EXHIBIT 10.8
SECURED REVOLVING CREDIT AGREEMENT
DATED AS OF OCTOBER 26, 2000
AMONG
EQUITY INNS PARTNERSHIP, L.P.,
EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P.
AND
EQUITY INNS PARTNERSHIP II, L.P.,
AS BORROWER
AND
BANK ONE, NA,
CREDIT LYONNAIS NEW YORK BRANCH,
BANK OF AMERICA, N.A.,
NATIONAL BANK OF COMMERCE,
AMSOUTH BANK,
AND
UNION PLANTERS BANK, NATIONAL ASSOCIATION
AS LENDERS
AND
BANK ONE, NA,
AS ADMINISTRATIVE AGENT,
BANC ONE CAPITAL MARKETS, INC.,
AS CO-LEAD ARRANGER/BOOK MANAGER,
CREDIT LYONNAIS NEW YORK BRANCH,
AS SYNDICATION AGENT AND CO-LEAD ARRANGER/BOOK MANAGER
AND
BANK OF AMERICA, N.A.
AS DOCUMENTATION AGENT
SECURED REVOLVING CREDIT AGREEMENT
THIS SECURED REVOLVING CREDIT AGREEMENT is entered into as of October
26, 2000, 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 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.;
EQUITY INNS PARTNERSHIP II, L.P., a Tennessee limited partnership
having its principal place of business c/o Equity Inns, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Equity II"), the sole general partner
of which is Equity Inns Trust and the sole limited partner of which is the
Operating Partnership (the Operating Partnership, EIP/WV and Equity II being
referred to herein collectively as the "Borrower");
BANK ONE, NA ("Bank One"), 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 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇;
BANK OF AMERICA, N.A. ("Bank of America"), having an office at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇;
NATIONAL BANK OF COMMERCE, having an office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇;
AMSOUTH BANK ("AmSouth"), a state banking corporation, having an office
at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇▇▇▇ Tower, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇;
UNION PLANTERS BANK, NATIONAL ASSOCIATION, having an office at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇;
BANC ONE CAPITAL MARKETS, INC. ("BOCM"), as Co-Lead Arranger/Book
Manager;
CREDIT LYONNAIS, as Syndication Agent ("Syndication Agent") and Co-Lead
Arranger/Book Manager;
BANK OF AMERICA, as Documentation Agent ("Documentation Agent"); and
BANK ONE, as Administrative Agent ("Administrative Agent") for the
Lenders (as defined below).
RECITALS
A. The Borrower is primarily engaged in the business of acquiring,
developing and owning premium limited service, premium extended stay and
all-suite and full service hotel properties.
B. The Borrower, the Administrative Agent, and certain other lenders have
previously entered into an Amended and Restated Unsecured Revolving Credit
Agreement dated as of June 23, 1999 (the "Existing Agreement").
C. Borrower desires to repay the credit facility extended under the Existing
Agreement and replace it with this facility and another loan.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
Article I.
DEFINITIONS AND ACCOUNTING TERMS
Section I.1 Definitions. As used in this Agreement, the following terms
have the meanings set forth below:
"ABR Applicable Margin" means, as of any date with respect to any
Adjusted Alternate Base Rate Advance, the Applicable Margin in effect for such
Adjusted Alternate Base Rate Advance as determined in accordance with Section
2.6 hereof.
"Adjusted Alternate Base Rate" means a floating interest rate equal to
the Alternate Base Rate plus the ABR Applicable Margin changing when and as the
Alternate Base Rate and ABR Applicable Margin changes.
"Adjusted Alternate Base Rate Advance" means an Advance that bears
interest at the Adjusted Alternate Base Rate.
"Adjusted EBITDA" means, for any period, EBITDA adjusted to deduct from
EBITDA the sum of (a) the Agreed FF&E Reserve for all Properties of the
Consolidated Group during such period plus (b) the Consolidated Group Pro Rata
Share of the Agreed FF&E Reserve for all Properties of Investment Affiliates
during such period.
"Adjusted LIBOR Rate" means, with respect to a LIBOR Advance for any
day during the relevant LIBOR Interest Period, the sum of (i) the quotient of
(a) the Base LIBOR Rate applicable to such LIBOR Interest Period, divided by (b)
one minus the Reserve Requirement (expressed as a decimal) applicable to such
LIBOR Interest Period, plus the LIBOR Applicable Margin in effect on such day.
"Adjusted Net Operating Income" means, with respect to any Property,
Net Operating Income for such Property less the Agreed FF&E Reserve for such
Property.
"Administrative Agent" means Bank One, acting as agent for the Lenders
in connection with the transactions contemplated by this Agreement, and its
successors in such capacity.
"Advance" means a loan to the Borrower hereunder by one or more of the
Lenders pursuant to Section 2.1 hereof, whether such Advances are from time to
time, Adjusted Alternate Base Rate Advances, LIBOR Advances or Swingline Loans.
"Affiliate" means any Person directly or indirectly controlling,
controlled by or under direct or indirect common control with any other Person.
A Person shall be deemed to control another Person if the controlling Person
owns ten percent (10%) or more of any class of voting securities of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Aggregate Commitment" means, as of any date, the sum of all of the
Lenders' then-current Commitments, which on the Agreement Effective Date shall
be $125,000,000, subject to Borrower's right to reduce the Aggregate Commitment
pursuant to Section 2.17 or to increase the Aggregate Commitment pursuant to
Section 2.18.
"Agreed FF&E Reserve" means, with respect to any period and Property,
4% of gross room revenues for such Property during such period.
"Agreement" means this Secured Revolving Credit Agreement and all
amendments, modifications and supplements hereto.
"Agreement Effective Date" shall mean November 2, 2000.
"Allocated Facility Amount" means, at any time, the sum of all then
outstanding Advances (including all Swingline Loans) and the then Facility
Letter of Credit Obligations.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Commitment Fee Percentage" means, as of any date, the
percentage then in effect pursuant to the chart shown in Section 2.6.
"Applicable Margin" means the applicable margins set forth in the table
in Section 2.6 used to calculate the interest rate applicable to the various
types of Advances, which may vary from time to time in the manner set forth in
Section 2.6.
"Appraisal" shall mean an appraisal commissioned by the Administrative
Agent, and acceptable to the Administrative Agent and Required Lenders, in
compliance with the Financial Institutions Reform, Recovery and Enforcement Act
of 1989, as amended, and the regulations promulgated thereunder ("FIRREA") and
with the Uniform Standards of Professional Appraisal Practice.
"Appraised Value" shall mean the "as-is" appraised value of a Property
as shown on an Appraisal.
"Approved Management Agreement" means a management agreement with a
tenant under a Permitted Operating Lease which (i) will not have an adverse
effect upon the Collateral, (ii) contains terms which are commercially
reasonable and standard in the industry, (iii) is with any or
all of the following management companies or their Affiliates: Interstate
Management, Prime Hospitality, Starwood Hotels and Resorts, Bristol/Bass,
Crestline Capital, Marriott International, Meristar Hotels and Resorts, RFS
Hotels, Bristol, Hilton and any entity created for the purposes of hotel
management which was formed by individuals who as of the Agreement Effective
Date are directors and officers of Equity Inns, provided such officers and
directors continue to own a majority of the ownership interests in such entity
and have effective management control of such entity, and (iv) unless such
requirement has been otherwise waived by the Administrative Agent, is subject to
a lender-manager agreement with the Administrative Agent having the
subordination provisions attached hereto as Exhibit P and made a part hereof
and/or other provisions which are reasonably satisfactory to the Administrative
Agent in form and substance regarding the subordination of such management
agreement.
"Arrangers" means Banc One Capital Markets, Inc. ("BOCM") and Credit
Lyonnais, collectively.
"Assignment of Contracts" means an Assignment of Contracts in the form
of Exhibit O attached hereto and made a part hereof, assigning the agreements
relating to the Collateral.
"Assignment of Leases" means the collective reference to the
assignments of leases to be recorded against the Initial Collateral Pool Assets,
together with any assignments of leases on Properties added to Collateral
hereafter pursuant to Section 2.20 hereof, each of which shall be contained in
the Mortgage or Deed of Trust for such Collateral Pool Asset.
"Assumed Debt Amount" is defined in Section 9.11 hereof.
"Bank One" means Bank One, NA.
--------
"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, Equity II and
EIP/WV, on a joint and several basis, along with their respective permitted
successors and assigns.
"Borrowing Base" means, as of any date, the aggregate Collateral Pool
Asset Values of each then-current Collateral Pool Asset.
"Borrowing Base Availability" means, as of any date, the lesser of (a)
55% of the Borrowing Base or (b) the sum of (i) an amount which, if it were the
Allocated Facility Amount, would produce the Included Collateral Pool Debt
Service Coverage Ratio of 1.75 plus (ii) 55% of the aggregate Collateral Pool
Asset Values of the Excluded Properties.
"Borrowing Date" means a Business Day on which an Advance is made to
the Borrower.
"Borrowing Notice" is defined in Section 2.11(a) hereof.
"Business Day" means a day, other than a Saturday, Sunday or holiday,
on which banks are open for business in Chicago, Illinois, New York, New York
and, where such term is used in reference to the selection or determination of
the Adjusted LIBOR Rate, in London, England.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person which is not a corporation
and any and all warrants or options to purchase any of the foregoing.
"Cash Equivalents" shall mean (i) short-term obligations of, or fully
guaranteed by, the United States of America, (ii) commercial paper rated A-1 or
better by Standard and Poor's Corporation or P-1 or better by ▇▇▇▇▇'▇ Investors
Service, Inc., or (iii) certificates of deposit issued by and time deposits with
commercial banks (whether domestic or foreign) having capital and surplus in
excess of $100,000,000.
"Code" means the Internal Revenue Code of 1986 as amended from time to
time, or any replacement or successor statute, and the regulations promulgated
thereunder from time to time.
"Collateral" means all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by any
Security Document including, without limitation, the Collateral Pool Assets.
"Collateral Pool Assets" means the collective reference to the Initial
Collateral Pool Assets and any other Properties added as "Collateral Pool
Assets" from time to time under Section 2.20 hereof, provided that the term
"Collateral Pool Assets" as of any date shall not include any Collateral Pool
Asset which has been previously released from the applicable Mortgage and
Assignment of Leases under the procedure set forth in Section 2.19(c) hereof
(and not subsequently added as a "Collateral Pool Asset" under Section 2.20).
"Collateral Pool Asset Value" means, as of any date, for each Included
Collateral Pool Asset the most recent Appraised Value, unless the Borrower has
owned such Collateral Pool Asset for less than a year, in which case Collateral
Pool Asset Value shall be the lesser of the all-in acquisition cost of such
Property or the Appraised Value. For the Excluded Properties, the Collateral
Pool Asset Value will be the lesser of (i) the Total Cost of such Property, or
(ii) the "stabilized" appraised value of such Property as established by an
Appraisal, based upon stabilization assumptions and projections approved by the
Administrative Agent.
"Commitment" means the obligation of each Lender, subject to the terms
and conditions of this Agreement and in reliance upon the representations and
warranties herein, to make Advances not exceeding in the aggregate the amount
set forth opposite its signature below, or the amount stated in any subsequent
amendment hereto.
"Commitment Fee" is defined in Section 2.7.
"Compliance Certificate" is defined in Section 8.2(v).
"Consolidated Group" means the Borrower, the Guarantors and any other
subsidiary partnerships or entities of any of them which are required under GAAP
to be consolidated with the Borrower and the Guarantors for financial reporting
purposes and does not include
Investment Affiliates.
"Consolidated Group Pro Rata Share" means, with respect to any
Investment Affiliate, the percentage of the total equity ownership interests
held by the Consolidated Group in the aggregate, in such Investment Affiliate,
determined by calculating the greater of (i) the percentage of the issued and
outstanding stock, partnership interests or membership interests in such
Investment Affiliate held by the Consolidated Group in the aggregate and (ii)
the percentage of the total book value of such Investment Affiliate that would
be received by the Consolidated Group in the aggregate, upon liquidation of such
Investment Affiliate after repayment in full of all Indebtedness of such
Investment Affiliate.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with all or any of the entities in the
Consolidated Group, are treated as a single employer under Sections 414(b) or
414(c) of the Code.
"Debt Service" means for any period, (a) Interest Expense for such
period plus (b) the aggregate amount of regularly scheduled principal payments
of Indebtedness (excluding optional prepayments and balloon principal payments
due on maturity in respect of any Indebtedness) required to be made during such
period by the Consolidated Group plus (c) the Consolidated Group Pro Rata Share
of all such regularly scheduled principal payments required to be made during
such period by any Investment Affiliate (other than Excluded Investment
Affiliates) on Indebtedness (excluding optional prepayments and balloon
principal payments due on maturity in respect of any Indebtedness) taken into
account in calculating Interest Expense, without duplication.
"Default" means an event which, with notice or lapse of time or both,
would become an Event of Default.
"Default Rate" means with respect to any Advance, a rate equal to the
interest rate applicable to such Advance plus four percent (4%) per annum.
"Defaulting Lender" means any Lender which fails or refuses to perform
its obligations under this Agreement within the time period specified for
performance of such obligation, or, if no time frame is specified, if such
failure or refusal continues for a period of five Business Days after written
notice from the Administrative Agent; provided that if such Lender cures such
failure or refusal, such Lender shall cease to be a Defaulting Lender.
"Dollars" and "$" mean United States Dollars.
"EBITDA" means (a) income as reported by the Consolidated Group in
accordance with GAAP (reduced to eliminate any income from Investment
Affiliates), but before (i) extraordinary items and gains or losses from the
sale of assets, (ii) Interest Expense, and (iii) depreciation, amortization and
income tax (if any) expense, plus (b) the Consolidated Group Pro Rata Share of
such income (adjusted as described above) of any Investment Affiliate (other
than Excluded Investment Affiliates), provided that no item of income or expense
shall be included more than once in such calculation even if it falls within
more than one of the foregoing categories. If a Property has been acquired
during the period for which EBITDA is being determined, then EBITDA will be
adjusted to reflect proforma net operating income for such Property as if it
were
owned for the entire period. If a Property has been sold during such period,
EBITDA shall be adjusted to exclude any net operating income from such Property
from the calculation of EBITDA.
"Effective Date" means each Borrowing Date and, if no Borrowing Date
has occurred in the preceding calendar month, the first Business Day of each
calendar month.
"EIP/WV" means Equity Inns/West Virginia Partnership, L.P., a Tennessee
limited partnership.
"Eligible Property" shall mean any Property for which each of the
following requirements listed in clauses (i) through (xiv) below is met with
respect to such Property. The Borrower shall establish and certify that each of
these requirements has been met when the Borrower seeks to have a Property that
is not one of the Initial Collateral Pool Assets included as a Collateral Pool
Asset pursuant to Section 2.20.
(i) such Property is located in the continental United
States,
(ii) a certificate of occupancy or similar evidence of
governmental approval, if available, has been issued with
respect to all occupied portions of such Property,
(iii) there exist no material title flaws affecting the
marketability of the Property,
(iv) there exist no material structural flaws with
respect to such Property as determined by a structural
inspection by an architect or engineer engaged by (or
acceptable to) the Administrative Agent on behalf of the
Lenders, provided that any such inspection shall either be
addressed to and for the benefit of the Administrative Agent
and the Lenders or provide that the Administrative Agent and
the Lenders may rely on such inspection,
(v) such Property is free of any material contamination
or other material violation of Environmental Laws as
determined by a phase I environmental report conforming to
ASTM Practice E 1527-97 and acceptable to the Administrative
Agent,
(vi) there exist no Liens on such Property, other than
Liens securing this Facility and those Permitted Liens
described in Subsections (i), (ii), (iii), (iv) and (vii) of
Section 9.6,
(vii) such Property is operated as one of the following:
a Hampton Inn, a Homewood Suites, a Residence Inn, an
AmeriSuites, or a hotel, resort or inn in the Marriott, Hilton
or Starwood line,
(viii) when such Property's Collateral Pool Asset Value
is added to the then- current Borrowing Base, at least 90% of
such sum shall be derived from Properties which are, directly
or indirectly, wholly owned and controlled by the Borrower,
(ix) when such Property's Collateral Pool Asset Value is
added to the then- current Borrowing Base, at least 90% of
such sum shall be derived from Properties which are, directly
or indirectly, held in fee simple by the Borrower or a Wholly-
Owned Subsidiary,
(x) the average occupancy of such Property for the most
recent period of 12 consecutive months for which financial
results have been delivered to the Administrative Agent shall
have been at least 60%, unless it is a Property Under
Development;
(xi) when such Property's Collateral Pool Asset Value is
added to the then- current Borrowing Base, the aggregate
Collateral Pool Asset Values of all Collateral Pool Assets
located in any one state shall not exceed 25% of the Borrowing
Base;
(xii) such Property's Collateral Pool Asset Value does
not exceed 20% of the Borrowing Base;
(xiii) such Property has been in operation for no less
than 24 months, unless such Property is an Excluded Property
or a Property Under Development, provided such Property Under
Development meets the requirements of Sections 8.3, and
(xiv) when such Property's Collateral Pool Asset Value is
added to the then- current Borrowing Base, the total amount of
the Borrowing Base attributable to Properties Under
Development shall not exceed the lesser of (i) 60% of the
aggregate Total Cost of such Properties Under Development
included in the Borrowing Base, (ii) $15,000,000 and (iii) the
difference between $25,000,000 and the book value of the
Consolidated Group's investment in Excluded Investment
Affiliates.
"Environmental Indemnity" means an Indemnity Agreement in the form of
Exhibit A, relating to possible environmental liabilities associated with the
Collateral Pool Assets.
"Environmental Laws" means any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority having jurisdiction over any
member of the Consolidated Group or any Investment Affiliate, or their
respective assets, and regulating or imposing liability or standards of conduct
concerning protection of human health or the environment, as now or may at any
time hereafter be in effect, in each case to the extent the foregoing are
applicable to the operations of such member of the Consolidated Group or
Investment Affiliate, or any of their respective assets or Properties.
"Equity Inns" means Equity Inns, Inc., a Tennessee corporation.
"Equity II" means Equity Inns Partnership II, L.P., a Tennessee limited
partnership.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and regulations promulgated thereunder from time to time.
"Event of Default" means any event set forth in Article X hereof.
"Excluded Investment Affiliate" means Investment Affiliates whose
assets and liabilities shall be excluded from the calculations of the
Consolidated Group's compliance with the financial covenants of this Agreement
so long as the following conditions are met: (i) the Consolidated Group Pro Rata
Share of any such Investment Affiliate is less than 20%; (ii) the Consolidated
Group does not have voting control of, or the ability to otherwise direct the
actions of, such Investment Affiliate; (iii) no Indebtedness of such Investment
Affiliate is recourse to, or guaranteed by, any member of the Consolidated
Group; (iv) the aggregate book value in accordance with GAAP of the Consolidated
Group's investment in all Excluded Investment Affiliates does not exceed the
lesser of $15,000,000 and the difference between $25,000,000 and the amount of
the Borrowing Base attributable to Projects Under Development; and (v) the
Consolidated Group Pro Rata Share of the aggregate Indebtedness of all Excluded
Investment Affiliates (other than Excluded Investment Affiliates for which no
investment (negative or positive) is reported on the balance sheet of the
Consolidated Group) does not exceed $45,000,000. If at any time an Excluded
Investment Affiliate causes a violation of Section (v) above, such Investment
Affiliate shall cease to be an Excluded Investment Affiliate hereunder.
"Excluded Properties" means (a) the Homewood Suites located in Chicago
and Orlando for the period from the Agreement Effective Date until April 1,
2002, and (b) the AmeriSuites located in Las Vegas for the period from the
Agreement Effective Date until April 1, 2001.
"Existing Agreement" means that certain Amended and Restated Unsecured
Revolving Credit Agreement dated as of June 23, 1999 by and between the
Borrower, the Administrative Agent and certain other Lenders.
"Facility" means the secured revolving credit facility described in
Section 2.1.
"Facility Letter of Credit" means a Letter of Credit issued pursuant to
Article III of this Agreement.
"Facility Letter of Credit Fee" is defined in Section 3.8.
"Facility Letter of Credit Obligations" means, as at the time of
determination thereof, all liabilities, whether actual or contingent, of the
Borrower with respect to Facility Letters of Credit, including the sum of (a)
the Reimbursement Obligations and (b) the aggregate undrawn face amount of the
then outstanding Facility Letters of Credit.
"Facility Letter of Credit Sublimit" means $20,000,000.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"FF&E" means fixtures, furniture and equipment located at the
Properties.
"FF&E Deficiency" means the amount, if any, by which 4% of the gross
room revenues of the Consolidated Group during the preceding four fiscal
quarters, on a rolling basis, exceeds the actual expenditures by the
Consolidated Group for FF&E replacements or capital items at the Consolidated
Group's Properties during the same period.
"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 for the Properties 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
restructuring 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), (iii) deducting Preferred Stock Expense, and (iv)
adding back depreciation, amortization and all non-cash items. Annualized Funds
from Operations for such Person will be calculated for the four most recent
fiscal quarters for which financial results are available.
"GAAP" means generally accepted accounting principles in the United
States of America consistent with those utilized in preparing the audited
financial statements of the Consolidated Group required hereunder, without
adjustment under SEC Staff Accounting Bulletin No. 101.
"GMAC Loan" means that certain $97,020,000 loan from General Motors
Acceptance Corporation to GMAC Partnership.
"GMAC Partnership" means EQI Financing Partnership II, L.P., the
borrower under the GMAC Loan.
"Ground Lease Expense" means, for any period, all payments due from any
member of the Consolidated Group under a lease of land underlying a Property for
such period.
"Guarantee Obligation" means, as to any Person (the "guaranteeing
person"), any obligation (determined without duplication) of (a) the
guaranteeing person or (b) another Person (including, without limitation, any
bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counter indemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the maximum stated
amount of the primary obligation relating to such Guarantee Obligation (or, if
less, the maximum stated liability set forth in the instrument embodying such
Guarantee Obligation), provided, that in the absence of any such stated amount
or stated liability, the amount of such Guarantee Obligation shall be such
guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith.
"Guarantors" means collectively, Equity Inns Trust, a Maryland real
estate investment trust, Equity Inns Services, Inc., a Tennessee corporation and
Equity Inns.
"Guaranty" means the Guaranty executed by the Guarantors in the form
attached hereto as Exhibit D.
"Included Collateral Pool Assets" means, as of any date, all Collateral
Pool Assets which are not Excluded Properties as of such date.
"Included Collateral Pool Debt Service Coverage Ratio" means, as of any
date, for a specified Allocated Facility Amount, the ratio of (a) the aggregate
Adjusted Net Operating Income of all Included Collateral Pool Assets for the
most recent four (4) consecutive fiscal quarters for which financial statements
have been delivered to the Administrative Agent to (b) the greater of (x) the
aggregate interest that would have accrued on such specified Allocated Facility
Amount, for the most recent four (4) consecutive fiscal quarters at an interest
rate equal to the average interest rate under the Facility for such period or
(y) the annual principal and interest payments that would be required to fully
amortize a loan in a principal amount equal to such specified Allocated Facility
Amount if paid in equal monthly installments over a period of 25 years at an
interest rate equal to the yield as of the last Business Day of the most
recently completed fiscal quarter on those obligations of the U.S. Treasury
having a maturity date closest to a date 10 years after such fiscal quarter end,
plus 2.50% per annum.
"Indebtedness" of any Person at any date means without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade liabilities and other accounts payable, and accrued expenses
incurred in the ordinary course of business and payable in accordance with
customary practices), to the extent such obligations constitute indebtedness for
the purposes of GAAP, (c) any other indebtedness of such Person which is
evidenced by a note, bond, debenture or similar instrument, (d) all obligations
of such Person under financing leases and capital leases, (e) all obligations of
such Person in respect of acceptances issued or created for the account of such
Person, (f) all Guarantee Obligations of such Person (excluding in any
calculation of consolidated indebtedness of such Person, Guarantee Obligations
of such Person in respect of primary obligations of any of its Subsidiaries),
(g) all reimbursement obligations of such Person for letters of credit and other
contingent liabilities, (h) all liabilities secured by any Lien (other than
Liens for taxes not yet due and payable) on any property owned by such Person
even though such Person has not assumed or otherwise become liable for the
payment thereof, (i) any
repurchase obligation or liability of such Person or any of its Subsidiaries
with respect to accounts or notes receivable sold by such Person or any of its
Subsidiaries, and (j) such Person's pro rata share of debt in Investment
Affiliates (other than Excluded Investment Affiliates) and any loans where such
Person is liable as a general partner.
"Initial Collateral Pool Assets" means the Properties described on
Schedule 1 attached hereto and made a part hereof which shall be included as
Collateral under the Loan Documents as of the Agreement Effective Date.
"Insolvency" means insolvency as defined in the United States
Bankruptcy Code, as amended. "Insolvent" when used with respect to a Person,
shall refer to a Person who satisfies the definition of Insolvency.
"Interest Expense" all interest expense of the Consolidated Group
determined in accordance with GAAP plus (i) capitalized interest not covered by
an interest reserve from a loan facility, plus (ii) the allocable portion (based
on liability) of any accrued or paid interest incurred on any obligation for
which any member of the Consolidated Group is wholly or partially liable under
repayment, interest carry, or performance guarantees, or other relevant
liabilities, plus (iii) the Consolidated Group Pro Rata Share of any accrued or
paid interest incurred on any Indebtedness of any Investment Affiliate, (other
than Excluded Investment Affiliates), whether recourse or non-recourse, provided
that no expense shall be included more than once in such calculation even if it
falls within more than one of the foregoing categories.
"Interest Period" means a LIBOR Interest Period.
"Investment Affiliate" means any Person in which any member of the
Consolidated Group, directly or indirectly, has an ownership interest, whose
financial results are not consolidated under GAAP with the financial results of
the Consolidated Group on the consolidated financial statements of the
Consolidated Group.
"Issuance Date" is defined in Section 3.4(a)(2).
"Issuance Notice" is defined in Section 3.4(c).
"Issuing Bank" means, with respect to each Facility Letter of Credit,
the Lender which issues such Facility Letter of Credit. Bank One shall be the
sole Issuing Bank.
"Lenders" means Bank One 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.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Letter of Credit Collateral Account" is defined in Section 3.9.
"Letter of Credit Request" is defined in Section 3.4(a).
"LIBOR Advance" means an Advance that bears interest at the Adjusted
LIBOR Rate.
"LIBOR Applicable Margin" means, as of any date with respect to any
LIBOR Advance, the Applicable Margin in effect for such LIBOR Advance as
determined in accordance with Section 2.6 hereof.
"LIBOR Interest Period" means, with respect to a LIBOR Advance, a
period of one, two, three or six months, as selected in advance by the Borrower.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien, charge or easement of any kind (including, without limitation, any
conditional sale or other title retention agreement or lease in the nature
thereof, any filing or agreement to file a financing statement as debtor under
the Uniform Commercial Code on any property leased to any Person under a lease
which is not in the nature of a conditional sale or title retention agreement,
or any subordination agreement in favor of another Person).
"Limited Recourse Guaranty" means a guaranty in the form of Exhibit C
attached hereto executed by each entity other than a Borrower that owns a
Collateral Pool Asset.
"Loan" means, with respect to a Lender, such Lender's portion of any
Advance.
"Loan Documents" means this Agreement, the Notes, the Guaranty, the
Limited Recourse Guaranties, the Environmental Indemnity Agreement and the
Security Documents and any and all other agreements or instruments required
and/or provided to Lenders hereunder or thereunder, as any of the foregoing may
be amended from time to time.
"Loan Parties" the Borrower, the Guarantors and each other Affiliate of
the Borrower which is a party to a Loan Document.
"Margin Stock" has the meaning ascribed to it in Regulation U of the
Board of Governors of the Federal Reserve System.
"Material Adverse Effect" means, with respect to any matter, that such
matter in the Required Lenders' good faith judgment may (x) materially and
adversely affect the business, properties, condition or results of operations of
the Consolidated Group taken as a whole, or (y) constitute a non-frivolous
challenge to the validity or enforceability of any material provision of any
Loan Document against any obligor party thereto.
"Material Adverse Financial Change" shall be deemed to have occurred if
the Required Lenders, in their good faith judgment, determine that a material
adverse financial change has occurred which could prevent timely repayment of
any Advance hereunder or materially impair Borrower's ability to perform its
obligations under any of the Loan Documents.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
radon, polychlorinated biphenyls and urea-formaldehyde insulation.
"Maturity Date" means October 26, 2003 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.
"Mortgages" means the collective reference to the deeds of trust and
mortgages to be recorded against the Initial Collateral Pool Assets, together
with any deeds of trust and mortgages on Properties added to Collateral
hereafter pursuant to Section 2.20 hereof, each of which shall be substantially
in the form attached hereto as Exhibit M and made a part hereof, conformed as
required by the Administrative Agent to applicable local law.
"Net Cash Proceeds" is defined in Section 9.11 hereof.
"Net Operating Income" means, with respect to any Property, for any
period, all income attributable to such Property less all expenses directly
related to such Property (except for any expenditures for FF&E replacement and
capital improvements), such as real estate taxes, ground lease payments, base
management fees and franchise fees, 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).
"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, the Facility Letter of Credit
Obligations and all accrued and unpaid fees and all other obligations of
Borrower to the Administrative Agent or any or all of the Lenders arising under
this Agreement or any of the other Loan Documents.
"Operating Partnership" means Equity Inns Partnership, L.P., a
Tennessee limited partnership.
"Owner" means, as of any date, each of the Wholly Owned Subsidiaries
and entities comprising the Borrower that own a Property included as a
Collateral Pool Asset.
"Participants" is defined in Section 13.2.1 hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Percentage" means, with respect to each Lender, the applicable
percentage of the then- current Aggregate Commitment represented by such
Lender's then-current Commitment.
"Permitted 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 Interstate Hotels
Management, Inc. on substantially the same lease form as has previously been
approved by the Administrative Agent and the Syndication Agent (which includes
without limitation a guaranty of the tenant's obligations by Interstate Hotels
Management, Inc. (or Patriot American Hospitality, Inc.) and Interstate Hotels,
LLC and a cross-default provision with all other leases between either of the
entities comprising the Borrower or a Wholly-Owned Subsidiary and any of such
tenants) and with specific rental terms for each lease to be approved by the
Administrative Agent, or (ii) a lease between one of the entities comprising the
Borrower or a Wholly-Owned Subsidiary and Prime Hospitality Corporation, or a
subsidiary thereof on substantially the same lease form as has previously been
approved by the Administrative Agent and the Syndication Agent and with specific
rental terms for each lease to be approved by the Administrative Agent, or (iii)
similar leases with other entities similarly approved as to lease form and
specific rental terms, provided that the identity of each such other entity is
approved by either (A) the Administrative Agent and the Syndication Agent so
long as such other entity, when aggregated with all other entities not named in
clauses (i) or (ii) above or previously approved by the Required Lenders under
clause (B) of this clause (iii), does not lease Properties representing more
than 5% of the total rooms in all Properties then owned by the Consolidated
Group or (B) the Required Lenders if such entity is not eligible for approval
under clause (A) of this clause (iii). Notwithstanding the foregoing, the
Lenders acknowledge that after the Agreement Effective Date Borrower may (a)
terminate the Permitted Operating Leases on some or all of the Properties, or
(b) cause the tenant under such Permitted Operating Leases on some or all of the
Properties to assign the Permitted Operating Lease to one or more taxable Wholly
Owned Subsidiaries of Equity Inns which will enter into management agreements
with existing or newly-formed management companies. If Borrower terminates the
Permitted Operating Leases, it will enter into new Permitted Operating Leases on
the same Properties with one or more taxable Wholly Owned Subsidiaries of Equity
Inns. The Lenders' consent shall not be required for any of such transfers of
the tenant's position under such Permitted Operating Leases and such operating
leases shall continue to be "Permitted Operating Leases" so long as (a) each of
such lease transfers will not have an adverse effect upon the Collateral, (b)
the new tenant has executed and delivered to the Administrative Agent (i) a
Subordination Agreement in the form of Exhibit Q-2 and (ii) a joinder in the
Security Agreement subjecting its interest in any of its personal property which
would otherwise be deemed to be a part of the Collateral Pool Assets to the
Liens securing the Obligations, and (c) the management agreements qualify as
Approved Management Agreements hereunder.
"Permitted Liens" are defined in Section 9.6 hereof.
"Person" means an individual, a corporation, a limited or general
partnership, an association, a joint venture or any other entity or
organization, including a governmental or political subdivision or an agent or
instrumentality thereof.
"Plan" means an employee benefit plan as defined in Section 3(3) of
ERISA, whether or not terminated, as to which the Borrower or any member of the
Controlled Group may have any liability.
"Preferred Stock" means, for any Person, any preferred stock issued by
such Person.
"Preferred Stock Expense" means, for any period for any Person, the
aggregate dividend payments due to the holders of Preferred Stock of such
Person, whether payable in cash or in kind, and whether or not actually paid
during such period.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced by Bank One or its parent from time to time (which is not necessarily
the lowest rate charged to any customer), changing when and as such prime rate
changes.
"Property" means any real estate asset owned by a member of the
Consolidated Group or an Investment Affiliate and operated as a premium limited
service, premium extended stay or premium all-suite or full-service hotel
property.
"Property Under Development" means a Property under development (in
accordance with GAAP) on which construction of the hotel has commenced but which
has not been substantially completed and occupied and which is subject to a
Permitted Operating Lease and an Approved Management Agreement that will be
effective upon opening. A Property Under Development that is included as a
Collateral Pool Asset shall continue to be treated as a Property Under
Development until it has been open for at least 24 months.
"Purchasers" is defined in Section 13.3.1 hereof.
"Qualified Officer" means, with respect to any entity, the president,
the vice president, the treasurer, the chief financial officer, the chief
accounting officer or the controller of such entity if it is a corporation or of
such entity's general partner if it is a partnership.
"Rate Option" means the Adjusted Alternate Base Rate or the Adjusted
LIBOR Rate. The Rate Option in effect on any date shall always be the Adjusted
Alternate Base Rate unless the Borrower has properly selected the Adjusted LIBOR
Rate pursuant to Section 2.11 hereof.
"Recourse Indebtedness" means, with respect to any Person, Indebtedness
for borrowed money, whether as a maker or a guarantor, other than non-recourse
secured Indebtedness which limits the liability of the maker thereof to its
interest in the Properties given for such indebtedness, subject only to those
customary "carve-outs" to non-recourse status required by institutional mortgage
lenders.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Reimbursement Obligations" means at any time, the aggregate
liabilities of the Borrower to the Lenders, the Issuing Bank and the
Administrative Agent in respect of all payments or disbursements made by the
Lenders, the Issuing Bank and the Administrative Agent under or in respect of
the Facility Letters of Credit, and which have not been repaid by Borrower.
"REMIC Loan" means that certain $88,000,000 issuance of mortgage bonds
by the REMIC Partnership pursuant to the terms of an Indenture dated as of
February 6, 1997.
"REMIC Partnership" means EQI Financing Partnership I, L.P., the
borrower under the REMIC Loan which has as its sole limited partner, holding 99%
of the partnership interests therein, the Operating Partnership and as its sole
general partner, holding 1% of the partnership interests therein, EQI Financing
Corporation which is wholly-owned by Equity Inns Trust.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable Event regardless of the issuance of any such waivers in accordance
with either Section 4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means, as of any date, those Lenders holding, in the
aggregate, more than two-thirds (2/3) of the then-current Aggregate Commitment
or, if the Aggregate Commitment has been terminated, Lenders holding, in the
aggregate, more than two-thirds (2/3) of the aggregate unpaid principal amount
of the outstanding Advances.
"Reserve Requirement" means, with respect to a LIBOR Interest Period,
the maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"S&P" means Standard & Poor's Ratings Group and its successors.
"Security Documents" means the collective reference to the Mortgages,
the Assignments of Leases, the Guarantees, UCC Financing Statements, Assignment
of Contracts, and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any asset or assets of any Person to
secure the obligations and liabilities of the Borrower hereunder and under any
of the other Loan Documents or to secure any guarantee of any such obligations
and liabilities.
"Subsidiary" means as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person, and provided such corporation, partnership or other entity is
consolidated with such Person for financial reporting purposes under GAAP.
"Supermajority Lenders" means, as of any date, those Lenders holding,
in the aggregate, more than eighty percent (80%) of the then-current Aggregate
Commitment or, if the Aggregate Commitment has been terminated, Lenders holding,
in the aggregate, more than eighty percent (80%) of the aggregate unpaid
principal amount of the outstanding Advances.
"Swingline Advances" means, as of any date, collectively, all Swingline
Loans then outstanding under this Facility.
"Swingline Commitment" means the obligation of the Swingline Lender to
make Swingline Loans not exceeding $7,500,000, which is included in, and is not
in addition to, the Swingline Lender's total Commitment hereunder.
"Swingline Lender" shall mean Bank One, in its capacity as a Lender.
"Swingline Loan" means a loan made by the Swingline Lender pursuant to
Section 2.16 hereof.
"Tangible Net Worth" means "net worth", as determined in accordance
with GAAP, less intangible assets included in such net worth, less equity
investment in Excluded Investment Affiliates, plus accumulated depreciation.
"Total Cost" means, as of any date, (a) if the Property is owned by the
Consolidated Group, the sum of (i) the book value under GAAP of such Property
plus (ii) all depreciation on such Property previously reflected on the
Consolidated Group's financial statements, in accordance with GAAP, or (b) if
such Property is owned by an Investment Affiliate, the sum of (i) the
Consolidated Group Pro Rata Share of the book value under GAAP of such Property
plus (ii) the Consolidated Group Pro Rata Share of all depreciation on such
Property previously reflected on the Investment Affiliate's financial
statements, in accordance with GAAP.
"Total Indebtedness" means, as of any date, the sum of (i) all
Indebtedness of the Consolidated Group in existence on such date plus (ii) the
Consolidated Group Pro Rata Share of all Indebtedness of any Investment
Affiliate (other than Excluded Investment Affiliates), to the extent not
included in the Indebtedness described in clause (i), without duplication.
"Transferee" is defined in Section 13.4 hereof.
"Wholly-Owned Subsidiary" means a Subsidiary which is 100% owned,
directly or indirectly, by one or more of the entities comprising the Borrower.
The foregoing definitions shall be equally applicable to both the
singular and the plural forms of the defined terms.
Section I.2 Financial Standards. All financial computations required
of a Person under this Agreement shall be made, and all financial information
required under this Agreement shall be prepared, in accordance with GAAP,
except that if any Person's financial statements are not audited, such
Person's financial statements shall be prepared in accordance with the same
sound accounting principles utilized in connection with the financial
information submitted to Lenders with respect to such Person or the
Properties of such Person in connection with this Agreement and shall be
certified by an authorized representative of such Person.
Article II.
THE FACILITY
Section II.1 The Facility; Limitations on Borrowing.
Subject to the terms and conditions of this Agreement and in reliance
upon the representations and warranties of the Borrower and the Guarantors
contained herein, Lenders agree (x) to make Advances through the Administrative
Agent to Borrower from time to time prior to the Maturity Date and (y) to issue
Facility Letters of Credit under Article III of this Agreement, provided that
the making of any such Advance or the issuance of such Facility Letter of Credit
will not:
(i) cause the then-current Allocated Facility Amount
to exceed the then-current Aggregate Commitment; or
(ii) cause the then-current Allocated Facility Amount
to exceed the then-current Borrowing Base Availability; or
(iii) cause the then-current outstanding Swingline
Advances to exceed the Swingline Commitment; or
(iv) cause the then outstanding Facility Letters of
Credit Obligations to exceed the Facility Letter of Credit
Sublimit.
The Advances may be ratable Adjusted Alternate Base Rate Advances, ratable LIBOR
Advances or non-pro rata Swingline Loans. Except as provided in Sections 2.16
and 2.18 hereof, each Lender shall fund its Percentage of each such Advance and
no Lender will be required to fund any amounts which when aggregated with such
Lender's Percentage of (i) all other Advances then outstanding, (ii) all
Swingline Advances and (iii) all Facility Letter of Credit Obligations would
exceed such Lender's then-current Commitment. This facility ("Facility") is a
revolving credit facility and, subject to the provisions of this Agreement, the
Borrower may request Advances hereunder, repay such Advances and reborrow
Advances at any time prior to the Maturity Date. Unless and until the
Administrative Agent is otherwise advised in writing to the contrary by all of
the entities comprising the Borrower, all Loans shall be deemed to be requested
by the Operating Partnership and shall be funded directly to the Operating
Partnership and EIP/WV and Equity II each irrevocably authorizes the
Administrative Agent to honor requests for Advances made by the Operating
Partnership and to fund such Loans directly to the Operating Partnership.
Section II.2 Maturity Date. The Facility created by this Agreement, and the
Commitment of each Lender to lend hereunder, shall terminate on the Maturity
Date, unless sooner terminated in accordance with the terms of this Agreement.
Any outstanding Advances not previously repaid and all other unpaid Obligations
shall be paid in full by the Borrower on the Maturity Date.
Section II.3 Requests for Advances; Responsibility for Advances. Ratable
Advances shall be made available to Borrower by Administrative Agent in
accordance with Section 2.1 and Section 2.11(a) hereof. The obligation of each
Lender to fund its Percentage of each ratable Advance shall be several and not
joint.
Section II.4 Evidence of Credit Extensions. The Advances of each Lender
outstanding at any time shall be evidenced by the Notes. Each Note executed by
the Borrower shall be in a maximum principal amount equal to each Lender's
Percentage of the current Aggregate Commitment. Each Lender shall record
Advances and principal payments thereof on the schedule attached to its Note or,
at its option, in its records, and each Lender's record thereof shall be
conclusive absent Borrower furnishing to such Lender conclusive and irrefutable
evidence of an error made by such Lender with respect to that Lender's records.
Notwithstanding the foregoing, the failure to make, or an error in making, a
notation with respect to any Advance shall not limit or otherwise affect the
obligations of Borrower hereunder or under the Notes to pay the amount actually
owed by Borrower to Lenders.
Section II.5 Ratable and Non-Ratable Loans. Each Advance hereunder shall
consist of Loans made from the several Lenders ratably in proportion to their
Percentages, except for Swingline Loans which shall be made by the Swingline
Lender in accordance with Section 2.16. The ratable Advances may be Adjusted
Alternate Base Rate Advances, LIBOR Advances or a combination thereof, selected
by the Borrower in accordance with Sections 2.10 and 2.11.
Section II.6 Applicable Margins and Fees. The ABR Applicable Margin, the
LIBOR Applicable Margin and the Applicable Commitment Fee Percentage to be used
in calculating the interest rate applicable to different types of Advances and
the Commitment Fee shall vary from time to time in accordance with the ratio of
Total Indebtedness to EBITDA:
Ratio of LIBOR ABR Applicable
Total Indebtedness to Applicable Applicable Commitment
EBITDA Margin Margin Fee Percentage
-------------------- ---------- ---------- --------------
Less than 2.5 1.50% 0.50% 0.25%
2.5 or over, but less than 3.0 1.75% 0.75% 0.30%
3.0 or over, but less than 3.5 2.00% 1.00% 0.40%
3.5 or over, but less than 4.0 2.25% 1.25% 0.45%
4.0 or over, but less than 4.5 2.50% 1.50% 0.50%
4.5 or over, but less than 4.75 2.75% 1.75% 0.55%
The Applicable Margins and Applicable Commitment Fee Percentage will change
only quarterly upon delivery of a compliance certificate in the form of attached
hereto, reflecting the ratio of Total Indebtedness to EBITDA as of the last day
of the preceding fiscal quarter as disclosed on the financial statements for
such fiscal quarter delivered to the Lenders.
Section II.7 Commitment Fee. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee (the
"Commitment Fee") from the Agreement Effective Date to and including the
Maturity Date, calculated at the then-current per annum Applicable Commitment
Fee Percentage (calculated for actual days elapsed on the basis of a 360 day
year) on the daily unborrowed portion of such Lender's Commitment (which is
equal to the difference between (a) such Lender's Commitment on such day and (b)
the then outstanding Loans owed to such Lender plus the Lender's Percentage of
any outstanding and undrawn Facility Letters of Credit) payable quarterly in
arrears on the last day of each calendar quarter hereafter beginning December
31, 2000 and ending on the Maturity Date. Notwithstanding the foregoing, all
accrued Commitment Fees shall be payable on the effective date of any
termination of the obligations of the Lenders to make Loans hereunder. The
Swingline Commitment shall be treated in the same fashion as the other
Commitments for purposes of calculating the Commitment Fees and only the actual
Swingline Loans outstanding on any day shall be included in the aggregate amount
of outstanding Loans owed to the Swingline Lender on such day.
Section II.8 Other Fees.
(a) The Borrower agrees to pay all fees payable to the
Administrative Agent and Banc One Capital Markets, Inc. pursuant to the
Borrower's prior letter agreement with them.
(b) The Borrower also agrees to pay the fees described in Section 3.8
below with respect to any Facility Letters of Credit.
Section II.9 Minimum Amount of Each Advance. Each LIBOR Advance shall be in
the minimum amount of $2,000,000 (and in multiples of $100,000 if in excess
thereof), each Adjusted Alternate Base Rate Advance shall be in the minimum
amount of $1,000,000 (and in multiples of $100,000 if in excess thereof) and
each Swingline Advance shall be in the minimum amount of $50,000 (and in
multiples of $25,000 if in excess thereof), provided, however, that any Adjusted
Alternate Base Rate Advance may be in the amount of the unused Aggregate
Commitment.
Section II.10 Interest.
(a) The outstanding principal balance under the Notes shall bear
interest from time to time at a rate per annum equal to:
(i) the Adjusted Alternate Base Rate; or
(ii) at the election of Borrower with respect to all or
portions of the Obligations, the Adjusted LIBOR Rate.
(b) All interest shall be calculated for actual days elapsed on the
basis of a 360-day year. Interest accrued on each Adjusted Alternate Base Rate
Advance, LIBOR Advance and Swingline Loan shall be payable in arrears from time
to time on each of (i) the first day of each calendar month, commencing with the
first such date to occur after the date hereof, (ii) the Maturity Date, and
(iii) the effective date of any termination of the Aggregate Commitment in full
pursuant to Section 2.17. Interest shall not be payable for the day of any
payment on the amount paid if payment is received by Administrative Agent prior
to noon (Chicago time). If any payment of principal or interest under the Notes
shall become due on a day that is not a Business Day, such payment shall be made
on the next succeeding Business Day and, in the case of a payment of principal,
such extension of time shall be included in computing interest due in connection
with such payment; provided that for purposes of Section 10.1 hereof, any
payments of principal described in this sentence shall be considered to be "due"
on such next succeeding Business Day.
Section II.11 Selection of Rate Options and LIBOR Interest Periods.
(a) Borrower, from time to time, may select the Rate Option and, in
the case of each LIBOR Advance, the commencement date (which shall be a Business
Day) and the length of the LIBOR Interest Period applicable to each LIBOR
Advance. Borrower shall give Administrative Agent irrevocable notice (a
"Borrowing Notice") not later than 11:00 a.m. (Chicago time) (i) at least one
Business Day prior to an Adjusted Alternate Base Rate Advance, (ii) at least
three (3) Business Days prior to a ratable LIBOR Advance, and (iii) not later
than 11:00 a.m. (Chicago time) on the Borrowing Date for each Swingline Loan,
specifying:
(i) the Borrowing Date, which shall be a Business Day,
of such Advance,
(ii) the aggregate amount of such Advance,
(iii) the type of Advance selected, and
(iv) in the case of each LIBOR Advance, the LIBOR
Interest Period applicable thereto.
The Borrower shall also deliver together with each Borrowing Notice the
compliance certificate required in Section 5.2 and otherwise comply with the
conditions set forth in Section 5.2 for Advances. Administrative Agent shall
provide each Lender by facsimile with a copy of each Borrowing Notice and
compliance certificate by 3:00 p.m. on the same Business Day it is received.
Not later than noon (Chicago time) on each Borrowing Date, each Lender
shall make available its Loan or Loans, in funds immediately available in
Chicago to the Administrative Agent. Administrative Agent will promptly make the
funds so received from the Lenders available to the Borrower.
(b) Administrative Agent shall, as soon as practicable after receipt
of a Borrowing Notice, determine the Adjusted LIBOR Rate applicable to the
requested ratable LIBOR Advance and inform Borrower and Lenders of the same.
Each determination of the Adjusted LIBOR Rate by Administrative Agent shall be
conclusive and binding upon Borrower in the absence of manifest error.
(c) If Borrower shall prepay a LIBOR Advance other than on the last
day of the LIBOR Interest Period applicable thereto, Borrower shall be
responsible to pay all amounts due to Lenders as required by Section 4.4 hereof.
(d) As of the end of each LIBOR Interest Period selected for a ratable
LIBOR Advance, the interest rate on the LIBOR Advance will become the Adjusted
Alternate Base Rate, unless Borrower has once again selected a LIBOR Interest
Period in accordance with the timing and procedures set forth in Section
2.11(g).
(e) The right of Borrower to select the Adjusted LIBOR Rate for an
Advance pursuant to this Agreement is subject to the availability to Lenders of
a similar option. If Administrative Agent determines that (i) deposits of
Dollars in an amount approximately equal to the LIBOR Advance for which the
Borrower wishes to select the Adjusted LIBOR Rate are not generally available at
such time in the London interbank eurodollar market, or (ii) the rate at which
the deposits described in subsection (i) herein are being offered will not
adequately and fairly reflect the costs to Lenders of maintaining an Adjusted
LIBOR Rate on an Advance or of funding the same in such market for such LIBOR
Interest Period, or (iii) reasonable means do not exist for determining an
Adjusted LIBOR Rate, or (iv) the Adjusted LIBOR Rate would be in excess of the
maximum interest rate which Borrower may by law pay, then in any of such events,
Administrative Agent shall so notify Borrower and Lenders and such Advance shall
bear interest at the Adjusted Alternate Base Rate. Notwithstanding the
foregoing, the Lenders shall not be obligated to match fund their LIBOR
Advances.
(f) In no event may Borrower elect a LIBOR Interest Period which would
extend beyond the Maturity Date. Unless Lenders agree thereto, in no event may
Borrower have more than ten (10) different LIBOR Interest Periods for LIBOR
Advances outstanding at any one time.
(g) Conversion and Continuation.
(i) Borrower may elect from time to time, subject to the
other provisions of this Section 2.11, to convert all or any
part of a ratable Advance into any other type of Advance;
provided that any conversion of a ratable LIBOR Advance shall
be made on, and only on, the last day of the LIBOR Interest
Period applicable thereto.
(ii) Adjusted Alternate Base Rate Advances shall continue
as Adjusted Alternate Base Rate Advances unless and until such
Adjusted Alternate Base Rate Advances are converted into
ratable LIBOR Advances pursuant to a Conversion/Continuation
Notice from Borrower in accordance with Section 2.11(g)(iv).
Ratable LIBOR Advances shall continue until the end of the
then applicable LIBOR Interest Period therefor, at which time
each such Advance shall be automatically converted into an
Adjusted Alternate Base Rate Advance unless the Borrower shall
have given the Administrative Agent a Conversion/Continuation
Notice in accordance with Section 2.11(g)(iv) requesting that,
at the end of such LIBOR Interest Period, such Advance either
continue as an Advance of such type for the same or another
LIBOR Interest Period.
(iii) Notwithstanding anything to the contrary contained
in Sections 2.11(g)(i) or (g)(ii), no Advance may be converted
into a LIBOR Advance or continued as a LIBOR Advance (except
with the consent of the Required Lenders) when any Monetary
Default or Event of Default has occurred and is continuing.
(iv) The Borrower shall give the Administrative Agent
irrevocable notice (a "Conversion/Continuation Notice") of
each conversion of an Advance or continuation of a LIBOR
Advance not later than 11:00 a.m. (Chicago time) on the
Business Day immediately preceding the date of the requested
conversion, in the case of a conversion into an Adjusted
Alternate Base Rate Advance, or 11:00 a.m. (Chicago time) at
least three (3) Business Days prior to the date of the
requested conversion or continuation, in the case of a
conversion into or continuation of a ratable LIBOR Advance,
specifying: (1) the requested date (which shall be a Business
Day) of such conversion or continuation; (2) the amount and
type of the Advance to be converted or continued; and (3) the
amounts and type(s) of Advance(s) into which such Advance is
to be converted or continued and, in the case of a conversion
into or continuation of a ratable LIBOR Advance, the duration
of the LIBOR Interest Period applicable thereto.
Section II.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 Bank One for each payment of
principal, interest and fees as it becomes due hereunder. Amounts paid to or
held by the Administrative Agent for the payment of Loans shall not be deemed
paid to a Lender until the Business Day that such amounts are received by such
Lender. If amounts are received by the Administrative Agent from the Borrower
prior to the applicable times stated herein and the Administrative Agent fails
to make a Lender's portion of such amount available to such Lender by close of
business on such Business Day, the Borrower shall have no obligation to pay any
further interest on such payment and the Administrative Agent shall pay to such
Lender interest on such payment to the date paid to such Lender by the
Administrative Agent at a rate per annum equal to the then-current Federal Funds
Effective Rate.
Section II.13 Default. Notwithstanding the foregoing, during the
continuance of a Monetary Default or an Event of Default, Borrower shall not
have the right to request a LIBOR Advance, select a new LIBOR Interest Period
for an existing ratable LIBOR Advance or convert any Adjusted Alternate Base
Rate Advance to a ratable LIBOR Advance. During the continuance of a Monetary
Default or an Event of Default, at the election of the Required Lenders, by
notice to Borrower, outstanding Advances shall bear interest at the applicable
Default Rates until such Monetary Default or Event of Default ceases to exist or
the Obligations are paid in full.
Section II.14 Lending Installations. Each Lender may book its Advances at
any Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or telex
notice to the Administrative Agent and Borrower, designate a Lending
Installation through which Advances will be made by it and for whose account
payments are to be made.
Section II.15 Non-Receipt of Funds by Administrative Agent. Unless Borrower
or a Lender, as the case may be, notifies Administrative Agent prior to the date
on which it is scheduled to make payment to Administrative Agent of (i) in the
case of a Lender, an Advance, or (ii) in the case of Borrower, a payment of
principal, interest or fees to the
Administrative Agent for the account of the Lenders, that it does not intend to
make such payment, Administrative Agent may assume that such payment has been
made. Administrative Agent may, but shall not be obligated to, make the amount
of such payment available to the intended recipient in reliance upon such
assumption. If such Lender or Borrower, as the case may be, has not in fact made
such payment to Administrative Agent, the recipient of such payment shall, on
demand by Administrative Agent, repay to Administrative Agent the amount so made
available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by
Administrative Agent until the date Administrative Agent recovers such amount at
a rate per annum equal to (i) in the case of payment by a Lender, the Federal
Funds Effective Rate (as determined by Administrative Agent) for such day or
(ii) in the case of payment by Borrower, the interest rate applicable to the
relevant Advance.
Section II.16 Swingline Loans. In addition to the other options available
to Borrower hereunder, up to $7,500,000 of the Swingline Commitment shall be
available for Swingline Loans subject to the following terms and conditions.
Swingline Loans shall be made available for same day borrowings provided that
notice is given in accordance with Section 2.11 hereof. All Swingline Loans
shall bear interest at the Adjusted Alternate Base Rate and shall be deemed to
be Adjusted Alternate Base Rate Advances. In no event shall the Swingline Lender
be required to fund a Swingline Loan if it would increase the total aggregate
outstanding Loans by Swingline Lender hereunder plus its Percentage of Facility
Letter of Credit Obligations to an amount in excess of such Lender's Commitment.
No Swingline Loan may be made to repay a Swingline Loan, but Borrower may repay
Swingline Loans from subsequent pro rata Advances hereunder. If any Swingline
Loan is not so repaid, upon request of the Swingline Lender made to all the
Lenders, which request must be given not later than the fifth (5th) Business Day
after such a Swingline Loan was made, each Lender irrevocably agrees to purchase
its Percentage of any Swingline Loan made by the Swingline Lender regardless of
whether the conditions for disbursement are satisfied at the time of such
purchase, including the existence of an Event of Default hereunder provided that
Swingline Lender did not have knowledge of such Event of Default at the time the
Swingline Loan was made and provided further that no Lender shall be required to
have total outstanding Loans plus its Percentage of Facility Letters of Credit
exceed its Commitment. Such purchase shall take place on the date of the request
by Swingline Lender so long as such request is made by noon (Chicago time),
otherwise on the Business Day following such request. All requests for purchase
shall be in writing. From and after the date it is so purchased, each such
Swingline Loan shall, to the extent purchased, (i) be treated as a Loan made by
the purchasing Lenders and not by the selling Lender for all purposes under this
Agreement and the payment of the purchase price by a Lender shall be deemed to
be the making of a Loan by such Lender and shall constitute outstanding
principal under such Lender's Note, and (ii) shall no longer be considered a
Swingline Loan except that all interest accruing on or attributable to such
Swingline Loan for the period prior to the date of such purchase shall be paid
when due by the Borrower to the Administrative Agent for the benefit of the
Swingline Lender and all such amounts accruing on or attributable to such Loans
for the period from and after the date of such purchase shall
be paid when due by the Borrower to the Administrative Agent for the benefit of
the purchasing Lenders. If prior to purchasing its Percentage of a Swingline
Loan one of the events described in Section 10.10 shall have occurred and such
event prevents the consummation of the purchase contemplated by preceding
provisions, each Lender will purchase an undivided participating interest in the
outstanding Swingline Loan in an amount equal to its Percentage of such
Swingline Loan. From and after the date of each Lender's purchase of its
participating interest in a Swingline Loan, if the Swingline Lender receives any
payment on account thereof, the Swingline Lender will distribute to such Lender
its participating interest in such amount (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Lender's
participating interest was outstanding and funded); provided, however, that in
the event that such payment was received by the Swingline Lender and is required
to be returned to the Borrower, each Lender will return to the Swingline Lender
any portion thereof previously distributed by the Swingline Lender to it. If any
Lender fails to so purchase its Percentage of any Swingline Loan, such Lender
shall be deemed to be a Defaulting Lender hereunder.
Section II.17 Voluntary Reduction of Aggregate Commitment Amount. Upon at
least five (5) days prior irrevocable written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent, Borrower shall have
the right, without premium or penalty, to terminate the Aggregate Commitment in
whole or in part provided that (a) Borrower may not reduce the Aggregate
Commitment below the Allocated Facility Amount at the time of such requested
reduction, and (b) any such partial termination shall be in the minimum
aggregate amount of Two Million Dollars (U.S. $2,000,000.00) or any integral
multiple of Two Million Dollars (U.S. $2,000,000.00) in excess thereof. Any
partial termination of the Aggregate Commitment shall be applied pro rata to
reduce each Lender's Commitment, including, unless otherwise agreed in writing
by the Swingline Lender, to reduce the Swingline Commitment by a percentage
equal to the percentage reduction in the Aggregate Commitment.
Section II.18 Increase in Aggregate Commitment. The Borrower shall also
have the right from time to time to increase the Aggregate Commitment up to a
maximum of $175,000,000 by either adding new entities as Lenders (subject to the
Administrative Agent's prior written approval of the identity of such new
entities) or obtaining the agreement, which shall be at such Lender's or
Lenders' sole discretion, of one or more of the then current Lenders to increase
its or their Commitments. Such increases shall be evidenced by the execution and
delivery of an Amendment Regarding Increase in the form of Exhibit L attached
hereto by the Borrower, the Administrative Agent and the new bank or existing
Lender providing such additional Commitment, a copy of which shall be forwarded
to each Lender by the Administrative Agent promptly after execution thereof. On
the effective date of each such increase in the Aggregate Commitment, the
Borrower and the Administrative Agent shall cause the new or existing Lenders
providing such increase, by either funding more than its or their Percentage of
new ratable Advances made on such date or purchasing shares of outstanding
ratable Loans held by the other Lenders or a combination thereof, to hold its or
their Percentage of all ratable Advances outstanding at the close of business on
such day. The Lenders agree to
cooperate in any required sale and purchase of outstanding ratable Advances to
achieve such result. In no event shall the Aggregate Commitment exceed
$175,000,000 without the approval of all of the Lenders.
Section II.19 Optional Prepayments; Mandatory Prepayments; Release of
Properties.
(a) The Borrower may, upon at least one (1) Business Day's notice to
the Administrative Agent, prepay the Advances, which notice shall specify the
date and amount of prepayment and whether the prepayment is of Adjusted
Alternate Base Rate Advances, LIBOR Advances, Swingline Loans or a combination
thereof, and if a combination thereof, the amount allocable to each; provided,
however, that (i) any partial prepayment under this Subsection shall be in an
amount not less than $1,000,000 or a whole multiple of $100,000 in excess
thereof; (ii) any LIBOR Advance prepaid on any day other than the last day of
the applicable LIBOR Interest Period must be accompanied by any amounts payable
pursuant to Section 4.4; and (iii) each prepayment under this subsection shall
include all interest accrued on the amount of principal prepaid through the date
of prepayment. Upon receipt of any such notice the Administrative Agent shall
promptly notify each Lender thereof. If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified therein,
together with any amounts payable pursuant to Section 4.4.
(b) If on any Business Day the Allocated Facility Amount exceeds the
then- current Borrowing Base Availability, then, without notice or demand, the
Borrower shall make a mandatory prepayment of the Loans in an amount equal to
such excess no later than thirty days following such Business Day. The failure
of the Borrower make any prepayment as required under this subsection shall
constitute an Event of Default under this Agreement. Each prepayment required to
be made under this subsection shall include all interest accrued on the amount
of principal prepaid through the date of prepayment and any amounts payable
pursuant to Section 4.4. Provided no Default or Event of Default has occurred
and is continuing on the date that the Borrower shall make a mandatory
prepayment pursuant to this subsection, the Borrower shall have the right to
direct whether such prepayment shall be of Adjusted Alternate Base Rate
Advances, LIBOR Advances, Swingline Loans or a combination thereof, and, if a
combination thereof, the amount allocable to each.
(c) The Borrower shall have the right at any time and from time to
time, on five (5) Business Days prior written notice to the Administrative
Agent, to obtain a release of any Collateral Pool Asset from the applicable
Mortgage and Assignment of Leases by repaying on the date of such release such
amount as may be required for it to provide the Compliance Certificate
referenced below taking into account the release, provided (i) no Default or
Event of Default has occurred and is continuing or shall occur upon the release
of such Collateral Pool Asset and (ii) Borrower has provided a Compliance
Certificate in the form of Exhibit I hereto signed by a Qualified Officer of the
Operating Partnership and Equity Inns certifying to Borrower's continued
compliance with all of the financial and other material covenants under the Loan
Documents after the removal of such Collateral Pool Asset and, to the extent
necessary, repayment of any Advances.
Section II.20 Procedures for Addition of Collateral Pool Assets.
(a) The Borrower may propose to include additional Properties as
Collateral Pool Assets by sending written proposals for inclusion to the
Administrative Agent along with (i) the items listed on Schedule 2, (ii) a
request for Administrative Agent to order an Appraisal of the proposed
additional Property and the other items, such as additional Loan Documents,
needed to finalize the addition of such Property to the Collateral Pool Assets
as shown on Schedule 3, (iii) evidence that the qualifications required under
the definition of "Eligible Property" are met, (iv) a request that the Required
Lenders evaluate and approve the Appraisal and Appraised Value of such Property
(applicable for all Properties) and (v) that the Required Lenders evaluate and
approve the Property for inclusion in the Collateral (applicable if (A) the
Appraised Value of such Property, when combined with the aggregate Appraised
Values of all other Properties added to the Collateral after the date of this
Agreement pursuant to this Section, is greater than $75,000,000, or (B) the
interest of the Owner of such Property is the tenant's interest under a ground
lease or any other estate less than fee simple title). Items (i)-(iii) above
shall be immediately forwarded to the Lenders by the Administrative Agent if
their approval is required under item (iv). Administrative Agent (and the
Lenders, as the case may be) shall endeavor to utilize all of the due diligence
reports obtained by Borrower from third-party providers and certified to the
Lenders by the third-party providers and not require new reports (except for the
Appraisals), but the Administrative Agent and the Lenders reserve the right to
require independent reports if the Borrower's report was prepared by a
third-party provider not reasonably satisfactory or if the Administrative Agent
or the Lenders in good faith believe the report furnished contains an inaccuracy
or is not current or is incomplete in any material respect. If all items
required by Schedule 2 and the preceding sentence accompany or precede the
written proposal, the written proposal shall so indicate. If all items required
by Schedule 2 do not accompany or precede the written proposal, the Borrower
shall accompany the last item required by Schedule 2 with a letter notifying the
Administrative Agent that it has completed delivery of all items required by
Schedule 2. The relevant time periods for acceptance or rejection by the
Administrative Agent and/or the Required Lenders shall commence upon the later
of (1) receipt of the completed Appraisal by both the Administrative Agent and
the Lenders and (2) receipt by the Administrative Agent of the proposal and all
items required by Schedule 2. When both items (1) and (2) above have been
delivered, the Administrative Agent shall immediately notify Borrower and the
relevant time periods for acceptance or rejection shall commence. For purposes
of this Section 2.20, Borrower may begin the process of including an additional
Collateral Pool Asset if Borrower has a binding contract to purchase such
Property provided that Borrower shall have consummated the purchase of such
Property on or before the date such Property is included in the Collateral.
(b) The Administrative Agent shall have fifteen (15) Business Days
after the Administrative Agent has actually received the completed Appraisal as
well as Borrower's proposal and all items set forth in Schedule 2 with respect
to a proposed Collateral Pool Asset pursuant to this Section to notify the
Borrower in writing as to whether the proposed Collateral Pool Asset is an
Eligible Property that is satisfactory to the Administrative Agent pursuant to
Section 2.20(a) above. The failure of the Administrative Agent to respond to the
Borrower's request within such fifteen Business Day period shall be deemed to
be a denial that such proposed Collateral Pool Asset qualifies as an Eligible
Property that is satisfactory to the Administrative Agent. The Lenders shall
have fifteen (15) Business Days after they have actually received the completed
Appraisal and other documents to which they are entitled pursuant to Section
2.20(a) above (it being acknowledged that this period will run substantially
concurrently with Administrative Agent's review period in light of
Administrative Agent's obligation under Section 2.20(a) to immediately forward
those items to the Lenders) to notify the Administrative Agent (who shall notify
the Borrower after all responses from the Lenders are received or deemed
received) as to (i) whether the Appraisal and Appraised Value are satisfactory,
or (ii) whether the Appraisal and Appraised Value are satisfactory and whether
the proposed Eligible Property otherwise is approved as a Collateral Pool
Asset, if the Required Lenders' approval is required as to the latter pursuant
to Section 2.20(a) above. The failure of any Lender to respond to the Borrower's
request within such fifteen Business Day period shall be deemed to be an
approval of the Appraisal and consent to the inclusion of such Eligible
Property in the Collateral. If the proposed Collateral Pool Asset is
deemed by the Administrative Agent to be an Eligible Property and is
approved by the Administrative Agent in the manner aforesaid, and the Appraisal
and Appraised Value are approved (or deemed approved) by the Required Lenders,
that Property shall be automatically approved for inclusion in the Collateral
without the need for any further approval by the other Lenders. If the proposed
Collateral Pool Asset is an Eligible Property but was not approved by the
Administrative Agent, Borrower may by written notice to the Administrative
Agent request that it nevertheless be included in the Collateral pursuant to
the procedure set forth in Section 2.20(c). Upon the approval by the
Administrative Agent (and the Required Lenders, if required) for inclusion
of an Eligible Property in the Collateral and the satisfaction of all
requirements listed in Schedule 3 with respect thereto, such Eligible Property
shall be added to the Collateral as a Collateral Pool Asset. The Administrative
Agent shall supply, at the written request of any Lender, copies of any of the
documents described on Schedule 2 and 3 to such Lender.
(c) With respect to any Property requested to be included as a
Collateral Pool Asset which does not qualify under Section 2.20(b) due to the
Administrative Agent's failure to approve such Property, the Borrower may
request that such Property be included as a Collateral Pool Asset
notwithstanding such failure, by written notice to the Administrative Agent to
be forwarded to the Lenders. Such proposed Collateral Pool Asset shall be
included if and only if (i) such Property qualifies in all respects as an
Eligible Property, and (ii) the Required Lenders in their sole discretion
approve the Borrower's request that such proposed Collateral Pool Asset be
included. Lenders shall respond to the Administrative Agent and the failure of
any Lender to respond in writing to the Borrower's request within fifteen (15)
Business Days of receipt of the Borrower's request for such Property to be
included in the Collateral, together with delivery of such of the items set
forth in Schedule 2 as a Lender may request, shall be deemed to be approval by
such Lender of the Borrower's request to include such Property in the
Collateral. The Administrative Agent shall promptly notify the Borrower in
writing if the Required Lenders approve the Borrower's request for such Eligible
Property to be included in the Collateral.
Section II.21 Application of Moneys Received. All moneys collected or
received by the Administrative Agent on account of the Facility directly or
indirectly, shall be applied in the following order of priority:
(i) to the payment of all reasonable costs incurred in
the collection of such moneys of which the Administrative
Agent shall have given notice to the Borrower;
(ii) to the reimbursement of any yield protection due
to any of the Lenders in accordance with Section 4.1;
(iii) to the payment of any fee due pursuant to Section
3.8(b) in connection with the issuance of a Facility Letter of
Credit to the Issuing Bank, to the payment of the Commitment
Fee and Facility Letter of Credit Fee to the Lenders, if then
due, and to the payment of all fees to the Administrative
Agent;
(iv) to payment of the full amount of interest and
principal on the Swingline Loans (provided that if Swingline
Lender has not requested the other Lenders to purchase their
applicable Percentages of the any outstanding Swingline Loans
within twenty (20) Business Days following a Default, then
principal and interest due on such Swingline Loans shall be of
equal priority with principal and interest due in connection
with other Loans);
(v) first to interest until paid in full and then to
principal for all Lenders (other than Defaulting Lenders) in
accordance with the respective Percentages of the Lenders;
(vi) any other sums due to the Administrative Agent or
any Lender under any of the Loan Documents; and
(vii) to the payment of any sums due to each Defaulting
Lender as their respective Percentages appear (provided that
Administrative Agent shall have the right to set-off against
such sums any amounts due from such Defaulting Lender).
Article III.
THE LETTER OF CREDIT SUBFACILITY
Section III.1 Obligation to Issue. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of the
Borrower herein set forth, the Issuing Bank hereby agrees to issue for the
account of either of the entities comprising the Borrower, one or more Facility
Letters of Credit in accordance with this Article III, from time to time during
the period commencing on the Agreement Effective Date and ending on a date one
Business Day prior to the Maturity Date.
Section III.2 Types and Amounts. The Issuing Bank shall not have any
obligation to:
(i) issue any Facility Letter of Credit if the aggregate
maximum amount then available for drawing under Letters of
Credit issued by such Issuing Bank, after giving effect to the
Facility Letter of Credit requested hereunder, shall exceed
any limit imposed by law or regulation upon such Issuing Bank;
(ii) issue any Facility Letter of Credit if, after giving
effect thereto, (1) the then applicable Allocated Facility
Amount would exceed the then current Aggregate Commitment, (2)
the then applicable Allocated Facility Amount would exceed the
then-current Borrowing Base Availability, or (3) the Facility
Letter of Credit Obligations would exceed the Facility Letter
of Credit Sublimit; or
(iii) issue any Facility Letter of Credit having an
expiration date, or containing automatic extension provision
to extend such date, to a date which is
(iv) Business Day immediately preceding the Maturity
Date.
Section III.3 Conditions. In addition to being subject to the satisfaction
of the conditions contained in Article V hereof, the obligation of the Issuing
Bank to issue any Facility Letter of Credit is subject to the satisfaction in
full of the following conditions:
(i) the Borrower shall have delivered to the Issuing Bank
at such times and in such manner as the Issuing Bank may
reasonably prescribe such documents and materials as may be
reasonably required pursuant to the terms of the proposed
Facility Letter of Credit (it being understood that if any
inconsistency exists between such documents and the Loan
Documents, the terms of the Loan Documents shall control) and
the proposed Facility Letter of Credit shall be reasonably
satisfactory to the Issuing Bank as to form and content;
(ii) as of the date of issuance, no order, judgment or
decree of any court, arbitrator or governmental authority
shall purport by its terms to enjoin or restrain the Issuing
Bank from issuing the requested Facility Letter of Credit
and no law, rule or regulation applicable to the Issuing
Bank and no request or directive (whether or not having the
force of law) from any governmental authority with
jurisdiction over the Issuing Bank shall prohibit or request
that the Issuing Bank refrain from the issuance of Letters of
Credit generally or the issuance of the requested Facility
Letter or Credit in particular; and
(iii) there shall not exist any Default or Event of
Default.
Section III.4 Procedure for Issuance of Facility Letters of Credit.
(a) Borrower shall give the Issuing Bank and the Administrative Agent
at least three (3) Business Days' prior written notice of any requested issuance
of a Facility Letter of Credit under this Agreement (a "Letter of Credit
Request"), a copy of which shall be sent immediately to all Lenders (except
that, in lieu of such written notice, the Borrower may give the Issuing Bank and
the Administrative Agent telephonic notice of such request if confirmed in
writing by delivery to the Issuing Bank and the Administrative Agent (i)
immediately (A) of a telecopy of the written notice required hereunder which has
been signed by an authorized officer, or (B) of a telex containing all
information required to be contained in such written notice and (ii) promptly
(but in no event later than the requested date of issuance) of the written
notice required hereunder containing the original signature of an authorized
officer); such notice shall be irrevocable and shall specify:
(1) the stated amount of the Facility Letter of Credit requested
(which stated amount shall not be less than $50,000);
(2) the effective date (which day shall be a Business Day) of
issuance of such requested Facility Letter of Credit (the
"Issuance Date");
(3) the date on which such requested Facility Letter of Credit is
to expire;
(4) the purpose for which such Facility Letter of Credit is to be
issued;
(5) the Person for whose benefit the requested Facility Letter of
Credit is to be issued; and
(6) any special language required to be included in the Facility
Letter of Credit.
At the time such request is made, the Borrower shall also provide the
Administrative Agent and the Issuing Bank with a copy of the form of the
Facility Letter of Credit that the Borrower is requesting be issued. Such
notice, to be effective, must be received by such Issuing Bank and the
Administrative Agent not later than 2:00 p.m. (Chicago time) on the last
Business Day on which notice can be given under this Section 3.4(a).
(b) Subject to the terms and conditions of this Article III and
provided that the applicable conditions set forth in Article V hereof have been
satisfied, the Issuing Bank shall, on the Issuance Date, issue a Facility Letter
of Credit on behalf of the Borrower in accordance with the Letter of Credit
Request and the Issuing Bank's usual and customary business practices unless the
Issuing Bank has actually received (i) written notice from the Borrower
specifically revoking the Letter of Credit Request with respect to such Facility
Letter of Credit, (ii) written notice from a Lender, which complies with the
provisions of Section 3.6(a), or (iii) written or telephonic notice from the
Administrative Agent stating that the issuance of such Facility Letter of Credit
would violate Section 3.2.
(c) The Issuing Bank shall give the Administrative Agent (who shall
promptly notify Lenders) and the Borrower written or telex notice, or telephonic
notice confirmed promptly thereafter in writing, of the issuance of a Facility
Letter of Credit (the "Issuance Notice").
(d) The Issuing Bank shall not extend or amend any Facility Letter of
Credit unless the requirements of this Section 3.4 are met as though a new
Facility Letter of Credit was being requested and issued.
Section III.5 Reimbursement Obligations; Duties of Issuing Bank.
(a) The Issuing Bank shall promptly notify the Borrower and the
Administrative Agent (who shall promptly notify Lenders) of any draw under a
Facility Letter of Credit. Any such draw shall not be deemed to be a default
hereunder but shall constitute an Advance of the Facility in the amount of the
Reimbursement Obligation with respect to such Facility Letter of Credit and
shall bear interest from the date of the relevant drawing(s) under the pertinent
Facility Letter of Credit at a rate selected by Borrower in accordance with
Section 2.11 hereof; provided that if a Monetary Default or an Event of Default
exists at the time of any such drawing(s), then the Borrower shall reimburse the
Issuing Bank for drawings under a Facility Letter of Credit issued by the
Issuing Bank no later than the next succeeding Business Day after the payment by
the Issuing Bank and until repaid such Reimbursement Obligation shall bear
interest at the Default Rate.
(b) Any action taken or omitted to be taken by the Issuing Bank under
or in connection with any Facility Letter of Credit, if taken or omitted in the
absence of willful misconduct or gross negligence, shall not put the Issuing
Bank under any resulting liability to any Lender or, provided that such Issuing
Bank has complied with the procedures specified in Section 3.4 and such Lender
has not given a notice contemplated by Section 3.6(a) that continues in full
force and effect, relieve that Lender of its obligations hereunder to the
Issuing Bank. In determining whether to pay under any Facility Letter of Credit,
the Issuing Bank shall have no obligation relative to the Lenders other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered in compliance, and that they appear to comply on
their face, with the requirements of such Letter of Credit.
Section III.6 Participation.
(a) Immediately upon issuance by the Issuing Bank of any Facility
Letter of Credit in accordance with the procedures set forth in Section 3.4,
each Lender shall be deemed to have irrevocably and unconditionally purchased
and received from the Issuing Bank, without recourse, representation or
warranty, an undivided interest and participation equal to such Lender's
Percentage in such Facility Letter of Credit (including, without limitation, all
obligations of the Borrower with respect thereto) and all related rights
hereunder and under the Guaranty and other Loan Documents; provided that a
Letter of Credit issued by the Issuing Bank shall not be deemed to be a Facility
Letter of Credit for purposes of this Section 3.6 if the Issuing Bank shall have
received written notice from any Lender on or before the Business Day prior to
the date of its issuance of such Letter of Credit that one or more of the
conditions contained in Section 5.2 is not then satisfied, and in the event the
Issuing Bank receives such a notice it shall have no further obligation to issue
any Facility Letter of Credit until such notice is withdrawn by that Lender or
the Issuing Bank receives a notice from the Administrative Agent that such
condition has been effectively waived in accordance with the provisions of this
Agreement. Each Lender's obligation to make further Loans to Borrower (other
than any payments such Lender is required to make under subparagraph (b) below)
or to purchase an interest from the Issuing Bank in any subsequent letters of
credit issued by the Issuing Bank on behalf of Borrower shall be reduced by such
Lender's Percentage of the undrawn portion of each Facility Letter of Credit
outstanding.
(b) In the event that the Issuing Bank makes any payment under any
Facility Letter of Credit and the Borrower shall not have repaid such amount to
the Issuing Bank pursuant to Section 3.7 hereof, the Issuing Bank shall promptly
notify the Administrative Agent, which shall promptly notify each Lender of such
failure, and each Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of the Issuing Bank the amount of such
Lender's Percentage of the unreimbursed amount of such payment, and the
Administrative Agent shall promptly pay such amount to the Issuing Bank.
Lender's payments of its Percentage of such Reimbursement Obligation as
aforesaid shall be deemed to be a Loan by such Lender and shall constitute
outstanding principal under such Lender's Note. The failure of any Lender to
make available to the Administrative Agent for the account of the Issuing Bank
its Percentage of the unreimbursed amount of any such payment shall not relieve
any other Lender of its obligation hereunder to make available to the
Administrative Agent for the account of such Issuing Bank its Percentage of the
unreimbursed amount of any payment on the date such payment is to be made, but
no Lender shall be responsible for the failure of any other Lender to make
available to the Administrative Agent its Percentage of the unreimbursed amount
of any payment on the date such payment is to be made. Any Lender which fails to
make any payment required pursuant to this Section 3.6(b) shall be deemed to be
a Defaulting Lender hereunder.
(c) Whenever the Issuing Bank receives a payment on account of a
Reimbursement Obligation, including any interest thereon, the Issuing Bank shall
promptly pay to the Administrative Agent and the Administrative Agent shall
promptly pay to each Lender which has funded its participating interest therein,
in immediately available funds, an amount equal to such Lender's Percentage
thereof.
(d) Upon the request of the Administrative Agent or any Lender, the
Issuing Bank shall furnish to such Administrative Agent or Lender copies of any
Facility Letter of Credit to which the Issuing Bank is party and such other
documentation as may reasonably be requested by the Administrative Agent or
Lender.
(e) The obligations of a Lender to make payments to the Administrative
Agent for the account of the Issuing Bank with respect to a Facility Letter of
Credit shall be absolute, unconditional and irrevocable, not subject to any
counterclaim, set-off, qualification or exception whatsoever other than a
failure of any such Issuing Bank to comply with the terms of this Agreement
relating to the issuance of such Facility Letter of Credit, and such payments
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances.
Section III.7 Payment of Reimbursement Obligations.
(a) The Borrower agrees to pay to the Administrative Agent for the
account of the Issuing Bank the amount of all Advances for Reimbursement
Obligations, interest and other amounts payable to the Issuing Bank under or in
connection with any Facility Letter of Credit when due, irrespective of any
claim, set-off, defense or other right which the Borrower may have at any time
against any Issuing Bank or any other Person, under all circumstances, including
without limitation any of the following circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower may have at any time against a
beneficiary named in a Facility Letter of Credit or any
transferee of any Facility Letter of Credit (or any Person for
whom any such transferee may be acting), the Administrative
Agent, the Issuing Bank, any Lender, or any other Person,
whether in connection with this Agreement, any Facility Letter
of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transactions
between the Borrower and the beneficiary named in any Facility
Letter of Credit);
(iii) any draft, certificate or any other document
presented under the Facility Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect of
any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the
Loan Documents; or
(v) the occurrence of any Default or Event of Default.
(b) In the event any payment by the Borrower received by the Issuing
Bank or the Administrative Agent with respect to a Facility Letter of Credit and
distributed by the Administrative Agent to the Lenders on account of their
participations is thereafter set aside, avoided or recovered from the
Administrative Agent or Issuing Bank in connection with any receivership,
liquidation, reorganization or bankruptcy proceeding, each Lender which received
such distribution shall, upon demand by the Administrative Agent, contribute
such Lender's Percentage of the amount set aside, avoided or recovered together
with interest at the rate required to be paid by the Issuing Bank or the
Administrative Agent upon the amount required to be repaid by the Issuing Bank
or the Administrative Agent.
Section III.8 Compensation for Facility Letters of Credit.
(a) The Borrower shall pay to the Administrative Agent, for the ratable
account of the Lenders (including the Issuing Bank), based upon the Lenders'
respective Percentages, a per annum fee (the "Facility Letter of Credit Fee") as
a percentage of the face amount of each Facility Letter of Credit equal to the
LIBOR Applicable Margin in effect from time to time while such Facility Letter
of Credit is outstanding. The Facility Letter of Credit Fee relating to any
Facility Letter of Credit shall be due and payable in arrears in equal
installments on the first Business Day of each month following the issuance of
such Facility Letter of Credit and, to the extent any such fees are then due and
unpaid, on the Maturity Date or any other earlier date that the Obligations are
due and payable in full. The Administrative Agent shall promptly remit such
Facility Letter of Credit Fees, when paid, to the other Lenders in accordance
with their Percentages thereof. The Borrower shall not have any liability to any
Lender for the failure of the Administrative Agent to promptly deliver funds to
any such Lender and shall be deemed to have made all such payments on the date
the respective payment is made by the Borrower to the Administrative Agent,
provided such payment is received by the time specified in Section 2.12 hereof.
(b) The Issuing Bank also shall have the right to receive solely for
its own account an issuance fee of one-eighth of one percent (0.125%) of the
face amount of each Facility Letter of Credit, payable by the Borrower on the
Issuance Date for each such Facility Letter of Credit. The Issuing Bank shall
also be entitled to receive its reasonable out-of-pocket costs and the Issuing
Bank's standard charges of issuing, amending and servicing Facility Letters of
Credit and processing draws thereunder.
Section III.9 Letter of Credit Collateral Account. The Borrower hereby
agrees that it will, until the Maturity Date, maintain a special collateral
account (the "Letter of Credit Collateral Account") at the Administrative
Agent's office at the address specified pursuant to Article XV, in the name of
the Borrower but under the sole dominion and control of the Administrative
Agent, for the benefit of the Lenders, and in which the Borrower shall have
no interest other than as set forth in Section 11.1. The Letter of Credit
Collateral Account shall hold the deposits the Borrower is required to make
after an Event of Default on account of any outstanding Facility Letters of
Credit as described in Section 11.1. In addition to the foregoing, the Borrower
hereby grants to the Administrative Agent, for the benefit of the Lenders, a
security interest in and to the Letter of Credit Collateral Account and any
funds that may hereafter be on deposit in such account, including income
earned thereon. The Lenders acknowledge and agree that the Borrower has no
obligation to fund the Letter of Credit Collateral Account unless and until so
required under Section 11.1 hereof.
Article IV.
CHANGE IN CIRCUMSTANCES
Section IV.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, its
interest in the Facility Letters of Credit or other amounts
due it hereunder, or
(ii) imposes or increases or deems applicable any
reserve, assessment, insurance charge, special deposit or
similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest
rate applicable to LIBOR Advances), or
(iii) imposes any other condition, and the result is to
increase the cost of any Lender or any applicable Lending
Installation of making, funding or maintaining the Loans or
reduces any amount receivable by any Lender or any applicable
Lending Installation in connection with the Loans, or requires
any Lender or any applicable Lending Installation to make any
payment calculated by reference to the amount of the Loans
held, Letters of Credit issued or participated in or interest
received by it, by an amount deemed material by such Lender,
then, within fifteen (15) days of demand by such Lender, Borrower shall pay such
Lender that portion of such increased expense incurred or reduction in an amount
received which such Lender determines is attributable to making, funding and
maintaining its Advances and its Commitment.
Section IV.2 Changes in Capital Adequacy Regulations. If a Lender
determines the amount of capital required or expected to be maintained by such
Lender, any Lending Installation of such Lender or any corporate entity
controlling such Lender with respect to this Facility is increased as a result
of a Change (as defined below), then, within fifteen (15) days of demand by such
Lender, Borrower shall pay such Lender the amount necessary to compensate for
any shortfall in the rate of return on the portion of such increased capital
which such Lender determines is attributable to this Agreement, its Advances,
its interest in the Facility Letters of Credit, or its obligation to make
Advances hereunder or participate in or issue Facility Letters of Credit
hereunder (after taking into account such Lender's policies as to capital
adequacy). "Change" means (i) any change after the date of this Agreement in the
Risk-Based Capital Guidelines (as defined below) or (ii) any adoption of or
change in any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having the force
of law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or any Lending Installation
or any corporation controlling any Lender. "Risk-Based Capital Guidelines" means
(i) the risk-based capital guidelines in effect in the United States on the date
of this Agreement, including transition rules, and (ii) the corresponding
capital regulations promulgated by regulatory authorities outside the United
States implementing the July 1988 report of the Basle Committee on Banking
Regulation and Supervisory Practices Entitled "International Convergence of
Capital Measurements and Capital Standards", including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
Section IV.3 Availability of LIBOR Advances. If any Lender determines that
maintenance of any of its LIBOR Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation or directive of any Governmental
Authority having jurisdiction, the Administrative Agent shall suspend by written
notice to Borrower the availability of LIBOR Advances from such Lender and
require any LIBOR Advances to be converted to Adjusted Alternate Base Rate
Advances, or if the Required Lenders determine that (i) deposits of a type or
maturity appropriate to match fund LIBOR Advances are not available, the
Administrative Agent shall suspend by written notice to Borrower the
availability of LIBOR Advances with respect to any LIBOR Advances made after the
date of any such determination, or (ii) an interest rate applicable to a LIBOR
Advance does not accurately reflect the cost of making a LIBOR Advance, and, if
for any reason whatsoever the provisions of Section 4.1 are inapplicable, the
Administrative Agent shall suspend by written notice to Borrower the
availability of LIBOR Advances with respect to any LIBOR Advances made after the
date of any such determination.
Section IV.4 Funding Indemnification. If any payment to Lenders of a
ratable LIBOR Advance occurs on a date which is not the last day of the
applicable Interest Period, whether because of acceleration, prepayment or
otherwise, or a ratable LIBOR Advance is not made on the date specified by
Borrower for any reason other than default by one or more of the Lenders,
Borrower will indemnify each Lender for any loss
or cost incurred by such Lender resulting therefrom, including, without
limitation, any loss or cost in liquidating or employing deposits acquired to
fund or maintain the ratable LIBOR Advance.
Section IV.5 Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its LIBOR Advances to reduce any liability of
Borrower to such Lender under Sections 4.1 and 4.2 or to avoid the
unavailability of a LIBOR Advance, so long as such designation is not
disadvantageous to such Lender. Each Lender shall deliver a written statement of
such Lender as to the amount due, if any, under Sections 4.1, 4.2 or 4.4 hereof.
Such written statement shall set forth in reasonable detail the calculations
upon which such Lender determined such amount and shall be final, conclusive and
binding on Borrower in the absence of manifest error. Determination of amounts
payable under such Sections in connection with a LIBOR Advance shall be
calculated as though each Lender funded its LIBOR Advance through the purchase
of a deposit of the type and maturity corresponding to the deposit used as a
reference in determining the Adjusted LIBOR Rate applicable to such Advance,
whether in fact that is the case or not. Unless otherwise provided herein, the
amount specified in the written statement shall be payable within ten (10) days
after receipt by Borrower of the written statement. The obligations of Borrower
under Sections 4.1, 4.2 and 4.4 hereof shall survive payment of the Obligations
and termination of this Agreement. Without in any way affecting the Borrower's
obligation to pay compensation actually claimed by a Lender under this Article
IV or the restrictions on the availability of LIBOR Advances under Section 4.3,
the Borrower shall have the right to replace any Lender which has demanded such
compensation or restricted such availability provided that Borrower notifies
such Lender that it has elected to replace such Lender and notifies such Lender
and the Administrative Agent of the identity of the proposed replacement Lender
not more than six (6) months after the date of such Lender's most recent demand
for compensation under this Article IV or most recent determination under
Section 4.3. The Lender being replaced shall assign its Percentage of the
Aggregate Commitment and its rights and obligations under this Facility to the
replacement Lender in accordance with the requirements of Section 13.3 hereof
and the replacement Lender shall assume such Percentage of the Aggregate
Commitment and the related obligations under this Facility prior to the Maturity
Date to be extended, all pursuant to an assignment agreement substantially in
the form of Exhibit K hereto. The purchase by the replacement Lender shall be at
par (plus all accrued and unpaid interest and any other sums owed to such Lender
being replaced hereunder) which shall be paid to the Lender being replaced upon
the execution and delivery of the assignment.
Article V.
CONDITIONS PRECEDENT
Section V.1 Conditions Precedent to Closing. The Lenders shall not be
required to make the initial Advance hereunder, nor shall the Issuing Bank be
required to issue the initial Facility Letter of Credit hereunder, unless (i)
the Borrower shall have paid all fees then due and payable to the Lenders, and
the Administrative Agent hereunder, (ii) all of the conditions set forth in
Section 5.2 are satisfied, and (iii) the Borrower shall have furnished to the
Administrative Agent, in form and substance satisfactory to the Administrative
Agent and their counsel and with sufficient copies for the Lenders, the
following:
(a) Certificates of Limited Partnership/Incorporation. A copy of the
Certificate of Limited Partnership for each entity comprising the Borrower and a
copy of the articles of incorporation of Equity Inns and the trust documents of
Equity Inns Trust, each certified by the appropriate Secretary of State or
equivalent state official.
(b) Agreements of Limited Partnership/Bylaws. A copy of the Agreement
of Limited Partnership for each entity comprising the Borrower and a copy of the
bylaws of each of the Guarantors, including all amendments thereto, each
certified by the Secretary or an Assistant Secretary of such entity as being in
full force and effect on the Agreement Effective Date.
(c) Good Standing and Foreign Qualification Certificates. A certified
copy of a certificate from the Secretary of State or equivalent state official
of the states where each entity comprising the Borrower and the Guarantors are
organized, dated as of the most recent practicable date, showing the good
standing or partnership qualification (if issued) of (i) each entity comprising
Borrower, and (ii) the Guarantors, and a certified copy of a certificate from
the Secretary of State or equivalent state official of the states where the
Initial Collateral Pool Assets are located, dated as of the most recent
practicable date, showing the qualification to transact business in said states
by the entities which own such Initial Collateral Pool Assets.
(d) Resolutions. A copy of a resolution or resolutions and adopted by
the Board of Directors of the general partner of each entity comprising the
Borrower, certified by the Secretary or an Assistant Secretary thereof as being
in full force and effect on the Agreement Effective Date, authorizing the
Advances provided for herein and the execution, delivery and performance of the
Loan Documents by such general partner to be executed and delivered by it
hereunder on behalf of itself and Borrower, together with a similar resolution
for each of the Guarantors.
(e) Incumbency Certificate. A certificate, signed by the Secretary
or an Assistant Secretary of the general partner of each entity comprising the
Borrower and dated the Agreement Effective Date, as to the incumbency, and
containing the specimen signature or signatures, of the Persons authorized to
execute and deliver the Loan Documents to be executed and delivered by it and
Borrower hereunder, together with a similar resolution for each of the
Guarantors.
(f) Loan Documents. Originals of the Loan Documents (in such
quantities as the Lenders may reasonably request), including Mortgages and
Assignments of Leases for all Initial Collateral Pool Assets, duly executed by
authorized officers of the appropriate entity.
(g) Opinion of Tennessee Counsel. A written opinion, from Tennessee
outside counsel for the Borrower and the Guarantors which counsel is reasonably
satisfactory to Administrative Agent, substantially in the form attached hereto
as Exhibit E.
(h) Opinion of Illinois Counsel. A written opinion, from Illinois
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.
(i) Opinion of Local Counsel. A written opinion from counsel in the
state where a Collateral Pool Asset is located, which counsel is reasonably
satisfactory to Administrative Agent, with respect to the Security Documents for
such Collateral Pool Asset substantially in the form of Exhibit G.
(j) Existing Facility. Evidence that the loan from General Electric
Capital Corporation ("GECC Loan") has closed and proceeds of at least
$100,000,000 have been disbursed to or for the benefit of Borrower, and all
obligations of the Borrower to the lenders under the Existing Agreement and
under the facilities which Borrower has with Credit Lyonnais and National Bank
of Commerce have been paid, or will be paid from the initial Advance hereunder,
and such other evidence of termination of all such agreements as is reasonably
required by the Administrative Agent.
(k) Financial and Related Information. The following information:
(i) A certificate, signed by an officer of the general
partners of each entity comprising the Borrower, stating that
on the Agreement Effective Date no Default or Event of Default
has occurred and is continuing and that all representations
and warranties of the Borrower contained herein are true and
correct in all material respects as of the Agreement Effective
Date as and to the extent set forth herein;
(ii) The most recent financial statements of the
Consolidated Group and a certificate from a Qualified Officer
of Equity Inns that no change in the Consolidated Group's
financial condition that would have a Material Adverse Effect
has occurred since June 30, 2000;
(iii) A compliance certificate in the form attached
hereto as Exhibit I calculating the applicable status of
Borrower's financial covenants hereunder as of the Agreement
Effective Date;
(iv) Written money transfer instructions, in
substantially the form of Exhibit H hereto, addressed to the
Administrative Agent and signed by a Qualified Officer,
together with such other related money transfer authorizations
as the Administrative Agent may have reasonably requested; and
(l) Other Evidence as any Lender May Require. Such other evidence as
any Lender may reasonably request to establish the compliance with the financial
covenants under this Agreement, the consummation of the transactions
contemplated hereby, the taking of all necessary actions in any proceedings in
connection herewith and compliance with the other conditions set forth in this
Agreement.
(m) Actions to Perfect Liens. The Administrative Agent shall have
received evidence in form and substance satisfactory to it that all filings,
recordings, registrations and other actions, including, without limitation the
recording of all Mortgages and Assignments of Leases on all Properties to be
included in the Initial Collateral Pool and the filing of all UCC-1 financing
statements, necessary or, in the opinion of the Administrative Agent, desirable
to perfect the Liens created by the Security Documents shall have been
completed.
(n) Surveys. The Administrative Agent shall have received a survey for
each Property in the Initial Collateral Pool hereunder either (i) certified to
the Administrative Agent or (ii) recertified to the Administrative Agent,
together with a certificate of the Borrower that no material changes in the
location or configuration of the improvements on the Properties subject to the
Mortgages have occurred since the date of the initial survey, and which is in
all other respects reasonably satisfactory to the Administrative Agent.
(o) Title Insurance Policy. The Administrative Agent shall have
received in respect of each Initial Collateral Pool Asset hereunder a title
policy (or policies) showing no exceptions to title other than those permitted
under the Mortgages and Assignments of Leases, except such as may be approved by
the Administrative Agent, naming the Administrative Agent for the benefit of the
Lenders as the insured under such policy and containing such "tie-in", revolving
credit and other endorsements as may be available in the applicable jurisdiction
and as the Administrative Agent may require. The Administrative Agent shall have
received evidence satisfactory to it that all premiums in respect of any
endorsements, and all charges for mortgage recording tax, if any, have been
paid.
(p) Flood Insurance. If any portion of any Property in the Initial
Collateral Pool is located in an area identified as a special flood hazard area
by the Federal Emergency Management Agency or other applicable agency, the
Administrative Agent shall have received (i) a policy of flood insurance which
(A) covers any parcel of improved real property which is encumbered by any
Mortgage (B) is written in an amount not less than the outstanding principal
amount of the indebtedness secured by
such Mortgage which is reasonably allocable to such real property or the maximum
limit of coverage made available with respect to the particular type of property
under the Act, whichever is less, and (C) has a term ending not later than the
maturity of the indebtedness secured by such Mortgage and (ii) confirmation that
the Borrower has received the notice required pursuant to Section 208(e)(3) of
Regulation H of the Board of Governors of the Federal Reserve System. To the
extent any Property included in the Initial Collateral Pool is not located in an
area identified as a special flood hazard area by the Federal Emergency
Management Agency or other agency, the certification of the survey of such
Property to be delivered pursuant to clause (m) above shall include confirmation
of such fact.
(q) Copies of Documents. The Administrative Agent shall have received
a copy of all recorded documents with respect to the Initial Collateral Pool
Assets referred to, or listed as exceptions to title in, the title policy or
policies referred to in Section 4.1(n) and a copy, certified by such parties as
the Administrative Agent may deem appropriate, of all other documents affecting
the Properties covered by each Mortgage, including without limitation copies of
any ground leases on any of such Properties.
(r) Lien Searches. The Administrative Agent shall have received the
results of a recent search by a Person satisfactory to the Administrative Agent,
of the Uniform Commercial Code, judgement and tax lien filings which may have
been filed with respect to personal property of the Borrower, any other Loan
Party and the results of such search shall be satisfactory to the Administrative
Agent.
(s) Insurance. The Administrative Agent shall have received evidence
in form and substance satisfactory to it that all of the requirements of Section
3 of each of the Mortgages shall have been satisfied.
(t) Borrowing Notice. The Administrative Agent shall have received
a Borrowing Notice in accordance with Section 2.11 hereunder.
(u) Appraisals. The Administrative Agent shall have received current
Appraisals which shall indicate the Collateral Pool Asset Value for each of the
Initial Collateral Pool Assets.
(v) Environmental Report/Certification. The Administrative Agent shall
have received, at the Borrower's expense, a detailed report and certification
(or updated report and recertification) for each Property in the Initial
Collateral Pool prepared by a consultant acceptable to Administrative Agent,
which shall include, inter alia, a certification that such consultant has
obtained and examined the list of prior owners and tenants, and has made an
on-site physical examination of the relevant Property and improvements thereon,
and a visual observation of the surrounding areas, and disclosing the extent of
past or present Materials of Environmental Concern activities or the presence of
Materials of Environmental Concern.
(w) Leases and Estoppels. The Administrative Agent shall have
received (i) in the case of all Initial Collateral Pool Assets which are subject
to a ground lease, estoppel letters from the ground lessor thereunder in form
and substance satisfactory to the Administrative Agent, and (ii) in the case of
all Permitted Operating Leases and tenants thereunder, (A) tenant estoppel
certificates in form and substance acceptable to the Administrative Agent, and
(B) upon request of the Administrative Agent and to the extent in the possession
of the Borrower, the Guarantors, the Management Company or the Owner of the
relevant Property, current, certified financial statements of the tenant and of
any guarantor of its obligations.
(x) Subordination of Permitted Operating Leases. The Administrative
Agent shall have received fully executed copies of all Permitted Operating
Leases affecting the Initial Collateral Pool Assets and shall have, on behalf of
the Lenders, entered into subordination agreements with the tenants thereunder
substantially in the form attached hereto as Exhibit Q-1 and made a part hereof
reasonably satisfactory to the Administrative Agent in form and substance
regarding the subordination of the Permitted Operating Leases relating to the
Initial Collateral Pool Assets.
Section V.2 Conditions Precedent to Subsequent Advances and Issuance.
Advances after the initial Advance and issuances of Facility Letters of Credit
shall be made from time to time as requested by Borrower, and the obligation of
each Lender to make any Advance (including Swingline Loans) and of the Issuing
Bank to issue Facility Letters of Credit is subject to the following terms and
conditions:
(a) prior to each such Advance or issuance no Default or Event of
Default shall have occurred and be continuing under this Agreement or any of the
Loan Documents and, if required by Administrative Agent, Borrower shall deliver
a certificate of Borrower to such effect;
(b) The representations and warranties contained in Article VI and VII
are true and correct as of such borrowing date, Issuance Date, or date of
conversion and/or continuation as and to the extent set forth therein, except to
the extent any such representation or warranty is stated to relate solely to an
earlier date, in which case such representation or warranty shall be true and
correct on and as of such earlier date; and
(c) The following conditions of Section 5.1 shall have been and
remain satisfied as of the date of the advance: (k)(i), (k)(iii) and (k)(iv).
Subject to the last grammatical paragraphs of Article VI and VII
hereof, each Borrowing Notice, Letter of Credit Request, and
Conversion/Continuation Notice shall constitute a representation and warranty by
the Borrower that the conditions contained in Sections 5.2(a) and (b) have been
satisfied.
Article VI.
REPRESENTATIONS AND WARRANTIES
Each of the entities comprising the Borrower hereby represents and
warrants that:
Section VI.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.
Section VI.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.
Section VI.3 Power of Officers. The officers of the general partner of each
of the entities comprising the Borrower executing the Loan Documents required to
be delivered by such entities hereunder have been duly elected or appointed and
were fully authorized to execute the same at the time each such agreement,
certificate or instrument was executed.
Section VI.4 Government and Other Approvals. No approval, consent,
exemption or other action by, or notice to or filing with, any governmental
authority is necessary in connection with the execution, delivery or performance
of the Loan Documents required hereunder.
Section VI.5 Solvency.
(i) Immediately after the Agreement Effective Date and
immediately following the making of each Loan and after giving
effect to the application of the proceeds of such Loans, (a)
the fair value of the assets of each entity comprising the
Borrower and its Subsidiaries on a consolidated basis, at a
fair valuation, will exceed the debts and liabilities,
subordinated, contingent or otherwise, of the such entity and
its Subsidiaries on a consolidated basis; (b) the present fair
saleable value of the Properties of each entity comprising the
Borrower and its Subsidiaries on a consolidated basis will be
greater than the amount that will be required to pay the
probable liability of such entity and its Subsidiaries on a
consolidated basis on their debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) each entity
comprising the Borrower and its Subsidiaries on a consolidated
basis will be able to pay their debts and liabilities,
subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each entity
comprising the Borrower and its Subsidiaries on a consolidated
basis will not have unreasonably small capital with which to
conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted
after the date hereof.
(ii) Neither of the entities comprising the Borrower
intends to, or to permit any of its Subsidiaries to, incur
debts beyond its ability to pay such debts as they mature,
taking into account the timing of and amounts of cash to be
received by it or any such Subsidiary and the timing of the
amounts of cash to be payable on or in respect of its
Indebtedness or the Indebtedness of any such Subsidiary.
Section VI.6 Compliance With Laws. There is no judgment, decree or order or
any law, rule or regulation of any court or governmental authority binding on
the entities comprising the Borrower or any of their Subsidiaries which would be
contravened by the execution, delivery or performance of the Loan Documents
required hereunder.
Section VI.7 Enforceability of Agreement. This Agreement is the legal,
valid and binding agreement of each of the entities comprising the Borrower, and
the Notes when executed and delivered will be the legal, valid and binding
obligations of such entities, enforceable against such entities in accordance
with their respective terms, and the Loan Documents required hereunder, when
executed and delivered, will be similarly legal, valid, binding and enforceable
except to the extent that such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting the
rights of creditors generally.
Section VI.8 Title to Property. To the best of Borrower's knowledge after
due inquiry, the Consolidated Group and the Investment Affiliates have good and
marketable title to their Properties and assets reflected in the financial
statements as owned by them free and clear of Liens except for the Permitted
Liens. The execution, delivery or performance of the Loan Documents required to
be delivered by the Borrower hereunder will not result in the creation of any
Lien on the Properties. No consent to the transactions contemplated hereunder is
required from any ground lessor or mortgagee or beneficiary under a deed of
trust or any other party except as has been delivered to the Lenders.
Section VI.9 Litigation. There are no suits, arbitrations, claims,
disputes or other proceedings (including, without limitation, any civil,
criminal, administrative or environmental proceedings), pending or, to the best
of Borrower's knowledge, threatened against or affecting the Borrower or any
of their Properties, the adverse determination of which individually or in
the aggregate would have a Material Adverse Effect on the Borrower and/or any
of their Properties and/or would cause a Material Adverse Financial Change of
Borrower or materially impair the Borrower's ability to perform its obligations
hereunder or under any instrument or agreement required hereunder, except as
disclosed on Schedule 6.9 hereto, or otherwise disclosed to Lenders in
accordance with the terms hereof.
Section VI.10 Events of Default. No Default or Event of Default has
occurred and is continuing or would result from the incurring of obligations by
the Borrower under any of the Loan Documents or any other document to which
Borrower is a party.
Section VI.11 Investment Company Act of 1940. Borrower is not and will by
such acts as may be necessary continue not to be, an investment company within
the meaning of the Investment Company Act of 1940.
Section VI.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.
Section VI.13 Regulation U. The proceeds of the Advances will not be used,
directly or indirectly, to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock.
Section VI.14 No Material Adverse Financial Change. To the best knowledge
of Borrower, there has been no Material Adverse Financial Change in the
condition of Borrower since the date of the financial and/or operating
statements most recently submitted to the Lenders.
Section VI.15 Financial Information. All financial statements furnished to
the Lenders by or at the direction of the Borrower and all other financial
information and data furnished by the Borrower to the Lenders are complete and
correct in all material respects as of the date thereof, and such financial
statements have been prepared in accordance with GAAP and fairly present the
consolidated financial condition and results of operations of the Borrower as of
such date. The Borrower has no contingent obligations, liabilities for taxes or
other outstanding financial obligations which are material in the aggregate,
except as disclosed in such statements, information and data.
Section VI.16 [Intentionally Omitted].
Section VI.17 ERISA. (i) Borrower is not an entity deemed to hold "plan
assets" within the meaning of ERISA or any regulations promulgated thereunder of
an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject
to Title I of ERISA or any plan within the meaning of Section 4975 of the Code,
and (ii) the execution of
this Agreement and the transactions contemplated hereunder do not give rise to a
prohibited transaction within the meaning of Section 406 of ERISA or Section
4975 of the Code.
Section VI.18 Taxes. All required tax returns have been filed by Borrower
with the appropriate authorities except to the extent that extensions of time to
file have been requested, granted and have not expired or except to the extent
such taxes are being contested in good faith and for which adequate reserves, in
accordance with GAAP, are being maintained.
Section VI.19 Environmental Matters. Except as disclosed in Schedule 6.19,
each of the following representations and warranties is true and correct in all
material respects except to the extent that the facts and circumstances giving
rise to any such failure to be so true and correct, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:
(i) To the knowledge of the Borrower, the Properties of
Borrower, its Subsidiaries, and Investment Affiliates do not
contain any Materials of Environmental Concern in amounts or
concentrations which constitute a violation of, or could
reasonably give rise to liability under, Environmental Laws.
(ii) Borrower has not received any written notice
alleging that any or all of the Properties of Borrower and its
Subsidiaries and Investment Affiliates and all operations at
the Properties are not in compliance with all applicable
Environmental Laws. Further, Borrower has not received any
written notice alleging the existence of any contamination at
or under such Properties in amounts or concentrations which
constitute a violation of any Environmental Law, or any
violation of any Environmental Law with respect to such
Properties for which Borrower, its Subsidiaries or Investment
Affiliates is or could be liable.
(iii) Neither Borrower nor any of its Subsidiaries or
Investment Affiliates has received any written notice of
non-compliance, liability or potential liability regarding
Environmental Laws with regard to any of the Properties, nor
does it have knowledge that any such notice will be received
or is being threatened.
(iv) To the knowledge of Borrower during the ownership of
the Properties by any or all of Borrower, its Subsidiaries and
Investment Affiliates, Materials of Environmental Concern have
not been transported or disposed of from the Properties of
Borrower and its Subsidiaries and Investment Affiliates in
violation of, or in a manner or to a location which could
reasonably give rise to liability of Borrower, any Subsidiary,
or any Investment Affiliate under, Environmental Laws, nor
during the ownership of the Properties by any or all of
Borrower, its Subsidiaries and Investment
Affiliates have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any
of such Properties in violation of, or in a manner that could
give rise to liability of Borrower, any Subsidiary or any
Investment Affiliate under, any applicable Environmental Laws.
(v) No judicial proceedings or governmental or
administrative action is pending, or, to the knowledge of
Borrower, threatened, under any Environmental Law to which
Borrower, any of its Subsidiaries, or any Investment
Affiliate, is named as a party with respect to the Properties
of such entity, nor are there any consent decrees or other
decrees, consent orders, administrative order or other orders,
or other administrative or judicial requirements outstanding
under any Environmental Law with respect to such Properties
for which Borrower, its Subsidiaries, or any Investment
Affiliate is or could be liable.
(vi) To the knowledge of Borrower during the ownership of
the Properties by any or all of Borrower, its Subsidiaries and
Investment Affiliates, there has been no release or threat of
release of Materials of Environmental Concern at or from the
Properties of Borrower and its Subsidiaries and Investment
Affiliates, or arising from or related to the operations of
such entity in connection with the Properties in violation of
or in amounts or in a manner that could give rise to liability
under Environmental Laws.
Section VI.20 Insurance. Borrower has obtained or cause to be obtained the
insurance which Borrower is required to furnish to Lenders under Section 3 of
each of the Mortgages.
Section VI.21 No Brokers. Borrower has dealt with no brokers in connection
with this Facility, and no brokerage fees or commissions are payable by or to
any Person in connection with this Agreement or the Advances. Lenders shall not
be responsible for the payment of any fees or commissions to any broker and
Borrower shall indemnify, defend and hold Lenders harmless from and against any
claims, liabilities, obligations, damages, costs and expenses (including
reasonable attorneys' fees and disbursements) made against or incurred by
Lenders as a result of claims made or actions instituted by any broker or Person
claiming by, through or under Borrower in connection with the Facility.
Section VI.22 No Violation of Usury Laws. No aspect of any of the
transactions contemplated herein violate or will violate any usury laws or laws
regarding the validity of agreements to pay interest in effect on the date
hereof.
Section VI.23 Not a Foreign Person. Borrower is not a "foreign
person" within the meaning of Section 1445 or 7701 of the Internal Revenue Code.
Section VI.24 No Trade Name. Except as otherwise set forth on
Schedule 6.24 attached hereto, Borrower does not use any trade name and has not
and does not do business under any name other than their actual names set forth
herein. The principal place of business of Borrower is as stated in the recitals
hereto.
Section VI.25 Subsidiaries. Schedule 6.25 hereto contains an accurate list
of all of the presently existing Subsidiaries of Borrower, setting forth their
respective jurisdictions of formation, the percentage of their respective
Capital Stock owned by it or its Subsidiaries and the Properties owned by them.
All of the issued and outstanding shares of Capital Stock of such Subsidiaries
have been duly authorized and issued and are fully paid and non-assessable.
Section VI.26 Security Interests. At all times after execution and delivery
of the Security Documents by the Loan Parties thereto and completion of the
filings and recordings listed on Schedule 3, the security interests created for
the benefit of the Administrative Agent and the Lenders pursuant to the Security
Documents will constitute valid, perfected security interests in the collateral
subject thereto, subject to no other Liens whatsoever except for Permitted
Liens.
Section VI.27 Collateral Pool Assets.
(a) Each of the representations and warranties made by each Loan Party
in its Security Documents with respect to any Collateral Pool Asset is true and
correct in all material respects.
(b) No Collateral Pool Asset is located in an area that has been
identified by the Secretary of Housing and Urban Development as an area having
special flood hazards and in which flood insurance has been made available under
the National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of
1973, as amended, or any successor law, or, if located within any such area,
Borrower has obtained and will maintain the insurance prescribed in Section
5.1(p) hereof.
(c) To the Borrower's knowledge, except as shown on Schedule 6.19,
each Collateral Pool Asset and the present use and occupancy thereof are in
material compliance with all applicable zoning ordinances (without reliance upon
adjoining or other properties), building codes, land use and Environmental Laws,
and other similar laws ("Applicable Laws").
(d) Each Collateral Pool Asset is served by all utilities required for
the current or contemplated use thereof. All utility service is provided by
public utilities and each Collateral Pool Asset has accepted or is equipped to
accept such utility service.
(e) All public roads and streets necessary for service of and access
to each Collateral Pool Asset for the current or contemplated use thereof have
been completed, are serviceable and all-weather and are physically and legally
open for use by the public.
(f) Each Collateral Pool Asset is served by public water and sewer
systems or, if a Collateral Pool Asset is not serviced by a public water and
sewer system, the
alternate systems are adequate and meet, in all material respects, all
requirements and regulations of, and otherwise comply in all material respects
with, all Applicable Laws with respect to such alternate systems.
(g) Borrower is not aware of any latent or patent structural or other
significant deficiency of any Collateral Pool Asset. Each Collateral Pool Asset
is free of damage and waste that would materially and adversely affect the value
of such Collateral Pool Asset, is in good repair and there is no deferred
maintenance other than ordinary wear and tear. Each Collateral Pool Asset is
free from damage caused by fire or other casualty. There is no pending or, to
the actual knowledge of Borrower, threatened condemnation proceedings affecting
any Collateral Pool Asset, or any material part thereof.
(h) To Borrower's knowledge, all liquid and solid waste disposal,
septic and sewer systems located on each and every Collateral Pool Asset are in
a good and safe condition and repair and to Borrower's knowledge, in material
compliance with all Applicable Laws with respect to such systems.
(i) All improvements on each Collateral Pool Asset lie within the
boundaries and building restrictions of the legal description of record of such
Collateral Pool Asset, no improvements encroach upon easements benefiting any
Collateral Pool Asset other than encroachments that do not materially adversely
affect the use or occupancy of a Collateral Pool Asset and no improvements on
adjoining properties encroach upon any Collateral Pool Asset or easements
benefiting any Collateral Pool Asset other than encroachments that do not
materially adversely affect the use or occupancy of a Collateral Pool Asset. All
amenities, access routes or other items that materially benefit each Collateral
Pool Asset are under direct control of Borrower, constitute permanent easements
that benefit all or part of such Collateral Pool Asset or are public property,
and each Collateral Pool Asset, by virtue of such easements or otherwise, is
contiguous to a physically open, dedicated all weather public street, and has
the necessary permits for ingress and egress.
(j) There are no delinquent taxes, ground rents, water charges, sewer
rents, assessments, insurance premiums, leasehold payments, or other outstanding
charges affecting any Collateral Pool Asset except to the extent such items are
being contested in good faith and as to which adequate reserves have been
provided.
(k) Each Collateral Pool Asset conforms to all requirements for an
Eligible Property except that certain Initial Collateral Pool Assets may not
satisfy condition (x) of the conditions for being an Eligible Property.
A breach of any of the representations and warranties contained in this
Section 6.27 with respect to a Property shall disqualify such Property from
being a Collateral Pool Asset for so long as such breach continues (unless
otherwise approved by the Required Lenders) but shall not constitute a Default
(unless the elimination of such Property as a Collateral Pool Asset results in a
Default under one of the other provisions of this Agreement).
Borrower agrees that all of its representations and warranties set forth in
Article VI of this Agreement and elsewhere in this Agreement are true on the
Agreement Effective Date, and will be true on each Effective Date in all
material respects (except with respect to matters which have been disclosed in
writing to and approved by the Required Lenders), and will be true in all
material respects (except with respect to matters which have been disclosed in
writing to and approved by the Required Lenders) upon each request for
disbursement of an Advance. Each request for disbursement hereunder shall
constitute a reaffirmation of such representations and warranties as deemed
modified in accordance with the disclosures made and approved, as aforesaid, as
of the date of such request and disbursement.
Article VII.
ADDITIONAL REPRESENTATIONS AND WARRANTIES
Each of the Guarantors hereby represents and warrants that:
Section VII.1 Existence. Equity Inns is a corporation duly organized and
existing under the laws of the State of Tennessee, with its principal place of
business in the State of Tennessee and Equity Inns Trust is a real estate
investment trust duly organized and existing under the laws of the State of
Maryland, with its principal place of business in the State of Tennessee and
each Guarantor is duly qualified as a foreign corporation and properly licensed
(if required) and in good standing in each jurisdiction where the failure to
qualify or be licensed (if required) would constitute a Material Adverse
Financial Change with respect to such Guarantor or have a Material Adverse
Effect on the business or properties of such Guarantor.
Section VII.2 Corporate or Trust Powers. The execution, delivery and
performance of the Loan Documents required to be delivered by the Guarantors
hereunder are within the corporate powers of the Guarantors, have been duly
authorized by all requisite corporate action, and are not in conflict with the
terms of any organizational instruments of the Guarantors, or any instrument or
agreement to which the either of the Guarantors is a party or by which either of
the Guarantors or any of its assets is bound or affected.
Section VII.3 Power of Officers. The officers of the Guarantors executing
the Loan Documents required to be delivered by the Guarantors hereunder have
been duly elected or appointed and were fully authorized to execute the same at
the time each such agreement, certificate or instrument was executed.
Section VII.4 Government and Other Approvals. No approval, consent,
exemption or other action by, or notice to or filing with, any governmental
authority is necessary in connection with the execution, delivery or performance
of the Loan Documents required hereunder.
Section VII.5 Compliance With Laws. There is no judgment, decree or order
or any law, rule or regulation of any court or governmental authority binding
on the Guarantors which would be contravened by the execution, delivery
or performance of the Loan Documents required hereunder.
Section VII.6 Enforceability of Guaranty. The Guaranty is the legal, valid
and binding agreement of the Guarantors, enforceable against the Guarantors in
accordance with its terms, except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws affecting the rights of creditors generally.
Section VII.7 Liens; Consents. The execution, delivery or performance of
the Loan Documents required to be delivered by the Guarantors hereunder will not
result in the creation of any Lien on the Properties. No consent to the
transactions hereunder is required from any ground lessor or mortgagee or
beneficiary under a deed of trust or any other party except as has been
delivered to the Lenders.
Section VII.8 Litigation. There are no suits, arbitrations, claims,
disputes or other proceedings (including, without limitation, any civil,
criminal, administrative or environmental proceedings), pending or, to the best
of the Guarantors' knowledge, threatened against or affecting either of the
Guarantors or any of their Properties, the adverse determination of which
individually or in the aggregate would have a Material Adverse Effect on the
Guarantors or would cause a Material Adverse Financial Change with respect to
the Guarantors or materially impair the Guarantors' ability to perform their
obligations under the Guaranty, except as disclosed on Schedule 7.8 hereto, or
otherwise disclosed to the Lenders in accordance with the terms hereof.
Section VII.9 Investment Company Act of 1940. Neither of the Guarantors is,
and the Guarantors will by such acts as may be necessary continue not to be, an
investment company within the meaning of the Investment Company Act of 1940.
Section VII.10 Public Utility Holding Company Act. Neither of the
Guarantors is a "holding company" or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company," or of a "subsidiary company"
of a "holding company," within the definitions of the Public Utility Holding
Company Act of 1935, as amended.
Section VII.11 No Material Adverse Financial Change. There has been no
Material Adverse Financial Change in the condition of the Guarantors since the
last date on which the financial and/or operating statements were submitted to
the Lenders.
Section VII.12 Financial Information. All financial statements furnished to
the Lenders by or on behalf of the Guarantors and all other financial
information and data furnished by or on behalf of the Guarantors to the Lenders
are complete and correct in all material respects as of the date thereof, and
such financial statements have been prepared in accordance with GAAP and fairly
present the consolidated financial condition and results of operations of the
Guarantors as of such date. The Guarantors have no contingent obligations,
liabilities for taxes or other outstanding financial obligations which are
material in the aggregate, except as disclosed in such statements, information
and data.
Section VII.13 [Intentionally Omitted].
Section VII.14 ERISA. (i) Neither Guarantor is an entity deemed to hold
"plan assets" within the meaning of ERISA or any regulations promulgated
thereunder of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan within the meaning of Section
4975 of the Code, and (ii) the execution of this Agreement and the transactions
contemplated hereunder do not give rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code.
Section VII.15 Taxes. All required tax returns have been filed by the
Guarantors with the appropriate authorities except to the extent that extensions
of time to file have been requested, granted and have not expired or except to
the extent such taxes are being contested in good faith and for which adequate
reserves, in accordance with GAAP, are being maintained.
Section VII.16 Subsidiaries. Schedule 7.16 hereto contains an accurate list
of all of the presently existing Subsidiaries of Guarantors, setting forth their
respective jurisdictions of formation, the percentage of their respective
Capital Stock owned by it or its Subsidiaries and the Properties owned by them.
All of the issued and outstanding shares of Capital Stock of such Subsidiaries
have been duly authorized and issued and are fully paid and non-assessable.
Section VII.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 Effective Date, and
will be true on each Effective Date in all material respects (except with
respect to matters which have been disclosed in writing to and approved by the
Required Lenders), and will be true in all material respects (except with
respect to matters which have been disclosed in writing to and approved by the
Required Lenders) upon each request for disbursement of an Advance or issuance
of a Facility Letter of Credit. Each such request hereunder shall constitute a
reaffirmation of such representations and warranties as deemed modified in
accordance with the disclosures made and approved, as aforesaid, as of the date
of such request and disbursement.
Article VIII.
AFFIRMATIVE COVENANTS
The Borrower and each of the Guarantors covenant and agree that so long
as the Commitment of any Lender shall remain available and until the full and
final payment of all Obligations incurred under the Loan Documents they will:
Section VIII.1 Notices. Promptly give written notice to Administrative
Agent (who will promptly send such notice to Lenders) of:
(a) all litigation or arbitration proceedings affecting any member of
the Consolidated Group where the amount claimed is $5,000,000 or more;
(b) any Default or Event of Default, specifying the nature and the
period of existence thereof and what action has been taken or been proposed to
be taken with respect thereto;
(c) all claims filed against any Property owned by any member of the
Consolidated Group which, if adversely determined, could have a Material Adverse
Effect on the ability of the Borrower or the Guarantors to meet any of their
obligations under the Loan Documents;
(d) the occurrence of any other event which might have a Material
Adverse Effect or cause a Material Adverse Financial Change on or with respect
to the Borrower or the Guarantors;
(e) any Reportable Event or any "prohibited transaction" (as such term
is defined in Section 4975 of the Code) in connection with any Plan or any trust
created thereunder, which may, singly or in the aggregate materially impair the
ability of the Borrower or the Guarantors to repay any of the Obligations under
the Loan Documents, describing the nature of each such event and the action, if
any, the Borrower or the Guarantors, as the case may be, proposes to take with
respect thereto;
(f) any notice from any federal, state, local or foreign authority
regarding any Hazardous Material, asbestos, or other environmental condition,
proceeding, order, claim or violation affecting any of the Properties of the
Consolidated Group.
Section VIII.2 Financial Statements, Reports, Etc. The Borrower and the
Guarantors will maintain, for the Consolidated Group, a system of accounting
established and administered in accordance with GAAP, and furnish to the
Lenders:
(i) as soon as available, but in any event not later than
60 days after the close of each fiscal quarter, for the
Consolidated Group an unaudited quarterly financial statement
(including a balance sheet and income statement) for such
period and the portion of the fiscal year through the end of
such period, setting forth in each case in comparative form
the figures for the previous year, all certified by Equity
Inns' chief financial officer or chief accounting officer;
(ii) As soon as available, but in any event not later
than 60 days after the close of each fiscal quarter, for the
Consolidated Group, related reports in form and substance
satisfactory to the Lenders, all certified by Equity Inns'
chief financial officer or chief accounting officer, including
a statement of Funds From Operations, calculation of the
financial covenants described below, a 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 sixty (60) days after the end of each of the first three
fiscal quarters, and not later than 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 Net 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 in the Borrowing Base, 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 sixty (60) days after the end of each
of the first three fiscal quarters, and not later than ninety
(90) days after the end of the fiscal year, a compliance
certificate in substantially the form of Exhibit I hereto
("Compliance Certificate") signed by the Operating Partnership
and Equity Inns' chief financial officer or chief accounting
officer confirming that the Borrower and the Guarantors are in
compliance with all of the covenants of the Loan Documents,
showing the calculations and computations necessary to
determine compliance with the financial covenants contained in
this Agreement (including such schedules and backup
information as may be necessary to demonstrate such
compliance) and stating that to such officer's best knowledge,
there is no other Default or Event of Default exists, or if
any Default or Event of Default exists, stating the nature and
status thereof;
(vi) As soon as possible and in any event within 10
Business Days after any member of the Consolidated Group knows
that any Reportable Event has occurred with respect to any
Plan, a statement, signed by the chief financial officer of
Equity Inns, describing said Reportable Event and within 20
days after such Reportable Event, a statement signed by such
chief financial officer describing the action which the
Consolidated Group
proposes to take with respect thereto; and (b) within 10
Business Days of receipt, any notice from the Internal Revenue
Service, PBGC or Department of Labor with respect to a Plan
regarding any excise tax, proposed termination of a Plan,
prohibited transaction or fiduciary violation under ERISA or
the Code which could result in any liability to the
Consolidated Group in excess of $100,000; and (c) within 10
Business Days of filing, any Form 5500 filed with respect to a
Plan by any member of the Consolidated Group which includes a
qualified accountant's opinion.
(vii) As soon as possible and in any event within 30 days
after receipt, a copy of (a) any notice or claim to the effect
that any member of the Consolidated Group is or may be liable
to any Person as a result of the release by such entity or any
other Person of any toxic or hazardous waste or substance into
the environment, and (b) any notice alleging any violation of
any federal, state or local environmental, health or safety
law or regulation by any member of the Consolidated Group,
which, in either case, could be reasonably likely to have a
Material Adverse Effect;
(viii) Promptly upon the distribution thereof to the
press or the public, copies of all press releases;
(ix) As soon as possible, and in any event within 10 days
after the Borrower knows of any fire or other casualty or any
pending or threatened condemnation or eminent domain
proceeding with respect to all or any material portion of any
Collateral Pool Asset, a statement describing such fire,
casualty or condemnation and the action Borrower intends to
take with respect thereto;
(x) Such other information (including, without
limitation, non-financial information) as the Administrative
Agent or any Lender may from time to time reasonably request.
The request for a reappraisal of any Collateral Pool Asset, as
long as such Collateral Pool Asset has not been the subject of
an Appraisal in the preceding 12 months, is hereby deemed
reasonable; and
(xi) Within ten (10) Business Days after the request of
the Administrative Agent, a financial statement showing
Adjusted EBITDA, Ground Lease Expense, Fixed Charges and
Interest Expense for the period of twelve (12) full months
ending immediately prior to the date of such request.
Section VIII.3 Existence and Conduct of Operations; Limitations on
Investments. Except as permitted herein, maintain and preserve its existence and
all rights, privileges and franchises now enjoyed and necessary for the
operation of its business, including remaining in good standing in each
jurisdiction in which business is currently operated.
The Borrower and the Guarantors shall carry on and conduct their respective
businesses in substantially the same manner and in substantially the same fields
of enterprise as presently conducted. The Borrower and the Guarantors will do,
and will cause each of their Subsidiaries to do, all things necessary to remain
duly incorporated and/or duly qualified, validly existing and in good standing
as a real estate investment trust, corporation, general partnership, limited
liability company or limited partnership, as the case may be, in its
jurisdiction of incorporation/formation. The Borrower and the Guarantors will
maintain all requisite authority to conduct their businesses in each
jurisdiction in which the Properties are located and, except where the failure
to be so qualified would not have a Material Adverse Effect, in each
jurisdiction required to carry on and conduct its businesses in substantially
the same manner as it is presently conducted, and, specifically, neither the
Borrower, the Guarantors nor any of their Subsidiaries will undertake any
business other than the acquisition, development, ownership, management and
operation of hotel properties (excluding economy and budget hotels) which are
located in the United States, provided that the aggregate Total Cost of all
Properties Under Development shall not exceed 10% of the Total Cost of all
Properties owned by the Consolidated Group.
Section VIII.4 Maintenance of Properties. Maintain, preserve, protect and
keep the Properties in good repair, working order and condition, and make all
necessary and proper repairs, renewals and replacements, normal wear and tear
excepted.
Section VIII.5 Insurance. Provide a certificate of insurance from all
insurance carriers who maintain policies with respect to the Properties within
thirty (30) days after the end of each fiscal year, evidencing that the
insurance required to be furnished to Lenders pursuant to Section 3 of the
Mortgages] is in full force and effect. Borrower shall timely pay, or cause to
be paid, all premiums on all insurance policies required under the Loan
Documents from time to time. Borrower shall promptly notify its insurance
carrier or agent therefor (with a copy of such notification being provided
simultaneously to Administrative Agent) if there is any occurrence which, under
the terms of any insurance policy then in effect with respect to the Properties,
requires such notification.
Section VIII.6 Payment of Obligations. Pay all taxes, assessments,
governmental charges and other obligations when due, except such as may be
contested in good faith or as to which a bona fide dispute may exist, and for
which adequate reserves have been provided in accordance with sound accounting
principles used by the Consolidated Group on the date hereof.
Section VIII.7 Compliance with Laws. Comply in all material respects with
all applicable laws, rules, regulations, orders and directions of any
governmental authority having jurisdiction over Borrower, the Guarantors, or any
of their respective businesses, subject to the right to contest such compliance
obligations in good faith so long as adequate reserves are established for
possible liabilities arising therefrom and an adverse resolution of such
noncompliance would not have a Material Adverse Effect.
Section VIII.8 Adequate Books. Maintain adequate books, accounts and
records in order to provide financial statements in accordance with GAAP and, if
requested by any Lender, permit employees or representatives of such Lender at
any reasonable time and upon reasonable notice to inspect and audit the
properties of Borrower and of the Consolidated Group, and to examine or audit
the inventory, books, accounts and records of each of them and make copies and
memoranda thereof.
Section VIII.9 ERISA. Comply in all material respects with all requirements
of ERISA applicable to it with respect to each Plan.
Section VIII.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).
Section VIII.11 Use of Proceeds. Use the proceeds of the Facility for the
general business purposes of the Borrower, including without limitation
repayment in full of the Existing Agreement, acquisition by the Borrower of
premium limited service, premium extended stay and premium all-suite and
full-service hotel properties, developments, expansions and renovations of the
Borrower's existing hotel properties and other general corporate and working
capital needs.
Section VIII.12 Pre-Acquisition Environmental Investigations. Cause to be
prepared prior to the acquisition of each Property that it intends to acquire an
environmental report pursuant to a standard scope of work attached as Exhibit J
hereto and made a part hereof.
Section VIII.13 Eligible Properties. Cause all Collateral Pool Assets to
continue to meet all the requirements included in the definition of "Eligible
Property" hereunder (except for the condition regarding 60% occupancy in
subsection (x) of those requirements).
Section VIII.14 Required Repairs. Cause all items designated as "Immediate
Repairs" in the Property Condition Report prepared by IVI Architects Engineers
and Construction Consultants in connection with the Initial Collateral Pool
Assets to be completed within sixty 6 months after the Agreement Execution. If
such work is not completed with respect to any Property, the Required Lenders
can require such Property to not be included as a Collateral Pool Asset in which
case Borrower shall make any payment required by Section 2.19(b) within the time
period provided therein.
Section VIII.15 Additional Environmental Studies. Cause further testing of
the ground water quality at the Property located in Birmingham, Alabama. Such
investigation and testing shall be completed within sixty (60) days from the
Agreement Effective Date and if the results are unsatisfactory to Administrative
Agent it can require such Properties to not be included as Collateral Pool
Assets in which case Borrower shall make any payment required by Section 2.19(b)
within the time period provided therein.
Article IX.
NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as the Commitment shall
remain available and until full and final payment of all obligations incurred
under the Loan Documents, without the prior written consent of the Required
Lenders (or the Administrative Agent or a greater Percentage of the Lenders, if
so expressly provided), the Borrower, the Guarantors and the Consolidated Group
will not:
Section IX.1 Change of Borrower Ownership. Allow (i) Equity Inns Trust to
own less than one hundred percent (100%) of the general partnership interests in
the Operating Partnership and Equity II, (ii) Equity Inns Services, Inc. to own
less than one hundred percent (100%) of the general partnership interests in
EIP/WV, (iii) Equity Inns to own less than 100% of the beneficial interests in
Equity Inns Trust or 100% of the stock in Equity Inns Services, Inc., (iv) any
pledge of, other encumbrance on, or conversion to limited partnership interests
of, any of the general partnership interests in the Borrower, or (v) any pledge,
hypothecation, encumbrance, transfer or other change in the ownership or the
partnership interests in the REMIC Partnership (except for the pledge of such
partnership interests to the lender under the REMIC Loan).
Section IX.2 Use of Proceeds. Apply or permit to be applied any proceeds of
any Advance directly or indirectly, to the funding of any purchase of, or offer
for, any Margin Stock or any share of capital stock of any publicly held
corporation unless the board of directors of such corporation has consented to
such offer prior to any public announcements relating thereto and the Lenders
have consented to such use of the proceeds of the Facility.
Section IX.3 Leverage; Additional Recourse Indebtedness. Permit or
suffer:
(a) From the Agreement Effective Date through March 31, 2002, the
the ratio of Total Indebtedness to EBITDA to exceed 4.75;
(b) From April 1, 2002 through Maturity Date, the ratio of Total
Indebtedness to EBITDA to exceed 4.50; or
(c) At any time, the aggregate Recourse Indebtedness of the
Consolidated Group to exceed the sum of (a) the then-outstanding Advances
hereunder plus (b) $50,000,000.
Section IX.4 Dividends. Permit or suffer:
(a) At any time after the Agreement Effective Date, the aggregate
amount of dividends paid by Equity Inns (excluding Preferred Stock Expense) plus
the amount paid by Equity Inns to repurchase its stock, without duplication, for
the most recent four fiscal quarters for which financial reports are available,
to exceed 90% of the Funds From Operations of Equity Inns for such four fiscal
quarters, 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.
(b) As of the following dates, the aggregate amount of dividends paid
by Equity Inns (excluding Preferred Stock Expense), without duplication, for the
most recent four fiscal quarters for which financial reports are available, to
exceed the following percentages of Free Cash Flow of the Consolidated Group for
such four fiscal quarters, 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:
Quarter End Dates Percentage of Free Cash Flow
----------------- ----------------------------
June 30, 2000 and September 110%
30, 2000
December 31, 2000 through
December 31, 2001 105%
March 31, 2002 through
Maturity Date 100%
(c) As of the following dates, the aggregate amount of dividends paid
by Equity Inns (excluding Preferred Stock Expense), without duplication, for the
most recent four fiscal quarters for which financial reports are available, plus
the amount paid by Equity Inns for the repurchase of its stock, without
duplication, for such four fiscal quarters, to exceed the following percentages
of the sum of Free Cash Flow of the Consolidated Group for such four fiscal
quarters plus 50% of all Net Cash Proceeds from the sales of Properties during
such four fiscal quarters, 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:
Quarter End Dates Percentage
----------------- ----------
June 30, 2000 and September
30, 2000 110%
December 31, 2000 through
December 31, 2001 105%
March 31, 2002 through
Maturity Date 100%
Section IX.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.
Section IX.6 Liens. Create, incur, or suffer to exist (or permit any of the
Consolidated Group to create, incur, or suffer to exist) any Lien in, of or on
the Properties of the Consolidated Group except:
(i) Liens for taxes, assessments or governmental charges
or levies on their Property if the same shall not at the time
be delinquent or thereafter can be paid without penalty, or
are being contested in good faith and by appropriate
proceedings and for which adequate reserves shall have been
set aside on their books;
(ii) Liens which arise by operation of law, such as
carriers', warehousemen's, landlords', materialmen and
mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of
obligations not more than 30 days past due or which are being
contested in good faith by appropriate proceedings and for
which adequate reserves shall have been set aside on its books
and, in the case of any mechanic's lien on a Collateral Pool
Asset, for which an affirmative endorsement to the Lender's
title insurance policy has been provided to the Administrative
Agent;
(iii) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance, old age
pensions, or other social security or retirement benefits, or
similar legislation;
(iv) Utility easements and such other encumbrances or
charges against real property as are of a nature generally
existing with respect to properties of a similar character and
which do not in any material way affect the marketability of
the same or interfere with the use thereof in the business of
the Borrower or its Subsidiaries, provided that Collateral
Pool Assets shall only be subject to such matters as are
listed as exceptions to the title insurance policies for such
Collateral Pool Assets which have been submitted to and
approved by the Administrative Agent;
(v) Liens of any member of the Consolidated Group in
favor of the Borrower or the Guarantors which are junior to
any Lien for the benefit of Lenders;
(vi) Liens arising in connection with any Indebtedness
permitted hereunder to the extent such Liens will not result
in a violation of any of the provisions of this Agreement; and
(vii) Liens which are Permitted Operating Leases.
Liens permitted pursuant to this Section 9.6 shall be deemed to be "Permitted
Liens".
Section IX.7 FF&E Expenditures. Permit, as of the last day of any fiscal
quarter, the sum of (i) the actual expenditures of the Consolidated Group for
FF&E replacement and capital improvements (of the types approved by the
Administrative Agent) at the Properties during the immediately preceding four
(4) consecutive full fiscal quarters plus (ii) the difference between the amount
of reserves maintained by the Consolidated Group for FF&E replacement and
capital improvements as of the last day of such fiscal quarter as shown on the
Consolidated Group's financial statements for such quarter and the amount of
such reserves maintained on the first day of such quarter, to be less than four
percent (4%) of the gross room revenues from such Properties for such four (4)
full fiscal quarters.
Section IX.8 Indebtedness, Coverage and Net Worth Covenants. Permit or
suffer:
(a) as of any day, the Tangible Net Worth of the Consolidated Group,
to be less than the sum of (i) eighty percent (80%) of the Consolidated Group's
Tangible Net Worth as of June 30, 2000 plus (ii) seventy-five percent (75%) of
the aggregate proceeds received (net of customary related fees and expenses) in
connection with any offering or sale after June 30, 2000 of equity interests in
the Borrower or the Guarantors, whether common stock, preferred stock, limited
partnership units or other forms of equity ownership;
(b) as of any day, the ratio of (A) the sum of (i) Adjusted EBITDA for
the most recent twelve (12) full calendar months plus (ii) Ground Lease Expense
for such period to (B) Fixed Charges for such period to be less than 1.75 to 1;
(c) as of any day, the ratio of Adjusted EBITDA of the Consolidated
Group for the most recent twelve (12) full calendar months to Interest Expense
for such period to be less than 2.25 to 1;
Section IX.9 Mergers. Enter into any merger, consolidation, reorganization
or liquidation or transfer or otherwise dispose of all or a substantial portion
of the Consolidated Group's Properties, except for such transactions that occur
between members of the Consolidated Group or as otherwise approved in advance by
the Supermajority Lenders.
Section IX.10 Minimum Borrowing Base. Permit, as of any date, the
then-current Borrowing Base to be less than $125,000,000.
Section IX.11 Share Repurchase. Permit, during any quarter, (the "Current
Quarter"), the aggregate amount paid by Equity Inns for stock repurchases during
such quarter to exceed the sum of (a) 50% of the greater of (i) $0 and (ii) Free
Cash Flow of the Consolidated Group during the preceding four quarter period
ending immediately prior to commencement of the Current Quarter (the "Prior 4
Quarters") minus any amounts attributable to dividend payments (excluding
Preferred Stock Expense) and stock repurchases during the Prior 4 Quarters, plus
(b) 50% of all Net Cash Proceeds from sales of Properties during the Prior 4
Quarters (subject to the limit hereinafter set forth). As used herein, "Net Cash
Proceeds" shall mean the sales proceeds from the sales of Properties minus the
Assumed Debt Amount and any expenses associated with such sale. As used herein,
"Assumed Debt Amount" shall mean either (a) if the Property was financed with a
specific amount of debt, any debt required to be repaid in connection with the
sale of such Property, or (b) if the Property was financed as part of a pool of
Properties (including without limitation any Properties financed pursuant to
this Facility), the greater of (i) the Collateral Pool Asset Value attributable
to such Property sold (if it is a Collateral Pool Asset being sold) multiplied
by the average advance rate (i.e. the ratio of Allocated Facility Amount under
the Facility to the Borrowing Base) under the Facility at the time of such sale
or a comparable amount if the Property being sold was financed with a pool of
other assets based on a borrowing base formulation or (ii) the total amount of
debt repaid pursuant to the release of such Property from the pool.
Notwithstanding the foregoing, the amount of stock repurchases that can be
supported by 50% of Net Cash Proceeds from sales of Properties during any four
quarter period shall be further limited so that such amount does not exceed the
following amounts less the aggregate amount of stock previously repurchased
since the Agreement Effective Date based upon Net Cash Proceeds from the sales
of Properties:
(a) $6,000,000 until September 30, 2001; (b) $12,000,000 until
September 30, 2002; and (c) $18,000,000 until the Facility Termination
Date.
Each Compliance Certificate delivered pursuant to Section 8.2(v) shall show the
amount of shares repurchased during the preceding quarter, the amount of the
permitted share
repurchases during such quarter in accordance with the terms of this Section
9.11 (broken down as to whether based on Free Cash Flow or net proceeds from
asset sales), and based on the results of the preceding four fiscal quarters,
the amount that Equity Inns may repurchase during the then Current Quarter.
Article X.
DEFAULTS
The occurrence of any one or more of the following events shall
constitute an Event of Default:
Section X.1 Nonpayment of Principal. The Borrower fails to pay any
principal portion of the Obligations when due, whether on the Maturity Date or
otherwise.
Section X.2 Certain Covenants. Any one or more of the Borrower, the
Guarantors and the Consolidated Group, as the case may be, is not in compliance
with any one or more of Sections 8.3 or 8.10 or any Section of Article IX
hereof.
Section X.3 Nonpayment of Interest and Other Obligations. The Borrower
fails to pay any interest or other portion of the Obligations, other than
payments of principal, and such failure continues for a period of five (5) days
after the date such payment is due, provided that the first occurrence of any
such non-payment during any calendar year shall not constitute an Event of
Default unless such failure continues for one (1) Business Day after written
notice to the Borrower from the Administrative Agent of such failure.
Section X.4 Cross Default. Any monetary default occurs (after giving effect
to any applicable cure period) under any other Indebtedness (which includes
Guarantee Obligations) of any members of the Consolidated Group, singly or in
the aggregate, in excess of Ten Million Dollars ($10,000,000).
Section X.5 Loan Documents. Any Loan Document is not in full force and
effect or a default has occurred and is continuing thereunder after giving
effect to any cure or grace period in any such document.
Section X.6 Representation or Warranty. At any time or times hereafter any
representation or warranty set forth in Articles VI or VII of this Agreement or
in any other Loan Document or in any statement, report or certificate now or
hereafter made by the Borrower or the Guarantors to the Lenders or the
Administrative Agent is not true and correct in any material respect and such
noncompliance is not cured within thirty (30) days after the Borrower receives
written notice thereof, provided, however, that if such Default is susceptible
of cure but cannot by the use of reasonable efforts be cured within such thirty
(30) day period, such Default shall not constitute an Event of Default under
this Section 10.6 so long as (i) the Borrower or the Guarantors, as the case may
be, have commenced a cure within such thirty-day period and (ii) thereafter,
Borrower or Guarantors, as the case may be, are proceeding to cure such default
continuously and diligently and in a manner reasonably satisfactory to Lenders
and (iii) such default is cured not later than sixty (60) days after the
expiration of such thirty (30) day period..
Section X.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-day period and (ii)
thereafter, Borrower or General Partner, as the case may be, is proceeding to
cure such default continuously and diligently and in a manner reasonably
satisfactory to Lenders and (iii) such default is cured not later than sixty
(60) days after the expiration of such thirty (30) day period.
Section X.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.
Section X.9 Material Adverse Financial Change. Any one of the Operating
Partnership, EIP/WV, Equity Inns or Equity Inns Trust has suffered a Material
Adverse Financial Change or is Insolvent.
Section X.10 Bankruptcy.
(a) Any member of the Consolidated Group shall (i) have an order for
relief entered with respect to it under the Federal bankruptcy laws as now or
hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii)
apply for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
substantial portion of its Property, (iv) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it as a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v)
take any corporate action to authorize or effect any of the foregoing actions
set forth in this Section 10.10(a), (vi) fail to contest in good faith any
appointment or proceeding described in Section 10.10(b) or (vii) not pay, or
admit in writing its inability to pay, its debts generally as they become due;
(b) A receiver, trustee, examiner, liquidator or similar official
shall be appointed for any member of the Consolidated Group or any substantial
portion of any of their Properties, or a proceeding described in Section
10.10(a)(iv) shall be instituted against any member of the Consolidated Group
and such appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of sixty (60) consecutive days.
Section X.11 Legal Proceedings. Any member of the Consolidated Group is
enjoined, restrained or in any way prevented by any court order or judgment or
if a notice of lien, levy, or assessment is filed of record with respect to all
or any part of the Properties by any governmental department, office or agency,
which could materially adversely affect the performance of the obligations of
such parties hereunder or under the Loan Documents, as the case may be, or if
any proceeding is filed or commenced seeking to enjoin, restrain or in any way
prevent the foregoing parties from conducting all or a substantial part of their
respective business affairs and failure to vacate, stay, dismiss, set aside or
remedy the same within sixty (60) days after the occurrence thereof.
Section X.12 ERISA. Any member of the Consolidated Group is deemed to hold
"plan assets" within the meaning of ERISA or any regulations promulgated
thereunder of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code).
Section X.13 Failure to Satisfy Judgments. Any member of the Consolidated
Group shall fail within sixty (60) days to pay, bond or otherwise discharge any
judgments or orders for the payment of money in an amount which, when added to
all other judgments or orders outstanding against such member of the
Consolidated Group would exceed $2,000,000 in the aggregate, which have not been
stayed on appeal or otherwise appropriately contested in good faith, unless the
liability is insured against and the insurer has not challenged coverage of such
liability.
Section X.14 Environmental Remediation. Failure to remediate within the
time period required by law or governmental order, (or within a reasonable time
in light of the nature of the problem if no specific time period is so
established), environmental problems in violation of applicable law related to
Properties of any member of the Consolidated Group where the estimated cost of
remediation is in the aggregate in excess of $2,000,000, in each case after all
administrative hearings and appeals have been concluded.
Section X.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.
Section X.16 Mortgage Default. There shall be an Event of Default
(as defined in the Mortgages) under any of the Mortgages.
Section X.17 Enforceability of Security Documents. (i) Any of the
Security Documents shall cease, for any reason, to be in full force and effect,
or the Borrower or any other Loan Party which is a party to any of the Security
Documents shall so assert or (ii) the Lien created by any of the Security
Documents shall cease to be enforceable or of the same effect and priority
purported to be created thereby.
Article XI.
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
Section XI.1 Acceleration.
If any Event of Default described in Section 10.10 hereof occurs, the
obligation of the Lenders to make Advances and of the Issuing Bank to issue
Facility Letters of Credit hereunder shall automatically terminate and the
Obligations shall immediately become due and payable. If any other Event of
Default described in Article X hereof occurs, such obligation to make Advances
and to issue Facility Letters of Credit shall be terminated and at the election
of the Required Lenders, the Obligations may be declared to be due and payable.
In addition to the foregoing, following the occurrence of an Event of
Default and so long as any Facility Letter of Credit has not been fully drawn
and has not been cancelled or expired by its terms, upon demand by the Required
Lenders the Borrower shall deposit in the Letter of Credit Collateral Account
cash in an amount equal to the aggregate undrawn face amount of all outstanding
Facility Letters of Credit and all fees and other amounts due or which may
become due with respect thereto. The Borrower shall have no control over funds
in the Letter of Credit Collateral Account, which funds shall be invested by the
Administrative Agent from time to time in its discretion in certificates of
deposit of Bank One having a maturity not exceeding thirty (30) days. Such funds
shall be promptly applied by the Administrative Agent to reimburse the Issuing
Bank for drafts drawn from time to time under the Facility Letters of Credit.
Such funds, if any, remaining in the Letter of Credit Collateral Account
following the payment of all Obligations in full shall, unless the
Administrative Agent is otherwise directed by a court of competent jurisdiction,
be promptly paid over to the Borrower.
Section XI.2 Preservation of Rights; Amendments. No delay or omission of
the Lenders in exercising any right under the Loan Documents shall impair such
right or be construed to be a waiver of any Default or an acquiescence therein,
and the making of an Advance notwithstanding the existence of a Default or the
inability of the Borrower to satisfy the conditions precedent to such Advance
shall not constitute any waiver or acquiescence. Any single or partial exercise
of any such right shall not preclude other or further exercise thereof or the
exercise of any other right, and no waiver, amendment or other variation of the
terms, conditions or provisions of the Loan Documents whatsoever shall be valid
unless in writing signed by the Administrative Agent and the number of Lenders
required hereunder and then only to the extent in such writing specifically set
forth. All remedies contained in the Loan Documents or by law afforded shall be
cumulative and all shall be available to the Lenders until the Obligations have
been paid in full.
Section XI.3 Foreclosure. The Lenders hereby agree to the following in the
event of foreclosure under any of the Mortgages or any other attempt at
realization of the security thereunder:
(a) To subscribe to and accept its Percentage of the ownership
interests in any entity organized to hold title to the Collateral Pool Assets
and that the nature of such entity shall be determined by the Required Lenders,
subject to each Lender's right to hold its interests in such entity in, and
assign such interests to, any affiliate of such Lender or any other entity
required by laws or regulations governing such Lender. The Administrative Agent
is hereby authorized to act for and on behalf of the Lenders in all day-to-day
matters with respect to the exercise of rights described herein such as the
supervision of attorneys, accountants, appraisers or others acting for the
benefit of all of the Lenders in connection with litigation, foreclosure or
realization of all or any security given as Collateral for the Obligations or
other similar actions.
(b) If the Lenders acquire the Collateral Pool Assets either by
foreclosure or deed in lieu of foreclosure, to negotiate in good faith to reach
agreement in writing relating to the ownership, operation, maintenance,
marketing and sale of such Collateral Pool Assets and that such agreement shall
be consistent with the following:
(i) The Collateral Pool Assets will not be held as a
long-term investment but will be marketed in an attempt to
sell them in a time period consistent with the regulations
applicable to national banks for owning real estate. Current
appraisals of the Collateral Properties shall be obtained by
the Administrative Agent from time to time during the
ownership period at Lenders' expense (without diminishing or
releasing any obligation of the Borrower to pay for such
costs) and an appraised value shall be established and updated
from time to time based on such appraisals.
(ii) Certain decisionmaking with respect to the
day-to-day operations of the Properties will be delegated to
management and leasing agents. All agreements with such
management and leasing agents will be subject to the approval
of the Required Lenders. The day-to-day supervision of such
agents shall be done by the Administrative Agent.
(iii) Except as provided in the following sentences, all
decisions as to whether to sell the Collateral Pool Assets
shall be subject to the approval of all the Lenders.
Notwithstanding the foregoing, the Lenders agree that if the
Administrative Agent receives a bona fide "all cash" offer
from an entity not affiliated with the Borrower or any Lender
for the purchase of any of the Collateral Pool Assets and such
offer equals or exceeds ninety percent (90%) of the most
recent appraised value of such Collateral Pool Asset as
established by an appraisal prepared in accordance with the
standards established in this Agreement that has been
completed within six months of such offer, then the
Administrative Agent shall give written notice of such offer
to the Lenders and request their approval for sale at such a
price. If the Required Lenders approve of such a sale (or
are deemed to approve of such a sale) then the Administrative
Agent, acting on behalf of the Lenders, is irrevocably
authorized to accept such offer.
(iv) All expenses incurred by the Administrative Agent
and Lenders in connection with the ownership, operation,
maintenance, marketing and sale of the Collateral Pool Assets
shall be allocated among the Lenders pro rata in accordance
with their respective Percentages.
(v) All expenditures and other actions taken with respect
to the Collateral Pool Assets shall at all times be subject to
the regulations and requirements pertaining to national banks
applicable thereto. Without limiting the generality of the
foregoing, all necessary approvals from regulatory authorities
in connection with any expenditure of funds by the Lenders
shall be a condition to such expenditure.
Article XII.
THE ADMINISTRATIVE AGENT
Section XII.1 Appointment. Bank One is hereby appointed Administrative
Agent hereunder and under each other Loan Document, and each of the Lenders
authorizes the Administrative Agent to act as the agent of such Lender. The
Administrative Agent agrees to act as such upon the express conditions contained
in this Article XII. The Administrative Agent shall not have a fiduciary
relationship in respect of any Lender by reason of this Agreement, except to the
extent the Administrative Agent acts as an agent with respect to the receipt or
payment of funds hereunder.
Section XII.2 Powers. The Administrative Agent shall have and may exercise
such powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders to take any
action thereunder except any action specifically provided by the Loan Documents
to be taken by the Administrative Agent.
Section XII.3 General Immunity. Neither the Administrative Agent (in its
capacity as Administrative Agent) nor any of its directors, officers, agents or
employees shall be liable to the Borrower, the Lenders or any Lender for any
action taken or omitted to be taken by it or them hereunder or under any other
Loan Document or in connection herewith or therewith, except for its or their
own gross negligence or willful misconduct.
Section XII.4 No Responsibility for Loans, Recitals, etc. Neither the
Administrative Agent (in its capacity as Administrative Agent) nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into, or verify (i) any statement, warranty or
representation made in connection with any Loan Document or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document; (iii) the satisfaction of
any condition specified in Article V, except receipt of items required
to be delivered to the Administrative Agent; or (iv) the validity,
effectiveness or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith.
Section XII.5 Action on Instructions of Lenders. The Administrative Agent
shall exercise its rights on behalf of the Lenders hereunder at the direction of
the Required Lenders or all of the Lenders, as the case may be, and shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by
the Required Lenders or all Lenders, as the case may be, and such instructions
and any action taken or failure to act pursuant thereto shall be binding on all
of the Lenders and on all holders of Notes. The Administrative Agent shall be
fully justified in failing or refusing to take any action hereunder and under
any other Loan Document unless it shall first be indemnified to its reasonable
satisfaction by the Lenders pro rata against any and all liability, cost and
expense that it may incur by reason of taking or continuing to take any such
action.
Section XII.6 Employment of Administrative Agents and Counsel. The
Administrative Agent may execute any of its duties as Administrative Agent
hereunder and under any other Loan Document by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Lenders, except as to money
or securities received by it or its authorized agents, for the default or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. The Administrative Agent shall be entitled to advice of counsel
concerning all matters pertaining to the agency hereby created and its duties
hereunder and under any other Loan Document.
Section XII.7 Reliance on Documents; Counsel. The Administrative Agent
shall be entitled to rely upon any Note, notice, consent, certificate,
affidavit, letter, telegram, statement, paper or document reasonably believed by
it to be genuine and correct and to have been signed or sent by the proper
person or persons, and, in respect to legal matters, upon the opinion of outside
counsel selected by the Administrative Agent.
Section XII.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.
Section XII.9 Rights as a Lender. With respect to the Commitment, Advances
made by it and the Note issued to it, the Administrative Agent shall have the
same rights and powers hereunder and under any other Loan Document as any Lender
and may exercise the same as though it were not the Administrative Agent, and
the term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Administrative Agent in its individual capacity. The Administrative
Agent, in its individual capacity, may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person.
Section XII.10 Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Agent or any
other Lender and based on the financial statements prepared by the Borrower and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
Section XII.11 Successor Administrative Agent. Each Lender agrees that Bank
One shall serve as Administrative Agent at all times during the term of this
Facility, except that Bank One may resign as Administrative Agent in the event
(x) Bank One 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) Bank One shall determine, in its sole
reasonable discretion, that because of its other banking relationships with the
Consolidated Group at the time of such decision Bank One's resignation as
Administrative Agent would be necessary in order to avoid creating an appearance
of impropriety on the part of Bank One. Bank One (or any successor
Administrative Agent) may be removed as Administrative Agent by written notice
received by Administrative Agent from the Required Lenders at any time with
cause (e.g., a breach by Bank One (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 or delayed and shall
not be required if an Event of Default has occurred. If no successor
Administrative Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within thirty days after the retiring
Administrative Agent's giving notice of resignation, then the retiring
Administrative Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Administrative Agent. Such successor Administrative Agent shall be a
commercial bank having capital and retained earnings of at least $100,000,000.
Upon the acceptance of any appointment as Administrative Agent hereunder by
a successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent (including the right to receive
any fees for performing such duties which accrue thereafter), and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Article XII shall continue in effect for its benefit and
that of the other Lenders in respect of any actions taken or omitted to be
taken by it while it was acting as the Administrative Agent hereunder and under
the other Loan Documents.
Section XII.12 Notice of Defaults. If a Lender becomes aware of a Default
or Event of Default, such Lender shall notify the Administrative Agent of such
fact. Upon receipt of such notice that a Default or Event of Default has
occurred, the Administrative Agent shall notify each of the Lenders of such
fact.
Section XII.13 Requests for Approval. Unless a specific time period for
approval is set forth elsewhere in this Agreement, if the Administrative Agent
requests in writing the consent or approval of a Lender, such Lender shall
respond and either approve or disapprove definitively in writing to the
Administrative Agent within ten (10) Business Days (or sooner if such notice
specifies a shorter period, but in no event less than five Business Days for
responses based on Administrative Agent's good faith determination that
circumstances exist warranting its request for an earlier response) after such
written request from the Administrative Agent. If the Lender does not so
respond, that Lender shall be deemed to have approved the request. Upon request,
the Administrative Agent shall notify the Lenders which Lenders, if any, failed
to respond to a request for approval.
Section XII.14 Copies of Documents. Administrative Agent shall promptly
deliver to each of the Lenders copies of all notices of default and other formal
notices sent or received and according to Section 15.1 of this Agreement.
Administrative Agent shall deliver to Lenders within fifteen (15) Business Days
following receipt, copies of all financial statements, certificates and notices
received regarding the Operating Partnership's or Equity Inns' ratings except to
the extent such items are required to be furnished directly to the Lenders by
Borrower hereunder. Within fifteen (15) Business Days after a request by a
Lender to the Administrative Agent for other documents furnished to the
Administrative Agent by the Borrower, the Administrative Agent shall provide
copies of such documents to such Lender except where this Agreement obligates
Administrative Agent to provide copies in a shorter period of time.
Section XII.15 Defaulting Lenders. At such time as a Lender becomes a
Defaulting Lender, such Defaulting Lender's right to vote on matters which are
subject to the consent or approval of the Required Lenders, such Defaulting
Lender or all Lenders shall be immediately suspended until such time as the
Lender is no longer a Defaulting Lender. If a Defaulting Lender has failed to
fund its Percentage of any Advance and until such time as such Defaulting Lender
subsequently funds its Percentage of such Advance, all Obligations owing to such
Defaulting Lender hereunder shall be subordinated in right of payment, as
provided in the following sentence, to the prior payment in full of all
principal of, interest on and fees relating to the Loans funded by the other
Lenders in connection with any such Advance in which the Defaulting Lender has
not funded its Percentage (such principal, interest and fees being referred to
as "Senior Loans" for the purposes of this section). All amounts paid by the
Borrower and otherwise due to be applied to the Obligations owing to such
Defaulting Lender pursuant to the terms hereof shall be distributed by the
Administrative Agent to the other Lenders in accordance with their respective
Percentages (recalculated for the purposes hereof to exclude the Defaulting
Lender) until all Senior Loans have been paid in full. At that point, the
"Defaulting Lender" shall no longer be deemed a Defaulting Lender. After the
Senior Loans have been paid in full equitable adjustments will be made in
connection with future payments by the Borrower to the extent a portion of the
Senior Loans had been repaid with amounts that otherwise would have been
distributed to a Defaulting Lender but for the operation of this Section 12.15.
This provision governs only the relationship among the Administrative Agent,
each Defaulting Lender and the other Lenders; nothing hereunder shall limit the
obligation of the Borrower to repay all Loans in accordance with the terms of
this Agreement. The provisions of this Section 12.15 shall apply and be
effective regardless of whether a Default occurs and is continuing, and
notwithstanding (i) any other provision of this Agreement to the contrary, (ii)
any instruction of the Borrower as to its desired application of payments or
(iii) the suspension of such Defaulting Lender's right to vote on matters as
provided above.
Section XII.16 Co-Agents: Lead Managers. None of the Lenders identified on
the facing page or signature pages of this Agreement as a "documentation agent,"
"syndication agent' or "co-lead arranger/book manager" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of Lenders so identified as a "documentation agent," "syndication agent" or
"co-lead arranger/book manager" shall have or be deemed to have any fiduciary
relationship with any Lenders. Each Lender acknowledges that it has not relied,
and will not rely, on any of Lenders so identified in deciding to enter into
this Agreement or in taking or not taking action hereunder.
Article XIII.
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
Section XIII.1 Successors and Assigns.
The terms and provisions of the Loan Documents shall be
binding upon and inure to the benefit of Borrower and the Lenders and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights or obligations under the Loan Documents without the
consent of all the Lenders and any assignment by any Lender must be made in
compliance with Section 13.3. The Administrative Agent and Borrower may treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until such payee complies with Section 13.3 in the case of an assignment thereof
or, in the case of any other transfer, a written notice of the transfer is filed
with the Administrative Agent and Borrower. Any assignee or transferee of a Note
agrees by acceptance thereof to be bound by all the terms and provisions of the
Loan Documents. Any request, authority or consent of any Person who at the time
of making such request or giving such authority or consent is the holder of any
Note, shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange therefor.
Section XIII.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.
Section XIII.3 Assignments.
13.3.1 Permitted Assignments. Any Lender may, with the prior
written consent of Administrative Agent and Borrower (which consents
shall not be unreasonably withheld or delayed), in accordance with
applicable law, at any time assign to one or more banks or other
entities (collectively, "Purchasers") all or any part of its rights and
obligations under the Loan Documents, except that no consent of
Borrower shall be required if an Event of Default has occurred and is
continuing and that no consent of Administrative Agent or Borrower
shall ever be required for (i) any assignment to a Person directly or
indirectly controlling, controlled by or under direct or indirect
common control with the assigning Lender or (ii) the pledge or
assignment by a Lender of such Lender's Note and other rights under the
Loan Documents to any Federal Reserve Bank in accordance with
applicable law. No assignment to a Purchaser shall be for less than
$10,000,000 of the Aggregate Commitment. Such assignments and
assumptions shall be substantially in the form of Exhibit K hereto. The
Borrower shall execute any and all documents which are customarily
required by such Lender (including, without limitation, a replacement
promissory note or notes in the forms provided hereunder (upon receipt
of the original note that is being replaced), and a modification to the
Mortgages if required by Administrative Agent) in connection with any
such assignment, but Borrower shall not be obligated to pay any fees
and expenses incurred by any Lender in connection with any assignment
pursuant to this Section. Any Lender selling all or any part of its
rights and obligation hereunder in a transaction requiring the consent
of the Administrative Agent shall pay to the Administrative Agent a fee
of $3,500.00 per assignee to reimburse Administrative Agent for its
involvement in such assignment, plus the cost of recording fees and
taxes applicable to the replacement notes and modification of the
Mortgages and Assignment of Leases, and any applicable endorsement of
the title insurance policies. Notwithstanding anything to the contrary
in this Agreement or Exhibit K, so long as any portion of the
Collateral Pool Assets is located in the State of Texas, no replacement
note or notes will be issued that would require a modification to the
Mortgages or such Collateral Pool Assets unless the selling Lender pays
for replacement title insurance policies therefore.
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, subject to
13.3.1, 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.
Section XIII.4 Dissemination of Information. Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "Transferee") and
any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of Borrower and Guarantors. Each Transferee
shall agree in writing to keep confidential any such information which is not
publicly available. The Lenders agree not to make any transfers to a transferee
if such transfer would constitute a public offering which would impose any
obligation on the Borrower to incur liabilities and make disclosures,
representations or undertakings beyond those expressly provided for herein,
unless the Borrower has consented in writing thereto.
Section XIII.5 Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with all applicable provisions of the Code with respect to
withholding and other tax matters.
Article XIV.
GENERAL PROVISIONS
Section XIV.1 Survival of Representations. All representations and
warranties contained in this Agreement shall survive delivery of the Notes and
the making of the Advances herein contemplated.
Section XIV.2 Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, no Lender shall be obligated to extend credit
to the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
Section XIV.3 Taxes. Any recording and other taxes (excluding franchise,
income or similar taxes) or other similar assessments or charges payable or
ruled payable by any governmental authority incurred in connection with the
consummation of the transactions contemplated by this Agreement shall be paid by
the Borrower, together with interest and penalties, if any.
Section XIV.4 Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
Section XIV.5 No Third Party Beneficiaries. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns.
Section XIV.6 Expenses; Indemnification. Subject to the provisions of this
Agreement, Borrower will pay (a) all out-of-pocket costs and expenses incurred
by the Administrative Agent (including the reasonable fees, out-of-pocket
expenses and other reasonable expenses of counsel, which counsel may be
employees of Administrative Agent) in connection with the preparation, execution
and delivery of this Agreement, the Notes, the Loan Documents and any other
agreements or documents referred to herein or therein and any amendments
thereto, (b) all out-of-pocket costs and expenses incurred by the Administrative
Agent and the Lenders (including the reasonable fees, out-of-pocket expenses and
other reasonable expenses of counsel to the Administrative Agent and the
Lenders, which counsel may be employees of Administrative Agent or the Lenders)
in connection with the enforcement and protection of the rights of the Lenders
under this Agreement, the Notes, the Loan Documents or any other agreement or
document referred to herein or therein, (c) all reasonable and customary costs
and expenses of periodic audits by the Administrative Agent's personnel of the
Borrower's books and records provided that prior to an Event of Default,
Borrower shall be required to pay for only one such audit during any year, (d)
all out-of-pocket expenses incurred by the Administrative Agent in connection
with Collateral Pool Assets, including, without limitation, the ordering and
review of Appraisals, environmental reports and engineering reports with
reference to the Collateral Pool Assets, and (e) all title premiums, recording
fees and taxes (including documentary, intangible, and similar taxes and fees)
related to the Mortgages and Notes, and similar costs related to the Loan
Documents. The Borrower further agrees to indemnify the Lenders, their
directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and reasonable expenses (including, without
limitation, all expenses of litigation or preparation therefor whether or not
the Lenders 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.
Section XIV.7 Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
Section XIV.8 Nonliability of the Lenders. The relationship between the
Borrower and the Lenders shall be solely that of borrower and lender. The
Lenders shall not have any fiduciary responsibilities to the Borrower. The
Lenders undertake no responsibility to the Borrower to review or inform the
Borrower of any matter in connection with any phase of the Borrower's business
or operations.
Section XIV.9 Choice of Law. THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
Section XIV.10 Consent to Jurisdiction. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE LENDERS TO BRING PROCEEDINGS AGAINST
THE BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER
AGAINST THE LENDERS OR ANY AFFILIATE OF THE LENDERS INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
Section XIV.11 Waiver of Jury Trial. THE BORROWER, THE GUARANTORS,
THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY WAIVE TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.
Section XIV.12 Entire Agreement; Modification of Agreement. The Loan
Documents embody the entire agreement among the Borrower, Guarantors,
Administrative Agent, and Lenders and supersede all prior conversations,
agreements, understandings, commitments and term sheets among any or all of such
parties with respect to the subject matter hereof. Any provisions of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Borrower, and Administrative Agent if the rights
or duties of Administrative Agent are affected thereby, and
(a) each of the Lenders if such amendment or waiver
(i) reduces or forgives any payment of principal or
interest on the Obligations or any fees payable by Borrower to
such Lender hereunder, or modifies the provisions of Section
2.6 regarding the calculation of such interest and fees; or
(ii) postpones the date fixed for any payment of
principal of or interest on the Obligations or any fees
payable by Borrower to such Lender hereunder; or
(iii) changes the amount of such Lender's Commitment
(other than pursuant to a voluntary reduction of the Aggregate
Commitment under Section 2.17 or an assignment permitted under
Section 13.3) or the unpaid principal amount of such Lender's
Note; or
(iv) extends the Maturity Date; or
(v) releases or limits the liability of the Guarantors
under the Loan Documents; or
(vi) releases the Mortgage and Assignment of Leases
encumbering any Collateral Pool Asset, except expressly
provided for herein; or
(vii) changes the definition of Required Lenders or
Supermajority Lenders or modifies any requirement for consent
by each of the Lenders; or
(viii) modifies the definition of "Borrowing Base
Availability" or "Collateral Pool Asset Value" or modifies or
waives any covenant contained in Sections 9.3, 9.8(b) or
9.8(c) hereof; or
(ix) modifies this Section 14.12(a); or
(b) the Supermajority Lenders, if such amendment or waiver modifies or
waives the covenant in Section 9.9; or
(c) the Required Lenders, to the extent expressly provided for herein
and in the case of all other waivers or amendments if no percentage of Lenders
is specified herein.
Section XIV.13 Dealings with the Borrower. The Lenders and their affiliates
may accept deposits from, extend credit to and generally engage in any kind of
banking, trust or other business with the Borrower or the Guarantors or any
other member of the Consolidated Group regardless of the capacity of the Lenders
hereunder.
Section XIV.14 Set-Off.
(a) If an Event of Default shall have occurred, with the consent of
all the Lenders, each Lender (and with the consent of all the Lenders, if
permitted, pursuant to a participation agreement, each such participant) shall
have the right, at any time and from time to time without notice to the
Borrower, any such notice being hereby expressly waived, to set-off and to
appropriate or apply any and all deposits of money or property or any other
indebtedness at any time held or owing by such Lender to or for the credit or
the account of the Borrower against and on account of all outstanding
Obligations and all Obligations which from time to time may become due hereunder
and all other obligations and liabilities of the Borrower under this Agreement,
irrespective of whether or not such Lender shall have made any demand hereunder
and whether or not said obligations and liabilities shall have matured.
(b) Each Lender agrees that if it shall, by exercising any right of
set-off or counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal, interest or fees due with respect to any Note
held by it which is greater than the proportion received by any other Lender in
respect of the aggregate amount of principal, interest or fees due with respect
to any Note held by such other Lender, the Lender receiving such proportionately
greater payment shall purchase such participations in the Notes held by the
other Lenders and such other adjustments shall be made as may be required so
that all such payments of principal, interest or Fees with respect to the Notes
held by the Lenders shall be shared by the Lenders pro rata according to their
respective Commitments.
Section XIV.15 Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by the
Borrower and each of the Lenders shown on the signature pages hereof.
Section XIV.16 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 fair market value
of the Properties owned by EIP/WV exceeds (B) the then-current outstanding
principal balance of all Indebtedness (other than the Obligations) of EIP/WV
permitted under this Agreement, calculated in
each case as of the Maturity Date or the date of any earlier acceleration of the
Obligations, as applicable. Such maximum liability of EIP/WV shall be allocated
on a pro rata basis among the Notes in accordance with the Lenders' respective
Percentages.
Article XV.
NOTICES
Section XV.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: ▇▇▇▇▇▇ ▇. Silver
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
To Guarantors:
Equity Inns, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Silver
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Each of the above with a copy to:
Hunton & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
To each Lender:
As shown below the Lenders' signatures.
To the Administrative Agent:
Bank One, NA
Corporate Real Estate Division
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Section XV.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/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Its: E.V.P.
EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P.
By: EQUITY INNS SERVICES, INC., its General
Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Its: E.V.P.
EQUITY INNS PARTNERSHIP II, L.P.
By: EQUITY INNS TRUST, its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Its: E.V.P.
LENDERS: BANK ONE, NA
Individually and as Administrative Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Title: Sr. Vice President
Commitment: $28,416,667.34
Percentage of Aggregate Commitment:
22.7333338720%
Address for Notices:
Corporate Real Estate Division
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: 312/▇▇▇-▇▇▇▇
Telecopy: 312/732-1117
CREDIT LYONNAIS NEW YORK BRANCH
Individually and as Syndication Agent and
Co-Lead
Arranger/Book Manager
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Title: Vice President
Commitment: $28,416,666.33
Percentage of Aggregate Commitment:
22.7333330640%
Address for Notices:
Lodging Group
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: 212/▇▇▇-▇▇▇▇
Telecopy: 212/261-7532
BANK OF AMERICA, N.A.
Individually and as Documentation Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Title: Structuring Specialist
Commitment: $28,416,666.33
Percentage of Aggregate Commitment:
22.7333330640%
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: 214/▇▇▇-▇▇▇▇
Telecopy: 214/209-0085
NATIONAL BANK OF COMMERCE
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Title: V.P.
Commitment: $20,000,000.00
Percentage of Aggregate Commitment:
16.0000000000%
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: 901/▇▇▇-▇▇▇▇
Telecopy: 901/757-4883
AMSOUTH BANK
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Title: V.P.
Commitment: $15,000,000.00
Percentage of Aggregate Commitment:
12.0000000000%
Address for Notices:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇ Tower, 9th Floor
Birmingham, Alabama 35203
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: 205/▇▇▇-▇▇▇▇
Telecopy: 205/326-4075
UNION PLANTERS BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Title: S.V.P.
Commitment: $4,750,000.00
Percentage of Aggregate Commitment:
3.8000000000%
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: 901/▇▇▇-▇▇▇▇
Telecopy: 901/580-5451
The undersigned, Equity Inns, Inc. and Equity Inns Trust, join in this
Agreement for purposes of making the representations and warranties contained in
Article VII hereof and agreeing to perform certain of the covenants described in
Article VIII hereof.
EQUITY INNS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Title: E.V.P.
EQUITY INNS TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Title: E.V.P.
EXHIBIT A
FORM OF INDEMNITY AGREEMENT
See Indemnity Agreement of even date herewith.
EXHIBIT B
FORM OF NOTE
_________, 2000
On or before the Maturity Date, as defined in that certain Secured
Revolving Credit Agreement dated as of October 26, 2000 (the "Agreement") among
EQUITY INNS PARTNERSHIP, L.P., a Tennessee limited partnership, EQUITY INNS/WEST
VIRGINIA PARTNERSHIP, L.P., a Tennessee limited partnership and EQUITY INNS
PARTNERSHIP II, L.P., a Tennessee limited partnership (collectively,
"Borrower"), CREDIT LYONNAIS NEW YORK BRANCH, individually and as Syndication
Agent, BANK OF AMERICA, N.A., individually and as Documentation Agent, Bank One,
NA, a national bank organized under the laws of the United States of America,
individually and as Administrative Agent for the Lenders (as such terms are
defined in the Agreement), and the other Lenders listed on the signature pages
of the Agreement, Borrower promises to pay to the order of
_________________________ (the "Lender"), or its successors and assigns, the
aggregate unpaid principal amount of all Loans made by the Lender to the
Borrower pursuant to Section 2.1 of the Agreement, in immediately available
funds at the office of the Administrative Agent in Chicago, Illinois, together
with interest on the unpaid principal amount hereof at the rates and on the
dates set forth in the Agreement. The Borrower shall pay this Promissory Note
("Note") in full on or before the Maturity Date in accordance with the terms of
the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Advance and the date and amount of each principal
payment hereunder.
This Note is issued pursuant to, and is entitled to the security under
and benefits of, the Agreement and the other Loan Documents, to which Agreement
and Loan Documents, as they may be amended from time to time, reference is
hereby made for, inter alia, a statement of the terms and conditions under which
this Note may be prepaid or its maturity date accelerated. Capitalized terms
used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement. This Note is not negotiable.
If there is an Event of Default or Default under the Agreement or any
other Loan Document and Lender exercises its remedies provided under the
Agreement and/or any of the Loan Documents, then in addition to all amounts
recoverable by the Lender under such documents, Lender shall be entitled to
receive reasonable attorneys fees and expenses incurred by Lender in exercising
such remedies.
Borrower and all endorsers severally waive presentment, protest and demand,
notice of protest, demand and of dishonor and nonpayment of this Note (except as
otherwise expressly provided for in the Agreement), and any and all lack of
diligence or delays in collection or enforcement of this Note, and expressly
agree that this Note, or any payment hereunder, may be extended from time to
time, and expressly consent to the release of any party liable for the
obligation secured by this Note, the release of any of the security of this
Note, the acceptance of any other security therefor, or any other indulgence or
forbearance whatsoever, all without notice to any party and without affecting
the liability of the Borrower and any endorsers hereof.
This Note shall be governed and construed under the internal laws of
the State of Illinois.
All liability of the entities comprising the Borrower hereunder shall
be joint and several. The liability of Equity Inns/West Virginia Partnership,
L.P. under this Note is limited as described in Section 14.16 of the Agreement.
BORROWER AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHT UNDER THIS PROMISSORY NOTE OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO
OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS NOTE AND
AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
EQUITY INNS PARTNERSHIP, L.P., a Tennessee
limited partnership
By: Equity Inns Trust, its general partner
By:
---------------------------------------
Its:
---------------------------------------
EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P.,
a Tennessee limited partnership
By: Equity Inns Services, Inc., its general
partner
By:
---------------------------------------
Its:
---------------------------------------
EQUITY INNS PARTNERSHIP II, L.P.,
a Tennessee limited partnership
By: Equity Inns Trust, its general partner
By:
---------------------------------------
Its:
---------------------------------------
PAYMENTS OF PRINCIPAL
Unpaid
Principal Notataion
Date Balance Made by
EXHIBIT C
Form of Limited Recourse Guaranty
See form of Limited Recourse Guaranty of even date herewith delivered by E.I.P.
Orlando, L.P.
EXHIBIT D
FORM OF GUARANTY
This Guaranty made as of October ___, 2000, by Equity Inns, Inc.,
Equity Inns Services, Inc. and Equity Inns Trust (collectively, "Guarantor"), to
and for the benefit of Bank One, NA, individually ("Bank One"), and as
administrative agent for itself and the lenders listed on the signature pages of
the Revolving Credit Agreement (as defined below), all other lenders which are
parties thereto 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
and Equity Inns Partnership II, L.P., a Tennessee limited partnership
(collectively, "Borrower"), and
Guarantor have requested that Lender make an secured revolving credit facility
available to Borrower in the aggregate principal amount of up to $125,000,000
("Facility").
B. Lender has agreed to make available the Facility to Borrower
pursuant to the terms and conditions set forth in an Secured Revolving Credit
Agreement bearing even date herewith between Borrower and the Lenders
("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 or Promissory Notes each of even date in the aggregate principal amount of
$125,000,000 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 two 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."
1) In 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. 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.
2) 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.
3) 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.
4) 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.
5) This Guaranty shall be assignable by Lender to any assignee of all
or a portion of Lender's rights under the Loan Documents.
6) 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, any Competitive Bid Loan 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 attorney's fees, 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 incurred in
connection therewith (all of which are referred to herein as
"Enforcement Costs"), in addition to all other amounts due
hereunder.
7) 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.
8) 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.
9) 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).
10) 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.
11) The Guarantor hereby submits to personal jurisdiction in the State
of Illinois 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 either the Circuit Court of ▇▇▇▇ County,
Illinois, or the United States District Court for the Northern
District of Illinois, 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 Illinois 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.
12) 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: ▇▇▇▇▇▇ ▇. Silver
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Hunton & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Best
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
To the Lender:
c/o Bank One, NA, as agent
Corporate Real Estate Division
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, 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.
13) 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.
14) This Guaranty shall be construed and enforced under the internal
laws of the State of Illinois.
15) 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
then-current fair market value of 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.
16) GUARANTOR AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE
OR DEFEND ANY RIGHT UNDER THIS 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:
---------------------------------------
Its:
---------------------------------------
EQUITY INNS TRUST, a Maryland real estate
investment trust
By:
---------------------------------------
Its:
---------------------------------------
EQUITY INNS SERVICES, INC., a Tennessee
corporation
By:
---------------------------------------
Its:
---------------------------------------
STATE OF ___________ )
) SS.
COUNTY OF _________ )
I, the undersigned, a Notary Public, in and for said County, in the State
aforesaid, DO HEREBY CERTIFY, that , of Equity Inns, Inc., personally known to
me to be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person and acknowledged that he signed and
delivered the said instrument as his own free and voluntary act and as the free
and voluntary act of said corporation, for the uses and purposes therein set
forth.
GIVEN under my hand and Notarial Seal, this day of October, 2000.
------------------------------------
Notary Public
STATE OF ___________ )
) SS.
COUNTY OF _________ )
I, the undersigned, a Notary Public, in and for said County, in the State
aforesaid, DO HEREBY CERTIFY, that , of Equity Inns Trust, personally known to
me to be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person and acknowledged that he signed and
delivered the said instrument as his own free and voluntary act and as the free
and voluntary act of said trust, for the uses and purposes therein set forth.
GIVEN under my hand and Notarial Seal, this day of October, 2000.
------------------------------------
Notary Public
STATE OF ___________ )
) SS.
COUNTY OF _________ )
I, the undersigned, a Notary Public, in and for said County, in the State
aforesaid, DO HEREBY CERTIFY, that , of Equity Inns Services, Inc., personally
known to me to be the same person whose name is subscribed to the foregoing
instrument, appeared before me this day in person and acknowledged that he
signed and delivered the said instrument as his own free and voluntary act and
as the free and voluntary act of said trust, for the uses and purposes therein
set forth.
GIVEN under my hand and Notarial Seal, this day of October, 2000.
------------------------------------------
Notary Public
EXHIBIT E
OPINION OF TENNESSEE COUNSEL
See Opinion dated of even date from Hunton & ▇▇▇▇▇▇▇▇.
EXHIBIT F
OPINION OF ILLINOIS COUNSEL
See Opinion dated of even date from ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇.
EXHIBIT G
OPINION OF LOCAL COUNSEL
EXHIBIT H
WIRING INSTRUCTIONS
To: Bank One, NA,
as Administrative Agent (the "Agent")
under the Credit Agreement Described Below
Re: Secured Revolving Credit Agreement, dated as of October 26, 2000
(as amended, modified, renewed or extended from time to time,
the "Agreement"), among Equity Inns Partnership, L.P., Equity
Inns/West Virginia Partnership, L.P. and Equity Inns Partnership
II, L.P. (collectively, the "Borrower"), Bank One, NA,
individually and as Administrative Agent, Credit Lyonnais New
York Branch, individually and as Syndication Agent, Bank of
America, NA, individually and as Documentation Agent, and the
Lenders named therein. Terms used herein and not otherwise
defined shall have the meanings assigned thereto in the Credit
Agreement.
The Administrative Agent is specifically authorized and directed to act upon
the following standing money transfer instructions with respect to the proceeds
of Advances or other extensions of credit from time to time until receipt by the
Administrative Agent of a specific written revocation of such instructions by
the Borrower, provided, however, that the Administrative Agent may otherwise
transfer funds as hereafter directed in writing by the Borrower in accordance
with Section 15.1 of the Agreement or based on any telephonic notice made in
accordance with the Agreement.
Facility Identification Number(s)
-----------------------------------------------
Customer/Account Name: Equity Inns Partnership, L.P., Equity Inns/West Virginia
Partnership, L.P. and Equity Inns Partnership II, L.P.
Transfer Funds To: Bank One, NA
For Account No.
-----------------------------------------------------------------
Reference/Attention To
----------------------------------------------------------
Authorized Officer (Customer Representative) Date
------------------------
-------------------------------------------- -----------------------------
(Please Print) Signature
Bank Officer Name
-------------------------------------------- -----------------------------
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
EXHIBIT I
FORM OF COMPLIANCE CERTIFICATE
Under Credit Agreement dated as of October ___, 2000, between Equity Inns
Partnership, L.P., Equity Inns / West Virginia Partnership, L.P. and Equity Inns
Partnership II, L.P., as Borrower and Bank One, NA ("Bank One") as
Administrative agent, Credit Lyonnais New York Branch as Syndication Agent and
Co-Lead Arranger/Book Manager, Bank of America, N.A., as Documentation Agent,
and the Lenders defined therein (the "Credit Agreement").
The undersigned, as _________ of Equity Inns Partnership L.P., and as __________
of Equity Inn / West Virginia Partnership L.P., pursuant to Section 8.2 of the
Credit Agreement, hereby certify to Bank One as Administrative Agent as follows:
1. A review of the activities of Borrower during the most recent ended
fiscal quarter (which quarter ended _______) of the Borrower has been
made under my supervision.
2. As of the date hereof, all of the representations and warranties of
Borrower contained in the Credit Agreement and each of the Loan
Documents (as defined in the Credit Agreement) are true and correct in
all material respects (except to the extent that they speak to a
specific date or are based on facts which have changed by transactions
expressly contemplated or permitted by the Credit Agreement).
3. No event has occurred and is continuing which constitutes an Event of
Default or a potential Event of Default.
4. The following Borrowing Base computation for the most recent ended
fiscal quarter, together with the supporting schedule attached hereto is
true and correct:
A. Total Collateral Pool Asset Values $______________________
B. 55% of A $______________________
C. The principal amount which would produce
an Included Collateral Pool Debt Service
Coverage Ratio of 1.75 (from 1L of
Schedule I) $______________________
D. 55% of the total Collateral Pool Asset
Values of the Excluded Properties $______________________
E. C plus D $______________________
F. The lesser of B and E $______________________
G. Allocated Facility Amount $______________________
G must be less than or
Equal to F
5. The following covenant computations, for the most recent ended fiscal
quarter, together with the supporting schedule attached hereto, are true
and correct:
9.3 Leverage.
A. Total Indebtedness $______________________
B. EBITDA $______________________
C. A divided by B $______________________
D. 4.75
E. 4.50 C must be less than or
equal to D before April 1,
2002 and less than or
equal to E thereafter
9.3 Additional Recourse Indebtedness
A. Recourse Indebtedness of the Consolidated
Group $______________________
B. Allocated Facility Amount $______________________
C. $50,000,000
D. B plus C $______________________
A must be less than or
equal to D
9.4 Dividends
I. A. Total dividends for the past four quarters
(excluding preferred stock) $______________________
B. Total amount paid for stock repurchases
for the past four quarters $______________________
C. A plus B $______________________
D. 90% of the Funds From Operations for the
past four quarters $______________________
D must be less than
or equal to C
II. A. Total dividends for the past four quarters
(excluding preferred stock) $______________________
B. 110% of Free Cash Flow $______________________
A must be less than or
equal to B through
quarter ending 9-30-00
C. 105% of Free Cash Flow $______________________
A must be less than or
equal to C from
quarter ending
12-31-00 through
quarter ending
12-31-01
D. 100% of Free Cash Flow $______________________
A must be less than or
equal to D from
quarter ending 3-31-02
through the Maturity
Date
III. A. Total dividends for the past four quarters
(excluding preferred stock) $______________________
B. Total amount paid for stock repurchases
for the past four quarters $______________________
C. A plus B $______________________
D. Free Cash Flow $______________________
E. 50% of Net Cash Proceeds from the sales
of Properties for the past four quarters $______________________
F. D plus E $______________________
G. 110% of F $______________________
C must be less than or
equal to G through
quarter ending 9-30-00
H. 105% of F $______________________
C must be less than or
equal to H from
quarter ending
12-31-00 through
quarter ending
12-31-01
I. 100% of F $______________________
C must be less than or
equal to I from
quarter ending 3-31-02
through the Maturity
Date
9.5 Floating Rate Debt
A. Floating Rate Debt $______________________
Must be less than
$150mm
9.7 FF&E Expenditures.
A. Total actual expenditures of the
Consolidated Group for FF&E replacement
and approved capital improvements for
the Properties for the past four quarters. $______________________
B. Amount of reserves maintained on the
balance sheet on the last day of the
period by the Consolidated Group for
FF&E replacement and approved capital
improvements less the amount of such
reserves maintained as of the first day
of the period. $______________________
C. Sum of A plus B $______________________
D. 4% of gross room revenues for the past
four quarters for the Properties $______________________
C must be greater than
or equal to D
9.8(a) Minimum Tangible Net Worth.
A. Tangible Net Worth of the Consolidated
Group $______________________
B. 80% of Tangible Net Worth at 6/30/00 $______________________
C. 75% of equity interest issued after
6/30/00 $______________________
D. Sum of B and C $______________________
A must be greater than
or equal to D
9.8(b) Minimum Fixed Charge Coverage
A. Adjusted EBITDA for the most recent
12 calendar months $______________________
B. Ground Lease Expense for the most
recent 12 calendar months $______________________
C. Sum of A plus B $______________________
D. Fixed Charges for the most recent
12 calendar months $______________________
E. C divided by D $______________________
E must be greater than
or equal to 1.75
9.8(c) Minimum Interest Coverage
A. Adjusted EBITDA for the most recent
12 calendar months $______________________
B. Interest Expense for the most recent
12 calendar months $______________________
C. A divided by B ______________________
C should be greater
than or equal to 2.25
8.3 Limitations on Properties Under Development
A. Aggregate Total Cost of all Properties
Under Development $______________________
B. 10% of Total Cost of all Properties
owned by the Consolidated Group $______________________
A must be less than or
equal to B
9.11 Share Repurchase
A. Total amount paid by Equity Inns for
stock repurchase during the most
recently completed quarter $______________________
B. Amount Available for repurchases during
such quarter (from last quarter's
compliance certificate) $______________________
A must be less than or
equal to B.
C. $0
D. Free Cash Flow of the Consolidated
Group for the Prior 4 Quarters minus
any amounts attributable to dividend
payments (other than Preferred Stock
Expense) and stock repurchases $______________________
E. The greater of C and D $______________________
F. 50% of E $______________________
G. Net Cash Proceeds from sales of
Properties during the Prior 4 Quarters. $______________________
H. 50% of G $______________________
I. The maximum aggregate amount of stock
repurchases from Net Cash Proceeds
permitted per Section 9.11 of the
Credit Agreement minus Stock Repurchases
from Net Cash Proceeds in prior periods
(see Item 9E in Schedule I) $______________________
J. The lesser of H and I $______________________
K. The sum of F and J = Amount available
for stock repurchases during Current
Quarter $______________________
The following computation of the limits imbedded in the definitions, together
with the supporting schedule attached hereto, is true and correct.
Limitations in Borrowing Base (See definition of "Eligible Property")
Borrower Properties
A. Borrowing Base
B. Total Collateral Pool Asset Values
of Properties which are, directly or
indirectly, wholly owned and controlled
by Borrower $______________________
C. B divided by A _____________________%
C must be greater than
or equal to 90%
Fee Simple Properties
D. Total Collateral Pool Asset Values of
Properties which are, directly or
indirectly, held in fee simple by
Borrower or a Wholly-Owned Subsidiary $______________________
E. D divided by A _____________________%
E must be greater than
or equal to 90%
State Concentration
F. Total Collateral Pool Asset Values of
all Collateral Pool Assets located in
the state containing the Properties
which makes up the greatest percentage
of the Borrowing Base $______________________
G. F divided by A _____________________%
G must be less than or
equal to 25%
Individual Asset Concentration
H. Collateral Pool Asset Value of the
Collateral Pool Asset which makes up
the greatest percentage of the Borrowing
Base $______________________
I. H divided by A _____________________%
I must be less than or
equal to 20%
Properties Under Development
J. Total amount of the Borrowing Base
attributable to Properties Under
Development $______________________
K. 60% of the Aggregate Total Cost of
all Properties Under Development
included in the Borrowing Base $______________________
L. $15,000,000 $______________________
M. $25,000,000 minus the book value
of the Consolidated Group's investment
in Excluded Investment Affiliates $______________________
N. The lesser of K, L, and M $______________________
Must be greater than
or equal to J
Limitation on Excluded Investment Affiliates (see definition)
Ownership Percentage
A. The largest Consolidated Group
Pro Rata Share of any Investment Affiliate $______________________
A must be less than
20%
Book Value
B. The aggregate book value of the Consolidated
Group's investment in all Excluded Investment
Affiliates $______________________
C. $15,000,000
D. $25,000,000
E. The amount of the Borrowing Base attributable
to Projects Under Development $______________________
F. D minus E $______________________
G. The lesser of C and F $______________________
B must be less than or
equal to G
Indebtedness
H. Consolidated Group Pro Rata Share
of the aggregate Indebtedness of all
Excluded Investment Affiliates (other than
those for which no investment is reported
on the balance sheet of the Consolidated
Group) $______________________
H must be less than or
equal to $45,000,000
In addition, the Consolidated Group does not have voting control of, or the
ability to otherwise direct the actions of any Investment Affiliate, and no
Investment Affiliate has Indebtedness which is recourse to, or guaranteed by,
any member of the Consolidated Group.
Date:
---------------------------------------
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
SCHEDULE I
CALCULATION OF COVENANTS
1. Included Collateral Pool Debt Service Coverage Ratio
A. Net Operating Income of all Included
Collateral Pool Assets for the past
four quarters $______________________
B. Agreed FF&E Reserve for the past four
quarters $______________________
C. A minus B $______________________
D. C divided by 1.75 = annual debt service
payment amount resulting in 1.75 Included
Collateral Pool Debt Service Coverage
Ratio $______________________
E. Average Interest Rate for the Facility
or the past 4 quarters _____________________%
F. D divided by E $______________________
G. Yield on 10-year Treasuries as of the
last Business Day of the most recently
completed quarter. _____________________%
H. 2.50%
I. G plus H $______________________
J. Debt Service Constant for loan with
equal monthly payments and an interest
rate equal to I above and a 25 year
amortization Schedule. _____________________%
K. D divided by J $______________________
L The lesser of F and K (The principal
amount which would produce an
Included Collateral Pool Debt Service
Coverage Ratio of 1.75) $______________________
2. Total Cost
A. Book Value of all Properties owned
by the Consolidated Group $______________________
B. Accumulated Depreciation on such
Properties $______________________
C. Consolidated Group Pro Rata Share
of the book value of all properties
owned by Investment Affiliates $______________________
D. Consolidated Group Pro Rata Share
of the depreciation associated with
such Properties owned by Investment
Affiliates $______________________
E. Sum of A, B, C, and D $
======================
3. Total Indebtedness
A. Indebtedness of the Consolidated Group
1. indebtedness for borrowed money $______________________
2. obligations under financing and
capital leases $______________________
3. Guarantee Obligations $______________________
4. Letters of credit $______________________
5. Other items which constitute
Indebtedness not included in the
above $______________________
B. Consolidated Group Pro Rata Share of all Indebtedness of any
Investment Affiliate other than Excluded Investment Affiliates
(to the extent not included in A)
1. Indebtedness for borrowed money $______________________
2. Obligations under financing and
capital leases $______________________
3. Guarantee Obligations $______________________
4. Letters of Credit $______________________
5. Other items which constitute
Indebtedness not included in
the above $______________________
C. Sum of A and B equals Total
Indebtedness $______________________
4. EBITDA for the most recent twelve full calendar months
A. EBITDA of the Consolidated Group
excluding income from Investment
Affiliates $______________________
B. Consolidated Group Pro Rata Share
of EBITDA of Investment Affiliates
other than Excluded Investment
Affiliates $______________________
C. All extraordinary items included
in A or B $______________________
D. All gains or losses from sale of
assets $______________________
E. Sum of A plus B less sum of C
plus D equals EBITDA $______________________
5. Adjusted EBITDA for the most recent 12 full calendar months
A. EBITDA for the most recent 12 full
calendar months $______________________
B. 4% of gross room revenues for the
past four quarters on all Properties $______________________
C. A minus B equals Adjusted EBITDA $______________________
6. Interest Expense for the most recent twelve full calendar months
A. Interest Expense of the Consolidated
Group $______________________
B. Consolidated Group Pro Rata Share
of any accrued or paid interest of
an Investment Affiliate (other than
Excluded Investment Affiliates) $______________________
C. Sum of A plus B equals Interest
Expense $______________________
7. Fixed Charges for the most recent twelve full calendar months
A. Interest Expense $______________________
B. Regularly scheduled principal
payments of Indebtedness of the
Consolidated Group $______________________
C. Consolidated Group Pro Rata Share
of any regularly scheduled principal
payments of an Investment Affiliate
(other than Excluded Investment
Affiliates) $______________________
D. Preferred Stock Expense $______________________
E. Ground Lease Expense $______________________
F. Sum of A, B, C, D, and E equals
Fixed Charges $______________________
8. Free Cash Flow for the past four Quarters
A. Funds From Operations for the past
four quarters $______________________
B. Aggregate Room Revenue for the past
four quarters 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. Preferred Stock Expense for the
past four quarters $______________________
F. A minus the sum of C, D and E
equals Free Cash Flow $______________________
9. Stock Repurchase from Net Cash Proceeds
A. Net Cash Proceeds for most recent
quarter $______________________
B. Net Cash Proceeds for the first
three of the last four quarters $______________________
C. Total Net Cash Proceeds for last
four quarters $______________________
D. Stock repurchased during most
recent quarter from Net Cash
Proceeds $______________________
E. Cumulative amount of Stock
repurchased during the term of the
Facility from Net Cash Proceeds $______________________
EXHIBIT J
MINIMUM SPECIFICATIONS FOR ENVIRONMENTAL INVESTIGATIONS
The following are Guidelines for the qualification of firms
and environmental professionals and for information to be included in
Environmental Site Assessments. These standards include the minimum elements
common to acceptable site assessments. Generally, it is intended for the
standards to be consistent with those outlined in the American Society for
Testing and Materials ("ASTM") Designation: E 1527-93.
Qualifications of Investigating Firm
The firm or environmental professional must have 5 years of
experience in hazardous substances investigation. The environmental professional
supervising and signing the report should be experienced in environmental site
investigations, and should have relevant environmental experience and technical
qualifications, such as demonstrated by professional registration and/or
advanced education in related disciplines. The firm or environmental
professional performing the work should have adequate professional liability
insurance. Borrower and Lenders may agree in advance on qualified firms or
environmental professionals that will conduct the Phase I Reports. Borrower may
from time to time select other firms or environmental professionals that meet
the minimum qualifications set out above to conduct a Phase I Report, subject to
approval of the Administrative Agent, which approval shall not be unreasonably
withheld or delayed.
Depth of Reporting Required
Phase I - consists of site description, review of historical
and regulatory data and physical inspection. The firm or environmental
professional will follow the standard practices set out in the ASTM E 1527-93
guidelines in conducting the Phase I Site Assessment and drafting the Report and
in preparing the Findings and Conclusions.
All deletions and deviations from the ASTM E 1527-93 guidelines shall be listed
individually and in detail. As an additional component of the Phase I Site
Assessment, the firm or environmental professional will conduct an asbestos
survey or inspection in accordance with the protocols set by OSHA under the
Occupational Safety & Health Act (including protocols set forth under the
Asbestos Hazard Emergency Response Act (AHERA) that are incorporated into the
OSHA protocols) unless an alternate protocol is approved by the Administrative
Agent. In all events such survey or inspection shall comply with all applicable
Environmental Laws, including, but not limited to, 29 C.F.R. ss. 1910.1001. The
firm or environmental professional will also conduct a lead-based paint survey
or inspection when necessary, including but not limited to prior to demolition
or renovation work and as required by all applicable Environmental Laws,
including, but not limited to 29 C.F.R. ss. ss. 1910.1025 and 1926.62. If no
potential contamination is indicated, the report should so state, and a specific
statement should be made that no further investigation is required.
Phase II - If a Phase I examination indicates the presence of
recognized environmental conditions which would warrant further appropriate
inquiry, the consultant should document the basis for that conclusion, recommend
a testing program for further evaluation, including the areas to be tested and,
if appropriate, the hazardous constituents of concern, sampling procedures to be
used and methods used to assess the samples. If after evaluating the
recommendation, the Borrower determines that a Phase II is necessary, then the
Borrower will request the firm or environmental professional to prepare a bid,
and may solicit competitive bids from other firms or environmental
professionals. The Phase II Report should document the extent, and, if possible,
source, of contamination so that the Borrower can assess
whether remediation is required under applicable Environmental Laws. If the
Borrower plans to conduct remediation estimated to cost more than $250,000 for
any Project, the Borrower will promptly provide written notice to the
Administrative Agent. If the Borrower does not follow the recommendation of the
firm or environmental professional to conduct a Phase II investigation or
remediation for any Project, the Borrower will promptly provide written notice
to the Administrative Agent. Reliance on Phase I Report The Phase I Report shall
include a statement that the firm or environmental professional acknowledges
that the Lenders will be relying on the Report.
EXHIBIT K
FORM OF ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between (the
"Assignor") and (the "Assignee") is dated as of , 20 . The parties hereto agree
as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to an Secured
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 or Commitment Fees or Facility
Letter of Credit Fees is made under the Credit Agreement with respect to the
amounts assigned to the Assignee hereunder (other than a payment of interest or
Commitment Fees or Facility Letter of Credit Fees 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 or if the Commitment
Fee or Facility Letter of Credit Fee was calculated at the rate of % rather than
the actual percentage used to calculate the Commitment Fee or Facility Letter
of Credit Fee paid by the Borrower, as applicable. 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
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, the Syndication Agent, 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 the Assignor
harmless 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 Illinois.
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
________________, 20__
To: [NAME OF ADMINISTRATIVE AGENT]
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
i) We refer to that Secured 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.
ii)This Notice of Assignment (this "Notice") is given and delivered
to the Administrative Agent pursuant to Section 13.3.1 of the
Credit Agreement.
iii) The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of , 20 (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.
iv)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.
v) 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.
vi)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.
vii) The Assignee advises the Administrative Agent that notice and
payment instructions are set forth in the attachment to Schedule
1.
viii)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.
ix)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 BANK ONE, NA,
as Administrative Agent
By:_________________________________
Title:______________________________
[Attach photocopy of Schedule 1 to Assignment]
EXHIBIT L
AMENDMENT TO
SECURED REVOLVING CREDIT AGREEMENT
This Amendment to the Secured Revolving Credit Agreement (the "Agreement")
is made as of ____________________, __________________, by and among Equity Inns
Partnership, L.P., a Tennessee limited partnership, Equity Inns/West Virginia
Partnership, L.P., a Tennessee limited partnership and Equity Inns Partnership
II, L.P., a Tennessee limited partnership (collectively, "Borrower") Equity Inns
Trust, Equity Inns Services, Inc. and Equity Inns, Inc. (collectively,
"Guarantor"), Bank One, NA, individually and as "Administrative Agent," and one
or more new or existing "Lenders" shown on the signature pages hereof.
R E C I T A L S
A. Borrower, Administrative Agent and certain other Lenders have entered into a
Credit Agreement dated as of October __, 2000 (as amended, the "Credit
Agreement"). All capitalized terms used herein and not otherwise defined shall
have the meanings given to them in the Credit Agreement.
B. Pursuant to the terms of the Credit Agreement, the Lenders initially agreed
to provide Borrower with a revolving credit facility in an aggregate principal
amount of up to $125,000,000. The Borrower, the Administrative Agent and the
Lenders now desire to amend the Credit Agreement in order to, among other things
(i) increase the Aggregate Commitment to $__________________; and (ii) admit
[name of new banks] as "Lenders" under the Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing Recitals and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
AGREEMENTS
1. The foregoing Recitals to this Amendment hereby are incorporated into and
made part of this Amendment.
2. From and after _________, ____ (the "Effective Date") (i) [name of new banks]
shall be considered as "Lenders" under the Credit Agreement and the Loan
Documents, and (ii) [name of existing lenders] shall each be deemed to have
increased its Commitment to the amount shown next to their respective signatures
on the signature pages of this Amendment, each having a Commitment in the amount
shown next to their respective signatures on the signature pages of this
Amendment. The Borrower shall, on or before the Effective Date, execute and
deliver to each of such new or existing Lenders a new or Note in the amount of
such Commitment.
3. From and after the Effective Date, the Aggregate Commitment shall equal
__________ Million Dollars ($___,000,000).
4. For purposes of Section 15.1 of the Credit Agreement (Giving Notice), the
address(es) and facsimile number(s) for [name of new banks] shall be as
specified below their respective signature(s) on the signature pages of this
Amendment.
5. The Borrower hereby represents and warrants that, as of the Effective Date,
there is no Default or Event of Default, the representations and warranties
contained in Articles VI and VII of the Credit Agreement are true and correct as
of such and the Borrower has no offsets or claims against any of the Lenders.
6. As expressly modified as provided herein, the Credit Agreement shall continue
in full force and effect.
7. This Amendment may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Amendment by signing any such counterpart.
IN WITNESS WHEREOF, the parties have executed and delivered this Amendment as of
the date first written above.
EQUITY INNS PARTNERSHIP, L.P.
By: EQUITY INNS TRUST, its General Partner
By:
--------------------------------------------------
Title:
-----------------------------------------------
EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P.
By: EQUITY INNS SERVICES, INC., its General Partner
By:
--------------------------------------------------
Title:
-----------------------------------------------
EQUITY INNS PARTNERSHIP II, L.P.
By: EQUITY INNS TRUST, its General Partner
By:
--------------------------------------------------
Title:
-----------------------------------------------
EQUITY INNS, INC.
By:
--------------------------------------------------
Title:
-----------------------------------------------
EQUITY INNS TRUST
By:
--------------------------------------------------
Title:
-----------------------------------------------
EQUITY INNS SERVICES, INC.
By:
--------------------------------------------------
Title:
-----------------------------------------------
BANK ONE, NA, Individually and as Administrative Agent
By:
Print Name:
Title:
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: 312/732-1117
Attention: Corporate Real Estate
Amount of Commitment: $
[NAME OF NEW LENDER]
By:
Print Name:
Title:
[Address of New Lender]
Phone:
Facsimile:
Attention:
EXHIBIT M
FORM OF MORTGAGE
(see attached)
EXHIBIT N
INTENTIONALLY DELETED
EXHIBIT O
ASSIGNMENT OF CONTRACTS
See Assignment of Contract of even date herewith.
EXHIBIT P
FORM OF SUBORDINATION LANGUAGE FOR MANAGEMENT AGREEMENTS
This Agreement shall be subordinate to any mortgage encumbering a
Hotel, and Manager agrees to enter into a lender-manager agreement with respect
to each Hotel, which agreement shall contain reasonable lender-manager
provisions, including, without limitation, Manager's acknowledgment that its
real estate interest in and to a Hotel, if any, created by this Agreement is
subordinate to any mortgage encumbering such Hotel, including providing any
purchaser of such Hotel at a foreclosure sale or deed-in-lieu of foreclosure
(including the lender) with the right to terminate this Agreement with respect
to such Hotel; provided, however, in no event will Manager agree to subordinate
or waive its right to receive fees, reimbursements or indemnification payments
under this Agreement arising prior to termination (but (a) if this Agreement is
terminated by the lender or such purchaser with respect to such Hotel, Manager
shall not look to the lender for payment of such fees, reimbursements or
indemnification payments and Manager's right to receive such fees,
reimbursements or indemnification payments shall be subordinated to the lender's
rights and (b) if this Agreement is not terminated by the lender or such
purchaser with respect to such Hotel, then such fees, reimbursements or
indemnification payments shall be payable by the lender or such purchaser).
EXHIBIT Q-1
FORM OF SUBORDINATION
AGREEMENT FOR PERMITTED OPERATING LEASES (NON-AFFILIATED)
See Subordination Non-Disturbance and Attornment Agreement Crossroads and
Consolidated Lease Estoppel Subordination Non-Disturbance and Attornment
Agreement delivered concurrently herewith.
EXHIBIT Q-2
FORM OF SUBORDINATION
AGREEMENT FOR PERMITTED OPERATING LEASES (AFFILIATES)
This Subordination and Attornment Agreement (the "Agreement") is dated
as of January 1, 2001, among BANK ONE, NA, a national banking association, not
individually but as "Agent" for the benefit of the lenders from time to time
under the Credit Facility described below (the "Lenders"),
___________________________., a Delaware corporation (the "Tenant") and EQUITY
INNS PARTNERSHIP, L.P.(the "Landlord").
RECITALS
A. The Landlord is the legal or beneficial owner of a fee or leasehold
estate in the hotel properties listed on Schedule 1, which Schedule is attached
hereto and made a part hereof by this reference (individually a "Property" or
collectively the "Properties" or the "Premises").
B. The Lenders have extended to Landlord and its affiliates a certain
secured revolving facility (the "Credit Facility") in the initial maximum
principal sum of $125,000,000, subject to further increase to $175,000,000, on
the terms, covenants and provisions contained in a certain Secured Revolving
Credit Agreement dated as of October __, 2000 as amended and modified from time
to time (as so modified and amended, and as the same may hereafter be modified
and amended, the "Credit Agreement").
C. The Credit Facility is secured by various mortgages, deeds of trust,
deeds to secure debt, assignments of leases and similar instruments in favor of
the Agent for the benefit of the Lenders (collectively, the "Mortgages")
encumbering the Properties and certain other hotel properties owned by the
Landlord and its affiliates. The Mortgages and any other documents now and
hereafter evidencing, securing or otherwise relating to the Credit Facility are
hereinafter collectively referred to as the "Security Documents."
D. Tenant is the lessee of all of the Properties by the terms of
certain lease agreements described in Schedule 2 which is attached hereto and
made a part hereof, as amended and modified from time to time (as so modified
and amended, and as the same may hereafter be modified and amended as expressly
permitted in accordance with the terms and provisions hereof, individually a
"Lease" and collectively the "Leases").
E. The intent of the parties is that this Agreement shall be construed
as a separate subordination and attornment agreement for each Lease and for each
Property.
AGREEMENT
For mutual consideration, including the mutual covenants and agreements
set forth below, the Lenders' consent to Landlord's execution and delivery of
the Leases and the substantial economic benefit Tenant will derive from the
extension of the Credit Facility by Lenders to Landlord and its affiliates, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Subordination. Tenant agrees that each Lease and all of the terms,
covenants and provisions thereof and all rights, remedies and options of Tenant
thereunder, including, without limitation, (a) any right of Tenant to purchase
all or part of the Property demised under such Lease and any right of first
offer available to Tenant to purchase all or part of the Property demised under
such Lease (such rights, collectively, the "Options"), (b) any renewal options
for the benefit of Tenant, (c) Tenant's interest, if any, in the Capital
Expenditure Reserve Account (as defined in such Lease) and (d) any right to
insurance proceeds or condemnation awards, shall at all times be subject and
subordinate to the Security Documents and the lien thereof and to all present or
future advances under the Credit Facility and all renewals, amendments,
modifications, consolidations, replacements and extensions of the Credit
Facility and the Security Documents, to the full extent of all amounts secured
by the Security Documents from time to time. Said subordination is to have the
same force and effect as if the Security Documents and such renewals,
modifications, consolidations, replacements and extensions thereof have been
executed, acknowledged, delivered and recorded prior to such Lease, any
amendments or modifications thereof and any notice thereof.
2. Tenant Options. Notwithstanding anything to the contrary contained
in this Agreement, provided Tenant is not then in default under terms of the
related Lease or this Agreement, Tenant may exercise any of the Options or
renewal rights granted to it under, and in strict accordance with the terms of,
such Lease; provided, however, Tenant acknowledges that Landlord's ability to
convey all or any portion of the Premises free and clear of the lien of the
Security Documents shall be subject to the fulfillment by Landlord of all terms,
provisions and conditions contained in Section 2.19(c) of the Credit Agreement.
3. Lack of Nondisturbance. Tenant acknowledges that the Agent shall
have the right to terminate each of the Leases pursuant to a foreclosure of the
related Mortgage, notwithstanding anything to the contrary in Article XXX of the
Lease or in any other provision thereof or in this Agreement.
4. Attornment. Tenant agrees that, at the written election of the Agent
given to Tenant which election may be given or withheld in the Agent's sole
discretion, in the event of a foreclosure of any or all of the Security
Documents by Agent or the acceptance of an assignment or deed in lieu of
foreclosure by Agent on behalf of the Lenders (or any assignee, nominee,
designee or successor of Agent or the Lenders) to ownership of a fee or
leasehold (as the case may be) interest or interests in any of the
Premises, Tenant will attorn to and recognize as its landlord the party which
thereby takes title (whether fee or leasehold, as the case may be) to all or any
part of the premises subject to the related Lease or Leases for the remainder of
the term of such Lease or Leases (including all extension periods which have
been or are hereafter exercised in accordance with the provisions of such Lease)
upon the same terms and conditions as are set forth in such Leases, which will
thenceforth be deemed direct leases between such party and Tenant, and Tenant
hereby agrees to pay and perform all of the obligations of Tenant pursuant to
such Leases. If such written election is made, Agent or such other party, by
virtue of such foreclosure, shall be deemed to have assumed and agreed to be
bound, as substitute landlord, by the terms and conditions of such Leases
(including, without limitation, any obligations with respect to the maintenance
and use of the Capital Expenditure Reserve Account) until the sale or other
disposition of its interest, except that such assumption shall not be deemed of
itself an acknowledgment by such new landlord of the validity of any then
existing claims of Tenant against any prior landlord (including Landlord);
provided however, that the Agent, the Lenders, and any such assignee, nominee,
designee or successor of the Agent or the Lenders, as the case may be, shall not
be (i) liable for any accrued obligation of Landlord, or for an act or omission
of Landlord, whether prior to or after such foreclosure or transfer by
assignment or deed in lieu of foreclosure not arising by, through or under such
new landlord, in effectuating such transfer or foreclosure, (ii) required to
make (or to permit proceeds of insurance or condemnation awards to be used by
Tenant to pay for) any repairs to the Premises required as a result of fire or
other casualty or by reason of condemnation unless such new landlord shall be
expressly obligated under the Lease to make such repairs (or permit such
proceeds or awards to be used for such purposes) and shall have received
sufficient casualty insurance proceeds or condemnation awards to finance the
completion of such repairs, (iii) required to make any capital improvements to
the Premises which Landlord may have agreed to make, but had not completed, or
to perform or provide any services not related to possession or quiet enjoyment
of the Premises, unless in each case such new landlord shall be expressly
obligated to do so under such Lease, or (iv) subject to any offsets or
counterclaims which shall have accrued to Tenant against Landlord prior to the
date upon which such new landlord shall become the owner of all or part of the
Premises. If the Agent so elects in writing to require Tenant's attornment,
except as set forth to the contrary in clause (i) or (iv) of this paragraph 5
above, all rights and obligations under such Leases shall continue as though
such foreclosure proceedings had not been brought or as though a deed or
assignment in lieu of foreclosure had not been granted, and such new landlord
shall recognize all of Tenant's rights under such Leases except as expressly
provided otherwise in this Agreement. Tenant acknowledges and agrees that, from
and after the date on which such new landlord becomes the owner of all or part
of the Properties, for purposes of calculating the "Minimum Price" under the
Leases with respect to such Properties, the date on which such new landlord
becomes the owner shall be deemed to be the date of acquisition, the "equity" of
such new landlord under clause (a) of the definition of "Minimum Price" shall be
deemed to be the greater of (i) that portion of the aggregate Obligations under
the Credit Agreement reasonably allocated to such Property by the Agent or (ii)
the purchase price paid for such Property at the foreclosure sale, such Property
shall be deemed to be free of encumbrances as of such date and all further
adjustments to the "Minimum Price" for such Property will be made from such
initial "equity" amount.
5. Tenant Rights upon Landlord Security Documents Default. The Agent
acknowledges the rights of Tenant to cure any defaults of Landlord under the
Mortgages contained in Section 34.2 of each of the Leases. In furtherance
thereof, the Agent shall (a) give Tenant the same notice, if any, given to
Landlord of any default or acceleration of any obligation secured by any such
Mortgage or other Security Document or any sale in foreclosure thereunder, (b)
permit Tenant to cure any such default on Landlord's behalf within any
applicable cure period (and seek reimbursement of all costs associated therewith
from Landlord) and (c) permit Tenant to appear by its representative and to bid
at any sale in foreclosure made with respect to any of the Security Documents.
6. Tenant Estoppel. Tenant hereby represents and warrants to Agent that
as of the date hereof (i) Tenant is the owner and holder of the lessee's
interest under the Leases, (ii) none of the Leases have been modified or
amended, (iii) each of the Leases is in full force and effect, (iv) Tenant has
taken possession of the Premises on a rent- paying basis, (v) to the best of
Tenant's knowledge and belief, neither Tenant nor Landlord is in default under
any of the terms, covenants or provisions of any of the Leases, and (vi) neither
Tenant nor, to the best of Tenant's knowledge and belief, Landlord has commenced
any action or given or received any notice for the purposes of terminating any
of the Leases.
7. Landlord Lease Default. Tenant shall notify Agent of any default by
Landlord under any Lease which could or would entitle Tenant to cancel such
Lease or ▇▇▇▇▇ the rent (or any portion thereof) payable to Landlord thereunder.
Tenant agrees that, notwithstanding any provisions of any Lease to the contrary,
no notice of cancellation shall be effective unless Agent shall have received
notice of the default giving rise to such cancellation and shall have failed
within thirty (30) days after receipt of such notice to cure such default, or if
such default cannot be cured within thirty (30) days, shall have failed within
thirty (30) days after receipt of such notice to commence and to thereafter
diligently pursue any action necessary to cure such default; provided, however,
in no event shall such cure period extend beyond ninety (90) days after such
notice. Nothing contained in this paragraph 8 shall be construed as imposing any
obligation on Agent to cure any default by Landlord under any Lease.
8. (a) Tenant Notices and Agent Audit Access. Tenant hereby
acknowledges and agrees that, from and after the date hereof (and without regard
to whether any default then exists under any Lease or whether Agent has
exercised any other rights available to it hereunder or under the Security
Documents), (i) Tenant shall deliver to Agent copies of any and all notices
delivered to Landlord pursuant to or otherwise in connection with any Lease,
simultaneously with Tenant's delivery of the same to Landlord, and (ii) all of
the audit, examination, inspection, transcription and related rights of Landlord
pursuant to Section 3.9 and Article 25 of each of the Leases shall inure to the
benefit of Agent and may be exercised by Agent at all the times and to the full
extent provided therein with respect to Landlord.
(b) Agent Receipt of Rents. In the event Tenant receives
written notice from Agent that rentals and/or other monies due under any of the
Leases are to be paid to Agent, Tenant shall pay to Agent, or as otherwise
directed by Agent, by check made payable solely to Agent or as otherwise
directed by Agent, all rentals and other monies due or to become due under such
Leases, and Landlord hereby expressly authorizes Tenant to make such payments to
Agent, or as otherwise directed by Agent and Landlord hereby releases and
discharges Tenant of and from any liability to Landlord on account of any such
payments. Should Tenant fail to make payment as directed by Agent after receipt
of any such notice from Agent, Tenant shall remain liable to Agent for all
amounts so paid after receipt of such notice.
9. Insurance, Casualty and Condemnation. Notwithstanding any contrary
or inconsistent provisions contained in any Lease or in the Credit Agreement,
with respect to each and every Property which is both (a) part of the Collateral
Pool Assets under the Credit Facility and (b) demised to Tenant pursuant to a
Lease, the following provisions will apply:
A. Insurance Requirements. During the term of the Credit
Facility and for so long as any portion of the Obligations (as defined in the
Credit Agreement) shall remain outstanding, Tenant shall maintain the types of
insurance with respect to the Premises as are required by the provisions of
Article 13 of each of the Leases and shall otherwise perform its obligations set
forth in such Article 13. Notwithstanding anything contained in any Lease to the
contrary, Tenant shall not be permitted to acquire insurance through insurance
companies which are Affiliates (as defined in the Leases) of Tenant even if
insurance otherwise satisfies the requirements of Section 13.6 of the Leases.
Without limiting the generality of the foregoing, all insurance policies
insuring against casualty and business interruption and other appropriate
policies required under the Leases shall include noncontributing mortgagee
endorsements in favor of Agent with loss payable to Agent, as well as standard
waiver of subrogation endorsements, and shall provide that the coverage shall
not be terminated or modified, nor a risk changed without thirty (30) days'
advance written notice to Landlord and Agent. If any portion of the insured
risks are re-insured, the re-insurance policies shall contain "cut-through"
endorsements reasonably satisfactory to Agent. Tenant shall pay the premiums for
such insurance policies as the same become due and payable. Not later than ten
(10) days prior to the expiration date of each of such insurance policies,
Tenant will deliver to Agent certificates of insurance for a renewal policy or
policies marked "premium paid" or accompanied by other evidence of payment of
premium reasonably satisfactory to Agent. If any insurance policy or part
thereof shall expire or be withdrawn or become void by reason of the failure or
impairment of the capital of any company in which the insurance shall be
carried, or if at any time Agent is not in receipt of written evidence that all
insurance required hereunder is in force and effect or if for any reason
whatsoever the insurance shall be reasonably unsatisfactory to Agent, Agent
shall have the absolute and unconditional right without prior notice to Landlord
or Tenant to take such action as Agent deems necessary to protect the interest
of Agents in the Premises, including without limitation, the obtaining of such
insurance coverage as Agent deems appropriate, and Landlord agrees to pay to
Agent and upon demand by Agent all expenses incurred by Agent in connection
with such action or by Agents in obtaining such insurance and keeping it
in effect, together with interest thereon at the Default Rate (as defined
in the Credit Agreement). Except as otherwise hereinafter specifically provided
below in subparagraph B, if any portion of the Premises shall be damaged or
destroyed, in whole or in part, by fire or other property hazard or casualty,
Tenant shall give prompt notice thereof to Agent and Landlord and one hundred
(100%) percent of the net amount of all insurance proceeds received by Agent,
Tenant or Landlord as a result of such damage or destruction, after deduction of
reasonable costs and expenses, if any, in collecting the same, shall be applied
in reduction of Obligations (as such term is defined in the Credit Agreement)
under the Credit Facility.
B. Application of Insurance to Repair. Tenant will give Agent
and Landlord prompt notice of any loss or damage to all or any portion of the
Premises, and in the event of any such loss or damage, the following provisions
shall apply:
(i) Settlement. In case of loss or damage covered by any of
the insurance policies required under Article 13 of any Lease, Tenant
shall not have the right to settle and adjust any claim under such
insurance policies without the consent of Agent (which consent shall
not be unreasonably withheld or delayed); provided, however, that so
long as no default or event of default under such Lease has occurred
and is continuing, Tenant shall have the right, without the consent of
Agent, to settle and adjust claims relating to an insurance loss of
less than $10,000. Tenant shall, in good faith and with due diligence,
file and prosecute its claim or claims for any such loss or damage
covered by the insurance policies, and shall cause the same to be
collected and paid over to Agent; provided, however, Tenant (and, to
the extent provided in such Lease, Landlord) shall have the right to
receive the proceeds of claims of less than $10,000 as long as no
default or event of default under such Lease shall have occurred and
shall be continuing; and provided, further, that such proceeds are
applied to reimburse Tenant for the cost of restoring, repairing,
replacing or rebuilding (herein generally called "Restoration") the
Premises or the affected portion thereof subsequent to such damage or
destruction, in accordance with subparagraph (xiv) below. Each of
Tenant and Landlord hereby appoints Agent its attorney-in-fact to
endorse any checks, drafts or other instruments representing any
proceeds of such insurance.
(ii) Restoration. Notwithstanding anything to the contrary
contained in subparagraph (i) above, if at any one time during the term
of the Credit Facility, up to (but not more than) three (3) Properties
shall have been damaged or destroyed by fire or other casualty such
that, simultaneously, any three (3) Properties are not substantially
complete and open for occupancy, provided that the aggregate book value
plus depreciation (i.e., "Total Cost" as defined in the Credit
Agreement) of such Property or Properties (in each case immediately
prior to the casualty in question) shall not exceed 10% of the
aggregate Total Cost of all the Properties immediately prior to such
casualty, then Agent shall, in accordance with the provisions of this
paragraph hereinafter set forth, make available to Tenant for
Restoration the net amount ("Net Proceeds") of all insurance proceeds
received by Agent as a result of such damage or destruction, after
deduction of the reasonable costs and expenses in collecting the
insurance proceeds; provided, further, that (a) no default or event
of default under such Lease shall have occurred and shall be
continuing; (b) Tenant shall, as soon as reasonably practicable
after such casualty and, in any event, in accordance with the
applicable provisions of such Lease, commence and shall thereafter
diligently pursue to completion the Restoration of the Premises to a
condition as near as possible to the condition of Premises immediately
prior to such casualty; (c) Agent shall have determined that the
applicable hotel franchise or license agreement shall not be terminated
with respect to any Property as a result of such fire or other
casualty, but will remain in full force and effect during and after the
completion of the repair and restoration of such Property or that an
alternative franchise agreement or commitment therefor from a
nationally recognized franchisor of comparable or better reputation
will be secured for the Property within sixty (60) days of such
casualty; and (d) such Lease shall not be terminated with respect to
any Property as a result of such fire or other casualty, but shall
remain in full force and effect during and after the completion of the
Restoration of such Property(ies).
(iii) Tenant Termination/Purchase Option. Nothing contained in
this paragraph shall be construed to limit, modify, vitiate or
otherwise affect the rights of Tenant pursuant to Article 14 of any
Lease to elect to terminate such Lease, to require Landlord to offer
the affected Property or Properties for sale to Tenant, or to purchase
(or offer to purchase) the affected Property or Properties, in each
case in accordance with the terms and provisions of such Article 14, it
being understood and agreed that if Tenant shall exercise any such
right or option to terminate such Lease (except in connection with an
acquisition of a Property or Properties as provided in Article 14 of
such Lease), or if such Lease is otherwise terminated pursuant to the
provisions of Article 14 of such Lease, Agent shall have the absolute
and unconditional right to apply the Net Proceeds to the payment of the
Obligations under the Credit Facility. Notwithstanding the foregoing,
unless Landlord shall have obtained, in accordance with the provisions
of Section 2.19(c) of the Credit Agreement, Agent's approval of any
such acquisition by Tenant pursuant to Article 14 of such Lease, such
acquisition shall constitute an Event of Default and the subject
Property shall remain subject to the lien of the Security Documents
after the consummation of such acquisition. In any event, the entire
amount of the Rejectable Offer Price (as defined in such Lease) for any
such acquisition shall be paid to Agent for application to the
Obligations in accordance with the provisions of Section 2.19(c) of the
Credit Agreement.
(iv) Tenant Purchase Note Proceeds. In the event Lender makes
Net Proceeds available to Tenant for Restoration of any of the
Properties, Tenant shall be obligated to use such Net Proceeds solely
for Restoration in accordance with the provisions of the related Leases
and this paragraph. If Tenant acquires the affected Property or
Properties in accordance with the provisions of Article 14 of the
related Leases (which acquisition shall be subject to the provision of
the foregoing clause (iii)), Agent shall disburse the Net Proceeds to
Tenant (or, at Tenant's option, cause the same to be applied to the
Obligations and credit the amount of such Net Proceeds against the
Rejectable Offer Price payable to Agent pursuant to clause (iii)
above).
(v) Approved Work, Deficiency Deposit and Construction Funds.
In the event that Agent makes Net Proceeds available to Tenant for
Restoration of any of the Properties, Tenant hereby covenants to
restore the same in accordance with plans and specifications reasonably
approved by Agent, and Tenant shall cause to be prepared and presented
to Agent and Landlord a certified construction statement, acceptable to
Agent, showing the total estimated cost of the Restoration (the work
being certified in such statement being hereinafter referred to as the
"Approved Work"); if such cost exceeds the available insurance
proceeds, Landlord shall pay the excess of the amount of such cost over
the amount of the available insurance proceeds, in cash, to Agent, as a
condition precedent to any disbursement of Net Proceeds by Agent. Such
excess (the "Deficiency Deposit") shall be held and disbursed by Agent
pursuant to the provisions of this paragraph (Net Proceeds and any
Deficiency Deposit paid to Agent being hereinafter referred to
collectively as the "Construction Funds"). Any such Deficiency Deposit
shall be disbursed prior to the disbursement of any Net Proceeds.
(vi) Construction Funds Account Interest. Construction Funds
shall be held by Agent in an interest-bearing account selected by Agent
in its sole and absolute discretion and may be commingled with any
other accounts of Agent and until so disbursed (in strict accordance
with the terms hereof), shall constitute additional security for the
Obligations. Upon the final disbursement of the Construction Funds, the
party or parties entitled thereto shall receive their respective pro
rata share of any interest earned thereon.
(vii) Monthly Disbursement. The Construction Funds shall be
made available to Tenant, not more frequently than once every 30 days,
as the Restoration of the Property or Properties in question
progresses.
(viii) Consultant; Casualty Retainage. In no event shall Agent
be obligated to make disbursements of the Construction Funds in excess
of an amount equal to the costs actually incurred from time to time for
work in place as part of the repair and restoration of the
Improvements, as certified by an independent consulting engineer
reasonably acceptable to Agent and Landlord (the "Consultant"), minus
the Casualty Retainage. The term "Casualty Retainage" as used in this
paragraph shall mean an amount equal to 10% of the costs actually
incurred for work in place as part of the Restoration of a particular
Property, as certified by the Consultant. Notwithstanding the
foregoing, the Casualty Retainage being held by Agent with respect to
work or materials supplied by any subcontractor or materialman in
connection with the Approved Work will be released by Agent, upon
request by Tenant, provided (a) no default or event of default has
occurred and is continuing under the Security Documents, (b) Consultant
verifies to Agent that such subcontractor or materialman has completed
100% of all work and has supplied 100% of all the material under such
materialman's subcontract and in conformity with the plans and
specifications therefor accepted by Agent, Tenant and Consultant, (c)
such subcontractor or materialman will be paid in full upon the release
of the portion of the Casualty Retainage being held with respect to
such subcontractor or materialman, (d) such subcontractor or
materialman executes and delivers all lien waivers which may be
reasonably requested or required by Agent or by the title company
insuring the lien waivers which may be reasonably requested or required
by Agent or by the title company insuring the lien of the Security
Documents to induce such title company to insure the lien of the
Security Documents against any mechanic's or materialman's lien
which may be filed by such subcontractor or materialman, and (e) if a
surety bond is in place in accordance with the provisions of this
Agreement, such release of such portion of the Casualty Retainage shall
be approved by any surety company which has issued a payment or
performance bond with respect to such subcontractor or materialman.
Construction Funds may be disbursed by Agent directly or through a
third party escrow agent, such as, but not limited to, a title
insurance company, or its agents, as Agent may determine in its sole
discretion.
(ix) Contractor Certificates and Lien Waivers. Tenant shall
deliver or cause to be delivered to Agent, with each such Consultant's
certificate, sworn statements and lien waivers from the general
contractor and such subcontractors as Agent shall determine in its sole
discretion, in an amount at least equal to the amount of Construction
Funds to be paid out to Tenant pursuant to each Consultant's
certificate and dated as of the date of the disbursement to which they
relate.
(x) Plans and Costs. Tenant shall deliver or cause to be
delivered to Agent such other evidence as Agent may reasonably request,
from time to time, during the Restoration, as to the progress of the
work, compliance with the approved plans and specifications, the cost
of the work and the total amount needed to complete the work.
(xi) Progress Reports. Tenant shall deliver or cause to be
delivered to Agent, at no cost to Agent, such other evidence as Agent
may reasonably request from time to time (including, without
limitation, a current title rundown), showing that there are no liens
against the Premises filed in connection with the Restoration (other
than liens which will be paid with the Construction Funds, provided
that Agent shall not have previously disbursed Construction Funds to
Tenant for the payment of the items which are the subject of such
liens), that the remaining Construction Funds are sufficient to
complete the Restoration, and that the Security Documents, including
the Mortgages, remain insured as a first priority lien or liens on the
Premises with the same priority as on the date of the initial
execution, delivery and recording of the same.
(xii) Excess Net Proceeds Deficiency Deposit. The excess, if
any, of the Net Proceeds, together with interest thereon, after the
Consultant has certified to Agent that the Restoration of the Property
or Properties in question has been completed in accordance with the
provisions of this paragraph, and Lender has received evidence
satisfactory to Agent that all costs incurred in connection with
Restoration have been paid in full, shall be disbursed to Tenant, and
the remaining balance, if any, of the Deficiency Deposit shall be
remitted by Agent to Landlord.
(xiii) Failure to Perform. In the event Tenant or Landlord at
any time shall fail to promptly and fully perform the conditions and
covenants set forth in this paragraph, or in the event that during the
Restoration a default or an event of default under the related Lease
shall occur, Agent may, at its option, immediately cease making any
further payments to Tenant for such Restoration, and may further, at
its option, apply the Construction Funds then in its possession either
to the Obligations in such order, priority and proportions as Lender
shall elect in its sole and absolute discretion or to Restoration in
the manner above provided and notwithstanding any such default or event
of default, without affecting the liens of the Security Documents and
the obligations thereunder or hereunder.
(xiv) Minor Casualty. Notwithstanding anything to the contrary
contained in this paragraph, if the Net Proceeds allocable to any
individual Property shall be less than $10,000 and if the costs of
completing the Restoration shall be less than $10,000, such Net
Proceeds shall be disbursed by Agent to Tenant upon receipt, provided
that no default or event of default under the Lease shall have occurred
and be continuing, and provided further, that Tenant delivers to Agent
a written undertaking expeditiously to commence the Restoration and to
complete the same with due diligence, in a manner reasonably
satisfactory to Agent and otherwise in accordance with the provisions
of this paragraph. Upon completion of the Restoration, Tenant shall
deliver to Agent evidence reasonably satisfactory to Agent, including,
upon request of Agent, lien waivers, that such proceeds have been
expended for the Restoration and the Restoration has been completed in
good and workmanlike manner, free of liens (other than those held by
Agent) and in compliance with law.
C. Application of Condemnation Award to Repair.
(i) Award. If all or any portion of the Premises is taken by
any public or quasi-public authority through eminent domain or
otherwise, Agent is hereby authorized to collect and receive from the
condemnation authorities the aggregate amount of all awards or payments
received as a result of such taking, less the reasonable costs and
expenses, if any, incurred in collecting the same (such net amount, the
"Award"). Agent is hereby authorized to give appropriate receipts and
acquittances therefor. Tenant and Landlord shall give Agent immediate
notice of the actual or threatened commencement of any condemnation or
eminent domain proceedings affecting all or any part of any of the
Premises and shall deliver to Agent copies of any and all papers served
in connection with any such proceedings upon receipt of the same.
(ii) Application of Award. The Agent shall be entitled to
apply the amount of any Award made with respect to the Premises or for
loss of rent, or for Landlord's loss of business beyond the term of the
related Lease, in reduction of the Obligations under the Credit
Facility. Any part of an Award made for loss of Tenant's business
during the remaining term of such Lease, if any, for the taking of
Tenant's Personal Property (as defined in such Lease), or for removal
and relocation expenses of Tenant in any such proceedings shall be paid
over to Tenant. Tenant may also make a claim for any additional award
to the extent it does not diminish any portion of the Award due and
payable for the account of Landlord.
(iii) Notwithstanding the foregoing, if up to (but not more
than) three (3) Properties shall have been affected by such takings
such that simultaneously, any three (3) Properties are not
substantially complete and open for occupancy, provided that the
aggregate book value plus depreciation (i.e., "Total Cost" as defined
in the Credit Agreement) of such Property or Properties (in each case
immediately prior to the taking in question) shall not exceed 10% of
the aggregate Total Cost of all of the Properties immediately prior to
such casualty, then Agent shall, in accordance with the provisions of
this paragraph, make the Award available to Landlord for Restoration of
the Premises, provided that (a) no default or event of default under
the related Leases shall have occurred and shall be continuing; (b)
Tenant shall, as soon as reasonably practicable after suck taking and,
in any event, in accordance with applicable provisions of such related
Leases, commence and shall thereafter diligently pursue to completion
the Restoration of the Premises to a condition as near as possible to
the condition of the Premises immediately prior to such taking; (c)
Agent shall have determined that the applicable hotel franchise or
license agreement shall not be terminated with respect to any Property
as a result of such taking, but will remain in full force and effect
during and after the completion of the repair and restoration of such
Property or that an alternative franchise agreement or commitment
therefor from a nationally recognized franchisor of comparable or
better reputation will be secured for such Property within sixty (60)
days of such taking; and (d) the related Leases shall not be terminated
as a result of such taking, but shall remain in full force and effect
during and after the completion of the Restoration of such Property.
(iv) Administration of Award for Restoration. Any such Award
shall be held or disbursed and applied to Restoration in the same
manner as is provided in subparagraph B above with respect to the
application of Net Proceeds (it being understood that for purposes of
this subparagraph C, the term "Construction Funds" shall mean,
collectively, the Award and any Deficiency Deposit which may be
required to be deposited with Agent as a result of the insufficiency
of the Award to pay the cost of Restoration, and the term "Restoration"
shall mean the restoring, repairing, replacing or rebuilding of the
Premises or any part thereof subsequent to a taking by condemnation or
eminent domain of all or any part of the Premises, such Restoration to
be completed free of liens (other than the liens held by Agent), in
compliance with all applicable law and otherwise in accordance with the
provisions of the related Lease and this Agreement). Any Construction
Funds resulting from the receipt of any Award shall be held and
disbursed by Agent in the manner provided in subparagraph B above with
respect to Net Proceeds and shall constitute additional security for
the Obligations under the Credit Facility. The balance of any Award
remaining after the completion of Restoration in accordance with this
paragraph shall be applied to Obligations under the Credit Facility,
unless a partial condemnation materially impairs the operations or
financial performance of the Property, in which case the Award shall
be equitably apportioned as provided in Section 15.5 of the related
Lease, and Landlord's share thereof shall be applied to Obligations
under the Credit Facility.
(v) Nothing contained in this paragraph shall be construed to
limit, modify, vitiate or otherwise affect the rights of Tenant or
Landlord pursuant to Article XV of any Lease to elect to terminate such
Lease, it being understood and agreed that if Tenant or Landlord shall
exercise any such right or option to terminate such Lease, Agent shall
have the absolute and unconditional right to apply the Award to the
payment of the Obligations under the Credit Facility.
D. Provisions of Credit Agreement and Lease. Except as
expressly provided to the contrary in subparagraphs A through C above, the
provisions of Section 5 of each of the Mortgages and Articles 14 and 15 of each
of the Leases remain in full force and effect and the obligations of Landlord
thereunder shall not be modified by the terms and provisions of this Agreement.
In the event of any conflict between the terms and provisions of the Credit
Agreement or the Leases (as the case may be) and the terms and provisions of
this paragraph, the terms of this paragraph shall control.
10. Notices. Any notice, election, communication, request or other
document or demand required or permitted under this Agreement shall be in
writing and shall be deemed delivered on the earlier to occur of (a) receipt, or
(b) the date of delivery, refusal or nondelivery indicated on the return
receipt, if deposited in a United States Postal Service depository, postage
prepaid, sent certified or registered mail, return receipt requested, or if sent
via a recognized commercial courier service providing for a receipt, addressed
to Tenant or Agent, as the case may be, at the following addresses:
If to Tenant:
--------------------------------------------
Attn:
---------------------------------------
with a copy to:
--------------------------------------------
Attn:
---------------------------------------
If to Agent: Bank One, NA
Corporate Real Estate Division
1 Bank ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Any party may change its address for purposes of notices hereunder by delivery
of written notice to the other fifteen (15) days prior to the effective date of
such change.
11. Successors. The term "Agent" as used herein includes any successor
or assign of the named Agent herein, including without limitation, any purchaser
at a foreclosure sale and any transferee pursuant to an assignment or deed in
lieu of foreclosure, and their successors and assigns, and the term "Tenant" as
used herein includes any successor and assign of the named Tenant herein;
provided, however, that such reference to Tenant's successors and assigns shall
not be construed as Agent's consent to any assignment or other transfer by
Tenant. The term "Premises" as used herein shall include land and improvements
now or hereafter thereon, and estates therein encumbered by the Security
Documents, and shall mean, unless the context otherwise requires, any individual
hotel property.
12. Further Assurances. Each of the parties hereto hereby covenants and
agrees to sign, execute and deliver, or cause to be signed, executed and
delivered, and to do or make, or cause to be done or made, upon reasonable
request of the other party hereto or Landlord, any and all agreements,
instruments, papers, deeds, acts or things, supplemental, confirmatory or
otherwise, as may be reasonably required by the requesting party for the purpose
of or in connection with provisions of this Agreement.
13. Partial Validity. If any provision of this Agreement is held to be
invalid or unenforceable by a court of competent jurisdiction, such provision
shall be deemed modified to the extent necessary to be enforceable, or if such
modification is not practicable, such provision shall be deemed deleted from
this Agreement, and the other provisions of this Agreement shall remain in full
force and effect, and shall be liberally construed in favor of Agent.
14. Amendments. Neither this Agreement nor any of the terms hereof may
be terminated, amended, supplemented, waived or modified orally, but only by an
instrument in writing executed by the party against which enforcement of the
termination, amendment, supplement, waiver or modification is sought.
Additionally, the Leases shall not be modified or amended, nor shall the same be
terminated other than in strict accordance with the terms and provisions
thereof, without the advance prior written consent of Agent in each instance.
15. Nonrecourse. Notwithstanding anything contained to the contrary in
this Agreement or under the terms of the Leases, in the event Agent, the Lenders
or any assignee, nominee, designee or successor of the Agent or the Lenders
takes possession of all or any portion of the Premises by virtue of a
foreclosure or deed or assignment in lieu of foreclosure, such party's liability
as "Landlord/Lessor" under the related Leases shall be expressly limited to its
interest in the Properties demised under such Leases..
16. Counterparts. This Agreement may be executed in a number of
identified counterparts. If so executed, each of such counterparts is to be
deemed an original for all purposes, and all such counterparts shall,
collectively, constitute one agreement, but in making proof of this Agreement,
it shall not be necessary to produce or account for more than one such
counterpart.
17. Governing Law. With respect to each Lease and Mortgage, this
Agreement shall be construed in accordance with the laws of the state wherein
the related Property is located.
[Balance of Page Intentionally Left Blank]
SIGNATURE PAGE
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
BANK ONE, NA, not individually but as Agent
as aforesaid
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
STATE OF ILLINOIS,
COUNTY OF ▇▇▇▇, to-wit:
The foregoing instrument was acknowledged before me in the County of
▇▇▇▇, State of Illinois, this ____ day of January, 2001, by
____________________________________, as _____________________________________
of Bank One, NA, on behalf of the bank.
My commission expires: ______________________.
-----------------------------
Notary Public
[NOTARIAL SEAL]
SIGNATURE PAGE
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
TENANT:
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
STATE OF ,
----------------------
CITY/COUNTY OF , to-wit:
----------------------
The foregoing instrument was acknowledged before me in the City/County
of , State of this ___ day of January, 2001, by , as of
____________________________, a Delaware corporation, on behalf of the company.
My commission expires: ______________________.
-----------------------------
Notary Public
[NOTARIAL SEAL]
SIGNATURE PAGE
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
EQUITY INNS PARTNERSHIP, L.P.
By: Equity Inns Trust, its general partner
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
STATE OF ,
----------------------
CITY/COUNTY OF , to-wit:
----------------------
The foregoing instrument was acknowledged before me in the City/County
of , State of this ___ day of January, 2001, by , as of Equity Inns Trust, a
Maryland real estate investment trust, as general partner of Equity Inns
Partnership, L.P., a Tennessee limited partnership, on behalf of the
partnership.
My commission expires: ______________________.
-----------------------------
Notary Public
[NOTARIAL SEAL]
SCHEDULE 1 - [Equity Inns Affiliates]
PREMISES
Name and Location
[List all Properties in Collateral Pool as of January 1,
2001]
SCHEDULE 2
DESCRIPTION OF LEASE
1. Consolidated Lease Agreement dated as of January 1, 2001 between Equity Inns
Partnership, L.P. and ___________________________________ [insert hotel location
and repeat].
SCHEDULE 1
LIST OF INITIAL COLLATERAL POOL ASSETS
ALABAMA ILLINOIS TEXAS
------- -------- -----
HAMPTON INN (Mtn. Brook) HOMEWOOD SUITES HAMPTON INN (Dallas)
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ 280 40 East Grand Avenue 4555 Beltway
Birmingham, AL 35223 ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ARIZONA LOUISIANA COMFORT INN
------- --------- 121 East ▇-▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ARKANSAS MINNESOTA VERMONT
-------- --------- -------
HAMPTON INN AMERISUITES (Minneapolis) RESIDENCE INN
500 West 29 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇. ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Bloomington, MN 5542 ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
COLORADO NEVADA WASHINGTON
-------- ------ ----------
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
HAMPTON INN NORTH CAROLINA WEST VIRGINIA
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ -------------- -------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ HAMPTON INN HOLIDAY INN
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇-▇▇▇ ▇▇. 460 By-Pass
FLORIDA ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------
AMERISUITES HOLIDAY INN EXPRESS HOLIDAY INN
▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
AMERISUITES (▇▇▇▇▇▇▇) OHIO
▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇ ----
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ AMERISUITES (Cincinnati)
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ SOUTH CAROLINA
--------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ INN
------- ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ TENNESSEE
---------
HOMEWOOD SUITES HAMPTON INN & SUITES
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
AMERISUITES (Nashville)
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
HAMPTON INN
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇, ▇▇ & Old South
Pickwick Dam, TN 3836
SCHEDULE 2
LIST OF DOCUMENTS TO BE DELIVERED TO ADMINISTRATIVE AGENT
WITH PROPOSAL FOR ADDITION OF COLLATERAL PROPERTIES
A. Survey
B. Title Insurance Commitment
B. Copies of All Recorded Documents
▇. ▇▇▇▇▇ Insurance, if applicable
E. Evidence of Casualty and Liability Insurance (or commitment to issue)
F. Environmental Report/Certification
G. Permitted Operating Lease (or draft thereof)
H. Management Agreement (or draft thereof), if applicable
I. Property Condition Report
J. Lessee/Manager financials, if applicable
K. Occupancy Certificate, if available in that jurisdiction
L. 2 years of Historical Operating Statements, unless new construction or
new acquisition, to the extent Borrower has owned the Property during
such 2 year period
M. Pro-Forma Operating Statements, unless new construction or new
acquisition
N. Capital Expenditure Budget, unless new construction or new acquisition
O. Franchisor Commitment
All items shall meet substantially the same standards as the prior deliveries
for the Initial Collateral Properties.
SCHEDULE 3
LIST OF ITEMS TO BE COMPLETED TO
FINALIZE ADDITION OF COLLATERAL PROPERTIES
A. Execution, delivery and recording of applicable Mortgage and Assignment
of Leases, together with a Limited Recourse Guaranty and joinders to
the other security documents if the applicable Owner is a Wholly Owned
Subsidiary
B. Organizational Documents for the Owner
C. Opinion of Counsel for Owner
D. Resolution regarding authority of Owner
E. Incumbency Certificate regarding Owner
F. UCC-1 Financing Statements from Owner
▇. ▇▇▇▇ Searches
H. Issuance of Title Insurance Policy and Endorsements, including
insurance over possible mechanic's lien claims
I. Receipt of Estoppel Certificates from ground lessor, if applicable
J. Subordination Agreements with lessee under Permitted Operating Lease
together with a joinder to the Security Agreement
K. Lender-Manager Agreement, if applicable
L. Receipt of Appraisal and confirmation that it conforms to requirements
M. Franchise Agreement
N. Permitted Operating Lease
O. Evidence of Casualty and Liability Insurance
SCHEDULE 6.19
ENVIRONMENTAL COMPLIANCE
All environmental matters identified in the environmental reports
delivered to Administrative Agent in connection with the Facility.
SCHEDULE 6.24
TRADE NAMES
None.
SCHEDULE 6.25
SUBSIDIARIES (BORROWERS)
Name Entity Type Percentage Ownership
---- ----------- --------------------
Equity Inns Partnership, L.P. Tennessee limited
partnership
ENN Company, Inc. Tennessee corporation 95.2% non-voting shares
Equity Inns Partnership II, Tennessee limited 99% limited partner of
L.P. partnership this entity
Equity Inns/West Virginia Tennessee limited 99% limited partner of
Partnership, L.P. partnership this entity
EIP Orlando, L.P. Tennessee limited 99% limited partner of
partnership this entity
EQI Financing Partnership Tennessee limited 99% limited partner of
I, L.P. partnership this entity
EQI Financing Partnership Tennessee limited 99% limited partner of
II, L.P. partnership this entity
EQI Financing Partnership Tennessee limited 99% limited partner of
III, L.P. partnership this entity
EQI Financing Partnership Tennessee limited 99% limited partner of
IV, L.P. partnership this entity
EQI Financing Partnership Tennessee limited 99% limited partner of
V, L.P. partnership this entity
EQI/WV Financing Partnership, Tennessee limited 99% limited partner of
L.P. partnership this entity
EQI/WV Financing Partnership Tennessee limited 99% limited partner of
II, L.P. partnership this entity
Equity Inns Partnership II, Tennessee limited
L.P. partnership
None
Equity Inns/West Virginia Tennessee limited
Partnership, L.P. partnership
None
SCHEDULE 7.16
SUBSIDIARIES (GUARANTORS)
Name Entity Type Percentage Ownership
---- ----------- --------------------
Equity Inns, Inc. Tennessee corporation
Equity Inns Services, Inc. Tennessee corporation 100% of outstanding
shares
Equity Inns Trust Maryland real estate 100% of all interests
investment trust
Equity Inns TRS Holdings, Tennessee corporation 100% of outstanding
Inc. shares
ENN Leasing Company, Inc. Tennessee corporation 100% of outstanding
shares by Equity Inns
TRS Holdings, Inc.
ENN Leasing Company I, Delaware SP V limited 100% owned by Equity
L.L.C. liability company Inns TRS Holdings,
Inc.
ENN Leasing Company II, Delaware SP V limited 100% owned by Equity
L.L.C. liability company Inns TRS Holdings,
Inc.
ENN Leasing Company III, Delaware SP V limited 100% owned by Equity
L.L.C. liability company Inns TRS Holdings,
Inc.
ENN Leasing Company IV, Delaware SP V limited 100% owned by Equity
L.L.C. liability company Inns TRS Holdings,
Inc.
ENN Leasing Company V, Delaware SP V limited 100% owned by Equity
L.L.C. liability company Inns TRS Holdings,
Inc.
Equity Inns Services, Inc. Tennessee corporation
Equity Inns/West Virginia Tennessee limited 1% of general
Partnership, L.P. partnership partnership interest
E. Inns Orlando, Inc. Tennessee corporation 100% of outstanding
E.I.P. Orlando, L.P. shares
E. Inns Orlando, Inc. Tennessee limited E. Inns Orlando, Inc. a
L.P. partnership 1% general
partnership interest
in EIP Orlando, L.P.
and Equity Inns
Partnership, L.P. is
a 99% limited partner
of this entity
Equity Inns Trust Maryland real estate
investment trust
Equity Inns Partnership, Tennessee limited Approximately 96%
L.P. partnership general partnership
interest in the
Operating Parntership
Equity Inns Partnership Tennessee limited 1% general partnership
II, L.P. partnership interest
EQI Financing Corporation Tennessee corporation 100% of outstanding
shares
EQI Financing Partnership Tennessee limitmed Approximately 1%
I, L.P. partnership general partnership
by EQI Financing
Corporation
ENN Company, Inc. Tennessee corporation 92.5% of outstanding
shares
EQI Financing Corporation Tennessee corporation 100% of outstanding
II shares
EQI/WV Financing Tennessee limited 1% general partnership
Partnership, L.P. partnership interest owned by
EQI Financing
Corporation II
EQI Financing Partnership Tennessee corporation 1% general partnership
II, L.P. interest owned by
EQI Financing
Corporation II
EQI Financing Corporation Tennessee corporation 100% outstanding
III shares
EQI Financing Partnership Tennessee limited 1% general partnership
III, L.P. partnership intereste by EQI
Financing Corporation
III
EQI/WV Financing Corporation Tennessee corporation 100% of outstanding
shares
EQI/WV Financing Partnership Tennessee limited 1% general partnership
II, L.P. partnership interest by EQI/WV
Financing Corporation
EQI Financing Corporation IV Tennessee corporation 100% of outstanding
shares
EQI Financing Partnership IV, Tennessee limited 1% general partnership
L.P. partnership interest by EQI/WV
Financing Corporation
IV
EQI Financing Corporation V Tennessee corporation 100% of outstanding
shares
EQI Financing Partnership V, Tennessee limited 1% general partnership
L.P. partnership interest by EQI/WV
Financing Corporation
V
Table of Contents
SECURED REVOLVING CREDIT AGREEMENT.............................................1
RECITALS.......................................................................2
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS....................................2
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SECTION 1.1 DEFINITIONS. ...............................................2
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SECTION 1.2 FINANCIAL STANDARDS.........................................19
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ARTICLE II. THE FACILITY......................................................20
------------------------
SECTION 2.1 THE FACILITY; LIMITATIONS ON BORROWING......................20
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SECTION 2.2 MATURITY DATE...............................................20
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SECTION 2.3 REQUESTS FOR ADVANCES; RESPONSIBILITY FOR ADVANCES..........21
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SECTION 2.4 EVIDENCE OF CREDIT EXTENSIONS...............................21
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SECTION 2.5 RATABLE AND NON-RATABLE LOANS...............................21
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SECTION 2.6 APPLICABLE MARGINS AND FEES.................................21
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SECTION 2.7 ............................................................22
-----------
SECTION 2.8 OTHER FEES..................................................22
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SECTION 2.9 MINIMUM AMOUNT OF EACH ADVANCE..............................22
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SECTION 2.10 INTEREST....................................................22
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SECTION 2.11 SELECTION OF RATE OPTIONS AND LIBOR INTEREST PERIODS........23
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SECTION 2.12 METHOD OF PAYMENT...........................................25
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SECTION 2.13 DEFAULT.....................................................25
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SECTION 2.14 LENDING INSTALLATIONS.......................................26
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SECTION 2.15 ............................................................26
------------
SECTION 2.16 SWINGLINE LOANS.............................................26
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SECTION 2.17 VOLUNTARY REDUCTION OF AGGREGATE COMMITMENT AMOUNT..........27
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SECTION 2.18 INCREASE IN AGGREGATE COMMITMENT............................27
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SECTION 2.19 OPTIONAL PREPAYMENTS; MANDATORY PREPAYMENTS; RELEASE
OF PROPERTIES...............................................28
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SECTION 2.20 PROCEDURES FOR ADDITION OF COLLATERAL POOL ASSETS...........29
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SECTION 2.21 APPLICATION OF MONEYS RECEIVED..............................31
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ARTICLE III. THE LETTER OF CREDIT SUBFACILITY.................................31
---------------------------------------------
SECTION 3.1 OBLIGATION TO ISSUE.........................................31
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SECTION 3.2 TYPES AND AMOUNTS...........................................32
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SECTION 3.3 CONDITIONS..................................................32
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SECTION 3.4 PROCEDURE FOR ISSUANCE OF FACILITY LETTERS OF CREDIT........32
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SECTION 3.5 REIMBURSEMENT OBLIGATIONS; DUTIES OF ISSUING BANK...........34
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SECTION 3.6 PARTICIPATION...............................................34
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SECTION 3.7 PAYMENT OF REIMBURSEMENT OBLIGATIONS........................35
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SECTION 3.8 COMPENSATION FOR FACILITY LETTERS OF CREDIT.................36
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SECTION 3.9 LETTER OF CREDIT COLLATERAL ACCOUNT.........................37
----------- -----------------------------------
ARTICLE IV. CHANGE IN CIRCUMSTANCES...........................................37
-----------------------------------
SECTION 4.1 YIELD PROTECTION............................................37
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SECTION 4.2 CHANGES IN CAPITAL ADEQUACY REGULATIONS.....................38
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SECTION 4.3 AVAILABILITY OF LIBOR ADVANCES..............................38
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SECTION 4.4 FUNDING INDEMNIFICATION.....................................39
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SECTION 4.5 LENDER STATEMENTS; SURVIVAL OF INDEMNITY....................39
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ARTICLE V. CONDITIONS PRECEDENT...............................................40
-------------------------------
SECTION 5.1 CONDITIONS PRECEDENT TO CLOSING.............................40
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SECTION 5.2 CONDITIONS PRECEDENT TO SUBSEQUENT ADVANCES AND
ISSUANCE. ..................................................44
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ARTICLE VI. REPRESENTATIONS AND WARRANTIES....................................44
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SECTION 6.1 EXISTENCE...................................................44
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SECTION 6.2 CORPORATE/PARTNERSHIP POWERS................................45
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SECTION 6.3 POWER OF OFFICERS...........................................45
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SECTION 6.4 GOVERNMENT AND OTHER APPROVALS..............................45
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SECTION 6.5 SOLVENCY....................................................45
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SECTION 6.6 COMPLIANCE WITH LAWS........................................46
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SECTION 6.7 ENFORCEABILITY OF AGREEMENT.................................46
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SECTION 6.8 TITLE TO PROPERTY...........................................46
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SECTION 6.9 LITIGATION..................................................46
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SECTION 6.10 EVENTS OF DEFAULT...........................................46
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SECTION 6.11 INVESTMENT COMPANY ACT OF 1940..............................46
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SECTION 6.12 PUBLIC UTILITY HOLDING COMPANY ACT..........................46
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SECTION 6.13 REGULATION U................................................47
------------ ------------
SECTION 6.14 NO MATERIAL ADVERSE FINANCIAL CHANGE........................47
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SECTION 6.15 FINANCIAL INFORMATION.......................................47
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SECTION 6.16 [INTENTIONALLY OMITTED].....................................47
SECTION 6.17 ERISA.......................................................47
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SECTION 6.18 TAXES.......................................................47
------------ -----
SECTION 6.19 ENVIRONMENTAL MATTERS.......................................47
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SECTION 6.20 INSURANCE...................................................48
------------ ---------
SECTION 6.21 NO BROKERS..................................................48
------------ ----------
SECTION 6.22 NO VIOLATION OF USURY LAWS..................................49
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SECTION 6.23 NOT A FOREIGN PERSON........................................49
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SECTION 6.24 NO TRADE NAME...............................................49
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SECTION 6.25 SUBSIDIARIES................................................49
------------ ------------
SECTION 6.26 SECURITY INTERESTS..........................................49
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SECTION 6.27 COLLATERAL POOL ASSETS......................................49
------------ ----------------------
ARTICLE VII. ADDITIONAL REPRESENTATIONS AND WARRANTIES........................51
------------------------------------------------------
SECTION 7.1 EXISTENCE...................................................51
----------- ---------
SECTION 7.2 CORPORATE OR TRUST POWERS...................................51
----------- -------------------------
SECTION 7.3 POWER OF OFFICERS...........................................51
----------- -----------------
SECTION 7.4 GOVERNMENT AND OTHER APPROVALS..............................52
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SECTION 7.5 COMPLIANCE WITH LAWS........................................52
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SECTION 7.6 ENFORCEABILITY OF GUARANTY..................................52
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SECTION 7.7 LIENS; CONSENTS.............................................52
----------- ---------------
SECTION 7.8 LITIGATION..................................................52
----------- ----------
SECTION 7.9 INVESTMENT COMPANY ACT OF 1940..............................52
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SECTION 7.10 PUBLIC UTILITY HOLDING COMPANY ACT..........................52
------------ ----------------------------------
SECTION 7.11 NO MATERIAL ADVERSE FINANCIAL CHANGE........................52
------------ ------------------------------------
SECTION 7.12 FINANCIAL INFORMATION.......................................52
------------ ---------------------
SECTION 7.13 [INTENTIONALLY OMITTED].....................................53
SECTION 7.14 ERISA.......................................................53
------------ -----
SECTION 7.15 TAXES.......................................................53
------------ -----
SECTION 7.16 SUBSIDIARIES................................................53
------------ ------------
SECTION 7.17 STATUS......................................................53
------------ ------
ARTICLE VIII. AFFIRMATIVE COVENANTS...........................................53
-----------------------------------
SECTION 8.1 NOTICES.....................................................54
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SECTION 8.2 FINANCIAL STATEMENTS, REPORTS, ETC..........................54
----------- -----------------------------------
SECTION 8.3 EXISTENCE AND CONDUCT OF OPERATIONS; LIMITATIONS ON
INVESTMENTS.................................................56
----------- ---------------------------------------------------
SECTION 8.4 MAINTENANCE OF PROPERTIES...................................57
----------- -------------------------
SECTION 8.5 INSURANCE...................................................57
----------- ---------
SECTION 8.6 PAYMENT OF OBLIGATIONS......................................57
----------- ----------------------
SECTION 8.8 ADEQUATE BOOKS..............................................57
----------- --------------
SECTION 8.9 ERISA.......................................................57
----------- -----
SECTION 8.10 MAINTENANCE OF STATUS.......................................57
------------ ---------------------
SECTION 8.11 USE OF PROCEEDS.............................................58
------------ ---------------
SECTION 8.12 PRE-ACQUISITION ENVIRONMENTAL INVESTIGATIONS................58
------------ --------------------------------------------
SECTION 8.13 ELIGIBLE PROPERTIES.........................................58
------------ -------------------
SECTION 8.14 REQUIRED REPAIRS............................................58
------------ ----------------
SECTION 8.15 ADDITIONAL ENVIRONMENTAL STUDIES............................58
------------ --------------------------------
ARTICLE IX. NEGATIVE COVENANTS................................................58
------------------------------
SECTION 9.1 CHANGE OF BORROWER OWNERSHIP................................58
----------- ----------------------------
SECTION 9.2 USE OF PROCEEDS.............................................59
----------- ---------------
SECTION 9.3 LEVERAGE; ADDITIONAL RECOURSE INDEBTEDNESS.
PERMIT OR SUFFER:...........................................59
----------- ------------------------------------------
SECTION 9.4 DIVIDENDS. PERMIT OR SUFFER:...............................59
----------- ---------
SECTION 9.5 FLOATING RATE DEBT..........................................60
----------- ------------------
SECTION 9.6 LIENS.......................................................60
----------- -----
SECTION 9.7 FF&E EXPENDITURES...........................................61
----------- -----------------
SECTION 9.8 INDEBTEDNESS, COVERAGE AND NET WORTH COVENANTS.
PERMIT OR SUFFER:...........................................62
----------- ----------------------------------------------
SECTION 9.9 MERGERS.....................................................62
----------- -------
SECTION 9.10 MINIMUM BORROWING BASE......................................62
------------ ----------------------
SECTION 9.11 SHARE REPURCHASE............................................62
------------ ----------------
ARTICLE X. DEFAULTS...........................................................63
-------------------
SECTION 10.1 NONPAYMENT OF PRINCIPAL.....................................63
------------ -----------------------
SECTION 10.2 CERTAIN COVENANTS...........................................63
------------ -----------------
SECTION 10.3 NONPAYMENT OF INTEREST AND OTHER OBLIGATIONS................63
------------ --------------------------------------------
SECTION 10.4 CROSS DEFAULT...............................................63
------------ -------------
SECTION 10.5 LOAN DOCUMENTS..............................................64
------------ --------------
SECTION 10.6 REPRESENTATION OR WARRANTY..................................64
------------ --------------------------
SECTION 10.7 COVENANTS, AGREEMENTS AND OTHER CONDITIONS..................64
------------ ------------------------------------------
SECTION 10.8 NO LONGER GENERAL PARTNER...................................64
------------ -------------------------
SECTION 10.9 MATERIAL ADVERSE FINANCIAL CHANGE...........................64
------------ ---------------------------------
SECTION 10.10 BANKRUPTCY...............................................64
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SECTION 10.11 LEGAL PROCEEDINGS........................................65
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SECTION 10.12 ERISA....................................................65
------------- -----
SECTION 10.13 FAILURE TO SATISFY JUDGMENTS.............................65
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SECTION 10.14 ENVIRONMENTAL REMEDIATION................................65
------------- -------------------------
SECTION 10.15 REIT STATUS..............................................66
------------- -----------
SECTION 10.16 MORTGAGE DEFAULT.........................................66
------------- ----------------
SECTION 10.17 ENFORCEABILITY OF SECURITY DOCUMENTS.....................66
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ARTICLE XI. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES....................66
----------------------------------------------------------
SECTION 11.1 ACCELERATION................................................66
------------ ------------
SECTION 11.2 PRESERVATION OF RIGHTS; AMENDMENTS..........................66
------------ ----------------------------------
SECTION 11.3 FORECLOSURE.................................................67
------------ -----------
ARTICLE XII. THE ADMINISTRATIVE AGENT.........................................68
-------------------------------------
SECTION 12.1 APPOINTMENT.................................................68
------------ -----------
SECTION 12.2 POWERS......................................................68
------------ ------
SECTION 12.3 GENERAL IMMUNITY............................................68
------------ ----------------
SECTION 12.4 NO RESPONSIBILITY FOR LOANS, RECITALS, ETC..................69
------------ ------------------------------------------
SECTION 12.5 ACTION ON INSTRUCTIONS OF LENDERS...........................69
------------ ---------------------------------
SECTION 12.6 EMPLOYMENT OF ADMINISTRATIVE AGENTS AND COUNSEL.............69
------------ -----------------------------------------------
SECTION 12.7 RELIANCE ON DOCUMENTS; COUNSEL..............................69
------------ ------------------------------
SECTION 12.8 ADMINISTRATIVE AGENT'S REIMBURSEMENT AND INDEMNIFICATION....69
------------ --------------------------------------------------------
SECTION 12.9 RIGHTS AS A LENDER..........................................70
------------ ------------------
SECTION 12.10 LENDER CREDIT DECISION...................................70
------------- ----------------------
SECTION 12.11 SUCCESSOR ADMINISTRATIVE AGENT...........................70
------------- ------------------------------
SECTION 12.12 NOTICE OF DEFAULTS.......................................71
------------- ------------------
SECTION 12.13 REQUESTS FOR APPROVAL....................................71
------------- ---------------------
SECTION 12.14 COPIES OF DOCUMENTS......................................71
------------- -------------------
SECTION 12.15 DEFAULTING LENDERS.......................................71
------------- ------------------
SECTION 12.16 CO-AGENTS: LEAD MANAGERS.................................72
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ARTICLE XIII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS...............72
---------------------------------------------------------------
SECTION 13.1 SUCCESSORS AND ASSIGNS......................................72
------------ ----------------------
SECTION 13.2 PARTICIPATIONS..............................................73
------------ --------------
SECTION 13.3 ASSIGNMENTS.................................................73
SECTION 13.4 DISSEMINATION OF INFORMATION................................74
------------ ----------------------------
SECTION 13.5 TAX TREATMENT...............................................75
------------ -------------
ARTICLE XIV. GENERAL PROVISIONS...............................................75
-------------------------------
SECTION 14.1 SURVIVAL OF REPRESENTATIONS.................................75
------------ ---------------------------
SECTION 14.2 GOVERNMENTAL REGULATION.....................................75
------------ -----------------------
SECTION 14.3 TAXES.......................................................75
------------ -----
SECTION 14.4 HEADINGS....................................................75
------------ --------
SECTION 14.6 EXPENSES;...................................................75
------------ ---------
SECTION 14.7 SEVERABILITY OF PROVISIONS..................................76
------------ --------------------------
SECTION 14.8 NONLIABILITY OF THE LENDERS.................................76
------------ ---------------------------
SECTION 14.9 CHOICE OF LAW...............................................76
------------ -------------
SECTION 14.10 CONSENT TO JURISDICTION..................................76
------------- -----------------------
SECTION 14.11 WAIVER OF JURY TRIAL.....................................77
------------- --------------------
SECTION 14.12 ENTIRE AGREEMENT; MODIFICATION OF AGREEMENT..............77
------------- -------------------------------------------
SECTION 14.13 DEALINGS WITH THE BORROWER...............................78
------------- --------------------------
SECTION 14.14 SET-OFF..................................................78
------------- -------
SECTION 14.15 COUNTERPARTS.............................................79
------------- ------------
SECTION 14.16 LIMITATION ON LIABILITY OF EIP/WV........................79
------------- ---------------------------------
ARTICLE XV. NOTICES...........................................................79
-------------------
SECTION 15.1 GIVING NOTICE...............................................79
------------ -------------
SECTION 15.2 CHANGE OF ADDRESS...........................................80
------------ -----------------
