EXHIBIT 10.28
REVOLVING CREDIT LOAN AGREEMENT
THIS REVOLVING CREDIT LOAN AGREEMENT is made and entered into as of the
14th day of November, 1997, by EQUITY INNS PARTNERSHIP, L.P.. a Tennessee
limited partnership, and EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P.. a
Tennessee limited partnership (together herein called "Borrower"), EQUITY INNS,
INC.. a Tennessee corporation, and EQUITY INNS TRUST, a Maryland real estate
investment trust (together herein called "Guarantor"), and NATIONAL BANK OF
COMMERCE, Memphis, Tennessee ("Bank").
WITNESSETH
For mutual considerations, receipt and sufficiency of which are hereby
acknowledged, it is agreed as follows:
ARTICLE l
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Defined Terms. As used in this Agreement the following
terms have the following meanings (terms defined in the singular to have the
same meaning when used in the plural and vice versa):
"Agreement" means this Revolving Credit Loan Agreement, as amended,
supplemented, or modified from time to time.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in Memphis, Tennessee, are authorized or required to
close under the laws of the State of Tennessee.
"Commitment" means Bank's obligation to make Loans to Borrower pursuant
to Section 2.01 in the amount referred to therein.
"Default" means any of the events specified in Section 4.01, whether or
not any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.
"Event of Default" means any of the events specified in Section 4.01,
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"First Chicago Credit Facility" means the unsecured revolving credit
facility of up to $250,000,000.00 committed to Borrower by The First National
Bank of Chicago, Credit Lyonnais New York Branch and AmSouth Bank.
"Guarantors" means Equity Inns, Inc., a Tennessee corporation, and
Equity Inns Trust, a Maryland real estate investment trust.
"Guaranty" means the Guaranty Agreement in substantially the form of
Exhibit A attached hereto to be delivered by Guarantors under the terms of this
Agreement.
"Head Office" means the office of Bank at 0000 Xxxxxx Xxxxxx, X.X. Xxx
000000, Xxxxxxxxxx, Xxxxxxxxx 00000-0000.
"Loan(s)" means collectively the Revolving Credit Loans.
"Loan Documents" means collectively this Agreement, the Revolving
Credit Note, the Guaranty, and any additional documents required to be delivered
by Borrower or Guarantors under this Agreement.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority, or other entity of whatever nature.
"Prime Rate" means such variable reference or benchmark rate of
interest as shall be established by Bank as its prime rate to be in effect from
time to time, whether or not such rate is otherwise published.
"Revolving Credit Loans" shall have the meaning assigned to such term
in Section 2.01.
"Revolving Credit Note" shall have the meaning assigned to such term in
Section 2.05.
"Termination Date" means the date on which Bank's commitment to make
Revolving Credit Loans hereunder shall terminate, which is September 1, 2000.
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
SECTION 2.01. Revolving Credit. Bank agrees on the terms and conditions
hereinafter set forth, to make advances ("Revolving Credit Loans") to Borrower
from time to time during the period from the date of this Agreement up to but
not including the Termination Date in an aggregate amount not to exceed at any
time outstanding FIVE MILLION and No/100 DOLLARS ($5,000,000.00). Within the
limits of the Commitment, Borrower may borrow, prepay pursuant to Section 2.06,
and reborrow under this Section 2.01.
SECTION 2.02. Notice and Manner of Borrowing. Borrower shall submit to
Bank a request for any Revolving Credit Loan under this Agreement in writing. In
order for Bank to fund any such Revolving Credit Loan on the same date a request
is received, Bank must receive such request not later than 2:00 P.M. current
Memphis, Tennessee time on the date such Revolving Credit Loan is
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requested. Requests received after 2:00 PM. will be funded the next Business
Day. Bank will make such Revolving Credit Loan available to Borrower in
immediately available funds by crediting the amount thereof to Borrower's
account with Bank.
SECTION 2.03. Interest. Borrower shall pay interest to Bank on the
outstanding and unpaid principal amount of the Revolving Credit Loans made under
this Agreement at a rate per annum equal to the lesser of (a) the maximum
effective rate which Bank is allowed under applicable law to contract for and
charge from time to time, or (b) the Prime Rate of Bank. On the date of this
Agreement, the rate of interest payable on the Revolving Credit Loans is
__________________. Such interest rate shall be adjusted daily, on each day the
Prime Rate is changed by Bank. Interest shall be calculated on the basis of a
year of 365 days for the actual number of days elapsed. Interest on the
Revolving Credit Loans shall be paid in immediately available funds on the first
day of each month at the Head Office. Any principal amount not paid when due (at
maturity, by acceleration, or otherwise) shall beat interest thereafter until
paid at a rate which shall be equal to the lesser of (i) Prime Rate plus two
percent (2%) or (ii) the maximum effective rate of interest which Bank as a
national bank is permitted to contract for and charge from time to time.
SECTION 2.04 Commitment Fee. In consideration of Bank's undertaking to
make Revolving Credit Loans hereunder, Borrower shall pay to Bank a commitment
fee in an amount equal to the following: two-tenths of one percent (.20%) per
annum of the unused portion of the Commitment. The fee will be calculated based
on the average daily unborrowed portion of the Commitment in each calendar
quarter, and shall be payable quarterly in arrears.
SECTION 2.05. Revolving Credit Note. All Revolving Credit Loans made by
Bank under this Agreement shall be evidenced by, and repaid with interest in
accordance with, a single promissory note of Borrower in substantially the form
of Exhibit B attached hereto duly completed, in the principal amount of FIVE
MILLION AND NO/100 DOLLARS ($5,000,000.00), payable to Bank, and maturing as to
principal on the Termination Date (the "Revolving Credit Note"). The amounts
reflected on Bank's internal records shall be deemed conclusive as to the
outstanding balance of principal and interest of the Revolving Credit Loans from
time to time absent Borrower furnishing to Bank conclusive and irrefutable
evidence of an error made by Bank with respect to such records.
SECTION 2.06. Prepayments. Borrower may prepay the Revolving Credit
Note in whole or in part at any time without penalty, provided that accrued
interest to the date of such prepayment shall be paid on the principal amount
prepaid.
SECTION 2.07. Method of Payment. Borrower shall make each payment under
this Agreement and under the Revolving Credit Note not later than 1:00 P.M.
current Memphis, Tennessee time on the date when due in lawful money of the
United States to Bank at the Head Office in immediately available funds.
Borrower hereby authorizes Bank, if and to the extent payment is not made when
due under this Agreement or under the Revolving Credit Note, to charge from time
to time against any account of Borrower with Bank any amount so due. Whenever
any payment to be made under this Agreement or under the Revolving Credit Note
shall be stated to be due on a
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Saturday, Sunday, or a public holiday, or banking holiday under the laws of the
state in which the Head Office is located, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of the payment of interest.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01. Condition Precedent to Initial Revolving Credit Loan. The
obligation of Bank to make the initial Revolving Credit Loan to Borrower is
subject to the condition precedent that Bank shall have received and approved on
or before the day of such Revolving Credit Loan each of the following, in form
and substance satisfactory to Bank and its counsel:
(1) Note. The Revolving Credit Note duly executed by Borrower.
(2) Guaranty. The Guaranty duly executed by the Guarantor.
(3) Evidence of existence and good standing of Borrower. Certified
copies of Borrower's Certificate and Partnership Agreement,
Certificates of Existence of Borrower issued by the Secretary
of State of Tennessee.
(4) Evidence of all required partnership action by the Borrower.
Certified (as of the date of this Agreement) copies of all
partnership action taken by the Borrower, authorizing the
execution, delivery, and performance of the Note, Agreement
and all other Loan Documents to be executed and delivered by
it.
(5) Opinion of counsel for Borrower and Guarantor. A favorable
opinion of Hunton & Xxxxxxxx, counsel for Borrower and
Guarantor as to the existence and authority of Borrower and
Guarantor, as applicable, and the enforceability of the
applicable Loan Documents, and as to such other matters as
Bank may reasonably request;
(6) Evidence of existence and authority of Guarantors. Certified
copy of the Charter of Equity Inns, Inc. and certificate of
good standing issued by the Secretary of Tennessee.
Certificate of Existence of Equity Inns Trust issued by the
Secretary of State of Maryland.
(7) Evidence of all corporate action by Guarantor. Certified (as
of the date of this Agreement) copies of all corporate action
taken by Guarantor, including resolutions of its Board of
Directors, and trustees authorizing the execution, delivery
and performance of the Loan Documents to which it is a party
and each other document to be delivered pursuant to this
Agreement;
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(8) Other Documents. Bank shall have received such other
approvals, opinions, or documents as Bank may reasonably
request.
(9) Other. The items required by Section 3.02(1).
SECTION 3.02. Conditions Precedent to All Revolving, Credit Loans. The
obligation of Bank to make such Revolving Credit Loans (including the initial
Revolving Credit Loan) is subject to the further conditions precedent that on
the date of such Loan:
(1) The following statements shall be true and Bank shall have received
a certificate signed by a duly authorized officer of the general partner of the
Borrower dated the date of such Revolving Credit Loan, stating that:
(a) No Default or Event of Default has occurred and is
continuing, or would result from such Loan; and
(b) There has been no material adverse change in the financial
condition of Borrower or either Guarantor since the date of the last financial
statements delivered to Bank in connection herewith.
ARTICLE IV
EVENTS OF DEFAULT
SECTION 4.01. Events of Default. If any of the following events
("Events of Default") shall occur:
(1) Borrower should fail to pay the principal of, or interest on, the Loans,
or any amount of a commitment fee, within ten (10) days after notice of such
default in payment is given to Borrower by Bank; '
(2) Any representation or warranty made or deemed made by Borrower or
Guarantor in this Agreement, the Loan Documents or in any certificate, document,
opinion or financial or other statement furnished at any time under or in
connection with any Loan Document shall prove to have been materially and
adversely incorrect in any material respect on or as of the date made or deemed
made;
(3) Borrower or Guarantor shall fail to perform or observe any term,
covenant, or agreement to be performed or observed by Borrower or Guarantor
contained in any Loan Document (other than the Revolving Credit Note) to which
it is a party; and such failure shall continue for a period of thirty (30) days
after notice to Borrower from Bank describing the nature of the failure;
provided that, if such failure is not susceptible of cure within such thirty
(30) day period, Borrower shall be allowed a reasonable time not to exceed an
additional sixty (60) days to effect such cure to Bank's reasonable satisfaction
provided Borrower promptly begins efforts to cure and thereafter diligently
pursues such cure.
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(4) Any Default under the First Chicago Credit Facility.
(5) Borrower or either Guarantor (a) shall generally not, or shall be
unable to, or shall admit in writing its inability to pay its debts as such
debts become due; or (b) shall make an assignment for the benefits of creditors,
petition or apply to any tribunal for the appointment of a custodian, receiver
or trustee for it or a substantial part of its assets; or (3) shall commence any
proceeding under any bankruptcy, reorganization, arrangements, readjustment of
debt, dissolution, or liquidation law or statute of any jurisdiction whether how
or hereafter in effect, or (d) shall have any such petition or application filed
or any such proceeding commenced against it in which an order for relief is
entered or adjudication or appointment is made and which remains undismissed for
a period of one hundred eighty (180) days or more; or (e) by any act or omission
shall indicate its consent to, approval of, or acquiescence in any such
petition, application, or proceeding, or order for relief, or the appointment of
a custodian, receiver, or trustee for all or any substantial part of its
properties; or (f) shall suffer any such custodianship, receivership, or
trusteeship to continue undischarged for a period of one hundred eighty (180)
days or more;
(6) The Guaranty shall, at any time after its execution and delivery
and for any reason, cease to be in full force and effect or shall be declared
null and void, or an Event of Default shall occur thereunder, or the validity or
enforceability thereof shall be contested by either Guarantor, or either
Guarantor shall deny it has any further liability or obligation or shall fail to
perform its obligations under the Guaranty. within any applicable cure period:
then, and in any such event, Bank may, by notice to Borrower, (1) declare its
obligation to make Revolving Credit Loans terminated, whereupon the same shall
forthwith terminate, and (2) declare the outstanding Revolving Credit Loans, all
interest thereon, and all other amount payable under this Agreement to be
forthwith due and payable, without presentment, demand, protest. or further
notice of any kind, all of which are hereby expressly waived by Borrower;
provided, however, that occurrence of any event specified in subsection (5)
above shall constitute an immediate and automatic termination of Bank's
obligation to make Revolving Credit Loans hereunder, and all Revolving Credit
Loans then outstanding shall become automatically and simultaneously due and
payable in full without any action on the part of Bank.
ARTICLE V MISCELLANEOUS
SECTION 5.01. Amendments. Etc. No amendment modification, termination,
or waiver of any provision of any Loan Document to which Borrower is a party,
nor consent to any departure by Borrower from any Loan Document to which it is a
party, shall in any event be effective unless the same shall be in writing and
signed by Bank, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 5.02. Notices. Etc. All notices and other communications
provided for under this Agreement and under the other Loan Documents to which
Borrower is a party shall be in writing (including telegraphic or facsimile
communication) and mailed, sent by facsimile or telegraphed or delivered, if to
Borrower, at its address at:
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0000 Xxxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. XxXxxxx
(fax number (000) 000-0000)
With a copy to:
Xxxxxx Best
Hunton & Xxxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxx 0000
XxXxxx. XX 00000
and if to Bank, at its address at:
0000 Xxxxxx Xxxxxx
X.X. Xxx 000000
Xxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
(fax number (000) 000-0000)
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section 5.02. All such notices and communications shall, when mailed or
telegraphed, be effective when deposited in the mails or delivered to the
telegraph company, respectively, addressed as aforesaid, except that notices to
Bank pursuant to the provisions of Article Il shall not be effective until
received by Bank.
SECTION 5.03. No Waiver: Remedies. No failure on the part of Bank to
exercise, and no delay in exercising, any right, power, or remedy under any Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right under any Loan Documents preclude any other or further
exercise thereof or the exercise of any other right. The remedies provided in
the Loan Documents are cumulative and not exclusive of any remedies provided by
law.
SECTION 5.04. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of Borrower and Bank and their respective
successors and assigns, except that Borrower may not assign or transfer, any of
its rights under any Loan Document to which Borrower is a party without the
prior written consent of Bank.
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SECTION 5.05. Costs, Expenses and Taxes. Borrower agrees to pay on
demand all costs and expenses in connection with the preparation, execution,
delivery, and administration of any of the Loan Documents, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for Bank,
and all costs and expenses, if any, in connection with the enforcement of any of
the Loan Documents.
SECTION 5.06. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, Bank is hereby authorized at any time and
from time to time, without notice to Borrower (any such notice being expressly
waived by Borrower), to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by Bank to or for the credit or the account of
Borrower against any and all of the obligations of Borrower now or hereafter
existing under this Agreement or the Note or any other Loan Document,
irrespective of whether or not Bank shall have made any demand under this
Agreement or the Note or such other Loan Document and although such obligations
may be unmatured. Bank agrees promptly to notify Borrower after any such setoff
and application provided that the failure to give such notice shall not affect
the validity of such setoff and application. The rights of Bank under this
Section 5.06 are in addition to other rights and remedies (including, without
limitation, other rights of setoff) which Bank may have.
SECTION 5.07. Waiver of Right to Jury Trial. The undersigned jointly
and severally waive(s) any right to a trial by jury in any action or proceeding
to enforce or defend any rights under this Agreement or under any amendment,
instrument, document or agreement delivered (or which may in the future be
delivered) in connection herewith or arising from any banking relationship
existing in connection with this Agreement. The undersigned agree(s) that such
action or proceeding shall be tried in Shelby County, Tennessee before a court
and not before a jury.
SECTION 5.08. Governing Law. This Agreement and the Revolving Credit
Note shall be governed by, and construed in accordance with, the internal laws
of the State of Tennessee, except with respect to interest which shall be
governed by applicable federal law in effect from time to time.
SECTION 5.09. Severability of Provisions. Any provision of any Loan
Document which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of such Loan
Document or affecting the valid~, or enforceability of such provision in any
other jurisdiction.
SECTION 5.10. Headings. Article and Section headings in the Loan
Documents are included in such Loan Documents for the convenience of reference
only and shall not constitute a part of the applicable Loan Documents for any
other purpose.
SECTION 5.11. Joinder by Guarantor. Guarantor joins in the execution
hereof for the purpose of consenting to the provisions contained herein
applicable to it and its properties and of agreeing to comply with all such
provisions.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
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BORROWER:
EQUITY INNS PARTNERSHIP, L.P.,
a Tennessee limited partnership
By: Equity Inns Trust, a Maryland
real estate investment trust,
its sole general partner
By: /s/ Xxxxxx X. Silver
--------------------
Name: Xxxxxx X. Silver
Title: CFO
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EQUITY INNS/WEST VIRGINIA
PARTNERSHIP. L.P.,
a Tennessee limited partnership
By: Equity Inns Services, Inc.,
a Tennessee corporation
ts sole general partner
By: /s/ Xxxxxx X. Silver
--------------------
Name: Xxxxxx X. Silver
Title: CFO
GUARANTOR:
EQUITY INNS, INC.,
a Tennessee corporation
By: /s/ Xxxxxxx X. XxXxxxx, Xx.
---------------------------
Xxxxxxx X. XxXxxxx, Xx.
Title: Chairman of the Board
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EQUITY INNS TRUST, a
Maryland real estate investment trust
By: /s/ Xxxxxxx X. XxXxxxx, Xx.
---------------------------
Xxxxxxx X. XxXxxxx, Xx.
Title: Chairman of the Board
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BANK:
NATIONAL BANK OF COMMERCE
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
Title: Vice President
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GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT is entered into as of the 14th day of November,
1997, by and between EQUITY INNS, INC., a Tennessee corporation, and EQUITY INNS
TRUST, a Maryland real estate investment trust (hereafter collectively called
"Guarantor") and NATIONAL BANK OF COMMERCE, Memphis, Tennessee, a national
banking association (hereafter "Bank").
Statement of Guaranty. In consideration of the extension by Bank of
credit to EQUITY INNS PARTNERSHIP, L.P., a Tennessee limited partnership, and
EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P., a Tennessee limited partnership
(collectively "Borrower"), and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and in order to induce
Bank to make loans or other financial accommodations to Borrower and
acknowledging that Bank is relying on this Guaranty, Guarantor absolutely and
unconditionally guarantees to Bank, its endorsees, transferees, successors and
assigns of either this Guaranty or of any obligation guaranteed hereby, the
punctual payment when due (whether at scheduled maturity, acceleration, demand
or otherwise) of any and all indebtedness or obligations now or hereafter owing
by Borrower to Bank arising under or as a consequence of the loans from Bank to
Borrower made under or pursuant to the Revolving Credit Loan Agreement (the
"Loan Agreement") of even date herewith by and among Borrower, Guarantor and
Bank and evidenced by the Revolving Credit Promissory Note of Borrower of even
date herewith in the stated principal sum of FIVE MILLION AND NO/100 DOLLARS
($5,000,000.00), or any renewals or extensions thereof, in whole or in part,
without limitation as to the number of such renewals or extensions or the period
or periods thereof, together with interest thereon and all collection costs,
attorneys' fees and other losses, charges and expenses of whatever nature
becoming due or incurred by Bank and/or by the endorsees, transferees,
successors or assigns of Bank in connection with the indebtedness guaranteed
hereby (all of the foregoing principal indebtedness, interest, costs, fees,
loss, charges and expenses being hereinafter referred to as the "Indebtedness").
Other Agreements.
(a) The liability of Guarantor hereunder shall be independent of and in
addition to any other guaranty or agreement by Guarantor or any other party at
any time in effect as to all or any part of the Indebtedness and Guarantor's
obligations hereunder may be enforced regardless of any such other guaranty or
agreement.
(b) Each Guarantor understands and agrees that in the event any payment
made by or on behalf of Borrower respecting the Indebtedness or any part thereof
shall at any time be repaid by Bank in compliance with an order (whether or not
final) by a court of competent jurisdiction pursuant to any provision of the
Revised Bankruptcy Act as now existing or hereafter amended or applicable state
law, the Indebtedness guaranteed hereby shall not be deemed to have been paid to
the extent of the repayment so made, the obligations of Guarantor and each of
them shall continue in full force and effect and Bank will continue to be
entitled to the full benefits of this Guaranty, notwithstanding any termination
of this Guaranty or the cancellation of any note or other agreement evidencing
the Indebtedness.
(c) No invalidity., irregularity or unenforceability of the
Indebtedness or any part thereof shall be a defense to this Guaranty. Guarantor
and each of them understand and agree that this Guaranty remains fully
enforceable not withstanding any defenses that Borrower may assert to liability
for the Indebtedness, including but not limited to failure of consideration,
breach of warranty, statute of frauds and statute of limitations.
(d) This Guaranty is a continuing and unconditional guaranty of payment
and may not be terminated by Guarantor until such time as all Indebtedness
guaranteed hereby, including any renewals or extensions thereof, have been paid
in full and such payments have become final and are not subject to being
refunded as a preference or fraudulent transfer under Bankruptcy Code or other
applicable law.
Waivers. Guarantor waives notice of acceptance of this Guaranty and of
the creation, extension or renewal of any Indebtedness or liability of Borrower
guaranteed hereby and the default on or acceleration of maturity of such
Indebtedness. Guarantor also waives presentment, demand, notice of protest,
notice of dishonor and all other demands and notices in connection with the
delivery, acceptance, performance, default or endorsement of any Indebtedness or
liability guaranteed hereby or of this Guaranty, and hereby waives any failure
to promptly commence suit against any party thereto or liable thereon or to give
any notice to or make any claim or demand upon the Guarantor or the Borrower. No
act, failure to act, or omission of any kind on the part of the Guarantor, the
Borrower, the Bank or any other person shall be a legal or equitable discharge
or release of the Guarantor from its obligation hereunder unless agreed to
hereafter in writing by the Bank. This Guaranty shall not be affected by any
change which may arise by reason of the dissolution of the Guarantor, or the
death or dissolution of any partner(s) of the Guarantor, or of the Borrower, or
by reason of the accession to any such partnership of any one or more new
partners.
Rights of Bank. From time to time, without further authorization from
or notice to Guarantor, and with or without consideration, Bank may (a) grant
credit to Borrower from time to time; (b) alter, compromise, accelerate, extend
or modify the time or manner of payment of any Indebtedness guaranteed hereby;
(c) increase or reduce the rate of interest thereon; (d) extend, modify or amend
the terms and conditions of any instrument evidencing the Indebtedness; and (e)
add or release any one or more other Guarantors. Bank is expressly authorized to
(a) waive any right it may have to require additional collateral; (b) surrender
or release collateral held by it; and (c) substitute any collateral held by it
for other collateral of like kind or of any kind. The obligations of Guarantor
hereunder and the rights of Bank protected hereby shall not be diminished or in
any manner affected by (a) Bank's failure to accelerate the maturity of the
Indebtedness upon default by Borrower; (b) Bank's failure to exercise its rights
with regard to any collateral; (c) the extension of the maturity of the
Indebtedness; (d) the renewal or modification of any instrument evidencing the
Indebtedness; (e) Bank's failure to attempt collection of the Indebtedness by
legal proceedings or otherwise or by proceeding in any manner against Borrower
or the collateral securing the Indebtedness; or (f) any impairment,
modification, change, release or limitation of the Indebtedness or obligations
guaranteed hereby, or any release of Borrower, resulting from the operation of
any present or future provision of the Revised Bankruptcy Act or other similar
statute, or from the decision of any court.
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Default/Remedy. "Event of Default" as used herein shall mean:
1) Any "Event of Default" as defined under the Loan
Agreement or any other of the Loan Documents (as defined in the Loan Agreement);
2) Default in the observance or performance of any
covenant or agreement of Guarantor contained herein and the expiration of any
grace or cure period herein given; or
3) Insolvency of Guarantor, however evidenced; or
4) Guarantor voluntarily or involuntarily terminates or
dissolves or is terminated or dissolved; or
5) There is a material adverse change in the financial
status of Guarantor.
If an Event of Default shall occur, then or at any time thereafter,
while such Event of Default shall continue, Bank may declare all Indebtedness,
regardless of their terms, for the purposes of this Guaranty, together with all
obligations of Guarantor hereunder, to be due and payable and Guarantor shall,
upon demand by Bank, immediately pay to Bank the full amount of the Indebtedness
and such obligation shall become the direct and primary obligation of Guarantor.
Except as may otherwise be provided herein or in any other Loan
Document, there shall be no duty. or obligation upon the Bank, whether by notice
under any applicable statutory law or otherwise, (i) to proceed against the
Borrower or the Guarantor, (ii) to initiate any proceeding or exhaust any remedy
against the Borrower or the Guarantor, or (iii) to give any notice to the
Guarantor or the Borrower, whatsoever, before bringing suit, exercising any
rights to any collateral or security, or instituting proceedings of any kind
against the Borrower, the Guarantor or both.
Application of Payments. With or without notice to Guarantor, Bank, in
its sole discretion, may apply to the Indebtedness all payments from Borrower,
from Guarantor, or from any other Guarantor under this or any other instrument,
or realized from any collateral, in such manner and order of priority as Bank
sees fit subject, however, to applicable law.
Joint and Several Liability. If more than one Guarantor has executed
this Guaranty or a separate guaranty, the obligations and liability of all
Guarantors shall be joint and several. Bank shall be authorized and empowered to
institute proceedings in law or in equity against each Guarantor, or any one or
more of them, without joining Borrower or any other Guarantor. Bank shall have
no duty or obligation to proceed against any collateral securing the
Indebtedness prior to enforcing this Guaranty.
Lien on Guarantor's Property. In addition to all liens upon, and rights
of setoff against the moneys, securities, or other properties of Guarantor given
to Bank by contract or by law, Bank shall have a lien upon and right of setoff
against all moneys, securities, and other property of Guarantor or any one of
them now or hereafter in the possession of or on deposit with Bank, whether held
in a general or special account, or deposit, or for safekeeping or otherwise;
and every such lien and right of setoff may be exercised without demand upon or
notice to Guarantor.
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Rights with Respect to Collateral. The Guarantor hereby agrees that any
rights which the Guarantor may now or hereafter have to payments of any
indebtedness owing from Borrower or to Guarantor in any collateral securing any
of the Indebtedness or against the Borrower or any property of the Borrower,
including rights arising by virtue of subrogation or indemnification upon
payment by Guarantor of amounts due from Borrower to Bank or otherwise, shall be
subordinate and junior to the Bank's rights to said collateral or property and
to the Bank's indefeasible right to the prior payment of the Indebtedness or
liabilities until such time as the Indebtedness is fully and finally paid. The
Guarantor further authorizes the Bank, without notice or demand, to apply any
obligations due or to become due to the Guarantor from the Bank in satisfaction
of any of the Indebtedness and the Guarantor's obligation hereunder, including,
but not limited to, the right to set-off against any deposits of the Guarantor
with the Bank.
The Bank shall be under no duty to undertake to collect upon such
collateral or any part thereof, and shall not be liable for any negligence or
mistake in judgment in handling, disposing of, obtaining, or failing to collect
upon, or perfecting a security, interest in, any such collateral.
Incorporation by Reference. Guarantor agrees that the terms,
conditions, agreements, and stipulations in all instruments evidencing the
Indebtedness guaranteed hereby, heretofore or hereafter executed, shall become
part of this Guaranty and are hereby ratified, adopted and confirmed by
Guarantor.
Severability. If any provision in this Guaranty is held invalid, such
invalidity shall not affect the validity or enforceability of the remaining
provisions of this Guaranty.
Binding Effect. This Guaranty shall bind the heirs, legal
representatives, successors and assigns of Guarantor.
Counterpart Originals. This Guaranty may be executed in several
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
Governing Law. This Guaranty shall be governed by and construed
according to the internal laws of the State of Tennessee.
Disclaimer. THE GUARANTOR'S EXECUTION OF THIS GUARANTY WAS NOT BASED
UPON ANY FACTS OR MATERIALS PROVIDED BY BANK, NOR WAS THE GUARANTOR INDUCED TO
EXECUTE THIS GUARANTY BY ANY REPRESENTATION, STATEMENT OR ANALYSIS MADE BY BANK.
THE GUARANTOR ACKNOWLEDGES AND AGREES THAT THE GUARANTOR ASSUMES SOLE
RESPONSIBILITY FOR INDEPENDENTLY OBTAINING ANY INFORMATION OR REPORTS DEEMED
ADVISABLE BY THE GUARANTOR WITH REGARD TO THE BORROWER OR THE GUARANTOR, AND THE
GUARANTOR AGREES TO RELY SOLELY ON THE INFORMATION OR REPORTS SO OBTAINED IN
REACHING ANY DECISION TO EXECUTE OR NOT TO TERMINATE THIS GUARANTY. THE
GUARANTOR ACKNOWLEDGES AND AGREES THAT THE BANK IS AND SHALL BE UNDER NO
OBLIGATION NOW OR IN THE FUTURE TO FURNISH ANY
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INFORMATION TO THE GUARANTOR CONCERNING THE BORROWER, THE INDEBTEDNESS OR THE
GUARANTOR, AND THAT THE BANK DOES NOT AND SHALL NOT BE DEEMED IN THE FUTURE TO
WARRANT THE ACCURACY OF ANY INFORMATION OR REPRESENTATION CONCERNING THE
BORROWER, THE GUARANTOR OR ANY OTHER PERSON WHICH MAY INDUCE THE GUARANTOR TO
EXECUTE OR NOT TO TERMINATE THIS GUARANTY.
Waiver of Trial by Juryo GUARANTOR AND BANK HEREBY WAIVE ANY RIGHT TO
TRIAL BY JURY ON ANY CLAIM, COUNTERCLAIM, SETOFF, DEMAND, ACTION OR CAUSE OF
ACTION (A) ARISING OUT OF OR IN ANY WAY PERTAINING OR RELATING TO THIS GUARANTY
OR ANY OTHER LOAN DOCUMENT OR (B) IN ANY WAY CONNECTED WITH OR PERTAINING OR
RELATED TO OR INCIDENTAL TO ANY DEALINGS OF THE PARTIES HERETO WITH RESPECT TO
THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR (c) ARISING IN CONNECTION WITH THE
TRANSACTIONS RELATED THERETO OR CONTEMPLATED THEREBY OR THE EXERCISE OF EITHER
PARTY'S RIGHTS AND REMEDIES THEREUNDER, IN ALL OF THE FOREGOING CASES WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND Whether SOUNDING IN CONTRACT, TORT OR
OTHERWISE. THE GUARANTOR AND BANK AGREE THAT EITHER OR BOTH OF THEM MAY FILE A
COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING,
VOLUNTARY AND BARGAINED AGREEMENT BETWEEN THE PARTIES IRREVOCABLY TO WAIVE TRIAL
BY JURY, AND THAT ANY DISPUTE OR CONTROVERSY WHATSOEVER BETWEEN THEM SHALL
INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT
A JURY.
Modification. No provision of this Guaranty may be changed, waived,
discharged or terminated except by an instrument in writing signed by the party
against whom enforcement of the change, waiver, discharge or termination is
sought.
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IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the day
and year first written above.
GUARANTOR:
EQUITY INNS, INC.,
a Tennessee corporation
By: /s/ Xxxxxx X. Silver
--------------------
Title: CFO
EQUITY INNS TRUST, a Maryland
By: /s/ Xxxxxx X. Silver
--------------------
Title: CFO
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REVOLVING CREDIT
PROMISSORY NOTE
$5,000,000.00 Memphis, Tennessee
November 14, 1997
FOR VALUE RECEIVED, the undersigned EQUITY INNS PARTNERSHIP, L.P., a
Tennessee limited partnership, and EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P.,
a Tennessee limited partnership ("Borrower"), jointly and severally promise to
pay to the order of NATIONAL BANK OF COMMERCE ("Bank") the principal sum of FIVE
MILLION AND NO/100 DOLLARS ($5,000,000.00) together with interest from the date
hereof on so much of the principal hereof as shall have been advanced pursuant
to file Revolving Credit Loan Agreement of even date herewith among Borrower,
Equity Inns, Inc., a Tennessee corporation, Equity Inns Trust, a Maryland real
estate investment trust, and Bank (the "Loan Agreement") and remain outstanding
from time to time at the rate which shall be equal to the lesser of (a) the
maximum effective rate which Bank is allowed under applicable law to contract
for and charge from time to time (the "Maximum Rate"), or (b) the Prime Rate (as
hereinafter defined) of Bank as such Prime Rate shall vary from time to time,
changes in the rate of interest payable hereunder to become effective without
notice to Borrower on the effective date of any change in said Prime Rate. As
used herein the term "Prime Rate" shall mean such variable reference or
benchmark rate of interest as shall be established by Bank as its prime rate to
be in effect from time to time, whether or not such rate is otherwise published.
Monthly installments of accrued interest shall be due and payable on
the first day of each and every month hereafter until the principal outstanding
is paid in full. Interest shall accrue on a 365-day year basis. All sums of
principal or interest payable hereunder not paid when due shall bear interest
beginning thirty (30) days after the due date at the lesser of (i) the Prime
Rate plus two percent (2%) or (ii) the Maximum Rate in effect on the due date.
Maturity Date. The entire balance of principal outstanding and all
accrued and unpaid interest shall be due and payable, on September 1, 2000 (the
"Maturity Date").
Place of Payment. All installments of interest and the final
installment of principal and interest of this Note are payable in lawful money
of the United States of America, at the Head Office of Bank in Germantown,
Tennessee or such other place as the holder of this Note may designate in
writing.
Prepayments. This Note may be prepaid, in whole or in part without
premium, Any prepayment shall be applied first to interest accrued on the
outstanding principal balance and currently due and payable, and the remainder,
if any, shall be applied to reduce the outstanding principal balance of this
Note.
Additional Charges. The Borrower shall pay a "late charge" of five
percent (5%) of any payments of principal and/or interest (excluding, however,
the final payment after maturity or acceleration) which are paid as much as
fifteen (15) days after the due date thereof (provided that in no event shall
the said "late charge" result in the payment of interest in excess of the
maximum interest permitted by law) to cover the extra expenses involved in
handling delinquent payments.
Limitation of Interest. Notwithstanding any provision to the contrary,
it is the intent of the Bank, the Borrower, and all parties liable on this Note,
that neither the Bank nor any subsequent holder shall be entitled to receive,
collect, reserve or apply, as interest, any are not in excess of the maximum
lawful rate of interest permitted to be charged by applicable law or
regulations, as amended or enacted from time to time. In the event this Note
calls for an interest payment that exceeds the maximum lawful rate of interest
then applicable, such interest shall not be received, collected, charged, or
restated until such time as that interest, together with all other interest then
payable, falls within the then applicable maximum lawful rate of interest. In
the event the Bank, or any subsequent holder, receives any such interest in
excess of the then maximum lawful rate of interest, such amount which would be
excessive interest shall be deemed a partial prepayment of principal and treated
hereunder as such, or, if the principal indebtedness evidenced hereby is paid in
full, any remaining excess funds shall immediately be paid to the Borrower.
Waiver. Borrower and every maker, endorser, surety and guarantor of
this Note or the obligations in the Loan Documents waives demand, presentment,
protest, notice of nonpayment, notice of protest, notice of dishonor, any and
all lack of diligence or delay in collection or the filing of suit hereon which
may occur, and all other demands and notices in connection with the delivery,
acceptance, performance, default, or endorsement of this Note or their
respective obligations hereon; consents to any extensions, renewals or
postponements of the due date or time of payment hereof, or any other
indulgence; agrees that the indebtedness evidenced hereby may be extended or
renewed in whole or in part without notice to the Borrower, maker, endorser,
surety or guarantor, and without limitation as to the number of such extensions
or the period or periods thereof; and consents to any substitution, exchange or
release of collateral and/or to the addition or release of any other liable
party or person, whether primarily or secondarily liable.
Attorneys' Fees and Costs. In the event this Note is placed in the
hands of an attorney for collection or in the event this Note is collected in
whole or in part through legal proceedings of any nature, then, and in any such
case, there shall be added to the unpaid principal balance hereof all costs of
collection, including but not limited to reasonable attorneys' fees and all
expenses incurred, whether or not suit is filed.
Governing Law. This Note shall be construed in accordance with the
internal laws of the State of Tennessee.
Headings. The headings of the Sections of this Note are inserted for
convenience only and shall not be deemed to constitute a part hereof.
Modification. No provision of this Note may be changed, waived,
discharged or terminated except by an instrument in writing signed by the party
against whom enforcement of the change, waiver, discharge or termination is
sought.
Severability. If any provision of this Note is held invalid, such
invalidity shall not affect the validity or enforceability of the remaining
provisions of this Note.
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Loan Agreement. This Note is the Revolving Credit Note as defined in
the Loan Agreement and is subject to the terms and conditions therein set forth.
Unless otherwise defined herein, all capitalized terms referenced herein shall
have the meanings assigned to such terms as set forth in the Loan Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed
as of the date first set forth above.
BORROWER:
EQUITY INNS PARTNERSHIP, L.P.,
a Tennessee limited partnership
By: Equity Inns Trust, a Maryland
real estate investment trust,
its sole general partner
By: /s/ Xxxxxx X. Silver
--------------------
Title: CFO
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EQUITY INNS/WEST VIRGINIA
PARTNERSHIP. L.P.,
a Tennessee limited partnership
By: Equity Inns Services, Inc.,
a Tennessee corporation.
its sole general partner
By: /s/ Xxxxxx X. Silver
--------------------
Title: CFO
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