properties in violation
of or in amounts or in a manner that could give rise to liability under
Environmental Laws.
Section 6.20. Insurance. Borrower has obtained or cause to be obtained the
insurance which Borrower is required to furnish to Lenders under Section 3 of
each of the Mortgages.
Section 6.21. No Brokers. Borrower has dealt with no brokers in connection
with this Facility, and no brokerage fees or commissions are payable by or to
any Person in connection with this Agreement or the Advances. Lenders shall not
be responsible for the payment of any fees or commissions to any broker and
Borrower shall indemnify, defend and hold Lenders harmless from and against any
claims, liabilities, obligations, damages, costs and expenses (including
reasonable attorneys' fees and disbursements) made against or incurred by
Lenders as a result of claims made or actions instituted by any broker or Person
claiming by, through or under Borrower in connection with the Facility.
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Section 6.22. No Violation of Usury Laws. No aspect of any of the
transactions contemplated herein violate or will violate any usury laws or laws
regarding the validity of agreements to pay interest in effect on the date
hereof.
Section 6.23. Not a Foreign Person. Borrower is not a "foreign person"
within the meaning of Section 1445 or 7701 of the Internal Revenue Code.
Section 6.24. No Trade Name. Except as otherwise set forth on Schedule
6.24 attached hereto, Borrower does not use any trade name and has not and does
not do business under any name other than their actual names set forth herein.
The principal place of business of Borrower is as stated in the recitals hereto.
Section 6.25. Subsidiaries. Schedule 6.25 hereto contains an accurate list
of all of the presently existing Subsidiaries of Borrower, setting forth their
respective jurisdictions of formation, the percentage of their respective
Capital Stock owned by it or its Subsidiaries and the Properties owned by them.
All of the issued and outstanding shares of Capital Stock of such Subsidiaries
have been duly authorized and issued and are fully paid and non assessable.
Section 6.26. Security Interests. At all times after execution and
delivery of the Security Documents by the Loan Parties thereto and completion of
the filings and recordings listed on Schedule 3, the security interests created
for the benefit of the Administrative Agent and the Lenders pursuant to the
Security Documents will constitute valid, perfected security interests in the
collateral subject thereto, subject to no other Liens whatsoever except for
Permitted Liens.
Section 6.27. Collateral Pool Assets.
(a) Each of the representations and warranties made by each Loan
Party in its Security Documents with respect to any Collateral Pool Asset is
true and correct in all material respects.
(b) No Collateral Pool Asset is located in an area that has been
identified by the Secretary of Housing and Urban Development as an area having
special flood hazards and in which flood insurance has been made available under
the National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of
1973, as amended, or any successor law, or, if located within any such area,
Borrower has obtained and will maintain through the Maturity Date the insurance
prescribed in Section 5.1(o) hereof.
(c) To the Borrower's knowledge, except as shown on Schedule 6.19,
each Collateral Pool Asset and the present use and occupancy thereof are in
material compliance with all applicable zoning ordinances (without reliance upon
adjoining or other properties), building codes, land use and Environmental Laws,
and other similar laws ("Applicable Laws").
(d) Each Collateral Pool Asset is served by all utilities required
for the current or contemplated use thereof. All utility service is provided by
public utilities and each Collateral Pool Asset has accepted or is equipped to
accept such utility service.
(e) All public roads and streets necessary for service of and access
to each Collateral Pool Asset for the current or contemplated use thereof have
been completed, are serviceable and all-weather and are physically and legally
open for use by the public.
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(f) Each Collateral Pool Asset is served by public water and sewer
systems or, if a Collateral Pool Asset is not serviced by a public water and
sewer system, the alternate systems are adequate and meet, in all material
respects, all requirements and regulations of, and otherwise comply in all
material respects with, all Applicable Laws with respect to such alternate
systems.
(g) Borrower is not aware of any latent or patent structural or
other significant deficiency of any Collateral Pool Asset. Each Collateral Pool
Asset is free of damage and waste that would materially and adversely affect the
value of such Collateral Pool Asset, is in good repair and there is no deferred
maintenance other than ordinary wear and tear. Each Collateral Pool Asset is
free from damage caused by fire or other casualty. There is no pending or, to
the actual knowledge of Borrower, threatened condemnation proceedings affecting
any Collateral Pool Asset, or any material part thereof.
(h) To Borrower's knowledge, all liquid and solid waste disposal,
septic and sewer systems located on each and every Collateral Pool Asset are in
a good and safe condition and repair and to Borrower's knowledge, in material
compliance with all Applicable Laws with respect to such systems.
(i) All improvements on each Collateral Pool Asset lie within the
boundaries and building restrictions of the legal description of record of such
Collateral Pool Asset, no improvements encroach upon easements benefiting any
Collateral Pool Asset other than encroachments that do not materially adversely
affect the use or occupancy of a Collateral Pool Asset and no improvements on
adjoining properties encroach upon any Collateral Pool Asset or easements
benefiting any Collateral Pool Asset other than encroachments that do not
materially adversely affect the use or occupancy of a Collateral Pool Asset. All
amenities, access routes or other items that materially benefit each Collateral
Pool Asset are under direct control of Borrower, constitute permanent easements
that benefit all or part of such Collateral Pool Asset or are public property,
and each Collateral Pool Asset, by virtue of such easements or otherwise, is
contiguous to a physically open, dedicated all weather public street, and has
the necessary permits for ingress and egress.
(j) There are no delinquent taxes, ground rents, water charges,
sewer rents, assessments, insurance premiums, leasehold payments, or other
outstanding charges affecting any Collateral Pool Asset except to the extent
such items are being contested in good faith and as to which adequate reserves
have been provided.
(k) Each Collateral Pool Asset conforms to all requirements for an
Eligible Property except that certain Initial Collateral Pool Assets may not
satisfy condition (x) of the conditions for being an Eligible Property.
A breach of any of the representations and warranties contained in this Section
6.27 with respect to a Property shall disqualify such Property from being a
Collateral Pool Asset for so long as such breach continues (unless otherwise
approved by the Required Lenders) but shall not constitute a Default (unless the
elimination of such Property as a Collateral Pool Asset results in a Default
under one of the other provisions of this Agreement).
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Borrower agrees that all of its representations and warranties set forth in
Article VI of this Agreement and elsewhere in this Agreement are true on the
Agreement Effective Date, and will be true on each Effective Date in all
material respects (except with respect to matters which have been disclosed in
writing to and approved by the Required Lenders), and will be true in all
material respects (except with respect to matters which have been disclosed in
writing to and approved by the Required Lenders) upon each request for
disbursement of an Advance. Each request for disbursement hereunder shall
constitute a reaffirmation of such representations and warranties as deemed
modified in accordance with the disclosures made and approved, as aforesaid, as
of the date of such request and disbursement.
Article VII.
ADDITIONAL REPRESENTATIONS AND WARRANTIES
Each of the Guarantors hereby represents and warrants that:
Section 7.1. Existence. Equity Inns is a corporation duly organized and
existing under the laws of the State of Tennessee, with its principal place of
business in the State of Tennessee and Equity Inns Trust is a real estate
investment trust duly organized and existing under the laws of the State of
Maryland, with its principal place of business in the State of Tennessee and
each Guarantor is duly qualified as a foreign corporation and properly licensed
(if required) and in good standing in each jurisdiction where the failure to
qualify or be licensed (if required) would constitute a Material Adverse
Financial Change with respect to such Guarantor or have a Material Adverse
Effect on the business or properties of such Guarantor.
Section 7.2. Corporate or Trust Powers. The execution, delivery and
performance of the Loan Documents required to be delivered by the Guarantors
hereunder are within the corporate powers of the Guarantors, have been duly
authorized by all requisite corporate action, and are not in conflict with the
terms of any organizational instruments of the Guarantors, or any instrument or
agreement to which the either of the Guarantors is a party or by which either of
the Guarantors or any of its assets is bound or affected.
Section 7.3. Power of Officers. The officers of the Guarantors executing
the Loan Documents required to be delivered by the Guarantors hereunder have
been duly elected or appointed and were fully authorized to execute the same at
the time each such agreement, certificate or instrument was executed.
Section 7.4. Government and Other Approvals. No approval, consent,
exemption or other action by, or notice to or filing with, any governmental
authority is necessary in connection with the execution, delivery or performance
of the Loan Documents required hereunder.
Section 7.5. Compliance With Laws. There is no judgment, decree or order
or any law, rule or regulation of any court or governmental authority binding on
the Guarantors which would be contravened by the execution, delivery or
performance of the Loan Documents required hereunder.
Section 7.6. Enforceability of Guaranty. The Guaranty is the legal, valid
and binding agreement of the Guarantors, enforceable against the Guarantors in
accordance with its terms,
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except to the extent that such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting the
rights of creditors generally.
Section 7.7. Liens; Consents. The execution, delivery or performance of
the Loan Documents required to be delivered by the Guarantors hereunder will not
result in the creation of any Lien on the Properties. No consent to the
transactions hereunder is required from any ground lessor or mortgagee or
beneficiary under a deed of trust or any other party except as has been
delivered to the Lenders.
Section 7.8. Litigation. There are no suits, arbitrations, claims,
disputes or other proceedings (including, without limitation, any civil,
criminal, administrative or environmental proceedings), pending or, to the best
of the Guarantors' knowledge, threatened against or affecting either of the
Guarantors or any of their Properties, the adverse determination of which
individually or in the aggregate would have a Material Adverse Effect on the
Guarantors or would cause a Material Adverse Financial Change with respect to
the Guarantors or materially impair the Guarantors' ability to perform their
obligations under the Guaranty, except as disclosed on Schedule 7.8 hereto, or
otherwise disclosed to the Lenders in accordance with the terms hereof.
Section 7.9. Investment Company Act of 1940. Either of the Guarantors is,
and the Guarantors will by such acts as may be necessary continue not to be, an
investment company within the meaning of the Investment Company Act of 1940.
Section 7.10. Public Utility Holding Company Act. Neither of the
Guarantors is a "holding company" or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company," or of a "subsidiary company"
of a "holding company," within the definitions of the Public Utility Holding
Company Act of 1935, as amended.
Section 7.11. No Material Adverse Financial Change. There has been no
Material Adverse Financial Change in the condition of the Guarantors since the
last date on which the financial and/or operating statements were submitted to
the Lenders.
Section 7.12. Financial Information. All financial statements furnished to
the Lenders by or on behalf of the Guarantors and all other financial
information and data furnished by or on behalf of the Guarantors to the Lenders
are complete and correct in all material respects as of the date thereof, and
such financial statements have been prepared in accordance with GAAP and fairly
present the consolidated financial condition and results of operations of the
Guarantors as of such date. The Guarantors have no contingent obligations,
liabilities for taxes or other outstanding financial obligations which are
material in the aggregate, except as disclosed in such statements, information
and data.
Section 7.13. [Intentionally Omitted].
Section 7.14. ERISA. (i) Neither Guarantor is an entity deemed to hold
"plan assets" within the meaning of ERISA or any regulations promulgated
thereunder of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan within the meaning of Section
4975 of the Code, and (ii) the execution of this Agreement and the transactions
contemplated hereunder do not give rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code.
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Section 7.15. Taxes. All required tax returns have been filed by the
Guarantors with the appropriate authorities except to the extent that extensions
of time to file have been requested, granted and have not expired or except to
the extent such taxes are being contested in good faith and for which adequate
reserves, in accordance with GAAP, are being maintained.
Section 7.16. Subsidiaries. Schedule 7.16 hereto contains an accurate list
of all of the presently existing Subsidiaries of Guarantors, setting forth their
respective jurisdictions of formation, the percentage of their respective
Capital Stock owned by it or its Subsidiaries and the Properties owned by them.
All of the issued and outstanding shares of Capital Stock of such Subsidiaries
have been duly authorized and issued and are fully paid and non-assessable.
Section 7.17. Status. Equity Inns is a corporation listed and in good
standing on the New York Stock Exchange ("NYSE"), the American Stock Exchange,
or NASDAQ.
Each Guarantor agrees that all of its representations and warranties set forth
in Article VII of this Agreement are true on the Agreement Effective Date, and
will be true on each Effective Date in all material respects (except with
respect to matters which have been disclosed in writing to and approved by the
Required Lenders), and will be true in all material respects (except with
respect to matters which have been disclosed in writing to and approved by the
Required Lenders) upon each request for disbursement of an Advance or issuance
of a Facility Letter of Credit. Each such request hereunder shall constitute a
reaffirmation of such representations and warranties as deemed modified in
accordance with the disclosures made and approved, as aforesaid, as of the date
of such request and disbursement.
Article VIII.
AFFIRMATIVE COVENANTS
The Borrower and each of the Guarantors covenant and agree that so long as
the Commitment of any Lender shall remain available and until the full and final
payment of all Obligations incurred under the Loan Documents they will:
Section 8.1. Notices. Promptly give written notice to Administrative Agent
(who will promptly send such notice to Lenders) of:
(a) all litigation or arbitration proceedings affecting any member
of the Consolidated Group where the amount claimed is $5,000,000 or more;
(b) any Default or Event of Default, specifying the nature and the
period of existence thereof and what action has been taken or been proposed to
be taken with respect thereto;
(c) all claims filed against any Property owned by any member of the
Consolidated Group which, if adversely determined, could have a Material Adverse
Effect on the ability of the Borrower or the Guarantors to meet any of their
obligations under the Loan Documents;
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(d) the occurrence of any other event which might have a Material
Adverse Effect or cause a Material Adverse Financial Change on or with respect
to the Borrower or the Guarantors;
(e) any Reportable Event or any "prohibited transaction" (as such
term is defined in Section 4975 of the Code) in connection with any Plan or any
trust created thereunder, which may, singly or in the aggregate materially
impair the ability of the Borrower or the Guarantors to repay any of the
Obligations under the Loan Documents, describing the nature of each such event
and the action, if any, the Borrower or the Guarantors, as the case may be,
proposes to take with respect thereto;
(f) any notice from any federal, state, local or foreign authority
regarding any Hazardous Material, asbestos, or other environmental condition,
proceeding, order, claim or violation affecting any of the Properties of the
Consolidated Group.
Section 8.2. Financial Statements, Reports, Etc.
The Borrower and the Guarantors will maintain, for the Consolidated Group,
a system of accounting established and administered in accordance with GAAP, and
furnish to the Lenders:
(i) as soon as available, but in any event not later than 60
days after the close of each fiscal quarter, for the Consolidated Group an
unaudited quarterly financial statement (including a balance sheet and
income statement) for such period and the portion of the fiscal year
through the end of such period, setting forth in each case in comparative
form the figures for the previous year, all certified by Equity Inns'
chief financial officer and chief executive officer;
(ii) As soon as available, but in any event not later than 60
days after the close of each fiscal quarter, for the Consolidated Group,
related reports in form and substance satisfactory to the Lenders, all
certified by Equity Inns' chief financial officer or chief accounting
officer, including a statement of Funds From Operations, calculation of
the financial covenants described below, a report listing and describing
all newly acquired Properties, summary property information for all
Properties, and such other information as may be requested to evaluate any
other certificates delivered hereunder;
(iii) As soon as publicly available but in no event later than
the date such reports are to be filed with the Securities Exchange
Commission, copies of all Form 10Ks, 10Qs, 8Ks, and any other annual,
quarterly, monthly or other reports, copies of all registration statements
and any other public information filed with the Securities Exchange
Commission along with all other materials distributed to shareholders and
limited partners by the Borrower or the Guarantors, including a copy of
the Equity Inns annual report containing audited annual financial
statements. All such annual and quarterly reports shall be certified by
the chief executive officer and chief financial officer; notwithstanding
the foregoing, Borrowers and Guarantors shall not be required to provide
copies of Form 10Ks and 10Qs to the extent same are available at no cost
on the internet;
(iv) As soon as available, but in any event not later than
sixty (60) days after the end of each of the first three fiscal quarters,
and not later than 90 days after the
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close of each fiscal year, reports in form and substance satisfactory to
the Lenders, certified by Equity Inns' chief financial officer or chief
accounting officer containing a recap of Net Operating Income, less (i)
Agreed FF&E Reserves, (ii) real estate taxes and (iii) Ground Lease
Expense, as applicable, for each individual Property owned by the Borrower
or a Wholly Owned Subsidiary and included in the Borrowing Base;
(v) Not later than sixty (60) days after the end of each of
the first three fiscal quarters, and not later than ninety (90) days after
the end of the fiscal year, a compliance certificate in substantially the
form of Exhibit I hereto ("Compliance Certificate") signed by the
Operating Partnership and Equity Inns' chief financial officer or chief
accounting officer confirming that the Borrower and the Guarantors are in
compliance with all of the covenants of the Loan Documents, showing the
calculations and computations necessary to determine compliance with the
financial covenants contained in this Agreement (including such schedules
and backup information as may be necessary to demonstrate such compliance)
and stating that to such officer's best knowledge, there is no other
Default or Event of Default exists, or if any Default or Event of Default
exists, stating the nature and status thereof;
(vi) As soon as possible and in any event within 10 Business
Days after any member of the Consolidated Group knows that any Reportable
Event has occurred with respect to any Plan, a statement, signed by the
chief financial officer of Equity Inns, describing said Reportable Event
and within 20 days after such Reportable Event, a statement signed by such
chief financial officer describing the action which the Consolidated Group
proposes to take with respect thereto; and (b) within 10 Business Days of
receipt, any notice from the Internal Revenue Service, PBGC or Department
of Labor with respect to a Plan regarding any excise tax, proposed
termination of a Plan, prohibited transaction or fiduciary violation under
ERISA or the Code which could result in any liability to the Consolidated
Group in excess of $100,000; and (c) within 10 Business Days of filing,
any Form 5500 filed with respect to a Plan by any member of the
Consolidated Group which includes a qualified accountant's opinion.
(vii) As soon as possible and in any event within 30 days
after receipt, a copy of (a) any notice or claim to the effect that any
member of the Consolidated Group is or may be liable to any Person as a
result of the release by such entity or any other Person of any toxic or
hazardous waste or substance into the environment, and (b) any notice
alleging any violation of any federal, state or local environmental,
health or safety law or regulation by any member of the Consolidated
Group, which, in either case, could be reasonably likely to have a
Material Adverse Effect;
(viii) Promptly upon the distribution thereof to the press or
the public, copies of all press releases;
(ix) As soon as possible, and in any event within 10 days
after the Borrower knows of any fire or other casualty or any pending or
threatened condemnation or eminent domain proceeding with respect to all
or any material portion of any Collateral Pool Asset, a statement
describing such fire, casualty or condemnation and the action Borrower
intends to take with respect thereto;
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(x) Such other information (including, without limitation, non
financial information) as the Administrative Agent or any Lender may from
time to time reasonably request. The request for a reappraisal of any
Collateral Pool Asset, as long as such Collateral Pool Asset has not been
the subject of an Appraisal in the preceding 12 months, is hereby deemed
reasonable; and
(xi) Within ten (10) Business Days after the request of the
Administrative Agent, a financial statement showing Adjusted EBITDA,
Ground Lease Expense, Fixed Charges and Interest Expense for the period of
twelve (12) full months ending immediately prior to the date of such
request.
Section 8.3. Existence and Conduct of Operations; Limitations on
Investments. Except as permitted herein, maintain and preserve its existence and
all rights, privileges and franchises now enjoyed and necessary for the
operation of its business, including remaining in good standing in each
jurisdiction in which business is currently operated. The Borrower and the
Guarantors shall carry on and conduct their respective businesses in
substantially the same manner and in substantially the same fields of enterprise
as presently conducted. The Borrower and the Guarantors will do, and will cause
each of their Subsidiaries to do, all things necessary to remain duly
incorporated and/or duly qualified, validly existing and in good standing as a
real estate investment trust, corporation, general partnership, limited
liability company or limited partnership, as the case may be, in its
jurisdiction of incorporation/formation. The Borrower and the Guarantors will
maintain all requisite authority to conduct their businesses in each
jurisdiction in which the Properties are located and, except where the failure
to be so qualified would not have a Material Adverse Effect, in each
jurisdiction required to carry on and conduct its businesses in substantially
the same manner as it is presently conducted, and, specifically, neither the
Borrower, the Guarantors nor any of their Subsidiaries will undertake any
business other than the acquisition, development, ownership, management and
operation of hotel properties (excluding economy and budget hotels) which are
located in the United States, provided that the aggregate Total Cost of all
Properties Under Development shall not exceed 10% of the Total Cost of all
Properties owned by the Consolidated Group.
Section 8.4. Maintenance of Properties. Maintain, preserve, protect and
keep the Properties in good repair, working order and condition, and make all
necessary and proper repairs, renewals and replacements, normal wear and tear
excepted.
Section 8.5. Insurance. Provide a certificate of insurance from all
insurance carriers who maintain policies with respect to the Properties within
thirty (30) days after the end of each fiscal year, evidencing that the
insurance required to be furnished to Lenders pursuant to Section 3 of the
Mortgages] is in full force and effect. Borrower shall timely pay, or cause to
be paid, all premiums on all insurance policies required under the Loan
Documents from time to time. Borrower shall promptly notify its insurance
carrier or agent therefor (with a copy of such notification being provided
simultaneously to Administrative Agent) if there is any occurrence which, under
the terms of any insurance policy then in effect with respect to the Properties,
requires such notification.
Section 8.6. Payment of Obligations. Pay all taxes, assessments,
governmental charges and other obligations when due, except such as may be
contested in good faith or as to which a
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bona fide dispute may exist, and for which adequate reserves have been provided
in accordance with sound accounting principles used by the Consolidated Group on
the date hereof.
Section 8.7. Compliance with Laws. Comply in all material respects with
all applicable laws, rules, regulations, orders and directions of any
governmental authority having jurisdiction over Borrower, the Guarantors, or any
of their respective businesses, subject to the right to contest such compliance
obligations in good faith so long as adequate reserves are established for
possible liabilities arising therefrom and an adverse resolution of such
noncompliance would not have a Material Adverse Effect.
Section 8.8. Adequate Books. Maintain adequate books, accounts and records
in order to provide financial statements in accordance with GAAP and, if
requested by any Lender, permit employees or representatives of such Lender at
any reasonable time and upon reasonable notice to inspect and audit the
properties of Borrower and of the Consolidated Group, and to examine or audit
the inventory, books, accounts and records of each of them and make copies and
memoranda thereof.
Section 8.9. ERISA. Comply in all material respects with all requirements
of ERISA applicable to it with respect to each Plan.
Section 8.10. Maintenance of Status. Equity Inns shall at all times (i)
remain as a corporation listed and in good standing on the New York Stock
Exchange (NYSE), American Stock Exchange, or NASDAQ, and (ii) take all steps
maintain its status as a real estate investment trust in compliance with all
applicable provisions of the Code (unless otherwise consented to by the Required
Lenders).
Section 8.11. Use of Proceeds. Use the proceeds of the Facility for the
general business purposes of the Borrower, including without limitation
repayment in full of the Existing Agreement, acquisition by the Borrower of
premium limited service, premium extended stay and premium all suite and full
service hotel properties, developments, expansions and renovations of the
Borrower's existing hotel properties and other general corporate and working
capital needs.
Section 8.12. Pre Acquisition Environmental Investigations. Cause to be
prepared prior to the acquisition of each Property that it intends to acquire an
environmental report pursuant to a standard scope of work attached as Exhibit J
hereto and made a part hereof.
Section 8.13. Eligible Properties. Cause all Collateral Pool Assets to
continue to meet all the requirements included in the definition of "Eligible
Property" hereunder (except for the condition regarding 60% occupancy in
subsection (x) of those requirements).
Section 8.14. Management Agreements and Permitted Operating Leases. Cause
each Collateral Pool Asset to at all times be leased pursuant to a Permitted
Operating Lease and managed pursuant to the terms of an Approved Management
Agreement with the tenant under such Permitted Operating Lease. Borrower and
such tenant may terminate a management agreement provided that there is a new
Approved Management Agreement in effect immediately following such termination,
and Borrower may cause the tenant under a Permitted Operating Lease to assign
its interest under a Permitted Operating Lease to another taxable Wholly-Owned
Subsidiary. In both cases, Borrower shall cause the new tenant and/or new
management
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company to execute documentation satisfactory to the Administrative Agent with
regard to the obligations of such parties to the Lenders.
Section 8.15. Limitations on Borrowing Base. Cause each of the following
requirements to be met at all times, including at such times when Borrower seeks
to have a Property that is not one of the Initial Collateral Pool Assets
included as a Collateral Pool Asset pursuant to Section 2.20 or seeks to have a
Property removed as a Collateral Pool Asset pursuant to Section 2.19(c):
(i) At least 85% of the Borrowing Base shall be derived from
Properties which are, directly or indirectly, wholly owned and controlled
by the Borrower and all Properties in the Borrowing Base that are not
wholly owned shall be majority owned by the Borrower;
(ii) At least 90% of the Borrowing Base shall be derived from
Properties which are held in fee simple;
(iii) At no time shall any one Property's Collateral Pool
Asset Value exceed 20% of the Borrowing Base;
(iv) The total amount of the Borrowing Base attributable to
Properties operated as a Choice Hotel shall not exceed fifteen percent
(15%) of the total amount of the Borrowing Base;
(v) The total amount of the Borrowing Base attributable to
Properties Under Development and Excluded Properties shall not exceed
seventeen percent (17%) of the total amount of the Borrowing Base; and
(vi) No more than 30% in the aggregate of one or more of the
following criteria of the total amount of the Borrowing Base may be
derived from Collateral Pool Assets that are: (i) not directly or
indirectly, wholly owned and controlled by the Borrower; (ii) not directly
or indirectly, held in fee simple by the Borrower or a Wholly-Owned
Subsidiary, (iii) Properties Under Development, or (iv) Excluded
Properties.
Article IX.
NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as the Commitment shall
remain available and until full and final payment of all obligations incurred
under the Loan Documents, without the prior written consent of the Required
Lenders (or the Administrative Agent or a greater Percentage of the Lenders, if
so expressly provided), the Borrower, the Guarantors and the Consolidated Group
will not:
Section 9.1. Change of Borrower Ownership. Allow (i) Equity Inns Trust to
own less than one hundred percent (100%) of the general partnership interests in
the Operating Partnership and Equity II, (ii) Equity Inns Services, Inc. to own
less than one hundred percent (100%) of the general partnership interests in
EIP/WV, (iii) Equity Inns to own less than 100%
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of the beneficial interests in Equity Inns Trust or 100% of the stock in Equity
Inns Services, Inc., (iv) any pledge of, other encumbrance on, or conversion to
limited partnership interests of, any of the general partnership interests in
the Borrower, or (v) any pledge, hypothecation, encumbrance, transfer or other
change in the ownership or the partnership interests in the REMIC Partnership
(except for the pledge of such partnership interests to the lender under the
REMIC Loan).
Section 9.2. Use of Proceeds. Apply or permit to be applied any proceeds
of any Advance directly or indirectly, to the funding of any purchase of, or
offer for, any Margin Stock or any share of capital stock of any publicly held
corporation unless the board of directors of such corporation has consented to
such offer prior to any public announcements relating thereto and the Lenders
have consented to such use of the proceeds of the Facility.
Section 9.3. Leverage; Additional Recourse Indebtedness. Permit or suffer:
(a) From and after the Agreement Effective Date, the ratio of Total
Indebtedness to EBITDA to exceed 5.75x;
(b) At any time, the aggregate amount of the secured Recourse
Indebtedness of the Consolidated Group to exceed the sum of (a) the
then-outstanding Advances hereunder plus (b) $50,000,000.
Section 9.4. Dividends. Permit or suffer, for each fiscal quarter, the
aggregate amount of dividends paid by Equity Inns (excluding Preferred Stock
Expense) for the most recent four fiscal quarters for which financial reports
are available, to exceed 95% of the Funds From Operations of Equity Inns for
such fiscal quarter as determined on a consistent basis with the prior financial
statements of Equity Inns, as approved by the Administrative Agent, provided
that Equity Inns may, so long as an Event of Default does not exist, pay the
minimum amount of dividends required to maintain its tax status as a real estate
investment trust under the Code.
Section 9.5. Floating Rate Debt. Permit the Consolidated Group to have
outstanding Indebtedness for borrowed money that bears interest at a floating
rate (excluding this Facility) in excess of 25% of Total Indebtedness at all
times during any six (6) month period, unless such excess shall thereafter be
covered by a swap, interest rate cap or other interest rate protection product
reasonably satisfactory to the Administrative Agent.
Section 9.6. Liens. Create, incur, or suffer to exist (or permit any of
the Consolidated Group to create, incur, or suffer to exist) any Lien in, of or
on the Properties of the Consolidated Group except:
(i) Liens for taxes, assessments or governmental charges or
levies on their Property if the same shall not at the time be delinquent
or thereafter can be paid without penalty, or are being contested in good
faith and by appropriate proceedings and for which adequate reserves shall
have been set aside on their books;
(ii) Liens which arise by operation of law, such as carriers',
warehousemen's, landlords', materialmen and mechanics' liens and other
similar liens arising in the ordinary course of business which secure
payment of obligations not more than 30 days past due or which are being
contested in good faith by appropriate
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proceedings and for which adequate reserves shall have been set aside on
its books and, in the case of any mechanic's lien on a Collateral Pool
Asset, for which an affirmative endorsement to the Lender's title
insurance policy has been provided to the Administrative Agent;
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation;
(iv) Utility easements and such other encumbrances or charges
against real property as are of a nature generally existing with respect
to properties of a similar character and which do not in any material way
affect the marketability of the same or interfere with the use thereof in
the business of the Borrower or its Subsidiaries, provided that Collateral
Pool Assets shall only be subject to such matters as are listed as
exceptions to the title insurance policies for such Collateral Pool Assets
which have been submitted to and approved by the Administrative Agent;
(v) Liens of any member of the Consolidated Group in favor of
the Borrower or the Guarantors which are junior to any Lien for the
benefit of Lenders;
(vi) Liens arising in connection with any Indebtedness
permitted hereunder to the extent such Liens will not result in a
violation of any of the provisions of this Agreement; and
(vii) Liens which are Permitted Operating Leases.
Liens permitted pursuant to this Section 9.6 shall be deemed to be "Permitted
Liens".
Section 9.7. FF&E Expenditures. Permit, as of the last day of any fiscal
quarter, the sum of (i) the actual expenditures of the Consolidated Group for
FF&E replacement and capital improvements (of the types approved by the
Administrative Agent) at the Properties during the immediately preceding four
(4) consecutive full fiscal quarters plus (ii) the difference between the amount
of reserves maintained by the Consolidated Group for FF&E replacement and
capital improvements as of the last day of such fiscal quarter as shown on the
Consolidated Group's financial statements for such quarter and the amount of
such reserves maintained on the first day of such quarter, to be less than four
percent (4%) of the gross room revenues from such Properties for such four (4)
full fiscal quarters.
Section 9.8. Indebtedness, Coverage and Net Worth Covenants. Permit or
suffer:
(a) as of any day, the Consolidated Group's Tangible Net Worth, plus
accumulated depreciation, to be less than the sum of (i) eighty percent (80%) of
the Consolidated Group's Tangible Net Worth, plus accumulated depreciation, as
of December 31, 2004 plus (ii) seventy-five percent (75%) of the aggregate
proceeds received (net of customary related fees and expenses) in connection
with any offering or sale after December 31, 2004 of equity interests in the
Borrower or the Guarantors, whether common stock, preferred stock, limited
partnership units or other forms of equity ownership;
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(b) as of any day, the ratio of (A) the sum of (i) Adjusted EBITDA
for the most recent four quarters plus (ii) Ground Lease Expense for such period
to (B) Fixed Charges for such period to be less than 1.50 to 1;
Section 9.9. Mergers. Enter into any merger, consolidation, reorganization
or liquidation or transfer or otherwise dispose of all or a substantial portion
of the Consolidated Group's Properties, except for such transactions that occur
between members of the Consolidated Group or as otherwise approved in advance by
the Supermajority Lenders.
Section 9.10. Minimum Borrowing Base. Permit, as of any date, the then
current Borrowing Base to be less than $125,000,000.
Article X.
DEFAULTS
The occurrence of any one or more of the following events shall constitute
an Event of Default:
Section 10.1. Nonpayment of Principal. The Borrower fails to pay any
principal portion of the Obligations when due, whether on the Maturity Date or
otherwise.
Section 10.2. Certain Covenants. Any one or more of the Borrower, the
Guarantors and the Consolidated Group, as the case may be, is not in compliance
with any one or more of Sections 8.3 or 8.10 or any Section of Article IX
hereof.
Section 10.3. Nonpayment of Interest and Other Obligations. The Borrower
fails to pay any interest or other portion of the Obligations, other than
payments of principal, and such failure continues for a period of five (5) days
after the date such payment is due, provided that the first occurrence of any
such non payment during any calendar year shall not constitute an Event of
Default unless such failure continues for one (1) Business Day after written
notice to the Borrower from the Administrative Agent of such failure.
Section 10.4. Cross Default. Any monetary default occurs (after giving
effect to any applicable cure period) under any other Indebtedness (which
includes Guarantee Obligations) of any members of the Consolidated Group, singly
or in the aggregate, in excess of Ten Million Dollars ($10,000,000).
Section 10.5. Loan Documents. Any Loan Document is not in full force and
effect or a default has occurred and is continuing thereunder after giving
effect to any cure or grace period in any such document.
Section 10.6. Representation or Warranty. At any time or times hereafter
any representation or warranty set forth in Articles VI or VII of this Agreement
or in any other Loan Document or in any statement, report or certificate now or
hereafter made by the Borrower or the Guarantors to the Lenders or the
Administrative Agent is not true and correct in any material respect and such
noncompliance is not cured within thirty (30) days after the Borrower receives
written notice thereof, provided, however, that if such Default is susceptible
of cure but cannot by the use of reasonable efforts be cured within such thirty
(30) day period, such Default shall
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not constitute an Event of Default under this Section 10.6 so long as (i) the
Borrower or the Guarantors, as the case may be, have commenced a cure within
such thirty day period and (ii) thereafter, Borrower or Guarantors, as the case
may be, are proceeding to cure such default continuously and diligently and in a
manner reasonably satisfactory to Lenders and (iii) such default is cured not
later than sixty (60) days after the expiration of such thirty (30) day period.
Section 10.7. Covenants, Agreements and Other Conditions. The Borrower
fails to perform or observe any of the other covenants, agreements and
conditions contained in Article VIII (except for Sections 8.3, or 8.10) and
elsewhere in this Agreement or any of the other Loan Documents in accordance
with the terms hereof or thereof, not specifically referred to herein, and such
Default continues unremedied for a period of thirty (30) days after written
notice from Administrative Agent, provided, however, that if such Default is
susceptible of cure but cannot by the use of reasonable efforts be cured within
such thirty (30) day period, such Default shall not constitute an Event of
Default under this Section 10.7 so long as (i) the Borrower or the General
Partner, as the case may be, has commenced a cure within such thirty day period
and (ii) thereafter, Borrower or General Partner, as the case may be, is
proceeding to cure such default continuously and diligently and in a manner
reasonably satisfactory to Lenders and (iii) such default is cured not later
than sixty (60) days after the expiration of such thirty (30) day period.
Section 10.8. No Longer General Partner. Equity Inns shall no longer,
directly or indirectly, hold 100% of the general partnership interests in the
three entities constituting the Borrower.
Section 10.9. Material Adverse Financial Change. Any one of the Operating
Partnership, EIP/WV, Equity Inns or Equity Inns Trust has suffered a Material
Adverse Financial Change or is Insolvent.
Section 10.10. Bankruptcy.
(a) Any member of the Consolidated Group shall (i) have an order for
relief entered with respect to it under the Federal bankruptcy laws as now or
hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii)
apply for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
substantial portion of its Property, (iv) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it as a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v)
take any corporate action to authorize or effect any of the foregoing actions
set forth in this Section 10.10(a), (vi) fail to contest in good faith any
appointment or proceeding described in Section 10.10(b) or (vii) not pay, or
admit in writing its inability to pay, its debts generally as they become due;
(b) A receiver, trustee, examiner, liquidator or similar official
shall be appointed for any member of the Consolidated Group or any substantial
portion of any of their Properties, or a proceeding described in Section
10.10(a)(iv) shall be instituted against any
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member of the Consolidated Group and such appointment continues undischarged or
such proceeding continues undismissed or unstayed for a period of sixty (60)
consecutive days.
Section 10.11. Legal Proceedings. Any member of the Consolidated Group is
enjoined, restrained or in any way prevented by any court order or judgment or
if a notice of lien, levy, or assessment is filed of record with respect to all
or any part of the Properties by any governmental department, office or agency,
which could materially adversely affect the performance of the obligations of
such parties hereunder or under the Loan Documents, as the case may be, or if
any proceeding is filed or commenced seeking to enjoin, restrain or in any way
prevent the foregoing parties from conducting all or a substantial part of their
respective business affairs and failure to vacate, stay, dismiss, set aside or
remedy the same within sixty (60) days after the occurrence thereof.
Section 10.12. ERISA. Any member of the Consolidated Group is deemed to
hold "plan assets" within the meaning of ERISA or any regulations promulgated
thereunder of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code).
Section 10.13. Failure to Satisfy Judgments. Any member of the
Consolidated Group shall fail within sixty (60) days to pay, bond or otherwise
discharge any judgments or orders for the payment of money in an amount which,
when added to all other judgments or orders outstanding against such member of
the Consolidated Group would exceed $2,000,000 in the aggregate, which have not
been stayed on appeal or otherwise appropriately contested in good faith, unless
the liability is insured against and the insurer has not challenged coverage of
such liability.
Section 10.14. Environmental Remediation. Failure to remediate within the
time period required by law or governmental order, (or within a reasonable time
in light of the nature of the problem if no specific time period is so
established), environmental problems in violation of applicable law related to
Properties of any member of the Consolidated Group where the estimated cost of
remediation is in the aggregate in excess of $2,000,000, in each case after all
administrative hearings and appeals have been concluded.
Section 10.15. REIT Status; Stock Exchange Listing. Failure of either
Equity Inns or Equity Inns Trust to maintain (i) its status as a real estate
investment trust under the Code and (ii) Equity Inns' listing on the New York
Stock Exchange, American Stock Exchange, or NASDAQ.
Section 10.16. Mortgage Default. There shall be an Event of Default (as
defined in the Mortgages) under any of the Mortgages.
Section 10.17. Enforceability of Security Documents. (i) Any of the
Security Documents shall cease, for any reason, to be in full force and effect,
or the Borrower or any other Loan Party which is a party to any of the Security
Documents shall so assert or (ii) the Lien created by any of the Security
Documents shall cease to be enforceable or of the same effect and priority
purported to be created thereby.
Article XI.
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
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Section 11.1. Acceleration. If any Event of Default described in Section
10.10 hereof occurs, the obligation of the Lenders to make Advances and of the
Issuing Bank to issue Facility Letters of Credit hereunder shall automatically
terminate and the Obligations shall immediately become due and payable. If any
other Event of Default described in Article X hereof occurs, such obligation to
make Advances and to issue Facility Letters of Credit shall be terminated and at
the election of the Required Lenders, the Obligations may be declared to be due
and payable.
In addition to the foregoing, following the occurrence of an Event of
Default and so long as any Facility Letter of Credit has not been fully drawn
and has not been cancelled or expired by its terms, upon demand by the Required
Lenders the Borrower shall deposit in the Letter of Credit Collateral Account
cash in an amount equal to the aggregate undrawn face amount of all outstanding
Facility Letters of Credit and all fees and other amounts due or which may
become due with respect thereto. The Borrower shall have no control over funds
in the Letter of Credit Collateral Account, which funds shall be invested by the
Administrative Agent from time to time in its discretion in certificates of
deposit of JPMorgan having a maturity not exceeding thirty (30) days. Such funds
shall be promptly applied by the Administrative Agent to reimburse the Issuing
Bank for drafts drawn from time to time under the Facility Letters of Credit.
Such funds, if any, remaining in the Letter of Credit Collateral Account
following the payment of all Obligations in full shall, unless the
Administrative Agent is otherwise directed by a court of competent jurisdiction,
be promptly paid over to the Borrower.
Section 11.2. Preservation of Rights; Amendments. No delay or omission of
the Lenders in exercising any right under the Loan Documents shall impair such
right or be construed to be a waiver of any Default or an acquiescence therein,
and the making of an Advance notwithstanding the existence of a Default or the
inability of the Borrower to satisfy the conditions precedent to such Advance
shall not constitute any waiver or acquiescence. Any single or partial exercise
of any such right shall not preclude other or further exercise thereof or the
exercise of any other right, and no waiver, amendment or other variation of the
terms, conditions or provisions of the Loan Documents whatsoever shall be valid
unless in writing signed by the Administrative Agent and the number of Lenders
required hereunder and then only to the extent in such writing specifically set
forth. All remedies contained in the Loan Documents or by law afforded shall be
cumulative and all shall be available to the Lenders until the Obligations have
been paid in full.
Section 11.3. Foreclosure. The Lenders hereby agree to the following in
the event of foreclosure under any of the Mortgages or any other attempt at
realization of the security thereunder:
(a) To subscribe to and accept its Percentage of the ownership
interests in any entity organized to hold title to the Collateral Pool Assets
and that the nature of such entity shall be determined by the Required Lenders,
subject to each Lender's right to hold its interests in such entity in, and
assign such interests to, any affiliate of such Lender or any other entity
required by laws or regulations governing such Lender. The Administrative Agent
is hereby authorized to act for and on behalf of the Lenders in all day-to-day
matters with respect to the exercise of rights described herein such as the
supervision of attorneys, accountants, appraisers or others acting for the
benefit of all of the Lenders in connection with litigation, foreclosure or
realization of all or any security given as Collateral for the Obligations or
other similar actions.
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(b) If the Lenders acquire the Collateral Pool Assets either by
foreclosure or deed in lieu of foreclosure, to negotiate in good faith to reach
agreement in writing relating to the ownership, operation, maintenance,
marketing and sale of such Collateral Pool Assets and that such agreement shall
be consistent with the following:
(i) The Collateral Pool Assets will not be held as a long-term
investment but will be marketed in an attempt to sell them in a time
period consistent with the regulations applicable to national banks for
owning real estate. Current appraisals of the Collateral Properties shall
be obtained by the Administrative Agent from time to time during the
ownership period at Lenders' expense (without diminishing or releasing any
obligation of the Borrower to pay for such costs) and an appraised value
shall be established and updated from time to time based on such
appraisals.
(ii) Certain decisionmaking with respect to the day-to-day
operations of the Properties will be delegated to management and leasing
agents. All agreements with such management and leasing agents will be
subject to the approval of the Required Lenders. The day-to-day
supervision of such agents shall be done by the Administrative Agent.
(iii) Except as provided in the following sentences, all
decisions as to whether to sell the Collateral Pool Assets shall be
subject to the approval of all the Lenders. Notwithstanding the foregoing,
the Lenders agree that if the Administrative Agent receives a bona fide
"all cash" offer from an entity not affiliated with the Borrower or any
Lender for the purchase of any of the Collateral Pool Assets and such
offer equals or exceeds ninety percent (90%) of the most recent appraised
value of such Collateral Pool Asset as established by an appraisal
prepared in accordance with the standards established in this Agreement
that has been completed within six months of such offer, then the
Administrative Agent shall give written notice of such offer to the
Lenders and request their approval for sale at such a price. If the
Required Lenders approve of such a sale (or are deemed to approve of such
a sale) then the Administrative Agent, acting on behalf of the Lenders, is
irrevocably authorized to accept such offer.
(iv) All expenses incurred by the Administrative Agent and
Lenders in connection with the ownership, operation, maintenance,
marketing and sale of the Collateral Pool Assets shall be allocated among
the Lenders pro rata in accordance with their respective Percentages.
(v) All expenditures and other actions taken with respect to
the Collateral Pool Assets shall at all times be subject to the
regulations and requirements pertaining to national banks applicable
thereto. Without limiting the generality of the foregoing, all necessary
approvals from regulatory authorities in connection with any expenditure
of funds by the Lenders shall be a condition to such expenditure.
Article XII.
THE ADMINISTRATIVE AGENT
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Section 12.1. Appointment. JPMorgan is hereby appointed Administrative
Agent hereunder and under each other Loan Document, and each of the Lenders
authorizes the Administrative Agent to act as the agent of such Lender. The
Administrative Agent agrees to act as such upon the express conditions contained
in this Article XII. The Administrative Agent shall not have a fiduciary
relationship in respect of any Lender by reason of this Agreement, except to the
extent the Administrative Agent acts as an agent with respect to the receipt or
payment of funds hereunder.
Section 12.2. Powers. The Administrative Agent shall have and may exercise
such powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders to take any
action thereunder except any action specifically provided by the Loan Documents
to be taken by the Administrative Agent.
Section 12.3. General Immunity. Neither the Administrative Agent (in its
capacity as Administrative Agent) nor any of its directors, officers, agents or
employees shall be liable to the Borrower, the Lenders or any Lender for any
action taken or omitted to be taken by it or them hereunder or under any other
Loan Document or in connection herewith or therewith, except for its or their
own gross negligence or willful misconduct.
Section 12.4. No Responsibility for Loans, Recitals, etc. Neither the
Administrative Agent (in its capacity as Administrative Agent) nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into, or verify (i) any statement, warranty or
representation made in connection with any Loan Document or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document; (iii) the satisfaction of any
condition specified in Article V, except receipt of items required to be
delivered to the Administrative Agent; or (iv) the validity, effectiveness or
genuineness of any Loan Document or any other instrument or writing furnished in
connection therewith.
Section 12.5. Action on Instructions of Lenders. The Administrative Agent
shall exercise its rights on behalf of the Lenders hereunder at the direction of
the Required Lenders or all of the Lenders, as the case may be, and shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by
the Required Lenders or all Lenders, as the case may be, and such instructions
and any action taken or failure to act pursuant thereto shall be binding on all
of the Lenders and on all holders of Notes. The Administrative Agent shall be
fully justified in failing or refusing to take any action hereunder and under
any other Loan Document unless it shall first be indemnified to its reasonable
satisfaction by the Lenders pro rata against any and all liability, cost and
expense that it may incur by reason of taking or continuing to take any such
action.
Section 12.6. Employment of Administrative Agents and Counsel. The
Administrative Agent may execute any of its duties as Administrative Agent
hereunder and under any other Loan Document by or through employees, agents, and
attorneys in fact and shall not be answerable to the Lenders, except as to money
or securities received by it or its authorized agents, for the default or
misconduct of any such agents or attorneys in fact selected by it with
reasonable care. The Administrative Agent shall be entitled to advice of counsel
concerning all
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matters pertaining to the agency hereby created and its duties hereunder and
under any other Loan Document.
Section 12.7. Reliance on Documents; Counsel. The Administrative Agent
shall be entitled to rely upon any Note, notice, consent, certificate,
affidavit, letter, telegram, statement, paper or document reasonably believed by
it to be genuine and correct and to have been signed or sent by the proper
person or persons, and, in respect to legal matters, upon the opinion of outside
counsel selected by the Administrative Agent.
Section 12.8. Administrative Agent's Reimbursement and Indemnification.
The Lenders agree to reimburse and indemnify the Administrative Agent ratably in
accordance with their respective Percentages (i) for any amounts not reimbursed
by the Borrower for which the Administrative Agent is entitled to reimbursement
by the Borrower under the Loan Documents, (ii) for any other reasonable out of
pocket expenses incurred by the Administrative Agent on behalf of the Lenders,
in connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents, if not paid by Borrower, and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative Agent (in its
capacity as Administrative Agent and not as a Lender) in any way relating to or
arising out of the Loan Documents or any other document delivered in connection
therewith or the transactions contemplated thereby, or the enforcement of any of
the terms thereof or of any such other documents, provided that no Lender shall
be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Administrative Agent.
Section 12.9. Rights as a Lender. With respect to the Commitment, Advances
made by it and the Note issued to it, the Administrative Agent shall have the
same rights and powers hereunder and under any other Loan Document as any Lender
and may exercise the same as though it were not the Administrative Agent, and
the term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Administrative Agent in its individual capacity. The Administrative
Agent, in its individual capacity, may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person.
Section 12.10. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Agent or any
other Lender and based on the financial statements prepared by the Borrower and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
Section 12.11. Successor Administrative Agent. Each Lender agrees that
JPMorgan shall serve as Administrative Agent at all times during the term of
this Facility, except that JPMorgan
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may resign as Administrative Agent in the event (x) JPMorgan and Borrower shall
mutually agree in writing or (y) an Event of Default shall occur under the Loan
Documents (irrespective of whether such Event of Default subsequently is
waived), or (z) JPMorgan shall determine, in its sole reasonable discretion,
that because of its other banking relationships with the Consolidated Group at
the time of such decision JPMorgan's resignation as Administrative Agent would
be necessary in order to avoid creating an appearance of impropriety on the part
of JPMorgan. JPMorgan (or any successor Administrative Agent) may be removed as
Administrative Agent by written notice received by Administrative Agent from the
Required Lenders at any time with cause (e.g., a breach by JPMorgan (or any
successor Administrative Agent) of its duties as Administrative Agent
hereunder). Upon any such resignation or removal, the Required Lenders shall
appoint, on behalf of the Borrower and the Lenders, a successor Administrative
Agent with the consent of the Borrower, which consent shall not be unreasonably
withheld or delayed and shall not be required if an Event of Default has
occurred. If such appointed successor Administrative Agent's Commitment and
outstanding Advances is less than the Commitment and outstanding Advances of
Calyon, then in order to become the successor Administrative Agent, such
appointed successor Administrative Agent must purchase a portion of Calyon'
Commitment and outstanding Advances such that the amount of the appointed
successor Administrative Agent's new Commitment and outstanding Advances shall
be in an amount greater than or equal to the Commitment and outstanding Advances
of Calyon. If no successor Administrative Agent shall have been so appointed by
the Required Lenders and shall have accepted such appointment within thirty days
after the retiring Administrative Agent's giving notice of resignation, then the
retiring Administrative Agent may appoint, on behalf of the Borrower and the
Lenders, a successor Administrative Agent. Such successor Administrative Agent
shall be a commercial bank having capital and retained earnings of at least
$100,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent (including the right
to receive any fees for performing such duties which accrue thereafter), and the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Article XII shall continue in effect for its benefit and that
of the other Lenders in respect of any actions taken or omitted to be taken by
it while it was acting as the Administrative Agent hereunder and under the other
Loan Documents.
Section 12.12. Notice of Defaults. If a Lender becomes aware of a Default
or Event of Default, such Lender shall notify the Administrative Agent of such
fact. Upon receipt of such notice that a Default or Event of Default has
occurred, the Administrative Agent shall notify each of the Lenders of such
fact.
Section 12.13. Requests for Approval. Unless a specific time period for
approval is set forth elsewhere in this Agreement, if the Administrative Agent
requests in writing the consent or approval of a Lender, such Lender shall
respond and either approve or disapprove definitively in writing to the
Administrative Agent within ten (10) Business Days (or sooner if such notice
specifies a shorter period, but in no event less than five Business Days for
responses based on Administrative Agent's good faith determination that
circumstances exist warranting its request for an earlier response) after such
written request from the Administrative Agent. If the Lender does not so
respond, that Lender shall be deemed to have approved the request. Upon request,
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the Administrative Agent shall notify the Lenders which Lenders, if any, failed
to respond to a request for approval.
Section 12.14. Copies of Documents. Administrative Agent shall promptly
deliver to each of the Lenders copies of all notices of default and other formal
notices sent or received and according to Section 15.1 of this Agreement.
Administrative Agent shall deliver to Lenders within fifteen (15) Business Days
following receipt, copies of all financial statements, certificates and notices
received regarding the Operating Partnership's or Equity Inns' ratings except to
the extent such items are required to be furnished directly to the Lenders by
Borrower hereunder. Within fifteen (15) Business Days after a request by a
Lender to the Administrative Agent for other documents furnished to the
Administrative Agent by the Borrower, the Administrative Agent shall provide
copies of such documents to such Lender except where this Agreement obligates
Administrative Agent to provide copies in a shorter period of time.
Section 12.15. Defaulting Lenders. At such time as a Lender becomes a
Defaulting Lender, such Defaulting Lender's right to vote on matters which are
subject to the consent or approval of the Required Lenders, such Defaulting
Lender or all Lenders shall be immediately suspended until such time as the
Lender is no longer a Defaulting Lender. If a Defaulting Lender has failed to
fund its Percentage of any Advance and until such time as such Defaulting Lender
subsequently funds its Percentage of such Advance, all Obligations owing to such
Defaulting Lender hereunder shall be subordinated in right of payment, as
provided in the following sentence, to the prior payment in full of all
principal of, interest on and fees relating to the Loans funded by the other
Lenders in connection with any such Advance in which the Defaulting Lender has
not funded its Percentage (such principal, interest and fees being referred to
as "Senior Loans" for the purposes of this section). All amounts paid by the
Borrower and otherwise due to be applied to the Obligations owing to such
Defaulting Lender pursuant to the terms hereof shall be distributed by the
Administrative Agent to the other Lenders in accordance with their respective
Percentages (recalculated for the purposes hereof to exclude the Defaulting
Lender) until all Senior Loans have been paid in full. At that point, the
"Defaulting Lender" shall no longer be deemed a Defaulting Lender. After the
Senior Loans have been paid in full equitable adjustments will be made in
connection with future payments by the Borrower to the extent a portion of the
Senior Loans had been repaid with amounts that otherwise would have been
distributed to a Defaulting Lender but for the operation of this Section 12.15.
This provision governs only the relationship among the Administrative Agent,
each Defaulting Lender and the other Lenders; nothing hereunder shall limit the
obligation of the Borrower to repay all Loans in accordance with the terms of
this Agreement. The provisions of this Section 12.15 shall apply and be
effective regardless of whether a Default occurs and is continuing, and
notwithstanding (i) any other provision of this Agreement to the contrary, (ii)
any instruction of the Borrower as to its desired application of payments or
(iii) the suspension of such Defaulting Lender's right to vote on matters as
provided above.
Section 12.16. Co-Agents: Lead Managers. None of the Lenders identified on
the facing page or signature pages of this Agreement as a "documentation agent,"
"syndication agent' or "co-lead arranger/book manager" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of Lenders so identified as a "documentation agent," "syndication agent" or
"co-lead arranger/book manager" shall have or be deemed to have any fiduciary
relationship with any Lenders. Each Lender acknowledges that it has not relied,
and will not
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rely, on any of Lenders so identified in deciding to enter into this Agreement
or in taking or not taking action hereunder.
Article XIII.
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
Section 13.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of Borrower and the
Lenders and their respective successors and assigns, except that the Borrower
shall not have the right to assign its rights or obligations under the Loan
Documents without the consent of all the Lenders and any assignment by any
Lender must be made in compliance with Section 13.3. The Administrative Agent
and Borrower may treat the payee of any Note as the owner thereof for all
purposes hereof unless and until such payee complies with Section 13.3 in the
case of an assignment thereof or, in the case of any other transfer, a written
notice of the transfer is filed with the Administrative Agent and Borrower. Any
assignee or transferee of a Note agrees by acceptance thereof to be bound by all
the terms and provisions of the Loan Documents. Any request, authority or
consent of any Person who at the time of making such request or giving such
authority or consent is the holder of any Note, shall be conclusive and binding
on any subsequent holder, transferee or assignee of such Note or of any Note or
Notes issued in exchange therefor.
Section 13.2. Participations.
(a) Permitted Participants; Effect. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time sell
to one or more banks or other entities ("Participants") participating interests
in any Advance owing to such Lender, any Note held by such Lender, any
Commitment of such Lender or any other interest of such Lender under the Loan
Documents. In the event of any such sale by a Lender of participating interests
to a Participant, such Lender's obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall remain
the holder of any such Note for all purposes under the Loan Documents, all
amounts payable by Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and Borrower and the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under the Loan Documents. The Borrower shall not be obligated to pay
any fees and expenses incurred by any Lender in connection with the sale of a
participation pursuant to this Section.
(b) Voting Rights. Each Lender shall retain the sole right to vote
its Percentage of the Aggregate Commitment, without the consent of any
Participant, for the approval or disapproval of any amendment, modification or
waiver of any provision of the Loan Documents, provided that such Lender may
grant such Participant the right to approve any amendment, modification or
waiver which forgives principal, interest or fees or reduces the interest rate
or fees payable hereunder, postpones any date fixed for any regularly scheduled
payment of principal of or interest on the Obligations, or extends the Maturity
Date.
Section 13.3. Assignments.
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(a) Permitted Assignments. Any Lender may, with the prior written
consent of Administrative Agent and Borrower (which consents shall not be
unreasonably withheld or delayed), in accordance with applicable law, at any
time assign to one or more banks or other entities (collectively, "Purchasers")
all or any part of its rights and obligations under the Loan Documents, except
that no consent of Borrower shall be required if an Event of Default has
occurred and is continuing and that no consent of Borrower shall ever be
required for (i) any assignment to a Person directly or indirectly controlling,
controlled by or under direct or indirect common control with the assigning
Lender or (ii) the pledge or assignment by a Lender of such Lender's Note and
other rights under the Loan Documents to any Federal Reserve Bank in accordance
with applicable law. No assignment to a Purchaser shall be for less than
$10,000,000 of the Aggregate Commitment. Such assignments and assumptions shall
be substantially in the form of Exhibit K hereto. The Borrower shall execute any
and all documents which are customarily required by such Lender (including,
without limitation, a replacement promissory note or notes in the forms provided
hereunder (upon receipt of the original note that is being replaced), and a
modification to the Mortgages if required by Administrative Agent) in connection
with any such assignment, but Borrower shall not be obligated to pay any fees
and expenses incurred by any Lender in connection with any assignment pursuant
to this Section. Any Lender selling all or any part of its rights and obligation
hereunder in a transaction requiring the consent of the Administrative Agent
shall pay to the Administrative Agent a fee of $3,500.00 per assignee to
reimburse Administrative Agent for its involvement in such assignment, plus the
cost of recording fees and taxes applicable to the replacement notes and
modification of the Mortgages and any applicable endorsement of the title
insurance policies. Notwithstanding anything to the contrary in this Agreement
or Exhibit K, so long as any portion of the Collateral Pool Assets is located in
the State of Texas, no replacement note or notes will be issued that would
require a modification to the Mortgages or such Collateral Pool Assets unless
the selling Lender pays for replacement title insurance policies therefor.
(b) Effect; Effective Date of Assignment. Upon delivery to the
Administrative Agent and Borrower of a notice of assignment executed by the
assigning Lender and the Purchaser, such assignment shall become effective on
the effective date specified in such notice of assignment. The notice of
assignment shall contain a representation by the Purchaser to the effect that
none of the consideration used to make the purchase of the Commitment and the
Loan under the applicable assignment agreement are "plan assets" as defined
under ERISA and that the rights and interests of the Purchaser in and under the
Loan Documents will not be "plan assets" under ERISA. On and after the effective
date of such assignment, such Purchaser shall for all purposes be a Lender party
to this Agreement and any other Loan Document executed by the Lenders and shall
have all the rights and obligations of a Lender under the Loan Documents, to the
same extent as if it were an original party hereto, and no further consent or
action by Borrower, the Lenders or the Administrative Agent shall be required to
release the transferor Lender for matters arising after such sale with respect
to the percentage of the Commitment and Advances assigned to such Purchaser.
Upon the consummation of any assignment to a Purchaser pursuant to this Section
13.3.(b), subject to 13.3.(a), the transferor Lender, the Administrative Agent
and Borrower shall make appropriate arrangements so that replacement Notes are
issued to such transferor Lender and new Notes or, as appropriate, replacement
Notes, are issued to such Purchaser, in each case in principal amounts
reflecting their respective Commitments, as adjusted pursuant to such
assignment.
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Section 13.4. Dissemination of Information. Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "Transferee") and
any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of Borrower and Guarantors. Each Transferee
shall agree in writing to keep confidential any such information which is not
publicly available. The Lenders agree not to make any transfers to a transferee
if such transfer would constitute a public offering which would impose any
obligation on the Borrower to incur liabilities and make disclosures,
representations or undertakings beyond those expressly provided for herein,
unless the Borrower has consented in writing thereto.
Section 13.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with all applicable provisions of the Code with respect to
withholding and other tax matters.
Article XIV.
GENERAL PROVISIONS
Section 14.1. Survival of Representations. All representations and
warranties contained in this Agreement shall survive delivery of the Notes and
the making of the Advances herein contemplated.
Section 14.2. Governmental Regulation. Anything contained in this
Agreement to the contrary notwithstanding, no Lender shall be obligated to
extend credit to the Borrower in violation of any limitation or prohibition
provided by any applicable statute or regulation.
Section 14.3. Taxes. Any recording and other taxes (excluding franchise,
income or similar taxes) or other similar assessments or charges payable or
ruled payable by any governmental authority incurred in connection with the
consummation of the transactions contemplated by this Agreement shall be paid by
the Borrower, together with interest and penalties, if any.
Section 14.4. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
Section 14.5. No Third Party Beneficiaries. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns.
Section 14.6. Expenses; Indemnification. Subject to the provisions of this
Agreement, Borrower will pay (a) all out of pocket costs and expenses incurred
by the Administrative Agent (including the reasonable fees, out of pocket
expenses and other reasonable expenses of counsel, which counsel may be
employees of Administrative Agent) in connection with the preparation, execution
and delivery of this Agreement, the Notes, the Loan Documents and any other
agreements or documents referred to herein or therein and any amendments
thereto, (b) all out of pocket costs and expenses incurred by the Administrative
Agent and the Lenders (including the
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reasonable fees, out of pocket expenses and other reasonable expenses of counsel
to the Administrative Agent and the Lenders, which counsel may be employees of
Administrative Agent or the Lenders) in connection with the enforcement and
protection of the rights of the Lenders under this Agreement, the Notes, the
Loan Documents or any other agreement or document referred to herein or therein,
(c) all reasonable and customary costs and expenses of periodic audits by the
Administrative Agent's personnel of the Borrower's books and records provided
that prior to an Event of Default, Borrower shall be required to pay for only
one such audit during any year, (d) all out of pocket expenses incurred by the
Administrative Agent in connection with Collateral Pool Assets, including,
without limitation, the ordering and review of Appraisals, environmental reports
and engineering reports with reference to the Collateral Pool Assets, and (e)
all title premiums, recording fees and taxes (including documentary, intangible,
and similar taxes and fees) related to the Mortgages and Notes, and similar
costs related to the Loan Documents. The Borrower further agrees to indemnify
the Lenders, their directors, officers and employees against all losses, claims,
damages, penalties, judgments, liabilities and reasonable expenses (including,
without limitation, all expenses of litigation or preparation therefor whether
or not the Lenders are a party thereto) which any of them may pay or incur
arising out of or relating to this Agreement, the other Loan Documents, the
transactions contemplated hereby or the direct or indirect application or
proposed application of the proceeds of any Advance hereunder, except that the
foregoing indemnity shall not apply to a Lender to the extent that any losses,
claims, etc. are the result of such Lender's gross negligence or willful
misconduct. The obligations of the Borrower under this Section shall survive the
termination of this Agreement.
Section 14.7. Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
Section 14.8. Nonliability of the Lenders. The relationship between the
Borrower and the Lenders shall be solely that of borrower and lender. The
Lenders shall not have any fiduciary responsibilities to the Borrower. The
Lenders undertake no responsibility to the Borrower to review or inform the
Borrower of any matter in connection with any phase of the Borrower's business
or operations.
Section 14.9. Choice of Law. THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
Section 14.10. Consent to Jurisdiction. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
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IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE LENDERS TO BRING PROCEEDINGS AGAINST
THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
THE BORROWER AGAINST THE LENDERS OR ANY AFFILIATE OF THE LENDERS INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO,
ILLINOIS.
Section 14.11. Waiver of Jury Trial. THE BORROWER, THE GUARANTORS, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
Section 14.12. Entire Agreement; Modification of Agreement. The Loan
Documents embody the entire agreement among the Borrower, Guarantors,
Administrative Agent, and Lenders and supersede all prior conversations,
agreements, understandings, commitments and term sheets among any or all of such
parties with respect to the subject matter hereof. Any provisions of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Borrower, and Administrative Agent if the rights
or duties of Administrative Agent are affected thereby, and
(a) each of the Lenders if such amendment or waiver
(i) reduces or forgives any payment of principal or interest
on the Obligations or any fees payable by Borrower to such Lender
hereunder, or modifies the provisions of Section 2.6 regarding the
calculation of such interest and fees; or
(ii) postpones the date fixed for any payment of principal of
or interest on the Obligations or any fees payable by Borrower to such
Lender hereunder; or
(iii) changes the amount of such Lender's Commitment (other
than pursuant to a voluntary reduction of the Aggregate Commitment under
Section 2.17 or an assignment permitted under Section 13.3) or the unpaid
principal amount of such Lender's Note; or
(iv) extends the Maturity Date; or
(v) releases or limits the liability of any Borrower or
Guarantor under the Loan Documents; or
(vi) releases the Mortgage encumbering any Collateral Pool
Asset or any Collateral, except as expressly provided for herein; or
(vii) changes the definition of Required Lenders or
Supermajority Lenders or modifies any requirement for consent by each of
the Lenders; or
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(viii) modifies the definition of "Borrowing Base
Availability" or "Collateral Pool Asset Value"; or
(ix) modifies this Section 14.12(a); or
(b) the Supermajority Lenders, if such amendment or waiver modifies
or waives the covenant in Section 9.9; or
(c) the Required Lenders, to the extent expressly provided for
herein and in the case of all other waivers or amendments if no percentage of
Lenders is specified herein.
Section 14.13. Dealings with the Borrower. The Lenders and their
affiliates may accept deposits from, extend credit to and generally engage in
any kind of banking, trust or other business with the Borrower or the Guarantors
or any other member of the Consolidated Group regardless of the capacity of the
Lenders hereunder.
Section 14.14. Set-Off.
(a) If an Event of Default shall have occurred, with the consent of
all the Lenders, each Lender (and with the consent of all the Lenders, if
permitted, pursuant to a participation agreement, each such participant) shall
have the right, at any time and from time to time without notice to the
Borrower, any such notice being hereby expressly waived, to set off and to
appropriate or apply any and all deposits of money or property or any other
indebtedness at any time held or owing by such Lender to or for the credit or
the account of the Borrower against and on account of all outstanding
Obligations and all Obligations which from time to time may become due hereunder
and all other obligations and liabilities of the Borrower under this Agreement,
irrespective of whether or not such Lender shall have made any demand hereunder
and whether or not said obligations and liabilities shall have matured.
(b) Each Lender agrees that if it shall, by exercising any right of
set off or counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal, interest or fees due with respect to any Note
held by it which is greater than the proportion received by any other Lender in
respect of the aggregate amount of principal, interest or fees due with respect
to any Note held by such other Lender, the Lender receiving such proportionately
greater payment shall purchase such participations in the Notes held by the
other Lenders and such other adjustments shall be made as may be required so
that all such payments of principal, interest or Fees with respect to the Notes
held by the Lenders shall be shared by the Lenders pro rata according to their
respective Commitments.
Section 14.15. Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by the
Borrower and each of the Lenders shown on the signature pages hereof.
Section 14.16. Limitation on Liability of EIP/WV. The liability of each
entity comprising the Borrower under this Agreement for the Obligations shall be
joint and several. However, notwithstanding the foregoing, the Lenders agree
that, the liability of EIP/WV under this Agreement shall not exceed the amount
by which (A) the portion of the then current fair
-73-
market value of the Properties owned by EIP/WV exceeds (B) the then current
outstanding principal balance of all Indebtedness (other than the Obligations)
of EIP/WV permitted under this Agreement, calculated in each case as of the
Maturity Date or the date of any earlier acceleration of the Obligations, as
applicable. Such maximum liability of EIP/WV shall be allocated on a pro rata
basis among the Notes in accordance with the Lenders' respective Percentages.
Article XV.
NOTICES
Section 15.1. Giving Notice. All notices and other communications provided
to any party hereto under this Agreement or any other Loan Document shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below or at such other address as may be designated by
such party in a notice to the other parties. Any notice, if mailed and properly
addressed with postage prepaid, shall be deemed given when received; any notice,
if transmitted by telex or facsimile, shall be deemed given when transmitted
(answerback confirmed in the case of telexes). Notice may be given as follows:
To the Borrower:
Equity Inns, Inc.
0000 Xxxx Xxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: J. Xxxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
To Guarantors:
Equity Inns, Inc.
0000 Xxxx Xxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: J. Xxxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
To each Lender:
As shown below the Lenders' signatures.
To the Administrative Agent:
JPMorgan Chase Bank, N.A.
Real Estate Investment Banking
000 Xxxxx Xxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000 0315
Attention: Xxxxxxxx Xxxxx
Telecopy: (000) 000-0000
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With a copy to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx LLP
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000 0000
Section 15.2. Change of Address. Each party may change the address for
service of notice upon it by a notice in writing to the other parties hereto.
-75-
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
BORROWER: EQUITY INNS PARTNERSHIP, L.P.
By: EQUITY INNS TRUST, its General Partner
By: /s/ J. Xxxxxxxx Xxxxxxx
Title: Executive VP
EQUITY INNS/WEST VIRGINIA
PARTNERSHIP, L.P.
By: EQUITY INNS SERVICES, INC., its
General Partner
By: /s/ J. Xxxxxxxx Xxxxxxx
Title: Executive VP
EQUITY INNS PARTNERSHIP II, L.P.
By: EQUITY INNS TRUST, its General Partner
By: /s/ J. Xxxxxxxx Xxxxxxx
Title: Executive VP
S-1-
LENDERS: JPMORGAN CHASE BANK, N.A.
Individually and as Administrative Agent
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Associate
Commitment: $20,000,000
Percentage of Aggregate Commitment: 16%
Address for Notices:
Real Estate Investment Banking
000 Xxxxx Xxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000 0315
Attention: Xxxxxxxx Xxxxx
Telephone: 312/000-0000
Telecopy: 312/325-3122
S-2-
CALYON NEW YORK BRANCH
Individually and as Syndication Agent and Co-Lead
Arranger
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Managing Director
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Director
Commitment: $20,000,000
Percentage of Aggregate Commitment: 16%
Address for Notices:
Lodging Group
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
Telephone: 212/000-0000
Telecopy: 212/261-7532
S-3-
AMSOUTH BANK
Individually and as Documentation Agent
By: /s/ Xxxxxxxx Xxxxx
Name: Xxxxxxxx Xxxxx
Title: Vice President
Commitment: $19,000,000
Percentage of Aggregate Commitment: 15.2%
Address for Notices:
0000 Xxxxx Xxxxxx Xxxxx
XxXxxxx Sonat Tower, 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx Xxxxx
Telephone: 205/000-0000
Telecopy: 205/326-4075
S-4-
BANK OF AMERICA, N.A.
Individually and as Documentation Agent
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
Commitment: $19,000,000
Percentage of Aggregate Commitment: 15.2%
Address for Notices:
000 Xxxx Xxxxxx, 00xx xxxxx,
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone: 214/000-0000
Telecopy: 214/209-0085
S-5-
SUNTRUST BANK
Individually and as Documentation Agent
By: /s/ W. Xxxx Xxxxxxx
Name: W. Xxxx Xxxxxxx
Title: Senior Vice President
Commitment: $19,000,000
Commitment: $19,000,000
Percentage of Aggregate Commitment: 15.2%
Address for Notices:
0000 Xxxxx Xxxxxxxxx 0xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: W. Xxxx Xxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
S-6-
UNION PLANTERS BANK, N.A.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
Commitment: $15,000,000
Percentage of Aggregate Commitment: 12%
Address for Notices:
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
S-7-
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Senior Vice President
Commitment: $8,000,000
Percentage of Aggregate Commitment: 6.4%
Address for Notices:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
S-8-
FIFTH THIRD BANK, N.A.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Assistant Cashier
Commitment: $5,000,000
Percentage of Aggregate Commitment: 4%
Address for Notices:
000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
S-9-
The undersigned, Equity Inns, Inc. and Equity Inns Trust, join in this
Agreement for purposes of making the representations and warranties contained in
Article VII hereof and agreeing to perform certain of the covenants described in
Article VIII hereof.
EQUITY INNS, INC.
By: /s/ J. Xxxxxxxx Xxxxxxx
Title: Executive VP
EQUITY INNS TRUST
By: /s/ J. Xxxxxxxx Xxxxxxx
Title: Executive VP
S-10-
EXHIBIT A
FORM OF INDEMNITY AGREEMENT
SEE INDEMNITY AGREEMENT OF EVEN DATE HEREWITH.
1
EXHIBIT B
FORM OF NOTE
[Banks in Existing Facility will receive an Amended and Restated Note]
_________, 2005
On or before the Maturity Date, as defined in that certain Second Amended
and Restated Secured Revolving Credit Agreement dated as of _______, 2005 (the
"Agreement") among EQUITY INNS PARTNERSHIP, L.P., a Tennessee limited
partnership, EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P., a Tennessee limited
partnership and EQUITY INNS PARTNERSHIP II, L.P., a Tennessee limited
partnership (collectively, "Borrower"), CALYON NEW YORK BRANCH, individually and
as Syndication Agent, JPMORGAN CHASE BANK, N.A., a national bank organized under
the laws of the United States of America, individually and as Administrative
Agent for the Lenders (as such terms are defined in the Agreement), and the
other Lenders listed on the signature pages of the Agreement, Borrower promises
to pay to the order of _________________________ (the "Lender"), or its
successors and assigns, the aggregate unpaid principal amount of all Loans made
by the Lender to the Borrower pursuant to Section 2.1 of the Agreement, in
immediately available funds at the office of the Administrative Agent in
Chicago, Illinois, together with interest on the unpaid principal amount hereof
at the rates and on the dates set forth in the Agreement. The Borrower shall pay
this Promissory Note ("Note") in full on or before the Maturity Date in
accordance with the terms of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Advance and the date and amount of each principal
payment hereunder.
This Note is issued pursuant to, and is entitled to the security under and
benefits of, the Agreement and the other Loan Documents, to which Agreement and
Loan Documents, as they may be amended from time to time, reference is hereby
made for, inter alia, a statement of the terms and conditions under which this
Note may be prepaid or its maturity date accelerated. Capitalized terms used
herein and not otherwise defined herein are used with the meanings attributed to
them in the Agreement. This Note is not negotiable.
If there is an Event of Default or Default under the Agreement or any
other Loan Document and Lender exercises its remedies provided under the
Agreement and/or any of the Loan Documents, then in addition to all amounts
recoverable by the Lender under such documents, Lender shall be entitled to
receive reasonable attorneys fees and expenses incurred by Lender in exercising
such remedies.
Borrower and all endorsers severally waive presentment, protest and
demand, notice of protest, demand and of dishonor and nonpayment of this Note
(except as otherwise expressly provided for in the Agreement), and any and all
lack of diligence or delays in collection or enforcement of this Note, and
expressly agree that this Note, or any payment hereunder, may be extended from
time to time, and expressly consent to the release of any party liable for the
obligation secured by this Note, the release of any of the security of this
Note, the acceptance of
2
any other security therefor, or any other indulgence or forbearance whatsoever,
all without notice to any party and without affecting the liability of the
Borrower and any endorsers hereof.
This Note shall be governed and construed under the internal laws of the
State of Illinois.
All liability of the entities comprising the Borrower hereunder shall be
joint and several. However, the liability of Equity Inns/West Virginia
Partnership, L.P. under this Note is limited as described in Section 14.16 of
the Agreement.
BORROWER AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT
UNDER THIS PROMISSORY NOTE OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO OR
ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS NOTE AND
AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
Florida documentary stamp tax due on this Note is being paid upon the
recordation, in the Public Records of Miami-Dade County, Florida, of the
mortgage and modifications thereto securing this Note.
EQUITY INNS PARTNERSHIP, L.P., a Tennessee
limited partnership
By: Equity Inns Trust, its general partner
By: __________________________________
Its:__________________________________
EQUITY INNS/WEST VIRGINIA
PARTNERSHIP, L.P., a Tennessee limited
partnership
By: Equity Inns Services, Inc., its general
partner
By:__________________________________
Its:__________________________________
EQUITY INNS PARTNERSHIP II, L.P., a
Tennessee limited partnership
By: Equity Inns Trust, its general partner
3
By:__________________________________
Its:__________________________________
4
Unpaid
Principal Notation
Date Balance Made by
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
5
EXHIBIT C
Form of Limited Recourse Guaranty
See form of Limited Recourse Guaranty of even date herewith delivered by
E.I.P. Orlando, L.P.
6
EXHIBIT D
FORM OF AMENDED AND RESTATED GUARANTY
See Amended and Restated Guaranty of even date.
7
EXHIBIT E
Intentionally Deleted
8
EXHIBIT F
Intentionally Deleted
9
EXHIBIT G
Intentionally Deleted
10
EXHIBIT H
WIRING INSTRUCTIONS
To: JPMorgan Chase Bank, N.A., as Administrative Agent (the "Agent") under the
Credit Agreement Described Below
Re: Second Amended and Restated Secured Revolving Credit Agreement, dated as
of _________, 2005 (as amended, modified, renewed or extended from time to
time, the "Agreement"), among Equity Inns Partnership, L.P., Equity
Inns/West Virginia Partnership, L.P. and Equity Inns Partnership II, L.P.
(collectively, the "Borrower"), JPMorgan Chase Bank, N.A., individually
and as Administrative Agent, Calyon New York Branch, individually and as
Syndication Agent, Fleet Bank, as Documentation Agent, and the Lenders
named therein. Terms used herein and not otherwise defined shall have the
meanings assigned thereto in the Credit Agreement.
The Administrative Agent is specifically authorized and directed to act
upon the following standing money transfer instructions with respect to the
proceeds of Advances or other extensions of credit from time to time until
receipt by the Administrative Agent of a specific written revocation of such
instructions by the Borrower, provided, however, that the Administrative Agent
may otherwise transfer funds as hereafter directed in writing by the Borrower in
accordance with Section 15.1 of the Agreement or based on any telephonic notice
made in accordance with the Agreement.
Facility Identification Number(s)_______________________________________________
Customer/Account Name: Equity Inns Partnership, L.P., Equity Inns/West Virginia
Partnership, L.P. and Equity Inns Partnership II, L.P.
Transfer Funds To: JPMorgan Chase Bank, N.A.
For Account No._________________________________________________________________
Reference/Attention To _________________________________________________________
Authorized Officer (Customer Representative) Date
_______________________________ ____________________________
(Please Print) Signature
Bank Officer Name Date
_______________________________ ____________________________
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
11
EXHIBIT I
FORM OF COMPLIANCE CERTIFICATE
Under that certain Second Amended and Restated Secured Revolving Credit
Agreement dated as of _________ 2005, (the "Credit Agreement"), between Equity
Inns Partnership, L.P., Equity Inns / West Virginia Partnership, L.P. and Equity
Inns Partnership II, L.P., as Borrower and JPMorgan Chase Bank, N.A.
("JPMorgan") as Administrative agent, Calyon New York Branch as Syndication
Agent and Co-Lead Arranger, Fleet Bank, as Documentation Agent, and the Lenders
defined therein (the "Credit Agreement").
The undersigned, as _________________ of Equity Inns Partnership L.P., and as
_________________ of Equity Inn / West Virginia Partnership L.P., pursuant to
Section 8.2 of the Credit Agreement, hereby certify to JPMorgan as
Administrative Agent as follows:
1. A review of the activities of Borrower during the most recent ended fiscal
quarter (which quarter ended _______) of the Borrower has been made under
my supervision.
2. As of the date hereof, all of the representations and warranties of
Borrower contained in the Credit Agreement and each of the Loan Documents
(as defined in the Credit Agreement) are true and correct in all material
respects (except to the extent that they speak to a specific date or are
based on facts which have changed by transactions expressly contemplated
or permitted by the Credit Agreement).
3. No event has occurred and is continuing which constitutes an Event of
Default or a potential Event of Default.
4. The following Borrowing Base computation for the most recent ended fiscal
quarter, together with the supporting schedule attached hereto is true and
correct:
A. Total Collateral Pool Asset Values $_________________
B. 60% of A $_________________
C. The principal amount which would produce an Included Collateral Pool
Debt Service Coverage Ratio of 1.75 (from 1L of Schedule I) $_________________
D. 60% of the total Collateral Pool Asset Values of the Excluded
Properties and Properties Under Development $_________________
E. C plus D $_________________
F. The lesser of B and E $_________________
G. Allocated Facility Amount $_________________
12
5. The following covenant computations, for the most recent ended fiscal
quarter, together with the supporting schedule attached hereto, are true
and correct:
8.3 Limitations on Properties Under Development
A. Aggregate Total Cost of all Properties Under Development $_________________
B. 10% of Total Cost of all Properties owned by the Consolidated Group $_________________
A must be less than or
equal to B
8.15 Limitations in Borrowing Base
Borrower Properties
A. Borrowing Base $_________________
B. Total Collateral Pool Asset Values of Properties which are,
directly or indirectly, wholly owned and controlled by Borrower $_________________
C. B divided by A $_________________
C must be greater than or
Fee Simple Properties equal to 85%
D. Total Collateral Pool Asset Values of Properties which are,
directly or indirectly, held in fee simple by Borrower or a
Wholly-Owned Subsidiary $_________________
E. D divided by A _________________%
E must be greater than or
equal to 90%
Individual Asset Concentration
H. Collateral Pool Asset Value of the Collateral Pool Asset
which makes up the greatest percentage of the Borrowing
Base $_________________
I. H divided by A _________________%
I must be less than or
equal to 20%
Properties Under Development and Excluded Properties
J. Total amount of the Borrowing Base attributable to Properties
Under Development and Excluded Properties _________________%
J must be less than
17% of A
K. Total Amount of Borrowing Base derived from Collateral Pool
Asset that are:
(i) not directly or indirectly, wholly owned and controlled by the
Borrower; (ITEM C)
(ii) not directly or indirectly, held in fee simple by the Borrower or a
Wholly-Owned Subsidiary (ITEM E) plus
(iii) Properties Under Development and Excluded Properties (ITEM J). _________________%
K must be less than
30% of A
9.3 Leverage.
$_________________
A. Total Indebtedness $_________________
B. EBITDA $_________________
C. A divided by B C must be less than or
D. 5.75 equal to D
13
\
9.3 Additional Recourse Indebtedness
A. Recourse Indebtedness of the Consolidated Group $_________________
B. Allocated Facility Amount $_________________
C. $50,000,000
D. B plus C $_________________
A must be less than or
equal to D
9.4 Dividends
9.4(a) A. Total dividends for the past four quarters
(excluding Pre ferred Stock Expense) $_________________
B. 95% of the Funds From Operations for the past four quarters $_________________
A must be less than or
equal to B
9.4(b) A. Total dividends for the past four quarters
(excluding Preferred Stock Expense) $_________________
B. Applicable FCF Percentage of Free Cash Flow $_________________
A must be less than or
equal to B
9.4(c) A. Amount of Dividends preceding quarter
(excluding Preferred Stock Expense) $_________________
B. Amount of Dividends This Quarter $_________________
B must be less than or
equal to A if the ratio of
Total Indebtedness to
EBIDTA Exceeds 5.25x
9.5 Floating Rate Debt
A. Floating Rate Debt, excluding the Facility $_________________
Must be less than
$150mm
9.7 FF&E Expenditures.
A. Total actual expenditures of the Consolidated Group for FF&E
replacement and approved capital improvements for the Properties for
the past four quarters. $_________________
B. Amount of reserves maintained on the balance sheet on the last
day of the period by the Consolidated Group for FF&E replacement and
approved capital improvements less the amount of such reserves
maintained as of the first day of the period. $_________________
C. Sum of A plus B $_________________
D. 4% of gross room revenues for the past four
quarters for the Properties $_________________
C must be greater than or
equal to D
9.8(a) 9.8(a)Minimum Tangible Net Worth.
A. Tangible Net Worth of the Consolidated Group $_________________
14
B. 80% of Tangible Net Worth at 12/31/04 $_________________
C. 75% of equity interest issued after 12/31/04 $_________________
D. Sum of B and C $_________________
A must be greater than or
equal to D
9.8(b) Minimum Fixed Charge Coverage
A. Adjusted EBITDA for the most recent 12 calendar months $_________________
B. Ground Lease Expense for the most recent 12 calendar months $_________________
C. Sum of A plus B $_________________
D. Fixed Charges for the most recent 12 calendar months $_________________
E. C divided by D $_________________
E must be greater than or
equal to the amount
1.5 to 1
9.8(c) Minimum Interest Coverage
A. Adjusted EBIDTA for the most recent 12 calendar months $_________________
B. Interest Expense for the most recent 12 calendar months $_________________
C. A divided by B _________________
C must be greater than or
equal to the amount
specified in Section
9.8(c) for the applicable
time period
9.11 Share Repurchase
A. Total amount paid by Equity Inns for stock repurchase during the
most recently completed quarter $_________________
B. Amount Available for dividend payments during such quarter $_________________
C. Amount of Dividends paid during such quarter $_________________
A must be less than B-C
The following computation of the limits imbedded in the definitions, together
with the supporting schedule attached hereto, is true and correct.
Limitations in Borrowing Base (See definition of "Eligible Property")
Borrower Properties
A. Borrowing Base $_________________
B. Total Collateral Pool Asset Values of Properties which are,
directly or
15
indirectly, wholly owned and controlled by Borrower $____________
C. B divided by A _____________%
C must be greater than
or equal to 90%
Fee Simple Properties
D. Total Collateral Pool Asset Values of Properties which are, directly or
indirectly, held in fee simple by Borrower or a Wholly-Owned Subsidiary $____________
E. D divided by A _____________%
E must be greater than
or equal to 90%
State Concentration
F. Total Collateral Pool Asset Values of all Collateral Pool Assets located
in the state containing the Properties which makes up the greatest percentage of
the Borrowing Base $____________
G. F divided by A _____________%
G must be less than or
equal to 20%
Individual Asset Concentration
H. Collateral Pool Asset Value of the Collateral Pool Asset which makes up
the greatest percentage of the Borrowing Base $____________
I. H divided by A _____________%
I must be less than or
equal to 20%
Properties Under Development
J. Total amount of the Borrowing Base attributable to Properties Under
Development $____________
K Total Amount of Borrowing Base attributable to Excluded Properties. $____________
J must be less than
$35,000,000
Limitation on Excluded Investment Affiliates (see definition)
Ownership Percentage
A. The largest Consolidated Group Pro Rata Share of any Investment Affiliate $____________
A must be less than
20%
Book Value
B. The aggregate book value of the Consolidated Group's investment in all
Excluded Investment Affiliates $____________
C. $20,000,000 $____________
D. $25,000,000 $____________
E. The amount of the Borrowing Base attributable to Properties Under
Development $____________
F. D minus E $____________
A must be less than or
equal to D
G. The lesser of C and F
16
In addition, the Consolidated Group does not have voting control of, or
the ability to otherwise direct the actions of any Investment Affiliate, and no
Investment Affiliate has Indebtedness which is recourse to, or guaranteed by,
any member of the Consolidated Group.
Date:__________________________________
By:____________________________________
Name:__________________________________
Title:_________________________________
17
SCHEDULE I
CALCULATION OF COVENANTS
1. Included Collateral Pool Debt Service Coverage Ratio
A. Net Operating Income of all Included Collateral Pool Assets for the
past four quarters $____________
B. Agreed FF&E Reserve for the past four quarters $____________
C. A minus B $____________
D. C divided by 1.75 = annual debt service payment amount resulting in
1.75 Included Collateral Pool Debt Service Coverage Ratio $____________
E. Average Interest Rate for the Facility for the past 4 quarters _____________%
F. D divided by E $____________
G. Yield on 10-year Treasuries as of the last Business Day of the
most recently completed quarter. _____________%
H. 2.50%
I. G plus H _____________%
J. 6.75% _____________%
K. Higher of I or J _____________%
L. Debt Service Constant for loan with equal monthly payments and an
interest rate equal to K above and a 25 year amortization Schedule. %____________
M. D divided by L $____________
N The lesser of F and M (The principal amount which would produce an
Included Collateral Pool Debt Service Coverage Ratio of 1.75) $____________
2. Total Cost
A. Book Value of all Properties owned by the Consolidated Group $____________
B. Accumulated Depreciation on such Properties $____________
C. Consolidated Group Pro Rata Share of the book value of all
properties owned by Investment Affiliates $____________
D. Consolidated Group Pro Rata Share of the depreciation associated
with such Properties owned by Investment Affiliates $____________
E. Sum of A, B, C, and D $____________
3. Total Indebtedness
A. Indebtedness of the Consolidated Group
1. indebtedness for borrowed money $____________
18
2. obligations under financing and capital leases $____________
3. Guarantee Obligations $____________
4. Letters of credit $____________
5. Other items which constitute Indebtedness not included in the
above $____________
B. Consolidated Group Pro Rata Share of all Indebtedness of any
Investment Affiliate other than Excluded Investment Affiliates (to the
extent not included in A)
1. Indebtedness for borrowed money $____________
2. Obligations under financing and capital leases $____________
3. Guarantee Obligations $____________
4. Letters of Credit $____________
5. Other items which constitute Indebtedness not included in the
above $____________
C. Sum of A and B equals Total Indebtedness $____________
4. EBITDA for the most recent four quarters
A. EBITDA of the Consolidated Group excluding income from Investment
Affiliates $____________
B. Consolidated Group Pro Rata Share of EBITDA of Investment Affiliates
other than Excluded Investment Affiliates $____________
C. Preferred Stock Expense $____________
D. All gains or losses from sale of assets, write downs debt or
equity restructure, adjusting for non-cash effect of straight lining of
rents $____________
E. Effect of discontinued operations $____________
F. Effect of income taxes $____________
G. Effect of minority interests $____________
H. Interest Expense $____________
I. Depreciation, amortization and non cash items $____________
J. Adjustment for Properties not owned during whole period $____________
k. Sum of (A plus B) less sum of (C plus D plus E plus F plus G minus H
or minus I) equals EBITDA $____________
5. Adjusted EBITDA for any period
A. EBITDA for any period $____________
B. Agreed FF&E Reserve for all Properties of the Consolidated Group $____________
during such period
$____________
C. 4% of gross room revenues for such period on all Properties of
Investment Affiliates $____________
19
D. A minus the sum of B plus C equals Adjusted EBITDA
6. Interest Expense for the most recent four quarters
A. Interest Expense of the Consolidated Group $____________
B. Consolidated Group Pro Rata Share of any accrued or paid interest of
an Investment Affiliate (other than Excluded Investment Affiliates) $____________
C. Sum of A plus B equals Interest Expense $____________
7. Fixed Charges for the most recent four quarters
A. Interest Expense $____________
B. Regularly scheduled principal payments of Indebtedness of the
Consolidated Group $____________
C. Consolidated Group Pro Rata Share of any regularly scheduled
principal payments of an Investment Affiliate (other than Excluded
Investment Affiliates) $____________
D. Preferred Stock Expense $____________
E. Ground Lease Expense $____________
F. Sum of A, B, C, D, and E equals Fixed Charges $____________
8. Free Cash Flow for the past four Quarters
A. Funds From Operations for the past four quarters $____________
B. Aggregate Room Revenue for the past four quarters $____________
C. B multiplied by 4% $____________
D. Scheduled principal payments on all Indebtedness of the Consolidated
Group for the past four quarters $____________
E. A minus the sum of C and D equals Free Cash Flow $____________
20
EXHIBIT J
MINIMUM SPECIFICATIONS FOR ENVIRONMENTAL INVESTIGATIONS
The following are Guidelines for the qualification of firms and
environmental professionals and for information to be included in Environmental
Site Assessments. These standards include the minimum elements common to
acceptable site assessments. Generally, it is intended for the standards to be
consistent with those outlined in the American Society for Testing and Materials
("ASTM") Designation: E 1527-00.
Qualifications of Investigating Firm
The firm or environmental professional must have 5 years of experience in
hazardous substances investigation. The environmental professional supervising
and signing the report should be experienced in environmental site
investigations, and should have relevant environmental experience and technical
qualifications, such as demonstrated by professional registration and/or
advanced education in related disciplines. The firm or environmental
professional performing the work should have adequate professional liability
insurance. Borrower and Lenders may agree in advance on qualified firms or
environmental professionals that will conduct the Phase I Reports. Borrower may
from time to time select other firms or environmental professionals that meet
the minimum qualifications set out above to conduct a Phase I Report, subject to
approval of the Administrative Agent, which approval shall not be unreasonably
withheld or delayed.
Depth of Reporting Required
Phase I - consists of site description, review of historical and
regulatory data and physical inspection. The firm or environmental professional
will follow the standard practices set out in the ASTM E 1527-00 guidelines in
conducting the Phase I Site Assessment and drafting the Report and in preparing
the Findings and Conclusions. All deletions and deviations from the
21
ASTM E 1527-00 guidelines shall be listed individually and in detail. As an
additional component of the Phase I Site Assessment, the firm or environmental
professional will conduct an asbestos survey or inspection in accordance with
the protocols set by OSHA under the Occupational Safety & Health Act (including
protocols set forth under the Asbestos Hazard Emergency Response Act (AHERA)
that are incorporated into the OSHA protocols) unless an alternate protocol is
approved by the Administrative Agent. In all events such survey or inspection
shall comply with all applicable Environmental Laws, including, but not limited
to, 29 C.F.R. Section 1910.1001. The firm or environmental professional will
also conduct a lead-based paint survey or inspection when necessary, including
but not limited to prior to demolition or renovation work and as required by all
applicable Environmental Laws, including, but not limited to 29 C.F.R. Section
1910.1025 and 1926.62. If no potential contamination is indicated, the report
should so state, and a specific statement should be made that no further
investigation is required.
Phase II - If a Phase I examination indicates the presence of recognized
environmental conditions which would warrant further appropriate inquiry, the
consultant should document the basis for that conclusion, recommend a testing
program for further evaluation, including the areas to be tested and, if
appropriate, the hazardous constituents of concern, sampling procedures to be
used and methods used to assess the samples. If after evaluating the
recommendation, the Borrower determines that a Phase II is necessary, then the
Borrower will request the firm or environmental professional to prepare a bid,
and may solicit competitive bids from other firms or environmental
professionals. The Phase II Report should document the extent, and, if possible,
source, of contamination so that the Borrower can assess whether remediation is
required under applicable Environmental Laws. If the Borrower plans to conduct
remediation estimated to cost more than $250,000 for any Project, the Borrower
will promptly provide written notice to the
22
Administrative Agent. If the Borrower does not follow the recommendation of the
firm or environmental professional to conduct a Phase II investigation or
remediation for any Project, the Borrower will promptly provide written notice
to the Administrative Agent.
Reliance on Phase I Report
The Phase I Report shall include a statement that the firm or
environmental professional acknowledges that the Lenders will be relying on the
Report.
23
EXHIBIT K
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption (the "Assignment and Assumption") is dated
as of the Effective Date set forth below and is entered into by and between
[INSERT NAME OF ASSIGNOR] (the "Assignor") and [INSERT NAME OF ASSIGNEE] (the
"Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Agent as contemplated below, the interest in and to all of the Assignor's
rights and obligations in its capacity as a Lender under the Credit Agreement
and any other documents or instruments delivered pursuant thereto that
represents the amount and percentage interest identified below of all of the
Assignor's outstanding rights and obligations under the respective facilities
identified below (including without limitation any letters of credit, guaranties
and swingline loans included in such facilities and, to the extent permitted to
be assigned under applicable law, all claims (including without limitation
contract claims, tort claims, malpractice claims, statutory claims and all other
claims at law or in equity), suits, causes of action and any other right of the
Assignor against any Person whether known or unknown arising under or in
connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby) (the
"Assigned Interest"). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.
1. Assignor:
2. Assignee:_______________________ [AND IS AN AFFILIATE/APPROVED FUND OF
[IDENTIFY LENDER] (1)
3. Borrower(s):
4. Agent:__________ , as the agent under the Credit Agreement.
5. Credit Agreement: The [AMOUNT] Credit Agreement dated as of
_______________ among [NAME OF BORROWER(S)], the Lenders party thereto, [NAME OF
AGENT], as Agent, and the other agents party thereto.
6. Assigned Interest:
---------------
(1) Select is Applicable
24
Facility Assigned Aggregate Amount of Amount of Commitment/Loans Percentage Assigned of
Commitment/Loans for all Assigned* Commitment/Loans(2)
Lenders*
____________(3) $ $ _______%
____________ $ $ _______%
____________ $ $ _______%
7. Trade Date:________________________________ (4)
Effective Date: ____________________, 20__ [TO BE INSERTED BY AGENT AND
WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER BY THE AGENT.]
The terms set forth in this Assignment and Assumption are hereby agreed
to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:_____________________________
Title:__________________________
ASSIGNEE
[NAME OF ASSIGNEE]
By:_____________________________
Title:__________________________
[Consented to and](5) Accepted:___________________
[NAME OF AGENT], as Agent
By:_________________________
Title:______________________
[Consented to:](6)
-----------------
(2) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.
(3) Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g. "Revolving
Credit Commitment," "Term Loan Commitment," etc.
(4) Insert if satisfaction of minimum amounts is to be determined as of the
Trade Date.
(5) To be added only if the consent of the Agent is required by the terms of the
Credit Agreement.
25
*Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Effective Date.
[NAME OF RELEVANT PARTY]
By:_____________________
Title:__________________
---------------
(6) To be added only if the consent of the Borrower and/or other parties (e.g.
Swingline Lender, L/C Issuer) is required by the terms of the Credit Agreement.
26
ANNEX 1
TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor represents and warrants that (i) it is the
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby. Neither the Assignor nor any of its officers, directors,
employees, agents or attorneys shall be responsible for (i) any statements,
warranties or representations made in or in connection with the Credit Agreement
or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency, perfection, priority, collectibility,
or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document, (iv) the performance or
observance by the Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document, (v)
inspecting any of the property, books or records of the Borrower, or any
guarantor, or (vi) any mistake, error of judgment, or action taken or omitted to
be taken in connection with the Loans or the Loan Documents.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) from
and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of the Assigned Interest,
shall have the obligations of a Lender thereunder, (iii) agrees that its payment
instructions and notice instructions are as set forth in Schedule 1 to this
Assignment and Assumption, (iv) confirms that none of the funds, monies, assets
or other consideration being used to make the purchase and assumption hereunder
are "plan assets" as defined under ERISA and that its rights, benefits and
interests in and under the Loan Documents will not be "plan assets" under ERISA,
(v) agrees to indemnify and hold the Assignor harmless against all losses, costs
and expenses (including, without limitation, reasonable attorneys' fees) and
liabilities incurred by the Assignor in connection with or arising in any manner
from the Assignee's non-performance of the obligations assumed under this
Assignment and Assumption, (vi) it has received a copy of the Credit Agreement,
together with copies of financial statements and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the
Assigned Interest on the basis of which it has made such analysis and decision
independently and without reliance on the Agent or any other Lender, and (vii)
attached as Schedule 1 to this Assignment and Assumption is any documentation
required to be delivered by the Assignee with respect to its tax status pursuant
to the terms of the Credit Agreement, duly completed and executed by the
Assignee and (b) agrees that (i) it will, independently and without reliance on
the Agent, the Assignor or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action
27
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.
2. Payments. The Assignee shall pay the Assignor, on the Effective Date,
the amount agreed to by the Assignor and the Assignee. From and after the
Effective Date, the Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignor for amounts which have accrued to but excluding the Effective Date
and to the Assignee for amounts which have accrued from and after the Effective
Date.
3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of Illinois.
28
ADMINISTRATIVE QUESTIONNAIRE
(Schedule to be supplied by Closing Unit or Trading Documentation Unit)
29
EXHIBIT L
AMENDMENT TO SECOND AMENDED AND RESTATED
SECURED REVOLVING CREDIT AGREEMENT
This Amendment to the Second Amended and Restated Secured Revolving Credit
Agreement (the "Agreement") is made as of _________________ ,________________ ,
by and among Equity Inns Partnership, L.P., a Tennessee limited partnership,
Equity Inns/West Virginia Partnership, L.P., a Tennessee limited partnership and
Equity Inns Partnership II, L.P., a Tennessee limited partnership (collectively,
"Borrower") Equity Inns Trust, Equity Inns Services, Inc. and Equity Inns, Inc.
(collectively, "Guarantor"), JPMorgan Chase Bank, N.A., individually and as
"Administrative Agent," and one or more new or existing "Lenders" shown on the
signature pages hereof.
RECITALS
A. Borrower, Administrative Agent and certain other Lenders have entered
into a Second Amended and Restated Secured Revolving Credit Agreement dated as
of __________, 2005 (as amended, the "Credit Agreement"). All capitalized terms
used herein and not otherwise defined shall have the meanings given to them in
the Credit Agreement.
B. Pursuant to the terms of the Credit Agreement, the Lenders initially
agreed to provide Borrower with a revolving credit facility in an aggregate
principal amount of up to $125,000,000. The Borrower, the Administrative Agent
and the Lenders now desire to amend the Credit Agreement in order to, among
other things (i) increase the Aggregate Commitment to $__________________; and
(ii) admit [NAME OF NEW BANKS] as "Lenders" under the Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing Recitals and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
AGREEMENTS
1. The foregoing Recitals to this Amendment hereby are incorporated into
and made part of this Amendment.
2. From and after _________, ____ (the "Effective Date") (i) [NAME OF NEW
BANKS] shall be considered as "Lenders" under the Credit Agreement and the Loan
Documents, and (ii) [name of existing lenders] shall each be deemed to have
increased its Commitment to the amount shown next to their respective signatures
on the signature pages of this Amendment, each having a Commitment in the amount
shown next to their respective signatures on the signature pages of this
Amendment. The Borrower shall, on or before the Effective Date, execute and
deliver to each of such new or existing Lenders a new or Note in the amount of
such Commitment.
3. From and after the Effective Date, the Aggregate Commitment shall equal
__________ Million Dollars ($___,000,000).
30
4. For purposes of Section 15.1 of the Credit Agreement (Giving Notice),
the address(es) and facsimile number(s) for [NAME OF NEW BANKS] shall be as
specified below their respective signature(s) on the signature pages of this
Amendment.
5. The Borrower hereby represents and warrants that, as of the Effective
Date, there is no Default or Event of Default, the representations and
warranties contained in Articles VI and VII of the Credit Agreement are true and
correct as of such and the Borrower has no offsets or claims against any of the
Lenders.
6. As expressly modified as provided herein, the Credit Agreement shall
continue in full force and effect.
7. This Amendment may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Amendment by signing any such counterpart.
IN WITNESS WHEREOF, the parties have executed and delivered this Amendment
as of the date first written above.
EQUITY INNS PARTNERSHIP, L.P.
By: EQUITY INNS TRUST, its General Partner
By:________________________________________
Title:_____________________________________
EQUITY INNS/WEST VIRGINIA
PARTNERSHIP, L.P.
By: EQUITY INNS SERVICES, INC., its
General Partner
By:________________________________________
Title:_____________________________________
EQUITY INNS PARTNERSHIP II, L.P.
By: EQUITY INNS TRUST, its General Partner
By:_______________________________________
EQUITY INNS, INC.
31
By:_______________________________________
Title:____________________________________
EQUITY INNS TRUST
By:_______________________________________
Title:____________________________________
EQUITY INNS SERVICES, INC.
By:_______________________________________
Title:____________________________________
JPMORGAN CHASE BANK, N.A., Individually
and as Administrative Agent
By:______________________________________
Print Name:______________________________
Title:___________________________________
0 Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: 312/325-3122
Attention: Corporate Real Estate
Amount of Commitment: $__________________
[NAME OF NEW LENDER]
By:______________________________________
Print Name:______________________________
Title:___________________________________
[ADDRESS OF NEW LENDER]
Phone:___________________________________
Facsimile:_______________________________
Attention:_______________________________
32
EXHIBIT M
FORM OF MORTGAGE
(see attached)
33
EXHIBIT N
FORM OF MORTGAGE AMENDMENT
34
EXHIBIT O
ASSIGNMENT OF CONTRACTS
See Assignment of Contract of even date herewith.
35
EXHIBIT P
FORM OF SUBORDINATION LANGUAGE FOR MANAGEMENT AGREEMENTS
This Agreement shall be subordinate to any mortgage encumbering a Hotel,
and Manager agrees to enter into a lender-manager agreement with respect to each
Hotel, which agreement shall contain reasonable lender-manager provisions,
including, without limitation, Manager's acknowledgment that its real estate
interest in and to a Hotel, if any, created by this Agreement is subordinate to
any mortgage encumbering such Hotel, including providing any purchaser of such
Hotel at a foreclosure sale or deed in lieu of foreclosure (including the
lender) with the right to terminate this Agreement with respect to such Hotel;
provided, however, in no event will Manager agree to subordinate or waive its
right to receive fees, reimbursements or indemnification payments under this
Agreement arising prior to termination (but (a) if this Agreement is terminated
by the lender or such purchaser with respect to such Hotel, Manager shall not
look to the lender for payment of such fees, reimbursements or indemnification
payments and Manager's right to receive such fees, reimbursements or
indemnification payments shall be subordinated to the lender's rights and (b) if
this Agreement is not terminated by the lender or such purchaser with respect to
such Hotel, then such fees, reimbursements or indemnification payments shall be
payable by the lender or such purchaser).
36
EXHIBIT Q
FORM OF SUBORDINATION
AGREEMENT FOR PERMITTED OPERATING LEASES (AFFILIATES)
This Subordination and Attornment Agreement (the "Agreement") is dated as
of ______, 2005, among JPMORGAN CHASE BANK, N.A., a national banking
association, not individually but as "Agent" for the benefit of the lenders from
time to time under the Credit Facility described below (the "Lenders"),
___________________________., a Delaware corporation (the "Tenant") and EQUITY
INNS PARTNERSHIP, L.P.(the "Landlord").
RECITALS
A. The Landlord is the legal or beneficial owner of a fee or leasehold
estate in the hotel properties listed on Schedule 1, which Schedule is attached
hereto and made a part hereof by this reference (individually a "Property" or
collectively the "Properties" or the "Premises").
B. The Lenders have extended to Landlord and its affiliates a certain
secured revolving facility (the "Credit Facility") in the initial maximum
principal sum of $125,000,000, subject to further increase to $175,000,000, on
the terms, covenants and provisions contained in a certain Second Amended and
Restated Secured Revolving Credit Agreement dated as of ________, 2005 as
amended and modified from time to time (as so modified and amended, and as the
same may hereafter be modified and amended, the "Credit Agreement").
C. The Credit Facility is secured by various mortgages, deeds of trust,
deeds to secure debt, and similar instruments in favor of the Agent for the
benefit of the Lenders (collectively, the "Mortgages") encumbering the
Properties and certain other hotel properties owned by the Landlord and its
affiliates. The Mortgages and any other documents now and hereafter evidencing,
securing or otherwise relating to the Credit Facility are hereinafter
collectively referred to as the "Security Documents."
D. Tenant is the lessee of all of the Properties by the terms of certain
lease agreements described in Schedule 2 which is attached hereto and made a
part hereof, as amended and modified from time to time (as so modified and
amended, and as the same may hereafter be modified and amended as expressly
permitted in accordance with the terms and provisions hereof, individually a
"Lease" and collectively the "Leases").
E. The intent of the parties is that this Agreement shall be construed as
a separate subordination and attornment agreement for each Lease and for each
Property.
AGREEMENT
For mutual consideration, including the mutual covenants and agreements
set forth below, the Lenders' consent to Landlord's execution and delivery of
the Leases and the substantial economic benefit Tenant will derive from the
extension of the Credit Facility by Lenders to Landlord and its affiliates, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
37
1. Subordination. Tenant agrees that each Lease and all of the terms,
covenants and provisions thereof and all rights, remedies and options of Tenant
thereunder, including, without limitation, (a) any right of Tenant to purchase
all or part of the Property demised under such Lease and any right of first
offer available to Tenant to purchase all or part of the Property demised under
such Lease (such rights, collectively, the "Options"), (b) any renewal options
for the benefit of Tenant, (c) Tenant's interest, if any, in the Capital
Expenditure Reserve Account (as defined in such Lease) and (d) any right to
insurance proceeds or condemnation awards, shall at all times be subject and
subordinate to the Security Documents and the lien thereof and to all present or
future advances under the Credit Facility and all renewals, amendments,
modifications, consolidations, replacements and extensions of the Credit
Facility and the Security Documents, to the full extent of all amounts secured
by the Security Documents from time to time. Said subordination is to have the
same force and effect as if the Security Documents and such renewals,
modifications, consolidations, replacements and extensions thereof have been
executed, acknowledged, delivered and recorded prior to such Lease, any
amendments or modifications thereof and any notice thereof.
2. Tenant Options. Notwithstanding anything to the contrary contained in
this Agreement, provided Tenant is not then in default under terms of the
related Lease or this Agreement, Tenant may exercise any of the Options or
renewal rights granted to it under, and in strict accordance with the terms of,
such Lease; provided, however, Tenant acknowledges that Landlord's ability to
convey all or any portion of the Premises free and clear of the lien of the
Security Documents shall be subject to the fulfillment by Landlord of all terms,
provisions and conditions contained in Section 2.19(c) of the Credit Agreement.
3. Lack of Nondisturbance. Tenant acknowledges that the Agent shall have
the right to terminate each of the Leases pursuant to a foreclosure of the
related Mortgage, notwithstanding anything to the contrary in Article XXX of the
Lease or in any other provision thereof or in this Agreement.
4. Attornment. Tenant agrees that, at the written election of the Agent
given to Tenant which election may be given or withheld in the Agent's sole
discretion, in the event of a foreclosure of any or all of the Security
Documents by Agent or the acceptance of an assignment or deed in lieu of
foreclosure by Agent on behalf of the Lenders (or any assignee, nominee,
designee or successor of Agent or the Lenders) to ownership of a fee or
leasehold (as the case may be) interest or interests in any of the Premises,
Tenant will attorn to and recognize as its landlord the party which thereby
takes title (whether fee or leasehold, as the case may be) to all or any part of
the premises subject to the related Lease or Leases for the remainder of the
term of such Lease or Leases (including all extension periods which have been or
are hereafter exercised in accordance with the provisions of such Lease) upon
the same terms and conditions as are set forth in such Leases, which will
thenceforth be deemed direct leases between such party and Tenant, and Tenant
hereby agrees to pay and perform all of the obligations of Tenant pursuant to
such Leases. If such written election is made, Agent or such other party, by
virtue of such foreclosure, shall be deemed to have assumed and agreed to be
bound, as substitute landlord, by the terms and conditions of such Leases
(including, without limitation, any obligations with respect to the maintenance
and use of the Capital Expenditure Reserve Account) until the sale or other
disposition of its interest, except that such assumption shall not be deemed of
itself an acknowledgment by such new landlord of the validity of any then
existing claims of Tenant
38
against any prior landlord (including Landlord); provided however, that the
Agent, the Lenders, and any such assignee, nominee, designee or successor of the
Agent or the Lenders, as the case may be, shall not be (i) liable for any
accrued obligation of Landlord, or for an act or omission of Landlord, whether
prior to or after such foreclosure or transfer by assignment or deed in lieu of
foreclosure not arising by, through or under such new landlord, in effectuating
such transfer or foreclosure, (ii) required to make (or to permit proceeds of
insurance or condemnation awards to be used by Tenant to pay for) any repairs to
the Premises required as a result of fire or other casualty or by reason of
condemnation unless such new landlord shall be expressly obligated under the
Lease to make such repairs (or permit such proceeds or awards to be used for
such purposes) and shall have received sufficient casualty insurance proceeds or
condemnation awards to finance the completion of such repairs, (iii) required to
make any capital improvements to the Premises which Landlord may have agreed to
make, but had not completed, or to perform or provide any services not related
to possession or quiet enjoyment of the Premises, unless in each case such new
landlord shall be expressly obligated to do so under such Lease, or (iv) subject
to any offsets or counterclaims which shall have accrued to Tenant against
Landlord prior to the date upon which such new landlord shall become the owner
of all or part of the Premises. If the Agent so elects in writing to require
Tenant's attornment, except as set forth to the contrary in clause (i) or (iv)
of this paragraph 5 above, all rights and obligations under such Leases shall
continue as though such foreclosure proceedings had not been brought or as
though a deed or assignment in lieu of foreclosure had not been granted, and
such new landlord shall recognize all of Tenant's rights under such Leases
except as expressly provided otherwise in this Agreement. Tenant acknowledges
and agrees that, from and after the date on which such new landlord becomes the
owner of all or part of the Properties, for purposes of calculating the "Minimum
Price" under the Leases with respect to such Properties, the date on which such
new landlord becomes the owner shall be deemed to be the date of acquisition,
the "equity" of such new landlord under clause (a) of the definition of "Minimum
Price" shall be deemed to be the greater of (i) that portion of the aggregate
Obligations under the Credit Agreement reasonably allocated to such Property by
the Agent or (ii) the purchase price paid for such Property at the foreclosure
sale, such Property shall be deemed to be free of encumbrances as of such date
and all further adjustments to the "Minimum Price" for such Property will be
made from such initial "equity" amount.
5. Tenant Rights upon Landlord Security Documents Default. The Agent
acknowledges the rights of Tenant to cure any defaults of Landlord under the
Mortgages contained in Section 34.2 of each of the Leases. In furtherance
thereof, the Agent shall (a) give Tenant the same notice, if any, given to
Landlord of any default or acceleration of any obligation secured by any such
Mortgage or other Security Document or any sale in foreclosure thereunder, (b)
permit Tenant to cure any such default on Landlord's behalf within any
applicable cure period (and seek reimbursement of all costs associated therewith
from Landlord) and (c) permit Tenant to appear by its representative and to bid
at any sale in foreclosure made with respect to any of the Security Documents.
6. Tenant Estoppel. Tenant hereby represents and warrants to Agent that as
of the date hereof (i) Tenant is the owner and holder of the lessee's interest
under the Leases, (ii) none of the Leases have been modified or amended, (iii)
each of the Leases is in full force and effect, (iv) Tenant has taken possession
of the Premises on a rent-paying basis, (v) to the best of Tenant's knowledge
and belief, neither Tenant nor Landlord is in default under any of the terms,
39
covenants or provisions of any of the Leases, and (vi) neither Tenant nor, to
the best of Tenant's knowledge and belief, Landlord has commenced any action or
given or received any notice for the purposes of terminating any of the Leases.
7. Landlord Lease Default. Tenant shall notify Agent of any default by
Landlord under any Lease which could or would entitle Tenant to cancel such
Lease or xxxxx the rent (or any portion thereof) payable to Landlord thereunder.
Tenant agrees that, notwithstanding any provisions of any Lease to the contrary,
no notice of cancellation shall be effective unless Agent shall have received
notice of the default giving rise to such cancellation and shall have failed
within thirty (30) days after receipt of such notice to cure such default, or if
such default cannot be cured within thirty (30) days, shall have failed within
thirty (30) days after receipt of such notice to commence and to thereafter
diligently pursue any action necessary to cure such default; provided, however,
in no event shall such cure period extend beyond ninety (90) days after such
notice. Nothing contained in this paragraph 8 shall be construed as imposing any
obligation on Agent to cure any default by Landlord under any Lease.
8. (a) Tenant Notices and Agent Audit Access. Tenant hereby acknowledges
and agrees that, from and after the date hereof (and without regard to whether
any default then exists under any Lease or whether Agent has exercised any other
rights available to it hereunder or under the Security Documents), (i) Tenant
shall deliver to Agent copies of any and all notices delivered to Landlord
pursuant to or otherwise in connection with any Lease, simultaneously with
Tenant's delivery of the same to Landlord, and (ii) all of the audit,
examination, inspection, transcription and related rights of Landlord pursuant
to Section 3.9 and Article 25 of each of the Leases shall inure to the benefit
of Agent and may be exercised by Agent at all the times and to the full extent
provided therein with respect to Landlord.
(b) Agent Receipt of Rents. In the event Tenant receives written notice
from Agent that rentals and/or other monies due under any of the Leases are to
be paid to Agent, Tenant shall pay to Agent, or as otherwise directed by Agent,
by check made payable solely to Agent or as otherwise directed by Agent, all
rentals and other monies due or to become due under such Leases, and Landlord
hereby expressly authorizes Tenant to make such payments to Agent, or as
otherwise directed by Agent and Landlord hereby releases and discharges Tenant
of and from any liability to Landlord on account of any such payments. Should
Tenant fail to make payment as directed by Agent after receipt of any such
notice from Agent, Tenant shall remain liable to Agent for all amounts so paid
after receipt of such notice.
9. Insurance, Casualty and Condemnation. Notwithstanding any contrary or
inconsistent provisions contained in any Lease or in the Credit Agreement, with
respect to each and every Property which is both (a) part of the Collateral Pool
Assets under the Credit Facility and (b) demised to Tenant pursuant to a Lease,
the following provisions will apply:
A. Insurance Requirements. During the term of the Credit Facility and for
so long as any portion of the Obligations (as defined in the Credit Agreement)
shall remain outstanding, Tenant shall maintain the types of insurance with
respect to the Premises as are required by the provisions of Article 13 of each
of the Leases and shall otherwise perform its obligations set forth in such
Article 13. Notwithstanding anything contained in any Lease to the contrary,
Tenant shall not be permitted to acquire insurance through insurance companies
which are
40
Affiliates (as defined in the Leases) of Tenant even if insurance otherwise
satisfies the requirements of Section 13.6 of the Leases. Without limiting the
generality of the foregoing, all insurance policies insuring against casualty
and business interruption and other appropriate policies required under the
Leases shall include noncontributing mortgagee endorsements in favor of Agent
with loss payable to Agent, as well as standard waiver of subrogation
endorsements, and shall provide that the coverage shall not be terminated or
modified, nor a risk changed without thirty (30) days' advance written notice to
Landlord and Agent. If any portion of the insured risks are re-insured, the
re-insurance policies shall contain "cut-through" endorsements reasonably
satisfactory to Agent. Tenant shall pay the premiums for such insurance policies
as the same become due and payable. Not later than ten (10) days prior to the
expiration date of each of such insurance policies, Tenant will deliver to Agent
certificates of insurance for a renewal policy or policies marked "premium paid"
or accompanied by other evidence of payment of premium reasonably satisfactory
to Agent. If any insurance policy or part thereof shall expire or be withdrawn
or become void by reason of the failure or impairment of the capital of any
company in which the insurance shall be carried, or if at any time Agent is not
in receipt of written evidence that all insurance required hereunder is in force
and effect or if for any reason whatsoever the insurance shall be reasonably
unsatisfactory to Agent, Agent shall have the absolute and unconditional right
without prior notice to Landlord or Tenant to take such action as Agent deems
necessary to protect the interest of Agents in the Premises, including without
limitation, the obtaining of such insurance coverage as Agent deems appropriate,
and Landlord agrees to pay to Agent and upon demand by Agent all expenses
incurred by Agent in connection with such action or by Agents in obtaining such
insurance and keeping it in effect, together with interest thereon at the
Default Rate (as defined in the Credit Agreement). Except as otherwise
hereinafter specifically provided below in subparagraph B, if any portion of the
Premises shall be damaged or destroyed, in whole or in part, by fire or other
property hazard or casualty, Tenant shall give prompt notice thereof to Agent
and Landlord and one hundred (100%) percent of the net amount of all insurance
proceeds received by Agent, Tenant or Landlord as a result of such damage or
destruction, after deduction of reasonable costs and expenses, if any, in
collecting the same, shall be applied in reduction of Obligations (as such term
is defined in the Credit Agreement) under the Credit Facility.
B. Application of Insurance to Repair. Tenant will give Agent and Landlord
prompt notice of any loss or damage to all or any portion of the Premises, and
in the event of any such loss or damage, the following provisions shall apply:
(i) Settlement. In case of loss or damage covered by any of the insurance
policies required under Article 13 of any Lease, Tenant shall not have the right
to settle and adjust any claim under such insurance policies without the consent
of Agent (which consent shall not be unreasonably withheld or delayed);
provided, however, that so long as no default or event of default under such
Lease has occurred and is continuing, Tenant shall have the right, without the
consent of Agent, to settle and adjust claims relating to an insurance loss of
less than $10,000. Tenant shall, in good faith and with due diligence, file and
prosecute its claim or claims for any such loss or damage covered by the
insurance policies, and shall cause the same to be collected and paid over to
Agent; provided, however, Tenant (and, to the extent provided in such Lease,
Landlord) shall have the right to receive the proceeds of claims of less than
$10,000 as long as no default or event of default under such Lease shall have
occurred and shall be continuing; and provided, further, that such proceeds are
applied to reimburse Tenant for the cost of restoring,
41
repairing, replacing or rebuilding (herein generally called "Restoration") the
Premises or the affected portion thereof subsequent to such damage or
destruction, in accordance with subparagraph (xiv) below. Each of Tenant and
Landlord hereby appoints Agent its attorney-in-fact to endorse any checks,
drafts or other instruments representing any proceeds of such insurance.
(ii) Restoration. Notwithstanding anything to the contrary contained in
subparagraph (i) above, if at any one time during the term of the Credit
Facility, up to (but not more than) three (3) Properties shall have been damaged
or destroyed by fire or other casualty such that, simultaneously, any three (3)
Properties are not substantially complete and open for occupancy, provided that
the aggregate book value plus depreciation (i.e., "Total Cost" as defined in the
Credit Agreement) of such Property or Properties (in each case immediately prior
to the casualty in question) shall not exceed 10% of the aggregate Total Cost of
all the Properties immediately prior to such casualty, then Agent shall, in
accordance with the provisions of this paragraph hereinafter set forth, make
available to Tenant for Restoration the net amount ("Net Proceeds") of all
insurance proceeds received by Agent as a result of such damage or destruction,
after deduction of the reasonable costs and expenses in collecting the insurance
proceeds; provided, further, that (a) no default or event of default under such
Lease shall have occurred and shall be continuing; (b) Tenant shall, as soon as
reasonably practicable after such casualty and, in any event, in accordance with
the applicable provisions of such Lease, commence and shall thereafter
diligently pursue to completion the Restoration of the Premises to a condition
as near as possible to the condition of Premises immediately prior to such
casualty; (c) Agent shall have determined that the applicable hotel franchise or
license agreement shall not be terminated with respect to any Property as a
result of such fire or other casualty, but will remain in full force and effect
during and after the completion of the repair and restoration of such Property
or that an alternative franchise agreement or commitment therefor from a
nationally recognized franchisor of comparable or better reputation will be
secured for the Property within sixty (60) days of such casualty; and (d) such
Lease shall not be terminated with respect to any Property as a result of such
fire or other casualty, but shall remain in full force and effect during and
after the completion of the Restoration of such Property(ies).
(iii) Tenant Termination/Purchase Option. Nothing contained in this
paragraph shall be construed to limit, modify, vitiate or otherwise affect the
rights of Tenant pursuant to Article 14 of any Lease to elect to terminate such
Lease, to require Landlord to offer the affected Property or Properties for sale
to Tenant, or to purchase (or offer to purchase) the affected Property or
Properties, in each case in accordance with the terms and provisions of such
Article 14, it being understood and agreed that if Tenant shall exercise any
such right or option to terminate such Lease (except in connection with an
acquisition of a Property or Properties as provided in Article 14 of such
Lease), or if such Lease is otherwise terminated pursuant to the provisions of
Article 14 of such Lease, Agent shall have the absolute and unconditional right
to apply the Net Proceeds to the payment of the Obligations under the Credit
Facility. Notwithstanding the foregoing, unless Landlord shall have obtained, in
accordance with the provisions of Section 2.19(c) of the Credit Agreement,
Agent's approval of any such acquisition by Tenant pursuant to Article 14 of
such Lease, such acquisition shall constitute an Event of Default and the
subject Property shall remain subject to the lien of the Security Documents
after the consummation of such acquisition. In any event, the entire amount of
the Rejectable Offer
42
Price (as defined in such Lease) for any such acquisition shall be paid to Agent
for application to the Obligations in accordance with the provisions of Section
2.19(c) of the Credit Agreement.
(iv) Tenant Purchase Note Proceeds. In the event Lender makes Net Proceeds
available to Tenant for Restoration of any of the Properties, Tenant shall be
obligated to use such Net Proceeds solely for Restoration in accordance with the
provisions of the related Leases and this paragraph. If Tenant acquires the
affected Property or Properties in accordance with the provisions of Article 14
of the related Leases (which acquisition shall be subject to the provision of
the foregoing clause (iii)), Agent shall disburse the Net Proceeds to Tenant
(or, at Tenant's option, cause the same to be applied to the Obligations and
credit the amount of such Net Proceeds against the Rejectable Offer Price
payable to Agent pursuant to clause (iii) above).
(v) Approved Work, Deficiency Deposit and Construction Funds. In the event
that Agent makes Net Proceeds available to Tenant for Restoration of any of the
Properties, Tenant hereby covenants to restore the same in accordance with plans
and specifications reasonably approved by Agent, and Tenant shall cause to be
prepared and presented to Agent and Landlord a certified construction statement,
acceptable to Agent, showing the total estimated cost of the Restoration (the
work being certified in such statement being hereinafter referred to as the
"Approved Work"); if such cost exceeds the available insurance proceeds,
Landlord shall pay the excess of the amount of such cost over the amount of the
available insurance proceeds, in cash, to Agent, as a condition precedent to any
disbursement of Net Proceeds by Agent. Such excess (the "Deficiency Deposit")
shall be held and disbursed by Agent pursuant to the provisions of this
paragraph (Net Proceeds and any Deficiency Deposit paid to Agent being
hereinafter referred to collectively as the "Construction Funds"). Any such
Deficiency Deposit shall be disbursed prior to the disbursement of any Net
Proceeds.
(vi) Construction Funds Account Interest. Construction Funds shall be held
by Agent in an interest bearing account selected by Agent in its sole and
absolute discretion and may be commingled with any other accounts of Agent and
until so disbursed (in strict accordance with the terms hereof), shall
constitute additional security for the Obligations. Upon the final disbursement
of the Construction Funds, the party or parties entitled thereto shall receive
their respective pro rata share of any interest earned thereon.
(vii) Monthly Disbursement. The Construction Funds shall be made available
to Tenant, not more frequently than once every 30 days, as the Restoration of
the Property or Properties in question progresses.
(viii) Consultant; Casualty Retainage. In no event shall Agent be
obligated to make disbursements of the Construction Funds in excess of an amount
equal to the costs actually incurred from time to time for work in place as part
of the repair and restoration of the Improvements, as certified by an
independent consulting engineer reasonably acceptable to Agent and Landlord (the
"Consultant"), minus the Casualty Retainage. The term "Casualty Retainage" as
used in this paragraph shall mean an amount equal to 10% of the costs actually
incurred for work in place as part of the Restoration of a particular Property,
as certified by the Consultant. Notwithstanding the foregoing, the Casualty
Retainage being held by Agent with respect to work or materials supplied by any
subcontractor or materialman in connection with the Approved Work will be
released by Agent, upon request by Tenant, provided (a) no default or
43
event of default has occurred and is continuing under the Security Documents,
(b) Consultant verifies to Agent that such subcontractor or materialman has
completed 100% of all work and has supplied 100% of all the material under such
materialman's subcontract and in conformity with the plans and specifications
therefor accepted by Agent, Tenant and Consultant, (c) such subcontractor or
materialman will be paid in full upon the release of the portion of the Casualty
Retainage being held with respect to such subcontractor or materialman, (d) such
subcontractor or materialman executes and delivers all lien waivers which may be
reasonably requested or required by Agent or by the title company insuring the
lien waivers which may be reasonably requested or required by Agent or by the
title company insuring the lien of the Security Documents to induce such title
company to insure the lien of the Security Documents against any mechanic's or
materialman's lien which may be filed by such subcontractor or materialman, and
(e) if a surety bond is in place in accordance with the provisions of this
Agreement, such release of such portion of the Casualty Retainage shall be
approved by any surety company which has issued a payment or performance bond
with respect to such subcontractor or materialman. Construction Funds may be
disbursed by Agent directly or through a third party escrow agent, such as, but
not limited to, a title insurance company, or its agents, as Agent may determine
in its sole discretion.
(ix) Contractor Certificates and Lien Waivers. Tenant shall deliver or
cause to be delivered to Agent, with each such Consultant's certificate, sworn
statements and lien waivers from the general contractor and such subcontractors
as Agent shall determine in its sole discretion, in an amount at least equal to
the amount of Construction Funds to be paid out to Tenant pursuant to each
Consultant's certificate and dated as of the date of the disbursement to which
they relate.
(x) Plans and Costs. Tenant shall deliver or cause to be delivered to
Agent such other evidence as Agent may reasonably request, from time to time,
during the Restoration, as to the progress of the work, compliance with the
approved plans and specifications, the cost of the work and the total amount
needed to complete the work.
(xi) Progress Reports. Tenant shall deliver or cause to be delivered to
Agent, at no cost to Agent, such other evidence as Agent may reasonably request
from time to time (including, without limitation, a current title rundown),
showing that there are no liens against the Premises filed in connection with
the Restoration (other than liens which will be paid with the Construction
Funds, provided that Agent shall not have previously disbursed Construction
Funds to Tenant for the payment of the items which are the subject of such
liens), that the remaining Construction Funds are sufficient to complete the
Restoration, and that the Security Documents, including the Mortgages, remain
insured as a first priority lien or liens on the Premises with the same priority
as on the date of the initial execution, delivery and recording of the same.
(xii) Excess Net Proceeds Deficiency Deposit. The excess, if any, of the
Net Proceeds, together with interest thereon, after the Consultant has certified
to Agent that the Restoration of the Property or Properties in question has been
completed in accordance with the provisions of this paragraph, and Lender has
received evidence satisfactory to Agent that all costs incurred in connection
with Restoration have been paid in full, shall be disbursed to Tenant, and the
remaining balance, if any, of the Deficiency Deposit shall be remitted by Agent
to Landlord.
44
(xiii) Failure to Perform. In the event Tenant or Landlord at any time
shall fail to promptly and fully perform the conditions and covenants set forth
in this paragraph, or in the event that during the Restoration a default or an
event of default under the related Lease shall occur, Agent may, at its option,
immediately cease making any further payments to Tenant for such Restoration,
and may further, at its option, apply the Construction Funds then in its
possession either to the Obligations in such order, priority and proportions as
Lender shall elect in its sole and absolute discretion or to Restoration in the
manner above provided and notwithstanding any such default or event of default,
without affecting the liens of the Security Documents and the obligations
thereunder or hereunder.
(xiv) Minor Casualty. Notwithstanding anything to the contrary contained
in this paragraph, if the Net Proceeds allocable to any individual Property
shall be less than $10,000 and if the costs of completing the Restoration shall
be less than $10,000, such Net Proceeds shall be disbursed by Agent to Tenant
upon receipt, provided that no default or event of default under the Lease shall
have occurred and be continuing, and provided further, that Tenant delivers to
Agent a written undertaking expeditiously to commence the Restoration and to
complete the same with due diligence, in a manner reasonably satisfactory to
Agent and otherwise in accordance with the provisions of this paragraph. Upon
completion of the Restoration, Tenant shall deliver to Agent evidence reasonably
satisfactory to Agent, including, upon request of Agent, lien waivers, that such
proceeds have been expended for the Restoration and the Restoration has been
completed in good and workmanlike manner, free of liens (other than those held
by Agent) and in compliance with law.
C. Application of Condemnation Award to Repair.
(i) Award. If all or any portion of the Premises is taken by any public or
quasi-public authority through eminent domain or otherwise, Agent is hereby
authorized to collect and receive from the condemnation authorities the
aggregate amount of all awards or payments received as a result of such taking,
less the reasonable costs and expenses, if any, incurred in collecting the same
(such net amount, the "Award"). Agent is hereby authorized to give appropriate
receipts and acquittances therefor. Tenant and Landlord shall give Agent
immediate notice of the actual or threatened commencement of any condemnation or
eminent domain proceedings affecting all or any part of any of the Premises and
shall deliver to Agent copies of any and all papers served in connection with
any such proceedings upon receipt of the same.
(ii) Application of Award. The Agent shall be entitled to apply the amount
of any Award made with respect to the Premises or for loss of rent, or for
Landlord's loss of business beyond the term of the related Lease, in reduction
of the Obligations under the Credit Facility. Any part of an Award made for loss
of Tenant's business during the remaining term of such Lease, if any, for the
taking of Tenant's Personal Property (as defined in such Lease), or for removal
and relocation expenses of Tenant in any such proceedings shall be paid over to
Tenant. Tenant may also make a claim for any additional award to the extent it
does not diminish any portion of the Award due and payable for the account of
Landlord.
(iii) Notwithstanding the foregoing, if up to (but not more than) three
(3) Properties shall have been affected by such takings such that
simultaneously, any three (3) Properties are not substantially complete and open
for occupancy, provided that the aggregate book value plus
45
depreciation (i.e., "Total Cost" as defined in the Credit Agreement) of such
Property or Properties (in each case immediately prior to the taking in
question) shall not exceed 10% of the aggregate Total Cost of all of the
Properties immediately prior to such casualty, then Agent shall, in accordance
with the provisions of this paragraph, make the Award available to Landlord for
Restoration of the Premises, provided that (a) no default or event of default
under the related Leases shall have occurred and shall be continuing; (b) Tenant
shall, as soon as reasonably practicable after such taking and, in any event, in
accordance with applicable provisions of such related Leases, commence and shall
thereafter diligently pursue to completion the Restoration of the Premises to a
condition as near as possible to the condition of the Premises immediately prior
to such taking; (c) Agent shall have determined that the applicable hotel
franchise or license agreement shall not be terminated with respect to any
Property as a result of such taking, but will remain in full force and effect
during and after the completion of the repair and restoration of such Property
or that an alternative franchise agreement or commitment therefor from a
nationally recognized franchisor of comparable or better reputation will be
secured for such Property within sixty (60) days of such taking; and (d) the
related Leases shall not be terminated as a result of such taking, but shall
remain in full force and effect during and after the completion of the
Restoration of such Property.
(iv) Administration of Award for Restoration. Any such Award shall be held
or disbursed and applied to Restoration in the same manner as is provided in
subparagraph B above with respect to the application of Net Proceeds (it being
understood that for purposes of this subparagraph C, the term "Construction
Funds" shall mean, collectively, the Award and any Deficiency Deposit which may
be required to be deposited with Agent as a result of the insufficiency of the
Award to pay the cost of Restoration, and the term "Restoration" shall mean the
restoring, repairing, replacing or rebuilding of the Premises or any part
thereof subsequent to a taking by condemnation or eminent domain of all or any
part of the Premises, such Restoration to be completed free of liens (other than
the liens held by Agent), in compliance with all applicable law and otherwise in
accordance with the provisions of the related Lease and this Agreement). Any
Construction Funds resulting from the receipt of any Award shall be held and
disbursed by Agent in the manner provided in subparagraph B above with respect
to Net Proceeds and shall constitute additional security for the Obligations
under the Credit Facility. The balance of any Award remaining after the
completion of Restoration in accordance with this paragraph shall be applied to
Obligations under the Credit Facility, unless a partial condemnation materially
impairs the operations or financial performance of the Property, in which case
the Award shall be equitably apportioned as provided in Section 15.5 of the
related Lease, and Landlord's share thereof shall be applied to Obligations
under the Credit Facility.
(v) Nothing contained in this paragraph shall be construed to limit,
modify, vitiate or otherwise affect the rights of Tenant or Landlord pursuant to
Article XV of any Lease to elect to terminate such Lease, it being understood
and agreed that if Tenant or Landlord shall exercise any such right or option to
terminate such Lease, Agent shall have the absolute and unconditional right to
apply the Award to the payment of the Obligations under the Credit Facility.
D. Provisions of Credit Agreement and Lease. Except as expressly provided
to the contrary in subparagraphs A through C above, the provisions of Section 5
of each of the Mortgages and Articles 14 and 15 of each of the Leases remain in
full force and effect and the obligations of Landlord thereunder shall not be
modified by the terms and provisions of this
46
Agreement. In the event of any conflict between the terms and provisions of the
Credit Agreement or the Leases (as the case may be) and the terms and provisions
of this paragraph, the terms of this paragraph shall control.
10. Notices. Any notice, election, communication, request or other
document or demand required or permitted under this Agreement shall be in
writing and shall be deemed delivered on the earlier to occur of (a) receipt, or
(b) the date of delivery, refusal or nondelivery indicated on the return
receipt, if deposited in a United States Postal Service depository, postage
prepaid, sent certified or registered mail, return receipt requested, or if sent
via a recognized commercial courier service providing for a receipt, addressed
to Tenant or Agent, as the case may be, at the following addresses:
If to Tenant:
__________________________
__________________________
Attn: ____________________
with a copy to:
__________________________
__________________________
__________________________
Attn: ____________________
If to Agent: JPMorgan Chase Bank, N.A.
Real Estate Investment Banking
000 Xxxxx Xxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000 0315
Attention: Xxxxxxxx Xxxxx
Telecopy: (000) 000-0000
with a copy to: Xxxxxxxxxxxx Xxxx & Xxxxxxxxx LLP
000 Xxxxx Xxxxxx Xxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esquire
Any party may change its address for purposes of notices hereunder by delivery
of written notice to the other fifteen (15) days prior to the effective date of
such change.
11. Successors. The term "Agent" as used herein includes any successor or
assign of the named Agent herein, including without limitation, any purchaser at
a foreclosure sale and any transferee pursuant to an assignment or deed in lieu
of foreclosure, and their successors and assigns, and the term "Tenant" as used
herein includes any successor and assign of the named Tenant herein; provided,
however, that such reference to Tenant's successors and assigns shall not be
construed as Agent's consent to any assignment or other transfer by Tenant. The
term "Premises" as used herein shall include land and improvements now or
hereafter thereon, and
47
estates therein encumbered by the Security Documents, and shall mean, unless the
context otherwise requires, any individual hotel property.
12. Further Assurances. Each of the parties hereto hereby covenants and
agrees to sign, execute and deliver, or cause to be signed, executed and
delivered, and to do or make, or cause to be done or made, upon reasonable
request of the other party hereto or Landlord, any and all agreements,
instruments, papers, deeds, acts or things, supplemental, confirmatory or
otherwise, as may be reasonably required by the requesting party for the purpose
of or in connection with provisions of this Agreement.
13. Partial Validity. If any provision of this Agreement is held to be
invalid or unenforceable by a court of competent jurisdiction, such provision
shall be deemed modified to the extent necessary to be enforceable, or if such
modification is not practicable, such provision shall be deemed deleted from
this Agreement, and the other provisions of this Agreement shall remain in full
force and effect, and shall be liberally construed in favor of Agent.
14. Amendments. Neither this Agreement nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified orally, but only by an
instrument in writing executed by the party against which enforcement of the
termination, amendment, supplement, waiver or modification is sought.
Additionally, the Leases shall not be modified or amended, nor shall the same be
terminated other than in strict accordance with the terms and provisions
thereof, without the advance prior written consent of Agent in each instance.
15. Nonrecourse. Notwithstanding anything contained to the contrary in
this Agreement or under the terms of the Leases, in the event Agent, the Lenders
or any assignee, nominee, designee or successor of the Agent or the Lenders
takes possession of all or any portion of the Premises by virtue of a
foreclosure or deed or assignment in lieu of foreclosure, such party's liability
as "Landlord/Lessor" under the related Leases shall be expressly limited to its
interest in the Properties demised under such Leases.
16. Counterparts. This Agreement may be executed in a number of identified
counterparts. If so executed, each of such counterparts is to be deemed an
original for all purposes, and all such counterparts shall, collectively,
constitute one agreement, but in making proof of this Agreement, it shall not be
necessary to produce or account for more than one such counterpart.
17. Governing Law. With respect to each Lease and Mortgage, this Agreement
shall be construed in accordance with the laws of the state wherein the related
Property is located.
[Balance of Page Intentionally Left Blank]
48
SIGNATURE PAGE
SUBORDINATION AND ATTORNMENT AGREEMENT
JPMORGAN CHASE BANK, N.A., not
individually but as Agent as
aforesaid
By: __________________________
Name: ________________________
Title: _______________________
STATE OF ILLINOIS,
COUNTY OF XXXX, to-wit:
The foregoing instrument was acknowledged before me in the County of Xxxx,
State of Illinois, this ____ day of __________, 200_, by ______________________,
as _____________________________________ of JPMorgan Chase Bank, N.A., on behalf
of the bank.
My commission expires: ______________________.
___________________________
Notary Public
[NOTARIAL SEAL]
49
SIGNATURE PAGE
SUBORDINATION AND ATTORNMENT AGREEMENT
TENANT:
By: __________________________
Name: ________________________
Title: _______________________
STATE OF _________,
CITY/COUNTY OF _______________, to-wit:
The foregoing instrument was acknowledged before me in the City/County of
__________, State of ________________ this ___ day of ____________, 200_, by
____________________________, as ____________________ of _______________, a
Delaware corporation, on behalf of the company.
My commission expires: ______________________.
___________________________
Notary Public
[NOTARIAL SEAL]
50
SIGNATURE PAGE
SUBORDINATION AND ATTORNMENT AGREEMENT
EQUITY INNS PARTNERSHIP, L.P.
By: Equity Inns Trust, its general partner
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
STATE OF ___________,
CITY/COUNTY OF ___________, to-wit:
The foregoing instrument was acknowledged before me in the City/County of
___________, State of ___________ this ___ day of _______________, 200_, by
_________________________, as ________________________ of Equity Inns Trust, a
Maryland real estate investment trust, as general partner of Equity Inns
Partnership, L.P., a Tennessee limited partnership, on behalf of the
partnership.
My commission expires: ______________________.
___________________________
Notary Public
[NOTARIAL SEAL]
51
SCHEDULE 1 - [Equity Inns Affiliates]
PREMISES
NAME AND LOCATION
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
52
SCHEDULE 2
DESCRIPTION OF LEASE
1. Consolidated Lease Agreement dated as of January 1, 200_ between Equity
Inns Partnership, L.P. and ___________________________________ [INSERT HOTEL
LOCATION AND REPEAT].
53
SCHEDULE 1
LIST OF INITIAL COLLATERAL POOL ASSETS
ARIZONA ILLINOIS TENNESSEE
HAMPTON INN HOMEWOOD SUITES AMERISUITES
4415 Civic Center Plaza 40 East Grand Avenue (Nashville-Cool Spr)
Xxxxxxxxxx, XX Xxxxxxx, XX 00000 000 Xxxxxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
ARKANSAS LOUISIANA HAMPTON INN
HAMPTON INN AMERISUITES 0000 Xxxxxxxx Xxxx
000 Xxxx 29 0000 Xxxxxxxxxx Xxxx. Xxxxxxx, XX 00000
Xxxxx Xxxxxx Xxxx, XX 00000 Xxxxx Xxxxx, XX 00000
COLORADO MINNESOTA HAMPTON INN
RESIDENCE INN AMERISUITES (Minneapolis-MOA) Xxxxxx xx Xxx, 00 & Xxx Xxxxx
0000 Xxxxxxx Xxxx. 0000 Xxxxxxxxxxxxx Xxxxx Xxxxxxxx Xxx, XX 00000
Xxxxxxxx Xxxxxxx, XX 00000 Xxxxxxxxxxx, XX 00000
HAMPTON INN NEVADA TEXAS
0000 Xxxxxxxx Xxxxx AMERISUITES HAMPTON INN (Dallas)
Xxxxxxxx Xxxxxxx, XX 00000 0000 Xxxxxxxx Xxxx 0000 Xxxxxxx
Xxx Xxxxx, XX 00000 Xxxxxxx, XX 00000
FLORIDA NORTH CAROLINA VERMONT
AMERISUITES HAMPTON INN Residence Inn
0000 XX 00xx Xxxxxx 1740 Highway 15-501 0 Xxxxxxxxx Xxxx
Xxxxx, XX 00000 Xxxxxx Xxxx, XX 00000 Xxxxxxxxx, XX 00000
AMERISUITES (Xxxxxxx) OHIO WASHINGTON
11520 S.W. 88th Street AMERISUITES (Cincinnati) XXXXXXXX XXXXXX
Xxxxx, XX 00000 11435 Xxxx Xxxxxxx Highway 000 Xxxxxxx Xxxxxx Xxxx
Xxxx Xxx, XX 00000 Xxxxxxx, XX 00000
HOMEWOOD SUITES SOUTH CAROLINA WEST VIRGINIA
0000 Xxxxxxxxxxxxx Xxxxx XXXXXXX INN HOLIDAY INN
Xxxxxxx, XX 00000 0000 Xxxxx Xxxxx 0000 Xxx Xxxxxx Xxxxxxx
Xxxx Xxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
GEORGIA HOLIDAY INN
HAMPTON INN 000 Xxxxx Xxxxxx
0000 Xxxxxxxxx Xxxxxxx Xxx Xxxx, XX 00000
Xxxxxxx, XX 00000
HOMEWOOD SUITES
0000 Xxxxxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
54
SCHEDULE 2
LIST OF DOCUMENTS TO BE DELIVERED TO ADMINISTRATIVE AGENT
WITH PROPOSAL FOR ADDITION OF COLLATERAL PROPERTIES
A. Survey
B. Title Insurance Commitment
C. Copies of All Recorded Documents
X. Xxxxx Insurance, if applicable
E. Evidence of Casualty and Liability Insurance (or commitment to issue)
F. Environmental Report/Certification
G. Permitted Operating Lease (or draft thereof)
H. Management Agreement (or draft thereof), if applicable
I. Property Condition Report
J. Lessee/Manager financials, if applicable
K. Occupancy Certificate, if available in that jurisdiction
L. 2 years of Historical Operating Statements, unless new construction or new
acquisition, to the extent Borrower has owned the Property during such 2 year
period
M. Pro-Forma Operating Statements, unless new construction or new acquisition
N. Capital Expenditure Budget, unless new construction or new acquisition
O. Franchisor Commitment
All items shall meet substantially the same standards as the prior deliveries
for the Initial Collateral Properties.
55
SCHEDULE 3
LIST OF ITEMS TO BE COMPLETED TO
FINALIZE ADDITION OF COLLATERAL PROPERTIES
A. Execution, delivery and recording of applicable Mortgage together with a
Limited Recourse Guaranty and joinders to the other security documents if the
applicable Owner is a Wholly Owned Subsidiary
B. Organizational Documents for the Owner
C. Opinion of Counsel for Owner
D. Resolution regarding authority of Owner; including consent from any joint
venture partner.
E. Incumbency Certificate regarding Owner
F. UCC 1 Financing Statements from Owner
X. Xxxx Searches
H. Issuance of Title Insurance Policy and Endorsements, including insurance over
possible mechanic's lien claims and such amendments as may be necessary and
available to existing title policies to assure cross-collateralization.
I. Receipt of Estoppel Certificates from ground lessor, if applicable
J. Subordination Agreements with lessee under Permitted Operating Lease together
with a joinder to the Security Agreement
K. Lender-Manager Agreement, if applicable
L. Receipt of Appraisal and confirmation that it conforms to requirements
O. Franchise Agreement
P. Permitted Operating Lease
Q. Evidence of Casualty and Liability Insurance
56
SCHEDULE 6.19
ENVIRONMENTAL COMPLIANCE
All environmental matters identified in the environmental reports
delivered to Administrative Agent in connection with the Facility.
57
SCHEDULE 6.24
TRADE NAMES
None.
58
SCHEDULE 6.25
SUBSIDIARIES (BORROWERS)
Name Entity Type Percentage Ownership
---- ----------- --------------------
Equity Inns Partnership, L.P. Tennessee limited partnership
Equity Inns Partnership II, L.P. Tennessee limited partnership 99% limited partner of this entity
Equity Inns/West Virginia Partnership,
L.P. Tennessee limited partnership 99% limited partner of this entity
EIP Orlando, L.P. Tennessee limited partnership 99% limited partner of this entity
EQI Financing Partnership I, L.P. Tennessee limited partnership 99% limited partner of this entity
EQI Financing Partnership II, L.P. Tennessee limited partnership 99% limited partner of this entity
EQI Financing Partnership III, L.P. Tennessee limited partnership 99% limited partner of this entity
EQI Financing Partnership IV, L.P. Tennessee limited partnership 99% limited partner of this entity
EQI Financing Partnership V, L.P. Tennessee limited partnership 99% limited partner of this entity
EQI/WV Financing Partnership, L.P. Tennessee limited partnership 99% limited partner of this entity
EQI/WV Financing Partnership II, L.P. Tennessee limited partnership 99% limited partner of this entity
Equity Inns TRS Holdings, Inc. Tennessee corporation 100% of outstanding shares
ENN Leasing Company, Inc. Tennessee corporation 100% of outstanding shares by Equity
Inns TRS Holdings, Inc.
ENN Leasing Company I, L.L.C. Delaware SP V limited liability 100% owned by Equity Inns TRS
company Holdings, Inc.
ENN Leasing Company II, L.L.C. Delaware SP V limited liability 100% owned by Equity Inns TRS
company Holdings, Inc.
ENN Leasing Company III, L.L.C. Delaware SP V limited liability 100% owned by Equity Inns TRS
company Holdings, Inc.
ENN Leasing Company IV, L.L.C. Delaware SP V limited liability 100% owned by Equity Inns TRS
company Holdings, Inc.
ENN Leasing Company V, L.L.C. Delaware SP V limited liability 100% owned by Equity Inns TRS
company Holdings, Inc.
Equity Inns Partnership II, L.P. Tennessee limited partnership
None
Equity Inns/West Virginia Partnership,
L.P. Tennessee limited partnership
None
59
SCHEDULE 7.16
SUBSIDIARIES (GUARANTORS)
Name Entity Type Percentage Ownership
---- ----------- --------------------
Equity Inns, Inc. Tennessee corporation
Equity Inns Services, Inc Tennessee corporation 100% of outstanding shares
Equity Inns Trust Maryland real estate investment trust 100% of all interests
Equity Inns Services, Inc. Tennessee corporation
Equity Inns/West Virginia Partnership,
L.P. Tennessee Limited Partnership 1% of general partnership interest
E. Inns Orlando, Inc. Tennessee corporation 100% of outstanding shares
E.I.P. Orlando, L.P. Tennessee limited partnership E. Inns Orlando, Inc. an 1% general
partnership interest in EIP Orlando,
L.P. and Equity Inns Partnership,
L.P. is a 99% limited partner of
this entity
Equity Inns Trust Maryland real estate investment trust
Equity Inns Partnership, L.P. Tennessee limited partnership Approximately 96% general
partnership interest in the
Operating Partnership.
Equity Inns Partnership II, L.P. Tennessee limited partnership 1% general partnership interest
EQI Financing Corporation Tennessee corporation 100% of outstanding shares
EQI Financing Partnership I, L.P. Tennessee limited partnership Approximately 1% general partnership
by EQI Financing corporation
EQI Financing Corporation II Tennessee corporation 100% of outstanding shares
EQI/WV Financing Partnership, L.P. Tennessee limited partnership 1% general partnership interest
owned by EQI Financing Corporation II
EQI Financing Partnership II, L.P. Tennessee corporation 1% general partnership interest
owned by EQI Financing Corporation II
EQI Financing Corporation III Tennessee corporation 100% outstanding shares
EQI Financing Partnership III, L.P. Tennessee limited partnership 1% general partnership interest by
EQI Financing Corporation III
EQI/WV Financing Corporation Tennessee corporation 100% of outstanding shares
EQI/WV Financing Partnership II, L.P. Tennessee limited partnership 1% general partnership interest by
EQI/WV Financing Corporation
EQI Financing Corporation IV Tennessee corporation 100% of outstanding shares
EQI Financing Partnership IV, L.P. Tennessee limited partnership 1% general partnership interest by
EQI/WV Financing Corporation IV
EQI Financing Corporation V Tennessee corporation 100% of outstanding shares
EQI Financing Partnership V, L.P. Tennessee limited partnership 1% general partnership interest by
EQI/WV Financing Corporation V
60
TABLE OF CONTENTS
Page
----
Article I. DEFINITIONS AND ACCOUNTING TERMS...................................................................... 3
Section 1.1. Definitions................................................................................. 3
Section 1.2. Financial Standards......................................................................... 19
Article II. THE FACILITY......................................................................................... 19
Section 2.1. The Facility; Limitations on Borrowing...................................................... 19
Section 2.2. Maturity Date............................................................................... 19
Section 2.3. Requests for Advances; Responsibility for Advances.......................................... 20
Section 2.4. Evidence of Credit Extensions............................................................... 20
Section 2.5. Ratable and Non Ratable Loans............................................................... 20
Section 2.6. Applicable Margins and Fees................................................................. 20
Section 2.7. Commitment Fee.............................................................................. 21
Section 2.8. Other Fees.................................................................................. 21
Section 2.9. Minimum Amount of Each Advance.............................................................. 21
Section 2.10. Interest................................................................................. 21
Section 2.11. Selection of Rate Options and LIBOR Interest Periods..................................... 22
Section 2.12. Method of Payment........................................................................ 24
Section 2.13. Default.................................................................................. 24
Section 2.14. Lending Installations.................................................................... 24
Section 2.15. Non Receipt of Funds by Administrative Agent............................................. 25
Section 2.16. Swingline Loans.......................................................................... 25
Section 2.17. Voluntary Reduction of Aggregate Commitment Amount....................................... 26
Section 2.18. Increase in Aggregate Commitment......................................................... 26
Section 2.19. Optional Prepayments; Mandatory Prepayments; Release of Properties....................... 26
Section 2.20. Procedures for Addition of Collateral Pool Assets........................................ 27
Section 2.21. Application of Moneys Received........................................................... 29
Section 2.22. Extension of Maturity Date............................................................... 30
Article III. THE LETTER OF CREDIT SUBFACILITY.................................................................... 30
Section 3.1. Obligation to Issue......................................................................... 30
Section 3.2. Types and Amounts........................................................................... 30
Section 3.3. Conditions.................................................................................. 31
Section 3.4. Procedure for Issuance of Facility Letters of Credit........................................ 31
Section 3.5. Reimbursement Obligations; Duties of Issuing Bank........................................... 32
Section 3.6. Participation............................................................................... 33
Section 3.7. Payment of Reimbursement Obligations........................................................ 34
Section 3.8. Compensation for Facility Letters of Credit................................................. 35
Section 3.9. Letter of Credit Collateral Account......................................................... 35
Article IV. CHANGE IN CIRCUMSTANCES.............................................................................. 36
Section 4.1. Yield Protection............................................................................ 36
Section 4.2. Changes in Capital Adequacy Regulations..................................................... 36
Section 4.3. Availability of LIBOR Advances.............................................................. 37
61
Section 4.4. Funding Indemnification..................................................................... 37
Section 4.5. Lender Statements; Survival of Indemnity.................................................... 37
Article V. CONDITIONS PRECEDENT.................................................................................. 38
Section 5.1. Conditions Precedent to Closing............................................................. 38
Section 5.2. Conditions Precedent to Subsequent Advances and Issuance.................................... 42
Article VI. REPRESENTATIONS AND WARRANTIES....................................................................... 42
Section 6.1. Existence................................................................................... 42
Section 6.2. Corporate/Partnership Powers................................................................ 43
Section 6.3. Power of Officers........................................................................... 43
Section 6.4. Government and Other Approvals.............................................................. 43
Section 6.5. Solvency.................................................................................... 43
Section 6.6. Compliance With Laws........................................................................ 44
Section 6.7. Enforceability of Agreement................................................................. 44
Section 6.8. Title to Property........................................................................... 44
Section 6.9. Litigation.................................................................................. 44
Section 6.10. Events of Default........................................................................ 44
Section 6.11. Investment Company Act of 1940........................................................... 44
Section 6.12. Public Utility Holding Company Act....................................................... 44
Section 6.13. Regulation U............................................................................. 45
Section 6.14. No Material Adverse Financial Change..................................................... 45
Section 6.15. Financial Information.................................................................... 45
Section 6.16. [Intentionally Omitted].................................................................. 45
Section 6.17. ERISA.................................................................................... 45
Section 6.18. Taxes.................................................................................... 45
Section 6.19. Environmental Matters.................................................................... 45
Section 6.20. Insurance................................................................................ 46
Section 6.21. No Brokers............................................................................... 46
Section 6.22. No Violation of Usury Laws............................................................... 47
Section 6.23. Not a Foreign Person..................................................................... 47
Section 6.24. No Trade Name............................................................................ 47
Section 6.25. Subsidiaries............................................................................. 47
Section 6.26. Security Interests....................................................................... 47
Section 6.27. Collateral Pool Assets................................................................... 47
Article VII. ADDITIONAL REPRESENTATIONS AND WARRANTIES........................................................... 49
Section 7.1. Existence................................................................................... 49
Section 7.2. Corporate or Trust Powers................................................................... 49
Section 7.3. Power of Officers........................................................................... 49
Section 7.4. Government and Other Approvals.............................................................. 49
Section 7.5. Compliance With Laws........................................................................ 49
Section 7.6. Enforceability of Guaranty.................................................................. 49
Section 7.7. Liens; Consents............................................................................. 50
Section 7.8. Litigation.................................................................................. 50
Section 7.9. Investment Company Act of 1940.............................................................. 50
Section 7.10. Public Utility Holding Company Act....................................................... 50
62
Section 7.11. No Material Adverse Financial Change..................................................... 50
Section 7.12. Financial Information.................................................................... 50
Section 7.13. [Intentionally Omitted].................................................................. 50
Section 7.14. ERISA.................................................................................... 50
Section 7.15. Taxes.................................................................................... 51
Section 7.16. Subsidiaries............................................................................. 51
Section 7.17. Status................................................................................... 51
Article VIII. AFFIRMATIVE COVENANTS.............................................................................. 51
Section 8.1. Notices..................................................................................... 51
Section 8.2. Financial Statements, Reports, Etc.......................................................... 52
Section 8.3. Existence and Conduct of Operations; Limitations on Investments............................. 54
Section 8.4. Maintenance of Properties................................................................... 54
Section 8.5. Insurance................................................................................... 54
Section 8.6. Payment of Obligations...................................................................... 54
Section 8.7. Compliance with Laws........................................................................ 55
Section 8.8. Adequate Books.............................................................................. 55
Section 8.9. ERISA....................................................................................... 55
Section 8.10. Maintenance of Status.................................................................... 55
Section 8.11. Use of Proceeds.......................................................................... 55
Section 8.12. Pre Acquisition Environmental Investigations............................................. 55
Section 8.13. Eligible Properties...................................................................... 55
Section 8.14. Management Agreements and Permitted Operating Leases..................................... 55
Section 8.15. Limitations on Borrowing Base............................................................ 56
Article IX. NEGATIVE COVENANTS................................................................................... 56
Section 9.1. Change of Borrower Ownership................................................................ 56
Section 9.2. Use of Proceeds............................................................................. 57
Section 9.3. Leverage; Additional Recourse Indebtedness.................................................. 57
Section 9.4. Dividends................................................................................... 57
Section 9.5. Floating Rate Debt.......................................................................... 57
Section 9.6. Liens....................................................................................... 57
Section 9.7. FF&E Expenditures........................................................................... 58
Section 9.8. Indebtedness, Coverage and Net Worth Covenants.............................................. 58
Section 9.9. Mergers..................................................................................... 59
Section 9.10. Minimum Borrowing Base................................................................... 59
Article X. DEFAULTS.............................................................................................. 59
Section 10.1. Nonpayment of Principal.................................................................. 59
Section 10.2. Certain Covenants........................................................................ 59
Section 10.3. Nonpayment of Interest and Other Obligations............................................. 59
Section 10.4. Cross Default............................................................................ 59
Section 10.5. Loan Documents........................................................................... 59
Section 10.6. Representation or Warranty............................................................... 59
Section 10.7. Covenants, Agreements and Other Conditions............................................... 60
Section 10.8. No Longer General Partner................................................................ 60
Section 10.9. Material Adverse Financial Change........................................................ 60
63
Section 10.10. Bankruptcy............................................................................... 60
Section 10.11. Legal Proceedings........................................................................ 61
Section 10.12. ERISA.................................................................................... 61
Section 10.13. Failure to Satisfy Judgments............................................................. 61
Section 10.14. Environmental Remediation................................................................ 61
Section 10.15. REIT Status; Stock Exchange Listing...................................................... 61
Section 10.16. Mortgage Default......................................................................... 61
Section 10.17. Enforceability of Security Documents..................................................... 61
Article XI. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES....................................................... 61
Section 11.1. Acceleration............................................................................. 62
Section 11.2. Preservation of Rights; Amendments....................................................... 62
Section 11.3. Foreclosure.............................................................................. 62
Article XII. THE ADMINISTRATIVE AGENT............................................................................ 63
Section 12.1. Appointment.............................................................................. 64
Section 12.2. Powers................................................................................... 64
Section 12.3. General Immunity......................................................................... 64
Section 12.4. No Responsibility for Loans, Recitals, etc............................................... 64
Section 12.5. Action on Instructions of Lenders........................................................ 64
Section 12.6. Employment of Administrative Agents and Counsel.......................................... 64
Section 12.7. Reliance on Documents; Counsel........................................................... 65
Section 12.8. Administrative Agent's Reimbursement and Indemnification................................. 65
Section 12.9. Rights as a Lender....................................................................... 65
Section 12.10. Lender Credit Decision................................................................... 65
Section 12.11. Successor Administrative Agent........................................................... 65
Section 12.12. Notice of Defaults....................................................................... 66
Section 12.13. Requests for Approval.................................................................... 66
Section 12.14. Copies of Documents...................................................................... 67
Section 12.15. Defaulting Lenders....................................................................... 67
Section 12.16. Co-Agents: Lead Managers................................................................. 67
Article XIII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.................................................. 68
Section 13.1. Successors and Assigns................................................................... 68
Section 13.2. Participations........................................................................... 68
Section 13.3. Assignments.............................................................................. 68
Section 13.4. Dissemination of Information............................................................. 70
Section 13.5. Tax Treatment............................................................................ 70
Article XIV. GENERAL PROVISIONS.................................................................................. 70
Section 14.1. Survival of Representations.............................................................. 70
Section 14.2. Governmental Regulation.................................................................. 70
Section 14.3. Taxes.................................................................................... 70
Section 14.4. Headings................................................................................. 70
Section 14.5. No Third Party Beneficiaries............................................................. 70
Section 14.6. Expenses; Indemnification................................................................ 70
Section 14.7. Severability of Provisions............................................................... 71
64
Section 14.8. Nonliability of the Lenders.............................................................. 71
Section 14.9. Choice of Law............................................................................ 71
Section 14.10. Consent to Jurisdiction.................................................................. 71
Section 14.11. Waiver of Jury Trial..................................................................... 72
Section 14.12. Entire Agreement; Modification of Agreement.............................................. 72
Section 14.13. Dealings with the Borrower............................................................... 73
Section 14.14. Set-Off.................................................................................. 73
Section 14.15. Counterparts............................................................................. 73
Section 14.16. Limitation on Liability of EIP/WV........................................................ 73
Article XV. NOTICES.............................................................................................. 74
Section 15.1. Giving Notice............................................................................ 74
Section 15.2. Change of Address........................................................................ 75
Exhibit A Form of Indemnity Agreement
Exhibit B Form of Note
Exhibit C Form of Limited Recourse Guaranty
Exhibit D Form of Amended and Restated Guaranty
Exhibit E Intentionally Deleted
Exhibit F Intentionally Deleted
Exhibit G Intentionally Deleted
Exhibit H Wiring Instructions
Exhibit I Form of Compliance Certificate
Schedule I Calculation of Covenants
Exhibit J Minimum Specifications for Environmental Investigations
Exhibit K Assignment and Assumption Agreement
Exhibit L Amendment to Amended and Restated Secured Revolving Credit Agreement
Exhibit M Form of Mortgage
Exhibit N Form of Mortgage Amendment
Exhibit O Assignment of Contracts
Exhibit P Form of Subordination Language for Management Agreements
65
Exhibit Q Form of Subordination Agreement for Permitted Operating Leases
(Affiliates)
SCHEDULE 1 LIST OF INITIAL COLLATERAL POOL ASSETS
SCHEDULE 2 LIST OF DOCUMENTS TO BE DELIVERED TO ADMINISTRATIVE AGENT WITH
PROPOSAL FOR ADDITION OF COLLATERAL PROPERTIES
SCHEDULE 3 LIST OF ITEMS TO BE COMPLETED TO FINALIZE ADDITION OF COLLATERAL
PROPERTIES
SCHEDULE 6.19 Environmental Compliance
SCHEDULE 6.24 Trade Names
SCHEDULE 6.25 Subsidiaries (Borrowers)
SCHEDULE 7.16 Subsidiaries (Guarantors)
66
