EXHIBIT 10.1
AMENDED AND RESTATED
UNSECURED REVOLVING CREDIT AGREEMENT
DATED AS OF JUNE 23, 1999
AMONG
EQUITY INNS PARTNERSHIP, L.P.,
EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P.
AND
EQUITY INNS PARTNERSHIP II, L.P.,
AS BORROWER
AND
THE FIRST NATIONAL BANK OF CHICAGO,
CREDIT LYONNAIS NEW YORK BRANCH,
NATIONSBANK, N.A.,
AMSOUTH BANK,
PNC BANK, NATIONAL ASSOCIATION,
NATIONAL BANK OF COMMERCE,
XXXXX XXX COMMERCIAL BANK, LTD., NEW YORK BRANCH
UNION PLANTERS BANK, NATIONAL ASSOCIATION
AND
FIRST TENNESSEE BANK,
AS LENDERS
AND
THE FIRST NATIONAL BANK OF CHICAGO
AND
CREDIT LYONNAIS NEW YORK BRANCH,
AS BOOKRUNNERS,
THE FIRST NATIONAL BANK OF CHICAGO,
AS ADMINISTRATIVE AGENT
CREDIT LYONNAIS NEW YORK BRANCH,
AS SYNDICATION AGENT,
AND
NATIONSBANK, N.A.,
AS DOCUMENTATION AGENT
AMENDED AND RESTATED UNSECURED REVOLVING CREDIT AGREEMENT
THIS UNSECURED REVOLVING CREDIT AGREEMENT is entered into as of June
23, 1999, by and among the following:
EQUITY INNS PARTNERSHIP, L.P., a Tennessee limited partnership having
its principal place of business at c/o Equity Inns, Inc., 0000 Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000 (AOperating Partnership@), the sole
general partner of which is Equity Inns Trust;
EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P., a Tennessee limited
partnership having its principal place of business c/o Equity Inns, Inc., 0000
Xxxx Xxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000 ("EIP/WV"), the sole general
partner of which is Equity Inns Services, Inc., a Tennessee corporation which is
wholly-owned by Equity Inns, Inc.;
EQUITY INNS PARTNERSHIP II, L.P., a Tennessee limited partnership
having its principal place of business c/o Equity Inns, Inc., 0000 Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000 ("Equity II"), the sole general partner
of which is Equity Inns Trust and the sole limited partner of which is the
Operating Partnership (the Operating Partnership, EIP/WV and Equity II
being referred to herein collectively as the "Borrower");
THE FIRST NATIONAL BANK OF CHICAGO ("First Chicago"), a national
bank organized under the laws of the United States of America having an
office at Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000; CREDIT
LYONNAIS NEW YORK BRANCH ("Credit Lyonnais"), the New York branch of a French
banking corporation, having an office at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000;
NATIONSBANK, N.A. ("Nationsbank"), having an office at 000 Xxxxxxxxx
Xxxxxx, 0xx Xxxxx, Xxxxxxx, Xxxxxxx 00000;
AMSOUTH BANK ("AmSouth"), a state banking corporation, having an office
at 0000 Xxxxx Xxxxxx Xxxxx, XxXxxxx-Xxxxx Tower, 0xx Xxxxx, Xxxxxxxxxx,
Xxxxxxx 00000;
PNC BANK, NATIONAL ASSOCIATION, having an office at Mail Stop P1-1-
Xxxx-19-2, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000;
NATIONAL BANK OF COMMERCE, having an office at 0000 Xxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxx 00000;
XXXXX XXX COMMERCIAL BANK, LTD., NEW YORK BRANCH, having an office at
Xxx Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000;
UNION PLANTERS BANK, NATIONAL ASSOCIATION, having an office at 0000
Xxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxx, Xxxxxxxxx 00000;
FIRST TENNESSEE BANK, having an office at 000 Xxxxxxx Xxxxxx, 0xx
Xxxxx, Xxxxxxx, Xxxxxxxxx 00000;
FIRST CHICAGO and CREDIT LYONNAIS, as Bookrunners;
CREDIT LYONNAIS, as Syndication Agent ("Syndication Agent");
NATIONSBANK, as Documentation Agent ("Documentation Agent"); and
FIRST CHICAGO, 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, the Syndication Agent, First
Chicago, Credit Lyonnais and AmSouth have previously entered into an Unsecured
Revolving Credit Agreement dated as of October 10, 1997 (the "Original
Agreement"), which Original Agreement has been amended by (i) First Amendment to
Unsecured Revolving Credit Agreement dated as of November 24, 1997 and (ii)
Second Amendment to Unsecured Revolving Credit Agreement dated as of September
28, 1998 (as so amended, the "Existing Agreement").
C. Borrowers, the Syndication Agent, the Administrative Agent, the
Documentation Agent and the Lenders (as defined below) desire to amend the
Existing Agreement by amending and restating it in its entirety.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree that the Existing Agreement is hereby
amended and restated in its entirety to read 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 Person for any period, EBITDA for
such Person under GAAP for such period adjusted to exclude (i) all extraordinary
items, (ii) all gains or losses from the sale of assets and (iii) the Agreed
FF&E Reserve for such period.
"Adjusted LIBOR Rate" means, with respect to a LIBOR Advance for any
day during the relevant LIBOR Interest Period, the sum of (i) the quotient of
(a) the Base LIBOR Rate applicable to such LIBOR Interest Period, divided by
(b) one minus the Reserve Requirement (expressed as a decimal) applicable to
such LIBOR Interest Period, plus the LIBOR Applicable Margin in effect on such
day.
"Administrative Agent" means First Chicago, 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(a) hereof (including Swingline Loans), 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 initially shall be $219,500,000,
subject to Borrower's right to reduce the Aggregate Commitment pursuant to
Section 2.17 and which shall otherwise only be increased with the consent of
all Lenders.
"Agreed FF&E Reserve" means, with respect to any period, 4% of gross
room revenues of the Consolidated Group during such period.
"Agreement" means this Amended and Restated Unsecured Revolving Credit
Agreement and all amendments, modifications and supplements hereto.
"Agreement Execution Date" shall mean June 23, 1999, the date on which
all of the parties hereto have executed this Agreement.
"Allocated Facility Amount" means, at any time, the sum of all then
outstanding Advances (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 Corporate Base 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.
"Arranger" means First Chicago Capital Markets, Inc. and Credit
Lyonnais, collectively.
"Base LIBOR Rate" means, with respect to a LIBOR Advance for the
relevant LIBOR Interest Period, the rate reasonably determined by the
Administrative Agent to be the rate at which deposits in immediately available
funds in Dollars are offered by the Administrative Agent to first-class banks
in the London interbank eurodollar market at approximately 11:00 a.m. London
time two Business Days prior to the first day of such LIBOR Interest Period, in
the approximate amount of the relevant LIBOR Advance and having a maturity
approximately equal to such LIBOR Interest Period.
"Borrower" means, collectively the Operating Partnership and EIP/WV, on
a joint and several basis, along with their respective permitted successors
and assigns.
"Borrowing Base" means, as of any date, the then-current Value of
Unencumbered Assets, provided that (i) no more than 10% of the Borrowing Base
shall be attributable to a single Property, (ii) no more than 25% of the
Borrowing Base shall be attributable to Properties located in the same state,
(iii) no more than 45% of the Borrowing Base shall be attributable to
Properties which are operated by, or leased under Permitted Operating Leases to
a single tenant or a single group of tenants which are affiliates of each other,
excluding Interstate Hotels Management, Inc. and its Affiliates, but including,
without limitation, Prime Hospitality Corporation, or a subsidiary thereof,
(iv) at least 80% of the Borrowing Base shall be attributable to premium limited
service hotels, premium extended stay hotels, all-suite hotels or full service
hotels and (v) at least 80% of the Borrowing Base shall be attributable to
hotels operated as Hampton Inns, Homewood Suites, Residence Inns or AmeriSuites.
"Borrowing Date" means a Business Day on which an Advance is made to
the Borrower.
"Borrowing Notice" is defined in Section 2.11(a) hereof.
"Business Day" means a day, other than a Saturday, Sunday or holiday,
on which banks are open for business in Chicago, Illinois, New York, New York
and, where such term is used in reference to the selection or determination
of the Adjusted LIBOR Rate, in London, England.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person which is not a corporation
and any and all warrants or options to purchase any of the foregoing.
"Cash Equivalents" shall mean (i) short-term obligations of, or fully
guaranteed by, the United States of America, (ii) commercial paper rated A-1
or better by Standard and Poor"s Corporation or P-1 or better by Xxxxx'x
Investors Service, Inc., or (iii) certificates of deposit issued by and time
deposits with commercial banks (whether domestic or foreign) having capital
and surplus in excess of $100,000,000.
"Code" means the Internal Revenue Code of 1986 as amended from time to
time, or any replacement or successor statute, and the regulations promulgated
thereunder from time to time.
"Commitment" means the obligation of each Lender, subject to the terms
and conditions of this Agreement and in reliance upon the representations and
warranties herein, to make Advances not exceeding in the aggregate the amount
set forth opposite its signature below, or the amount stated in any subsequent
amendment hereto.
"Commitment Fee" is defined in Section 2.7.
"Consolidated Group" means the Borrower, the Guarantors and any other
subsidiary partnerships or entities of any of them which are required under GAAP
to be consolidated with the Borrower and the Guarantors for financial reporting
purposes.
"Consolidated Group Pro Rata Share" means, with respect to any
Investment Affiliate, the percentage of the total equity ownership interests
held by the Consolidated Group in the aggregate, in such Investment Affiliate,
determined by calculating the greater of (i) the percentage of the issued and
outstanding stock, partnership interests or membership interests in such
Investment Affiliate held by the Consolidated Group in the aggregate and (ii)
the percentage of the total book value of such Investment Affiliate that would
be received by the Consolidated Group in the aggregate, upon liquidation of such
Investment Affiliate after repayment in full of all Indebtedness of such
Investment Affiliate.
"Consolidated Secured Debt" as of any date of determination, the sum of
(a) the aggregate principal amount of all Indebtedness of the Consolidated
Group outstanding at such date which is secured by a Lien on any asset or
Capital Stock of any member of the Consolidated Group, including without
limitation loans secured by mortgages, stock, or partnership interests, and
(b) the aggregate principal amount of all unsecured Indebtedness of any member
of the Consolidated Group other than the Borrower and the Guarantors outstanding
at such date, without duplication of any Indebtedness included under clause (a).
"Consolidated Senior Unsecured Debt" as of any date, means all
Indebtedness of the Consolidated Group other than (i) Indebtedness expressly
subordinated to the Obligations and (ii) that portion of the Consolidated
Secured Debt described in clause (a) of the definition thereof.
"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.
"Corporate Base Rate" means a rate per annum equal to the corporate
base rate of interest announced by First Chicago from time to time, changing
when and as such corporate base rate changes.
"Credit Requirement" means, as of any date, the sum of (i) the then-
current Allocated Facility Amount plus (ii) the then-current Consolidated
Senior Unsecured Debt plus (iii) the then-current FF&E Deficiency, if any.
"Debt Service" means for any period, (a) Interest Expense for such
period plus (b) the aggregate amount of regularly scheduled principal payments
of Indebtedness (excluding optional prepayments and balloon principal payments
due on maturity in respect of any Indebtedness) required to be made during
such period by the Consolidated Group plus (c) the Consolidated Group Pro Rata
Share of all such regularly scheduled principal payments required to be made
during such period by any Investment Affiliation 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. ADefault 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.
"Duff & Xxxxxx" means Duff & Xxxxxx Credit Rating Company.
"EBITDA" means income before extraordinary items (reduced to eliminate
any income from Investment Affiliates), as reported by the Consolidated Group
in accordance with GAAP, plus Interest Expense, depreciation, amortization and
income tax (if any) expense plus the Consolidated Group Pro Rata Share of such
income (adjusted as described above) of any Investment Affiliate (provided that
no item of income or expense shall be included more than once in such
calculation even if it falls within more than one of the foregoing categories).
"Effective Date" means each Borrowing Date and, if no Borrowing Date
has occurred in the preceding calendar month, the first Business Day of each
calendar month.
"Environmental Laws" means any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority having jurisdiction over
any member of the Consolidated Group or any Investment Affiliate, or their
respective assets, and regulating or imposing liability or standards of conduct
concerning protection of human health or the environment, as now or may at any
time hereafter be in effect, in each case to the extent the foregoing are
applicable to the operations of such member of the Consolidated Group or
Investment Affiliate, or any of their respective assets or Properties.
"Equity Inns" means Equity Inns, Inc., a Tennessee corporation.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and regulations promulgated thereunder from time to time.
"Event of Default" means any event set forth in Article X hereof.
"Facility" means the unsecured 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 Deficiency" means the amount, if any, by which 4% of the gross
room revenues of the Consolidated Group during the preceding four fiscal
quarters, on a rolling basis, exceeds the actual expenditures by the
Consolidated Group for FF&E replacements or capital items at the Consolidated
Group's Properties during the same period.
"Financeable Ground Lease" means a Major Ground Lease satisfactory to
the Required Lenders and the Administrative Agent's counsel in their reasonable
discretion, which must provide protections for a potential leasehold mortgagee
("Mortgagee") which include, among other things (i) a remaining term of no less
than 25 years from the Effective Date, (ii) that the lease will not be
terminated until the Mortgagee has received notice of a default and has had a
reasonable opportunity to cure or complete foreclosure, and fails to do so,
(iii) provision for a new lease on the same terms to the Mortgagee as tenant
if the ground lease is terminated for any reason, (iv) non-merger of the fee
and leasehold estates, (v) transferability of the tenant's interest under the
ground lease, without the ground lessor's prior consent except for restrictions
based on the satisfaction of certain objective criteria acceptable to
Administrative Agent, and (vi) that insurance proceeds and condemnation awards
(from the fee interest as well as the leasehold interest) will be applied
pursuant to the terms of a leasehold mortgage. The existing Major Ground Leases
described on Exhibit C attached hereto have been reviewed and approved for
inclusion as "Financeable Ground Leases" by the Required Lenders as of the
Agreement Execution Date, notwithstanding deviations from the standards set
forth in the preceding sentence.
"First Chicago" means The First National Bank of Chicago.
"Fitch" means Fitch Investors Services, L.P.
"Fixed Charges" means, for any period, the sum of (i) Debt Service for
such period plus (ii) Preferred Stock Expense of the Guarantors for such period
plus (iii) Ground Lease Expense for such period.
"Free Cash Flow" means, for any period, Funds From Operations less (i)
the Agreed FF&E Reserve for such period and less (ii) scheduled principal
amortization (excluding balloon payments due on maturity) on all Indebtedness of
the Consolidated Group for such period.
"Funds From Operations" for any period, means GAAP net income, as
adjusted by (i) excluding gains and losses from property sales, debt
restructurings and property write-downs and adjusting for the non-cash effect of
straight-lining of rents, (ii) straight-lining various ordinary operating
expenses which are payable less frequently than monthly (e.g. real estate taxes
and Ground Lease Expense) and (iii) adding back depreciation, amortization and
all non-cash items. Annualized Funds from Pperations 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.
"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 Equity Inns Trust, a Maryland real estate investment
trust, Equity Inns Services, Inc. and Equity Inns, Inc., which is the holder
of 100% of the beneficial interests in Equity Inns Trust, jointly and
severally.
"Guaranty" means the Guaranty executed by the Guarantors in the form
attached hereto as Exhibit D.
"Indebtedness" of any Person at any date means without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade liabilities and other accounts payable, and accrued expenses
incurred in the ordinary course of business and payable in accordance with
customary practices), to the extent such obligations constitute indebtedness
for the purposes of GAAP, (c) any other indebtedness of such Person which is
evidenced by a note, bond, debenture or similar instrument, (d) all obligations
of such Person under financing leases and capital leases, (e) all obligations of
such Person in respect of acceptances issued or created for the account of such
Person, (f) all Guarantee Obligations of such Person (excluding in any
calculation of consolidated indebtedness of such Person, Guarantee Obligations
of such Person in respect of primary obligations of any of its Subsidiaries),
(g) all reimbursement obligations of such Person for letters of credit and
other contingent liabilities, (h) all liabilities secured by any Lien (other
than Liens for taxes not yet due and payable) on any property owned by such
Person even though such Person has not assumed or otherwise become liable for
the payment thereof, (i) any repurchase obligation or liability of such Person
or any of its Subsidiaries with respect to accounts or notes receivable sold
by such Person or any of its Subsidiaries, and (j) such Person's pro rata share
of debt in Investment Affiliates and any loans where such Person is liable as a
general partner.
"Insolvency" means insolvency as defined in the United States
Bankruptcy Code, as amended. "Insolvent" when used with respect to a Person,
shall refer to a Person who satisfies the definition of Insolvency.
"Interest Expense" all interest expense of the Consolidated Group
determined in accordance with GAAP plus (i) capitalized interest not covered by
an interest reserve from a loan facility, plus (ii) the allocable portion (based
on liability) of any accrued or paid interest incurred on any obligation for
which any member of the Consolidated Group is wholly or partially liable under
repayment, interest carry, or performance guarantees, or other relevant
liabilities, plus (iii) the Consolidated Group Pro Rata Share of any accrued or
paid interest incurred on any Indebtedness of any Investment Affiliate, whether
recourse or non-recourse, provided that no expense shall be included more than
once in such calculation even if it falls within more than one of the foregoing
categories.
"Interest Period" means a LIBOR Interest Period.
"Investment Affiliate" means any Person in which any member of the
Consolidated Group, directly or indirectly, has an ownership interest, whose
financial results are not consolidated under GAAP with the financial results of
the Consolidated Group on the consolidated financial statements of the
Consolidated Group.
"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. First Chicago shall be
the sole Issuing Bank.
"Lenders" means, collectively, First Chicago, Credit Lyonnais and the
other Persons executing this Agreement in such capacity, or any Person which
subsequently executes and delivers any amendment hereto in such capacity and
each of their respective permitted successors and assigns. Where reference is
made to "the Lenders" in any Loan Document it shall be read to mean "all of the
Lenders".
"Lending Installation" means any U.S. office of any Lender authorized
to make loans similar to the Advances described herein.
"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, six or twelve months, as selected in advance by the
Borrower.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including, without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof, any filing or
agreement to file a financing statement as debtor under the Uniform Commercial
Code on any property leased to any Person under a lease which is not in the
nature of a conditional sale or title retention agreement, or any subordination
agreement in favor of another Person).
"Loan" means, with respect to a Lender, such Lender's portion of any
Advance.
"Loan Documents" means this Agreement, the Notes, the Guaranty and any
and all other agreements or instruments required and/or provided to Lenders
hereunder or thereunder, as any of the foregoing may be amended from time to
time.
"Major Ground Lease" means a ground lease demising to one of the
Borrowers or a Wholly-Owned Subsidiary all of the land included in any Property
or any portion of such land which the Administrative Agent, in its reasonable
judgment, deems necessary for the continued operation of a hotel on such
Property.
"Majority Lenders" means Lenders in the aggregate having in excess of
50% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding in excess of 50% of the aggregate
unpaid principal amount of the outstanding Advances.
"Margin Stock" has the meaning ascribed to it in Regulation U of the
Board of Governors of the Federal Reserve System.
"Material Adverse Effect" means, with respect to any matter, that
such matter in the Required Lenders' good faith judgment may (x) materially and
adversely affect the business, properties, condition or results of operations
of the Consolidated Group taken as a whole, or (y) constitute a non-frivolous
challenge to the validity or enforceability of any material provision of any
Loan Document against any obligor party thereto.
"Material Adverse Financial Change" shall be deemed to have occurred
if the Required Lenders, in their good faith judgment, determine that a
material adverse financial change has occurred which could prevent timely
repayment of any Advance hereunder or materially impair Borrower's
ability to perform its obligations under any of the Loan Documents.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, radon, polychlorinated biphenyls and urea-formaldehyde insulation.
"Maturity Date" means October 9, 2000.
"Monetary Default" means any Default involving Borrower=s failure to
pay any of the Obligations when due.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"New Property" means, as of any date, any Property then owned by a
member of the Consolidated Group or an Investment Affiliate which (i) was
owned by a member of the Consolidated Group or an Investment Affiliate on
the date such Property was first opened for business and such opening date is
less than six (6) full fiscal quarters prior to the date of determination, or
(ii) was owned by an entity other than a member of the Consolidated Group or an
Investment Affiliate on the date such Property was first opened for business,
was acquired by such member of the Consolidated Group or Investment Affiliate
within six (6) months after such opening date and such opening date is less than
six (6) full fiscal quarters prior to the date of determination, or (iii) was
owned by an entity other than a member of the Consolidated Group or an
Investment Affiliate on the date such Property was first opened for business,
was acquired by such member of the Consolidated Group or Investment Affiliate
more than six (6) months after such opening date and the acquisition date of
such Property by such member of the Consolidated Group or Investment Affiliate
is less than four (4) full fiscal quarters prior to the date of determination.
"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.
"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).
"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. APlan@ 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": for any Person, any preferred stock issued by
such Person.
"Preferred Stock Expense": for any period for any Person, the
aggregate dividend payments due to the holders of Preferred Stock of such
Person, whether payable in cash or in kind, and whether or not actually paid
during such period.
"Property": means any real estate asset owned by a member of the
Consolidated Group or an Investment Affiliate and operated as a premium limited
service, premium extended stay or premium all-suite or full-service hotel
property.
"Property Operating Income": means, with respect to any Property, for
any period, earnings from rental operations attributable to such Property
less all expenses directly related to such Property, such as real estate taxes
and ground lease payments plus depreciation, amortization and interest
expense with respect to such Property for such period, and, if such period
is less than a year, adjusted by straight lining various expenses which are
payable less frequently than monthly during every such period (e.g. real estate
taxes, ground lease payments and insurance).
"Purchasers" is defined in Section 13.3.1 hereof.
"Qualified Officer" means, with respect to any entity, the chief
financial officer, chief accounting officer or controller of such entity if it
is a corporation or of such entity=s general partner if it is a partnership.
"Rate Option" means the Adjusted Alternate Base Rate or the Adjusted
LIBOR Rate. The Rate Option in effect on any date shall always be the
Adjusted Alternate Base Rate unless the Borrower has properly selected the
Adjusted LIBOR Rate pursuant to Section 2.11 hereof.
"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 of the
Obligations of the Borrower to the Lenders, the Issuing Bank and the
Administrative Agent in respect of all unreimbursed payments or disbursements
made by the Lenders, the Issuing Bank and the Administrative Agent under or in
respect of the Facility Letters of Credit.
"REMIC Loan" means that certain $88,000,000 issuance of mortgage bonds
by the REMIC Partnership pursuant to the terms of an Indenture dated as of
February 6, 1997.
"REMIC Partnership" means EQI Financing Partnership I, L.P., the
borrower under the REMIC Loan which has as its sole limited partner, holding
99% of the partnership interests therein, the Operating Partnership and as
its sole general partner, holding 1% of the partnership interests therein, EQI
Financing Corporation which is wholly-owned by Equity Inns Trust.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable Event regardless of the issuance of any such waivers in accordance
with either Section 4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means, as of any date, those Lenders holding, in
the aggregate, more than two-thirds (2/3) of the then-current Aggregate
Commitment or, if the Aggregate Commitment has been terminated, Lenders holding,
in the aggregate, more than two-thirds (2/3) of the aggregate unpaid principal
amount of the outstanding Advances.
"Reserve Requirement" means, with respect to a LIBOR Interest Period,
the maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"S&P" means Standard & Poor's Ratings Group and its successors.
"Subsidiary" means as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect
a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person, and provided such
corporation, partnership or other entity is consolidated with such Person
for financial reporting purposes under GAAP.
"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 First Chicago, in its capacity as a
Lender.
"Swingline Loan" means a Loan made by the Swingline Lender under the
special availability provisions described in Sections 2.16 hereof.
"Total Cost": means, as of any date, the sum of (i) the book value
under GAAP of all Properties then owned by the Consolidated Group plus (ii)
all depreciation on such Properties previously reflected on the
Consolidated Group's financial statements, in accordance with GAAP plus (iii)
the Consolidated Group Pro Rata Share of the book value under GAAP of all
Properties then owned by Investment Affiliates plus (iv) the Consolidated Group
Pro Rata Share of all depreciation on such Properties previously reflected on
such Investment Affiliates financial statements, in accordance with GAAP.
"Total Indebtedness": means, as of any date, the sum of (i) all
Indebtedness of the Consolidated Group in existence on such date plus (ii)
the Consolidated Group Pro Rata Share of all Indebtedness of any Investment
Affiliate (to the extent not included in the Indebtedness described in clause
(i)), without duplication.
"Total Value": means, as of any date, the sum of (i) all cash and
Cash Equivalents then held by the Consolidated Group plus (ii) for all
Properties, other than New Properties, owned by a member of the
Consolidated Group (A) the aggregate Property Operating Income for such
Properties during the most recent four fiscal quarters for which financial
results have then been reported less the Agreed FF&E Reserve applicable thereto
for such four fiscal quarters, divided by (B) 11.5%, plus (iii) for all New
Properties owned by a member of the Consolidated Group, the book value, under
GAAP, of such Properties plus (iv) for all Properties, other than New
Properties, owned by an Investment Affiliate (A) the Consolidated Group Pro Rata
Share of the aggregate Property Operating Income for such Properties during the
four most recent fiscal quarters for which results have then been reported less
the Agreed FF&E Reserve that would be applicable thereto for such four fiscal
quarters, divided by (B) 11.5% and plus (v) for all New Properties owned by an
Investment Affiliate, the Consolidated Group Pro Rata Share of the book value,
under GAAP, of such Properties.
"Transferee" is defined in Section 13.4 hereof.
"Unencumbered Asset" means, with respect to any Properties 100% of
which, in the aggregate, are owned or ground leased by one of the entities
comprising the Borrower or a Wholly-Owned Subsidiary at any date of
determination, the circumstance that such Property on such date (a) is not
subject to any Liens (including any Liens on the operating leases of such
Properties) other than those in favor of the Lenders and those Permitted Liens
described in clauses (i) through (v) of Section 9.6, (b) if subject to a Major
Ground Lease, (i) such Major Ground Lease is a Financeable Ground Lease and
(ii) all such ground leased Properties subject to Major Ground Leases do not
exceed 15% of the Value of Unencumbered Assets, (c) is not subject to any
agreement (including any agreement governing Indebtedness incurred in order
to finance or refinance the acquisition of such asset) which creates a
"negative pledge" which prohibits or limits the ability of the owner thereof, to
create, incur, assume or suffer to exist any Lien upon any assets of such owner
(or the capital stock in such owner if the owner is a Wholly-Owned Subsidiary),
(d) is not subject to any agreement (including any agreement governing
Indebtedness incurred in order to finance or refinance the acquisition of such
asset) which entitles any Person to the benefit of any Lien (but excluding liens
in favor of Lenders and those Permitted Liens described in clauses (i) through
(v) of Section 9.6) on any assets or capital stock of either of the Borrowers or
any of their Subsidiaries or would entitle any Person to the benefit of any Lien
(but excluding liens in favor of Lenders and those Permitted Liens described in
clauses (i) through (v) of Section 9.6) on such assets or capital stock upon the
occurrence of any contingency (including, without limitation, pursuant to an
"equal and ratable" clause), (e) is free from any material structural defects as
evidenced by a certification of Borrowers, (f) is free from any material
environmental contamination or condition, as evidenced by a certification of the
Borrowers and a current detailed environmental assessment delivered to the
Administrative Agent, (g) is subject to a Permitted Operating Lease, and (h) is
fully operational with less than 20% of the rooms on such Property being
unavailable for occupancy due to casualty, construction, renovation or other
reason. No Property of a Wholly-Owned Subsidiary shall be deemed to be
unencumbered unless both such Property and all capital stock of such
Wholly-Owned Subsidiary is unencumbered and neither such Wholly-Owned Subsidiary
nor any other intervening Subsidiary between the Borrower and such Wholly-Owned
Subsidiary has any Indebtedness for borrowed money (other than Indebtedness due
to the Borrower).
"Value of Unencumbered Assets" means, as of any date, the amount
determined (i) for all Unencumbered Assets (other than New Properties), (A) the
sum of (x) Property Operating Income attributable thereto for the most recent
four fiscal quarters for which financial results have then been reported less
(y) the Agreed FF&E Reserve attributable thereto for such period divided by (B)
11.5 % and (ii) for all Unencumbered Assets which are New Properties, the book
value, in accordance with GAAP, of such Properties. If an Unencumbered Asset is
no longer owned as of the date of calculation, then no value shall be included
based on capitalizing Property Operating Income from such Unencumbered Asset.
"Wholly-Owned Subsidiary" means a Subsidiary which is 100% owned by one
or both of the entities comprising the Borrower.
The foregoing definitions shall be equally applicable to both the
singular and the plural forms of the defined terms.
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.
(a) Subject to the terms and conditions of this Agreement and in reliance upon
the representations and warranties of the Borrower and the Guarantors
contained herein, Lenders agree to make Advances through the Administrative
Agent to Borrower from time to time prior to the Maturity Date and to
support the issuance of 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 Credit Requirement to exceed fifty percent
(50%) of the then-current Borrowing Base; or
(iii) cause the then-current outstanding Swingline Advances to exceed the
Swingline Commitment; or
(iv) cause the then outstanding Facility Letters of Credit Obligations to
exceed the Facility Letter of Credit Sublimit.
The Advances may be ratable Adjusted Alternate Base Rate Advances, ratable LIBOR
Advances or non-pro rata Swingline Loans. Except as provided in Sections 2.16
and 12.16 hereof, each Lender shall fund its Percentage of each such Advance and
no Lender will be required to fund any amounts which when aggregated with such
Lender=s Percentage of (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 both of
the entities comprising the Borrower, all Loans shall be deemed to be requested
by the Operating Partnership and shall be funded directly to the Operating
Partnership and EIP/WV irrevocably authorizes the Administrative Agent to honor
requests for Advances made by the Operating Partnership and to fund such Loans
directly to the Operating Partnership.
(b) The Facility created by this Agreement, and the Commitment of each
Lender to lend hereunder, shall terminate on the Maturity Date, unless
sooner terminated in accordance with the terms of this Agreement.
(c) In no event shall the Aggregate Commitment exceed Two Hundred Nineteen
Million Five Hundred Thousand Dollars ($219,500,000) without the approval
of all of the Lenders.
Section II.2 Principal Payments. If on any Business Day the then-current Credit
Requirement should exceed 50% of the then-current Borrowing Base, the Borrower
shall make a mandatory principal repayment on the immediately following Business
Day in the amount of such excess. Solely for purposes of applying the test set
forth in the preceding sentence and in Section 9.10 hereof, the Property
Operating Income attributable to Unencumbered Assets shall be revised, and such
revision shall become effective, on the earlier of (i) receipt by the
Administrative Agent of the quarterly certificate described in Section 8.2 or
(ii) the forty-fifth (45th) day after the end of the most recent fiscal quarter.
Any outstanding Advances not previously repaid and all other unpaid Obligations
shall be paid in full by the Borrower on the Maturity Date.
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(a) and Section 2.11(a) hereof. The obligation of
each Lender to fund its Percentage of each ratable Advance shall be several and
not joint.
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-Pro Rata 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 percentage
of Total Value that Total Indebtedness comprises from time to time as follows:
LIBOR ABR Applicable
Total Indebtedness as a Applicable Applicable Commitment
Percentage of Total Value Margin Margin Fee Percentage
------------------------- ---------- ---------- --------------
Less than 25% 1.50% 0.50% 0.25%
25% or over, but less than 35% 1.75% 0.75% 0.30%
35% or over, but less than 40% 2.00% 1.00% 0.40%
40% or over, but less than 45% 2.25% 1.25% 0.50%
45% or over 2.50% 1.50% 0.50%
The Applicable Margins and Applicable Commitment Fee Percentage will change
only quarterly upon delivery of a compliance certificate in the form of Exhibit
H attached hereto, reflecting the Total Value and Total Indebtedness 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 Execution Date to and including the Maturity Date, calculated
at the then-current per annum Applicable Commitment Fee Percentage (calculated
for actual days elapsed on the basis of a 360 day year) on the daily unborrowed
portion of such Lender's Commitment (which is equal to the difference between
(a) such Lender's Commitment on such day and (b) the then outstanding Loans owed
to such Lender plus the Lender's Percentage of any outstanding and undrawn
Facility Letters of Credit) payable quarterly in arrears on the last day of each
calendar quarter hereafter beginning June 30, 1999 and on the Maturity Date.
Notwithstanding the foregoing, all accrued Commitment Fees shall be payable on
the effective date of any termination of the obligations of the Lenders to make
Loans hereunder. 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
the Syndication Agent 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.
(c) The Borrower also agrees to pay to the Administrative Agent for the benefi
of the Lenders a one-time amendment fee in connection with this Agreement
equal to one-quarter of one percent (0.25%) of the Aggregate Commitment in
effect as of the effective date of this Agreement.
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 $100,000 (and in
multiples of $50,000 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 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 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 First Chicago 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 its
Commitment. 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 if all
Swingline Advances then outstanding exceed $1,000,000, 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 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
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;
(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 Execution 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,
either (1) the then applicable Allocated Facility Amount would exceed
the then current Aggregate Commitment, (2) the then applicable Credit
Requirement would exceed fifty percent (50%) of the then-current
Borrowing Base, or (3) the Facility Letter of Credit Obligations
would exceed the Facility Letter of Credit Sublimit; or
(iii) issue any Facility Letter of Credit having an expiration date, or
containing automatic extension provision to extend such date, to a
date which is after the 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 minus
one-eighth of one percent (0.125%). 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 Sectio 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 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 J hereto. The purchase by the replacement Lender shall be at
par (plus all accrued and unpaid interest and any other sums owed to such Lender
being replaced hereunder) which shall be paid to the Lender being replaced upon
the execution and delivery of the assignment.
Article V.
CONDITIONS PRECEDENT
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, the Syndication
Agent and the Administrative Agent hereunder, (ii) all of the conditions set
forth in Section 5.2 are satisfied, and (iii) the Borrower shall have furnished
to the Administrative Agent, in form and substance satisfactory to the
Administrative Agent and their counsel and with sufficient copies for the
Lenders, the following:
(a) Certificates of Limited Partnership/Incorporation. A copy of the
Certificate of Limited Partnership for each entity comprising the Borrower
and a copy of the articles of incorporation of Equity Inns and the trust
documents of Equity Inns Trust, each certified by the appropriate Secretary
of State or equivalent state official.
(b) Agreements of Limited Partnership/Bylaws. A copy of the Agreement of
Limited Partnership for each entity comprising the Borrower and a copy of
the bylaws of each of the Guarantors, including all amendments thereto,
each certified by the Secretary or an Assistant Secretary of such entity as
being in full force and effect on the Agreement Execution Date.
(c) Good Standing Certificates. A certified copy of a certificate from the
Secretary of State or equivalent state official of the states where each
entity comprising the Borrower and the Guarantors are organized, dated as
of the most recent practicable date, showing the good standing or
partnership qualification (if issued) of (i) each entity comprising
Borrower, and (ii) the Guarantors.
(d) Resolutions. A copy of a resolution or resolutions and adopted by the Board
of Directors of the general partner of each entity comprising the Borrower,
certified by the Secretary or an Assistant Secretary thereof as being in
full force and effect on the Agreement Execution Date, authorizing the
Advances provided for herein and the execution, delivery and performance of
the Loan Documents by such general partner to be executed and delivered by
it hereunder on behalf of itself and Borrower, together with a similar
resolution for each of the Guarantors.
(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 Execution Date, as to the incumbency, and
containing the specimen signature or signatures, of the Persons authorized
to execute and deliver the Loan Documents to be executed and delivered by
it and Borrower hereunder, together with a similar resolution for each of
the Guarantors.
(f) Loan Documents. Originals of the Loan Documents (in such quantities as the
Lenders may reasonably request), duly executed by authorized officers of
the appropriate entity.
(g) Opinion of Tennessee Counsel. A written opinion, dated the Agreement
Execution Date, 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, dated the Agreement
Execution Date, 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) Existing Facilities. Evidence that all amounts due under the two existing
secured credit facilities of the Borrower agented by First Chicago have
been repaid in full and terminated.
(j) Financial and Related Information. The following information:
(i) A certificate, signed by an officer of the general partners of each
entity comprising the Borrower, stating that on the Agreement
Execution 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 as of the Agreement
Execution Date as and to the extent set forth herein;
(ii) The most recent financial statements of the Consolidated Group and a
certificate from a Qualified Officer of Equity Inns that no change
in the Consolidated Group's financial condition that would have
a Material Adverse Effect has occurred since June 30, 1997;
(iii) Evidence of sufficient Unencumbered Assets (which evidence may
include pay-off letters (together with evidence of payment or a
direction of Borrower to use a portion of the proceeds of the
Advances to repay such Indebtedness), mortgage releases and/or title
policies) to assist the Administrative Agent in determining the
Borrower's compliance with the covenants set forth in Article IX
herein;
(iv) A pro forma compliance certificate as of June 30, 1997 calculating
the applicable status of Borrower's financial covenants if they were
effective as of such date;
(v) Written money transfer instructions, in substantially the form of
Exhibit G hereto, addressed to the Administrative Agent and signed
by a Qualified Officer, together with such other related money
transfer authorizations as the Administrative Agent may have
reasonably requested; and
(vi) Operating statements for the Unencumbered Assets and other evidence
of income and expenses to assist the Administrative Agent in
determining Borrower's compliance with the covenants set forth in
Article VIII herein.
(k) GMAC Loan. Such evidence as Lenders may require that the GMAC Loan has
closed and been funded.
(l) Other Evidence as any Lender May Require. Such other evidence as any Lender
may reasonably request to establish the consummation of the transactions
contemplated hereby, the taking of all necessary actions in any proceedings
in connection herewith and compliance with the conditions set forth in this
Agreement.
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; and
(b) The representations and warranties contained in Article VI and VII are
true and correct as of such borrowing date, Issuance Date, or date of
conversion and/or continuation as and to the extent set forth therein,
except to the extent any such representation or warranty is stated to
relate solely to an earlier date, in which case such representation or
warranty shall be true and correct on and as of such earlier date.
Subject to the last grammatical paragraphs of Article VI and VII
hereof, each Borrowing Notice, Letter of Credit Request, and
Conversion/Continuation Notice shall constitute a representation and warranty by
the Borrower that the conditions contained in Sections 5.2(a) and (b) have been
satisfied. Article VI.
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 Execution Date and immediately
following the making of each Loan and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the
assets of each entity comprising the Borrower and its Subsidiaries on
a consolidated basis, at a fair valuation, will exceed the debts and
liabilities, subordinated, contingent or otherwise, of the such
entity and its Subsidiaries on a consolidated basis; (b) the present
fair 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 the insurance which Borrower
is required to furnish to Lenders under Section 5.1(j) hereof.
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.S
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 Unencumbered Assets. Schedule 6.26 hereto contains a complete and
accurate description of Unencumbered Assets as of the Agreement Execution Date
and as supplemented from time to time including the entity that owns each
Unencumbered Asset. With respect to each Property identified from time to time
as an Unencumbered Asset, Borrower hereby represents and warrants as follows
except to the extent disclosed in writing to the Lenders and approved by the
Required Lenders (which approval shall not be unreasonably withheld):
(a) No portion of any improvement on the Unencumbered Asset is located in an
area identified by the Secretary of Housing and Urban Development or any
successor thereto as an area having special flood hazards pursuant to the
National Flood Insurance Act of 1968 or the Flood Disaster Protection Act
of 1973, as amended, or any successor law, or, if located within any such
area, Borrower has obtained and will maintain the insurance prescribed in
Section 5.1(j) hereof.
(b) To the Borrower's knowledge, except as shown on Schedule 6.9, the
Unencumbered Asset and the present use and occupancy thereof are in
material compliance with all applicable zoning ordinances (without reliance
upon adjoining or other properties), building codes, land use and
Environmental Laws, and other similar laws ("Applicable Laws").
(c) The Unencumbered Asset is served by all utilities required for the current
or contemplated use thereof. All utility service is provided by public
utilities and the Unencumbered Asset has accepted or is equipped to accept
such utility service.
(d) All public roads and streets necessary for service of and access to the
Unencumbered Asset for the current or contemplated use thereof have been
completed, are serviceable and all-weather and are physically and legally
open for use by the public.
(e) The Unencumbered Asset is served by public water and sewer systems or, if
the Unencumbered Asset is not serviced by a public water and sewer system,
such alternate systems are adequate and meet, in all material respects, all
requirements and regulations of, and otherwise complies in all material
respects with, all Applicable Laws with respect to such alternate systems.
(f) Borrower is not aware of any latent or patent structural or other
significant deficiency of the Unencumbered Asset. The Unencumbered Asset
is free of damage and waste that would materially and adversely affect the
value of the Unencumbered Asset, is in good repair and there is no deferred
maintenance other than ordinary wear and tear. The Unencumbered Asset is
free from damage caused by fire or other casualty. There is no pending or,
to the actual knowledge of Borrower threatened condemnation proceedings
affecting the Unencumbered Asset, or any material part thereof.
(g) To Borrower's knowledge, all liquid and solid waste disposal, septic and
sewer systems located on the Unencumbered Asset are in a good and safe
condition and repair and to Borrower's knowledge, in material compliance
with all Applicable Laws with respect to such systems.
(h) All improvements on the Unencumbered Asset lie within the boundaries and
building restrictions of the legal description of record of the
Unencumbered Asset, no such improvements encroach upon easements
benefitting the Unencumbered Asset other than encroachments that do not
materially adversely affect the use or occupancy of the Unencumbered Asset
and no improvements on adjoining properties encroach upon the Unencumbered
Asset or easements benefitting the Unencumbered Asset other than
encroachments that do not materially adversely affect the use or occupancy
of the Unencumbered Asset. All amenities, access routes or other items
that materially benefit the Unencumbered Asset are under direct control of
Borrower, constitute permanent easements that benefit all or part of the
Unencumbered Asset or are public property, and the Unencumbered Asset, by
virtue of such easements or otherwise, is contiguous to a physically open,
dedicated all weather public street, and has the necessary permits for
ingress and egress.
(i) There are no delinquent taxes, ground rents, water charges, sewer rents,
assessments, insurance premiums, leasehold payments, or other outstanding
charges affecting the Unencumbered Asset except to the extent such items
are being contested in good faith and as to which adequate reserves have
been provided.
A breach of any of the representations and warranties contained in this
Section 6.26 with respect to a Property shall disqualify such Property from
being an Unencumbered Asset for so long as such breach continues (unless
otherwise approved by the Required Lenders) but shall not constitute a Default
(unless the elimination of such Property as an Unencumbered Asset results
in a Default under one of the other provisions of this Agreement).
Borrower agrees that all of its representations and warranties set forth in
Article VI of this Agreement and elsewhere in this Agreement are true on the
Agreement Execution Date, and will be true on each Effective Date in all
material respects (except with respect to matters which have been disclosed in
writing to and approved by the Required Lenders), and will be true in all
material respects (except with respect to matters which have been disclosed in
writing to and approved by the Required Lenders) upon each request for
disbursement of an Advance. Each request for disbursement hereunder shall
constitute a reaffirmation of such representations and warranties as deemed
modified in accordance with the disclosures made and approved, as aforesaid, as
of the date of such request and disbursement.
Article VII.
ADDITIONAL REPRESENTATIONS AND WARRANTIES
Each of the Guarantors hereby represents and warrants that:
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 Execution
Date, and will be true on each Effective Date in all material respects (except
with respect to matters which have been disclosed in writing to and approved by
the Required Lenders), and will be true in all material respects (except with
respect to matters which have been disclosed in writing to and approved by the
Required Lenders) upon each request for disbursement of an Advance 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 Aprohibited 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 45 days after
the close of each fiscal quarter, for the Consolidated Group an
unaudited quarterly financial statement (including a balance sheet
and income statement) for such period and the portion of the fiscal
year through the end of such period, setting forth in each case in
comparative form the figures for the previous year, all certified by
Equity Inns' chief financial officer or chief accounting officer;
(ii) As soon as available, but in any event not later than 45 days
after the close of each fiscal quarter, for the Consolidated Group,
related reports in form and substance satisfactory to the Lenders,
all certified by Equity Inns' chief financial officer or chief
accounting officer, including a statement of Funds From Operations,
calculation of the financial covenants described below, a summary
listing of capital expenditures, a report listing and describing all
newly acquired Properties, including their cash flow, cost and
secured Indebtedness, if any, summary property information for all
Properties, and such other information as may be requested to
evaluate any other certificates delivered hereunder;
(iii) As soon as publicly available but in no event later than the date
such reports are to be filed with the Securities Exchange Commission,
copies of all Form 10Ks, 10Qs, 8Ks, and any other annual, quarterly,
monthly or other reports, copies of all registration statements and
any other public information filed with the Securities Exchange
Commission along with all other materials distributed to shareholders
and limited partners by the Borrower or the Guarantors, including a
copy of the Equity Inns annual report;
(iv) As soon as available, but in any event not later than 90 days
after the close of each fiscal year, reports in form and substance
satisfactory to the Lenders, certified by Equity Inns' chief
financial officer or chief accounting officer containing Property
Operating Income and hotel operating statements from the operators
under the Permitted Operating Leases for each individual Property
owned by the Borrower or a Wholly-Owned Subsidiary and included as
Unencumbered Assets, provided that the Borrower and the Guarantors
shall in no event be obligated to furnish any such hotel operating
statement any earlier than five (5) Business Days after the
Borrower's receipt thereof from the applicable operator;
(v) Not later than forty-five (45) days after the end of each of the
first three fiscal quarters, and not later than ninety (90) days
after the end of the fiscal year, a compliance certificate in
substantially the form of Exhibit H hereto signed by the Operating
Partnership and Equity Inns' chief financial officer or chief
accounting officer confirming that the Borrower and the Guarantors
are in compliance with all of the covenants of the Loan Documents,
showing the calculations and computations necessary to determine
compliance with the financial covenants contained in this Agreement
(including such schedules and backup information as may be necessary
to demonstrate such compliance) and stating that to such officer=s
best knowledge, there is no other Default or Event of Default exists,
or if any Default or Event of Default exists, stating the nature and
status thereof;
(vi) As soon as possible and in any event within 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 Unencumbered Asset, a statement
describing such fire, casualty or condemnation and the action
Borrower intends to take with respect thereto;
(x) Such other information (including, without limitation, non-financial
information) as the Administrative Agent or any Lender may from time
to time reasonably request; and
(xi) Within ten (10) Business Days after the request of the Administrative
Agent, a financial statement showing Adjusted EBITDA, Ground Lease
Expense, Fixed Charges and Interest Expense for the period of twelve
(12) full months ending immediately prior to the date of such
request.
Section 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 Consolidated Group shall not
invest more than the following amounts with respect to the following specified
categories of hotel assets:
(i) the aggregate book value, under GAAP, of all hotels under
construction which are owned by the Consolidated Group shall not
exceed 10% of Total Value;
(ii) the sum of (i) the aggregate book value, under GAAP, of all hotels
under construction which are owned by the Consolidated Group and (ii)
the aggregate obligations of the Consolidated Group to purchase
hotels under construction shall not exceed 25% of Total Value;
(iii) the percentage of the total rooms in all Properties of the
Consolidated Group that are leased under Permitted Operating Leases
shall not be less than 85%; and
(iv) that portion of Total Value attributable to Properties of the
Consolidated Group leased to (A) a single tenant or any single group
of tenants which are Affiliates of each other (other than to
Interstate Hotels Management, Inc. and its Affiliates) under a
Permitted Operating Lease or Permitted Operating Leases shall not
exceed 40% of Total Value and (B) Crossroads/Memphis Partnership LLC,
Crossroads Future Company LLC or another entity directly or
indirectly wholly-owned by Interstate Hotels Management, Inc. under
Permitted Operating Leases shall not exceed 80% of Total Value.
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 5.1(j) hereof is in full force
and effect. Borrower shall timely pay, or cause to be paid, all premiums on all
insurance policies required under this Agreement from time to time. Borrower
shall promptly notify its insurance carrier or agent therefor (with a copy of
such notification being provided simultaneously to Administrative Agent) if
there is any occurrence which, under the terms of any insurance policy then in
effect with respect to the Properties, requires such notification.
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 two existing secured facilities of the Borrower which
are agented by First Chicago, 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 project that it intends to acquire an
environmental report pursuant to a standard scope of work attached as Exhibit
I hereto and made a part hereof.
Article IX.
NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as the Commitment shall
remain available and until full and final payment of all obligations incurred
under the Loan Documents, without the prior written consent of the Required
Lenders (or the Administrative Agent or a greater Percentage of the Lenders, if
so expressly provided), the Borrower, the Guarantors and the Consolidated Group
will not:
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 Sales, Encumbrances and Transfers of Assets. Sell, encumber or
otherwise transfer (other than pursuant to a Permitted Operating Lease or any
other operating lease of any of the Properties) to anyone other than another
member of the Consolidated Group without delivering prior written notice of
such proposed sale, encumbrance or transfer to the Administrative Agent
along with a certification to the Lenders that compliance with all of the
covenants in this Agreement will be maintained after giving effect to such
proposed action, with such detail and projections as the Administrative
Agent may require, any Properties of the Consolidated Group (excluding any
Property sold by the Consolidated Group prior to, simultaneously with or within
six months of the date such Property was first opened to the public as a hotel)
or any interests in entities owning such Properties if the value of such
Property or interest, together with the value of any other such Properties or
interests which have been sold, encumbered or transferred during the same
period, exceeds for a period beginning at the Agreement Execution Date and
ending on the last day of the fourth full fiscal quarter of the Consolidated
Group thereafter and for subsequent periods ending on the last day of each such
fiscal quarter thereafter and consisting of the immediately preceding four (4)
full fiscal quarters, a maximum of fifteen percent (15%) of the Total Value at
the beginning of such period.
Section IX.4 Dividends. Permit the aggregate amount of dividends paid by
Equity Inns (without duplication) for the most recent four fiscal quarters
for which financial reports are available (i) on an unadjusted basis, to
exceed 90% of the Funds From Operations of Equity Inns, or (ii) after deduction
of all dividends attributable to stock issued during the most recent of such
four fiscal quarters, to exceed 100% of Free Cash Flow, in each case as
determined on a consistent basis with the prior financial statements of
Equity Inns, as approved by the Administrative Agent, provided that Equity
Inns may, so long as an Event of Default does not exist, pay the minimum
amount of dividends required to maintain its tax status as a real estate
investment trust under the Code.
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;
(iii) Liens arising out of pledges or deposits under worker's compensation
laws, unemployment insurance, old age pensions, or other social
security or retirement benefits, or similar legislation;
(iv) Utility easements, building restrictions, zoning restrictions,
easements and such other encumbrances or charges against real
property as are of a nature generally existing with respect to
properties of a similar character and which do not in any material
way affect the marketability of the same or interfere with the use
thereof in the business of the Borrower or its Subsidiaries;
(v) Liens of any member of the Consolidated Group in favor of the
Borrower or the Guarantors;
(vi) Liens arising in connection with any Indebtedness permitted hereunder
to the extent such Liens will not result in a violation of any of the
provisions of this Agreement; and
(vii) Liens which are Permitted Operating eases or other operating leases
of any of the Properties, to the extent the existence of such other
operating leases will not result in a violation of Section 8.3(iii)
hereof.
Liens permitted pursuant to this Section 9.6 shall be deemed to be "Permitted
Liens".
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 amount of reserves maintained
by the Consolidated Group for FF&E replacement and capital improvements as of
the last day of such fiscal quarter as shown on the Consolidated Group's
financial statements for such quarter to be less than four percent (4%) of the
gross room revenues from such Properties for such four (4) full fiscal quarters.
Section IX.8 Indebtedness, Coverage and Net Worth Covenants. Permit or suffer:
(a) as of any day, Consolidated Secured Debt less the outstanding principal
balance under the REMIC Loan to exceed 15% of Total Value;
(b) as of any day, Total Indebtedness to exceed the lesser of (i) 50% of Total
Value or (ii) 50% of Total Cost;
(c) as of any day, the "tangible net worth" of the Consolidated Group, as
determined and defined under GAAP, to be less than the sum of (i) eighty-
five percent (85%) of the Consolidated Group's tangible net worth as of
June 30, 1997 plus (ii) fifty percent (50%) of the aggregate proceeds
received (net of customary related fees and expenses) in connection with
any offering or sale after June 30, 1997 of equity interests in the
Borrower or the Guarantors, whether common stock, preferred stock, limited
partnership units or other forms of equity ownership;
(d) as of any day, the ratio of (A) the sum of (i) Adjusted EBITDA of the
Consolidated Group 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 2.00 to 1;
(e) 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 2.5 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 Required Lenders.
Section IX.10 Borrowing Base. Permit, as of any day, the then-current Credit
Requirement to exceed 50% of the then-current Borrowing Base for a period of
more than one Business Day.
Article X.
DEFAULTS
The occurrence of any one or more of the following events shall
constitute an Event of Default:
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.
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 First Chicago 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.
Article XII.
THE ADMINISTRATIVE AGENT
Section XII.1 Appointment. First Chicago 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 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 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 First
Chicago shall serve as Administrative Agent at all times during the term
of this Facility, except that First Chicago may resign as Administrative Agent
in the event (x) First Chicago 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) First Chicago
shall determine, in its sole reasonable discretion, that because of its other
banking relationships with the Consolidated Group at the time of such
decision First Chicago's resignation as Administrative Agent would be
necessary in order to avoid creating an appearance of impropriety on the part of
First Chicago. First Chicago (or any successor Administrative Agent) may be
removed as Administrative Agent by written notice received by Administrative
Agent from all of the other Lenders at any time with cause (i.e., a breach
by First Chicago (or any successor Administrative Agent) of its duties
as Administrative Agent hereunder). Upon any such resignation or removal,
Credit Lyonnais shall be the successor Administrative Agent (unless objected to
by the Required Lenders) or, if Credit Lyonnais declines or is so objected to,
the Required Lenders shall have the right to appoint, on behalf of the
Borrower and the Lenders, a successor Administrative Agent with the consent
of the Borrower, which consent shall not be unreasonably withheld and shall
not be required if an Event of Default has occurred. If no successor
Administrative Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within thirty 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. 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 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 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 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.
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 (plus, during the initial
syndication, Credit Lyonnais) 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, Credit Lyonnais
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 J hereto. The
Borrower shall execute any and all documents which are customarily
required by such Lender (including, without limitation, a replacement
promissory note or notes in the forms provided hereunder) in connection
with any such assignment, but Borrower shall not be obligated to pay
any fees and expenses incurred by any Lender in connection with any
assignment pursuant to this Section. Any Lender selling all 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 $3,000.00 per assignee to reimburse Administrative Agent
for its involvement in such assignment.
13.3.2 Effect; Effective Date of Assignment. Upon delivery to
the Administrative Agent and Borrower of a notice of assignment
executed by the assigning Lender and the Purchaser, such assignment
shall become effective on the effective date specified in such notice
of assignment. The notice of assignment shall contain a representation
by the Purchaser to the effect that none of the consideration used to
make the purchase of the Commitment and the Loan under the applicable
assignment agreement are "plan assets" as defined under ERISA and that
the rights and interests of the Purchaser in and under the Loan
Documents will not be "plan assets" under ERISA. On and after the
effective date of such assignment, such Purchaser shall for all
purposes be a Lender party to this Agreement and any other Loan
Document executed by the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same extent as
if it were an original party hereto, and no further consent or action
by Borrower, the Lenders or the Administrative Agent shall be required
to release the transferor Lender for matters arising after such sale
with respect to the percentage of the Commitment and Advances assigned
to such Purchaser. Upon the consummation of any assignment to a
Purchaser pursuant to this Section 13.3.2, the transferor Lender, the
Administrative Agent and Borrower shall make appropriate arrangements
so that replacement Notes are issued to such transferor Lender and new
Notes or, as appropriate, replacement Notes, are issued to such
Purchaser, in each case in principal amounts reflecting their
respective Commitments, as adjusted pursuant to such assignment.
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, and
(d) all out-of-pocket expenses incurred by the Syndication Agent in arranging
for the joinder of Lenders in this Agreement. 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 wilful 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 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower
and the Lenders and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents. Any assignee or transferee of the Notes agrees by acceptance
thereof to be bound by all the terms and provisions of the Loan Documents.
Any request, authority or consent of any Person, who at the time of making such
request or giving such authority or consent is the holder of the Notes, shall
be conclusive and binding on any subsequent holder, transferee or assignee of
such Notes or of any note or notes issued in exchange therefor.
Section XIV.13 Entire Agreement; Modification of Agreement. The Loan Documents
embody the entire agreement among the Borrower, Guarantors, Administrative
Agent, and Lenders and supersede all prior conversations, agreements,
understandings, commitments and term sheets among any or all of such parties
with respect to the subject matter hereof. Any provisions of this Agreement may
be amended or waived if, but only if, such amendment or waiver is in writing and
is signed by the Borrower, and Administrative Agent if the rights or duties of
Administrative Agent are affected thereby, and
(a) each of the Lenders if such amendment or waiver
(i) reduces or forgives any payment of principal or interest on the
Obligations or any fees payable by Borrower to such Lender hereunder,
or modifies the provisions of Section 2.6 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) changes the definition of Required Lenders or modifies any
requirement for consent by each of the Lenders; or
(vii) modifies or waives any covenant contained in Sections 9.8(b), 9.8(d)
or 9.8(e) hereof; or
(b) the Required Lenders, to the extent expressly provided for herein and in
the case of all other waivers or amendments if no percentage of Lenders is
specified herein.
Section XIV.14 Dealings with the Borrower. The Lenders and their affiliates may
accept deposits from, extend credit to and generally engage in any kind of
banking, trust or other business with the Borrower or the Guarantors or any
other member of the Consolidated Group regardless of the capacity of the Lenders
hereunder.
Section XIV.15 Set-Off.
(a) If an Event of Default shall have occurred, each Lender shall have the
right, at any time and from time to time without notice to the Borrower,
any such notice being hereby expressly waived, to set-off and to
appropriate or apply any and all deposits of money or property or any other
indebtedness at any time held or owing by such Lender to or for the credit
or the account of the Borrower against and on account of all outstanding
Obligations and all Obligations which from time to time may become due
hereunder and all other obligations and liabilities of the Borrower under
this Agreement, irrespective of whether or not such Lender shall have made
any demand hereunder and whether or not said obligations and liabilities
shall have matured.
(b) Each Lender agrees that if it shall, by exercising any right of set-off or
counterclaim or otherwise, receive payment of a proportion of the aggregate
amount of principal, interest or fees due with respect to any Note held by
it which is greater than the proportion received by any other Lender in
respect of the aggregate amount of principal, interest or fees due with
respect to any Note held by such other Lender, the Lender receiving such
proportionately greater payment shall purchase such participations in the
Notes held by the other Lenders and such other adjustments shall be made as
may be required so that all such payments of principal, interest or Fees
with respect to the Notes held by the Lenders shall be shared by the
Lenders pro rata according to their respective Commitments.
Section XIV.16 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by the
Borrower and each of the Lenders shown on the signature pages hereof.
Section XIV.17 Limitation on Liability of EIP/WV. The liability of the Borrower
under this Agreement for the Obligations shall be joint and several. The Lenders
agree that, the liability of EIP/WV under this Agreement shall not exceed the
amount by which (A) the portion of the then-current Total Value attributable to
the Properties owned by EIP/WV exceeds (B) the then-current outstanding
principal balance of all Indebtedness (other than the Obligations) of EIP/WV
permitted under this Agreement, calculated in each case as of the Maturity Date
or the date of any earlier acceleration of the Obligations, as applicable. Such
maximum liability of EIP/WV shall be allocated on a pro rata basis among the
Notes in accordance with the Lenders' respective Percentages.
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.
0000 Xxxx Xxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Silver
Telecopy: (000) 000-0000
To Guarantors:
Equity Inns, Inc.
0000 Xxxx Xxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Silver
Telecopy: (000) 000-0000
Each of the above with a copy to:
Hunton & Xxxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxx 0000
XxXxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Best
Telecopy: (000) 000-0000
To each Lender:
As shown below the Lenders' signatures.
To the Administrative Agent:
The First National Bank of Chicago
Corporate Real Estate Division
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxxx Xxxxx
Telecopy: (000) 000-0000
With a copy to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
To the Syndication Agent:
Credit Lyonnais
Lodging Group
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
To the Documentation Agent:
Nationsbank, N.A.
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxx
Telecopy: (000) 000-0000
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/ Xxxxxx X. Xxxxxxx
Title: Executive VP & CFO
EQUITY INNS WEST VIRGINIA PARTNERSHIP, L.P.
By: EQUITY INNS SERVICES, INC., its General Partner
By: /s/ Xxxxxx X. Xxxxxxx
Title: Executive VP & CFO
EQUITY INNS PARTNERSHIP II, L.P.
By: EQUITY INNS TRUST, its General Partner
By: /s/ Xxxxxx X. Xxxxxxx
Title: Executive VP & CFO
LENDERS: THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Xxxxxxxx Xxxxx
Title: Managing Director
Commitment: $50,000,000.00
Percentage of Aggregate Commitment: 22.7790%
Address for Notices:
Corporate Real Estate Division
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxxx Xxxxx
Telephone: 312/000-0000
Telecopy: 312/732-1117
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Xxxxxx X. Xxxxxxxx
Title: First Vice President
Commitment: $30,000,000.00
Percentage of Aggregate Commitment: 13.6674%
Address for Notices:
Lodging Group
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telephone: 212/000-0000
Telecopy: 212/261-7532
NATIONSBANK, N.A.
By: /s/ Xxxxx Xxxx
Title: Vice President
Commitment: $30,000,000.00
Percentage of Aggregate Commitment: 13.6674%
Address for Notices:
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxx
Telephone: 404/000-0000
Telecopy: 404/607-4145
AMSOUTH BANK
By: /s/ Xxxxxxxx Xxxxx
Title: VP
Commitment: $30,000,000.00
Percentage of Aggregate Commitment: 13.6674%
Address for Notices:
0000 Xxxxx Xxxxxx Xxxxx
XxXxxxx-Xxxxx Tower, 9th Floor
Birmingham, Alabama 35203
Attention: Xxxxxxxx Xxxxx
Telephone: 205/000-0000
Telecopy: 205/326-4075
PNC BANK, NATIONAL ASSOCIATION
As successor by merger to PNC Bank, Kentucky, Inc.
By: /s/ Xxxxx Xxxxxxxxx
Title: Vice President
Commitment: $30,000,000.00
Percentage of Aggregate Commitment: 13.6674%
Address for Notices:
PNC Bank, N.A.
Mail Stop P1-Xxxx-19-2
19th Floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Telephone: 412/000-0000
Telecopy: 412/762-6500
NATIONAL BANK OF COMMERCE
By: /s/ Xxxxx Xxxxx
Title: Vice President
Commitment: $17,500,000.00
Percentage of Aggregate Commitment: 7.9727%
Address for Notices:
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx Xxxxx
Telephone: 901/000-0000
Telecopy: 901/757-4883
XXXXX XXX COMMERCIAL BANK, LTD., New York Branch
By: /s/ Wan-Tu Yeh
Title: VP & General Manager
Commitment: $15,000,000.00
Percentage of Aggregate Commitment: 6.8337%
Address for Notices:
Xxx Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxx
Telephone: 212/000-0000
Telecopy: 212/390-0120
UNION PLANTERS BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxxxx Xxxxx
Title: Vice President
Commitment: $9,500,000.00
Percentage of Aggregate Commitment: 4.3280%
Address for Notices:
0000 Xxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxxxx Xxxxx
Telephone: 901/000-0000
Telecopy: 901/580-5451
FIRST TENNESSEE BANK
By: /s/ Xxxxxx Xxxxxx
Title: Vice President
Commitment: $7,500,000.00
Percentage of Aggregate Commitment: 3.4169%
Address for Notices:
000 Xxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Telephone: 901/000-0000
Telecopy: 901/523-4235
ADMINISTRATIVE AGENT THE FIRST NATIONAL BANK OF CHICAGO
AND BOOKRUNNER:
By: /s/ Xxxxxxxx Xxxxx
Title: Managing Director
Address for Notices:
Corporate Real Estate Division
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxxx Xxxxx
Telephone: 312/000-0000
Telecopy: 312/732-1117
SYNDICATION AGENT CREDIT LYONNAIS NEW YORK BRANCH
AND BOOKRUNNER:
By: /s/ Xxxxxx X. Xxxxxxxx
Title: First Vice President
DOCUMENTATION AGENT: NATIONSBANK, N.A.
By: /s/ Xxxxx Xxxx
Title: Vice President
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/ Xxxxxx X. Xxxxxxx
Title: Executive VP & CFO
EQUITY INNS TRUST
By: /s/ Xxxxxx X. Xxxxxxx
Title: Executive VP & CFO
EXHIBIT A
PERCENTAGES
First Chicago B 22.7790%
Credit Lyonnais B 13.6674%
AmSouth B 13.6674%
Nationsbank B 13.6674%
PNC Bank, National Association B 13.6674%
National Bank of Commerce B 7.9727%
Xxxxx Xxx Commercial Bank, Ltd., New York Branch B 6.8337%
Union Planters Bank, National Association B 4.3280%
First Tennessee Bank B 3.4169%
EXHIBIT B
FORM OF [AMENDED AND RESTATED] NOTE
$_________________________ June _____, 1999
On or before the Maturity Date, as defined in that certain Amended and
Restated Unsecured Revolving Credit Agreement dated as of June ___, 1999 (the
"Agreement") among EQUITY INNS PARTNERSHIP, L.P., a Tennessee limited
partnership, EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P., a Tennessee limited
partnership and EQUITY INNS PARTNERSHIP II, L.P., a Tennessee limited
partnership (collectively, "Borrower"), Credit Lyonnais New York Branch,
individually and as Syndication Agent, Nationsbank, N.A., individually and as
Documentation Agent, The First National Bank of Chicago, a national bank
organized under the laws of the United States of America, individually and as
Administrative Agent for the Lenders (as such terms are defined in the
Agreement), and the other Lenders listed on the signature pages of the
Agreement, Borrower promises to pay to the order of _________________________
(the "Lender"), or its successors and assigns, the principal sum of AND NO/100
DOLLARS ($ ) or the aggregate unpaid principal amount of all Loans made
by the Lender to the Borrower pursuant to Section 2.1 of the Agreement, in
immediately available funds at the office of the Administrative Agent in
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.
[This Amended and Restated Note amends and restates in its entirety that certain
Note dated ________________ in the amount of $_____________ made by Borrower in
favor of Lender.]
The Lender shall, and is hereby authorized to, record on the schedule attached
hereto, or to otherwise record in accordance with its usual practice, the date
and amount of each Advance and the date and amount of each principal
payment hereunder.
This Note is issued pursuant to, and is entitled to the security under and
benefits of, the Agreement and the other Loan Documents, to which Agreement
and Loan Documents, as they may be amended from time to time, reference is
hereby made for, inter alia, a statement of the terms and conditions under which
this Note may be prepaid or its maturity date accelerated. Capitalized terms
used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.
If there is an Event of Default or Default under the Agreement or any other
Loan Document and Lender exercises its remedies provided under the Agreement
and/or any of the Loan Documents, then in addition to all amounts recoverable
by the Lender under such documents, Lender shall be entitled to receive
reasonable attorneys fees and expenses 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 14.17 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 Notation
Date Balance Made by
EXHIBIT C
FINANCEABLE GROUND LEASES -- CURRENTLY APPROVED
1. Mt. Brook, AL
2. Camelback, AZ
3. Atlanta, GA
4. Glen Burnie, MD
5. Traverse City, MI (Partial)
6. Tinton Falls, NJ
7. Nashville, TN
8. Sycamore, TN
9. Rutland, VT (Partial)
10. Norfolk, VA
EXHIBIT D
FORM OF GUARANTY
This Guaranty made as of June ___, 1999, by Equity Inns, Inc., Equity
Inns Services, Inc. and Equity Inns Trust (collectively, "Guarantor"), to and
for the benefit of The First National Bank of Chicago, individually ("First
Chicago"), 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
unsecured revolving credit facility available to Borrower in the aggregate
principal amount of up to $219,500,000 ("Facility").
B. Lender has agreed to make available the Facility to Borrower
pursuant to the terms and conditions set forth in an Amended and Restated
Unsecured 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 Amended and Restated Promissory Notes each of even date in the
aggregate principal amount of $219,500,000 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
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 wilful 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. ' 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 Xxxx 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.
0000 Xxxx Xxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Silver
Telecopy: (000) 000-0000
With a copy to:
Hunton & Xxxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxx 0000
XxXxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Best
Telecopy: (000) 000-0000
To the Lender:
c/o The First National Bank of Chicago, as agent
Corporate Real Estate Division
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxxx Xxxxx
Telecopy: (000) 000-0000
With a copy to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
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 portion of the then-current Total Value attributable to the
Properties owned by EIP/WV exceeds (B) the then-current
outstanding principal balance of all Indebtedness (other than the
Obligations) of EIP/WV permitted under the Revolving Credit
Agreement, calculated in each case as of the Maturity Date or the
date of any earlier acceleration of the Obligations, as applicable.
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 June, 1999.
------------------------------------
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 June, 1999.
------------------------------------
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 June, 1999.
------------------------------------------
Notary Public
EXHIBIT E
OPINION OF TENNESSEE COUNSEL
EXHIBIT F
OPINION OF ILLINOIS COUNSEL
EXHIBIT G
WIRING INSTRUCTIONS
To: The First National Bank of Chicago,
as Administrative Agent (the "Agent")
under the Credit Agreement Described Below
Re: Amended and Restated Unsecured Revolving Credit Agreement, dated as
of June ___, 1999 (as amended, modified, renewed or extended from
time to time, the "Agreement"), among Equity Inns Partnership, L.P.
and Equity Inns/West Virginia Partnership, L.P. (collectively, the
"Borrower"), The First National Bank of Chicago, individually and
as Administrative Agent, Credit Lyonnais New York Branch,
individually and as Syndication Agent, Nationsbank, N.A.,
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
Transfer Funds To
For Account No.
Reference/Attention To
Authorized Officer (Customer Representative) Date_______________________
___________________ ___________________________
(Please Print) Signature
Bank Officer Name Date_______________________
___________________ ___________________________
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
EXHIBIT H
FORM OF COMPLIANCE CERTIFICATE
Under Amended and Restated Credit Agreement dated as of June ___, 1999, between
Equity Inns Partnership, L.P. and Equity Inns / West Virginia Partnership, L.P.
as Borrower and The First National Bank of Chicago ("First Chicago") as
Administrative agent, Credit Lyonnais New York Branch as Syndication Agent,
Nationsbank, N.A., as Documentation Agent, and the Lenders defined there in (the
"Credit Agreement").
The undersigned, as _____________ of Equity Inns Partnership L.P. and as
___________ of Equity Inn / West Virginia Partnership L.P., pursuant to
Section 8.2 of the Credit Agreement, hereby, certifies to First Chicago as
Administrative Agent as follows:
1. A review of the activities of Borrower during the most recent ended
fiscal quarter (which quarter ended _______) of the Borrower has been
made under my supervision.
2. As of the date hereof, all of the representations and warranties of
Borrower contained in the Credit Agreement and each of the Loan
Documents (as defined in the Credit Agreement) are true and correct in
all material respects (except to the extent that they speak to a
specific date or are based on facts which have changed by transactions
expressly contemplated or permitted by the Credit Agreement).
3. No event has occurred and is continuing which constitutes a Default or
a Potential Default
4. The following Borrowing Base computation for the most recent ended
fiscal quarter, together with the supporting schedule attached hereto
is true and correct:
A. Value of the Borrowing Base $______________________
B. 50% of the Borrowing Base $______________________
C. Allocated Facility Amount $______________________
D. FF&E Deficiency $______________________
E. Consolidated Senior Unsecured Debt $______________________
E must be less than or
Equal to B
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 Sales, Encumbrances and Transfers of Assets.
A. Total value of Properties sold, encumbered
or transferred other than to members
of the Consolidated Group for the past
four quarters $______________________
B. 15% of Total Value $______________________
A must be less than or
equal to B
9.4 Dividends
I. A. Total dividends for the past
four quarters $______________________
B. 90% of the Funds From Operations
for the past four quarters $______________________
A must be less than or
equal to B
II. A. Total dividends for the past
four quarters $______________________
B. Dividends paid on stock issued
in the past quarter $______________________
C. A minus B $______________________
E. 100% of Free Cash Flow $______________________
C must be less than or
equal to B
9.7 FF&E Expenditures.
A. Total actual expenditures of the
Consolidated Group for FF&E replacement
and approved capital improvements for
the Properties for the past four
quarters. $______________________
B. Amount of reserves maintained on the
balance sheet on the last day of the
period by the Consolidated Group for
FF&E replacement and approved capital
improvements $______________________
C. Sum of A plus B $______________________
D. 4% of gross room revenues for the past
four quarters for the Properties $______________________
C must be greater than
or equal to D
9.8(a) Limitation on Secured Debt
A. Consolidated Secured Debt $______________________
B. Principal balance of REMIC Loan $______________________
C. A minus B $______________________
D. 15% of Total Value $______________________
C must be less than or
equal to D
9.8(b) Leverage Limitation
A. Consolidated Total Indebtedness $______________________
B. 50% of Total Value $______________________
C. 50% of Total Cost $______________________
A must be less than or
equal to B
A must be less than or
equal to C
9.8(c) Minimum Tangible Net Worth.
A. Tangible Net Worth of the Consolidated
Group $______________________
B. 85% of Tangible Net Worth at 6/30/97 $______________________
C. 50% of equity interest issued after
6/30/97 $______________________
D. Sum of B and C $______________________
A must be greater than
or equal to D
9.8(d) Minimum Fixed Charge Coverage
A. Adjusted EBITDA for the 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 2.00
9.8(e) 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 2.50
8.3(i) Limitations on hotels under construction
A. Aggregate book value of all hotels
under construction $______________________
B. 10% of Total Value $______________________
A must be less than or
equal to B
8.3(ii) Limitation on contracts to purchase hotels under construction
A. Aggregate book value of all hotels
under construction $______________________
B. Aggregate obligation to purchase
hotels under construction $______________________
C. A plus B $______________________
D. 25% of Total Value $______________________
C must be less than or
equal to D
8.3(iii)
A. Total rooms in all Properties $______________________
B. Total rooms leased under Permitted
Operating Leases $______________________
C. B divided by A $______________________
C should be greater than
or equal to 85%
8.3(iv)
A. Total Value $______________________
B. 40% of Total Value $______________________
C. Total Value attributable to a single
tenant or single group of tenants which
are Affiliates of each other (other than
Interstate Hotels Management, Inc. and
its affiliates) under Permitted Operating
Leases $______________________
D. 80% of Total Value $______________________
E. Total Value attributable to Crossroads/
Memphis Partnership LLC, Crossroads Future
Company LLC or another entity directly or
indirectly wholly owned by Interstate
Hotels Management, Inc. under Permitted
Operating Leases $______________________
E must be less than or
equal to D
6. The following computation of the limits in inbedded in the definitions,
together with the supporting schedule attached hereto, are true and
correct.
Limitations on Unencumbered Assets:
A. Value of Unencumbered Assets $______________________
B. Value of Properties included in
Unencumbered Assets subject to a
Major Ground Lease $______________________
C. B divided by A _____________________%
C must be less than or
equal to 15%
Limitations in Borrowing Base
A. Value of Unencumbered Assets $______________________
B. Value of largest single Property
included in Value of Unencumbered
Assets $______________________
C. B divided by A _____________________%
C must be less than or
equal to 10%
D. Largest Value of all Properties
located in a single state included
in the Value of Unencumbered Assets $______________________
E. D divided by A $______________________
E must be less than or
equal to 25%
F. Total Value of Properties operated by or
leased under Permitted Operating Leases
to a single tenant or single group of
tenants which are affiliates of each other
(excluding Interstate Hotels Management,
Inc. and its affiliates but including Prime
Hospitality Corporation or a subdidiary
thereof) $______________________
G. F divided by A $______________________
G must be less than or
equal to 45%
H. Total Value of Properties included in the
Value of Unencumbered Assets which are
premium limited service hotels $______________________
I. Total Value of Properties included in the
Value of Unencumbered Assets which
are premium extended stay hotels $______________________
J. Total Value of Properties included in the
Value of Unencumbered Assets which are
all-suite hotels $______________________
K. Total Value of Properties included in the
Value of Unencumbered Assets which are
full service hotels $______________________
L. Sum of H, I, J, and K $______________________
M. L divided by A _____________________%
M must be greater than
or equal to 80%
N. Total Value of Properties included in
the Value of Unencumbered Assets which
are operated as Hampton Inns $______________________
O. Total Value of Properties included in
the Value of unencumbered Assets which
are operated as Homewood Suites $______________________
P. Total Value of Properties included in
the Value of Unencumbered Assets which
are operated as Residence Inns $______________________
Q. Total Value of Properties included in
the Value of Unencumbered Assets which
are operated as AmeriSuites $______________________
R. Sum of N, O, P, and Q $______________________
S. R divided by A _____________________%
S must be greater than
or equal to 80%
Date:_______________
By:_______________________________________
Name:_____________________________________
Title:____________________________________
SCHEDULE I
CALCULATION OF COVENANTS
1. Value of Unencumbered Assets
A. For Properties other than New Properties (see schedule B)
1. Property Operating Income $______________________
2. Agreed FF&E Reserve $______________________
3. 1 minus 2 $______________________
4. 3 divided by .115 $______________________
B. Total Book Value of New Properties
(see schedule B) ______________________
C. Sum of A (4) plus B is Value of
Unencumbered Assets $______________________
Note: Schedule B shall contain a detailed listing of all properties in the
Unencumbered Assets and will at a minimum detail the calculation of Property
Operating Income, Agreed FF&E Reserve, book value or gross Room Revenues for the
past four quarters, where applicable, and actual FF&E replacement and approved
capital improvements.
2. Total Value
A. Total cash and Cash Equivalents _______________________
B. For all Properties other than New
Properties (See Schedules B and C)
1. Aggregate Property Operating Income _______________________
2. Agreed FF&E Reserve _______________________
3. 1 minus 2 _______________________
4. 3 divided by .115 _______________________
C. Total Book Value of New Properties owned
by a Member of the Consolidated Group
(See Schedule B and C) _______________________
D. For Properties other than New Properties
owned by an Investment Affiliate
(See Schedule C)
1. Consolidated Group Pro Rata Share
of aggregate Property Income $______________________
2. Applicable Agreed FF&E Reserve $______________________
3. 1 minus 2 $______________________
4. 3 divided by .115 $______________________
E. For New Properties owned by an
Investment Affiliate, the Consolidated
Group Pro Rata Share of the aggregate
book value $______________________
F. Sum of A, B(4), C, D(4) and E $______________________
(Note: Schedule C shall contain a detailed listing of all properties
not in the Unencumbered Assets and will at a minimum detail the calculation of
Property Operating Income, Agreed FF&E Reserve, book value or gross Room
Revenues for the past four quarters, where applicable, and actual FF&E
replacement and approved capital improvements.
3. Total Cost
A. Book Value of all Properties owned
by the Consolidated Group $______________________
B. Accumulated Depreciation on such
Properties $______________________
C. Consolidated Group Pro Rata Share of
the book value of all properties owned
by Investment 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 $______________________
4. 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 (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 $______________________
5. Adjusted 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 $______________________
C. All extraordinary items included
in A or B $______________________
D. All gains or losses from sale of
assets $______________________
X. Xxxxx Hotel Room Revenue $______________________
F. Sum of A and B less C, D and E $______________________
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 $______________________
C. Sum of A plus B $______________________
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 $______________________
D. Preferred Stock Expense $______________________
E. Ground Lease Expense $______________________
F. Sum of A, B, C, D, and E $______________________
8. Free Cash Flow for the past four Quarters
A. Funds From Operations for the past
four quarters $______________________
B. Aggregate Room Revenue for the past
four quarters on all Properties $______________________
C. B multiplied by 4%. $______________________
D. Scheduled principal payments on all
Indebtedness of the Consolidated
Group for the past four quarters $______________________
E. A minus C minus D $______________________
EXHIBIT I
SCOPE OF WORK FOR ENVIRONMENTAL INVESTIGATIONS
EXHIBIT J
FORM OF ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
______________ (the "Assignor") and __________________ (the "Assignee") is dated
as of _____________, 19___. The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to an Amended and
Restated Unsecured Revolving Credit Agreement (which, as it may be amended,
modified, renewed or extended from time to time is herein called the "Credit
Agreement") described in Item 1 of Schedule 1 attached hereto ("Schedule 1").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
the Assignee, and the Assignee hereby purchases and assumes from the Assignor,
an interest in and to the Assignor's rights and obligations under the Credit
Agreement such that after giving effect to such assignment the Assignee shall
have purchased pursuant to this Assignment Agreement the percentage interest
specified in Item 3 of Schedule 1 of all outstanding rights and obligations
under the Credit Agreement and the other Loan Documents. The aggregate
Commitment (or Loans, if the applicable Commitment has been terminated)
purchased by the Assignee hereunder is set forth in Item 4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of Schedule
1 or two (2) Business Days (or such shorter period agreed to by the
Administrative Agent) after a Notice of Assignment substantially in the form of
Exhibit "I" attached hereto has been delivered to the Agent. In no event will
the Effective Date occur if the payments required to be made by the Assignee to
the Assignor on the Effective Date under Sections 4 and 5 hereof are not made on
the proposed Effective Date, unless otherwise agreed to in writing by Assignor
and Assignee. The Assignor will notify the Assignee of the proposed Effective
Date no later than the Business Day prior to the proposed Effective Date. As of
the Effective Date, (i) the Assignee shall have the rights and obligations of a
Lender under the Loan Documents with respect to the rights and obligations
assigned to the Assignee hereunder and (ii) the Assignor shall relinquish its
rights and be released from its corresponding obligations under the Loan
Documents with respect to the rights and obligations assigned to the Assignee
hereunder.
4. PAYMENTS OBLIGATIONS. On and after the Effective Date, the Assignee
shall be entitled to receive from the Administrative Agent all payments of
principal, interest and fees with respect to the interest assigned hereby. The
Assignee shall advance funds directly to the Administrative Agent with respect
to all Loans and reimbursement payments made on or after the Effective Date with
respect to the interest assigned hereby. [In consideration for the sale and
assignment of Loans hereunder, (i) the Assignee shall pay the Assignor, on the
Effective Date, an amount equal to the principal amount of the portion of all
Adjusted Alternate Base Rate Loans assigned to the Assignee hereunder and (ii)
with respect to each ratable LIBOR Advance made by the Assignor and assigned to
the Assignee hereunder which is outstanding on the Effective Date, (a) on the
last day of the Interest Period therefor or (b) on such earlier date agreed to
by the Assignor and the Assignee or (c) on the date on which any such Loan
either becomes due (by acceleration or otherwise) or is prepaid (the date as
described in the foregoing clauses (a), (b) or (c) being hereinafter referred to
as the "Fixed Due Date"), the Assignee shall pay the Assignor an amount equal to
the principal amount of the portion of such Loan assigned to the Assignee which
is outstanding on the Fixed Due Date. If the Assignor and the Assignee agree
that the applicable Fixed Due Date for such Loan shall be the Effective Date,
they shall agree, solely for purposes of dividing interest paid by the Borrower
on such Loan, to an alternate interest rate applicable to the portion of such
Loan assigned hereunder for the period from the Effective Date to the end of the
related Interest Period (the "Agreed Interest Rate") and any interest received
by the Assignee in excess of the Agreed Interest Rate, with respect to such Loan
for such period, shall be remitted to the Assignor. In the event a prepayment of
any Loan which is existing on the Effective Date and assigned by the Assignor to
the Assignee hereunder occurs after the Effective Date but before the applicable
Fixed Due Date, the Assignee shall remit to the Assignor any excess of the
funding indemnification amount paid by the Borrower under Section 4.4 of the
Credit Agreement an account of such prepayment with respect to the portion of
such Loan assigned to the Assignee hereunder over the amount which would have
been paid if such prepayment amount were calculated based on the Agreed Interest
Rate and only covered the portion of the Interest Period after the Effective
Date. The Assignee will promptly remit to the Assignor (i) the portion of any
principal payments assigned hereunder and received from the Administrative Agent
with respect to any such Loan prior to its Fixed Due Date and (ii) any amounts
of interest on Loans and fees received from the Administrative Agent which
relate to the portion of the Loans assigned to the Assignee hereunder for
periods prior to the Effective Date, in the case of ratable Adjusted Alternate
Base Rate Loans or Fees, or the Fixed Due Date, in the case of LIBOR Loans, and
not previously paid by the Assignee to the Assignor.]* In the event that either
party hereto receives any payment to which the other party hereto is entitled
under this Assignment Agreement, then the party receiving such amount shall
promptly remit it to the other party hereto.
5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the Assignor
a fee on each day on which a payment of interest 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
________________, 19___
To: [NAME OF ADMINISTRATIVE AGENT]
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
i) We refer to that Unsecured Revolving Credit Agreement (the
"Credit Agreement") described in Item 1 of Schedule 1 attached
hereto ("Schedule 1"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to
them in the Credit Agreement.
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 ______________, 19__ (the "Assignment"),
pursuant to which, among other things, he 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
present.
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 THE FIRST NATIONAL BANK OF CHICAGO
as Administrative Agent
By:______________________________
Title:___________________________
(Attach photocopy of Schedule 1 to Assignment)
SCHEDULE 6.19
ENVIRONMENTAL COMPLIANCE
None.
SCHEDULE 6.24
TRADE NAMES
None.
SCHEDULE 6.25
SUBSIDIARIES (BORROWERS)
Name Entity Type Percentage Ownership
-------------------------- ------------------- ----------------------------
EQI Financing Tennessee 99% limited partner interest
Partnership I, L.P. limited partnership by Operating Partnership
Equity Inns/West Tennessee 99% limited partner interest
Virginia Partnership, L.P. limited partnership by Operating Partnership
SCHEDULE 6.26
UNENCUMBERED ASSETS
Albany, NY
Traverse City, MI
Arlington, TX
Xxxxxxx, WVA
Bluefield, WVA
Oak Hill, WVA
Wilkesboro,
State College, PA
Rutland, VT
Scranton, PA
Glen Burnie, MD
Hartford, CN
Scottsdale, AZ
Chattanooga, TN
Burlington, VT
Colorado Springs, CO
Oklahoma City, OK
Savannah, GA
Norfolk, VA
Pickwick, TN
Addison, TX
Atlanta-Northlake, GA
Mountain Brook, AL
Vestavia, AL
Chapel Hill, NC
Charleston-Airport, SC
Colorado Springs-I 25 N, CO
Columbia, SC
Denver-Aurora, CO
Detroit-Madison Heights, MI
Dublin, OH
Little Rock, AR
Memphis-Poplar, TN
Memphis-Sycamore View, TN
Nashville-Xxxxxx Parkway, TN
St. Louis-Westport, MO
Germantown, TN
Augusta, GA
Xxxxx Xxxxxxxx, XX
Xxxxxxxxxxxx Xxxxx, XX
Winston-Salem, NC
Cincinnati (Blue Ash), OH
Jacksonville, FL
Miami, FL
Tampa, FL
San Antonio (Hampton Inn), TX
Boise, ID
Xxxxxxx (Memphis), TN
Somers Point, NJ
Albuquerque, NM
Baltimore, MD
Baton Rouge, LA
Birmingham (AmeriSuites), AL
Las Vegas, NV
Miami (Xxxxxxx), FL
Minneapolis, MN
Nashville (AmeriSuites), TN
Seattle, WA
Borrower represents and warrants that all of the foregoing Unencumbered Assets
are owned by the Operating Partnership, except for those located in West
Virginia, which are owned by EIP/WV and those in Boise, ID and Somers Point, NJ,
which are owned by Equity II.
SCHEDULE 7.16
SUBSIDIARIES (GUARANTORS)
Name Entity Type Percentage Ownership
------------------------- -------------------- -------------------------
Equity Inns Trust Maryland real estate 100% by Equity Inns, Inc.
investment trust
Equity Inns Tennessee approximately 96.5% by
Partnership, L.P. limited partnership by Equity Inns Trust
1% by EQI Financing
EQI Financing Tennessee Corporation; 99% by
Partnership I, L.P. limited partnership Operating Partnership
EQI Financing Corporation Tennessee corporation 100% by Equity Inns Trust
1% by Equity Inns
Equity Inns/West Tennessee Services, Inc.; 99% by
Virginia Partnership, L.P. limited partnership by Operating Partnership
Equity Inns Services, Inc Tennessee corporation 100% by Equity Inns, Inc.
1% by Equity Inns Trust;
Equity Inns Partnership Tennessee 99% by Operating
II, L.P. limited partnership Partnership
1% by EQI Financing
EQI Financing Partnership Tennessee Corporation II; 99% by
II, L.P. limited partnership Operating Partnership
EQI Financing
Corporation II Tennessee corporation 100% by Equity Inns Trust
1% by Equity Financing
EQI/WV Financing Tennessee Corporation II; 99% by
Partnership, L.P. limited partnership Operating Partnership
