EXHIBIT 10.1
UNSECURED REVOLVING CREDIT AGREEMENT
DATED AS OF MARCH 29, 1999
AMONG
EQUITY INNS PARTNERSHIP, L.P.
AND
EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P.,
AS BORROWER,
NATIONSBANK, N.A.
AND
CREDIT LYONNAIS NEW YORK BRANCH,
AS LENDERS,
NATIONSBANK, N.A.,
AS ADMINISTRATIVE AND DOCUMENTATION AGENT,
CREDIT LYONNAIS NEW YORK BRANCH,
AS SYNDICATION AGENT, JOINT ARRANGER AND BOOK ARRANGER
AND
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES, LLC,
AS JOINT ARRANGER AND BOOK ARRANGER
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS AND ACCOUNTING TERMS...................................2
1.1 Definitions.......................................................2
1.2 Financial Standards..............................................14
1.3 Incorporation of Recitals........................................14
ARTICLE II - THE FACILITY.....................................................15
2.1 The Facility; Limitations on Borrowing...........................15
2.2 Principal Payments...............................................15
2.3 Requests for Advances; Responsibility for Advances...............16
2.4 Evidence of Credit Extensions....................................16
2.5 Ratable and Non-Pro Rata Loans...................................16
2.6 Applicable Margins and Fees......................................16
2.7 Commitment Fee...................................................17
2.8 Intentionally Omitted............................................17
2.9 Minimum Amount of Each Advance...................................17
2.10 Interest........................................................17
2.11 Selection of Rate Options and LIBOR Interest Periods............18
2.12 Method of Payment...............................................20
2.13 Default.........................................................20
2.14 Lending Installations...........................................20
2.15 Non-Receipt of Funds by Administrative Agent....................21
2.16 Intentionally Omitted...........................................21
2.17 Voluntary Reduction of Aggregate Commitment Amount..............21
2.18 Application of Moneys Received..................................21
ARTICLE III - INTENTIONALLY OMITTED...........................................22
ARTICLE IV - CHANGE IN CIRCUMSTANCES..........................................22
4.1 Yield Protection.................................................22
4.2 Changes in Capital Adequacy Regulations..........................22
4.3 Availability of LIBOR Advances...................................23
4.4 Funding Indemnification..........................................23
4.5 Lender Statements; Survival of Indemnity.........................23
ARTICLE V - CONDITIONS PRECEDENT..............................................24
5.1 Conditions Precedent to Closing..................................24
5.2 Conditions Precedent to Subsequent Advances and Issuance.........26
ARTICLE VI - REPRESENTATIONS AND WARRANTIES...................................27
6.1 Existence........................................................27
6.2 Corporate/Partnership Powers.....................................27
6.3 Power of Officers................................................27
6.4 Government and Other Approvals...................................27
6.5 Solvency.........................................................28
6.6 Compliance With Laws.............................................28
6.7 Enforceability of Agreement......................................28
6.8 Title to Property................................................28
6.9 Litigation.......................................................29
6.10 Events of Default...............................................29
6.11 Investment Company Act of 1940..................................29
6.12 Public Utility Holding Company Act..............................29
6.13 Regulation U....................................................29
6.14 No Material Adverse Financial Change............................29
6.15 Financial Information...........................................29
6.16 [Intentionally Omitted].........................................29
6.17 ERISA...........................................................29
6.18 Taxes...........................................................30
6.19 Environmental Matters...........................................30
6.20 Insurance.......................................................31
6.21 No Brokers......................................................31
6.22 No Violation of Usury Laws......................................31
6.23 Not a Foreign Person............................................31
6.24 No Trade Name...................................................31
6.25 Subsidiaries....................................................31
6.26 Unencumbered Assets.............................................31
ARTICLE VII - ADDITIONAL REPRESENTATIONS AND WARRANTIES.......................33
7.1 Existence........................................................33
7.2 Corporate or Trust Powers........................................33
7.3 Power of Officers................................................34
7.4 Government and Other Approvals...................................34
7.5 Compliance With Laws.............................................34
7.6 Enforceability of Guaranty.......................................34
7.7 Liens; Consents..................................................34
7.8 Litigation.......................................................34
7.9 Investment Company Act of 1940...................................34
7.10 Public Utility Holding Company Act..............................34
7.11 No Material Adverse Financial Change............................35
7.12 Financial Information...........................................35
7.13 [Intentionally Omitted].........................................35
7.14 ERISA...........................................................35
7.15 Taxes...........................................................35
7.16 Subsidiaries....................................................35
7.17 Status..........................................................35
ARTICLE VIII - AFFIRMATIVE COVENANTS..........................................35
8.1 Notices..........................................................36
8.2 Financial Statements, Reports, Etc...............................36
8.3 Existence and Conduct of Operations;
Limitations on Investments.....................................38
8.4 Maintenance of Properties........................................39
8.5 Insurance........................................................39
8.6 Payment of Obligations...........................................39
8.7 Compliance with Laws.............................................39
8.8 Adequate Books...................................................39
8.9 ERISA............................................................40
8.10 Maintenance of Status...........................................40
8.11 Use of Proceeds.................................................40
8.12 Pre-Acquisition Environmental Investigations....................40
ARTICLE IX - NEGATIVE COVENANTS...............................................40
9.1 Change of Borrower Ownership.....................................40
9.2 Use of Proceeds..................................................40
9.3 Sales, Encumbrances and Transfers of Assets......................40
9.4 Dividends........................................................41
9.5 Floating Rate Debt...............................................41
9.6 Liens............................................................41
9.7 FF&E Expenditures................................................42
9.8 Indebtedness, Coverage and Net Worth Covenants...................42
9.9 Mergers..........................................................43
9.10 Borrowing Base..................................................43
ARTICLE X - DEFAULTS..........................................................43
10.1 Nonpayment of Principal.........................................43
10.2 Certain Covenants...............................................43
10.3 Nonpayment of Interest and Other Obligations....................43
10.4 Cross Default...................................................43
10.5 Loan Documents..................................................43
10.6 Representation or Warranty......................................43
10.7 Covenants, Agreements and Other Conditions......................44
10.8 No Longer General Partner.......................................44
10.9 Material Adverse Financial Change...............................44
10.10 Bankruptcy.....................................................44
10.11 Legal Proceedings..............................................45
10.12 ERISA..........................................................45
10.13 Failure to Satisfy Judgments...................................45
10.14 Environmental Remediation......................................45
10.15 REIT Status....................................................45
ARTICLE XI - ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES...................46
11.1 Acceleration....................................................46
11.2 Preservation of Rights; Amendments..............................46
ARTICLE XII - THE ADMINISTRATIVE AGENT........................................46
12.1 Appointment.....................................................46
12.2 Powers..........................................................46
12.3 General Immunity................................................46
12.4 No Responsibility for Loans, Recitals, etc......................47
12.5 Action on Instructions of Lenders...............................47
12.6 Employment of Administrative Agents and Counsel.................47
12.7 Reliance on Documents; Counsel..................................47
12.8 Administrative Agent's Reimbursement and Indemnification........47
12.9 Rights as a Lender..............................................48
12.10 Lender Credit Decision.........................................48
12.11 Successor Administrative Agent.................................48
12.12 Notice of Defaults.............................................49
12.13 Requests for Approval..........................................49
12.14 Copies of Documents............................................49
12.15 Defaulting Lenders.............................................49
ARTICLE XIII - BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS..............50
13.1 Successors and Assigns..........................................50
13.2 Participations..................................................50
13.2.1 Permitted Participants; Effect..........................50
13.2.2. Voting Rights..........................................51
13.3 Assignments.....................................................51
13.3.1 Permitted Assignments...................................51
13.3.2 Effect; Effective Date of Assignment....................51
13.4 Dissemination of Information....................................52
13.5 Tax Treatment...................................................52
13.6 Syndicates......................................................52
ARTICLE XIV - GENERAL PROVISIONS..............................................52
14.1 Survival of Representations.....................................53
14.2 Governmental Regulation.........................................53
14.3 Taxes...........................................................53
14.4 Headings........................................................54
14.5 No Third Party Beneficiaries....................................54
14.6 Expenses; Indemnification.......................................54
14.7 Severability of Provisions......................................54
14.8 Nonliability of the Lenders.....................................54
14.9 Choice of Law...................................................55
14.10 Consent to Jurisdiction........................................55
14.11 Waiver of Jury Trial...........................................55
14.12 Successors and Assigns.........................................55
14.13 Entire Agreement; Modification of Agreement....................55
14.14 Dealings with the Borrower.....................................56
14.15 Set-Off........................................................56
14.16 Counterparts...................................................57
14.17 Limitation on Liability of EIP/WV..............................57
14.18 Year 2000 Compliance...........................................57
14.19 Modifications to Existing Credit Agreement.....................57
ARTICLE XV - NOTICES..........................................................58
15.1 Giving Notice...................................................58
15.2 Change of Address...............................................59
EXHIBITS
A - Percentages
B - Form of Note
C - Financeable Ground Leases -- Currently Approved
D - Form of Guaranty
E - Intentionally Omitted
F - Opinion of Georgia Counsel
G - Wiring Instructions
H - Form of Compliance Certificate
I - Scope of Work for Environmental Investigations
J - Form of Assignment Agreement
K Form Of Request For Advance/Payment/Interest Rate Conversion
SCHEDULES
6.9 Litigation (Borrowers)
6.19 Environmental Compliance
6.24 Trade Names
6.25 Subsidiaries (Borrowers)
6.26 Unencumbered Assets
7.8 Litigation (Guarantors)
7.16 Subsidiaries (Guarantors)
UNSECURED REVOLVING CREDIT AGREEMENT
THIS UNSECURED REVOLVING CREDIT AGREEMENT is entered into as of March
__, 1999, 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., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("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 at c/o Equity Inns, Inc.,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("EIP/WV"), the sole
general partner of which is Equity Inns Services, Inc., a Tennessee corporation
which is wholly-owned by Equity Inns, Inc. (the Operating Partnership and EIP/WV
being referred to herein collectively as the "Borrower");
NATIONSBANK, N.A. ("NationsBank"), a national bank organized under the
laws of the United States of America having an office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇;
CREDIT LYONNAIS NEW YORK BRANCH ("Credit Lyonnais"), the New York
branch of a French banking corporation, having an office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇;
CREDIT LYONNAIS, as Syndication Agent and Joint Arranger and Book
Manager ("Syndication Agent")
NATIONSBANK, as Administrative and Documentation Agent ("Administrative
Agent") for the Lenders (as defined below); and
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES, LLC ("Arranger"), a Delaware limited
liability company, having an office at NationsBank Corporate Center, ▇▇▇ ▇.
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, as Joint Arranger and Book Manager.
RECITALS
A. The Borrower is primarily engaged in the business of acquiring,
developing and owning premium limited service, premium extended stay and
all-suite and full service hotel properties.
B. The Borrower has requested that the Lenders make loans available to
each of the entities comprising the Borrower on a joint and several basis in the
maximum aggregate principal amount of $25,000,000 outstanding from time to time
pursuant to the terms of this Agreement (the "Facility"), that the
Administrative Agent act as administrative and documentation agent for the
Lenders, that Syndication Agent act as syndication agent and joint arranger and
book manager for the Lenders, and that Arranger act as joint arranger and book
manager for Lenders.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
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 Person for any period, EBITDA for such
Person under GAAP for such period adjusted to exclude (i) all extraordinary
items, (ii) all gains or losses from the sale of assets and (iii) the Agreed
FF&E Reserve for 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.
"Administrative Agent" means NationsBank, acting as administrative and
documentation 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(a) hereof, whether such Advances are from time
to time, Adjusted Alternate Base Rate Advances or LIBOR Advances.
"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 initially shall be $25,000,000, subject
to Borrower's right to reduce the Aggregate Commitment pursuant to Section 2.17
and which shall otherwise only be increased with the consent of all Lenders.
"Agreed FF&E Reserve" means, with respect to any period, 4% of gross
room revenues of the Consolidated Group during such period.
"Agreement" means this Unsecured Revolving Credit Agreement and all
amendments, modifications and supplements hereto.
"Agreement Execution Date" shall mean March __, 1999, the date on which
all of the parties hereto have executed this Agreement.
"Allocated Facility Amount" means, at any time, the sum of all then
outstanding Advances.
"Alternate Base Rate" means, at any time, the fluctuating and floating
rate per annum equal to the rate of interest announced by the Administrative
Agent as its reference rate for the determination of interest rates for loans of
varying maturities in U.S. Dollars to United States residents of varying degrees
of creditworthiness and being quoted by the Administrative Agent as its "prime
rate." The Alternate Base Rate is not necessarily the lowest rate of interest
charged to borrowers of the Administrative Agent.
"Applicable Commitment Fee Percentage" means thirty hundredths
percentage points (0.30%)
"Applicable Margin" means the applicable margins set forth in the table
in Section 2.6 used in calculating the interest rate applicable to the various
types of Advances, which shall vary from time to time in accordance with the
long term, senior unsecured debt ratings of the Operating Partnership or Equity
Inns in the manner set forth in Section 2.6.
"Arranger" or "NMS" means NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC.
"Base LIBOR Rate" means, with respect to a LIBOR Advance for the
relevant LIBOR Interest Period, the rate reasonably determined by the
Administrative Agent to be the rate at which deposits in immediately available
funds in Dollars are offered by the Administrative Agent to first-class banks in
the London interbank eurodollar market at approximately 11:00 a.m. London time
two Business Days prior to the first day of such LIBOR Interest Period, in the
approximate amount of the relevant LIBOR Advance and having a maturity
approximately equal to such LIBOR Interest Period.
"Borrower" means, collectively the Operating Partnership and EIP/WV, on
a joint and several basis, along with their respective permitted successors and
assigns.
"Borrowing Base" means, as of any date, the then-current Value of
Unencumbered Assets, provided that (i) no more than 10% of the Borrowing Base
shall be attributable to a single Property, (ii) no more than 25% of the
Borrowing Base shall be attributable to Properties located in the same state,
(iii) no more than 30% of the Borrowing Base shall be attributable to Properties
which are operated by, or leased to, Prime Hospitality Corporation, or a
subsidiary thereof, under a Permitted Operating Lease, (iv) at least 80% of the
Borrowing Base shall be attributable to premium limited service hotels, premium
extended stay hotels, all-suite hotels or full service hotels and (v) at least
80% of the Borrowing Base shall be attributable to hotels operated as Hampton
Inns, Homewood Suites, Residence Inns or AmeriSuites.
"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 Atlanta, Georgia, 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 ▇▇▇▇▇'▇ 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.
"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.
"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.
"Consolidated Secured Debt" as of any date of determination, the sum of
(a) the aggregate principal amount of all Indebtedness of the Consolidated Group
outstanding at such date which is secured by a Lien on any asset or Capital
Stock of any member of the Consolidated Group, including without limitation
loans secured by mortgages, stock, or partnership interests, and (b) the
aggregate principal amount of all unsecured Indebtedness of any member of the
Consolidated Group other than the Borrower and the Guarantors outstanding at
such date, without duplication of any Indebtedness included under clause (a).
"Consolidated Senior Unsecured Debt" as of any date, means all
Indebtedness of the Consolidated Group other than (i) Indebtedness expressly
subordinated to the Obligations and (ii) that portion of the Consolidated
Secured Debt described in clause (a) of the definition thereof.
"Consolidated Total Indebtedness" means as of any date of
determination, all Indebtedness of the Consolidated Group in existence on such
date, determined on a consolidated basis in accordance with GAAP, without
duplication.
"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.
"Credit Requirement" means, as of any date, the sum of (i) the
then-current Allocated Facility Amount plus (ii) the then-current Consolidated
Senior Unsecured Debt plus (iii) the then-current FF&E Deficiency, if any.
"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 on Indebtedness (excluding optional
prepayments and balloon principal payments due on maturity in respect of any
Indebtedness) taken into account in calculating Interest Expense, without
duplication.
"Default" means an event which, with notice or lapse of time or both,
would become an Event of Default.
"Default Rate" means with respect to any Advance, a rate equal to the
interest rate applicable to such Advance plus four percent (4%) per annum.
"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 (5) 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.
"Duff & ▇▇▇▇▇▇" means Duff & ▇▇▇▇▇▇ Credit Rating Company.
"EBITDA" means income before extraordinary items (reduced to eliminate
any income from Investment Affiliates), as reported by the Consolidated Group in
accordance with GAAP, plus Interest Expense, depreciation, amortization and
income tax (if any) expense plus the Consolidated Group Pro Rata Share of such
income (adjusted as described above) of any Investment Affiliate (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).
"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.
"Environmental Laws" means any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority having jurisdiction over any
member of the Consolidated Group or any Investment Affiliate, or their
respective assets, and regulating or imposing liability or standards of conduct
concerning protection of human health or the environment, as now or may at any
time hereafter be in effect, in each case to the extent the foregoing are
applicable to the operations of such member of the Consolidated Group or
Investment Affiliate, or any of their respective assets or Properties.
"Equity Inns" means Equity Inns, Inc., a Tennessee corporation.
"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.
"Existing Credit Agreement" means the Unsecured Revolving Credit
Agreement dated as of October 10, 1997, as amended by a First Amendment thereto
dated as of November 24, 1997, and as amended by a Second Amendment thereto
dated as of September 28, 1998 by and among Equity Inns Partnership, L.P. and
Equity Inns/West Virginia Partnership, L.P., First Chicago, NationsBank, N.A.,
Credit Lyonnais New York Branch and certain other lenders thereto.
"Facility" means the unsecured revolving credit facility described in
Section 2.1.
"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. (Atlanta,
Georgia 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 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.
"Financeable Ground Lease" means a Major Ground Lease satisfactory to the
Required Lenders and the Administrative Agent's counsel in their reasonable
discretion, which must provide protections for a potential leasehold mortgagee
("Mortgagee") which include, among other things (i) a remaining term of no less
than twenty-five (25) years from the Effective Date, (ii) that the lease will
not be terminated until the Mortgagee has received notice of a default and has
had a reasonable opportunity to cure or complete foreclosure, and fails to do
so, (iii) provision for a new lease on the same terms to the Mortgagee as tenant
if the ground lease is terminated for any reason, (iv) non-merger of the fee and
leasehold estates, (v) transferability of the tenant's interest under the ground
lease, without the ground lessor's prior consent except for restrictions based
on the satisfaction of certain objective criteria acceptable to Administrative
Agent, and (vi) that insurance proceeds and condemnation awards (from the fee
interest as well as the leasehold interest) will be applied pursuant to the
terms of a leasehold mortgage. Each existing ground lease originally approved as
a Financeable Ground Lease by First Chicago when the Existing Credit Agreement
was executed shall be deemed a Financeable Ground Lease under the Facility, as
described in Exhibit C hereto. Any and all subsequent ground leases shall be in
compliance with this definition.
"First Chicago" means The First National Bank of Chicago.
"Fitch" means Fitch Investors Service, L.P.
"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.
"Free Cash Flow" means, for any period, Funds From Operations less (i)
the Agreed FF&E Reserve for such period and less (ii) scheduled principal
amortization (excluding balloon payments due on maturity) on all Indebtedness of
the Consolidated Group for such period.
"Funds From Operations" for any period, means GAAP net income, as
adjusted by (i) excluding gains and losses from property sales, debt
restructurings and property write-downs and adjusting for the non-cash effect of
straight-lining of rents, (ii) straight-lining various ordinary operating
expenses which are payable less frequently than monthly (e.g. real estate taxes
and Ground Lease Expense) and (iii) adding back depreciation, amortization and
all non-cash items. Annualized Funds from Operations for such Person will be
calculated for the four (4) 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, provided however, that,
(i) for the purposes of calculating the Borrower's compliance with the terms of
certain covenants herein, there shall be excluded from the quarterly
determinations of Borrower's financial results for the first three (3) fiscal
quarters of any fiscal year (but not from Borrower's annual financial results
for such fiscal year) the deferred revenue/recognition of deferred revenue
adjustments associated with the application of Issue No. 98-9 titled "Accounting
for Contingent Rent in Interim Financial Period" and issued by the Emerging
Issues Task Force of the Financial Accounting Standards Board. Clause (i) of
this definition shall apply only to the extent that Issue No. 98-9 is required
pursuant to GAAP, the Securities and Exchange Commission, or any other
governmental authority or agency.
"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 Equity Inns Trust, a Maryland real estate investment
trust, Equity Inns Services, Inc. and Equity Inns, Inc., which is the holder of
100% of the beneficial interests in Equity Inns Trust, jointly and severally.
"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 and any loans where such Person is liable as a
general partner. Indebtedness shall include obligations under any interest rate
protection productions, forward equity commitments, and other amounts considered
debt by rating agencies.
"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, 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.
"Lenders" means, collectively, NationsBank, Credit Lyonnais 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".
"Lending Installation" means any U.S. office of any Lender authorized
to make loans similar to the Advances described herein.
"LIBOR Advance" means an Advance that bears interest at the Adjusted
LIBOR Rate.
"LIBOR Applicable Margin" means, as of any date with respect to any
LIBOR Advance, the Applicable Margin in effect for such LIBOR Advance as
determined in accordance with Section 2.6 hereof.
"LIBOR Interest Period" means, with respect to a LIBOR Advance, a
period of one, two, three or six months, as selected in advance by the Borrower.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge 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.
"Major Ground Lease" means a ground lease demising to one of the
Borrowers or a Wholly-Owned Subsidiary all of the land included in any Property
or any portion of such land which the Administrative Agent, in its reasonable
judgment, deems necessary for the continued operation of a hotel on such
Property.
"Majority Lenders" means Lenders in the aggregate having in excess of
50% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding in excess of 50% of the aggregate
unpaid principal amount of the outstanding Advances.
"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 October 9, 2000 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 ▇▇▇▇▇'▇ Investors Service, Inc. and its successors.
"Note" means the 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 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.
"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 (i) a lease between one of the
Borrowers or a Wholly-Owned Subsidiary and Crossroads/Memphis Partnership LLC,
Crossroads Future Company LLC or another entity directly or indirectly
wholly-owned by Patriot American Hospitality, Inc. under lease terms approved by
the Required Lenders, (ii) a lease between one of the entities comprising the
Borrower or a Wholly-Owned Subsidiary and Prime Hospitality Corporation
("Prime"), or a subsidiary thereof under lease terms approved by the Required
Lenders, or (iii) similar leases with other entities similarly approved as to
lease terms provided that the identity of each such other entity is approved by
the Required Lenders.
"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.
"Property" means any real estate asset owned by a member of the
Consolidated Group or an Investment Affiliate and leased to and operated under a
Permitted Operating Lease as a premium limited service, premium extended stay or
premium all-suite or full-service hotel property.
"Property Operating Income" means, with respect to any Property, for
any period, earnings from rental operations attributable to such Property less
all expenses directly related to such Property, such as real estate taxes and
ground lease payments plus 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).
"Purchasers" is defined in Section 13.3.1 hereof.
"Qualified Officer" means, with respect to any entity, the chief
financial officer, chief accounting officer or controller of such entity if it
is a corporation or of such entity's general partner if it is a partnership.
"Rate Option" means the Adjusted Alternate Base Rate or the Adjusted
LIBOR Rate. The Rate Option in effect on any date shall always be the Adjusted
Alternate Base Rate unless the Borrower has properly selected the Adjusted LIBOR
Rate pursuant to Section 2.11 hereof.
"Rating Pricing Period" means any period during the term of the
Facility during which the Operating Partnership's or Equity Inns' long-term,
senior unsecured debt has been rated by at least two of S&P, Moody's, Fitch
and ▇▇▇▇ & ▇▇▇▇▇▇ and the lower of the highest two ratings (at least one of
which is from S&P or ▇▇▇▇▇'▇) is at least BBB- (S&P) or Baa3 (Moody's) or an
equivalent rating from Fitch or Duff & ▇▇▇▇▇▇.
"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.
"REMIC Loan" means that certain $88,000,000 issuance of mortgage bonds
by the REMIC Partnership pursuant to the terms of an Indenture dated as of
February 6, 1997.
"REMIC Partnership" means EQI Financing Partnership I, L.P., the
borrower under the REMIC Loan which has as its sole limited partner, holding 99%
of the partnership interests therein, the Operating Partnership and as its sole
general partner, holding 1% of the partnership interests therein, EQI Financing
Corporation which is wholly-owned by Equity Inns Trust.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable Event regardless of the issuance of any such waivers in accordance
with either Section 4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means, as of any date, those Lenders holding, in the
aggregate, more than two-thirds (2/3) of the then-current Aggregate Commitment
or, if the Aggregate Commitment has been terminated, Lenders holding, in the
aggregate, more than two-thirds (2/3) of the aggregate unpaid principal amount
of the outstanding Advances.
"Reserve Requirement" means, with respect to a LIBOR Interest Period,
the maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"S&P" means Standard & Poor's Ratings Group and its successors.
"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.
"Syndication Agent" means Credit Lyonnais New York Branch.
"Total Cost" means, as of any date, the sum of (i) the book value under
GAAP of all Properties
then owned by the Consolidated Group plus (ii) all depreciation on such
Properties previously reflected on the Consolidated Group's financial
statements, in accordance with GAAP plus (iii) the Consolidated Group Pro Rata
Share of the book value under GAAP of all Properties then owned by Investment
Affiliates plus (iv) the Consolidated Group Pro Rata Share of all depreciation
on such Properties previously reflected on such Investment Affiliates 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 (to the extent not included in the Indebtedness described in clause
(i)), without duplication.
"Total Value" means, as of any date, the sum of (i) all cash and Cash
Equivalents then held by the Consolidated Group plus (ii) for Properties owned
for at least four (4)full fiscal quarters by the Consolidated Group, (A) the
aggregate Property Operating Income for such Properties during the most recent
four (4) fiscal quarters for which financial results have then been reported
less the Agreed FF&E Reserve applicable thereto for such four (4) fiscal
quarters, divided by (B) 11.5%, plus (iii) for Properties owned for less than
four (4) full fiscal quarters by the Consolidated Group, the book value, under
GAAP, of such Properties plus (iv) for Properties owned for at least four (4)
full fiscal quarters by an Investment Affiliate (A) the Consolidated Group Pro
Rata Share of the aggregate Property Operating Income for such Properties during
the four (4) most recent fiscal quarters for which results have then been
reported less the Agreed FF&E Reserve that would be applicable thereto for such
four (4) fiscal quarters, divided by (B) 11.5% and plus (v) for Properties owned
by an Investment Affiliate for less than four (4) full fiscal quarters the
Consolidated Group Pro Rata Share of the book value, under GAAP, of such
Properties.
"Transferee" is defined in Section 13.4 hereof.
"Unencumbered Asset" means, with respect to any Properties 100% of
which, in the aggregate, are owned or ground leased by one of the entities
comprising the Borrower or a Wholly-Owned Subsidiary at any date of
determination, the circumstance that such Property on such date (a) is not
subject to any Liens (including any Liens on the operating leases of such
Properties) other than those in favor of the Lenders and those Permitted Liens
described in clauses (i) through (v) of Section 9.6, (b) if subject to a Major
Ground Lease, (i) such Major Ground Lease is a Financeable Ground Lease and (ii)
all such ground leased Properties subject to Major Ground Leases do not exceed
15% of the Value of Unencumbered Assets, (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 creates a "negative pledge" which
prohibits or limits the ability of the owner thereof, to create, incur, assume
or suffer to exist any Lien upon any assets of such owner (or the capital stock
in such owner if the owner is a Wholly-Owned Subsidiary), (d) 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 (but excluding liens in favor of Lenders and those
Permitted Liens described in clauses (i) through (v) of Section 9.6) on any
assets or capital stock of either of the Borrowers or any of their Subsidiaries
or would entitle any Person to the benefit of any Lien (but excluding liens in
favor of Lenders and those Permitted Liens described in clauses (i) through (v)
of Section 9.6) on such assets or capital stock upon the occurrence of any
contingency (including, without limitation, pursuant to an "equal and ratable"
clause), (e) is free from any material structural defects as evidenced by a
certification of Borrowers, (f) is free from any material environmental
contamination or condition, as evidenced by a certification of the Borrowers,
(g) is subject to a Permitted Operating
Lease, and (h) is fully operational with less than 20% of the rooms on such
Property being unavailable for occupancy due to casualty, construction,
renovation or other reason. No Property of a Wholly-Owned Subsidiary shall be
deemed to be unencumbered unless both such Property and all capital stock of
such Wholly-Owned Subsidiary is unencumbered and neither such Wholly-Owned
Subsidiary nor any other intervening Subsidiary between the Borrower and such
Wholly-Owned Subsidiary has any Indebtedness for borrowed money (other than
Indebtedness due to the Borrower).
"Value of Unencumbered Assets" means, as of any date, the amount
determined (i) for all Unencumbered Assets owned for four (4) or more full
fiscal quarters by one of the entities comprising the Borrower or a Wholly-Owned
Subsidiary, (A) the sum of (x) Property Operating Income attributable thereto
for such period less (y) the Agreed FF&E Reserve attributable thereto for such
period divided by (B) 11.5 % and (ii) for all Unencumbered Assets not so owned
for four (4) or more fiscal quarters, the book value, in accordance with GAAP,
of such Properties. If an Unencumbered Asset is no longer owned as of the date
of calculation, then no value shall be included based on capitalizing Property
Operating Income from such Unencumbered Asset.
"Wholly-Owned Subsidiary" means a Subsidiary which is 100% owned by one
or both 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.
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.
1.3 Incorporation of Recitals. The Recitals set forth at the beginning
of this Agreement are hereby incorporated herein as if restated in full.
ARTICLE II
THE FACILITY
2.1 The Facility; Limitations on Borrowing.
(a) 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 to make Advances through the
Administrative Agent to Borrower from time to time prior to the Maturity Date,
provided that the making of any such Advance will not:
(i) cause the then-current Allocated Facility
Amount to exceed the then- current Aggregate Commitment; or
(ii) cause the then-current Credit Requirement to
exceed forty-five percent (45%) of the then-current Borrowing Base.
The Advances may be ratable Adjusted Alternate Base Rate Advances or ratable
LIBOR Advances. Except as provided in Sections 2.16 and 12.16 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 all other Advances then outstanding would exceed such Lender's then-current
Commitment. This facility ("Facility") is a revolving credit facility and,
subject to the provisions of this Agreement, the Borrower may request Advances
hereunder, repay such Advances and reborrow Advances at any time prior to the
Maturity Date. Unless and until the Administrative Agent is otherwise advised in
writing to the contrary by both of the entities comprising the Borrower, all
Loans shall be deemed to be requested by the Operating Partnership and shall be
funded directly to the Operating Partnership and EIP/WV 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.
(b) 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.
(c) In no event shall the Aggregate Commitment exceed
Twenty-Five Million Dollars ($25,000,000) without the approval of all of the
Lenders.
2.2 Principal Payments. If on any Business Day the then-current Credit
Requirement should exceed 45% of the then-current Borrowing Base, the Borrower
shall make a mandatory principal repayment on the immediately following Business
Day in the amount of such excess. Solely for purposes of applying the test set
forth in the preceding sentence and in Section 9.10 hereof, the Property
Operating Income attributable to Unencumbered Assets shall be revised, and such
revision shall become effective, on the earlier of (i) receipt by the
Administrative Agent of the quarterly certificate described in Section 8.2 or
(ii) the forty-fifth (45th) day after the end of the most recent fiscal quarter.
Any outstanding Advances not previously repaid and all other unpaid Obligations
shall be paid in full by the Borrower on the Maturity Date.
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(a) 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.
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.
2.5 Ratable and Non-Pro Rata Loans. Each Advance hereunder shall
consist of Loans made from the several Lenders ratably in proportion to their
Percentages. 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.
2.6 Applicable Margins and Fees. The ABR Applicable Margin and the
LIBOR Applicable Margin to be used in calculating the interest rate applicable
to different types of Advances and the Commitment Fee shall vary from time to
time in accordance with the ratings for the Operating Partnership's or Equity
Inns' long-term, senior unsecured debt as follows:
No Rating Pricing Period in Effect:
LIBOR ABR Applicable
Applicable Margin Margin
----------------- --------------
Consolidated Total Indebtedness
as a Percentage of Total Value
less than or equal to 25% 1.775% 0.10%
over 25%, but less than or equal 1.875% 0.25%
to 35%
over 35%, but less than or equal 2.00% 0.30%
to 40%
over 40% 2.25% 0.35%
Rating Pricing Period in Effect:
LIBOR ABR
Rating Level of Lower of Two Highest Applicable Margin Applicable Margin
Ratings*
------------------------------------ ----------------- -----------------
A-/A3 1.50% 0.0%
BBB+/Baa1 1.625% 0.0%
BBB/Baa2 1.75% 0.0%
BBB-/Baa3 1.875% 0.0%
* Rating levels established by reference to S&P and Moody's ratings,
respectively. At least one of S&P or Moody's ratings must always be
included in the two ratings used.
The Applicable Margins when no Rating Pricing Period is in effect will
change only quarterly and upon delivery of a compliance certificate in the form
of Exhibit H attached hereto, when the Total Value is determined. When a Rating
Pricing Period is in effect, all Applicable Margins shall change as and when the
applicable rating level changes. In the event an agency issues different ratings
for the Operating Partnership and Equity Inns, then the higher rating for the
two entities shall be deemed to be the rating from such agency.
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 Execution Date to and including the Maturity Date, calculated
at the 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
payable quarterly in arrears on the last day of each calendar quarter hereafter
beginning March 31, 1999 and on the Maturity Date. Notwithstanding the
foregoing, all accrued Commitment Fees shall be payable on the effective date of
any termination of the obligations of the Lenders to make Loans hereunder.
2.8 Intentionally Omitted.
2.9 Minimum Amount of Each Advance. Each LIBOR Advance and 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), provided,
however, that any Adjusted Alternate Base Rate Advance may be in the amount of
the unused Aggregate Commitment.
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 and LIBOR Advance 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 date on which such Advance is
prepaid, whether by acceleration or otherwise, and (iii) the Maturity Date.
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 (Atlanta 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.
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. (Atlanta time) (i) at least one (1)
Business Day prior to an Adjusted Alternate Base Rate Advance, and (ii) at least
three (3) Business Days prior to a ratable LIBOR Advance, specifying:
(i) the Borrowing Date, which shall be a Business
Day, of such Advance, (ii) the aggregate amount of such
Advance, (iii) the type of Advance selected, and
(iv) in the case of each LIBOR Advance, the LIBOR
Interest Period applicable thereto.
The Borrower shall also deliver together with each Borrowing Notice the
compliance certificate required in Section 5.2 and otherwise comply with the
conditions set forth in Section 5.2 for Advances. Administrative Agent shall
provide each Lender by facsimile with a copy of each Borrowing Notice and
compliance certificate on the same Business Day it is received.
Not later than noon (Atlanta time) on each Borrowing Date, each Lender
shall make available its Loan or Loans, in funds immediately available in
Atlanta 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 four (4) 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 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. (Atlanta 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. (Atlanta 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.
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 NationsBank 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.
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.
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.
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.
2.16 [Intentionally Omitted.]
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 One Million Dollars (U.S. $1,000,000.00) or any integral
multiple of One Million Dollars (U.S. $1,000,000.00) in excess thereof. Any
partial termination of the Aggregate Commitment shall be applied pro rata to
reduce each Lender's Commitment.
2.18 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 the Commitment Fee to the Lenders and
to the payment of all fees to the Administrative Agent and Arranger;
(iv) 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;
(v) any other sums due to the Administrative Agent, Arranger
or any Lender under any of the Loan Documents; and
(vi) 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).
ARTICLE III
INTENTIONALLY OMITTED
ARTICLE IV
CHANGE IN CIRCUMSTANCES
4.1 Yield Protection. If 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 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 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.
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 or its
obligation to make Advances 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.
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.
4.4 Funding Indemnification. If any payment 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.
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 J hereto. The purchase
by the replacement Lender shall be at par (plus all accrued and unpaid interest
and any other sums owed to such Lender being replaced hereunder) which shall be
paid to the Lender being replaced upon the execution and delivery of the
assignment.
ARTICLE V
CONDITIONS PRECEDENT
5.1 Conditions Precedent to Closing. The Lenders shall not be required
to make the initial Advance hereunder, unless (i) the Borrower shall have paid
all fees then due and payable to the Lenders, the Arranger and the
Administrative Agent hereunder, (ii) all of the conditions set forth in Section
5.2 are satisfied, and (iii) the Borrower shall have furnished to the
Administrative Agent, in form and substance satisfactory to the Administrative
Agent and their counsel and with sufficient copies for the Lenders, the
following:
(a) Certificates of Limited Partnership/Incorporation. A copy
of the Certificate of Limited Partnership for each entity comprising the
Borrower and a copy of the articles of incorporation of Equity Inns and the
trust documents of Equity Inns Trust, each certified by the appropriate
Secretary of State or equivalent state official.
(b) Agreements of Limited Partnership/Bylaws. A copy of the
Agreement of Limited Partnership for each entity comprising the Borrower and a
copy of the bylaws of each of the Guarantors, including all amendments thereto,
each certified by the Secretary or an Assistant Secretary of such entity as
being in full force and effect on the Agreement Execution Date.
(c) Good Standing 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) Foreign Qualification Certificates. A certified copy of a
certificate from the Secretary of State or equivalent state official of the
state where each entity comprising the Borrower and each of the Guarantors
maintain their principal place of business, dated as of the most recent
practicable date, showing the qualification to transact business in such state
as a foreign limited partnership or foreign corporation, as the case may be, for
(i) each entity comprising Borrower, and (ii) each of the Guarantors.
(e) 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 Execution 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.
(f) 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 Execution 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.
(g) Loan Documents. Originals of the Loan Documents (in such
quantities as the Lenders may reasonably request), duly executed by authorized
officers of the appropriate entity.
(h) Intentionally Omitted.
(i) Opinion of Georgia Counsel. A written opinion, dated the
Agreement Execution Date, from Georgia outside counsel for the Borrower and the
Guarantors which counsel is reasonably satisfactory to Administrative Agent,
substantially in the form attached hereto as Exhibit F.
(j) Insurance. Original or certified copies of insurance
policies or binders therefor, with accompanying receipts showing current payment
of all premiums, evidencing that Borrower carries insurance on the Unencumbered
Assets which satisfies the Administrative Agent's insurance requirements,
including, without limitation:
(i) Property and casualty insurance (including
coverage for flood and other water damage for any Unencumbered
Assets located within a 100-year flood plain) in the amount of
the replacement cost of the improvements at the Unencumbered
Assets;
(ii) Loss of rental income insurance in the amount
not less than one year's gross revenues from the Unencumbered
Assets; and
(iii) Comprehensive general liability insurance in
the amount of $1,000,000 per occurrence.
All insurance must be carried by companies with a Best
Insurance Reports (1992) Policyholder's and Financial Size Rating of "A-VII" or
better.
(k) Existing Facility. Evidence that any approvals required
under the Existing Credit Agreement have been obtained.
(l) 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 Execution Date no Default or
Event of Default has occurred and is continuing under this
Agreement or the Existing Credit Agreement and that all
representations and warranties of the Borrower contained
herein are true and correct as of the Agreement Execution 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, 1998;
(iii) Certification by Borrower of sufficient
Unencumbered Assets (which evidence may include pay-off
letters (together with evidence of payment or a direction of
Borrower to use a portion of the proceeds of the Advances to
repay such Indebtedness), mortgage releases and/or title
policies) to assist the Administrative Agent in determining
the Borrower's compliance with the covenants set forth in
Article IX herein;
(iv) A pro forma compliance certificate as of
December 31, 1998 calculating the applicable status of
Borrower's financial covenants if they were effective as of
such date, together with a certification stating that the
initial Advance does not exceed the Borrowing Base
availability.
(v) Written money transfer instructions, in
substantially the form of Exhibit G 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
(m) Other Evidence as any Lender May Require. Such other
evidence as any Lender may reasonably request to establish the consummation of
the transactions contemplated hereby, the taking of all necessary actions in any
proceedings in connection herewith and compliance with the conditions set forth
in this Agreement.
5.2 Conditions Precedent to Subsequent Advances. Advances after the
initial Advance shall be made from time to time as requested by Borrower, and
the obligation of each Lender to make any Advance is subject to the following
terms and conditions:
(a) prior to each such Advance no Default or Event of Default
shall have occurred, be continuing, or arise, under this Agreement or any of the
Loan Documents or any Indebtedness 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 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 and Conversion/Continuation Notice shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 5.2(a) and (b) have been satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Each of the entities comprising the Borrower hereby represents and
warrants that:
6.1 Existence. Operating Partnership is a limited partnership duly
organized and existing under the laws of the State of Tennessee, with its
principal place of business in the State of Tennessee and EIP/WV is a limited
partnership duly organized and existing under the laws of the State of
Tennessee, with its principal place of business in the State of Tennessee and
each of the Operating Partnership and EIP/WV is duly qualified as a foreign
limited partnership, properly licensed (if required), in good standing and has
all requisite authority to conduct its business in each jurisdiction in which it
owns Properties and, except where the failure to be so 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.
6.2 Corporate/Partnership Powers. The execution, delivery and
performance of the Loan Documents required to be delivered by Borrower hereunder
are within the partnership authority of such entities and the corporate or trust
powers of the general partners of such entities, have been duly authorized by
all requisite action, and are not in conflict with the terms of any
organizational instruments of such entity, or any instrument or agreement to
which either of the entities comprising the Borrower is a party or by which
either of the entities comprising the Borrower or any of their respective assets
may be bound or affected.
6.3 Power of Officers. The officers of the general partner of
each of the entities comprising the Borrower executing the Loan Documents
required to be delivered by such entities hereunder have been duly elected or
appointed and were fully authorized to execute the same at the time each such
agreement, certificate or instrument was executed.
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.
6.5 Solvency.
(i) Immediately after the Agreement Execution 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 salable value of the Properties of each
entity comprising the Borrower and its Subsidiaries on a
consolidated basis will be greater than the amount that will
be required to pay the probable liability of such entity and
its Subsidiaries on a consolidated basis on their debts and
other liabilities, subordinated, contingent or otherwise, as
such debts and other liabilities become absolute and matured;
(c) each entity comprising the Borrower and its Subsidiaries
on a consolidated basis will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d)
each entity comprising the Borrower and its Subsidiaries on a
consolidated basis will not have unreasonably small capital
with which to conduct the businesses in which they are engaged
as such businesses are now conducted and are proposed to be
conducted after the date hereof.
(ii) Neither of the entities comprising the Borrower
intends to, or to permit any of its Subsidiaries to, incur
debts beyond its ability to pay such debts as they mature,
taking into account the timing of and amounts of cash to be
received by it or any 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.
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.
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.
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.
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.
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.
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.
6.12 Public Utility Holding Company Act. The Borrower is not a "holding
company" or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company," or of a "subsidiary company" of a "holding company," within
the definitions of the Public Utility Holding Company Act of 1935, as amended.
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.
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.
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.
6.16 [Intentionally Omitted].
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 (as defined in plan 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.
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.
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.
6.20 Insurance. Borrower has obtained the insurance which Borrower is
required to furnish to Lenders under Section 5.1(j) hereof.
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.
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.
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.
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.
6.25 Subsidiaries. Schedule 6.25 hereto contains an accurate list of
all of the presently existing Subsidiaries of Borrower, setting forth their
respective jurisdictions of formation, the percentage of their respective
Capital Stock owned by it or its Subsidiaries and the Properties owned by them.
All of the issued and outstanding shares of Capital Stock of such Subsidiaries
have been duly authorized and issued and are fully paid and non-assessable.
6.26 Unencumbered Assets. Schedule 6.26 hereto contains a complete and
accurate description of Unencumbered Assets as of the Agreement Execution Date
and as supplemented from time to time including the entity that owns each
Unencumbered Asset. With respect to each Property identified from time to time
as an Unencumbered Asset, Borrower hereby represents and warrants as follows
except to the extent disclosed in writing to the Lenders and approved by the
Required Lenders (which approval shall not be unreasonably withheld):
(a) No portion of any improvement on the Unencumbered Asset is
located in an area identified by the Secretary of Housing and Urban Development
or any successor thereto as an area having special flood hazards pursuant to the
National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of
1973, as amended, or any successor law, or, if located within any such area,
Borrower has obtained and will maintain the insurance prescribed in Section
5.1(j) hereof.
(b) To the Borrower's knowledge, except as shown on Schedule
6.9, the Unencumbered Asset and the present use and occupancy thereof are in
material compliance with all applicable zoning ordinances (without reliance upon
adjoining or other properties), building codes, land use and Environmental Laws,
and other similar laws ("Applicable Laws").
(c) The Unencumbered Asset is served by all utilities required
for the current or contemplated use thereof. All utility service is provided by
public utilities and the Unencumbered Asset has accepted or is equipped to
accept such utility service.
(d) All public roads and streets necessary for service of and
access to the Unencumbered Asset for the current or contemplated use thereof
have been completed, are serviceable and all-weather and are physically and
legally open for use by the public.
(e) The Unencumbered Asset is served by public water and sewer
systems or, if the Unencumbered Asset is not serviced by a public water and
sewer system, such alternate systems are adequate and meet, in all material
respects, all requirements and regulations of, and otherwise complies in all
material respects with, all Applicable Laws with respect to such alternate
systems.
(f) Borrower is not aware of any latent or patent structural
or other significant deficiency of the Unencumbered Asset. The Unencumbered
Asset is free of damage and waste that would materially and adversely affect the
value of the Unencumbered Asset, is in good repair and there is no deferred
maintenance other than ordinary wear and tear. The Unencumbered Asset is free
from damage caused by fire or other casualty. There is no pending or, to the
actual knowledge of Borrower threatened condemnation proceedings affecting the
Unencumbered Asset, or any material part thereof.
(g) To Borrower's knowledge, all liquid and solid waste
disposal, septic and sewer systems located on the Unencumbered Asset are in a
good and safe condition and repair and to Borrower's knowledge, in material
compliance with all Applicable Laws with respect to such systems.
(h) All improvements on the Unencumbered Asset lie within the
boundaries and building restrictions of the legal description of record of the
Unencumbered Asset, no such improvements encroach upon easements benefiting the
Unencumbered Asset other than encroachments that do not materially adversely
affect the use or occupancy of the Unencumbered Asset and no improvements on
adjoining properties encroach upon the Unencumbered Asset or easements
benefiting the Unencumbered Asset other than encroachments that do not
materially adversely affect the use or occupancy of the Unencumbered Asset. All
amenities, access routes or other items that materially benefit the Unencumbered
Asset are under direct control of Borrower, constitute permanent easements that
benefit all or part of the Unencumbered Asset or are public property, and the
Unencumbered Asset, by virtue of such easements or otherwise, is contiguous to a
physically open, dedicated all weather public street, and has the necessary
permits for ingress and egress.
(i) There are no delinquent taxes, ground rents, water
charges, sewer rents, assessments, insurance premiums, leasehold payments, or
other outstanding charges affecting the Unencumbered Asset except to the extent
such items are being contested in good faith and as to which adequate reserves
have been provided.
A breach of any of the representations and warranties contained in this
Section 6.26 with respect to a Property shall disqualify such Property from
being an Unencumbered Asset for so long as such breach continues (unless
otherwise approved by the Required Lenders) but shall not constitute a Default
(unless the elimination of such Property as an Unencumbered Asset results in a
Default under one of the other provisions of this Agreement).
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 Execution Date, and will be true on each Effective Date in all
material respects (except with respect to matters which have been disclosed in
writing to and approved by the Required Lenders), and will be true in all
material respects (except with respect to matters which have been disclosed in
writing to and approved by the Required Lenders) upon each request for
disbursement of an Advance. Each request for disbursement hereunder shall
constitute a reaffirmation of such representations and warranties as deemed
modified in accordance with the disclosures made and approved, as aforesaid, as
of the date of such request and disbursement.
ARTICLE VII
ADDITIONAL REPRESENTATIONS AND WARRANTIES
Each of the Guarantors hereby represents and warrants that:
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.
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.
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.
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.
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.
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.
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.
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 any 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.
7.9 Investment Company Act of 1940. No Guarantor is, and no Guarantor
will by such acts as may be necessary continue to be, an investment company
within the meaning of the Investment Company Act of 1940.
7.10 Public Utility Holding Company Act. No Guarantor is a "holding
company" or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company," or of a "subsidiary company" of a "holding company," within
the definitions of the Public Utility Holding Company Act of 1935, as amended.
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.
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.
7.13 [Intentionally Omitted].
7.14 ERISA. (i) No 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.
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.
7.16 Subsidiaries. Schedule 7.16 hereto contains an accurate list of
all of the presently existing Subsidiaries of Guarantors, setting forth their
respective jurisdictions of formation, the percentage of their respective
Capital Stock owned by it or its Subsidiaries and the Properties owned by them.
All of the issued and outstanding shares of Capital Stock of such Subsidiaries
have been duly authorized and issued and are fully paid and non-assessable.
7.17 Status. Equity Inns is a corporation listed and in good standing
on the New York Stock Exchange ("NYSE").
Each Guarantor agrees that all of its representations and warranties
set forth in Article VII of this Agreement are true on the Agreement Execution
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 such
request hereunder shall constitute a reaffirmation of such representations and
warranties as deemed modified in accordance with the disclosures made and
approved, as aforesaid, as of the date of such request and disbursement.
ARTICLE VIII
AFFIRMATIVE COVENANTS
The Borrower and each of the Guarantors covenant and agree that so long
as the Commitment of any Lender shall remain available and until the full and
final payment of all Obligations incurred under the Loan Documents they will:
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.
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 forty-five (45) 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 or chief
accounting officer;
(ii) As soon as available, but in any event not later
than forty-five (45) 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
summary listing of capital expenditures, a report listing and
describing all newly acquired Properties, including their cash
flow, cost and secured Indebtedness, if any, 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;
(iv) As soon as available, but in any event not later
than ninety (90) days after the close of each fiscal year,
reports in form and substance satisfactory to the Lenders,
certified by Equity Inns' chief financial officer or chief
accounting officer containing Property Operating Income and
hotel operating statements from the operators under the
Permitted Operating Leases for each individual Property owned
by the Borrower or a Wholly-Owned Subsidiary and included as
Unencumbered Assets, provided that the Borrower and the
Guarantors shall in no event be obligated to furnish any such
hotel operating statement any earlier than five (5) Business
Days after the Borrower's receipt thereof from the applicable
operator;
(v) Not later than forty-five (45) days after the end
of each of the first three (3) 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 H
hereto signed by the Operating Partnership and Equity Inns'
chief financial officer or chief accounting officer confirming
that the Borrower and the Guarantors are in compliance with
all of the covenants of the Loan Documents, showing the
calculations and computations necessary to determine
compliance with the financial covenants contained in this
Agreement (including such schedules and backup information as
may be necessary to demonstrate such compliance) and stating
that to such officer's best knowledge, there is no other
Default or Event of Default exists, or if any Default or Event
of Default exists, stating the nature and status thereof;
(vi) As soon as possible and in any event within ten
(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
twenty (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 ten (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 ten (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
thirty (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 ten
(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 Unencumbered Asset, a statement describing such fire,
casualty or condemnation and the action Borrower intends to
take with respect thereto; and
(x) Such other information (including, without
limitation, non-financial information) as the Administrative
Agent or any Lender may from time to time reasonably request.
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 Consolidated Group shall not
invest more than the following amounts with respect to the following specified
categories of hotel assets:
(i) the aggregate book value, under GAAP, of all
hotels under construction which are owned by the Consolidated
Group shall not exceed 10% of Total Value;
(ii) the sum of (i) the aggregate book value, under
GAAP, of all hotels under construction which are owned by the
Consolidated Group and (ii) the aggregate obligations of the
Consolidated Group to purchase hotels under construction shall
not exceed 25% of Total Value;
(iii) the percentage of the total rooms in all
Properties of the Consolidated Group that are leased under
Permitted Operating Leases shall not be less than 85%; and
(iv) not more than 20% of the total rooms in all
Properties of the Consolidated Group shall be operated by, or
leased to, Prime Hospitality Corporation or a subsidiary
thereof pursuant to a Permitted Operating Lease.
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.
8.5 Insurance. Provide a certificate of insurance from all insurance
carriers who maintain policies with respect to the Properties within thirty (30)
days after the end of each fiscal year, evidencing that the insurance required
to be furnished to Lenders pursuant to Section 5.1(j) hereof is in full force
and effect. Borrower shall timely pay, or cause to be paid, all premiums on all
insurance policies required under this Agreement from time to time. Borrower
shall promptly notify its insurance carrier or agent therefor (with a copy of
such notification being provided simultaneously to Administrative Agent) if
there is any occurrence which, under the terms of any insurance policy then in
effect with respect to the Properties, requires such notification.
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.
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.
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.
8.9 ERISA. Comply in all material respects with all requirements of
ERISA applicable to it with respect to each Plan.
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), 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).
8.11 Use of Proceeds. Use the proceeds of the Facility for the general
business purposes of the Borrower, including without limitation, 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.
8.12 Pre-Acquisition Environmental Investigations. Cause to be prepared
prior to the acquisition of each project that it intends to acquire an
environmental report pursuant to a standard scope of work attached as Exhibit I
hereto and made a part hereof.
ARTICLE IX
NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as the Commitment shall
remain available and until full and final payment of all obligations incurred
under the Loan Documents, without the prior written consent of the Required
Lenders (or the Administrative Agent or a greater Percentage of the Lenders, if
so expressly provided), the Borrower, the Guarantors and the Consolidated Group
will not:
9.1 Change of Borrower Ownership. Allow (i) Equity Inns Trust and
Equity Inns Services, Inc. to own less than one hundred percent (100%) of the
general partnership interests in the Operating Partnership and EIP/WV,
respectively, (ii) Equity Inns to own less than 100% of the beneficial interests
in Equity Inns Trust or 100% of the stock in Equity Inns Services, Inc., (iii)
any pledge of, other encumbrance on, or conversion to limited partnership
interests of, any of the general partnership interests in the Borrower, or (iv)
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).
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.
9.3 Sales, Encumbrances and Transfers of Assets. Sell, encumber or
otherwise transfer (other than pursuant to a Permitted Operating Lease or any
other operating lease of any of the Properties) to anyone other than another
member of the Consolidated Group without delivering prior written notice of such
proposed sale, encumbrance or transfer to the Administrative Agent along with a
certification to the Lenders that compliance with all of the covenants in this
Agreement will be maintained after giving effect to such proposed action, with
such detail and projections as the Administrative Agent may require, any
Properties of the Consolidated Group or any interests in entities owning such
Properties if the value of such Property or interest, together with the value of
any other Properties or interests which have been sold, encumbered or
transferred during the same period, exceeds for a period beginning at the
Agreement Execution Date and ending on the last day of the fourth full fiscal
quarter of the Consolidated Group thereafter and for subsequent periods ending
on the last day of each such fiscal quarter thereafter and consisting of the
immediately preceding four (4) full fiscal quarters, a maximum of ten percent
(10%) of the Total Value at the beginning of such period.
9.4 Dividends. Permit the aggregate amount of dividends paid by Equity
Inns (without duplication) for the most recent four (4) fiscal quarters for
which financial reports are available (i) on an unadjusted basis, to exceed 90%
of the Funds From Operations of Equity Inns, or (ii) after deduction of all
dividends attributable to stock issued during the most recent of such four (4)
fiscal quarters, to exceed 100% of Free Cash Flow, in each case 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.
9.5 Floating Rate Debt. Permit the Consolidated Group to have
outstanding Indebtedness for borrowed money that bears interest at a floating
rate (including this Facility) in excess of $150,000,000 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.
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 thirty (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, building restrictions, zoning
restrictions, 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;
(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 or
other operating leases of any of the Properties, to the extent
the existence of such other operating leases will not result
in a violation of Section 8.3(iii) hereof.
Liens permitted pursuant to this Section 9.6 shall be deemed to be "Permitted
Liens".
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 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 to be less than four percent (4%) of the
gross room revenues from such Properties for such four (4) full fiscal quarters.
9.8 Indebtedness, Coverage and Net Worth Covenants. Permit or suffer:
(a) as of any day, Consolidated Secured Debt less the
outstanding principal balance under the REMIC Loan to exceed 15% of
Total Value;
(b) as of any day, Consolidated Total Indebtedness to exceed
the lesser of (i) 45% of Total Value or (ii) 45% of Total Cost;
(c) as of any day, the "tangible net worth" of the
Consolidated Group, as determined and defined under GAAP, to be less
than the sum of (i) eighty-five percent (85%) of the Consolidated
Group's tangible net worth as of June 30, 1997 plus (ii) fifty percent
(50%) of the aggregate proceeds received (net of customary related fees
and expenses) in connection with any offering or sale after June 30,
1997 of equity interests in the Borrower or the Guarantors, whether
common stock, preferred stock, limited partnership units or other forms
of equity ownership;
(d) as of any day, the ratio of (A) the sum of (i) Adjusted
EBITDA of the Consolidated Group plus (ii) Ground Lease Expense to (B)
Fixed Charges for the immediately preceding twelve (12) consecutive
month period to be less than 2.00 to 1;
(e) as of any day, the ratio of Adjusted EBITDA of the
Consolidated Group to Interest Expense for the immediately preceding
twelve (12) consecutive month period to be less than 2.5 to 1;
9.9 Mergers. Enter into any merger, consolidation, reorganization or
liquidation or transfer or otherwise dispose of all or a substantial portion of
the Consolidated Group's Properties, except for such transactions that occur
between members of the Consolidated Group or as otherwise approved in advance by
the Required Lenders.
9.10 Borrowing Base. Permit, as of any day, the then-current Credit
Requirement to exceed 45% of the then-current Borrowing Base for a period of
more than one Business Day.
ARTICLE X
DEFAULTS
The occurrence of any one or more of the following events shall
constitute an Event of Default:
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.
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.
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.
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).
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.
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 (30) 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.
10.7 Covenants, Agreements and Other Conditions. The Borrower fails to
perform or observe any of the other covenants, agreements and conditions
contained in Articles 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 (30) 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.
10.8 No Longer General Partner. Equity Inns shall no longer, directly
or indirectly, hold 100% of the general partnership interests in the two
entities constituting the Borrower.
10.9 Material Adverse Financial Change. Any one of the Operating
Partnership, EIP/WV, Equity Inns or Equity Inns Trust has suffered a Material
Adverse Financial Change or is Insolvent.
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.
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.
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).
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.
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.
10.15 REIT Status. 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.
ARTICLE XI
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
11.1 Acceleration.
If any Event of Default described in Section 10.10 hereof occurs, the
obligation of the Lenders to make Advances 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 shall be terminated and at the election of the Required Lenders,
the Obligations may be declared to be due and payable.
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
THE ADMINISTRATIVE AGENT
12.1 Appointment. NationsBank is hereby appointed Administrative and
Documentation 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 for all such purposes. 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.
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.
12.3 General Immunity. Neither the Administrative Agent (in its
capacity as Administrative and Documentation Agent) nor the Arranger nor any of
their 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 any of
them hereunder or under any other Loan Document or in connection herewith or
therewith, except for any of their own gross negligence or willful misconduct.
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.
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 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.
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.
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 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.
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 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.
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.
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.
12.11 Successor Administrative Agent. Each Lender agrees that
NationsBank shall serve as Administrative Agent at all times during the term of
this Facility, except that NationsBank may resign as Administrative Agent in the
event (x) NationsBank 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) NationsBank shall
determine, in its sole reasonable discretion, that because of its other banking
relationships with the Consolidated Group at the time of such decision
NationsBank's resignation as Administrative Agent would be necessary in order to
avoid creating an appearance of impropriety on the part of NationsBank.
NationsBank (or any successor Administrative Agent) may be removed as
Administrative Agent by written notice received by Administrative Agent from all
of the other Lenders at any time with cause (i.e., a breach by NationsBank (or
any successor Administrative Agent) of its duties as Administrative Agent
hereunder). Upon any such resignation or removal, Credit Lyonnais shall be the
successor Administrative Agent (unless objected to by the Required Lenders) or,
if Credit Lyonnais declines or is so objected to, the Required Lenders shall
have the right to 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 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 (30) 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.
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.
12.13 Requests for Approval. 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 (5) 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.
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.
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.
ARTICLE XIII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
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.
13.2 Participations.
13.2.1 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.
13.2.2. 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.
13.3 Assignments.
13.3.1 Permitted Assignments. Any Lender may, with the prior
written consent of the Administrative Agent, all of the other Lenders
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 other Lenders, Administrative Agent or Borrower
shall ever be required for (i) any assignment to an Affiliate 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. Such assignments and assumptions shall
be substantially in the form of Exhibit J 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) in connection with any such
assignment, but Borrower shall not be obligated to pay any fees and
expenses incurred by any Lender in connection with any assignment
pursuant to this Section. Any Lender selling all of 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 $3,000.00 per assignment to reimburse Administrative Agent for its
involvement in such assignment.
13.3.2 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 13.3.2, 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.
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.
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.
13.6 Syndications. The Facility is a syndicated facility, and Lenders
may from time to time further syndicate the Facility to other financial
institutions. Agent will continue to serve as the sole and exclusive
Administrative and Documentation Agent for itself and for all other lenders (the
"Syndicate Lenders"), Syndication Agent will continue to serve as syndication
agent and joint arranger and book manager for itself and all other Syndicate
Lenders and NMS will continue to serve as joint arranger and book manager for
itself and all other Syndicate Lenders, in the event of such further
syndication. Agent agrees to notify Borrower and Lenders of any such further
syndication. Borrower agrees to reasonably cooperate with Lenders in the further
syndication of the Facility, including providing all information deemed
reasonably necessary by the Lenders to be used in connection with the further
syndication of the Facility and making available members, officers and advisors
of Borrower and Indemnitor at a mutually agreeable time and location to attend
or make presentations regarding the business and prospects of Borrower and
Indemnitor at a meeting or meetings of prospective Syndicate Lenders. Agent
shall have the authority to act on behalf of the Syndicate Lenders in respect to
the Facility except where consent of some or all of the Lenders is expressly
required hereunder.
ARTICLE XIV
GENERAL PROVISIONS
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.
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.
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.
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.
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.
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, the Arranger 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, Arranger 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, and (d) all
out-of-pocket expenses incurred by the Syndication Agent, the Administrative
Agent or the Arranger in arranging for the joinder of Lenders in this Agreement.
The Borrower further agrees to indemnify the Agent, the Arranger, and the
Lenders, and their respective 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 is 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.
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.
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.
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 GEORGIA, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
14.10 Consent to Jurisdiction. THE BORROWER HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR GEORGIA STATE
COURT SITTING IN ATLANTA, GEORGIA 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 ATLANTA, GEORGIA.
14.11 Waiver of Jury Trial. THE BORROWER, THE GUARANTORS, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY WAIVE TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW 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.
14.12 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the 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. Any assignee or transferee of the Notes 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 the Notes, shall be conclusive
and binding on any subsequent holder, transferee or assignee of such Notes or of
any note or notes issued in exchange therefor.
14.13 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
2.16 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 the
Guarantors under the Loan Documents; or
(vi) changes the definition of Required Lenders or
modifies any requirement for consent by each of the Lenders;
or
(vii) modifies or waives any covenant contained in
Sections 9.8(b), 9.8(d) or 9.8(e) hereof; or
(b) 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.
14.14 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.
14.15 Set-Off.
(a) If an Event of Default shall have occurred, each Lender
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.
14.16 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.
14.17 Limitation on Liability of EIP/WV. The liability of the Borrower
under this Agreement for the Obligations shall be joint and several. 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 Total Value attributable to
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.
14.18 Year 2000 Compliance. Borrower has (i) initiated a review and
assessment of all areas within its business and operations (including those
affected by suppliers and vendors) that could be adversely affected by the "Year
2000 Problem" (that is, the risk that computer applications used by Borrower (or
its suppliers and vendors) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999), (ii) developed a plan and timeline for addressing the Year
2000 Problem on a timely basis, and (iii) to date, implemented that plan in
accordance with that timetable. Borrower reasonably believes that all computer
applications (including those of its suppliers and vendors) that are material to
its business and operations will on a timely basis be able to perform properly
date-sensitive functions for all dates before and after January 1, 2000 (that
is, will be "Year 2000 Compliant"), except to the extent that a failure to do so
could not reasonably be expected to cause a Material Adverse Effect. Borrower
will promptly notify Agent in the event that Borrower discovers or determines
that any computer application (including those of its suppliers and vendors)
that is material to its business and operations will not be Year 2000 Compliant
on a timely basis, except to the extent that such failure could not reasonably
be expected to cause a Material Adverse Effect.
14.19 Modifications to Existing Credit Agreement. Agent, Syndication
Agent and Lenders agree that any modification to the covenants of the Existing
Credit Agreement applicable to the terms of this Agreement (whether more
favorable to Borrower or Lenders) which has been approved by the Majority
Lenders, the Required Lenders or all of the Lenders of the Existing Credit
Agreement, as required under the Existing Credit Agreement, will be deemed
automatically made a part of and incorporated in this Agreement until October 9,
2000 without any further consents, requirements (other than requirements
specified for the Existing Credit Agreement modification), or amendment fees,
provided the Agent and the Syndication Agent approved such modification of the
Existing Credit Agreement. Notwithstanding the automatic incorporation of such
covenant modifications provided for in this Section 14.19, in confirmation of
such modification, Borrower shall, at Agent or any Lender's request, execute and
deliver such further instruments or documents desired by Agent or such Lender.
Borrower's obligations under Section 14.6 hereof will apply to any such
modification.
ARTICLE XV
NOTICES
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.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇ ▇▇▇▇
To Guarantors:
Equity Inns, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇ ▇▇▇▇
Each of the above with a copy to:
Hunton & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Best
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
To each Lender:
As shown below the Lenders' signatures.
To the Administrative Agent:
NationsBank, N.A.
Structured Debt Group
NationsBank Plaza
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: A. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
BORROWER: EQUITY INNS PARTNERSHIP, L.P.
By: EQUITY INNS TRUST,
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: EVP
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EQUITY INNS WEST VIRGINIA PARTNERSHIP, L.P.
By: EQUITY INNS SERVICES, INC.,
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: EVP
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LENDERS: NATIONSBANK, N.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇
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Title: Vice President
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Commitment: $12,500,000
Percentage of Aggregate Commitment: 50%
Address for Notices:
Structured Debt Group
NationsBank Plaza
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Senior Vice President
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Commitment: $12,500,000
Percentage of Aggregate Commitment: 50%
Address for Notices:
Hotel Finance Group
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: 212/▇▇▇-▇▇▇▇
Telecopy: 212/261-7532
The undersigned, Equity Inns, Inc. and Equity Inns Trust, join in this
Agreement for purposes of making the representations and warranties contained in
Article VII hereof and agreeing to perform certain of the covenants described in
Article VIII hereof.
EQUITY INNS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: EVP
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EQUITY INNS TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: EVP
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EXHIBIT A
PERCENTAGES
NationsBank -- 50%
Credit Lyonnais -- 50%
EXHIBIT B
FORM OF NOTE
$ March __, 1999
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On or before the Maturity Date, as defined in that certain Unsecured
Revolving Credit Agreement dated as of March __, 1999 (the "Agreement") among
EQUITY INNS PARTNERSHIP, L.P., a Tennessee limited partnership, and EQUITY
INNS/WEST VIRGINIA PARTNERSHIP, L.P., a Tennessee limited partnership
(collectively, "Borrower"), Credit Lyonnais New York Branch, individually and as
Syndication Agent and Joint Arranger and Book Manager, NationsBank, N.A.,
individually and as Administrative and Documentation Agent, and NationsBanc
▇▇▇▇▇▇▇▇▇▇ Securities, LLC, as Joint Arranger and Book Manager, Borrower
promises to pay to the order of ________________________________________________
(the "Lender"), or its successors and assigns, the principal sum of ____________
___________________ AND NO/100 DOLLARS ($______________) or 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 Atlanta, Georgia, 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.
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 actually 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 evidenced by this Note, the acceptance of any security for this Note,
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 Georgia.
All liability of the entities comprising the Borrower hereunder shall
be joint and several. The liability of Equity Inns/West Virginia Partnership,
L.P. under this Note is limited as described in Section 14.17 of the Agreement.
BORROWER AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, 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:
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Its:
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EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P.,
a Tennessee limited partnership
By: Equity Inns Services, Inc.,
its general partner
By:
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Its:
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PAYMENTS OF PRINCIPAL
Date Unpaid Principal Balance Notation Made By
EXHIBIT C
FINANCEABLE GROUND LEASES -- CURRENTLY APPROVED
1. Mt. Brook, AL
2. Camelback, AZ
3. Atlanta, GA
4. Glen Burnie, MD
5. Traverse City, MI (Partial)
6. Tinton Falls, NJ
7. Nashville, TN
8. Sycamore, TN
9. Rutland, VT (Partial)
10. Norfolk, VA
EXHIBIT D
FORM OF GUARANTY
This Guaranty made as of March __, 1999, by Equity Inns, Inc., Equity Inns
Services, Inc. and Equity Inns Trust (collectively, "Guarantor"), to and for the
benefit of NationsBank, N.A., ("NationsBank") individually , and as
administrative and documentation agent for itself and the other lenders listed
on the signature pages of the Revolving Credit Agreement (as defined below),
Credit Lyonnais New York Branch, individually and as Syndication Agent and Joint
Arranger and Book Manager for such lenders, ("Credit Lyonnais") and all other
lenders which are parties to the Revolving Credit Agreement from time to time,
and their respective successors and assigns (collectively, "Lender").
RECITALS
A. Equity Inns Partnership, L.P., a Tennessee limited partnership, and
Equity Inns/West Virginia Partnership, L.P., a Tennessee limited partnership
(collectively, "Borrower"), and Guarantor have requested that Lender make an
unsecured revolving credit facility available to Borrower in the aggregate
principal amount of up to $25,000,000 ("Facility").
B. Lender has agreed to make available the Facility to Borrower pursuant to
the terms and conditions set forth in an Unsecured Revolving Credit Agreement
bearing even date herewith between Borrower, NationsBank, as administrative and
documentation agent, Credit Lyonnais, as syndication agent and joint arranger
and book manager, NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities, LLC, as joint arranger and
book manager, and Lender ("Revolving Credit Agreement"). All capitalized terms
used herein and not otherwise defined shall have the meanings ascribed to such
terms in the Revolving Credit Agreement.
C. Borrower has executed and delivered to Lender one or more Promissory
Notes each of even date in the aggregate principal amount of $25,000,000 as
evidence of its indebtedness to Lender with respect to the Facility (the
promissory notes described above, together with any amendments or allonges
thereto, or restatements, replacements or renewals thereof, and/or new
promissory notes to new Lenders under the Revolving Credit Agreement, are
collectively referred to herein as the "Note").
D. Equity Inns Trust is the sole general partner of one of the entities
comprising the Borrower, Equity Inns Services, Inc. is the sole general partner
of the other entity comprising the Borrower and Equity Inns, Inc. is the holder
of 100% of the stock of Equity Inns Services, Inc., and therefore, Guarantor
will derive financial benefit from the Facility evidenced by the Note, Revolving
Credit Agreement and the other Loan Documents. The execution and delivery of
this Guaranty by Guarantor is a condition precedent to the performance by Lender
of its obligations under the Revolving Credit Agreement.
AGREEMENTS
NOW, THEREFORE, Guarantor, in consideration of the matters described in the
foregoing Recitals, which Recitals are incorporated herein and made a part
hereof, and for other good and valuable consideration, hereby agrees as follows:
1. Guarantor absolutely, unconditionally, and irrevocably guarantees to
Lender:
(a) the full and prompt payment of the principal of and
interest on the Note when due, whether at stated maturity, upon
acceleration or otherwise, and at all times thereafter, and the prompt
payment of all sums which may now be or may hereafter become due and
owing under the Note, the Revolving Credit Agreement, and the other
Loan Documents;
(b) the payment of all Enforcement Costs (as hereinafter
defined in Paragraph 7 hereof); and
(c) the full, complete, and punctual observance, performance,
and satisfaction of all of the obligations, duties, covenants, and
agreements of Borrower under the Revolving Credit Agreement and the
Loan Documents.
(d) All amounts due, debts, liabilities, and payment
obligations described in subparagraphs (a) and (b) of this Paragraph 1
are referred to herein as the "Facility Indebtedness." All obligations
described in subparagraph (c) of this Paragraph 1 are referred to
herein as the "Obligations."
▇.▇▇ the event of any default by Borrower in making payment of the Facility
Indebtedness, or in performance of the Obligations, as aforesaid, in each case
beyond the expiration of any applicable grace period, Guarantor agrees, on
demand by Lender or the holder of the Note, to pay all the Facility Indebtedness
and to perform all the Obligations as are or then or thereafter become due and
owing or are to be performed under the terms of the Note, the Revolving Credit
Agreement and the other Loan Documents, and to pay any reasonable expenses
incurred by Lender in connection with the Facility or under any of the Loan
Documents, including, without limitation, all reasonable attorneys' fees and
costs actually incurred. Lender shall have the right, at its option, either
before, during or after pursuing any other right or remedy against Borrower or
Guarantor, to perform any and all of the Obligations by or through any agent,
contractor or subcontractor, or any of their agents, of its selection, all as
Lender in its sole discretion deems proper, and Guarantor shall indemnify and
hold Lender free and harmless from and against any and all loss, damage, cost,
expense, injury, or liability Lender may suffer or incur in connection with the
exercise of its rights under this Guaranty or the performance of the
Obligations, except to the extent the same arises as a result of the gross
negligence or willful misconduct of Lender.
All of the remedies set forth herein and/or provided by any of the Loan
Documents or law or equity shall be equally available to Lender, and the choice
by Lender of one such alternative over another shall not be subject to question
or challenge by Guarantor or any other person, nor shall any such choice be
asserted as a defense, set-off, or failure to mitigate damages in any action,
proceeding, or counteraction by Lender to recover or seeking any other remedy
under this Guaranty, nor shall such choice preclude Lender from subsequently
electing to exercise a different remedy. The parties have agreed to the
alternative remedies hereinabove specified in part because they recognize that
the choice of remedies in the event of a failure hereunder will necessarily be
and should properly be a matter of business judgment, which the passage of time
and events may or may not prove to have been the best choice to maximize
recovery by Lender at the lowest cost to Borrower and/or Guarantor. It is the
intention of the parties that such choice by Lender be given conclusive effect
regardless of such subsequent developments.
3.Guarantor does hereby waive (i) notice of acceptance of this Guaranty by
Lender and any and all notices and demands of every kind which may be required
to be given by any statute, rule or law, (ii) any defense, right of set-off or
other claim which Guarantor may have against the Borrower or which Guarantor or
Borrower may have against Lender or the holder of the Note, (iii) presentment
for payment, demand for payment, notice of nonpayment or dishonor, protest and
notice of protest, diligence in collection and any and all formalities which
otherwise might be legally required to charge Guarantor with liability, (iv) any
failure by Lender to inform Guarantor of any facts Lender may now or hereafter
know about Borrower, the Facility, or the transactions contemplated by the
Revolving Credit Agreement, it being understood and agreed that Lender has no
duty so to inform and that the Guarantor is fully responsible for being and
remaining informed by the Borrower of all circumstances bearing on the existence
or creation, or the risk of nonpayment of the Facility Indebtedness or the risk
of nonperformance of the Obligations, and (v) any and all right to cause a
marshalling of assets of the Borrower or any other action by any court or
governmental body with respect thereto, or to cause Lender to proceed against
any other security given to Lender in connection with the Facility Indebtedness
or the Obligations. Credit may be granted or continued from time to time by
Lender to Borrower without notice to or authorization from Guarantor, regardless
of the financial or other condition of the Borrower at the time of any such
grant or continuation. Lender shall have no obligation to disclose or discuss
with Guarantor its assessment of the financial condition of Borrower. Guarantor
acknowledges that no representations of any kind whatsoever have been made by
Lender to Guarantor. No modification or waiver of any of the provisions of this
Guaranty shall be binding upon Lender except as expressly set forth in a writing
duly signed and delivered on behalf of Lender. Guarantor further agrees that any
exculpatory language contained in the Revolving Credit Agreement and the Note
shall in no event apply to this Guaranty, and will not prevent Lender from
proceeding against Guarantor to enforce this Guaranty.
4.Guarantor further agrees that Guarantor's liability as guarantor shall in
nowise be impaired by any renewals or extensions which may be made from time to
time, with or without the knowledge or consent of Guarantor of the time for
payment of interest or principal under the Note or by any forbearance or delay
in collecting interest or principal under the Note, or by any waiver by Lender
under the Revolving Credit Agreement or any other Loan Documents, or by Lender's
failure or election not to pursue any other remedies it may have against
Borrower, or by any change or modification in the Note, Revolving Credit
Agreement or any other Loan Documents, or by the acceptance by Lender of any
additional security or any increase, substitution or change therein, or by the
release by Lender of any security or any withdrawal thereof or decrease therein,
or by the application of payments received from any source to the payment of any
obligation other than the Facility Indebtedness, even though Lender might
lawfully have elected to apply such payments to any part or all of the Facility
Indebtedness, it being the intent hereof that Guarantor shall remain liable as
principal for payment of the Facility Indebtedness and performance of the
Obligations until all indebtedness has been paid in full and the other terms,
covenants and conditions of the Revolving Credit Agreement and other Loan
Documents and this Guaranty have been performed, notwithstanding any act or
thing which might otherwise operate as a legal or equitable discharge of a
surety. Guarantor further understands and agrees that Lender may at any time
enter into agreements with Borrower to amend and modify the Note, Revolving
Credit Agreement or other Loan Documents, or any thereof, and may waive or
release any provision or provisions of the Note, the Revolving Credit Agreement
and other Loan Documents or any thereof, and, with reference to such
instruments, may make and enter into any such agreement or agreements as Lender
and Borrower may deem proper and desirable, without in any manner impairing this
Guaranty or any of Lender's rights hereunder or any of the Guarantor's
obligations hereunder.
5.This is an absolute, unconditional, complete, present and continuing
guaranty of payment and performance and not of collection. Guarantor agrees that
this Guaranty may be enforced by Lender without the necessity at any time of
resorting to or exhausting any other security or collateral given in connection
herewith or with the Note, the Revolving Credit Agreement, or any of the other
Loan Documents, or resorting to any other guaranties, and Guarantor hereby
waives the right to require Lender to join Borrower in any action brought
hereunder or to commence any action against or obtain any judgment against
Borrower or to pursue any other remedy or enforce any other right. Guarantor
further agrees that nothing contained herein or otherwise shall prevent Lender
from pursuing concurrently or successively all rights and remedies available to
it at law and/or in equity or under the Note, Revolving Credit Agreement or any
other Loan Documents, and the exercise of any of its rights or the completion of
any of its remedies shall not constitute a discharge of any of Guarantor's
obligations hereunder, it being the purpose and intent of the Guarantor that the
obligations of such Guarantor hereunder shall be primary, absolute, independent
and unconditional under any and all circumstances whatsoever. Neither
Guarantor's obligations under this Guaranty nor any remedy for the enforcement
thereof shall be impaired, modified, changed or released in any manner
whatsoever by any impairment, modification, change, release or limitation of the
liability of Borrower under the Note, Revolving Credit Agreement or other Loan
Documents or by reason of Borrower's bankruptcy or by reason of any creditor or
bankruptcy proceeding instituted by or against Borrower. This Guaranty shall
continue to be effective and be deemed to have continued in existence or be
reinstated (as the case may be) if at any time payment of all or any part of any
sum payable pursuant to the Note, Revolving Credit Agreement or any other Loan
Document is rescinded or otherwise required to be returned by the payee upon the
insolvency, bankruptcy, or reorganization of the payor, all as though such
payment to Lender had not been made, regardless of whether Lender contested the
order requiring the return of such payment. The obligations of Guarantor
pursuant to the preceding sentence shall survive any termination, cancellation,
or release of this Guaranty.
6.This Guaranty shall be assignable by Lender to any assignee of all or a
portion of Lender's rights under the Loan Documents.
7.If: (i) this Guaranty, the Note or any other Loan Document is placed in the
hands of an attorney for collection or is collected through any legal
proceeding; (ii) an attorney is retained to represent Lender in any bankruptcy,
reorganization, receivership, or other proceedings affecting creditors' rights
and involving a claim under this Guaranty, the Note, the Revolving Credit
Agreement, or any Loan Document; (iii) an attorney is retained to provide advice
or other representation with respect to the Loan Documents in connection with an
enforcement action or potential enforcement action; or (iv) an attorney is
retained to represent Lender in any other legal proceedings whatsoever in
connection with this Guaranty, the Note, the Revolving Credit Agreement, any of
the Loan Documents, or any property subject thereto (other than any action or
proceeding brought by any Lender or participant against the Administrative Agent
(as defined in the Revolving Credit Agreement) alleging a breach by the
Administrative Agent of its duties under the Loan Documents), then Guarantor
shall pay to Lender upon demand all reasonable attorneys' fees actually
incurred, costs and expenses, including, without limitation, court costs, filing
fees, recording costs, expenses of foreclosure, title insurance premiums, survey
costs, minutes of foreclosure, and all other costs and expenses actually
incurred in connection therewith (all of which are referred to herein as
"Enforcement Costs"), in addition to all other amounts due hereunder.
8.The parties hereto intend that each provision in this Guaranty comports
with all applicable local, state and federal laws and judicial decisions.
However, if any provision or provisions, or if any portion of any provision or
provisions, in this Guaranty is found by a court of law to be in violation of
any applicable local, state or federal ordinance, statute, law, administrative
or judicial decision, or public policy, and if such court should declare such
portion, provision or provisions of this Guaranty to be illegal, invalid,
unlawful, void or unenforceable as written, then it is the intent of all parties
hereto that such portion, provision or provisions shall be given force to the
fullest possible extent that they are legal, valid and enforceable, that the
remainder of this Guaranty shall be construed as if such illegal, invalid,
unlawful, void or unenforceable portion, provision or provisions were not
contained therein, and that the rights, obligations and interest of Lender or
the holder of the Note under the remainder of this Guaranty shall continue in
full force and effect.
9.Any indebtedness of Borrower to Guarantor now or hereafter existing is
hereby subordinated to the Facility Indebtedness. Guarantor agrees that until
the entire Facility Indebtedness has been paid in full, (i) Guarantor will not
seek, accept, or retain for Guarantor's own account, any payment from Borrower
on account of such subordinated debt, and (ii) any such payments to Guarantor on
account of such subordinated debt shall be collected and received by Guarantor
in trust for Lender and shall be paid over to Lender on account of the Facility
Indebtedness without impairing or releasing the obligations of Guarantor
hereunder.
10. Guarantor waives and releases any claim (within the meaning of 11 U.S.C.
ss. 101) which Guarantor may have against Borrower arising from a payment made
by Guarantor under this Guaranty and agrees not to assert or take advantage of
any subrogation rights of Guarantor or Lender or any right of Guarantor or
Lender to proceed against (i) Borrower for reimbursement, or (ii) any other
guarantor or any collateral security or guaranty or right of offset held by
Lender for the payment of the Facility Indebtedness and performance of the
Obligations, nor shall Guarantor seek or be entitled to seek any contribution or
reimbursement from Borrower or any other guarantor in respect of payments made
by Guarantor hereunder. It is expressly understood that the waivers and
agreements of Guarantor set forth above constitute additional and cumulative
benefits given to Lender for its security and as an inducement for its extension
of credit to Borrower. Nothing contained in this Paragraph 10 is intended to
prohibit Guarantor from making all distributions to its constituent shareholders
which are required by law from time to time in order for Guarantor to maintain
its status as a real estate investment trust in compliance with all applicable
provisions of the Code (as defined in the Revolving Credit Agreement).
11. Any amounts received by Lender from any source on account of any
indebtedness may be applied by Lender toward the payment of such indebtedness,
and in such order of application, as Lender may from time to time elect.
12. The Guarantor hereby submits to personal jurisdiction in the State of
Georgia for the enforcement of this Guaranty and waives any and all personal
rights to object to such jurisdiction for the purposes of litigation to enforce
this Guaranty. Guarantor hereby consents to the jurisdiction of any applicable
Georgia state or federal court, in any action, suit, or proceeding which Lender
may at any time wish to file in connection with this Guaranty or any related
matter. Guarantor hereby agrees that an action, suit, or proceeding to enforce
this Guaranty may be brought in any state or federal court in the State of
Georgia and hereby waives any objection which Guarantor may have to the laying
of the venue of any such action, suit, or proceeding in any such court;
provided, however, that the provisions of this Paragraph shall not be deemed to
preclude Lender from filing any such action, suit, or proceeding in any other
appropriate forum.
13. 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 Guarantor:
Equity Inns, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Hunton & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Best
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
To the Lender:
NationsBank, N.A., as agent
- 6th Floor
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: A. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as the party to be served with notice may have
furnished in writing to the party seeking or desiring to serve notice as a place
for the service of notice.
14. This Guaranty shall be binding upon the heirs, executors, legal and
personal representatives, successors and assigns of Guarantor and shall inure to
the benefit of Lender's successors and assigns.
15. This Guaranty shall be construed and enforced under the internal laws of
the State of Georgia.
16. The liability of the entities comprising the Guarantor under this Guaranty
shall be joint and several. The liability of Equity Inns Services, Inc. under
this Guaranty shall not exceed a percentage (equal to the percentage partnership
interest of Equity Inns Services, Inc. in EIP/WV) of the amount by which (A) the
portion of the then-current Total Value attributable to 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 the
Revolving Credit Agreement, calculated in each case as of the Maturity Date or
the date of any earlier acceleration of the Obligations, as applicable.
17. GUARANTOR AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT UNDER THIS GUARANTY OR ANY
OTHER LOAN DOCUMENT OR RELATING THERETO OR ARISING FROM THE LENDING RELATIONSHIP
WHICH IS THE SUBJECT OF THIS GUARANTY AND AGREE THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
IN WITNESS WHEREOF, Guarantor has delivered this Guaranty as of the
date first written above.
EQUITY INNS, INC., a Tennessee corporation
By:
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Its:
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EQUITY INNS TRUST, a Maryland real estate
investment trust
By:
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Its:
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EQUITY INNS SERVICES, INC.,
a Tennessee corporation
By:
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Its:
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EXHIBIT E
INTENTIONALLY OMITTED
EXHIBIT F
OPINION OF GEORGIA COUNSEL
EXHIBIT G
WIRING INSTRUCTIONS
To: NationsBank, N.A.,
as Administrative Agent (the "Administrative Agent")
under the Credit Agreement Described Below
Re: Unsecured Revolving Credit Agreement, dated as of March __, 1999
(as amended, modified, renewed or extended from time to time, the
"Agreement"), among Equity Inns Partnership, L.P. and Equity Inns/West
Virginia Partnership, L.P. (collectively, the "Borrower"), NationsBank,
N.A., individually and as Administrative and Documentation Agent,
Credit Lyonnais New York Branch, individually and as Syndication Agent
and Joint Arranger and Book Manager, NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities,
LLC, as Joint Arranger and Book Manager, and the Lenders named therein.
Terms used herein and not otherwise defined shall have the meanings
assigned thereto in the 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___________________________________________________________
Transfer Funds To_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
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
FORM OF COMPLIANCE CERTIFICATE
Under Credit Agreement dated as of March __, 1999, between Equity Inns
Partnership, L.P. and Equity Inns / West Virginia Partnership, L.P., as
Borrower, NationsBank, N.A. ("NationsBank"), as Administrative and Documentation
Agent, Credit Lyonnais New York Branch, individually and as Syndicaton Agent and
Joint Arranger and Book Manager, NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC, as Joint
Arranger and Book Manager and the Lenders defined there in (the "Credit
Agreement").
The undersigned, as _____________ of Equity Inns Partnership L.P. and as
___________ of Equity Inn / West Virginia Partnership L.P., pursuant to Section
8.2 of the Credit Agreement, hereby, certifies to NationsBank, 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 a Default or
a Potential Default
4. Pursuant to Section 9.5 of the Facility, as of the date hereof, the
Consolidated Group does not have outstanding Indebtedness for borrowed
money that bears interest at a floating rate (including the Facility)
in excess of $150,000,000 at any time 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.
5. The following Borrowing Base computation for the most recent ended
fiscal quarter, together with the supporting schedule attached hereto
is true and correct:
A. Value of the Borrowing Base $
------------------
B. 45% of the Borrowing Base $
------------------
C. Outstanding under the Facility $
------------------
D. Consolidated Senior Unsecured Debt $
------------------
E. FF&E Deficiency $
------------------
F. Credit Requirements - (Sum of C, D and E) $
------------------
F must be less than
or equal to B
6. The following covenant computations, for the most recent ended fiscal
quarter, together with the supporting schedule attached hereto, are
true and correct:
9.3 Sales, Encumbrances and Transfers of Assets.
A. Total value of Properties sold,
encumbered or transferred $
-------------------
other than to members of the
Consolidated Group for the past
four quarters
B. 10% of Total Value $
-------------------
A is to be less
than or equal to B
9.4 Dividends
I. A. Total dividends for the past four
quarters $
-------------------
B. 90% of the Funds From Operations for
the past four quarters $
-------------------
A is to be less
than or equal to B
II. A. Total dividends for the past four
quarters $
-------------------
B. Dividends paid on stock issued in
the past quarter $
-------------------
C. A minus B $
-------------------
D. 100% of Free Cash Flow $
-------------------
C must be less than
or equal to D
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
C. Sum of A plus B $
-------------------
D. 4% of gross room revenues for the past $
-------------------
four quarters for the Properties C must be less than
or equal to D
9.8(a) Limitation on Secured Debt
A. Consolidated Secured Debt $
-------------------
B. Principal balance of REMIC Loan $
-------------------
C. A minus B $
-------------------
D. 15% of Total Value $
-------------------
C must be less than
or equal to D
9.8(b) Leverage Limitation
A. Consolidated Total Indebtedness $
-------------------
B. 45% of Total Value $
-------------------
C. 45% of Total Cost $
-------------------
A must be less than
or equal to B
A must be less than
or equal to C
9.8(c) Minimum Tangible Net Worth.
A. Tangible Net Worth of the Consolidated
Group $
-------------------
B. 85% of Tangible Net Worth at 6/30/97 $
-------------------
C. 50% of equity interest issued after
6/30/97 $
-------------------
D. Sum of B and C $
------------------
A must be greater
than or equal to D
9.8(d) Minimum Fixed Charge Coverage
A. Adjusted EBITDA for the quarter $
-------------------
B. Ground Lease Expense for the quarter $
-------------------
C. Sum of A plus B $
-------------------
D. Fixed Charges $
-------------------
E. C divided by D $
-------------------
E must be greater
than or equal to
2.00
9.8(e) Minimum Interest Coverage
A. Adjusted EBITDA for the quarter $
-------------------
B. Interest Expense for the quarter $
-------------------
C. A divided by B $
-------------------
C should be greater
than or equal to
2.50
8.3(i) Limitations on hotels under construction
A. Aggregate book value of all hotels
under construction $
-------------------
B. 10% of Total Value $
-------------------
A must be less than
or equal to B
8.3(ii) Limitation on contracts to purchase hotels under constriction
A. Aggregate book value of all hotels under
construction $
-------------------
B. Aggregate obligation to purchase hotels
under construction $
-------------------
C. A plus B $
-------------------
D. 25% of Total Value $
-------------------
C must be less than
or equal to D
8.3(iii)
A. Total rooms in all Properties $
-------------------
B. Total rooms leased under Permitted
Operating Leases $
-------------------
C. B divided by A $
-------------------
C should be greater
than or equal to
85%
D. Total rooms leased to Prime
Hospitality Corporation or a
subsidiary $
-------------------
E. D divided by A $
-------------------
E should be less
than or equal to
20%
7. The following computation of the limits is imbedded in the definitions,
together with the supporting schedule attached hereto are true and correct.
Limitations in Unencumbered Assets:
A. Value of Unencumbered Assets $
-------------------
B. Value of Properties included in
Unencumbered Assets subject to a
Major Ground Lease $
-------------------
C. B divided by A $
-------------------
C must be less than
or equal to 15%
Limitations in Borrowing Base
A. Value of Unencumbered Assets $
-------------------
B. Value of largest single Property
included in Value of Unencumbered
Assets $
-------------------
Portland
C. B divided by A $
-------------------
C must be less than
or equal to 10%
D. Largest Value of all Properties located
in a single state included in the Value
included in the Value of Unencumbered
Assets $
-------------------
E. D divided by A $
-------------------
E must be less than
or equal to 25%
F. Total Value of Properties included
in the Value of Unencumbered Assets
which are premium limited service hotels $
-------------------
G. Total Value of Properties included in
the Value of Unencumbered Assets which
are premium extended stay hotels $
-------------------
H. Total Value of Properties included in the
Value Unencumbered Assets which are all-
suite hotels $
-------------------
I. Total Value of Properties included in
the Value of Unencumbered Assets which
are full service hotels $
-------------------
J. Sum of F, G, H and I $
-------------------
K. J divided by A $
-------------------
K must be greater
than or equal to
80%
L. Total Value of Properties included in
the Value of Unencumbered Assets which
are operated as Hampton Inns $
-------------------
M. Total Value of Properties included in
the Value of unencumbered Assets which
are operated as Homewood Suite $
-------------------
N. Total Value of Properties included in
the Value of Unencumbered Assets which
are operated as Residence Inn $
-------------------
O. Total Value of Properties included in
the Value of Unencumbered Assets which
are operated as AmeriSuites $
-------------------
P. Sum of L, M, N, and O $
-------------------
Q. P divided by A $
-------------------
Q must be greater
than or equal to
80%
R. Total Value of Properties included in
the Value of Unencumbered Assets which
are leased to Prime Hospitality
Corporation $
-------------------
S. 30% of the Value of Unencumbered Assets $
-------------------
R must be less than
or equal to S
Date:
----------------------------
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
SCHEDULE A
CALCULATION OF VALUES
Note: Schedules B and C shall be prepared and attached in conformity with
Schedule A-1 attached hereto.
1. Value of Unencumbered Assets
A. For Properties owned for the past four quarters
(see Schedule B)
1. Property Operating Income $
-------------------
2. Agreed FF&E Reserve $
-------------------
3. 1 minus 2 $
-------------------
4. 3 divided by .115 $
-------------------
B. Total Book Value of Properties owned less
than four quarters (see schedule B) $
-------------------
C. Sum of A (4) plus B is Value of
Unencumbered Assets $
-------------------
Note: Schedule B shall contain a detailed listing of all properties in the
Unencumbered Assets and will at a minimum detail the calculation of Property
Operating Income, Agreed FF&E Reserve, book value or gross Room Revenues for the
past four quarters, where applicable, and actual FF&E replacement and approved
capital improvements.
2. Total Value
A. Total cash and cash equivalents $
-------------------
B. For Properties owned for at least four
full fiscal quarters (See Schedules B and C)
1. Aggregate Property Operating Income $
-------------------
2. Agreed FF&E Reserve $
-------------------
3. 1 minus 2 $
-------------------
4. 3 divided by .115 $
-------------------
C. Total Book Value of Properties owned less
than four quarters (See Schedule B and C) $
-------------------
D. For Properties owned for at lease four full
fiscal quarters by an Investment Affiliate
Consolidated Group (See Schedule C) $
-------------------
1. Pro Rata Share of aggregate
Property Income $
-------------------
2. Applicable Agreed FF&E Reserve $
-------------------
3. 1 minus 2 $
-------------------
4. 3 divided by .115 $
-------------------
E. For Properties owned for less than
four quarters by an Investment Affiliate,
the Consolidated Group Pro Rata Share of
the aggregate book value $
-------------------
F. Sum of A, B(4) C, D(4) and E $
-------------------
(Note: Schedule C shall contain a detailed listing of all properties not in the
Unencumbered Assets and will at a minimum detail the calculation of Property
Operating Income, Agreed FF&E Reserve, book value or gross Room Revenues for the
past four quarters, where applicable, and actual FF&E replacement and approved
capital improvements.
3. Total Cost
A. Book Value of all Properties owned by
the Consolidated Group $
-------------------
B. Accumulated Depreciation on such
Properties $
-------------------
C. Consolidated Group Pro Rata Share of
the book value of all properties owned
by Investment Affiliated $
-------------------
D. Consolidated Group Pro Rata Share of
the depreciation associated with such
Properties owned by Investment Affiliated $
-------------------
E. Sum of A, B, C, and D $
===================
4. Consolidated Total Indebtedness
A. Indebtedness of the Consolidated Group
1. indebtedness for borrowing money $
-------------------
2. obligations under financing on
capital leases $
-------------------
3. Guarantee obligations $
-------------------
4. Other items which constitute
Indebtedness not included in the
above $
-------------------
B. Consolidated Group Pro Rata Share of all Indebtedness of any
Investment Affiliated (to the extent not included in A)
1. Indebtedness for borrowing money $
-------------------
2. Obligations under financing and
Capital Leases $
-------------------
3. Guarantee Obligation $
-------------------
4. Other items which constitute
Indebtedness not included in the
above $
-------------------
C. Sum of A and B $
-------------------
5. Adjusted EBITDA for the quarter
A. EBITDA of the Consolidated Group
excluding income from Investment
affiliates $
-------------------
B. Consolidated Group Pro Rata Share of
EBITDA of Investment Affiliates $
-------------------
C. All extraordinary items included in
A or B $
-------------------
D. All gains or losses from sale of assets $
-------------------
▇. ▇▇▇▇▇ Hotel Room Revenue $
-------------------
F. E multiplied by 4% $
-------------------
G. Sum of A and B less C, D and F $
-------------------
6. Interest Expense for the Quarter
A. Interest Expense of the Consolidated
Group $
-------------------
B. Consolidated Group Pro Rata Share of any
accrued or paid interest of on Investment
Affiliate $
-------------------
C. Sum of A plus B $
-------------------
7. Fix Charges for the Quarter
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 of an
Investment Affiliate $
-------------------
D. Preferred Stock Expense $
-------------------
E. Ground Lease Expense $
-------------------
F. Sum of A, B, C, D, and E $
-------------------
8. Free Cash Flow for the past four Quarters
A. Funds From Operations for the past
four quarters $
-------------------
B. Aggregate Room Revenue for the past
four quarters on all properties $
-------------------
C. B multiplied by 4%. $
-------------------
D. Scheduled principal payments on all
Indebtedness of the Consolidated Group
for the past four quarters $
-------------------
E. A minus C minus D $
-------------------
EXHIBIT I
SCOPE OF WORK FOR ENVIRONMENTAL INVESTIGATIONS
EXHIBIT J
FORM OF ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
_____________________________ (the "Assignor") and _____________________________
(the "Assignee") is dated as of ____________, 19__. The parties hereto agree as
follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to an Unsecured
Revolving Credit Agreement (which, as it may be amended, modified, renewed or
extended from time to time is herein called the "Credit Agreement") described in
Item 1 of Schedule 1 attached hereto ("Schedule 1"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings attributed to
them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
the Assignee, and the Assignee hereby purchases and assumes from the Assignor,
an interest in and to the Assignor's rights and obligations under the Credit
Agreement such that after giving effect to such assignment the Assignee shall
have purchased pursuant to this Assignment Agreement the percentage interest
specified in Item 3 of Schedule 1 of all outstanding rights and obligations
under the Credit Agreement and the other Loan Documents. The aggregate
Commitment (or Loans, if the applicable Commitment has been terminated)
purchased by the Assignee hereunder is set forth in Item 4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of Schedule
1 or two (2) Business Days (or such shorter period agreed to by the
Administrative Agent) after a Notice of Assignment substantially in the form of
Exhibit I attached hereto has been delivered to the Agent. In no event will the
Effective Date occur if the payments required to be made by the Assignee to the
Assignor on the Effective Date under Sections 4 and 5 hereof are not made on the
proposed Effective Date, unless otherwise agreed to in writing by Assignor and
Assignee. The Assignor will notify the Assignee of the proposed Effective Date
no later than the Business Day prior to the proposed Effective Date. As of the
Effective Date, (i) the Assignee shall have the rights and obligations of a
Lender under the Loan Documents with respect to the rights and obligations
assigned to the Assignee hereunder and (ii) the Assignor shall relinquish its
rights and be released from its corresponding obligations under the Loan
Documents with respect to the rights and obligations assigned to the Assignee
hereunder.
4. PAYMENTS OBLIGATIONS. On and after the Effective Date, the Assignee
shall be entitled to receive from the Administrative Agent all payments of
principal, interest and fees with respect to the interest assigned hereby. The
Assignee shall advance funds directly to the Administrative Agent with respect
to all Loans and reimbursement payments made on or after the Effective Date with
respect to the interest assigned hereby. [In consideration for the sale and
assignment of Loans hereunder, (i) the Assignee shall pay the Assignor, on the
Effective Date, an amount equal to the principal amount of the portion of all
Adjusted Alternate Base Rate Loans assigned to the Assignee hereunder and (ii)
with respect to each ratable LIBOR Advance made by the Assignor and assigned to
the Assignee hereunder which is outstanding on the Effective Date, (a) on the
last day of the Interest Period therefor or (b) on such earlier date agreed to
by the Assignor and the Assignee or (c) on the date on which any such Loan
either becomes due (by acceleration or otherwise) or is prepaid (the date as
described in the foregoing clauses (a), (b) or (c) being hereinafter referred to
as the "Fixed Due Date"), the Assignee shall pay the Assignor an amount equal to
the principal amount of the portion of such
Loan assigned to the Assignee which is outstanding on the Fixed Due Date. If the
Assignor and the Assignee agree that the applicable Fixed Due Date for such Loan
shall be the Effective Date, they shall agree, solely for purposes of dividing
interest paid by the Borrower on such Loan, to an alternate interest rate
applicable to the portion of such Loan assigned hereunder for the period from
the Effective Date to the end of the related Interest Period (the "Agreed
Interest Rate") and any interest received by the Assignee in excess of the
Agreed Interest Rate, with respect to such Loan for such period, shall be
remitted to the Assignor. In the event a prepayment of any Loan which is
existing on the Effective Date and assigned by the Assignor to the Assignee
hereunder occurs after the Effective Date but before the applicable Fixed Due
Date, the Assignee shall remit to the Assignor any excess of the funding
indemnification amount paid by the Borrower under Section 4.4 of the Credit
Agreement an account of such prepayment with respect to the portion of such Loan
assigned to the Assignee hereunder over the amount which would have been paid if
such prepayment amount were calculated based on the Agreed Interest Rate and
only covered the portion of the Interest Period after the Effective Date. The
Assignee will promptly remit to the Assignor (i) the portion of any principal
payments assigned hereunder and received from the Administrative Agent with
respect to any such Loan prior to its Fixed Due Date and (ii) any amounts of
interest on Loans and fees received from the Administrative Agent which relate
to the portion of the Loans assigned to the Assignee hereunder for periods prior
to the Effective Date, in the case of ratable Adjusted Alternate Base Rate Loans
or Fees, or the Fixed Due Date, in the case of LIBOR Loans, and not previously
paid by the Assignee to the Assignor.]* In the event that either party hereto
receives any payment to which the other party hereto is entitled under this
Assignment Agreement, then the party receiving such amount shall promptly remit
it to the other party hereto.
5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the Assignor
a fee on each day on which a payment of interest is made under the Credit
Agreement with respect to the amounts assigned to the Assignee hereunder (other
than a payment of interest attributable to the period prior to the Effective
Date or, in the case of LIBOR Loans, the Payment Date, which the Assignee is
obligated to deliver to the Assignor pursuant to Section 4 hereof). The amount
of such fee shall be the difference between (i) the interest or fee, as
applicable, paid with respect to the amounts assigned to the Assignee hereunder
and (ii) the interest or fee, as applicable, which would have been paid with
respect to the amounts assigned to the Assignee hereunder if each interest rate
was calculated at the rate of % rather than the actual percentage used to
calculate the interest rate paid by the Borrower. In addition, the Assignee
agrees to pay ___% of the fee required to be paid to the Agent in connection
with this Assignment Agreement. [This sentence can be revised appropriately
based on how the fee is being paid.]
*Each Assignor may insert its standard provisions in lieu of the payment terms
included in Sections 4 and 5 of this Exhibit.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor. It is
understood and agreed that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor nor
any of its officers, directors, employees, agents or attorneys shall be
responsible for (i) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectability of any Loan Document, including
without limitation, documents granting the Assignor and the other Lenders a
security interest in assets of the Borrower or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of the
Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of the
the terms or provisions of any of the Loan Documents, (v) inspecting any of the
Property, books or records of the Borrower, its Subsidiaries or Investment
Affiliates, (vi) the validity, enforceability, perfection, priority, condition,
value or sufficiency of any collateral securing or purporting to secure the
Loans or (vii) any mistake, error of judgment, or action taken or omitted to
be taken in connection with the Loans or the Loan Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that it
has received a copy of the Credit Agreement and the other Loan Documents,
together with copies of the financial statements requested by the Assignee and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment Agreement, (ii)
agrees that it will, independently and without reliance upon the Administrative
Agent, Syndication Agent, the Arranger, the Assignor or any other Lender and
based on such documents and information at it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, (iii) appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto, (iv)
agrees that 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, (v) agrees that its payment instructions and notice
instructions are as set forth in the attachment to Schedule 1, (vi) 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, [and (vii) attaches the forms prescribed by
the Internal Revenue Service of the United States certifying that the Assignee
is entitled to receive payments under the Loan Documents without deduction or
withholding of any United States federal income taxes].** **to be inserted if
the Assignee is not incorporated under the laws of the United States, or a state
thereof.
8. INDEMNITY. The Assignee agrees to indemnify and hold harmless the
Assignor against any and 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 Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee shall
have the right pursuant to Section 13.3.1 of the Credit Agreement to assign the
rights which are assigned to the Assignee hereunder to any entity or person,
provided that (i) any such subsequent assignment does not violate any of the
terms and conditions of the Loan Documents or any law, rule, regulation, order,
writ, judgment, injunction or decree and that any consent required under the
terms of the Loan Documents has been obtained and (ii) unless the prior written
consent of the Assignor is obtained, the Assignee is not thereby released from
its obligations to the Assignor hereunder, if any remain unsatisfied, including,
without limitation, its obligations under Sections 4, 5 and 8 hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the
Aggregate Commitment occurs between the date of this Assignment Agreement and
the Effective Date, the percentage interest specified in Item 3 of Schedule 1
shall remain the same, but the dollar amount purchased shall be recalculated
based on the reduced Aggregate Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached
Notice of Assignment embody the entire agreement and understanding between the
parties hereto and supersede all prior agreements and understandings between the
parties hereto relating to the subject matter hereof.
12. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Georgia.
13. NOTICES. Notices shall be given under this Assignment Agreement in
the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto until notice of a change is delivered) shall be
the address set forth in the attachment to Schedule 1.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
[NAME OF ASSIGNOR]
By:
------------------------------------
Title:
------------------------------------
[NAME OF ASSIGNEE]
By:
------------------------------------
Title:
------------------------------------
SCHEDULE 1 TO
ASSIGNMENT AGREEMENT
1. Description and Date of Credit Agreement:
2. Date of Assignment Agreement: _______________, 19__
3. Amounts (As of Date of Item 2 above):
a. Aggregate Commitment
(Loans)* under
Credit Agreement $
-------------------
b. Assignee's Percentage
of the Aggregate Commitment
purchased under this
Assignment Agreement** %
------------------
4. Amount of Assignee's Commitment (Loan Amount)*
Purchased under this Assignment Agreement $
-------------------
5. Amount of Assignor's Commitment (Loan Amount)
After Purchase under this Assignment Agreement $
-------------------
6. Proposed Effective Date:
-------------------
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
---------------------------- ---------------------------
Title: Title:
---------------------------- ---------------------------
* If a Commitment has been terminated, insert outstanding Loans in place of
Commitment
** Percentage taken to 10 decimal places
ATTACHMENT TO SCHEDULE 1 TO
ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information
Sheet, which must include notice address and account
information for the Assignor and the Assignee
EXHIBIT "I" TO
ASSIGNMENT AGREEMENT
NOTICE OF ASSIGNMENT
______________, 19___
To: [NAME OF ADMINISTRATIVE AGENT]
______________________________
______________________________
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that Unsecured Revolving Credit Agreement (the "Credit
Agreement") described in Item 1 of Schedule 1 attached hereto ("Schedule 1").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings attributed to them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered to
the Administrative Agent pursuant to Section 13.3.1 of the Credit Agreement.
3.The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of ___________, 19__ (the "Assignment"), pursuant to which,
among other things, the Assignor has sold, assigned, delegated and transferred
to the Assignee, and the Assignee has purchased, accepted and assumed from
the Assignor the percentage interest specified in Item 3 of Schedule 1 of all
outstandings, rights and obligations under the Credit Agreement. From and
after such purchase, the Assignee's Commitment shall be the amount specified
in Item 4 of Schedule 1 and the Assignor's Commitment shall be the amount
specified in Item 5 of Schedule 1. The Effective Date of the Assignment shall
be the later of the date specified in Item 5 of Schedule 1 or two (2) Business
Days (or such shorter period as agreed to by the Administrative Agent) after
this Notice of Assignment and any fee required by Section 13.3.1 of the Credit
Agreement have been delivered to the Administrative Agent, provided that the
Effective Date shall not occur if any condition precedent agreed to by the
Assignor and the Assignee or set forth in Section 13 of the Credit Agreement has
not been satisfied.
4. The Assignor and the Assignee hereby give to the Administrative
Agent notice of the assignment and delegation referred to herein. The Assignor
will confer with the Administrative Agent before the date specified in Item 6 of
Schedule 1 to determine if the Assignment Agreement will become effective on
such date pursuant to Section 3 hereof, and will confer with the Administrative
Agent to determine the Effective Date pursuant to Section 3 hereof if it occurs
thereafter. The Assignor shall notify the Administrative Agent if the Assignment
Agreement does not become effective on any proposed Effective Date as a result
of the failure to satisfy the conditions precedent agreed to by the Assignor and
the Assignee. At the request of the Administrative Agent, the Assignor will give
the Administrative Agent written confirmation of the satisfaction of the
conditions precedent.
5. The Assignor or the Assignee shall pay to the Administrative Agent
on or before the Effective Date the processing fee of $3,000 required by Section
13.3.1 of the Credit Agreement.
6. If Notes are outstanding on the Effective Date, the Assignor and the
Assignee request and direct that the Administrative Agent prepare and cause the
Borrower to execute and deliver new Notes or, as appropriate, replacements
notes, to the Assignor and the Assignee. The Assignor and, if applicable, the
Assignee each agree to deliver to the Administrative Agent the original Note
received by it from the Borrower upon its receipt of a new Note in the
appropriate amount.
7. The Assignee advises the Administrative Agent that notice and
payment instructions are set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none of the funds,
monies, assets or other consideration being used to make the purchase pursuant
to the Assignment 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.
9. The Assignee authorizes the Administrative Agent to act as its agent
under the Loan Documents in accordance with the terms thereof. The Assignee
acknowledges that the Administrative Agent has no duty to supply information
with respect to the Borrower or the Loan Documents to the Assignee until the
Assignee becomes a party to the Credit Agreement.*
*May be eliminated if Assignee is a party to the Credit Agreement prior to the
Effective Date.
NAME OF ASSIGNOR NAME OF ASSIGNEE
By: By:
------------------------------ ------------------------------
Title: Title:
------------------------------ ------------------------------
ACKNOWLEDGED AND CONSENTED TO
BY NATIONSBANK, N.A.,
as Administrative Agent
By:
------------------------------
Title:
------------------------------
[Attach photocopy of Schedule 1 to Assignment]
EXHIBIT J
FORM OF REQUEST FOR ADVANCE/PAYMENT/INTEREST RATE CONVERSION
Date: _______________________
TO: NationsBank, N.A., Agent
BORROWER: Equity Inns Partnership, L.P. and Equity Inns/West Virginia
Partnership, L.P.
LOAN: $25,000,000.00 Unsecured Revolving Credit Agreement ("Agreement")
dated March __, 1999. All capitalized terms not otherwise defined
herein shall have the meanings as set forth in the Agreement.
ADVANCE:
ADVANCE AMOUNT REQUESTED: $
---------------------
PROPOSED DATE OF ADVANCE: _____________________(if different from above)
ADVANCE TYPE: ______________________(Alternate Base Rate or
LIBOR Advance)
If a LIBOR Advance:
INTEREST PERIOD: ______________________(30, 60, 90, or 180 days)
EXPIRATION DATE OF
INTEREST PERIOD: ______________________
INTEREST RATE: ______________________(including Applicable
Margin)
INTENDED USE OF THE PROCEEDS:
AGENT IS AUTHORIZED TO CREDIT ACCOUNT NUMBER ________________ MAINTAINED WITH
AGENT FOR THE ABOVE ADVANCE.
********************************************************************************
PAYMENT:
PAYMENT AMOUNT REQUESTED: $
---------------------
PROPOSED DATE OF PAYMENT: _____________________(if different from above)
ADVANCE TYPE TO BE REPAID: _____________________(Alternate Base Rate or
LIBOR Advance)
If a LIBOR Advance, select tranche
to be repaid: $____________________(original dollar amount of
tranche)
_____________________(original expiration date
of tranche)
PREPAYMENT FEE TO BE
COLLECTED IN ADDITION TO
PAYMENT AMOUNT: _____________________
AGENT IS AUTHORIZED TO DEBIT ACCOUNT NUMBER _______________ MAINTAINED WITH
AGENT FOR THE ABOVE PAYMENT AMOUNT AND PREPAYMENT FEE.
EQUITY INNS PARTNERSHIP, L.P. AND EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P.
REQUEST FOR ADVANCE/PAYMENT/INTEREST RATE CONVERSION - CONTINUED
INTEREST RATE CONVERSION:
AMOUNT TO BE CONVERTED: $
---------------------
PROPOSED DATE OF CONVERSION: _____________________(if different from page
(Effective Date) one)
CONVERTING FROM:
Interest Rate Type: _____________________(Base Rate/LIBOR Rate)
If a LIBOR Advance, select tranche
to be repaid: $____________________(original dollar amount of
tranche)
_____________________(original expiration date
of tranche)
PREPAYMENT FEE TO BE COLLECTED:
CONVERTING TO:
Interest Rate Type: _____________________(Alternate Base Rate or
LIBOR)
If converting to LIBOR Rate, select:
INTEREST PERIOD: _____________________(30, 60, 90, or 180 days)
EXPIRATION DATE OF
INTEREST PERIOD: _____________________
INTEREST RATE: _____________________(including Applicable
Margin)
AGENT IS AUTHORIZED TO DEBIT ACCOUNT NUMBER _______________ OF BORROWER
MAINTAINED WITH AGENT FOR THE ABOVE PREPAYMENT FEE.
********************************************************************************
Borrower represents and warrants that:
1. no Default or Event of Default shall have occurred and be continuing under
the Agreement or any of the Loan Documents or any other Indebtedness of
the Borrower, Guarantor or their subsidiaries equal to or exceeding
$10,000,000.00 either singly or in the aggregate, prior to or subsequent to
this advance, conversion or continuation;
2. the representations and warranties contained in Article VI and VII of
the Agreement are true and correct as of the borrowing date or date
of conversion and/or continuation as and to the extent set forth;
3. the contemplated Advance does not exceed the Borrowing Base availability;
4. the incumbency of the authorized signatories has not been modified,
amended, or rescinded since the certificate of incumbency dated
___________________, 199__.
Equity Inns Partnership, L.P.
By: Equity Inns Trust, its general partner
By:
-------------------------------
Title:
-------------------------------
Equity Inns/West Virginia Partnership, L.P.
By: Equity Inns Services, Inc., its general
partner
By:
-------------------------------
Title:
-------------------------------
SCHEDULE 6.9
LITIGATION (BORROWERS)
1. Equity Inns Partnership, L.P. ("Equity") has received a notice of
zoning violation with respect to its Scottsdale (Phoenix), Arizona
property claiming insufficient parking. Equity is negotiating a
settlement agreement with the municipality, Equity's seller and an
adjacent owner whereby Equity would agree to pay the municipality a fee
in lieu of providing parking in an amount of $147,679.80, payable
without interest in 60 equal monthly installments of $2,461.33.
2 Equity has received a notice of delinquent business taxes due from
Equity's seller to the State of Nebraska for its Omaha, Nebraska site
for which Equity may be personally liable under state law since Equity
is deemed to have purchased the seller's business. Equity's contingent
liability, if Equity's seller fails to pay, should not exceed
approximately $50,000.
SCHEDULE 6.19
ENVIRONMENTAL COMPLIANCE
SCHEDULE 6.24
TRADE NAMES
"NONE"
SCHEDULE 6.25
SUBSIDIARIES (BORROWERS)
Name Entity Type Percentage Ownership
---------------------------- ----------------- ----------------------------
EQI Financing Partnership I, Tennessee limited 99% limited partner interest
L.P. partnership by Operating Partnership
Equity Inns/West Virginia Tennessee limited 99% limited partner interest
Partnership, L.P. partnership by Operating Partnership
Equity Inns Partnership II, Tennessee limited 99% limited partner interest
L.P. partnership by Operating Partnership
SCHEDULE 6.26
UNENCUMBERED ASSETS
SCHEDULE 7.8
LITIGATION (GUARANTORS)
SCHEDULE 7.16
SUBSIDIARIES (GUARANTORS)
Name Entity Type Percentage Ownership
----------------------------- --------------------- ------------------------
Equity Inns Trust Maryland real estate 100% by Equity Inns,
investment trust Inc.
Equity Inns Partnership, L.P. Tennessee limited approximately 96.2% by
partnership Equity Inns Trust
EQI Financing Partnership I, Tennessee limited 1% by EQI Financing
L.P. partnership Corporation; 99% by
Operating Partnership
EQI Financing Corporation Tennessee corporation 100% by Equity Inns
Trust
Equity Inns/West Virginia Tennessee limited 1% by Equity Inns
Partnership, L.P. partnership Services, Inc.; 99%
by Operating
Partnership
Equity Inns Services, Inc. Tennessee corporation 100% by Equity Inns,
Inc.