UNSECURED REVOLVING CREDIT AGREEMENT DATED AS OF SEPTEMBER 21, 2006 AMONG EQUITY INNS PARTNERSHIP, L.P., EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P., EQI ORLANDO 2, L.L.C., AND EQI FINANCING PARTNERSHIP I, L.P., AS BORROWER AND JPMORGAN CHASE BANK,...
EXHIBITI
10.1
DATED
AS OF SEPTEMBER 21, 2006
AMONG
EQUITY
INNS PARTNERSHIP, L.P.,
EQUITY
INNS/WEST VIRGINIA PARTNERSHIP, L.P.,
EQI
ORLANDO 2, L.L.C.,
AND
EQI
FINANCING PARTNERSHIP I, L.P.,
AS
BORROWER
AND
JPMORGAN
CHASE BANK, N.A.,
AS
ADMINISTRATIVE AGENT,
X.X.
XXXXXX SECURITIES INC.,
AS
CO-LEAD ARRANGER/SOLE BOOK MANAGER,
AND
CALYON
NEW YORK BRANCH,
AS
SYNDICATION AGENT AND CO-LEAD ARRANGER
AMSOUTH
BANK
BANK
OF
AMERICA, N.A.
AND
KEYBANK
NATIONAL ASSOCIATION
EACH
AS
DOCUMENTATION AGENT
AND
THE
SEVERAL OTHER LENDERS
FROM
TIME
TO TIME PARTIES HERETO
TABLE
OF CONTENTS
Page
|
ARTICLE
I.
|
2
|
|
|
Section
1.1.
|
Definitions
|
2
|
|
Section
1.2.
|
Financial
Standards
|
18
|
|
ARTICLE
II.
|
||
|
Section
2.1.
|
The
Facility; Limitations on Borrowing
|
18
|
|
Section
2.2.
|
Maturity
Date
|
19
|
|
Section
2.3.
|
Requests
for Advances; Responsibility for Advances
|
19
|
|
Section
2.4.
|
Evidence
of Credit Extensions
|
19
|
|
Section
2.5.
|
Ratable
and Non Ratable Loans
|
19
|
|
Section
2.6.
|
Applicable
Margins and Fees
|
19
|
|
Section
2.7.
|
Commitment
Fee
|
20
|
|
Section
2.8.
|
Other
Fees
|
20
|
|
Section
2.9.
|
Minimum
Amount of Each Advance
|
20
|
|
Section
2.10.
|
Interest
|
20
|
|
Section
2.11.
|
Selection
of Rate Options and LIBOR Interest Periods
|
21
|
|
Section
2.12.
|
Method
of Payment
|
23
|
|
Section
2.13.
|
Default
|
24
|
|
Section
2.14.
|
Lending
Installations
|
24
|
|
Section
2.15.
|
Non
Receipt of Funds by Administrative Agent
|
24
|
|
Section
2.16.
|
Swingline
Loans
|
24
|
|
Section
2.17.
|
Voluntary
Reduction of Aggregate Commitment Amount
|
25
|
|
Section
2.18.
|
Increase
in Aggregate Commitment
|
26
|
|
Section
2.19.
|
Optional
Prepayments; Mandatory Prepayments
|
26
|
|
Section
2.20.
|
Application
of Moneys Received
|
27
|
|
Section
2.21.
|
Extension
of Maturity Date
|
27
|
|
ARTICLE
III.
|
THE
LETTER OF CREDIT SUBFACILITY
|
28
|
|
Section
3.1.
|
Obligation
to Issue
|
28
|
|
Section
3.2.
|
Types
and Amounts
|
28
|
|
Section
3.3.
|
Conditions
|
28
|
|
Section
3.4.
|
Procedure
for Issuance of Facility Letters of Credit
|
29
|
|
Section
3.5.
|
Reimbursement
Obligations; Duties of Issuing Bank
|
30
|
|
Section
3.6.
|
Participation
|
31
|
|
Section
3.7.
|
Payment
of Reimbursement Obligations
|
32
|
|
Section
3.8.
|
Compensation
for Facility Letters of Credit
|
33
|
|
Section
3.9.
|
Letters
of Credit Collateral Account
|
33
|
|
ARTICLE
IV.
|
||
|
Section
4.1.
|
Yield
Protection
|
34
|
|
Section
4.2.
|
Changes
in Capital Adequacy Regulations
|
34
|
|
Section
4.3.
|
Availability
of LIBOR Advances
|
35
|
|
Section
4.4.
|
Funding
Indemnification
|
35
|
|
Section
4.5.
|
Lender
Statements; Survival of Indemnity
|
35
|
|
ARTICLE
V.
|
CONDITIONS
PRECEDENT
|
36
|
|
Section
5.1.
|
Conditions
Precedent to Closing
|
36
|
|
Section
5.2.
|
Conditions
Precedent to Subsequent Advances and Issuance
|
38
|
|
ARTICLE
VI.
|
REPRESENTATIONS
AND WARRANTIES
|
39
|
|
Section
6.1.
|
Existence
|
39
|
|
Section
6.2.
|
Corporate/Partnership
Powers
|
39
|
|
Section
6.3.
|
Power
of Officers
|
39
|
|
Section
6.4.
|
Government
and Other Approvals
|
39
|
|
Section
6.5.
|
Solvency
|
39
|
|
Section
6.6.
|
Compliance
with Laws
|
40
|
|
Section
6.7.
|
Enforceability
of Agreement
|
40
|
|
Section
6.8.
|
Title
to Property
|
40
|
|
Section
6.9.
|
Litigation
|
41
|
|
Section
6.10.
|
Events
of Default
|
41
|
|
Section
6.11.
|
Investment
Company Act of 1940
|
41
|
|
Section
6.12.
|
[Intentionally
Omitted]
|
41
|
|
Section
6.13.
|
Regulation
U
|
41
|
|
Section
6.14.
|
No
Material Adverse Financial Change
|
41
|
|
Section
6.15.
|
Financial
Information
|
41
|
|
Section
6.16.
|
[Intentionally
Omitted]
|
41
|
|
Section
6.17.
|
ERISA
|
41
|
|
Section
6.18.
|
Taxes
|
42
|
|
Section
6.19.
|
Environmental
Matters
|
42
|
|
Section
6.20.
|
Insurance
|
42
|
|
Section
6.21.
|
No
Brokers
|
43
|
|
Section
6.22.
|
No
Violation of Usury Laws
|
43
|
|
Section
6.23.
|
Not
a Foreign Person
|
43
|
|
Section
6.24.
|
No
Trade Name
|
43
|
|
Section
6.25.
|
Subsidiaries
|
43
|
|
Section
6.26.
|
Unencumbered
Assets
|
44
|
|
Section
6.27.
|
Borrowing
Base Assets
|
44
|
|
ARTICLE
VII.
|
||
|
Section
7.1.
|
Existence
|
44
|
|
Section
7.2.
|
Corporate
or Trust Powers
|
44
|
|
Section
7.3.
|
Power
of Officers
|
44
|
|
Section
7.4.
|
Government
and Other Approvals
|
44
|
|
Section
7.5.
|
Compliance
with Laws
|
45
|
|
Section
7.6.
|
Enforceability
of Guaranty
|
45
|
|
Section
7.7.
|
Liens;
Consents
|
45
|
|
Section
7.8.
|
Litigation
|
45
|
|
Section
7.9.
|
Investment
Company Act of 1940
|
45
|
|
Section
7.10.
|
[Intentionally
Omitted]
|
45
|
|
Section
7.11.
|
No
Material Adverse Financial Change
|
45
|
|
Section
7.12.
|
Financial
Information
|
45
|
|
Section
7.13.
|
[Intentionally
Omitted]
|
46
|
|
Section
7.14.
|
ERISA
|
46
|
|
Section
7.15.
|
Taxes
|
46
|
|
Section
7.16.
|
Subsidiaries
|
46
|
|
Section
7.17.
|
Status
|
46
|
|
ARTICLE
VIII.
|
46
|
|
|
Section
8.1.
|
Notices
|
46
|
|
Section
8.2.
|
Financial
Statements, Reports, Etc.
|
47
|
|
Section
8.3.
|
Existence
and Conduct of Operations; Limitations on Investments
|
49
|
|
Section
8.4.
|
Maintenance
of Properties
|
49
|
|
Section
8.5.
|
Insurance
|
50
|
|
Section
8.6.
|
Payment
of Obligations
|
50
|
|
Section
8.7.
|
Compliance
with Laws
|
50
|
|
Section
8.8.
|
Adequate
Books
|
50
|
|
Section
8.9.
|
ERISA
|
50
|
|
Section
8.10.
|
Maintenance
of Status
|
50
|
|
Section
8.11.
|
Use
of Proceeds
|
50
|
|
Section
8.12.
|
Pre
Acquisition Environmental Investigations
|
50
|
|
Section
8.13.
|
Unencumbered
Assets
|
50
|
|
Section
8.14.
|
Management
Agreements and Permitted Operating Leases
|
51
|
|
ARTICLE
IX.
|
||
|
Section
9.1.
|
Change
of Borrower Ownership
|
52
|
|
Section
9.2.
|
Use
of Proceeds
|
52
|
|
Section
9.3.
|
Leverage;
Additional Recourse Indebtedness
|
52
|
|
Section
9.4.
|
Dividends
|
52
|
|
Section
9.5.
|
Floating
Rate Debt
|
52
|
|
Section
9.6.
|
Liens
|
53
|
|
Section
9.7
|
FF&E
Expenditures
|
53
|
|
Section
9.8
|
Indebtedness,
Coverage and Net Worth Covenants
|
54
|
|
Section
9.9
|
Qualifying
Trust Preferred Securities
|
54
|
|
ARTICLE
X.
|
DEFAULTS
|
54
|
|
Section
10.1.
|
Nonpayment
of Principal
|
54
|
|
Section
10.2.
|
Certain
Covenants
|
55
|
|
Section
10.3.
|
Nonpayment
of Interest and Other Obligations
|
55
|
|
Section
10.4.
|
Cross
Default
|
55
|
|
Section
10.5.
|
Loan
Documents
|
55
|
|
Section
10.6.
|
Representations
or Warranty
|
55
|
|
Section
10.7.
|
Covenants,
Agreements and Other Conditions
|
55
|
|
Section
10.8.
|
No
Longer General Partner
|
56
|
|
Section
10.9.
|
Material
Adverse Financial Change
|
56
|
|
Section
10.10.
|
Bankruptcy
|
56
|
|
Section
10.11.
|
Legal
Proceedings
|
56
|
|
Section
10.12.
|
ERISA
|
56
|
|
Section
10.13.
|
Failure
to Satisfy Judgments
|
57
|
|
Section
10.14.
|
Environmental
Remediation
|
57
|
|
Section
10.15.
|
REIT
Status; Stock Exchange Listing
|
57
|
|
ARTICLE
XI.
|
ACCELERATION,
WAIVERS, AMENDMENTS AND REMEDIES
|
57
|
|
Section
11.1.
|
Acceleration
|
57
|
|
Section
11.2.
|
Preservation
of Rights; Amendments
|
58
|
|
ARTICLE
XII.
|
THE
ADMINISTRATIVE AGENT
|
58
|
|
Section
12.1.
|
Appointment
|
58
|
|
Section
12.2.
|
Powers
|
58
|
|
Section
12.3.
|
General
Immunity
|
58
|
|
Section
12.4.
|
No
Responsibility for Loans, Recitals, Etc.
|
58
|
|
Section
12.5.
|
Action
on Instructions of Lenders
|
59
|
|
Section
12.6.
|
Employment
of Administrative Agents and Counsel
|
59
|
|
Section
12.7.
|
Reliance
on Documents; Counsel
|
59
|
|
Section
12.8.
|
Administrative
Agent’s Reimbursement and Indemnification
|
59
|
|
Section
12.9.
|
Rights
as a Lender
|
60
|
|
Section
12.10.
|
Lender
Credit Decision
|
60
|
|
Section
12.11.
|
Successor
Administrative Agent
|
60
|
|
Section
12.12.
|
Notice
of Defaults
|
61
|
|
Section
12.13.
|
Requests
for Approval
|
61
|
|
Section
12.14.
|
Copies
of Documents
|
61
|
|
Section
12.15.
|
Defaulting
Lenders
|
61
|
|
Section
12.16.
|
Co-Agents;
Lead Managers
|
62
|
|
ARTICLE
XIII.
|
62
|
|
|
Section
13.1.
|
Successors
and Assigns
|
62
|
|
Section
13.2.
|
Participations
|
62
|
|
Section
13.3.
|
Assignments
|
63
|
|
Section
13.4.
|
Dissemination
of Information
|
64
|
|
Section
13.5.
|
Tax
Treatment
|
64
|
|
Section
13.6.
|
USA
Patriot Act
|
64
|
|
ARTICLE
XIV.
|
GENERAL
PROVISIONS
|
65
|
|
Section
14.1.
|
Survival
of Representations
|
65
|
|
Section
14.2.
|
Governmental
Regulation
|
65
|
|
Section
14.3.
|
Taxes
|
65
|
|
Section
14.4.
|
Headings
|
65
|
|
Section
14.5.
|
No
Third Party Beneficiaries
|
65
|
|
Section
14.6.
|
Expenses;
Indemnification
|
65
|
|
Section
14.7.
|
Severability
of Provisions
|
66
|
|
Section
14.8.
|
Nonliability
of the Lenders
|
66
|
|
Section
14.9.
|
Choice
of Law
|
66
|
|
Section
14.10.
|
Consent
to Jurisdiction
|
66
|
|
Section
14.11.
|
Waiver
of Jury Trial
|
66
|
|
Section
14.12.
|
Entire
Agreement; Modification of Agreement
|
67
|
|
Section
14.13.
|
Dealings
with the Borrower
|
67
|
|
Section
14.14.
|
Set-Off
|
68
|
|
Section
14.15.
|
Counterparts
|
68
|
|
Section
14.16.
|
Limitation
on Liability of EIP/WV
|
68
|
|
ARTICLE
XV.
|
NOTICES
|
69
|
|
Section
15.1.
|
Giving
Notice
|
69
|
|
Section
15.2.
|
Change
of Address
|
70
|
EXHIBITS
AND SCHEDULES
Exhibit
A Intentionally
Deleted
Exhibit
B Form
of
Note
Exhibit
C Intentionally
Deleted
Exhibit
D Form
of
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 Intentionally
Deleted
Exhibit
K Assignment
and Assumption Agreement
Exhibit
L Amendment
to Unsecured Revolving Credit Agreement
SCHEDULE
1.1 Schedule
of Existing Letters of Credit
SCHEDULE
6.19 Environmental
Compliance
SCHEDULE
6.24 Trade
Names
SCHEDULE
6.25 Subsidiaries
(Borrowers) Owning Unencumbered Assets
SCHEDULE
7.16 Subsidiaries
(Guarantors) Owning Unencumbered Assets
THIS
UNSECURED REVOLVING CREDIT AGREEMENT is entered into as of September 21, 2006
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, L.L.C.., a Tennessee
limited liability company which is wholly owned by Equity Inns,
Inc.;
EQI
ORLANDO 2, L.L.C., a
Delaware limited liability company having its principal place of business c/o
Equity Inns, Inc., 0000 Xxxx Xxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxx
00000
(“EQI2);
EQI
FINANCING PARTNERSHIP I, L.P., a Tennessee limited partnership having its
principal place of business c/o Equity Inns, Inc., 0000 Xxxx Xxxxx Xxxxxxxxx,
Xxxxxxxxxx, Xxxxxxxxx 00000 (“EQI
Financing),
the
sole general partner of which is EQI Financing Corporation, a Tennessee
corporation (the Operating Partnership, EIP/WV, EQI2, and EQI Financing being
referred to herein collectively as the “Borrower”);
JPMORGAN
CHASE BANK, N.A. (“JPMorgan”),
(successor by merger to Bank One, NA (main office New York, New York)) a
national bank organized under the laws of the United States of America having
an
office at 000 Xxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; as Co-Lead
Arranger and Administrative Agent ("Administrative
Agent")
for
the Lenders (as defined below);
X.X.
XXXXXX SECURITIES INC. ("JPMS"), as 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 Co-Lead Arranger and Syndication
Agent (“Syndication
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");
KEYBANK
NATIONAL ASSOCIATION (“KeyBank”)
having
an office at 0000 Xxxxxxxxx Xxxx, XX, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, as
Documentation Agent;
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;
U.S.
BANK
NATIONAL ASSOCIATION ("USBank")
having
an office at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000;
and
BRANCH
BANKING AND TRUST COMPANY ("BB&T")
having
an office at 000 Xxxx 0xx
Xxxxxx;
00xx
xxxxx,
Xxxxxxx-Xxxxx, XX 00000;
REGIONS
BANK (“Regions”),
having an office at 000 00xx
Xxxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxx, 00000.
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 a Second Amended and Restated Secured Revolving Credit Agreement
dated as of June 20, 2005 with respect to a secured credit facility in the
amount of $125,000,000 (the “Existing
Facility”).
C. The
Borrower has requested that the Lenders extend unsecured loans to the Borrower
in the aggregate amount of $150,000,000 (with possible future increases to
an
amount up to $250,000,000) pursuant to the terms of this Agreement (the
“Facility”), and that the Administrative Agent act as administrative agent for
the Lenders and that the Existing Facility be terminated. The Administrative
Agent and the Lenders have agreed to do so.
D. X.X.
Xxxxxx Securities Inc. has acted as co-lead arranger/sole book manager and
Calyon New York Branch has acted as co-lead arranger and have arranged the
Facility between the Lenders and Borrower and coordinated the closing of the
Facility.
Article
I.
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.
“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 $150,000,000 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 Unsecured Revolving Credit Agreement and all amendments, modifications
and
supplements hereto.
“Agreement
Effective Date”
shall
mean September ____, 2006.
“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
2.7.
“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.
“Approved
Management Agreement”
means
a
management agreement that contains substantially market standard
terms.
“Arrangers”
means
JPMS and Calyon, collectively.
“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.
“Borrower”
is
defined in the Preambles.
“Borrowing
Base”
means,
as of any date, 60% of Total Asset Value derived from Borrowing Base Assets,
provided that the maximum value of any one Borrowing Base Asset will not exceed
20% of Total Asset Value derived from Borrowing Base Assets.
“Borrowing
Base Assets”
means
Unencumbered Assets which (i) are wholly-owned in fee simple by Borrower or
a
Guarantor, except that up to 15% of the Borrowing Base may be comprised of
Borrowing Base Assets owned by Qualifying Investment Affiliates in which the
Borrower and/or Guarantors have an ownership percentage of at least 74.9%,
and
(ii) have been in service for at least 24 months.
“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 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.
“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 three percent (3%) per annum.
“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.
“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.
“EQI
Financing”
means
EQI Financing Partnership I, L.P., a Tennessee limited partnership.
“EQI2”
means
EQI
Orlando
2,
L.L.C., A Tennessee
limited liability company.
“Equity
Inns”
means
Equity Inns, Inc., a Tennessee corporation.
“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.
“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
Property that has been completed but has been in operation for less than 24
months.
“Existing
Agreement”
means
that certain Second Amended and Restated Secured Revolving Credit Agreement
dated as of June 20, 2005 by and between the Borrower, the Administrative Agent
and certain of the other Lenders.
“Existing
Trust Preferred Securities”
means
the fixed/floating preferred securities in an aggregate principal amount of
$50,000,000 issued on or about June 17, 2005 by Equity Inns Statutory Trust,
a
wholly-owned subsidiary of Equity Inns Partnership, L.P., which mature on June
30, 2035.
“Facility”
means
the unsecured revolving credit facility as defined in Recital C and 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
as
shown on Schedule
1.1
hereto.
“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
$25,000,000.
“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. (New York 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.
“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 and
Equity Inns, Inc., a Tennessee corporation.
“Guaranty”
means
the Guaranty executed by the Guarantors in the form attached hereto as
Exhibit
D.
“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.
“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
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,
or
any other period as approved by all Lenders, as selected in advance by the
Borrower.
“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).
“Loan”
means,
with respect to a Lender, such Lender’s portion of any Advance.
“Loan
Documents”
means
this Agreement, the Notes, the Guaranty, 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
September _____, 2010 (subject to extension in accordance with Section
2.21)
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.
“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).
“Newly
Acquired Properties”
means
each Property acquired after the closing of the Facility for an effective cap
rate greater than nine percent (9%) until such time as the purchase price for
such Property divided by the Adjusted Net Operating Income for such Property
for
the trailing twelve month period, is equal to or less than 9.0.
“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.
“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 the hotel
covered by such Permitted Operating Lease) on substantially the same lease
form
as currently being used by Borrower.
“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.
“Qualifying
Investment Affiliate”
means
any Subsidiary or Investment Affiliate with respect to which (i) the
Borrower or one of its Wholly-Owned Subsidiaries has management control of
the
Subsidiary or Investment Affiliate and each of its assets and (ii) the
Borrower or such Wholly-Owned Subsidiary, as the case may be, is not subject
to
restrictions contained in the organizational documents of any of such entities
(or any such restrictions have expired) on its ability to sell or finance the
real property owned by such Subsidiary or Investment Affiliate or its interest
in the Subsidiary or Investment Affiliate. In no event shall a Subsidiary or
Investment Affiliate be a Qualifying Investment Affiliate if it has Indebtedness
that is recourse to the Subsidiary or Investment Affiliate (excluding
Indebtedness that is recourse to the Subsidiary or Investment Affiliate only
for
customary non-recourse carve-outs).
“Qualifying
Trust Preferred Securities”
means
(i) the Existing Trust Preferred Securities, (ii) up to $50,000,000 of
preferred securities issued to refinance the Existing Trust Preferred Securities
and (iii) up to $50,000,000 of additional trust preferred securities,
provided that the securities issued in accordance with clauses (ii) and (iii)
must be subordinate to all senior debt of the Borrower, including the Facility,
and be otherwise structured in substantially the same way as the Existing Trust
Preferred Securities.
“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
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 sixty percent
(60%) of the then current Aggregate Commitment or, if the Aggregate Commitment
has been terminated, Lenders holding, in the aggregate, more than sixty percent
(60%) 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.
“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, 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
$20,000,000, 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
Asset Value”
means
(a) Adjusted Net Operating Income from all Properties owned by the Consolidated
Group (other than Excluded Properties and Newly Acquired Properties) for the
trailing twelve month period divided by .09, plus (b) Consolidated Group Pro
Rata Share of the Adjusted Net Operating Income from all Properties owned by
Investment Affiliates (other than Excluded Properties and Newly Acquired
Properties) for the trailing twelve month period divided by .09, plus (c) the
amount by which Unrestricted Cash and Cash Equivalents exceeds $10,000,000,
plus
(d) the Total Cost for Properties Under Development, Excluded Properties, and
Newly Acquired Properties.
“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.
“Total
Secured Indebtedness”
means
as of any date, the aggregate principal amount of that portion of Total
Indebtedness that is secured by a Lien on the Property of any member of the
Consolidated Group or any Investment Affiliate.
“Total
Unsecured Indebtedness”
means
as of any date, the aggregate principal amount of that portion of Total
Indebtedness that is not secured by a Lien on the Property of any member of
the
Consolidated Group or any Investment Affiliate.
“Unencumbered
Asset”
means,
with respect to any Property located in the United States and wholly owned
by
Borrower, any Guarantor or a Qualifying Investment Affiliate, which is in
service or is a Property Under Development, at any date of determination, the
circumstance that such asset on such date (a) is not subject to any Liens
or claims (including restrictions on transferability or assignability) of any
kind, (b) is not subject to any agreement (including any agreement
governing Indebtedness incurred in order to finance or refinance the acquisition
of such asset which prohibits or limits the ability of the Borrower or any
Guarantor, as the case may be, to create, incur, assume or suffer to exist
any
Lien upon any assets or Capital Stock of the Borrower or Guarantor (c) is
not subject to any agreement (including any agreement governing Indebtedness
incurred in order to finance or refinance the acquisition of such asset) which
entitles any Person to the benefit of any Lien on any assets or Capital Stock
of
the Borrower or any Guarantor or would entitle any Person to the benefit of
any
Lien (but excluding liens in favor of Lenders and other Permitted Liens
identified in Section
9.6 (i) - (iv)
and
(vii))
on such
assets or Capital Stock upon the occurrence of any contingency (including,
without limitation, pursuant to an “equal and ratable” clause), and (d) is
compliant with the criteria set forth in Section
8.13
hereof.
For the purposes of the foregoing, any Property owned by a Qualifying Investment
Affiliate shall not be deemed to be an “Unencumbered Asset” unless (i) both such
Property and all Capital Stock of such Qualifying Investment Affiliate, and
of
each entity in the chain of ownership between the Borrower and such Qualifying
Investment Affiliate is unencumbered and (ii) such Qualifying Investment
Affiliate and each intervening entity between the Borrower and such Qualifying
Investment Affiliate does not have any Indebtedness for borrowed money or any
Guarantee Obligations.
“Unencumbered
Asset Value”
means,
subject to the limitations hereinafter set forth, as of the end of a quarter,
(a) the value of all Unencumbered Assets determined by dividing the Adjusted
Net
Operating Income from Unencumbered Assets owned by the Consolidated Group and
the Consolidated Group Pro Rata Share of Adjusted Net Operating Income from
Unencumbered Assets owned by Qualifying Investment Affiliates, each for the
trailing twelve month period (other than Excluded Properties and Newly Acquired
Properties) by .09, plus (b) the amount by which Unrestricted Cash and Cash
Equivalents exceeds $10,000,000, plus (c) the Total Cost for Unencumbered Assets
which are Properties Under Development, Excluded Properties and Newly Acquired
Properties. The inclusion of Unencumbered Assets in the calculation of
Unencumbered Asset Value shall be subject to the following
limitations:
| · |
85%
of the Unencumbered Asset Value shall be from assets that are wholly-owned
and controlled by the Borrower and the remaining amount shall be
from
assets owned by Qualifying Investment Affiliates (or Borrower or
a
Guarantor);
|
| · |
90%
of the Unencumbered Asset Value shall be from assets that are, directly
or
indirectly, held in fee simple by Borrower or a Wholly-Owned
Subsidiary;
|
| · |
The
maximum aggregate value of Properties Under Development and Excluded
Properties included in the Unencumbered Asset Value will not exceed
20% of
the Unencumbered Asset Value; and
|
| · |
No
more than 30% of the total Unencumbered Asset Value may be derived
from
assets that are (i) not wholly-owned and controlled by the Borrower
(ii)
not directly or indirectly, held in fee simple by Borrower or a
Wholly-Owned Subsidiary, (iii) Properties Under Development, and
(iv) Excluded Properties.
|
“Unrestricted
Cash and Cash Equivalents”
means,
in the aggregate, all cash, deposits with commercial banks or short term debt
instruments issued by the U.S. Treasury or other highly creditworthy
institutions described herein which are not pledged or otherwise restricted
for
the benefit of any creditor and which are owned by members of the Consolidated
Group, to be valued for purposes of this Facility at 100% of their then-current
book value, as determined under GAAP.
“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.
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.
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; 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 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, EIP/WV, EQI Financing and EQI2 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 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
.
The ABR
Applicable Margin and the LIBOR Applicable Margin to be used in calculating
the
interest rate applicable to different types of Advances shall vary from time
to
time in accordance with the ratio of Total Indebtedness to EBITDA:
|
Ratio
of Total Indebtedness to EBITDA
|
LIBOR
Applicable Margin
|
ABR
Applicable Margin
|
|
Less
than 4.5x
|
1.25%
|
0.25%
|
|
4.5x
or over, but less than 5.00x
|
1.375%
|
0.375%
|
|
5.00x
or over, but less than 5.50x
|
1.50%
|
0.50%
|
|
5.50x
or over, but less than 6.0x
|
1.875%
|
0.875%
|
The
Applicable Margins 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.
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 (“Unused
Facility Amount”))
payable quarterly in arrears on the last day of each calendar quarter hereafter
beginning December 31, 2006 and ending on the Maturity Date. The Applicable
Commitment Fee Percentage shall be equal to 0.15% for any period during which
the average daily Unused Facility Amount for all Lenders is less than fifty
percent (50%) of the Aggregate Commitment and 0.25% in all other cases.
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 (New York time).
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. (New York 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. (New
York
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, provided,
however,
that
with regard to delivering a compliance certificate with each Borrowing Notice,
so long as all Borrowing Base Assets, as of the time of the last compliance
certificate, continue to qualify as Borrowing Base Assets, a compliance
certificate will not be required provided that Borrower’s request for an Advance
or the issuance of a Facility Letter of Credit shall constitute its
representation and warranty that it is in compliance with the covenants herein,
including that the requested Advance or issuance of a Facility Letter of Credit
will not result in a violation of any of the limitations set forth in
Section 2.1 hereof. 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 (New York time) on each Borrowing Date, each Lender shall make
available its Loan or Loans, in funds immediately available in New York 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.
(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.
(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. (New York 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. (New York 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 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 $20,000,000
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 (New York 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 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 $250,000,000 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 $250,000,000 without the approval of all of the
Lenders.
Section
2.19. Optional
Prepayments; Mandatory Prepayments
(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 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 (30) 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.
Section
2.20. 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 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
2.21. Extension
of Maturity Date
.
Borrower shall have one (1) option to extend the Maturity Date for a period
of
one (1) 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.
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;
(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, 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);
|
|
(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. (New York 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 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 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;
(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, 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.
Section
4.1. Yield
Protection
.
If, on
or after the date of this Agreement, 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 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 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.
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 repaid the Existing Agreement
in
full, (ii) the Borrower shall have paid all fees then due and payable to the
Lenders, and the Administrative Agent hereunder, (iii) all of the conditions
set
forth in Section
5.2 are
satisfied, and (iv) 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.
(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).
(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 New York Counsel.
A
written opinion, from New York outside counsel for the Borrower and the
Guarantors in form and substance satisfactory to Administrative
Agent.
(i) 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, 2005;
(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
(j) 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.
(k) 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.
(l) Borrowing
Notice.
The
Administrative Agent shall have received a Borrowing Notice in accordance with
Section
2.11
hereunder.
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; and
(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.
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.
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, 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, EQI2 is a limited liability company duly organized
and existing under the laws of the State of Delaware, with its principal place
of business in the State of Tennessee and EQI Financing is a Tennessee 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, EIP/WV, EQI2 and EQI Financing is duly
qualified as a foreign limited partnership or a foreign limited liability
company as applicable, 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 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 or limited liability
company authority of such entities and the corporate or trust powers of the
general partners or managers 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 any 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 or the manager 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) None
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 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.
[Intentionally
Omitted].
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 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.
(i) .
Borrower
shall, and shall cause each of its Subsidiaries to maintain with financially
sound and reputable insurance companies, insurance in the amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations.
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.
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 that own Unencumbered Assets, setting forth their respective
jurisdictions of formation, the percentage of their respective Capital Stock
owned by Borrower 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. Unencumbered
Assets
Each
of
the assets included as an Unencumbered Asset for purposes of the covenants
contained herein, satisfies each of the requirements for an Unencumbered Asset
set forth in the definition thereof.
Section
6.27. Borrowing
Base Assets.
Each
of
the assets included as a Borrowing Base Asset for purposes of determining the
Borrowing Base satisfies each requirement for a Borrowing Base Asset set forth
in the definition thereof.
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 or issuance of a Facility Letter of Credit 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.
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, 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. [
Intentionally
Omitted].
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.
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 that own Unencumbered Assets, setting forth their respective
jurisdictions of formation, the percentage of their respective Capital Stock
owned by Guarantor 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.
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;
(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 ninety (90) days
after the close of each fiscal year, reports in form and substance satisfactory
to the Lenders, certified by a Qualified 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 by a Qualified 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 Borrowing
Base Asset, a statement describing such fire, casualty or condemnation and
the
action Borrower intends to take with respect thereto;
(x) Such
other information (including, without limitation, non financial information)
as
the Administrative Agent or any Lender may from time to time reasonably request;
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 Total Cost of all Properties
Under Development and Excluded Properties 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
.
The
Borrower will, and will cause each of its Subsidiaries to, maintain insurance
which is consistent with the representation contained in Section 6.20
on all
their Property and the Borrower will furnish to any Lender upon reasonable
request full information as to the insurance carried.
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 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 consistent
with that used by institutional purchasers of similar type
properties.
Section
8.13. Unencumbered
Assets
.
Cause
the Unencumbered Assets to at all times meet the following requirements (in
addition to the other requirements set forth in the definition of Unencumbered
Assets):
(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,
(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 third party Liens on such Property,
(vii) such
Property is operated as one of the following: a Hampton Inn, a Holiday Inn,
a
Homewood Suites, a Hyatt, a Residence Inn, an AmeriSuites, or a hotel, resort
or
inn in the Marriott, Hilton, Global Hyatt Corporation, Choice Hotels,
Intercontinental Hotel Group or Starwood line or any other nationally recognized
franchise approved in writing by the Required Lenders,
(viii) the
franchise agreement with the franchisor identified by Borrower for such Property
in compliance with clause (vii) above shall be in full force and effect and
no
default by either party shall have occurred and be continuing thereunder,
and
(ix) such
Property meets all of Administrative Agent’s customary due diligence
requirements for hotel properties provided that Borrower shall not have any
obligation to provide copies of any due diligence documentation unless
specifically requested by Administrative Agent.
Section
8.14. Management
Agreements and Permitted Operating Leases
.
Cause
each Property 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 company to execute documentation satisfactory to the Administrative
Agent with regard to the obligations of such parties to the
Lenders.
Article
IX.
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, EQI Financing and EQI2,
(ii)
Equity Inns Services, L.L.C. to own less than one hundred percent (100%) of
the
general partnership interests in EIP/WV, (iii) Equity Inns to own less than
100%
of the beneficial interests in Equity Inns Trust or 100% of Equity Inns
Services, L.L.C., (iv) any pledge of, other encumbrance on, assignment of
membership interest of or conversion to limited partnership interests of, any
of
the general partnership interests or membership interest 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 6.00x;
(b) At
any
time, the aggregate amount of the secured Recourse Indebtedness of the
Consolidated Group to exceed $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 proceedings
and for which adequate reserves shall have been set aside on its
books;
(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;
(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, 2005
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, 2005 of equity interests in the Borrower or the Guarantors,
whether common stock, preferred stock, limited partnership units or other forms
of equity ownership;
(b) as
of the
last day of any fiscal quarter, Total Secured Indebtedness to exceed fifty
percent (50%) of Total Asset Value, provided that such percentage may be up
to
fifty-five percent (55%) for up to two consecutive quarters once during the
term
of the Facility;
(c) as
of the
last day of any fiscal quarter, Total Unsecured Indebtedness to exceed sixty
percent (60%) of Unencumbered Asset Value, provided that for purposes of this
Section
9.8 (c)
only,
Total Unsecured Indebtedness shall not include Indebtedness resulting from
the
issuance of Qualifying Trust Preferred Securities;
(d) as
of any
day, Adjusted EBITDA derived from Unencumbered Assets to be less than 2.0 times
Interest Expense associated with Total Unsecured Indebtedness; and
(e) 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. Qualifying
Trust Preferred Securities
.
Permit,
as of any day in which a Event of Default exists, or a notice of a monetary
default has been given and not cured, any payments to be made on subordinated
notes issued in connection with the sale of Qualifying Trust Preferred
Securities, or the redemption of the Qualifying Trust Preferred
Securities.
Section
9.10. 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.
Article
X.
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 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 four entities constituting the
Borrower.
Section
10.9. Material
Adverse Financial Change
.
Any one
of the Operating Partnership, EIP/WV, EQI2, EQI Financing, 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 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.
Article
XI.
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.
Article
XII.
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 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 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 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, 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 rely, on any
of
Lenders so identified in deciding to enter into this Agreement or in taking
or
not taking action hereunder.
Article
XIII.
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.
(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)), 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.
(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.
(c) Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender,
including without limitation any pledge or assignment to secure obligations
to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided
that no
such pledge or assignment of a security interest shall release a Lender from
any
of its obligations hereunder or substitute any such pledgee or assignee for
such
Lender as a party hereto.
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.
Section
13.6. USA
Patriot Act
.
Each
Lender hereby notifies the Borrower that pursuant to the requirements of the
USA
Patriot Act (Title III of Pub. L 107-56 (signed into law October 26, 2001))
(the
“Act”), it is required to obtain, verify and record information that identifies
the Borrower, which information includes the name and address of the Borrower
and other information that will allow such Lender to identify the Borrower
in
accordance with the Act. Any Lender may request additional information with
respect to any Borrower in connection with such Lender’s “know your customer”
procedures.
Article
XIV.
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 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,
and (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. 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 NEW YORK, 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 NEW YORK STATE COURT SITTING IN NEW YORK COUNTY, NEW
YORK 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 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 NEW YORK, NEW YORK.
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) changes
the definition of Required Lenders or Supermajority Lenders or modifies any
requirement for consent by each of the Lenders; or
(vii) modifies
the definition of “Borrowing Base”; or
(viii) modifies
this Section
14.12(a);
or
(b) the
Supermajority Lenders, if such amendment or waiver modifies or waives the
covenant in Section
9.10;
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 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.
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
Xxxx
Xxxxxx, 0xx Xxxxx
Xxx
Xxxx,
XX 00000
Attention: Xxxxxx
Xxxxxxxx
Telecopy: (000)
000-0000
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.
[remainder
of this page intentionally blank]
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:
________________________________
Name:
J.
Xxxxxxxx Xxxxxxx
Title: Executive
VP
EQUITY
INNS/WEST VIRGINIA PARTNERSHIP, L.P.
By: Equity
Inns Services, L.L.C., its General
Partner
By:
________________________________
Name:
J.
Xxxxxxxx Xxxxxxx
Title: __________________________
EQI
ORLANDO 2, L.L.C.
By:
________________________________
Name:
J.
Xxxxxxxx Xxxxxxx
Its: ____________________________
EQI
FINANCING PARTNERSHIP I, L.P.
|
By:
|
EQI
Financing Corporation, its General
Partner
|
By:
________________________________
Name:
J.
Xxxxxxxx Xxxxxxx
Title: Executive
VP
LENDERS: JPMORGAN
CHASE BANK, N.A.
Individually
and as Administrative Agent
By:
________________________________
Name:
Xxxxxx
Xxxxxxxx
Title: Managing
Director
Commitment:
$25,000,000
Address
for Notices:
Real
Estate Investment Banking
000
Xxxx
Xxxxxx, 0xx Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxx Xxxxxxxx
Telephone:
212/000-0000
Telecopy:
646/534-0574
CALYON
NEW YORK BRANCH
Co-Lead
Arranger and as Syndication Agent
By: ________________________________
Name:
Title:
By:
________________________________
Name:
Title:
Commitment:
$25,000,000
Address
for Notices:
Calyon
New York Branch
Lodging
Group
1301
Avenue of the Xxxxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxx Xxxxxx
Telephone:
212/000-0000
Telecopy:
212/261-7532
BANK
OF
AMERICA, N.A.
Individually
and as Documentation Agent
By: ________________________________
Name:
Xxxxx
X.
Xxxxx
Title: Senior
Vice President
Commitment:
$22,000,000
Address
for Notices:
Bank
of
America, N.A.
000
Xxxx
Xx. 00xx
Xxxxx
Xxxxxx,
XX 00000
Attention:
Xxxxx X. Xxxxx
Telephone:
214/000-0000
Telecopy:
214/209-0085
KEYBANK
NATIONAL ASSOCIATION
Individually
and as Documentation Agent
By: ________________________________
Name:
________________________________
Title: ________________________________
Commitment:
$22,000,000
Address
for Notices:
KeyBank
National Association
0000
Xxxxxxxxx Xxxx XX, Xxxxx 0000
Xxxxxxx,
Xxxxxxx 00000
Phone:
770/000-0000
Telephone:
770/000-0000
Telecopy:
Xxxxxx Xxxxxxxxxxxx
AMSOUTH
BANK
Individually
and as Documentation Agent
By: ________________________________
Name:
________________________________
Title: ________________________________
Commitment:
$15,000,000
Address
for Notices:
AmSouth
Bank
0000
0xx
Xxxxxx
Xxxxx, XXX-00
Xxxxxxxxxx,
XX 00000
Attention:
Xxxx Xxxxxxx
Telephone:
205/000-0000
Telecopy:
205/326-4075
U.S.
BANK
NATIONAL ASSOCIATION
By: ________________________________
Name:
Xxxxxx
X.
Xxxxxxx
Title: Senior
Vice President
Commitment:
$19,000,000
Address
for Notices:
U.S.
Bank
National Association
000
X.
XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
Attention:
Xxxxxx X. Xxxxxxx
Telephone:
312/000-0000
Telecopy:
312/325-8852
BRANCH
BANKING AND TRUST COMPANY
By: ________________________________
Name:
Xxxxxx
Xxxxxxx
Title: Senior
Vice President
Commitment:
$15,000,000
Address
for Notices:
Branch
Banking and Trust Company
000
Xxxx
0xx
Xxxxxx;
00xx
Xxxxx
Xxxxxxx-Xxxxx,
XX 00000
Attention:
Xxxxxx Xxxxxxx
Telephone:
336/000-0000
Telecopy:
336/733-2740
REGIONS
BANK
By: ________________________________
Name:
________________________________
Title: ________________________________
Commitment:
$7,000,000
Address
for Notices:
Regions
Bank
0000
Xxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxxx 00000
Attention:
Xxxxx Xxxxxx
Telephone:
901/000-0000
Telecopy:
901/580-5451
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:
___________________________
Name: J.
Xxxxxxxx Xxxxxxx
Title: Executive
VP
EQUITY
INNS TRUST
By:
_____________________________
Name: J.
Xxxxxxxx Xxxxxxx
Title: Executive
VP
EXHIBIT
A
INTENTIONALLY
DELETED
Exhibit
A
- Page
EXHIBIT
B
FORM
OF NOTE
_________,
2006
On
or
before the Maturity Date, as defined in that certain Unsecured Revolving Credit
Agreement dated as of ___________, 2006 (the “Agreement”)
among
EQUITY INNS PARTNERSHIP, L.P., a Tennessee limited partnership, EQUITY INNS/WEST
VIRGINIA PARTNERSHIP, L.P., a Tennessee limited partnership, EQI ORLANDO 2,
L.L.C., a Delaware limited liability company, and EQI FINANCING PARTNERSHIP
I,
L.P., a Tennessee limited partnership (collectively, “Borrower”),
CALYON NEW YORK BRANCH, individually and as _____________ 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 New York, New York, 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 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 New
York.
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.
EQUITY
INNS PARTNERSHIP, L.P., a Tennessee limited partnership
By: Equity
Inns Trust, its general partner
By:
Name:
Title:
_________________________
EQUITY
INNS/WEST VIRGINIA PARTNERSHIP, L.P., a Tennessee limited
partnership
By: Equity
Inns Services, L.L.C., its general partner
By:
Name:
________________________
Its:
EQI
ORLANDO 2, L.L.C.
By:
________________________________
Name:
J.
Xxxxxxxx Xxxxxxx
Its:
______________________________
EQI
FINANCING PARTNERSHIP I, L.P.
|
By:
|
EQI
Financing Corporation, its General
Partner
|
By:
________________________________
Name:
J.
Xxxxxxxx Xxxxxxx
Title: ______________________________
|
Date
|
Unpaid
Principal
Balance
|
Notation
Made
by
|
Exhibit
B
- Page
EXHIBIT
C
Intentionally
Deleted
Exhibit
C
- Page
EXHIBIT
D
FORM
OF GUARANTY
See
Guaranty of even date.
Exhibit
D
- Page
EXHIBIT
E
Intentionally
Deleted
Exhibit
E
- Page
EXHIBIT
F
Intentionally
Deleted
Exhibit
F
- Page
EXHIBIT
G
Intentionally
Deleted
Exhibit
G
- Page
EXHIBIT
H
WIRING
INSTRUCTIONS
|
To:
|
JPMorgan
Chase Bank, N.A., as Administrative Agent (the “Agent”) under the Credit
Agreement Described Below
|
|
Re:
|
Unsecured
Revolving Credit Agreement, dated as of _________, 2006 (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., EQI Orlando 2, L.L.C. and EQI Financing Partnership I, L.P.
(collectively, the “Borrower”), JPMorgan Chase Bank, N.A., individually
and as Administrative Agent, Calyon New York Branch, as Co-Lead Arranger,
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.
EQI Orlando 2, L.L.C. and EQI Financing Partnership I, 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)
Exhibit
H
- Page
EXHIBIT
I
FORM
OF COMPLIANCE CERTIFICATE
Under
that certain Unsecured Revolving Credit Agreement dated as of _________ 2006,
(the “Credit Agreement”), between Equity Inns Partnership, L.P., Equity Inns /
West Virginia Partnership, L.P., EQI Orlando 2, L.L.C. and EQI Financing
Partnership I, L.P., as Borrower and JPMorgan Chase Bank, N.A. (“JPMorgan”) as
Administrative agent, Calyon New York Branch as Co-Lead Arranger and the Lenders
defined therein (the “Credit Agreement”).
The
undersigned, as _________________ of Equity Inns Partnership L.P., as
_________________ of Equity Inn / West Virginia Partnership L.P., as
______________ of EQI Orlando 2, L.L.C. and as _________________ of EQI
Financing Partnership I, 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 as of ______________, 20__,
together
with the supporting schedule attached hereto is true and
correct:
|
A. Total
Asset Value derived from Borrowing Base Assets
(See
Attached Schedule of Borrowing Base Assets) $
B. 60.0%
of
A $
C. Value
of
Asset which makes up greatest percentage of the Borrowing Base
$
D. C
divided
by A is less than 20% %
E. Allocated
Facility Amount $
F.
B is
equal to or more than E ____ Yes ____ No
| 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
|
A. Total
Cost of all Properties Under Development and Excluded
Properties
|
$
|
|
B. 10%
of Total Cost of all Properties
|
$
A
must be less than or equal to B
|
|
|
Unencumbered
Asset
Value
Definition
|
Limitations
on Unencumbered Asset Value
Wholly-Owned
Assets
A. Unencumbered
Asset Value (See Attached Schedule)
B. Total
Values of Properties which are, directly or indirectly, wholly owned
and
controlled by Borrower
C. B
divided by A
Fee
Simple Assets
D. Total
Asset Value attributed to Properties which are, directly or indirectly,
held in fee simple by Borrower or a Wholly-Owned Subsidiary
E. D
divided by A
Properties
Under Development and Excluded Properties
F. Total
Asset Value attributable to Properties Under Development and Excluded
Properties
G. F
divided by A
H. Total
Amount of Unencumbered Asset Value derived from Collateral Pool Asset
that
are:
(i)
not directly or indirectly, wholly owned and controlled by the Borrower;
(ITEM B) plus
(ii)
not directly or indirectly, held in fee simple by the Borrower or
a
Wholly-Owned Subsidiary (ITEM D) plus
(iii)
Properties Under Development and Excluded Properties (Item
F)
|
$
$
%
C
must be greater than or equal to 85%
$
%
E
must be greater than or equal to 90%
$
%
G
must be less than or equal to 20%
$
|
|
I. H
divided by A
|
%
I
must be less than 30%
|
|
|
9.3
|
Leverage.
A. Total
Indebtedness
B. EBITDA
C. A
divided by B
D. 6.00
|
$
$
C
must be less than or equal to D
|
|
9.3
|
Secured
Recourse Indebtedness
A. Recourse
Secured Indebtedness of the Consolidated Group
B. $50,000,000
|
$
$
A
must be less than or equal to B
|
|
9.4
|
||
|
9.4
|
A. Total
dividends for the past four quarters (excluding Preferred Stock
Expense)
B. 95%
of the Funds From Operations for the past four quarters
|
$
$
A
must be less than or equal to B
|
|
9.5
|
Floating
Rate Debt
A. 25%
of Total Indebtedness
B.
Floating Rate Debt, excluding the Facility
|
$
$
B
must be less than A
|
|
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
B. 80%
of Tangible Net Worth at 12/31/05
C. 75%
of equity interest issued after 12/31/05
D. Sum
of B and C
|
$
$
$
$
A
must be greater than or equal to D
|
|
9.8(b)
|
9.8(b)Maximum
Total Secured Indebtedness.
A. Total
Secured Indebtedness at last day of most recent fiscal
quarter
B. Total
Asset Value at last day of most recent fiscal quarter
C. A
divided by B
|
$
$
%
C
must be less than or equal to 50% (or 55% for up two consecutive
quarters)
|
|
9.8(c)
|
A. Total
Unsecured Indebtedness at last day of most recent fiscal
quarter
B.
Indebtedness resulting from the issuance of Qualifying Trust Preferred
Securities
C.
A minus B
D. Total
Unencumbered Asset Value at last day of most recent fiscal
quarter
E. C
divided by D
|
$
$
$
$
%
E
must be less than or equal to 60%
|
|
9.8(d)
|
Maximum
Interest Expense for Unsecured Debt
A. EBITDA
derived from Unencumbered Assets for the most recent 12 calendar
months
B. Agreed
FF&E Reserve for Unencumbered Assets for the most recent 12 calendar
months
C. A
minus B (Adjusted EBITDA derived from Unencumbered Assets)
D. Interest
Expense associated with Total Unsecured Indebtedness for the most
recent
12 calendar months
E. C
divided by D
|
$
$
$
E
must be equal to or greater than 2.0 to 1.0
|
|
9.8(e)
|
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
1.0
|
|
The
following computation of the limits imbedded in the definitions,
together
with the supporting schedule attached hereto, is true and
correct.
|
||
|
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.
|
$35,000,000
|
$
|
|
D.
|
The
amount of the Borrowing Base attributable to Properties Under
Development
|
$
|
|
E.
|
C
minus D
|
$
B
must be less than or equal to
E
|
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:
SCHEDULE
I
CALCULATION
OF COVENANTS
|
1.
|
Total
Cost
A. Book
Value of all Newly Acquired Properties, Excluded Properties and Properties
under Development owned by the Consolidated Group
B. Accumulated
Depreciation on such Properties
C. Consolidated
Group Pro Rata Share of the book value of all Newly Acquired Properties,
Excluded Properties and Properties under Development 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
|
$
$
$
$
$
|
|
2.
|
Total
Indebtedness
A. Indebtedness
of the Consolidated Group
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
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
|
$
$
$
$
$
$
$
$
$
$
$
|
|
3.
|
EBITDA
for the most recent four quarters
A. Net
income of the Consolidated Group applicable to common shareholders
excluding income from Investment Affiliates
B. Consolidated
Group Pro Rata Share of net income 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) plus sum of (C plus D plus E plus F plus G plus H plus
I
plus J) equals EBITDA.
Note:
For: X, X, X, X, X, X, X, and J only the Consolidate Group Pro Rata
Share
shall be added back to the extent the foregoing items relate to Investment
Affiliates.
|
$
$
$
$
$
$
$
$
$
$
$
|
|
4.
|
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. Consolidated
Group Pro Rata Share of 4% of gross room revenues for such period
on each
Property owned by Investment Affiliates
D. A
minus the sum of B plus C equals Adjusted EBITDA
|
$
$
$
$
|
|
5.
|
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
|
$
$
$
$
$
$
|
Exhibit
I
- Page
EXHIBIT
J
Intentionally
Deleted
Exhibit
J
- Page
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
Select as Applicable
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:
|
Facility
Assigned
|
Aggregate
Amount of Commitment/Loans for all Lenders*
|
Amount
of Commitment/Loans Assigned*
|
Percentage
Assigned of Commitment/Loans2
|
|
____________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
*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:
ANNEX
1
TERMS
AND CONDITIONS FOR
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 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 New York.
ADMINISTRATIVE
QUESTIONNAIRE
(Schedule
to be supplied by Closing Unit or Trading Documentation Unit)
1
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.
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.
Exhibit
K
- Page
EXHIBIT
L
AMENDMENT
TO UNSECURED REVOLVING CREDIT AGREEMENT
This
Amendment to Unsecured Revolving Credit Agreement (the “Amendment”)
is
made as of ,
2006,
by and among Equity Inns Partnership, L.P., a Tennessee limited partnership,
Equity Inns/West Virginia Partnership, L.P., a Tennessee limited partnership,
EQI Orlando 2, L.L.C., a Delaware limited liability company and EQI Financing
Partnership I, L.P., a Tennessee limited partnership (collectively,
“Borrower”)
Equity
Inns Trust, Equity Inns Services, L.L.C. 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.
A. Borrower,
Administrative Agent and certain other Lenders have entered into a Unsecured
Revolving Credit Agreement dated as of __________, 2006 (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 $150,000,000. 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 $__________________; and (ii) admit
[name
of new banks]
as
“Lenders” under the Credit Agreement.
1. The
foregoing Recitals to this Amendment hereby are incorporated into and made
part
of this Amendment.
2. From
and
after _________, ____ (the “Effective Date”) (i) [name
of new banks]
shall be
considered as “Lenders” under the Credit Agreement and the Loan Documents, and
(ii) [name of existing lenders] shall each be deemed to have increased its
Commitment to the amount shown next to their respective signatures on the
signature pages of this Amendment, each having a Commitment in the amount shown
next to their respective signatures on the signature pages of this Amendment.
The Borrower shall, on or before the Effective Date, execute and deliver to
each
of such new or existing Lenders a new or Note in the amount of such
Commitment.
3. From
and
after the Effective Date, the Aggregate Commitment shall equal __________
Million Dollars ($___,000,000).
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
date
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 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.
EQUITY
INNS PARTNERSHIP, L.P.
By: Equity
Inns Trust, its General Partner
By:
Name:
______________________________
Title:
EQUITY
INNS/WEST VIRGINIA PARTNERSHIP, L.P.
|
By:
|
Equity
Inns Services, L.L.C., its General
Partner
|
By:
Name:
Its:
EQI
ORLANDO 2, L.L.C.
By:
________________________________
Name:
J.
Xxxxxxxx Xxxxxxx
Its: ______________________________
EQI
FINANCING PARTNERSHIP I, L.P.
|
By:
|
EQI
Financing Corporation, its General
Partner
|
By:
________________________________
Name:
J.
Xxxxxxxx Xxxxxxx
Title: Executive
VP
EQUITY
INNS, INC.
By:
Title:
EQUITY
INNS TRUST
By:
Title:
EQUITY
INNS SERVICES, L.L.C.
By:
Its:
JPMORGAN
CHASE BANK, N.A., Individually and as Administrative Agent
By:
Print
Name:
Title:
000
Xxxx
Xxxxxx, 0xx Xxxxx
Xxx
Xxxx,
XX 00000
Facsimile:
646/ 534-0574
Attention:
Xxxxxx Xxxxxxxx
Amount
of
Commitment: $
[NAME
OF NEW LENDER]
By:
Print
Name:
Title:
[Address
of New Lender]
Phone:
Facsimile:
Attention:
Exhibit
L
- Page
SCHEDULE
1.1
Existing
Letters of Credit
|
JPM
Reference Number
|
Original
B1 L/C Number
|
Booking
Party Name
|
Beneficiary
Name
|
Liab
Outstanding Amount
|
Issue
/ Advising Date
|
Current
Expiration Date
|
|
CPCS-214002
|
-
|
EQUITY
INNS PARTNERSHIP LP
|
WACHOVIA
BANK, NATIONAL ASSOCIATION
|
600,000.00
|
NOV
15, 2005
|
NOV
14, 2006
|
|
CPCS-214003
|
-
|
EQUITY
INNS PARTNERSHIP XX
|
XXXXX
FARGO BANK, N.A., AS TRUSTEE
|
1,072,000.00
|
NOV
15, 2005
|
NOV
14, 2006
|
|
CPCS-214005
|
-
|
EQUITY
INNS PARTNERSHIP LP
|
WACHOVIA
BANK, NATIONAL ASSOCIATION
|
600,000.00
|
NOV
15, 2005
|
NOV
14, 2006
|
|
CPCS-634814
|
SLT323375
|
EQUITY
INNS PARTNERSHIP LP
|
GE
CAPITAL CORP C/O GEMSA LOAN
|
113,730.00
|
FEB
15, 2002
|
OCT
24, 2007
|
|
CPCS-634815
|
SLT323377
|
EQUITY
INNS PARTNERSHIP LP
|
GE
CAPITAL CORP C/O GEMSA LOAN
|
149,270.00
|
FEB
15, 2002
|
OCT
24, 2007
|
|
CPCS-634909
|
XXX000000
|
EQUITY
INNS PARTNERSHIP XX
|
XXXXXXX
NAT. BANK,
|
357,504.28
|
FEB
15, 2002
|
OCT
24, 2006
|
|
Total
|
|
|
|
$2,892,504.28
|
|
|
Schedule
1.1 - Page
SCHEDULE
6.19
All
environmental matters identified in the environmental reports delivered to
Administrative Agent in connection with the Facility.
Schedule
6.19 - Page
SCHEDULE
6.24
TRADE
NAMES
Schedule
6.24 - Page
SCHEDULE
6.25
SUBSIDIARIES
(BORROWERS) OWNING UNENCUMBERED ASSETS
|
Name
|
Entity
Type
|
Percentage
Ownership
|
Property
Owned
|
|
Equity
Inns Partnership, L.P.(1)
|
Tennessee
limited partnership
|
||
|
Equity
Inns/West Virginia Partnership, L.P.(1)
|
Tennessee
limited partnership
|
Operating
Partnership owns 99% LP interest
|
Holiday
Inn/Bluefield*
Holiday
Inn/Oak Hill*
|
|
EQI
Orlando 2, L.L.C.(1)
|
Delaware
limited liability company
|
Operating
Partnership owns 100% interest
|
Embassy
Suites/Orlando*
|
|
EQI
Financing Partnership I, L.P.(1)
|
Tennessee
limited partnership
|
Operating
Partnership owns 99% LP interest
|
Hampton
Inn/Cleveland, OH*
Hampton
Inn/Columbus, GA*
Hampton
Inn/Gurnee, IL*
Hampton
Inn/Gastonia, NC*
Residence
Inn/Omaha, NE*
Hampton
Inn/Fayetteville, NC*
Holiday
Inn/Mt. Pleasant, SC*
|
_______________________
*
Borrowing Base Asset under this Agreement.
(1)
Entity
is
a Borrower under this Agreement.
Schedule
6.25 - Page
SCHEDULE
7.16
SUBSIDIARIES
OF GUARANTORS OWNING UNENCUMBERED ASSETS
|
Name
|
Entity
Type
|
Percentage
Ownership
|
Property
Owned
|
|
Equity
Inns, Inc.
|
Tennessee
corporation
|
||
|
Equity
Inns Trust
|
Maryland
real estate investment trust
|
100%
of outstanding common shares owned by Equity Inns, Inc.
|
|
|
Equity
Inns Partnership, L.P.
|
Tennessee
limited partnership
|
Trust
owns approximately 96% general partnership interest in the Operating
Partnership
|
Residence
Inn/Burlington*
Residence
Inn/Colorado Springs*
Hampton
Inn/Pickwick*
Hampton
Inn/Addison*
Hampton
Inn/Columbia*
Homewood
Suites/Augusta*
AmeriSuites/Cincinnati-Blue
Ash*
AmeriSuites/Miami*
AmeriSuites/Baton
Rouge*
AmeriSuites/Las
Vegas*
AmeriSuites/Miami*
AmeriSuites/Minneapolis*
AmeriSuites/Nashville*
Homewood/Seattle*(
Homewood/Chicago*
Hampton
Inn/Urbana*
Hampton
Inn/East Lansing*
Hampton
Inn/Grand Rapids*
SpringHill
Suites/Grand Rapids*
Hampton
Inn/Nashville-Xxxxxx Pkwy(1)
Courtyard/Houston(1)
Hampton
Inn/Boca Raton(1)
Hampton
Inn & Suites/Boynton Beach(1)
Hampton
Inn/Deerfield Beach(1)
Hampton
Inn/Palm Beach Gardens(1)
Hampton
Inn/West Palm Beach(1)
Hampton
Inn/Orlando*
Residence
Inn/Sarasota(1)
Courtyard/Sarasota(1)
Residence
Inn/Ft. Xxxxx(1)
Xxxxxxx
Inn/Xxxxxxx(1)
Homewood
Suites/Peabody*
SpringHill
Suites/Sarasota*
TownPlace
Suites/Savannah*
Courtyard/Xxxxxxx
Xxxxxxxx(1)
Residence
Inn/Tampa North(1)
Residence
Inn/Mobile(1)
Fairfield
Inn/Atlanta*
SpringHill
Suites/Houston*
SpringHill
Suites/San Antonio*
|
|
Equity
Inns/West Virginia Partnership, L.P.
|
Tennessee
Limited Partnership
|
1%
GP interest held by Equity Inns Services, L.L.C. and 99% limited
partnership interest held by the Operating Partnership
|
Holiday
Inn/Bluefield*
Holiday
Inn/Oak Hill*
|
|
EQI
Orlando 2, L.L.C.
|
Delaware
limited liability company
|
Operating
Partnership owns 100% interest
|
Embassy
Suites/Orlando*
|
|
EQI
Financing Partnership I, L.P.
|
Tennessee
limited partnership
|
Approximately
1% general partnership owned by EQI Financing Corporation and 99%
limited
partnership interest held by Operating Partnership
|
Hampton
Inn/Cleveland, OH*
Hampton
Inn/Columbus, GA*
Hampton
Inn/Gurnee, IL*
Hampton
Inn/Gastonia, NC*
Residence
Inn/Omaha, NE*
Hampton
Inn/Fayetteville, NC*
Holiday
Inn/Mt. Pleasant, SC*
|
*
Borrowing Base Asset under this Agreement.
| (1) |
Hotel
is currently encumbered by mortgage debt and is not a Borrowing Base
Asset
under this Agreement.
|