EXHIBIT 10.1
AMENDED AND RESTATED
SECURED REVOLVING CREDIT AGREEMENT
DATED AS OF JUNE 11, 2003
AMONG
EQUITY INNS PARTNERSHIP, L.P.,
EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P.
AND
EQUITY INNS PARTNERSHIP II, L.P.,
AS BORROWER
AND
BANK ONE, NA,
CREDIT LYONNAIS NEW YORK BRANCH,
FLEET NATIONAL BANK,
NATIONAL BANK OF COMMERCE,
AMSOUTH BANK,
AND
UNION PLANTERS BANK, NATIONAL ASSOCIATION
AS LENDERS
AND
BANK ONE, NA,
AS ADMINISTRATIVE AGENT,
BANC ONE CAPITAL MARKETS, INC.,
AS CO-LEAD ARRANGER/SOLE BOOK MANAGER,
CREDIT LYONNAIS NEW YORK BRANCH,
AS SYNDICATION AGENT AND CO-LEAD ARRANGER
FLEET NATIONAL BANK
AS DOCUMENTATION AGENT
SECURED REVOLVING CREDIT AGREEMENT
THIS AMENDED AND RESTATED SECURED REVOLVING CREDIT AGREEMENT is entered
into as of June 11, 2003, by and among the following:
EQUITY INNS PARTNERSHIP, L.P., a Tennessee limited partnership having
its principal place of business at c/o Equity Inns, Inc., 0000 Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000 ("Operating Partnership"), the sole
general partner of which is Equity Inns Trust;
EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P., a Tennessee limited
partnership having its principal place of business c/o Equity Inns, Inc., 0000
Xxxx Xxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000 ("EIP/WV"), the sole general
partner of which is Equity Inns Services, 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");
BANK ONE, NA ("Bank One"), a national bank organized under the laws of
the United States of America having an office at 0 Xxxx Xxx 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;
FLEET NATIONAL BANK ("Fleet") having an office at 000 Xxxxxxxxx Xxxxxx
Xxxxx X.X., Xxxxx 000, Xxxxxxx, Xxxxxxx 00000;
NATIONAL BANK OF COMMERCE, having an office at 0000 Xxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxx 00000;
AMSOUTH BANK ("AmSouth"), a state banking corporation, having an office
at 0000 Xxxxx Xxxxxx Xxxxx, XxXxxxx-Xxxxx Tower, 0xx Xxxxx, Xxxxxxxxxx, Xxxxxxx
00000;
UNION PLANTERS BANK, NATIONAL ASSOCIATION, having an office at 0000
Xxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxx, Xxxxxxxxx 00000;
BANC ONE CAPITAL MARKETS, INC. ("BOCM"), as Co-Lead Arranger/Sole Book
Manager;
CREDIT LYONNAIS, as Syndication Agent ("Syndication Agent") and Co-Lead
Arranger;
FLEET NATIONAL BANK, as Documentation Agent ("Documentation Agent");
and
BANK ONE, as Administrative Agent ("Administrative Agent") for the
Lenders (as defined below).
RECITALS
A. The Borrower is primarily engaged in the business of acquiring,
developing and owning premium limited service, premium extended stay and
all-suite and full service hotel properties.
B. The Borrower, the Administrative Agent, and certain other lenders have
previously entered into a Secured Revolving Credit Agreement dated as of October
26, 2000 (the "Existing Agreement").
C. Borrower desires to modify the terms under the Existing Agreement to
provide, among other things, for an extension of the Maturity Date, reduction of
the Aggregate Commitment, and the Substitution of Fleet National Bank for Bank
of America as a Lender.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree to amend and restate the Existing
Agreement in its entirety as follows:
Article I.
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Definitions. As used in this Agreement, the following terms
have the meanings set forth below:
"ABR Applicable Margin" means, as of any date with respect to any
Adjusted Alternate Base Rate Advance, the Applicable Margin in effect for such
Adjusted Alternate Base Rate Advance as determined in accordance with Section
2.6 hereof.
"Adjusted Alternate Base Rate" means a floating interest rate equal to
the Alternate Base Rate plus the ABR Applicable Margin changing when and as the
Alternate Base Rate and ABR Applicable Margin changes.
"Adjusted Alternate Base Rate Advance" means an Advance that bears
interest at the Adjusted Alternate Base Rate.
"Adjusted EBITDA" means, for any period, EBITDA adjusted to deduct from
EBITDA the sum of (a) the Agreed FF&E Reserve for all Properties of the
Consolidated Group during such period plus (b) the Consolidated Group Pro Rata
Share of the Agreed FF&E Reserve for all Properties of Investment Affiliates
during such period.
"Adjusted LIBOR Rate" means, with respect to a LIBOR Advance for any
day during the relevant LIBOR Interest Period, the sum of (i) the quotient of
(a) the Base LIBOR Rate applicable to such LIBOR Interest Period, divided by (b)
one minus the Reserve Requirement (expressed as a decimal) applicable to such
LIBOR Interest Period, plus the LIBOR Applicable Margin in effect on such day.
"Adjusted Net Operating Income" means, with respect to any Property,
Net Operating Income for such Property less the Agreed FF&E Reserve for such
Property.
"Administrative Agent" means Bank One, acting as agent for the Lenders
in connection with the transactions contemplated by this Agreement, and its
successors in such capacity.
"Advance" means a loan to the Borrower hereunder by one or more of the
Lenders pursuant to Section 2.1 hereof, whether such Advances are from time to
time, Adjusted Alternate Base Rate Advances, LIBOR Advances or Swingline Loans.
"Affiliate" means any Person directly or indirectly controlling,
controlled by or under direct or indirect common control with any other Person.
A Person shall be deemed to control another Person if the controlling Person
owns ten percent (10%) or more of any class of voting securities of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Aggregate Commitment" means, as of any date, the sum of all of the
Lenders' then-current Commitments, which on the Agreement Effective Date shall
be $110,000,000, subject to Borrower's right to reduce the Aggregate Commitment
pursuant to Section 2.17 or to increase the Aggregate Commitment pursuant to
Section 2.18.
"Agreed FF&E Reserve" means, with respect to any period and Property,
4% of gross room revenues for such Property during such period.
"Agreement" means this Amended and Restated Secured Revolving Credit
Agreement and all amendments, modifications and supplements hereto.
"Agreement Effective Date" shall mean June 11, 2003.
"Allocated Facility Amount" means, at any time, the sum of all then
outstanding Advances (including all Swingline Loans) and the then Facility
Letter of Credit Obligations.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Commitment Fee Percentage" means, as of any date, the
percentage then in effect pursuant to the chart shown in Section 2.6.
"Applicable FCF Percentage": means for any given fiscal quarter, the
percentage set forth below in accordance with the ratio of Total Indebtedness to
EBITDA as of the last day of the preceding fiscal quarter and shall change upon
delivery of a compliance certificate to the Lenders in the form attached hereto.
Ratio of Total Indebtedness to EBITDA Applicable FCF Percentage
for preceding fiscal for current Quarter
Less than or equal to 4.5x 110%
Over 4.5x, but less than or equal to 4.75x 100%
Over 4.75x, but less than or equal to 5.00x 95%
Over 5.0x, but less than or equal to 5.25x 80%
"Applicable Margin" means the applicable margins set forth in the table
in Section 2.6 used to calculate the interest rate applicable to the various
types of Advances, which may vary from time to time in the manner set forth in
Section 2.6.
"Appraisal" shall mean an appraisal commissioned by the Administrative
Agent, and acceptable to the Administrative Agent and Required Lenders, in
compliance with the Financial Institutions Reform, Recovery and Enforcement Act
of 1989, as amended, and the regulations promulgated thereunder ("FIRREA") and
with the Uniform Standards of Professional Appraisal Practice.
"Appraisal Summary" shall mean a limited scope appraisal summary
updating the results of an Appraisal provided pursuant to the Existing
Agreement.
"Appraised Value" shall mean the "as-is" appraised value of a Property
as shown on an Appraisal, or if more recent, an Appraisal Summary.
"Approved Management Agreement" means a management agreement with a
tenant under a Permitted Operating Lease which (i) will not have an adverse
effect upon the Collateral or the execution of which shall not result in a
Default or an Event of Default (ii) contains terms which are commercially
reasonable and standard in the industry, (iii) is with any or all of the
following management companies or their Affiliates: Interstate Management, Prime
Hospitality, Starwood Hotels and Resorts, Bristol/Bass, Crestline Capital,
Marriott International, RFS Hotels, Bristol, Hilton, Waterford Hotel Group,
Inc., Xxxxxx Properties, Noble Properties, X.X. Hotels and any entity created
for the purposes of hotel management which was formed by individuals who as of
the Agreement Effective Date are directors and officers of Equity Inns, provided
such officers and directors continue to own a majority of the ownership
interests in such entity and have effective management control of such entity,
except that if there is a change in corporate ownership of any of the foregoing
named management companies, then upon notice from the Required Lenders such
company can be removed from the list of approved management companies for future
transactions unless it continues to be owned by one of the other companies on
the list of approved management companies, and (iv) unless such requirement has
been otherwise waived by the Administrative Agent, is subject to a
lender-manager agreement with the Administrative Agent having the subordination
provisions attached hereto as Exhibit P and made a part hereof and/or other
provisions which are reasonably satisfactory to the Administrative Agent in form
and substance regarding the subordination of such management agreement.
"Arrangers" means BOCM and Credit Lyonnais, collectively.
"Assignment of Contracts" means an Amended and Restated Assignment of
Contracts in the form of Exhibit O attached hereto and made a part hereof,
assigning the agreements relating to the Collateral.
"Assumed Debt Amount" is defined in Section 9.11 hereof.
"Bank One" means Bank One, NA.
"Base LIBOR Rate": means, with respect to a LIBOR Advance for the
relevant Interest Period, the applicable British Bankers' Association LIBOR rate
for deposits in U.S. dollars as reported by any generally recognized financial
information service as of 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period, and having a maturity equal to such
Interest Period, provided that, if no such British Bankers' Association LIBOR
rate is available to the Agent, the applicable Base LIBOR Rate for the relevant
Interest Period shall instead be the rate determined by the Agent to be the rate
at which Bank One or one of its Affiliate banks offers to place deposits in U.S.
dollars with first-class banks in the London interbank market at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, in the approximate amount of Bank One's relevant LIBOR Advance
and having a maturity equal to such Interest Period.
"Borrower" means, collectively the Operating Partnership, Equity II and
EIP/WV, on a joint and several basis, along with their respective permitted
successors and assigns.
"Borrowing Base" means, as of any date, the aggregate Collateral Pool
Asset Values of each then-current Collateral Pool Asset.
"Borrowing Base Availability" means, as of any date, the lesser of (a)
55% of the Borrowing Base or (b) the sum of (i) an amount which, if it were the
Allocated Facility Amount, would produce the Included Collateral Pool Debt
Service Coverage Ratio of 1.75 plus (ii) 55% of the aggregate Collateral Pool
Asset Values of any Excluded Properties and Properties Under Development,
subject to the limitations set forth in the definition of Eligible Property.
"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.
"Collateral" means all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by any
Security Document including, without limitation, the Collateral Pool Assets.
"Collateral Pool Assets" means the collective reference to the Initial
Collateral Pool Assets and any other Properties added as "Collateral Pool
Assets" from time to time under Section 2.20 hereof, provided that the term
"Collateral Pool Assets" as of any date shall not include any Collateral Pool
Asset which has been previously released from the applicable Mortgage under the
procedure set forth in Section 2.19(c) hereof (and not subsequently added as a
"Collateral Pool Asset" under Section 2.20).
"Collateral Pool Asset Value" means, as of any date, for each Included
Collateral Pool Asset the most recent Appraised Value, unless the Borrower has
owned such Collateral Pool Asset for less than a year, in which case Collateral
Pool Asset Value shall be the lesser of the all-in acquisition cost of such
Property or the Appraised Value. For the Excluded Properties and Properties
Under Development, the Collateral Pool Asset Value will be the lesser of (i) the
Total Cost of such Property, or (ii) the "stabilized" appraised value of such
Property as established by an Appraisal or if more recent, the Appraisal Summary
for such Property, based upon stabilization assumptions and projections approved
by the Administrative Agent.
"Commitment" means the obligation of each Lender, subject to the terms
and conditions of this Agreement and in reliance upon the representations and
warranties herein, to make Advances not exceeding in the aggregate the amount
set forth opposite its signature below, or the amount stated in any subsequent
amendment hereto.
"Commitment Fee" is defined in Section 2.7.
"Compliance Certificate" is defined in Section 8.2(v).
"Consolidated Group" means the Borrower, the Guarantors and any other
subsidiary partnerships or entities of any of them which are required under GAAP
to be consolidated with the Borrower and the Guarantors for financial reporting
purposes and does not include Investment Affiliates.
"Consolidated Group Pro Rata Share" means, with respect to any
Investment Affiliate, the percentage of the total equity ownership interests
held by the Consolidated Group in the aggregate, in such Investment Affiliate,
determined by calculating the greater of (i) the percentage of the issued and
outstanding stock, partnership interests or membership interests in such
Investment Affiliate held by the Consolidated Group in the aggregate and (ii)
the percentage of the total book value of such Investment Affiliate that would
be received by the Consolidated Group in the aggregate, upon liquidation of such
Investment Affiliate after repayment in full of all Indebtedness of such
Investment Affiliate.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with all or any of the entities in the
Consolidated Group, are treated as a single employer under Sections 414(b) or
414(c) of the Code.
"Debt Service" means for any period, (a) Interest Expense for such
period plus (b) the aggregate amount of regularly scheduled principal payments
of Indebtedness (excluding optional prepayments and balloon principal payments
due on maturity in respect of any Indebtedness) required to be made during such
period by the Consolidated Group plus (c) the Consolidated Group Pro Rata Share
of all such regularly scheduled principal payments required to be made during
such period by any Investment Affiliate (other than Excluded Investment
Affiliates) on Indebtedness (excluding optional prepayments and balloon
principal payments due on maturity in respect of any Indebtedness) taken into
account in calculating Interest Expense, without duplication.
"Default" means an event which, with notice or lapse of time or both,
would become an Event of Default.
"Default Rate" means with respect to any Advance, a rate equal to the
interest rate applicable to such Advance plus four percent (4%) per annum.
"Defaulting Lender" means any Lender which fails or refuses to perform
its obligations under this Agreement within the time period specified for
performance of such obligation, or, if no time frame is specified, if such
failure or refusal continues for a period of five Business Days after written
notice from the Administrative Agent; provided that if such Lender cures such
failure or refusal, such Lender shall cease to be a Defaulting Lender.
"Dividend Allotment" means, with respect to any given fiscal quarter,
the amount of dividends permitted to be paid during such fiscal quarter as
permitted under Section 9.4(b) and Section 9.4(c).
"Dollars" and "$" mean United States Dollars.
"EBITDA" means (a) income as reported by the Consolidated Group in
accordance with GAAP (reduced to eliminate any income from Investment
Affiliates), for the most recent four full fiscal quarters unless otherwise
specified, but before (i) extraordinary items and gains or losses from the sale
of assets, (ii) Interest Expense, and (iii) depreciation, amortization and
income tax (if any) expense, plus (b) the Consolidated Group Pro Rata Share of
such income (adjusted as described above) of any Investment Affiliate (other
than Excluded Investment Affiliates), provided that no item of income or expense
shall be included more than once in such calculation even if it falls within
more than one of the foregoing categories. If a Property has been acquired
during the period for which EBITDA is being determined (the "Measurement
Period"), then EBITDA will be adjusted to reflect an annualized performance
based on the applicable period of the time during the Measurement Period the
Property was owned by the Consolidated Group and up to six months
pre-acquisition. If a Property has been sold during such Measurement Period,
EBITDA shall be adjusted to exclude any net operating income from such Property
from the calculation of EBITDA.
"Effective Date" means each Borrowing Date and, if no Borrowing Date
has occurred in the preceding calendar month, the first Business Day of each
calendar month.
"EIP/WV" means Equity Inns/West Virginia Partnership, L.P., a Tennessee
limited partnership.
"Eligible Property" shall mean any Property for which each of the
following requirements listed in clauses (i) through (xiv) below is met with
respect to such Property. The Borrower shall establish and certify that each of
these requirements has been met when the Borrower seeks to have a Property that
is not one of the Initial Collateral Pool Assets included as a Collateral Pool
Asset pursuant to Section 2.20.
(i) such Property is located in the continental United States,
(ii) a certificate of occupancy or similar evidence of governmental
approval, if available, has been issued with respect to all
occupied portions of such Property,
(iii) there exist no material title flaws affecting the
marketability of the Property,
(iv) there exist no material structural flaws with respect to such
Property as determined by a structural inspection by an
architect or engineer engaged by (or acceptable to) the
Administrative Agent on behalf of the Lenders, provided that
any such inspection shall either be addressed to and for the
benefit of the Administrative Agent and the Lenders or provide
that the Administrative Agent and the Lenders may rely on such
inspection,
(v) such Property is free of any material contamination or other
material violation of Environmental Laws as determined by a
phase I environmental report acceptable to the Administrative
Agent,
(vi) there exist no Liens on such Property, other than Liens
securing this Facility and those Permitted Liens described in
Subsections (i), (ii), (iii), (iv) and (vii) of Section 9.6,
(vii) such Property is operated as one of the following: a Hampton
Inn, Holiday Inn, a Homewood Suites, a Residence Inn, an
AmeriSuites, or a hotel, resort or inn in the Marriott, Hilton
or Starwood line,
(viii) when such Property's Collateral Pool Asset Value is added to
the then-current Borrowing Base, at least 90% of such sum
shall be derived from Properties which are, directly or
indirectly, wholly owned and controlled by the Borrower,
(ix) when such Property's Collateral Pool Asset Value is added to
the then-current Borrowing Base, at least 90% of such sum
shall be derived from Properties which are, directly or
indirectly, held in fee simple by the Borrower or a
Wholly-Owned Subsidiary,
(x) the average occupancy of such Property for the most recent
period of 12 consecutive months for which financial results
have been delivered to the Administrative Agent at the time it
is added to the Collateral Pool shall have been at least 60%,
unless it is a Property Under Development;
(xi) when such Property's Collateral Pool Asset Value is added to
the then-current Borrowing Base, the aggregate Collateral Pool
Asset Values of all Collateral Pool Assets located in any one
state shall not exceed 25% of the Borrowing Base;
(xii) such Property's Collateral Pool Asset Value does not exceed
20% of the Borrowing Base;
(xiii) such Property has been in operation for no less than 24
months, unless such Property is an Excluded Property or a
Property Under Development, provided such Property Under
Development meets the requirements of Section 8.3, and
(xiv) when such Property's Collateral Pool Asset Value is added to
the then-current Borrowing Base, the total amount of the
Borrowing Base attributable to Properties Under Development
shall not exceed $25,000,000 and the total amount of the
Borrowing Base attributable to Properties Under Development
and Excluded Properties shall not exceed $35,000,000.
"Environmental Indemnity" means an Indemnity Agreement in the form of
Exhibit A, relating to possible environmental liabilities associated with the
Collateral Pool Assets.
"Environmental Laws" means any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority having jurisdiction over any
member of the Consolidated Group or any Investment Affiliate, or their
respective assets, and regulating or imposing liability or standards of conduct
concerning protection of human health or the environment, as now or may at any
time hereafter be in effect, in each case to the extent the foregoing are
applicable to the operations of such member of the Consolidated Group or
Investment Affiliate, or any of their respective assets or Properties.
"Equity Inns" means Equity Inns, Inc., a Tennessee corporation.
"Equity II" means Equity Inns Partnership II, L.P., a Tennessee limited
partnership.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and regulations promulgated thereunder from time to time.
"Event of Default" means any event set forth in Article X hereof.
"Excluded Investment Affiliate" means Investment Affiliates whose
assets and liabilities shall be excluded from the calculations of the
Consolidated Group's compliance with the financial covenants of this Agreement
so long as the following conditions are met: (i) the Consolidated Group Pro Rata
Share of any such Investment Affiliate is less than 20%; (ii) the Consolidated
Group does not have voting control of, or the ability to otherwise direct the
actions of, such Investment Affiliate; (iii) no Indebtedness of such Investment
Affiliate is recourse to, or guaranteed by, any member of the Consolidated
Group; and (iv) the aggregate book value in accordance with GAAP of the
Consolidated Group's investment in all Excluded Investment Affiliates does not
exceed the lesser of $20,000,000 and the difference between $25,000,000 and the
amount of the Borrowing Base attributable to Properties Under Development.
"Excluded Property" means a Collateral Pool Asset that has been
completed but has been in operation for less than 24 months.
"Existing Agreement" means that certain Secured Revolving Credit
Agreement dated as of October 26, 2000 by and between the Borrower, the
Administrative Agent and certain of the other Lenders.
"Facility" means the secured revolving credit facility described in
Section 2.1.
"Facility Letter of Credit" means a Letter of Credit issued pursuant to
Article III of this Agreement, including any Letter of Credit issued pursuant to
Article III of the Existing Agreement which remains outstanding at the Agreement
Execution Date.
"Facility Letter of Credit Fee" is defined in Section 3.8.
"Facility Letter of Credit Obligations" means, as at the time of
determination thereof, all liabilities, whether actual or contingent, of the
Borrower with respect to Facility Letters of Credit, including the sum of (a)
the Reimbursement Obligations and (b) the aggregate undrawn face amount of the
then outstanding Facility Letters of Credit.
"Facility Letter of Credit Sublimit" means $20,000,000.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"FF&E" means fixtures, furniture and equipment located at the
Properties.
"FF&E Deficiency" means the amount, if any, by which 4% of the gross
room revenues of the Consolidated Group during the preceding four fiscal
quarters, on a rolling basis, exceeds the actual expenditures by the
Consolidated Group for FF&E replacements or capital items at the Consolidated
Group's Properties during the same period.
"Fixed Charges" means, for any period, the sum of (i) Debt Service for
such period plus (ii) Preferred Stock Expense of the Guarantors for such period
plus (iii) Ground Lease Expense for such period.
"Free Cash Flow" means, for any period, Funds From Operations less (i)
the Agreed FF&E Reserve for such period for the Properties less (ii) scheduled
principal amortization (excluding balloon payments due on maturity) on all
Indebtedness of the Consolidated Group for such period.
"Funds From Operations" for any period, means GAAP net income, as
adjusted by (i) excluding gains and losses from property sales, debt
restructuring and property write-downs and adjusting for the non-cash effect of
straight-lining of rents, (ii) straight-lining various ordinary operating
expenses which are payable less frequently than monthly (e.g. real estate taxes
and Ground Lease Expense), (iii) deducting Preferred Stock Expense, and (iv)
adding back depreciation, amortization and all non-cash items. Annualized Funds
from Operations for such Person will be calculated for the four most recent
fiscal quarters for which financial results are available.
"GAAP" means generally accepted accounting principles in the United
States of America consistent with those utilized in preparing the audited
financial statements of the Consolidated Group required hereunder, without
adjustment under FASB SAB 101.
"Ground Lease Expense" means, for any period, all payments due from any
member of the Consolidated Group under a lease of land underlying a Property for
such period.
"Guarantee Obligation" means, as to any Person (the "guaranteeing
person"), any obligation (determined without duplication) of (a) the
guaranteeing person or (b) another Person (including, without limitation, any
bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counter indemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the maximum stated
amount of the primary obligation relating to such Guarantee Obligation (or, if
less, the maximum stated liability set forth in the instrument embodying such
Guarantee Obligation), provided, that in the absence of any such stated amount
or stated liability, the amount of such Guarantee Obligation shall be such
guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith.
"Guarantors" means collectively, Equity Inns Trust, a Maryland real
estate investment trust, Equity Inns Services, Inc., a Tennessee corporation and
Equity Inns.
"Guaranty" means the Amended and Restated Guaranty executed by the
Guarantors in the form attached hereto as Exhibit D.
"Included Collateral Pool Assets" means, as of any date, all Collateral
Pool Assets which are not Excluded Properties or Properties Under Development as
of such date.
"Included Collateral Pool Debt Service Coverage Ratio" means, as of any
date, for a specified Allocated Facility Amount, the ratio of (a) the aggregate
Adjusted Net Operating Income of all Included Collateral Pool Assets for the
most recent four (4) consecutive fiscal quarters for which financial statements
have been delivered to the Administrative Agent to (b) the greater of (x) the
aggregate interest that would have accrued on such specified Allocated Facility
Amount, for the most recent four (4) consecutive fiscal quarters at an interest
rate equal to the average interest rate under the Facility for such period or
(y) the annual principal and interest payments that would be required to fully
amortize a loan in a principal amount equal to such specified Allocated Facility
Amount if paid in equal monthly installments over a period of 25 years at an
interest rate equal to the higher of 6.75%, and the yield as of the last
Business Day of the most recently completed fiscal quarter on those obligations
of the U.S. Treasury having a maturity date closest to a date 10 years after
such fiscal quarter end, plus 2.50% per annum.
"Indebtedness" of any Person at any date means without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade liabilities and other accounts payable, and accrued expenses
incurred in the ordinary course of business and payable in accordance with
customary practices), to the extent such obligations constitute indebtedness for
the purposes of GAAP, (c) any other indebtedness of such Person which is
evidenced by a note, bond, debenture or similar instrument, (d) all obligations
of such Person under financing leases and capital leases, (e) all obligations of
such Person in respect of acceptances issued or created for the account of such
Person, (f) all Guarantee Obligations of such Person (excluding in any
calculation of consolidated indebtedness of such Person, Guarantee Obligations
of such Person in respect of primary obligations of any of its Subsidiaries),
(g) all reimbursement obligations of such Person for letters of credit and other
contingent liabilities, (h) all liabilities secured by any Lien (other than
Liens for taxes not yet due and payable) on any property owned by such Person
even though such Person has not assumed or otherwise become liable for the
payment thereof, (i) any repurchase obligation or liability of such Person or
any of its Subsidiaries with respect to accounts or notes receivable sold by
such Person or any of its Subsidiaries, and (j) such Person's pro rata share of
debt in Investment Affiliates (other than Excluded Investment Affiliates) and
any loans where such Person is liable as a general partner.
"Initial Collateral Pool Assets" means the Properties described on
Schedule 1 attached hereto and made a part hereof which shall be included as
Collateral under the Loan Documents as of the Agreement Effective Date.
"Insolvency" means insolvency as defined in the United States
Bankruptcy Code, as amended. "Insolvent" when used with respect to a Person,
shall refer to a Person who satisfies the definition of Insolvency.
"Interest Expense" all interest expense of the Consolidated Group
determined in accordance with GAAP plus (i) capitalized interest not covered by
an interest reserve from a loan facility, plus (ii) the allocable portion (based
on liability) of any accrued or paid interest incurred on any obligation for
which any member of the Consolidated Group is wholly or partially liable under
repayment, interest carry, or performance guarantees, or other relevant
liabilities, plus (iii) the Consolidated Group Pro Rata Share of any accrued or
paid interest incurred on any Indebtedness of any Investment Affiliate (other
than Excluded Investment Affiliates), whether recourse or non-recourse, provided
that no expense shall be included more than once in such calculation even if it
falls within more than one of the foregoing categories.
"Interest Period" means a LIBOR Interest Period.
"Investment Affiliate" means any Person in which any member of the
Consolidated Group, directly or indirectly, has an ownership interest, whose
financial results are not consolidated under GAAP with the financial results of
the Consolidated Group on the consolidated financial statements of the
Consolidated Group.
"Issuance Date" is defined in Section 3.4(a)(2).
"Issuance Notice" is defined in Section 3.4(c).
"Issuing Bank" means, with respect to each Facility Letter of Credit,
the Lender which issues such Facility Letter of Credit. Bank One shall be the
sole Issuing Bank.
"Lenders" means Bank One and the other Persons executing this Agreement
in such capacity, or any Person which subsequently executes and delivers any
amendment hereto in such capacity and each of their respective permitted
successors and assigns. Where reference is made to "the Lenders" in any Loan
Document it shall be read to mean "all of the Lenders" unless the context
requires otherwise.
"Lending Installation" means any U.S. office of any Lender authorized
to make loans similar to the Advances described herein.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Letter of Credit Collateral Account" is defined in Section 3.9.
"Letter of Credit Request" is defined in Section 3.4(a).
"LIBOR Advance" means an Advance that bears interest at the Adjusted
LIBOR Rate.
"LIBOR Applicable Margin" means, as of any date with respect to any
LIBOR Advance, the Applicable Margin in effect for such LIBOR Advance as
determined in accordance with Section 2.6 hereof.
"LIBOR Interest Period" means, with respect to a LIBOR Advance, a
period of one, two, three or six months, as selected in advance by the Borrower.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien, charge or easement of any kind (including, without limitation, any
conditional sale or other title retention agreement or lease in the nature
thereof, any filing or agreement to file a financing statement as debtor under
the Uniform Commercial Code on any property leased to any Person under a lease
which is not in the nature of a conditional sale or title retention agreement,
or any subordination agreement in favor of another Person).
"Limited Recourse Guaranty" means a guaranty in the form of Exhibit C
attached hereto executed by each entity other than a Borrower that owns a
Collateral Pool Asset.
"Loan" means, with respect to a Lender, such Lender's portion of any
Advance.
"Loan Documents" means this Agreement, the Notes, the Guaranty, the
Limited Recourse Guaranties, the Environmental Indemnity Agreement and the
Security Documents and any and all other agreements or instruments required
and/or provided to Lenders hereunder or thereunder, as any of the foregoing may
be amended from time to time.
"Loan Parties" the Borrower, the Guarantors and each other Affiliate of
the Borrower which is a party to a Loan Document.
"Margin Stock" has the meaning ascribed to it in Regulation U of the
Board of Governors of the Federal Reserve System.
"Material Adverse Effect" means, with respect to any matter, that such
matter in the Required Lenders' good faith judgment may (x) materially and
adversely affect the business, properties, condition or results of operations of
the Consolidated Group taken as a whole, or (y) constitute a non-frivolous
challenge to the validity or enforceability of any material provision of any
Loan Document against any obligor party thereto.
"Material Adverse Financial Change" shall be deemed to have occurred if
the Required Lenders, in their good faith judgment, determine that a material
adverse financial change has occurred which could prevent timely repayment of
any Advance hereunder or materially impair Borrower's ability to perform its
obligations under any of the Loan Documents.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
radon, polychlorinated biphenyls and urea-formaldehyde insulation.
"Maturity Date" means June 9, 2006 (subject to extension in accordance
with Section 2.22) or such earlier date on which the principal balance of the
Facility and all other sums due in connection with the Facility shall be due as
a result of the acceleration of the Facility.
"Monetary Default" means any Default involving Borrower's failure to
pay any of the Obligations when due.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Mortgage Amendments" means amendments to each of the existing
Mortgages, substantially in form of Exhibit N as modified to conform to local
law requirements.
"Mortgages" means the collective reference to the deeds of trust and
mortgages previously recorded against the Initial Collateral Pool Assets, as
amended by the Mortgage Amendments, together with any deeds of trust and
mortgages on Properties added to Collateral hereafter pursuant to Section 2.20
hereof, each of which shall be substantially in the form attached hereto as
Exhibit N and made a part hereof, conformed as required by the Administrative
Agent to applicable local law, as such documents may be hereafter amended and/or
restated from time to time.
"Net Cash Proceeds" is defined in Section 9.11 hereof.
"Net Operating Income" means, with respect to any Property, for any
period, all income attributable to such Property less all expenses directly
related to such Property (except for any expenditures for FF&E replacement and
capital improvements), such as real estate taxes, ground lease payments, base
management fees and franchise fees, plus depreciation, amortization and interest
expense with respect to such Property for such period, and, if such period is
less than a year, adjusted by straight lining various expenses which are payable
less frequently than monthly during every such period (e.g. real estate taxes,
ground lease payments and insurance).
"Note" means the promissory note (or amended and restated promissory
note) payable to the order of each Lender in the amount of such Lender's maximum
Commitment in the form attached hereto as Exhibit B (collectively, the "Notes").
"Obligations" means the Advances, the Facility Letter of Credit
Obligations and all accrued and unpaid fees and all other obligations of
Borrower to the Administrative Agent or any or all of the Lenders arising under
this Agreement or any of the other Loan Documents.
"Operating Partnership" means Equity Inns Partnership, L.P., a
Tennessee limited partnership.
"Owner" means, as of any date, each of the Wholly Owned Subsidiaries
and entities comprising the Borrower that own a Property included as a
Collateral Pool Asset.
"Participants" is defined in Section 13.2.1 hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Percentage" means, with respect to each Lender, the applicable
percentage of the then-current Aggregate Commitment represented by such Lender's
then-current Commitment.
"Permitted Liens" are defined in Section 9.6 hereof.
"Permitted Operating Lease" means a lease between one of the Borrowers
or a Wholly-Owned Subsidiary and a taxable Wholly-Owned Subsidiary (provided
such taxable Wholly-Owned Subsidiary has entered into an Approved Management
Agreement for the management of the hotel covered by such Permitted Operating
Lease) on substantially the same lease form as currently in effect for the
Collateral Pool Assets.
"Person" means an individual, a corporation, a limited or general
partnership, an association, a joint venture or any other entity or
organization, including a governmental or political subdivision or an agent or
instrumentality thereof.
"Plan" means an employee benefit plan as defined in Section 3(3) of
ERISA, whether or not terminated, as to which the Borrower or any member of the
Controlled Group may have any liability.
"Preferred Stock" means, for any Person, any preferred stock issued by
such Person.
"Preferred Stock Expense" means, for any period for any Person, the
aggregate dividend payments due to the holders of Preferred Stock of such
Person, whether payable in cash or in kind, and whether or not actually paid
during such period.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced by Bank One or its parent from time to time (which is not necessarily
the lowest rate charged to any customer), changing when and as such prime rate
changes.
"Property" means any real estate asset owned by a member of the
Consolidated Group or an Investment Affiliate and operated as a premium limited
service, premium extended stay or premium all-suite or full-service hotel
property.
"Property Under Development" means a Property under development (in
accordance with GAAP) on which construction of the hotel has commenced but which
has not been substantially completed and occupied and which is subject to a
Permitted Operating Lease and an Approved Management Agreement that will be
effective upon opening.
"Purchasers" is defined in Section 13.3.1 hereof.
"Qualified Officer" means, with respect to any entity, the president,
the vice president, the treasurer, the chief financial officer, the chief
accounting officer or the controller of such entity if it is a corporation or of
such entity's general partner if it is a partnership.
"Rate Option" means the Adjusted Alternate Base Rate or the Adjusted
LIBOR Rate. The Rate Option in effect on any date shall always be the Adjusted
Alternate Base Rate unless the Borrower has properly selected the Adjusted LIBOR
Rate pursuant to Section 2.11 hereof.
"Recourse Indebtedness" means, with respect to any Person, Indebtedness
for borrowed money, whether as a maker or a guarantor, other than non-recourse
secured Indebtedness which limits the liability of the maker thereof to its
interest in the Properties given for such indebtedness, subject only to those
customary "carve-outs" to non-recourse status required by institutional mortgage
lenders.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Reimbursement Obligations" means at any time, the aggregate
liabilities of the Borrower to the Lenders, the Issuing Bank and the
Administrative Agent in respect of all payments or disbursements made by the
Lenders, the Issuing Bank and the Administrative Agent under or in respect of
the Facility Letters of Credit, and which have not been repaid by Borrower.
"REMIC Loan" means that certain $88,000,000 issuance of mortgage bonds
by the REMIC Partnership pursuant to the terms of an Indenture dated as of
February 6, 1997.
"REMIC Partnership" means EQI Financing Partnership I, L.P., the
borrower under the REMIC Loan which has as its sole limited partner, holding 99%
of the partnership interests therein, the Operating Partnership and as its sole
general partner, holding 1% of the partnership interests therein, EQI Financing
Corporation which is wholly-owned by Equity Inns Trust.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable Event regardless of the issuance of any such waivers in accordance
with either Section 4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means, as of any date, those Lenders holding, in the
aggregate, more than two-thirds (2/3) of the then-current Aggregate Commitment
or, if the Aggregate Commitment has been terminated, Lenders holding, in the
aggregate, more than two-thirds (2/3) of the aggregate unpaid principal amount
of the outstanding Advances.
"Reserve Requirement" means, with respect to a LIBOR Interest Period,
the maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"S&P" means Standard & Poor's Ratings Group and its successors.
"Security Agreement" means an Amended and Restated Security Agreement
in the form attached hereto as Exhibit _.
"Security Documents" means the collective reference to the Mortgages,
the Security Agreement, the Guarantees, UCC Financing Statements, Assignment of
Contracts, and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any asset or assets of any Person to
secure the obligations and liabilities of the Borrower hereunder and under any
of the other Loan Documents or to secure any guarantee of any such obligations
and liabilities.
"Subsidiary" means as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person, and provided such corporation, partnership or other entity is
consolidated with such Person for financial reporting purposes under GAAP.
"Supermajority Lenders" means, as of any date, those Lenders holding,
in the aggregate, more than eighty percent (80%) of the then-current Aggregate
Commitment or, if the Aggregate Commitment has been terminated, Lenders holding,
in the aggregate, more than eighty percent (80%) of the aggregate unpaid
principal amount of the outstanding Advances.
"Swingline Advances" means, as of any date, collectively, all Swingline
Loans then outstanding under this Facility.
"Swingline Commitment" means the obligation of the Swingline Lender to
make Swingline Loans not exceeding $7,500,000, which is included in, and is not
in addition to, the Swingline Lender's total Commitment hereunder.
"Swingline Lender" shall mean Bank One, in its capacity as a Lender.
"Swingline Loan" means a loan made by the Swingline Lender pursuant to
Section 2.16 hereof.
"Tangible Net Worth" means "net worth", as determined in accordance
with GAAP, less intangible assets included in such net worth, less equity
investment in Excluded Investment Affiliates, plus accumulated depreciation.
"Total Cost" means, as of any date, (a) if the Property is owned by the
Consolidated Group, the sum of (i) the book value under GAAP of such Property
plus (ii) all depreciation on such Property previously reflected on the
Consolidated Group's financial statements, in accordance with GAAP, or (b) if
such Property is owned by an Investment Affiliate, the sum of (i) the
Consolidated Group Pro Rata Share of the book value under GAAP of such Property
plus (ii) the Consolidated Group Pro Rata Share of all depreciation on such
Property previously reflected on the Investment Affiliate's financial
statements, in accordance with GAAP.
"Total Indebtedness" means, as of any date, the sum of (i) all
Indebtedness of the Consolidated Group in existence on such date plus (ii) the
Consolidated Group Pro Rata Share of all Indebtedness of any Investment
Affiliate (other than Excluded Investment Affiliates), to the extent not
included in the Indebtedness described in clause (i), without duplication.
"Transferee" is defined in Section 13.4 hereof.
"Wholly-Owned Subsidiary" means a Subsidiary which is 100% owned,
directly or indirectly, by one or more of the entities comprising the Borrower.
The foregoing definitions shall be equally applicable to both the
singular and the plural forms of the defined terms.
Section 1.2 Financial Standards. All financial computations required of a Person
under this Agreement shall be made, and all financial information required under
this Agreement shall be prepared, in accordance with GAAP, except that if any
Person's financial statements are not audited, such Person's financial
statements shall be prepared in accordance with the same sound accounting
principles utilized in connection with the financial information submitted to
Lenders with respect to such Person or the Properties of such Person in
connection with this Agreement and shall be certified by an authorized
representative of such Person.
Article II.
THE FACILITY
Section 2.1 The Facility; Limitations on Borrowing.
Subject to the terms and conditions of this Agreement and in reliance
upon the representations and warranties of the Borrower and the Guarantors
contained herein, Lenders agree (x) to make Advances through the Administrative
Agent to Borrower from time to time prior to the Maturity Date and (y) to issue
Facility Letters of Credit under Article III of this Agreement, provided that
the making of any such Advance or the issuance of such Facility Letter of Credit
will not:
(i) cause the then-current Allocated Facility Amount to exceed the then-current
Aggregate Commitment; or
(ii) cause the then-current Allocated Facility Amount to exceed the then-current
Borrowing Base Availability; or
(iii) cause the then-current outstanding Swingline Advances to exceed the
Swingline Commitment; or
(iv) cause the then outstanding Facility Letters of Credit Obligations to exceed
the Facility Letter of Credit Sublimit.
The Advances may be ratable Adjusted Alternate Base Rate Advances, ratable LIBOR
Advances or non-pro rata Swingline Loans. Except as provided in Sections 2.16
and 2.18 hereof, each Lender shall fund its Percentage of each such Advance and
no Lender will be required to fund any amounts which when aggregated with such
Lender's Percentage of (i) all other Advances then outstanding, (ii) all
Swingline Advances and (iii) all Facility Letter of Credit Obligations would
exceed such Lender's then-current Commitment. This facility ("Facility") is a
revolving credit facility and, subject to the provisions of this Agreement, the
Borrower may request Advances hereunder, repay such Advances and reborrow
Advances at any time prior to the Maturity Date. Unless and until the
Administrative Agent is otherwise advised in writing to the contrary by all of
the entities comprising the Borrower, all Loans shall be deemed to be requested
by the Operating Partnership and shall be funded directly to the Operating
Partnership and EIP/WV and Equity II each irrevocably authorizes the
Administrative Agent to honor requests for Advances made by the Operating
Partnership and to fund such Loans directly to the Operating Partnership.
Section 2.2 Maturity Date. The Facility created by this Agreement, and the
Commitment of each Lender to lend hereunder, shall terminate on the Maturity
Date, unless sooner terminated in accordance with the terms of this Agreement.
Any outstanding Advances not previously repaid and all other unpaid Obligations
shall be paid in full by the Borrower on the Maturity Date.
Section 2.3 Requests for Advances; Responsibility for Advances. Ratable Advances
shall be made available to Borrower by Administrative Agent in accordance with
Section 2.1 and Section 2.11(a) hereof. The obligation of each Lender to fund
its Percentage of each ratable Advance shall be several and not joint.
Section 2.4 Evidence of Credit Extensions. The Advances of each Lender
outstanding at any time shall be evidenced by the Notes. Each Note executed by
the Borrower shall be in a maximum principal amount equal to each Lender's
Percentage of the current Aggregate Commitment. Each Lender shall record
Advances and principal payments thereof on the schedule attached to its Note or,
at its option, in its records, and each Lender's record thereof shall be
conclusive absent Borrower furnishing to such Lender conclusive and irrefutable
evidence of an error made by such Lender with respect to that Lender's records.
Notwithstanding the foregoing, the failure to make, or an error in making, a
notation with respect to any Advance shall not limit or otherwise affect the
obligations of Borrower hereunder or under the Notes to pay the amount actually
owed by Borrower to Lenders.
Section 2.5 Ratable and Non-Ratable Loans. Each Advance hereunder shall consist
of Loans made from the several Lenders ratably in proportion to their
Percentages, except for Swingline Loans which shall be made by the Swingline
Lender in accordance with Section 2.16. The ratable Advances may be Adjusted
Alternate Base Rate Advances, LIBOR Advances or a combination thereof, selected
by the Borrower in accordance with Sections 2.10 and 2.11.
Section 2.6 Applicable Margins and Fees. The ABR Applicable Margin, the LIBOR
Applicable Margin and the Applicable Commitment Fee Percentage to be used in
calculating the interest rate applicable to different types of Advances and the
Commitment Fee shall vary from time to time in accordance with the ratio of
Total Indebtedness to EBITDA:
Ratio of LIBOR ABR Applicable
Total Indebtedness to Applicable Applicable Commitment
EBITDA Margin Margin Fee Percentage
----------------------------------- ---------- ---------- --------------
Less than 4.5x 2.25% 1.25% 0.45%
4.5x or over, but less than 4.75x 2.50% 1.50% 0.50%
4.75x or over, but less than 5.25x 2.75% 1.75% 0.55%
5.25x or over, but less than 5.50x 3.00% 2.00% 0.60%
The Applicable Margins and Applicable Commitment Fee Percentage will
change only quarterly upon delivery of a compliance certificate in the form of
attached hereto, reflecting the ratio of Total Indebtedness to EBITDA as of the
last day of the preceding fiscal quarter as disclosed on the financial
statements for such fiscal quarter delivered to the Lenders.
Section 2.7 Commitment Fee. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee (the "Commitment Fee")
from the Agreement Effective Date to and including the Maturity Date, calculated
at the then-current per annum Applicable Commitment Fee Percentage (calculated
for actual days elapsed on the basis of a 360 day year) on the daily unborrowed
portion of such Lender's Commitment (which is equal to the difference between
(a) such Lender's Commitment on such day and (b) the then outstanding Loans owed
to such Lender plus the Lender's Percentage of any outstanding and undrawn
Facility Letters of Credit) payable quarterly in arrears on the last day of each
calendar quarter hereafter beginning June 30, 2003 and ending on the Maturity
Date. Notwithstanding the foregoing, all accrued Commitment Fees shall be
payable on the effective date of any termination of the obligations of the
Lenders to make Loans hereunder. The Swingline Commitment shall be treated in
the same fashion as the other Commitments for purposes of calculating the
Commitment Fees and only the actual Swingline Loans outstanding on any day shall
be included in the aggregate amount of outstanding Loans owed to the Swingline
Lender on such day.
Section 2.8 Other Fees.
(a) The Borrower agrees to pay all fees payable to the Administrative Agent and
Banc One Capital Markets, Inc. pursuant to the Borrower's prior letter agreement
with them.
(b) The Borrower also agrees to pay the fees described in Section 3.8 below
with respect to any Facility Letters of Credit.
Section 2.9 Minimum Amount of Each Advance. Each LIBOR Advance shall be in the
minimum amount of $2,000,000 (and in multiples of $100,000 if in excess
thereof), each Adjusted Alternate Base Rate Advance shall be in the minimum
amount of $1,000,000 (and in multiples of $100,000 if in excess thereof) and
each Swingline Advance shall be in the minimum amount of $50,000 (and in
multiples of $25,000 if in excess thereof), provided, however, that any Adjusted
Alternate Base Rate Advance may be in the amount of the unused Aggregate
Commitment.
Section 2.10 Interest.
(a) The outstanding principal balance under the Notes shall bear interest from
time to time at a rate per annum equal to:
(i) the Adjusted Alternate Base Rate; or
(ii) at the election of Borrower with respect to all or portions of the
Obligations, the Adjusted LIBOR Rate.
(b) All interest shall be calculated for actual days elapsed on the basis of a
360-day year. Interest accrued on each Adjusted Alternate Base Rate Advance,
LIBOR Advance and Swingline Loan shall be payable in arrears from time to time
on each of (i) the first day of each calendar month, commencing with the first
such date to occur after the date hereof, (ii) the Maturity Date, and (iii) the
effective date of any termination of the Aggregate Commitment in full pursuant
to Section 2.17. Interest shall not be payable for the day of any payment on the
amount paid if payment is received by Administrative Agent prior to noon
(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 2.11 Selection of Rate Options and LIBOR Interest Periods.
(a) Borrower, from time to time, may select the Rate Option and, in the case of
each LIBOR Advance, the commencement date (which shall be a Business Day) and
the length of the LIBOR Interest Period applicable to each LIBOR Advance.
Borrower shall give Administrative Agent irrevocable notice (a "Borrowing
Notice") not later than 11:00 a.m. (Chicago time) (i) at least one Business Day
prior to an Adjusted Alternate Base Rate Advance, (ii) at least three (3)
Business Days prior to a ratable LIBOR Advance, and (iii) not later than 11:00
a.m. (Chicago time) on the Borrowing Date for each Swingline Loan, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such Advance,
(ii) the aggregate amount of such Advance,
(iii) the type of Advance selected, and
(iv) in the case of each LIBOR Advance, the LIBOR Interest Period applicable
thereto.
The Borrower shall also deliver together with each Borrowing Notice the
compliance certificate required in Section 5.2 and otherwise comply with the
conditions set forth in Section 5.2 for Advances. Administrative Agent shall
provide each Lender by facsimile with a copy of each Borrowing Notice and
compliance certificate by 3:00 p.m. on the same Business Day it is received.
Not later than noon (Chicago time) on each Borrowing Date, each Lender
shall make available its Loan or Loans, in funds immediately available in
Chicago to the Administrative Agent. Administrative Agent will promptly make the
funds so received from the Lenders available to the Borrower.
(b) Administrative Agent shall, as soon as practicable after
receipt of a Borrowing Notice, determine the Adjusted LIBOR
Rate applicable to the requested ratable LIBOR Advance and
inform Borrower and Lenders of the same. Each determination of
the Adjusted LIBOR Rate by Administrative Agent shall be
conclusive and binding upon Borrower in the absence of
manifest error.
(c) If Borrower shall prepay a LIBOR Advance other than on the
last day of the LIBOR Interest Period applicable thereto,
Borrower shall be responsible to pay all amounts due to
Lenders as required by Section 4.4 hereof.
(d) As of the end of each LIBOR Interest Period selected for a
ratable LIBOR Advance, the interest rate on the LIBOR Advance
will become the Adjusted Alternate Base Rate, unless Borrower
has once again selected a LIBOR Interest Period in accordance
with the timing and procedures set forth in Section 2.11(g).
(e) The right of Borrower to select the Adjusted LIBOR Rate for an
Advance pursuant to this Agreement is subject to the
availability to Lenders of a similar option. If Administrative
Agent determines that (i) deposits of Dollars in an amount
approximately equal to the LIBOR Advance for which the
Borrower wishes to select the Adjusted LIBOR Rate are not
generally available at such time in the London interbank
eurodollar market, or (ii) the rate at which the deposits
described in subsection (i) herein are being offered will not
adequately and fairly reflect the costs to Lenders of
maintaining an Adjusted LIBOR Rate on an Advance or of funding
the same in such market for such LIBOR Interest Period, or
(iii) reasonable means do not exist for determining an
Adjusted LIBOR Rate, or (iv) the Adjusted LIBOR Rate would be
in excess of the maximum interest rate which Borrower may by
law pay, then in any of such events, Administrative Agent
shall so notify Borrower and Lenders and such Advance shall
bear interest at the Adjusted Alternate Base Rate.
Notwithstanding the foregoing, the Lenders shall not be
obligated to match fund their LIBOR Advances.
(f) In no event may Borrower elect a LIBOR Interest Period which
would extend beyond the Maturity Date. Unless Lenders agree
thereto, in no event may Borrower have more than ten (10)
different LIBOR Interest Periods for LIBOR Advances
outstanding at any one time.
(g) Conversion and Continuation.
(i) Borrower may elect from time to time, subject to the other
provisions of this Section 2.11, to convert all or any part of
a ratable Advance into any other type of Advance; provided
that any conversion of a ratable LIBOR Advance shall be made
on, and only on, the last day of the LIBOR Interest Period
applicable thereto.
(ii) Adjusted Alternate Base Rate Advances shall continue as
Adjusted Alternate Base Rate Advances unless and until such
Adjusted Alternate Base Rate Advances are converted into
ratable LIBOR Advances pursuant to a Conversion/Continuation
Notice from Borrower in accordance with Section 2.11(g)(iv).
Ratable LIBOR Advances shall continue until the end of the
then applicable LIBOR Interest Period therefor, at which time
each such Advance shall be automatically converted into an
Adjusted Alternate Base Rate Advance unless the Borrower shall
have given the Administrative Agent a Conversion/Continuation
Notice in accordance with Section 2.11(g)(iv) requesting that,
at the end of such LIBOR Interest Period, such Advance either
continue as an Advance of such type for the same or another
LIBOR Interest Period.
(iii) Notwithstanding anything to the contrary contained in Sections
2.11(g)(i) or (g)(ii), no Advance may be converted into a
LIBOR Advance or continued as a LIBOR Advance (except with the
consent of the Required Lenders) when any Monetary Default or
Event of Default has occurred and is continuing.
(iv) The Borrower shall give the Administrative Agent irrevocable
notice (a "Conversion/Continuation Notice") of each conversion
of an Advance or continuation of a LIBOR Advance not later
than 11:00 a.m. (Chicago time) on the Business Day immediately
preceding the date of the requested conversion, in the case of
a conversion into an Adjusted Alternate Base Rate Advance, or
11:00 a.m. (Chicago time) at least three (3) Business Days
prior to the date of the requested conversion or continuation,
in the case of a conversion into or continuation of a ratable
LIBOR Advance, specifying: (1) the requested date (which
shall be a Business Day) of such conversion or continuation;
(2) the amount and type of the Advance to be converted or
continued; and (3) the amounts and type(s) of Advance(s) into
which such Advance is to be converted or continued and, in the
case of a conversion into or continuation of a ratable LIBOR
Advance, the duration of the LIBOR Interest Period applicable
thereto.
Section 2.12 Method of Payment. All payments of the Obligations hereunder shall
be made, without set-off, deduction, or counterclaim, in immediately available
funds to Administrative Agent at Administrative Agent's address specified
herein, or at any other Lending Installation of Administrative Agent specified
in writing by Administrative Agent to Borrower, by noon (local time) on the date
when due and shall be applied ratably by Administrative Agent among Lenders.
Each payment delivered to Administrative Agent for the account of any Lender
shall be delivered promptly by Administrative Agent to such Lender in the same
type of funds that Administrative Agent received at its address specified herein
or at any Lending Installation specified in a notice received by Administrative
Agent from such Lender. Administrative Agent is hereby authorized to charge the
account of Borrower maintained with Bank One for each payment of principal,
interest and fees as it becomes due hereunder. Amounts paid to or held by the
Administrative Agent for the payment of Loans shall not be deemed paid to a
Lender until the Business Day that such amounts are received by such Lender. If
amounts are received by the Administrative Agent from the Borrower prior to the
applicable times stated herein and the Administrative Agent fails to make a
Lender's portion of such amount available to such Lender by close of business on
such Business Day, the Borrower shall have no obligation to pay any further
interest on such payment and the Administrative Agent shall pay to such Lender
interest on such payment to the date paid to such Lender by the Administrative
Agent at a rate per annum equal to the then-current Federal Funds Effective
Rate.
Section 2.13 Default. Notwithstanding the foregoing, during the continuance of a
Monetary Default or an Event of Default, Borrower shall not have the right to
request a LIBOR Advance, select a new LIBOR Interest Period for an existing
ratable LIBOR Advance or convert any Adjusted Alternate Base Rate Advance to a
ratable LIBOR Advance. During the continuance of a Monetary Default or an Event
of Default, at the election of the Required Lenders, by notice to Borrower,
outstanding Advances shall bear interest at the applicable Default Rates until
such Monetary Default or Event of Default ceases to exist or the Obligations are
paid in full.
Section 2.14 Lending Installations. Each Lender may book its Advances at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or telex
notice to the Administrative Agent and Borrower, designate a Lending
Installation through which Advances will be made by it and for whose account
payments are to be made.
Section 2.15 Non-Receipt of Funds by Administrative Agent. Unless Borrower or a
Lender, as the case may be, notifies Administrative Agent prior to the date on
which it is scheduled to make payment to Administrative Agent of (i) in the case
of a Lender, an Advance, or (ii) in the case of Borrower, a payment of
principal, interest or fees to the Administrative Agent for the account of the
Lenders, that it does not intend to make such payment, Administrative Agent may
assume that such payment has been made. Administrative Agent may, but shall not
be obligated to, make the amount of such payment available to the intended
recipient in reliance upon such assumption. If such Lender or Borrower, as the
case may be, has not in fact made such payment to Administrative Agent, the
recipient of such payment shall, on demand by Administrative Agent, repay to
Administrative Agent the amount so made available together with interest thereon
in respect of each day during the period commencing on the date such amount was
so made available by Administrative Agent until the date Administrative Agent
recovers such amount at a rate per annum equal to (i) in the case of payment by
a Lender, the Federal Funds Effective Rate (as determined by Administrative
Agent) for such day or (ii) in the case of payment by Borrower, the interest
rate applicable to the relevant Advance.
Section 2.16 Swingline Loans. In addition to the other options available to
Borrower hereunder, up to $7,500,000 of the Swingline Commitment shall be
available for Swingline Loans subject to the following terms and conditions.
Swingline Loans shall be made available for same day borrowings provided that
notice is given in accordance with Section 2.11 hereof. All Swingline Loans
shall bear interest at the Adjusted Alternate Base Rate and shall be deemed to
be Adjusted Alternate Base Rate Advances. In no event shall the Swingline Lender
be required to fund a Swingline Loan if it would increase the total aggregate
outstanding Loans by Swingline Lender hereunder plus its Percentage of Facility
Letter of Credit Obligations to an amount in excess of such Lender's Commitment.
No Swingline Loan may be made to repay a Swingline Loan, but Borrower may repay
Swingline Loans from subsequent pro rata Advances hereunder. If any Swingline
Loan is not so repaid, upon request of the Swingline Lender made to all the
Lenders, which request must be given not later than the fifth (5th) Business Day
after such a Swingline Loan was made, each Lender irrevocably agrees to purchase
its Percentage of any Swingline Loan made by the Swingline Lender regardless of
whether the conditions for disbursement are satisfied at the time of such
purchase, including the existence of an Event of Default hereunder provided that
Swingline Lender did not have knowledge of such Event of Default at the time the
Swingline Loan was made and provided further that no Lender shall be required to
have total outstanding Loans plus its Percentage of Facility Letters of Credit
exceed its Commitment. Such purchase shall take place on the date of the request
by Swingline Lender so long as such request is made by noon (Chicago time),
otherwise on the Business Day following such request. All requests for purchase
shall be in writing. From and after the date it is so purchased, each such
Swingline Loan shall, to the extent purchased, (i) be treated as a Loan made by
the purchasing Lenders and not by the selling Lender for all purposes under this
Agreement and the payment of the purchase price by a Lender shall be deemed to
be the making of a Loan by such Lender and shall constitute outstanding
principal under such Lender's Note, and (ii) shall no longer be considered a
Swingline Loan except that all interest accruing on or attributable to such
Swingline Loan for the period prior to the date of such purchase shall be paid
when due by the Borrower to the Administrative Agent for the benefit of the
Swingline Lender and all such amounts accruing on or attributable to such Loans
for the period from and after the date of such purchase shall be paid when due
by the Borrower to the Administrative Agent for the benefit of the purchasing
Lenders. If prior to purchasing its Percentage of a Swingline Loan one of the
events described in Section 10.10 shall have occurred and such event prevents
the consummation of the purchase contemplated by preceding provisions, each
Lender will purchase an undivided participating interest in the outstanding
Swingline Loan in an amount equal to its Percentage of such Swingline Loan. From
and after the date of each Lender's purchase of its participating interest in a
Swingline Loan, if the Swingline Lender receives any payment on account thereof,
the Swingline Lender will distribute to such Lender its participating interest
in such amount (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's participating interest was
outstanding and funded); provided, however, that in the event that such payment
was received by the Swingline Lender and is required to be returned to the
Borrower, each Lender will return to the Swingline Lender any portion thereof
previously distributed by the Swingline Lender to it. If any Lender fails to so
purchase its Percentage of any Swingline Loan, such Lender shall be deemed to be
a Defaulting Lender hereunder.
Section 2.17 Voluntary Reduction of Aggregate Commitment Amount. Upon at least
five (5) days prior irrevocable written notice (or telephonic notice promptly
confirmed in writing) to the Administrative Agent, Borrower shall have the
right, without premium or penalty, to terminate the Aggregate Commitment in
whole or in part provided that (a) Borrower may not reduce the Aggregate
Commitment below the Allocated Facility Amount at the time of such requested
reduction, and (b) any such partial termination shall be in the minimum
aggregate amount of Two Million Dollars (U.S. $2,000,000.00) 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 2.18 Increase in Aggregate Commitment. The Borrower shall also have the
right from time to time to increase the Aggregate Commitment up to a maximum of
$175,000,000 by either adding new entities as Lenders (subject to the
Administrative Agent's prior written approval of the identity of such new
entities) or obtaining the agreement, which shall be at such Lender's or
Lenders' sole discretion, of one or more of the then current Lenders to increase
its or their Commitments. Such increases shall be evidenced by the execution and
delivery of an Amendment Regarding Increase in the form of Exhibit L attached
hereto by the Borrower, the Administrative Agent and the new bank or existing
Lender providing such additional Commitment, a copy of which shall be forwarded
to each Lender by the Administrative Agent promptly after execution thereof. On
the effective date of each such increase in the Aggregate Commitment, the
Borrower and the Administrative Agent shall cause the new or existing Lenders
providing such increase, by either funding more than its or their Percentage of
new ratable Advances made on such date or purchasing shares of outstanding
ratable Loans held by the other Lenders or a combination thereof, to hold its or
their Percentage of all ratable Advances outstanding at the close of business on
such day. The Lenders agree to cooperate in any required sale and purchase of
outstanding ratable Advances to achieve such result. In no event shall the
Aggregate Commitment exceed $175,000,000 without the approval of all of the
Lenders.
Section 2.19 Optional Prepayments; Mandatory Prepayments;
Release of Properties.
(a) The Borrower may, upon at least one (1) Business Day's notice to the
Administrative Agent, prepay the Advances, which notice shall specify the date
and amount of prepayment and whether the prepayment is of Adjusted Alternate
Base Rate Advances, LIBOR Advances, Swingline Loans or a combination thereof,
and if a combination thereof, the amount allocable to each; provided, however,
that (i) any partial prepayment under this Subsection shall be in an amount not
less than $1,000,000 or a whole multiple of $100,000 in excess thereof; (ii) any
LIBOR Advance prepaid on any day other than the last day of the applicable LIBOR
Interest Period must be accompanied by any amounts payable pursuant to Section
4.4; and (iii) each prepayment under this subsection shall include all interest
accrued on the amount of principal prepaid through the date of prepayment. Upon
receipt of any such notice the Administrative Agent shall promptly notify each
Lender thereof. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with any
amounts payable pursuant to Section 4.4.
(b) If on any Business Day the Allocated Facility Amount exceeds the
then-current Borrowing Base Availability or the then current Aggregate
Commitment, then, without notice or demand, the Borrower shall make a mandatory
prepayment of the Loans in an amount equal to such excess no later than thirty
days following such Business Day. The failure of the Borrower make any
prepayment as required under this subsection shall constitute an Event of
Default under this Agreement. Each prepayment required to be made under this
subsection shall include all interest accrued on the amount of principal prepaid
through the date of prepayment and any amounts payable pursuant to Section 4.4.
Provided no Default or Event of Default has occurred and is continuing on the
date that the Borrower shall make a mandatory prepayment pursuant to this
subsection, the Borrower shall have the right to direct whether such prepayment
shall be of Adjusted Alternate Base Rate Advances, LIBOR Advances, Swingline
Loans or a combination thereof, and, if a combination thereof, the amount
allocable to each.
(c) The Borrower shall have the right at any time and from time to time, on five
(5) Business Days prior written notice to the Administrative Agent, to obtain a
release of any Collateral Pool Asset from the applicable Mortgage by repaying on
the date of such release such amount as may be required for it to provide the
Compliance Certificate referenced below taking into account the release,
provided (i) no Default or Event of Default has occurred and is continuing or
shall occur upon the release of such Collateral Pool Asset and (ii) Borrower has
provided a Compliance Certificate in the form of Exhibit I hereto signed by a
Qualified Officer of the Operating Partnership and Equity Inns certifying to
Borrower's continued compliance with all of the financial and other material
covenants under the Loan Documents after the removal of such Collateral Pool
Asset and, to the extent necessary, repayment of any Advances.
Section 2.20 Procedures for Addition of Collateral Pool Assets.
(a) The Borrower may propose to include additional Properties as Collateral Pool
Assets by sending written proposals for inclusion to the Administrative Agent
along with (i) the items listed on Schedule 2, (ii) a request for Administrative
Agent to order an Appraisal of the proposed additional Property and the other
items, such as additional Loan Documents, needed to finalize the addition of
such Property to the Collateral Pool Assets as shown on Schedule 3, (iii)
evidence that the qualifications required under the definition of "Eligible
Property" are met, (iv) a request that the Required Lenders evaluate and approve
the Appraisal and Appraised Value of such Property (applicable for all
Properties) and (v) that the Required Lenders evaluate and approve the Property
for inclusion in the Collateral (applicable if (A) the Appraised Value of such
Property, when combined with the aggregate Appraised Values of all other
Properties added to the Collateral after the date of this Agreement pursuant to
this Section, is greater than $75,000,000, or (B) the interest of the Owner of
such Property is the tenant's interest under a ground lease or any other estate
less than fee simple title). Items (i)-(iii) above shall be immediately
forwarded to the Lenders by the Administrative Agent if their approval is
required under item (iv). Administrative Agent (and the Lenders, as the case may
be) shall endeavor to utilize all of the due diligence reports obtained by
Borrower from third-party providers and certified to the Lenders by the
third-party providers and not require new reports (except for the Appraisals),
but the Administrative Agent and the Lenders reserve the right to require
independent reports if the Borrower's report was prepared by a third-party
provider not reasonably satisfactory or if the Administrative Agent or the
Lenders in good faith believe the report furnished contains an inaccuracy or is
not current or is incomplete in any material respect. If all items required by
Schedule 2 and the preceding sentence accompany or precede the written proposal,
the written proposal shall so indicate. If all items required by Schedule 2 do
not accompany or precede the written proposal, the Borrower shall accompany the
last item required by Schedule 2 with a letter notifying the Administrative
Agent that it has completed delivery of all items required by Schedule 2. The
relevant time periods for acceptance or rejection by the Administrative Agent
and/or the Required Lenders shall commence upon the later of (1) receipt of the
completed Appraisal by both the Administrative Agent and the Lenders and (2)
receipt by the Administrative Agent of the proposal and all items required by
Schedule 2. When both items (1) and (2) above have been delivered, the
Administrative Agent shall immediately notify Borrower and the relevant time
periods for acceptance or rejection shall commence. For purposes of this Section
2.20, Borrower may begin the process of including an additional Collateral Pool
Asset if Borrower has a binding contract to purchase such Property provided that
Borrower shall have consummated the purchase of such Property on or before the
date such Property is included in the Collateral.
(b) The Administrative Agent shall have fifteen (15) Business Days after the
Administrative Agent has actually received the completed Appraisal as well as
Borrower's proposal and all items set forth in Schedule 2 with respect to a
proposed Collateral Pool Asset pursuant to this Section to notify the Borrower
in writing as to whether the proposed Collateral Pool Asset is an Eligible
Property that is satisfactory to the Administrative Agent pursuant to Section
2.20(a) above. The failure of the Administrative Agent to respond to the
Borrower's request within such fifteen Business Day period shall be deemed to be
a denial that such proposed Collateral Pool Asset qualifies as an Eligible
Property that is satisfactory to the Administrative Agent. The Lenders shall
have fifteen (15) Business Days after they have actually received the completed
Appraisal and other documents to which they are entitled pursuant to Section
2.20(a) above (it being acknowledged that this period will run substantially
concurrently with Administrative Agent's review period in light of
Administrative Agent's obligation under Section 2.20(a) to immediately forward
those items to the Lenders) to notify the Administrative Agent (who shall notify
the Borrower after all responses from the Lenders are received or deemed
received) as to (i) whether the Appraisal and Appraised Value are satisfactory,
or (ii) whether the Appraisal and Appraised Value are satisfactory and whether
the proposed Eligible Property otherwise is approved as a Collateral Pool Asset,
if the Required Lenders' approval is required as to the latter pursuant to
Section 2.20(a) above. The failure of any Lender to respond to the Borrower's
request within such fifteen Business Day period shall be deemed to be an
approval of the Appraisal and consent to the inclusion of such Eligible Property
in the Collateral. If the proposed Collateral Pool Asset is deemed by the
Administrative Agent to be an Eligible Property and is approved by the
Administrative Agent in the manner aforesaid, and the Appraisal and Appraised
Value are approved (or deemed approved) by the Required Lenders, that Property
shall be automatically approved for inclusion in the Collateral without the need
for any further approval by the other Lenders. If the proposed Collateral Pool
Asset is an Eligible Property but was not approved by the Administrative Agent,
Borrower may by written notice to the Administrative Agent request that it
nevertheless be included in the Collateral pursuant to the procedure set forth
in Section 2.20(c). Upon the approval by the Administrative Agent (and the
Required Lenders, if required) for inclusion of an Eligible Property in the
Collateral and the satisfaction of all requirements listed in Schedule 3 with
respect thereto, such Eligible Property shall be added to the Collateral as a
Collateral Pool Asset. The Administrative Agent shall supply, at the written
request of any Lender, copies of any of the documents described on Schedule 2
and 3 to such Lender.
(c) With respect to any Property requested to be included as a Collateral Pool
Asset which does not qualify under Section 2.20(b) due to the Administrative
Agent's failure to approve such Property, the Borrower may request that such
Property be included as a Collateral Pool Asset notwithstanding such failure, by
written notice to the Administrative Agent to be forwarded to the Lenders. Such
proposed Collateral Pool Asset shall be included if and only if (i) such
Property qualifies in all respects as an Eligible Property, and (ii) the
Required Lenders in their sole discretion approve the Borrower's request that
such proposed Collateral Pool Asset be included. Lenders shall respond to the
Administrative Agent and the failure of any Lender to respond in writing to the
Borrower's request within fifteen (15) Business Days of receipt of the
Borrower's request for such Property to be included in the Collateral, together
with delivery of such of the items set forth in Schedule 2 as a Lender may
request, shall be deemed to be approval by such Lender of the Borrower's request
to include such Property in the Collateral. The Administrative Agent shall
promptly notify the Borrower in writing if the Required Lenders approve the
Borrower's request for such Eligible Property to be included in the Collateral.
Section 2.21 Application of Moneys Received. All moneys collected or received by
the Administrative Agent on account of the Facility directly or indirectly,
shall be applied in the following order of priority:
(i) to the payment of all reasonable costs incurred in the
collection of such moneys of which the Administrative Agent
shall have given notice to the Borrower;
(ii) to the reimbursement of any yield protection due to any of the
Lenders in accordance with Section 4.1;
(iii) to the payment of any fee due pursuant to Section 3.8(b) in
connection with the issuance of a Facility Letter of Credit to
the Issuing Bank, to the payment of the Commitment Fee and
Facility Letter of Credit Fee to the Lenders, if then due, and
to the payment of all fees to the Administrative Agent;
(iv) to payment of the full amount of interest and principal on the
Swingline Loans (provided that if Swingline Lender has not
requested the other Lenders to purchase their applicable
Percentages of the any outstanding Swingline Loans within
twenty (20) Business Days following a Default, then principal
and interest due on such Swingline Loans shall be of equal
priority with principal and interest due in connection with
other Loans);
(v) first to interest until paid in full and then to principal for
all Lenders (other than Defaulting Lenders) in accordance with
the respective Percentages of the Lenders;
(vi) any other sums due to the Administrative Agent or any Lender
under any of the Loan Documents; and
(vii) to the payment of any sums due to each Defaulting Lender as
their respective Percentages appear (provided that
Administrative Agent shall have the right to set-off against
such sums any amounts due from such Defaulting Lender).
Section 2.22 Extension of Maturity Date. Borrower shall have one (1) option to
extend the Maturity Date for a period of one year, upon satisfaction of the
following conditions precedent:
(a) Borrower shall provide Administrative Agent with written notice of
Borrower's intent to exercise such extension option not more than ninety (90)
and not less than thirty (30) days prior to the existing Maturity Date;
(b) As of the date of Borrower's delivery of notice of its intent to exercise
the extension option, and as of the Maturity Date, no Default or Event of
Default shall have occurred and be continuing, and Borrower shall so certify in
writing; and
(c) On or before the original Maturity Date, Borrower shall pay to
Administrative Agent for the benefit of the Lenders an extension fee in an
amount equal to 0.25% of the Aggregate Commitment.
Article III.
THE LETTER OF CREDIT SUBFACILITY
Section 3.1 Obligation to Issue. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of the
Borrower herein set forth, the Issuing Bank hereby agrees to issue for the
account of either of the entities comprising the Borrower, one or more Facility
Letters of Credit in accordance with this Article III, from time to time during
the period commencing on the Agreement Effective Date and ending on a date one
Business Day prior to the Maturity Date.
Section 3.2 Types and Amounts. The Issuing Bank shall not have any
obligation to:
(i) issue any Facility Letter of Credit if the aggregate maximum
amount then available for drawing under Letters of Credit
issued by such Issuing Bank, after giving effect to the
Facility Letter of Credit requested hereunder, shall exceed
any limit imposed by law or regulation upon such Issuing Bank;
(ii) issue any Facility Letter of Credit if, after giving effect
thereto, (1) the then applicable Allocated Facility Amount
would exceed the then current Aggregate Commitment, (2) the
then applicable Allocated Facility Amount would exceed the
then-current Borrowing Base Availability, or (3) the Facility
Letter of Credit Obligations would exceed the Facility Letter
of Credit Sublimit; or
(iii) issue any Facility Letter of Credit having an expiration date,
or containing automatic extension provision to extend such
date, to a date which is a Business Day immediately preceding
the Maturity Date.
Section 3.3 Conditions. In addition to being subject to the satisfaction of the
conditions contained in Article V hereof, the obligation of the Issuing Bank to
issue any Facility Letter of Credit is subject to the satisfaction in full of
the following conditions:
(i) the Borrower shall have delivered to the Issuing Bank at such
times and in such manner as the Issuing Bank may reasonably
prescribe such documents and materials as may be reasonably
required pursuant to the terms of the proposed Facility Letter
of Credit (it being understood that if any inconsistency
exists between such documents and the Loan Documents, the
terms of the Loan Documents shall control) and the proposed
Facility Letter of Credit shall be reasonably satisfactory to
the Issuing Bank as to form and content;
(ii) as of the date of issuance, no order, judgment or decree of
any court, arbitrator or governmental authority shall purport
by its terms to enjoin or restrain the Issuing Bank from
issuing the requested Facility Letter of Credit and no law,
rule or regulation applicable to the Issuing Bank and no
request or directive (whether or not having the force of law)
from any governmental authority with jurisdiction over the
Issuing Bank shall prohibit or request that the Issuing Bank
refrain from the issuance of Letters of Credit generally or
the issuance of the requested Facility Letter or Credit in
particular; and
(iii) there shall not exist any Default or Event of Default.
Section 3.4 Procedure for Issuance of Facility Letters of Credit.
(a) Borrower shall give the Issuing Bank and the Administrative Agent at least
three (3) Business Days' prior written notice of any requested issuance of a
Facility Letter of Credit under this Agreement (a "Letter of Credit Request"), a
copy of which shall be sent immediately to all Lenders (except that, in lieu of
such written notice, the Borrower may give the Issuing Bank and the
Administrative Agent telephonic notice of such request if confirmed in writing
by delivery to the Issuing Bank and the Administrative Agent (i) immediately (A)
of a telecopy of the written notice required hereunder which has been signed by
an authorized officer, or (B) of a telex containing all information required to
be contained in such written notice and (ii) promptly (but in no event later
than the requested date of issuance) of the written notice required hereunder
containing the original signature of an authorized officer); such notice shall
be irrevocable and shall specify:
(1) the stated amount of the Facility Letter of Credit requested
(which stated amount shall not be less than $50,000);
(2) the effective date (which day shall be a Business Day) of
issuance of such requested Facility Letter of Credit (the
"Issuance Date");
(3) the date on which such requested Facility Letter of Credit is
to expire;
(4) the purpose for which such Facility Letter of Credit is to be
issued;
(5) the Person for whose benefit the requested Facility Letter of
Credit is to be issued; and
(6) any special language required to be included in the Facility
Letter of Credit.
At the time such request is made, the Borrower shall also provide the
Administrative Agent and the Issuing Bank with a copy of the form of the
Facility Letter of Credit that the Borrower is requesting be issued. Such
notice, to be effective, must be received by such Issuing Bank and the
Administrative Agent not later than 2:00 p.m. (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 3.5 Reimbursement Obligations; Duties of Issuing Bank.
(a) The Issuing Bank shall promptly notify the Borrower and the Administrative
Agent (who shall promptly notify Lenders) of any draw under a Facility Letter of
Credit. Any such draw shall not be deemed to be a default hereunder but shall
constitute an Advance of the Facility in the amount of the Reimbursement
Obligation with respect to such Facility Letter of Credit and shall bear
interest from the date of the relevant drawing(s) under the pertinent Facility
Letter of Credit at a rate selected by Borrower in accordance with Section 2.11
hereof; provided that if a Monetary Default or an Event of Default exists at the
time of any such drawing(s), then the Borrower shall reimburse the Issuing Bank
for drawings under a Facility Letter of Credit issued by the Issuing Bank no
later than the next succeeding Business Day after the payment by the Issuing
Bank and until repaid such Reimbursement Obligation shall bear interest at the
Default Rate.
(b) Any action taken or omitted to be taken by the Issuing Bank under or in
connection with any Facility Letter of Credit, if taken or omitted in the
absence of willful misconduct or gross negligence, shall not put the Issuing
Bank under any resulting liability to any Lender or, provided that such Issuing
Bank has complied with the procedures specified in Section 3.4 and such Lender
has not given a notice contemplated by Section 3.6(a) that continues in full
force and effect, relieve that Lender of its obligations hereunder to the
Issuing Bank. In determining whether to pay under any Facility Letter of Credit,
the Issuing Bank shall have no obligation relative to the Lenders other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered in compliance, and that they appear to comply on
their face, with the requirements of such Letter of Credit.
Section 3.6 Participation.
(a) Immediately upon issuance by the Issuing Bank of any Facility Letter of
Credit in accordance with the procedures set forth in Section 3.4, each Lender
shall be deemed to have irrevocably and unconditionally purchased and received
from the Issuing Bank, without recourse, representation or warranty, an
undivided interest and participation equal to such Lender's Percentage in such
Facility Letter of Credit (including, without limitation, all obligations of the
Borrower with respect thereto) and all related rights hereunder and under the
Guaranty and other Loan Documents; provided that a Letter of Credit issued by
the Issuing Bank shall not be deemed to be a Facility Letter of Credit for
purposes of this Section 3.6 if the Issuing Bank shall have received written
notice from any Lender on or before the Business Day prior to the date of its
issuance of such Letter of Credit that one or more of the conditions contained
in Section 5.2 is not then satisfied, and in the event the Issuing Bank receives
such a notice it shall have no further obligation to issue any Facility Letter
of Credit until such notice is withdrawn by that Lender or the Issuing Bank
receives a notice from the Administrative Agent that such condition has been
effectively waived in accordance with the provisions of this Agreement. Each
Lender's obligation to make further Loans to Borrower (other than any payments
such Lender is required to make under subparagraph (b) below) or to purchase an
interest from the Issuing Bank in any subsequent letters of credit issued by the
Issuing Bank on behalf of Borrower shall be reduced by such Lender's Percentage
of the undrawn portion of each Facility Letter of Credit outstanding.
(b) In the event that the Issuing Bank makes any payment under any Facility
Letter of Credit and the Borrower shall not have repaid such amount to the
Issuing Bank pursuant to Section 3.7 hereof, the Issuing Bank shall promptly
notify the Administrative Agent, which shall promptly notify each Lender of such
failure, and each Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of the Issuing Bank the amount of such
Lender's Percentage of the unreimbursed amount of such payment, and the
Administrative Agent shall promptly pay such amount to the Issuing Bank.
Lender's payments of its Percentage of such Reimbursement Obligation as
aforesaid shall be deemed to be a Loan by such Lender and shall constitute
outstanding principal under such Lender's Note. The failure of any Lender to
make available to the Administrative Agent for the account of the Issuing Bank
its Percentage of the unreimbursed amount of any such payment shall not relieve
any other Lender of its obligation hereunder to make available to the
Administrative Agent for the account of such Issuing Bank its Percentage of the
unreimbursed amount of any payment on the date such payment is to be made, but
no Lender shall be responsible for the failure of any other Lender to make
available to the Administrative Agent its Percentage of the unreimbursed amount
of any payment on the date such payment is to be made. Any Lender which fails to
make any payment required pursuant to this Section 3.6(b) shall be deemed to be
a Defaulting Lender hereunder.
(c) Whenever the Issuing Bank receives a payment on account of a Reimbursement
Obligation, including any interest thereon, the Issuing Bank shall promptly pay
to the Administrative Agent and the Administrative Agent shall promptly pay to
each Lender which has funded its participating interest therein, in immediately
available funds, an amount equal to such Lender's Percentage thereof.
(d) Upon the request of the Administrative Agent or any Lender, the Issuing Bank
shall furnish to such Administrative Agent or Lender copies of any Facility
Letter of Credit to which the Issuing Bank is party and such other documentation
as may reasonably be requested by the Administrative Agent or Lender.
(e) The obligations of a Lender to make payments to the Administrative Agent for
the account of the Issuing Bank with respect to a Facility Letter of Credit
shall be absolute, unconditional and irrevocable, not subject to any
counterclaim, set-off, qualification or exception whatsoever other than a
failure of any such Issuing Bank to comply with the terms of this Agreement
relating to the issuance of such Facility Letter of Credit, and such payments
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances.
Section 3.7 Payment of Reimbursement Obligations.
(a) The Borrower agrees to pay to the Administrative Agent for the
account of the Issuing Bank the amount of all Advances for
Reimbursement Obligations, interest and other amounts payable
to the Issuing Bank under or in connection with any Facility
Letter of Credit when due, irrespective of any claim, set-off,
defense or other right which the Borrower may have at any time
against any Issuing Bank or any other Person, under all
circumstances, including without limitation any of the
following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower may have at any time against a beneficiary
named in a Facility Letter of Credit or any transferee of any
Facility Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, the
Issuing Bank, any Lender, or any other Person, whether in
connection with this Agreement, any Facility Letter of Credit,
the transactions contemplated herein or any unrelated
transactions (including any underlying transactions between
the Borrower and the beneficiary named in any Facility Letter
of Credit);
(iii) any draft, certificate or any other document presented under
the Facility Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect of any
statement therein being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the
Loan Documents; or
(v) the occurrence of any Default or Event of Default.
(b) In the event any payment by the Borrower received by the
Issuing Bank or the Administrative Agent with respect to a
Facility Letter of Credit and distributed by the
Administrative Agent to the Lenders on account of their
participations is thereafter set aside, avoided or recovered
from the Administrative Agent or Issuing Bank in connection
with any receivership, liquidation, reorganization or
bankruptcy proceeding, each Lender which received such
distribution shall, upon demand by the Administrative Agent,
contribute such Lender's Percentage of the amount set aside,
avoided or recovered together with interest at the rate
required to be paid by the Issuing Bank or the Administrative
Agent upon the amount required to be repaid by the Issuing
Bank or the Administrative Agent.
Section 3.8 Compensation for Facility Letters of Credit.
(a) The Borrower shall pay to the Administrative Agent, for the ratable account
of the Lenders (including the Issuing Bank), based upon the Lenders' respective
Percentages, a per annum fee (the "Facility Letter of Credit Fee") as a
percentage of the face amount of each Facility Letter of Credit equal to the
LIBOR Applicable Margin in effect from time to time while such Facility Letter
of Credit is outstanding. The Facility Letter of Credit Fee relating to any
Facility Letter of Credit shall be due and payable in arrears in equal
installments on the first Business Day of each month following the issuance of
such Facility Letter of Credit and, to the extent any such fees are then due and
unpaid, on the Maturity Date or any other earlier date that the Obligations are
due and payable in full. The Administrative Agent shall promptly remit such
Facility Letter of Credit Fees, when paid, to the other Lenders in accordance
with their Percentages thereof. The Borrower shall not have any liability to any
Lender for the failure of the Administrative Agent to promptly deliver funds to
any such Lender and shall be deemed to have made all such payments on the date
the respective payment is made by the Borrower to the Administrative Agent,
provided such payment is received by the time specified in Section 2.12 hereof.
(b) The Issuing Bank also shall have the right to receive solely for its own
account an issuance fee of one-eighth of one percent (0.125%) of the face amount
of each Facility Letter of Credit, payable by the Borrower on the Issuance Date
for each such Facility Letter of Credit. The Issuing Bank shall also be entitled
to receive its reasonable out-of-pocket costs and the Issuing Bank's standard
charges of issuing, amending and servicing Facility Letters of Credit and
processing draws thereunder.
Section 3.9 Letter of Credit Collateral Account. The Borrower hereby agrees that
it will, until the Maturity Date, maintain a special collateral account (the
"Letter of Credit Collateral Account") at the Administrative Agent's office at
the address specified pursuant to Article XV, in the name of the Borrower but
under the sole dominion and control of the Administrative Agent, for the benefit
of the Lenders, and in which the Borrower shall have no interest other than as
set forth in Section 11.1. The Letter of Credit Collateral Account shall hold
the deposits the Borrower is required to make after an Event of Default on
account of any outstanding Facility Letters of Credit as described in Section
11.1. In addition to the foregoing, the Borrower hereby grants to the
Administrative Agent, for the benefit of the Lenders, a security interest in and
to the Letter of Credit Collateral Account and any funds that may hereafter be
on deposit in such account, including income earned thereon. The Lenders
acknowledge and agree that the Borrower has no obligation to fund the Letter of
Credit Collateral Account unless and until so required under Section 11.1
hereof.
Article IV.
CHANGE IN CIRCUMSTANCES
Section 4.1 Yield Protection. If the adoption of or change in any law or
any governmental or quasi-governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law), or any interpretation
thereof, or the compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending Installation to
any tax, duty, charge or withholding on or from payments due
from Borrower (excluding federal and state taxation of the
overall net income of any Lender or applicable Lending
Installation), or changes the basis of such taxation of
payments to any Lender in respect of its Advances, its
interest in the Facility Letters of Credit or other amounts
due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest
rate applicable to LIBOR Advances), or
(iii) imposes any other condition, and the result is to increase the
cost of any Lender or any applicable Lending Installation of
making, funding or maintaining the Loans or reduces any amount
receivable by any Lender or any applicable Lending
Installation in connection with the Loans, or requires any
Lender or any applicable Lending Installation to make any
payment calculated by reference to the amount of the Loans
held, Letters of Credit issued or participated in or interest
received by it, by an amount deemed material by such Lender,
then, within fifteen (15) days of demand by such Lender, Borrower shall pay such
Lender that portion of such increased expense incurred or reduction in an amount
received which such Lender determines is attributable to making, funding and
maintaining its Advances and its Commitment.
Section 4.2 Changes in Capital Adequacy Regulations. If a Lender determines the
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporate entity controlling such
Lender with respect to this Facility is increased as a result of a Change (as
defined below), then, within fifteen (15) days of demand by such Lender,
Borrower shall pay such Lender the amount necessary to compensate for any
shortfall in the rate of return on the portion of such increased capital which
such Lender determines is attributable to this Agreement, its Advances, its
interest in the Facility Letters of Credit, or its obligation to make Advances
hereunder or participate in or issue Facility Letters of Credit hereunder (after
taking into account such Lender's policies as to capital adequacy). "Change"
means (i) any change after the date of this Agreement in the Risk-Based Capital
Guidelines (as defined below) or (ii) any adoption of or change in any other
law, governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement which affects the amount of capital required or expected
to be maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the risk-based
capital guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards", including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
Section 4.3 Availability of LIBOR Advances. If any Lender determines that
maintenance of any of its LIBOR Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation or directive of any Governmental
Authority having jurisdiction, the Administrative Agent shall suspend by written
notice to Borrower the availability of LIBOR Advances from such Lender and
require any LIBOR Advances to be converted to Adjusted Alternate Base Rate
Advances, or if the Required Lenders determine that (i) deposits of a type or
maturity appropriate to match fund LIBOR Advances are not available, the
Administrative Agent shall suspend by written notice to Borrower the
availability of LIBOR Advances with respect to any LIBOR Advances made after the
date of any such determination, or (ii) an interest rate applicable to a LIBOR
Advance does not accurately reflect the cost of making a LIBOR Advance, and, if
for any reason whatsoever the provisions of Section 4.1 are inapplicable, the
Administrative Agent shall suspend by written notice to Borrower the
availability of LIBOR Advances with respect to any LIBOR Advances made after the
date of any such determination.
Section 4.4 Funding Indemnification. If any payment to Lenders of a ratable
LIBOR Advance occurs on a date which is not the last day of the applicable
Interest Period, whether because of acceleration, prepayment or otherwise, or a
ratable LIBOR Advance is not made on the date specified by Borrower for any
reason other than default by one or more of the Lenders, Borrower will indemnify
each Lender for any loss or cost incurred by such Lender resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain the ratable LIBOR Advance.
Section 4.5 Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its LIBOR Advances to reduce any liability of Borrower to such Lender
under Sections 4.1 and 4.2 or to avoid the unavailability of a LIBOR Advance, so
long as such designation is not disadvantageous to such Lender. Each Lender
shall deliver a written statement of such Lender as to the amount due, if any,
under Sections 4.1, 4.2 or 4.4 hereof. Such written statement shall set forth in
reasonable detail the calculations upon which such Lender determined such amount
and shall be final, conclusive and binding on Borrower in the absence of
manifest error. Determination of amounts payable under such Sections in
connection with a LIBOR Advance shall be calculated as though each Lender funded
its LIBOR Advance through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Adjusted
LIBOR Rate applicable to such Advance, whether in fact that is the case or not.
Unless otherwise provided herein, the amount specified in the written statement
shall be payable within ten (10) days after receipt by Borrower of the written
statement. The obligations of Borrower under Sections 4.1, 4.2 and 4.4 hereof
shall survive payment of the Obligations and termination of this Agreement.
Without in any way affecting the Borrower's obligation to pay compensation
actually claimed by a Lender under this Article IV or the restrictions on the
availability of LIBOR Advances under Section 4.3, the Borrower shall have the
right to replace any Lender which has demanded such compensation or restricted
such availability provided that Borrower notifies such Lender that it has
elected to replace such Lender and notifies such Lender and the Administrative
Agent of the identity of the proposed replacement Lender not more than six (6)
months after the date of such Lender's most recent demand for compensation under
this Article IV or most recent determination under Section 4.3. The Lender being
replaced shall assign its Percentage of the Aggregate Commitment and its rights
and obligations under this Facility to the replacement Lender in accordance with
the requirements of Section 13.3 hereof and the replacement Lender shall assume
such Percentage of the Aggregate Commitment and the related obligations under
this Facility prior to the Maturity Date to be extended, all pursuant to an
assignment agreement substantially in the form of Exhibit K hereto. The purchase
by the replacement Lender shall be at par (plus all accrued and unpaid interest
and any other sums owed to such Lender being replaced hereunder) which shall be
paid to the Lender being replaced upon the execution and delivery of the
assignment.
Article V.
CONDITIONS PRECEDENT
Section 5.1 Conditions Precedent to Closing. The Lenders shall not be required
to make the initial Advance hereunder, nor shall the Issuing Bank be required to
issue the initial Facility Letter of Credit hereunder, unless (i) the Borrower
shall have paid all fees then due and payable to the Lenders, and the
Administrative Agent hereunder, (ii) all of the conditions set forth in Section
5.2 are satisfied, and (iii) the Borrower shall have furnished to the
Administrative Agent, in form and substance satisfactory to the Administrative
Agent and their counsel and with sufficient copies for the Lenders, the
following:
(a) Certificates of Limited Partnership/Incorporation. A copy of
the Certificate of Limited Partnership for each entity
comprising the Borrower and a copy of the articles of
incorporation of Equity Inns and the trust documents of Equity
Inns Trust, each certified by the appropriate Secretary of
State or equivalent state official.
(b) Agreements of Limited Partnership/Bylaws. A copy of the
Agreement of Limited Partnership for each entity comprising
the Borrower and a copy of the bylaws of each of the
Guarantors, including all amendments thereto, each certified
by the Secretary or an Assistant Secretary of such entity as
being in full force and effect on the Agreement Effective
Date.
(c) Good Standing and Foreign Qualification Certificates. A
certified copy of a certificate from the Secretary of State or
equivalent state official of the states where each entity
comprising the Borrower and the Guarantors are organized,
dated as of the most recent practicable date, showing the good
standing or partnership qualification (if issued) of (i) each
entity comprising Borrower, and (ii) the Guarantors, and a
certified copy of a certificate from the Secretary of State or
equivalent state official of the states where the Initial
Collateral Pool Assets are located, dated as of the most
recent practicable date, showing the qualification to transact
business in said states by the entities which own such Initial
Collateral Pool Assets.
(d) Resolutions. A copy of a resolution or resolutions and adopted
by the Board of Directors of the general partner of each
entity comprising the Borrower, certified by the Secretary or
an Assistant Secretary thereof as being in full force and
effect on the Agreement Effective Date, authorizing the
Advances provided for herein and the execution, delivery and
performance of the Loan Documents by such general partner to
be executed and delivered by it hereunder on behalf of itself
and Borrower, together with a similar resolution for each of
the Guarantors.
(e) Incumbency Certificate. A certificate, signed by the Secretary
or an Assistant Secretary of the general partner of each
entity comprising the Borrower and dated the Agreement
Effective Date, as to the incumbency, and containing the
specimen signature or signatures, of the Persons authorized to
execute and deliver the Loan Documents to be executed and
delivered by it and Borrower hereunder, together with a
similar resolution for each of the Guarantors.
(f) Loan Documents. Originals of the Loan Documents (in such
quantities as the Lenders may reasonably request), including
the Mortgage Amendments for all Initial Collateral Pool
Assets, duly executed by authorized officers of the
appropriate entity.
(g) Opinion of Tennessee Counsel. A written opinion, from
Tennessee outside counsel for the Borrower and the Guarantors
which counsel is reasonably satisfactory to Administrative
Agent, in form and substance acceptable to the Administrative
Agent.
(h) Opinion of Illinois Counsel. A written opinion, from Illinois
outside counsel for the Borrower and the Guarantors in form
and substance satisfactory to Administrative Agent.
(i) Opinion of Local Counsel. A written opinion from counsel in
the state where a Collateral Pool Asset is located, in form
and substance satisfactory to Administrative Agent, covering
the form of Mortgage Amendment and any material changes in
local law since the time their opinion was issued pursuant to
the Existing Agreement.
(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 Effective Date no Default or Event of Default has
occurred and is continuing and that all representations and
warranties of the Borrower contained herein are true and
correct in all material respects as of the Agreement Effective
Date as and to the extent set forth herein;
(ii) The most recent financial statements of the Consolidated Group
and a certificate from a Qualified Officer of Equity Inns that
no change in the Consolidated Group's financial condition that
would have a Material Adverse Effect has occurred since
December 31, 2002;
(iii) A compliance certificate in the form attached hereto as
Exhibit I calculating the applicable status of Borrower's
financial covenants hereunder as of the Agreement Effective
Date;
(iv) Written money transfer instructions, in substantially the form
of Exhibit H hereto, addressed to the Administrative Agent and
signed by a Qualified Officer, together with such other
related money transfer authorizations as the Administrative
Agent may have reasonably requested; and
(k) Other Evidence as any Lender May Require. Such other evidence
as any Lender may reasonably request to establish the
compliance with the financial covenants under this Agreement,
the consummation of the transactions contemplated hereby, the
taking of all necessary actions in any proceedings in
connection herewith and compliance with the other conditions
set forth in this Agreement.
(l) Actions to Perfect Liens. The Administrative Agent shall have
received evidence in form and substance satisfactory to it
that all filings, recordings, registrations and other actions,
including, without limitation the recording of all Mortgage
Amendments on all Properties included in the Initial
Collateral Pool and the filing of all UCC-1 financing
statements, necessary or, in the opinion of the Administrative
Agent, desirable to perfect or continue the Liens created by
the Security Documents shall have been completed.
(m) Surveys. If there has been any new construction at a
Collateral Pool Asset since the date of the Existing
Agreement, the Administrative Agent shall have received a
survey for each Property in the Initial Collateral Pool
hereunder either (i) certified to the Administrative Agent or
(ii) recertified to the Administrative Agent. For all other
Properties, Borrower shall provide a certificate of the
Borrower that no material changes in the location or
configuration of the improvements on the Properties subject to
the Mortgages have occurred since the date of the initial
survey, and which is in all other respects reasonably
satisfactory to the Administrative Agent.
(n) Title Insurance Policy. The Administrative Agent shall have
received in respect of each Initial Collateral Pool Asset
hereunder a title policy (or policies) or a date down
endorsement to the title policy issued pursuant to the
Existing Agreement, showing no exceptions to title other than
those permitted under the Mortgages, except such as may be
approved by the Administrative Agent, naming the
Administrative Agent for the benefit of the Lenders as the
insured under such policy and containing such "tie-in",
revolving credit and other endorsements as may be available in
the applicable jurisdiction and as the Administrative Agent
may require. The Administrative Agent shall have received
evidence satisfactory to it that all premiums in respect of
any endorsements, and all charges for mortgage recording tax,
if any, have been paid.
(o) Flood Insurance. If any portion of any buildings located on
any Property in the Initial Collateral Pool is located in an
area identified as a special flood hazard area by the Federal
Emergency Management Agency or other applicable agency, the
Administrative Agent shall have received (i) a policy of flood
insurance which (A) covers any parcel of improved real
property which is encumbered by any Mortgage and (B) is
written in an amount not less than the outstanding principal
amount of the indebtedness secured by such Mortgage which is
reasonably allocable to such real property or the maximum
limit of coverage made available with respect to the
particular type of property under the Act, whichever is less,
and (ii) confirmation that the Borrower has received the
notice required pursuant to Section 208(e)(3) of Regulation H
of the Board of Governors of the Federal Reserve System. To
the extent any Property included in the Initial Collateral
Pool is not located in an area identified as a special flood
hazard area by the Federal Emergency Management Agency or
other agency, the certification of the survey of such Property
to be delivered pursuant to clause (m) above shall include
confirmation of such fact.
(p) Copies of Documents. The Administrative Agent shall have
received a copy of all recorded documents with respect to the
Initial Collateral Pool Assets referred to, or listed as
exceptions to title in, the title policy or policies referred
to in Section 4.1(n) and a copy, certified by such parties as
the Administrative Agent may deem appropriate, of all other
documents affecting the Properties covered by each Mortgage,
including without limitation copies of any ground leases on
any of such Properties.
(q) Lien Searches. The Administrative Agent shall have received
the results of a recent search by a Person satisfactory to the
Administrative Agent, of the Uniform Commercial Code,
judgement and tax lien filings which may have been filed with
respect to personal property of the Borrower, any other Loan
Party and the results of such search shall be satisfactory to
the Administrative Agent.
(r) Insurance. The Administrative Agent shall have received
evidence in form and substance satisfactory to it that all of
the requirements of Section 3 of each of the Mortgages shall
have been satisfied.
(s) Borrowing Notice. The Administrative Agent shall have received
a Borrowing Notice in accordance with Section 2.11 hereunder.
(t) Appraisals. The Administrative Agent shall have received
current Appraisal Summaries which shall indicate the
Collateral Pool Asset Value for each of the Initial Collateral
Pool Assets.
(u) Environmental Report/Certification. If requested by
Administrative Agent because it has determined in good faith
that there are environmental questions with respect to a
Collateral Pool Asset, the Administrative Agent shall have
received, at the Borrower's expense, a detailed report and
certification (or updated report and recertification) for such
Property in the Initial Collateral Pool prepared by a
consultant acceptable to Administrative Agent, which shall
include, inter alia, a certification that such consultant has
obtained and examined the list of prior owners and tenants,
and has made an on-site physical examination of the relevant
Property and improvements thereon, and a visual observation of
the surrounding areas, and disclosing the extent of past or
present Materials of Environmental Concern activities or the
presence of Materials of Environmental Concern.
(v) Leases and Estoppels. The Administrative Agent shall have
received (i) in the case of all Initial Collateral Pool Assets
which are subject to a ground lease, estoppel letters from the
ground lessor thereunder in form and substance satisfactory to
the Administrative Agent, and (ii) in the case of all
Permitted Operating Leases and tenants thereunder, (A) tenant
estoppel certificates in form and substance acceptable to the
Administrative Agent, and (B) upon request of the
Administrative Agent current, certified financial statements
of the tenant and of any guarantor of its obligations.
(w) Subordination of Permitted Operating Leases. The
Administrative Agent shall have received fully executed copies
of all Permitted Operating Leases affecting the Initial
Collateral Pool Assets and shall have, on behalf of the
Lenders, entered into subordination agreements with the
tenants thereunder substantially in the form attached hereto
as Exhibit Q and made a part hereof reasonably satisfactory to
the Administrative Agent in form and substance regarding the
subordination of the Permitted Operating Leases relating to
the Initial Collateral Pool Assets.
Section 5.2 Conditions Precedent to Subsequent Advances and Issuance. Advances
after the initial Advance and issuances of Facility Letters of Credit shall be
made from time to time as requested by Borrower, and the obligation of each
Lender to make any Advance (including Swingline Loans) and of the Issuing Bank
to issue Facility Letters of Credit is subject to the following terms and
conditions:
(a) prior to each such Advance or issuance no Default or Event of Default shall
have occurred and be continuing under this Agreement or any of the Loan
Documents and, if required by Administrative Agent, Borrower shall deliver a
certificate of Borrower to such effect;
(b) The representations and warranties contained in Article VI and VII are true
and correct as of such borrowing date, Issuance Date, or date of conversion
and/or continuation as and to the extent set forth therein, except to the extent
any such representation or warranty is stated to relate solely to an earlier
date, in which case such representation or warranty shall be true and correct on
and as of such earlier date; and
(c) The following conditions of Section 5.1 shall have been and remain satisfied
as of the date of the advance: (j)(i), (j)(iii) and (j)(iv).
Subject to the last grammatical paragraphs of Article VI and VII
hereof, each Borrowing Notice, Letter of Credit Request, and
Conversion/Continuation Notice shall constitute a representation and warranty by
the Borrower that the conditions contained in Sections 5.2(a) and (b) have been
satisfied.
Article VI.
REPRESENTATIONS AND WARRANTIES
Each of the entities comprising the Borrower hereby represents and
warrants that:
Section 6.1 Existence. Operating Partnership is a limited partnership duly
organized and existing under the laws of the State of Tennessee, with its
principal place of business in the State of Tennessee and EIP/WV is a limited
partnership duly organized and existing under the laws of the State of
Tennessee, with its principal place of business in the State of Tennessee and
each of the Operating Partnership and EIP/WV is duly qualified as a foreign
limited partnership, properly licensed (if required), in good standing and has
all requisite authority to conduct its business in each jurisdiction in which it
owns Properties and, except where the failure to be so qualified or to obtain
such authority would not have a Material Adverse Effect, in each other
jurisdiction in which its business is conducted. Each of the Subsidiaries of the
entities comprising the Borrower is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and has all
requisite authority to conduct its business in each jurisdiction in which it
owns Property, and except where the failure to be so qualified or to obtain such
authority would not have a Material Adverse Effect, in each other jurisdiction
in which it conducts business.
Section 6.2 Corporate/Partnership Powers. The execution, delivery and
performance of the Loan Documents required to be delivered by Borrower hereunder
are within the partnership 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 any 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 6.3 Power of Officers. The officers of the general partner of each of
the entities comprising the Borrower executing the Loan Documents required to be
delivered by such entities hereunder have been duly elected or appointed and
were fully authorized to execute the same at the time each such agreement,
certificate or instrument was executed.
Section 6.4 Government and Other Approvals. No approval, consent, exemption or
other action by, or notice to or filing with, any governmental authority is
necessary in connection with the execution, delivery or performance of the Loan
Documents required hereunder.
Section 6.5 Solvency.
(i) Immediately after the Agreement Effective Date and immediately
following the making of each Loan and after giving effect to
the application of the proceeds of such Loans, (a) the fair
value of the assets of each entity comprising the Borrower and
its Subsidiaries on a consolidated basis, at a fair valuation,
will exceed the debts and liabilities, subordinated,
contingent or otherwise, of the such entity and its
Subsidiaries on a consolidated basis; (b) the present fair
saleable value of the Properties of each entity comprising the
Borrower and its Subsidiaries on a consolidated basis will be
greater than the amount that will be required to pay the
probable liability of such entity and its Subsidiaries on a
consolidated basis on their debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) each entity
comprising the Borrower and its Subsidiaries on a consolidated
basis will be able to pay their debts and liabilities,
subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each entity
comprising the Borrower and its Subsidiaries on a consolidated
basis will not have unreasonably small capital with which to
conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted
after the date hereof.
(ii) 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 6.6 Compliance With Laws. There is no judgment, decree or order or any
law, rule or regulation of any court or governmental authority binding on the
entities comprising the Borrower or any of their Subsidiaries which would be
contravened by the execution, delivery or performance of the Loan Documents
required hereunder.
Section 6.7 Enforceability of Agreement. This Agreement is the legal, valid and
binding agreement of each of the entities comprising the Borrower, and the Notes
when executed and delivered will be the legal, valid and binding obligations of
such entities, enforceable against such entities in accordance with their
respective terms, and the Loan Documents required hereunder, when executed and
delivered, will be similarly legal, valid, binding and enforceable except to the
extent that such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the rights of
creditors generally.
Section 6.8 Title to Property. To the best of Borrower's knowledge after due
inquiry, the Consolidated Group and the Investment Affiliates have good and
marketable title to their Properties and assets reflected in the financial
statements as owned by them free and clear of Liens except for the Permitted
Liens. The execution, delivery or performance of the Loan Documents required to
be delivered by the Borrower hereunder will not result in the creation of any
Lien on the Properties. No consent to the transactions contemplated hereunder is
required from any ground lessor or mortgagee or beneficiary under a deed of
trust or any other party except as has been delivered to the Lenders.
Section 6.9 Litigation. There are no suits, arbitrations, claims, disputes or
other proceedings (including, without limitation, any civil, criminal,
administrative or environmental proceedings), pending or, to the best of
Borrower's knowledge, threatened against or affecting the Borrower or any of
their Properties, the adverse determination of which individually or in the
aggregate would have a Material Adverse Effect on the Borrower and/or any of
their Properties and/or would cause a Material Adverse Financial Change of
Borrower or materially impair the Borrower's ability to perform its obligations
hereunder or under any instrument or agreement required hereunder, except as
disclosed on Schedule 6.9 hereto, or otherwise disclosed to Lenders in
accordance with the terms hereof.
Section 6.10 Events of Default. No Default or Event of Default has occurred and
is continuing or would result from the incurring of obligations by the Borrower
under any of the Loan Documents or any other document to which Borrower is a
party.
Section 6.11 Investment Company Act of 1940. Borrower is not and will by such
acts as may be necessary continue not to be, an investment company within the
meaning of the Investment Company Act of 1940.
Section 6.12 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 6.13 Regulation U. The proceeds of the Advances will not be used,
directly or indirectly, to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock.
Section 6.14 No Material Adverse Financial Change. To the best knowledge of
Borrower, there has been no Material Adverse Financial Change in the condition
of Borrower since the date of the financial and/or operating statements most
recently submitted to the Lenders.
Section 6.15 Financial Information. All financial statements furnished to the
Lenders by or at the direction of the Borrower and all other financial
information and data furnished by the Borrower to the Lenders are complete and
correct in all material respects as of the date thereof, and such financial
statements have been prepared in accordance with GAAP and fairly present the
consolidated financial condition and results of operations of the Borrower as of
such date. The Borrower has no contingent obligations, liabilities for taxes or
other outstanding financial obligations which are material in the aggregate,
except as disclosed in such statements, information and data.
Section 6.16 [Intentionally Omitted].
Section 6.17 ERISA. (i) Borrower is not an entity deemed to hold "plan assets"
within the meaning of ERISA or any regulations promulgated thereunder of an
employee benefit plan (as defined in Section 3(3) of ERISA) which is subject to
Title I of ERISA or any plan within the meaning of Section 4975 of the Code, and
(ii) the execution of this Agreement and the transactions contemplated hereunder
do not give rise to a prohibited transaction within the meaning of Section 406
of ERISA or Section 4975 of the Code.
Section 6.18 Taxes. All required tax returns have been filed by Borrower with
the appropriate authorities except to the extent that extensions of time to file
have been requested, granted and have not expired or except to the extent such
taxes are being contested in good faith and for which adequate reserves, in
accordance with GAAP, are being maintained.
Section 6.19 Environmental Matters. Except as disclosed in Schedule 6.19, each
of the following representations and warranties is true and correct in all
material respects except to the extent that the facts and circumstances giving
rise to any such failure to be so true and correct, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:
(i) To the knowledge of the Borrower, the Properties of Borrower,
its Subsidiaries, and Investment Affiliates do not contain any
Materials of Environmental Concern in amounts or
concentrations which constitute a violation of, or could
reasonably give rise to liability under, Environmental Laws.
(ii) Borrower has not received any written notice alleging that any
or all of the Properties of Borrower and its Subsidiaries and
Investment Affiliates and all operations at the Properties are
not in compliance with all applicable Environmental Laws.
Further, Borrower has not received any written notice alleging
the existence of any contamination at or under such Properties
in amounts or concentrations which constitute a violation of
any Environmental Law, or any violation of any Environmental
Law with respect to such Properties for which Borrower, its
Subsidiaries or Investment Affiliates is or could be liable.
(iii) Neither Borrower nor any of its Subsidiaries or Investment
Affiliates has received any written notice of non-compliance,
liability or potential liability regarding Environmental Laws
with regard to any of the Properties, nor does it have
knowledge that any such notice will be received or is being
threatened.
(iv) To the knowledge of Borrower during the ownership of the
Properties by any or all of Borrower, its Subsidiaries and
Investment Affiliates, Materials of Environmental Concern have
not been transported or disposed of from the Properties of
Borrower and its Subsidiaries and Investment Affiliates in
violation of, or in a manner or to a location which could
reasonably give rise to liability of Borrower, any Subsidiary,
or any Investment Affiliate under, Environmental Laws, nor
during the ownership of the Properties by any or all of
Borrower, its Subsidiaries and Investment Affiliates have any
Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of such Properties
in violation of, or in a manner that could give rise to
liability of Borrower, any Subsidiary or any Investment
Affiliate under, any applicable Environmental Laws.
(v) No judicial proceedings or governmental or administrative
action is pending, or, to the knowledge of Borrower,
threatened, under any Environmental Law to which Borrower, any
of its Subsidiaries, or any Investment Affiliate, is named as
a party with respect to the Properties of such entity, nor are
there any consent decrees or other decrees, consent orders,
administrative order or other orders, or other administrative
or judicial requirements outstanding under any Environmental
Law with respect to such Properties for which Borrower, its
Subsidiaries, or any Investment Affiliate is or could be
liable.
(vi) To the knowledge of Borrower during the ownership of the
Properties by any or all of Borrower, its Subsidiaries and
Investment Affiliates, there has been no release or threat of
release of Materials of Environmental Concern at or from the
Properties of Borrower and its Subsidiaries and Investment
Affiliates, or arising from or related to the operations of
such entity in connection with the Properties in violation of
or in amounts or in a manner that could give rise to liability
under Environmental Laws.
Section 6.20 Insurance. Borrower has obtained or cause to be obtained the
insurance which Borrower is required to furnish to Lenders under Section 3 of
each of the Mortgages.
Section 6.21 No Brokers. Borrower has dealt with no brokers in connection with
this Facility, and no brokerage fees or commissions are payable by or to any
Person in connection with this Agreement or the Advances. Lenders shall not be
responsible for the payment of any fees or commissions to any broker and
Borrower shall indemnify, defend and hold Lenders harmless from and against any
claims, liabilities, obligations, damages, costs and expenses (including
reasonable attorneys' fees and disbursements) made against or incurred by
Lenders as a result of claims made or actions instituted by any broker or Person
claiming by, through or under Borrower in connection with the Facility.
Section 6.22 No Violation of Usury Laws. No aspect of any of the transactions
contemplated herein violate or will violate any usury laws or laws regarding the
validity of agreements to pay interest in effect on the date hereof.
Section 6.23 Not a Foreign Person. Borrower is not a "foreign person" within the
meaning of Section 1445 or 7701 of the Internal Revenue Code.
Section 6.24 No Trade Name. Except as otherwise set forth on Schedule 6.24
attached hereto, Borrower does not use any trade name and has not and does not
do business under any name other than their actual names set forth herein. The
principal place of business of Borrower is as stated in the recitals hereto.
Section 6.25 Subsidiaries. Schedule 6.25 hereto contains an accurate list of all
of the presently existing Subsidiaries of Borrower, 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 6.26 Security Interests. At all times after execution and delivery of
the Security Documents by the Loan Parties thereto and completion of the filings
and recordings listed on Schedule 3, the security interests created for the
benefit of the Administrative Agent and the Lenders pursuant to the Security
Documents will constitute valid, perfected security interests in the collateral
subject thereto, subject to no other Liens whatsoever except for Permitted
Liens.
Section 6.27 Collateral Pool Assets.
(a) Each of the representations and warranties made by each Loan Party in its
Security Documents with respect to any Collateral Pool Asset is true and correct
in all material respects.
(b) No Collateral Pool Asset is located in an area that has been identified by
the Secretary of Housing and Urban Development as an area having special flood
hazards and in which flood insurance has been made available under the National
Flood Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as
amended, or any successor law, or, if located within any such area, Borrower has
obtained and will maintain through the Maturity Date the insurance prescribed in
Section 5.1(o) hereof.
(c) To the Borrower's knowledge, except as shown on Schedule 6.19, each
Collateral Pool Asset and the present use and occupancy thereof are in material
compliance with all applicable zoning ordinances (without reliance upon
adjoining or other properties), building codes, land use and Environmental Laws,
and other similar laws ("Applicable Laws").
(d) Each Collateral Pool Asset is served by all utilities required for the
current or contemplated use thereof. All utility service is provided by public
utilities and each Collateral Pool Asset has accepted or is equipped to accept
such utility service.
(e) All public roads and streets necessary for service of and access to each
Collateral Pool Asset for the current or contemplated use thereof have been
completed, are serviceable and all-weather and are physically and legally open
for use by the public.
(f) Each Collateral Pool Asset is served by public water and sewer systems or,
if a Collateral Pool Asset is not serviced by a public water and sewer system,
the alternate systems are adequate and meet, in all material respects, all
requirements and regulations of, and otherwise comply in all material respects
with, all Applicable Laws with respect to such alternate systems.
(g) Borrower is not aware of any latent or patent structural or other
significant deficiency of any Collateral Pool Asset. Each Collateral Pool Asset
is free of damage and waste that would materially and adversely affect the value
of such Collateral Pool Asset, is in good repair and there is no deferred
maintenance other than ordinary wear and tear. Each Collateral Pool Asset is
free from damage caused by fire or other casualty. There is no pending or, to
the actual knowledge of Borrower, threatened condemnation proceedings affecting
any Collateral Pool Asset, or any material part thereof.
(h) To Borrower's knowledge, all liquid and solid waste disposal, septic and
sewer systems located on each and every Collateral Pool Asset are in a good and
safe condition and repair and to Borrower's knowledge, in material compliance
with all Applicable Laws with respect to such systems.
(i) All improvements on each Collateral Pool Asset lie within the boundaries and
building restrictions of the legal description of record of such Collateral Pool
Asset, no improvements encroach upon easements benefiting any Collateral Pool
Asset other than encroachments that do not materially adversely affect the use
or occupancy of a Collateral Pool Asset and no improvements on adjoining
properties encroach upon any Collateral Pool Asset or easements benefiting any
Collateral Pool Asset other than encroachments that do not materially adversely
affect the use or occupancy of a Collateral Pool Asset. All amenities, access
routes or other items that materially benefit each Collateral Pool Asset are
under direct control of Borrower, constitute permanent easements that benefit
all or part of such Collateral Pool Asset or are public property, and each
Collateral Pool Asset, by virtue of such easements or otherwise, is contiguous
to a physically open, dedicated all weather public street, and has the necessary
permits for ingress and egress.
(j) There are no delinquent taxes, ground rents, water charges, sewer rents,
assessments, insurance premiums, leasehold payments, or other outstanding
charges affecting any Collateral Pool Asset except to the extent such items are
being contested in good faith and as to which adequate reserves have been
provided.
(k) Each Collateral Pool Asset conforms to all requirements for an Eligible
Property except that certain Initial Collateral Pool Assets may not satisfy
condition (x) of the conditions for being an Eligible Property.
A breach of any of the representations and warranties contained in this
Section 6.27 with respect to a Property shall disqualify such Property from
being a Collateral Pool Asset for so long as such breach continues (unless
otherwise approved by the Required Lenders) but shall not constitute a Default
(unless the elimination of such Property as a Collateral Pool Asset results in a
Default under one of the other provisions of this Agreement).
Borrower agrees that all of its representations and warranties set forth in
Article VI of this Agreement and elsewhere in this Agreement are true on the
Agreement Effective Date, and will be true on each Effective Date in all
material respects (except with respect to matters which have been disclosed in
writing to and approved by the Required Lenders), and will be true in all
material respects (except with respect to matters which have been disclosed in
writing to and approved by the Required Lenders) upon each request for
disbursement of an Advance. Each request for disbursement hereunder shall
constitute a reaffirmation of such representations and warranties as deemed
modified in accordance with the disclosures made and approved, as aforesaid, as
of the date of such request and disbursement.
Article VII.
ADDITIONAL REPRESENTATIONS AND WARRANTIES
Each of the Guarantors hereby represents and warrants that:
Section 7.1 Existence. Equity Inns is a corporation duly organized and existing
under the laws of the State of Tennessee, with its principal place of business
in the State of Tennessee and Equity Inns Trust is a real estate investment
trust duly organized and existing under the laws of the State of Maryland, with
its principal place of business in the State of Tennessee and each Guarantor is
duly qualified as a foreign corporation and properly licensed (if required) and
in good standing in each jurisdiction where the failure to qualify or be
licensed (if required) would constitute a Material Adverse Financial Change with
respect to such Guarantor or have a Material Adverse Effect on the business or
properties of such Guarantor.
Section 7.2 Corporate or Trust Powers. The execution, delivery and performance
of the Loan Documents required to be delivered by the Guarantors hereunder are
within the corporate powers of the Guarantors, have been duly authorized by all
requisite corporate action, and are not in conflict with the terms of any
organizational instruments of the Guarantors, or any instrument or agreement to
which the either of the Guarantors is a party or by which either of the
Guarantors or any of its assets is bound or affected.
Section 7.3 Power of Officers. The officers of the Guarantors executing the Loan
Documents required to be delivered by the Guarantors hereunder have been duly
elected or appointed and were fully authorized to execute the same at the time
each such agreement, certificate or instrument was executed.
Section 7.4 Government and Other Approvals. No approval, consent, exemption or
other action by, or notice to or filing with, any governmental authority is
necessary in connection with the execution, delivery or performance of the Loan
Documents required hereunder.
Section 7.5 Compliance With Laws. There is no judgment, decree or order or any
law, rule or regulation of any court or governmental authority binding on the
Guarantors which would be contravened by the execution, delivery or performance
of the Loan Documents required hereunder.
Section 7.6 Enforceability of Guaranty. The Guaranty is the legal, valid and
binding agreement of the Guarantors, enforceable against the Guarantors in
accordance with its terms, except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws affecting the rights of creditors generally.
Section 7.7 Liens; Consents. The execution, delivery or performance of the Loan
Documents required to be delivered by the Guarantors hereunder will not result
in the creation of any Lien on the Properties. No consent to the transactions
hereunder is required from any ground lessor or mortgagee or beneficiary under a
deed of trust or any other party except as has been delivered to the Lenders.
Section 7.8 Litigation. There are no suits, arbitrations, claims, disputes or
other proceedings (including, without limitation, any civil, criminal,
administrative or environmental proceedings), pending or, to the best of the
Guarantors' knowledge, threatened against or affecting either of the Guarantors
or any of their Properties, the adverse determination of which individually or
in the aggregate would have a Material Adverse Effect on the Guarantors or would
cause a Material Adverse Financial Change with respect to the Guarantors or
materially impair the Guarantors' ability to perform their obligations under the
Guaranty, except as disclosed on Schedule 7.8 hereto, or otherwise disclosed to
the Lenders in accordance with the terms hereof.
Section 7.9 Investment Company Act of 1940. 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 7.10 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 7.11 No Material Adverse Financial Change. There has been no Material
Adverse Financial Change in the condition of the Guarantors since the last date
on which the financial and/or operating statements were submitted to the
Lenders.
Section 7.12 Financial Information. All financial statements furnished to the
Lenders by or on behalf of the Guarantors and all other financial information
and data furnished by or on behalf of the Guarantors to the Lenders are complete
and correct in all material respects as of the date thereof, and such financial
statements have been prepared in accordance with GAAP and fairly present the
consolidated financial condition and results of operations of the Guarantors as
of such date. The Guarantors have no contingent obligations, liabilities for
taxes or other outstanding financial obligations which are material in the
aggregate, except as disclosed in such statements, information and data.
Section 7.13 [Intentionally Omitted].
Section 7.14 ERISA. (i) Neither Guarantor is an entity deemed to hold "plan
assets" within the meaning of ERISA or any regulations promulgated thereunder of
an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject
to Title I of ERISA or any plan within the meaning of Section 4975 of the Code,
and (ii) the execution of this Agreement and the transactions contemplated
hereunder do not give rise to a prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code.
Section 7.15 Taxes. All required tax returns have been filed by the Guarantors
with the appropriate authorities except to the extent that extensions of time to
file have been requested, granted and have not expired or except to the extent
such taxes are being contested in good faith and for which adequate reserves, in
accordance with GAAP, are being maintained.
Section 7.16 Subsidiaries. Schedule 7.16 hereto contains an accurate list of all
of the presently existing Subsidiaries of Guarantors, 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 7.17 Status. Equity Inns is a corporation listed and in good standing on
the New York Stock Exchange ("NYSE"), the American Stock Exchange, or NASDAQ.
Each Guarantor agrees that all of its representations and warranties set forth
in Article VII of this Agreement are true on the Agreement Effective Date, and
will be true on each Effective Date in all material respects (except with
respect to matters which have been disclosed in writing to and approved by the
Required Lenders), and will be true in all material respects (except with
respect to matters which have been disclosed in writing to and approved by the
Required Lenders) upon each request for disbursement of an Advance or issuance
of a Facility Letter of Credit. Each such request hereunder shall constitute a
reaffirmation of such representations and warranties as deemed modified in
accordance with the disclosures made and approved, as aforesaid, as of the date
of such request and disbursement.
Article VIII.
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 8.1 Notices. Promptly give written notice to Administrative Agent
(who will promptly send such notice to Lenders) of:
(a) all litigation or arbitration proceedings affecting any member of the
Consolidated Group where the amount claimed is $5,000,000 or more;
(b) any Default or Event of Default, specifying the nature and the period of
existence thereof and what action has been taken or been proposed to be taken
with respect thereto;
(c) all claims filed against any Property owned by any member of the
Consolidated Group which, if adversely determined, could have a Material Adverse
Effect on the ability of the Borrower or the Guarantors to meet any of their
obligations under the Loan Documents;
(d) the occurrence of any other event which might have a Material Adverse Effect
or cause a Material Adverse Financial Change on or with respect to the Borrower
or the Guarantors;
(e) any Reportable Event or any "prohibited transaction" (as such term is
defined in Section 4975 of the Code) in connection with any Plan or any trust
created thereunder, which may, singly or in the aggregate materially impair the
ability of the Borrower or the Guarantors to repay any of the Obligations under
the Loan Documents, describing the nature of each such event and the action, if
any, the Borrower or the Guarantors, as the case may be, proposes to take with
respect thereto;
(f) any notice from any federal, state, local or foreign authority regarding any
Hazardous Material, asbestos, or other environmental condition, proceeding,
order, claim or violation affecting any of the Properties of the Consolidated
Group.
Section 8.2 Financial Statements, Reports, Etc. The Borrower and the Guarantors
will maintain, for the Consolidated Group, a system of accounting established
and administered in accordance with GAAP, and furnish to the Lenders:
(i) as soon as available, but in any event not later than 60 days
after the close of each fiscal quarter, for the Consolidated
Group an unaudited quarterly financial statement (including a
balance sheet and income statement) for such period and the
portion of the fiscal year through the end of such period,
setting forth in each case in comparative form the figures for
the previous year, all certified by Equity Inns' chief
financial officer and chief executive officer;
(ii) As soon as available, but in any event not later than 60 days
after the close of each fiscal quarter, for the Consolidated
Group, related reports in form and substance satisfactory to
the Lenders, all certified by Equity Inns' chief financial
officer or chief accounting officer, including a statement of
Funds From Operations, calculation of the financial covenants
described below, a 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 containing audited annual financial
statements. All such annual and quarterly reports shall be
certified by the chief executive officer and chief financial
officer;
(iv) As soon as available, but in any event not later than sixty
(60) days after the end of each of the first three fiscal
quarters, and not later than 90 days after the close of each
fiscal year, reports in form and substance satisfactory to the
Lenders, certified by Equity Inns' chief financial officer or
chief accounting officer containing Net Operating Income and
hotel operating statements from the operators under the
Permitted Operating Leases for each individual Property owned
by the Borrower or a Wholly-Owned Subsidiary and included in
the Borrowing Base, provided that the Borrower and the
Guarantors shall in no event be obligated to furnish any such
hotel operating statement any earlier than five (5) Business
Days after the Borrower's receipt thereof from the applicable
operator;
(v) Not later than sixty (60) days after the end of each of the
first three fiscal quarters, and not later than ninety (90)
days after the end of the fiscal year, a compliance
certificate in substantially the form of Exhibit I hereto
("Compliance Certificate") signed by the Operating Partnership
and Equity Inns' chief financial officer or chief accounting
officer confirming that the Borrower and the Guarantors are in
compliance with all of the covenants of the Loan Documents,
showing the calculations and computations necessary to
determine compliance with the financial covenants contained in
this Agreement (including such schedules and backup
information as may be necessary to demonstrate such
compliance) and stating that to such officer's best knowledge,
there is no other Default or Event of Default exists, or if
any Default or Event of Default exists, stating the nature and
status thereof;
(vi) As soon as possible and in any event within 10 Business Days
after any member of the Consolidated Group knows that any
Reportable Event has occurred with respect to any Plan, a
statement, signed by the chief financial officer of Equity
Inns, describing said Reportable Event and within 20 days
after such Reportable Event, a statement signed by such chief
financial officer describing the action which the Consolidated
Group proposes to take with respect thereto; and (b) within 10
Business Days of receipt, any notice from the Internal Revenue
Service, PBGC or Department of Labor with respect to a Plan
regarding any excise tax, proposed termination of a Plan,
prohibited transaction or fiduciary violation under ERISA or
the Code which could result in any liability to the
Consolidated Group in excess of $100,000; and (c) within 10
Business Days of filing, any Form 5500 filed with respect to a
Plan by any member of the Consolidated Group which includes a
qualified accountant's opinion.
(vii) As soon as possible and in any event within 30 days after
receipt, a copy of (a) any notice or claim to the effect that
any member of the Consolidated Group is or may be liable to
any Person as a result of the release by such entity or any
other Person of any toxic or hazardous waste or substance into
the environment, and (b) any notice alleging any violation of
any federal, state or local environmental, health or safety
law or regulation by any member of the Consolidated Group,
which, in either case, could be reasonably likely to have a
Material Adverse Effect;
(viii) Promptly upon the distribution thereof to the press or the
public, copies of all press releases;
(ix) As soon as possible, and in any event within 10 days after the
Borrower knows of any fire or other casualty or any pending or
threatened condemnation or eminent domain proceeding with
respect to all or any material portion of any Collateral Pool
Asset, a statement describing such fire, casualty or
condemnation and the action Borrower intends to take with
respect thereto;
(x) Such other information (including, without limitation,
non-financial information) as the Administrative Agent or any
Lender may from time to time reasonably request. The request
for a reappraisal of any Collateral Pool Asset, as long as
such Collateral Pool Asset has not been the subject of an
Appraisal in the preceding 12 months, is hereby deemed
reasonable; and
(xi) Within ten (10) Business Days after the request of the
Administrative Agent, a financial statement showing Adjusted
EBITDA, Ground Lease Expense, Fixed Charges and Interest
Expense for the period of twelve (12) full months ending
immediately prior to the date of such request.
Section 8.3 Existence and Conduct of Operations; Limitations on Investments.
Except as permitted herein, maintain and preserve its existence and all rights,
privileges and franchises now enjoyed and necessary for the operation of its
business, including remaining in good standing in each jurisdiction in which
business is currently operated. The Borrower and the Guarantors shall carry on
and conduct their respective businesses in substantially the same manner and in
substantially the same fields of enterprise as presently conducted. The Borrower
and the Guarantors will do, and will cause each of their Subsidiaries to do, all
things necessary to remain duly incorporated and/or duly qualified, validly
existing and in good standing as a real estate investment trust, corporation,
general partnership, limited liability company or limited partnership, as the
case may be, in its jurisdiction of incorporation/formation. The Borrower and
the Guarantors will maintain all requisite authority to conduct their businesses
in each jurisdiction in which the Properties are located and, except where the
failure to be so qualified would not have a Material Adverse Effect, in each
jurisdiction required to carry on and conduct its businesses in substantially
the same manner as it is presently conducted, and, specifically, neither the
Borrower, the Guarantors nor any of their Subsidiaries will undertake any
business other than the acquisition, development, ownership, management and
operation of hotel properties (excluding economy and budget hotels) which are
located in the United States, provided that the aggregate Total Cost of all
Properties Under Development shall not exceed 10% of the Total Cost of all
Properties owned by the Consolidated Group.
Section 8.4 Maintenance of Properties. Maintain, preserve, protect and keep the
Properties in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements, normal wear and tear excepted.
Section 8.5 Insurance. Provide a certificate of insurance from all insurance
carriers who maintain policies with respect to the Properties within thirty (30)
days after the end of each fiscal year, evidencing that the insurance required
to be furnished to Lenders pursuant to Section 3 of the Mortgages] is in full
force and effect. Borrower shall timely pay, or cause to be paid, all premiums
on all insurance policies required under the Loan Documents from time to time.
Borrower shall promptly notify its insurance carrier or agent therefor (with a
copy of such notification being provided simultaneously to Administrative Agent)
if there is any occurrence which, under the terms of any insurance policy then
in effect with respect to the Properties, requires such notification.
Section 8.6 Payment of Obligations. Pay all taxes, assessments, governmental
charges and other obligations when due, except such as may be contested in good
faith or as to which a bona fide dispute may exist, and for which adequate
reserves have been provided in accordance with sound accounting principles used
by the Consolidated Group on the date hereof.
Section 8.7 Compliance with Laws. Comply in all material respects with all
applicable laws, rules, regulations, orders and directions of any governmental
authority having jurisdiction over Borrower, the Guarantors, or any of their
respective businesses, subject to the right to contest such compliance
obligations in good faith so long as adequate reserves are established for
possible liabilities arising therefrom and an adverse resolution of such
noncompliance would not have a Material Adverse Effect.
Section 8.8 Adequate Books. Maintain adequate books, accounts and records in
order to provide financial statements in accordance with GAAP and, if requested
by any Lender, permit employees or representatives of such Lender at any
reasonable time and upon reasonable notice to inspect and audit the properties
of Borrower and of the Consolidated Group, and to examine or audit the
inventory, books, accounts and records of each of them and make copies and
memoranda thereof.
Section 8.9 ERISA. Comply in all material respects with all requirements
of ERISA applicable to it with respect to each Plan.
Section 8.10 Maintenance of Status. Equity Inns shall at all times (i) remain as
a corporation listed and in good standing on the New York Stock Exchange (NYSE),
American Stock Exchange, or NASDAQ, and (ii) take all steps maintain its status
as a real estate investment trust in compliance with all applicable provisions
of the Code (unless otherwise consented to by the Required Lenders).
Section 8.11 Use of Proceeds. Use the proceeds of the Facility for the general
business purposes of the Borrower, including without limitation repayment in
full of the Existing Agreement, acquisition by the Borrower of premium limited
service, premium extended stay and premium all-suite and full-service hotel
properties, developments, expansions and renovations of the Borrower's existing
hotel properties and other general corporate and working capital needs.
Section 8.12 Pre-Acquisition Environmental Investigations. Cause to be prepared
prior to the acquisition of each Property that it intends to acquire an
environmental report pursuant to a standard scope of work attached as Exhibit J
hereto and made a part hereof.
Section 8.13 Eligible Properties. Cause all Collateral Pool Assets to continue
to meet all the requirements included in the definition of "Eligible Property"
hereunder (except for the condition regarding 60% occupancy in subsection (x) of
those requirements).
Section 8.14 Management Agreements and Permitted Operating Leases. Cause each
Collateral Pool Asset to at all times be leased pursuant to a Permitted
Operating Lease and managed pursuant to the terms of an Approved Management
Agreement with the tenant under such Permitted Operating Lease. Borrower and
such tenant may terminate a management agreement provided that there is a new
Approved Management Agreement in effect immediately following such termination,
and Borrower may cause the tenant under a Permitted Operating Lease to assign
its interest under a Permitted Operating Lease to another taxable Wholly-Owned
Subsidiary. In both cases, Borrower shall cause the new tenant and/or new
management company to execute documentation satisfactory to the Administrative
Agent with regard to the obligations of such parties to the Lenders.
Article IX.
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 9.1 Change of Borrower Ownership. Allow (i) Equity Inns Trust to own
less than one hundred percent (100%) of the general partnership interests in the
Operating Partnership 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 9.2 Use of Proceeds. Apply or permit to be applied any proceeds of any
Advance directly or indirectly, to the funding of any purchase of, or offer for,
any Margin Stock or any share of capital stock of any publicly held corporation
unless the board of directors of such corporation has consented to such offer
prior to any public announcements relating thereto and the Lenders have
consented to such use of the proceeds of the Facility.
Section 9.3 Leverage; Additional Recourse Indebtedness. Permit or suffer:
(a) From the Agreement Effective Date through December 31, 2003, the ratio of
Total Indebtedness to EBITDA to exceed 5.50x;
(b) From January 1, 2004 through December 31, 2004, the ratio of Total
Indebtedness to EBITDA to exceed 5.25x;
(c) From January 1, 2005 through December 31, 2005, the ratio of Total
Indebtedness to EBITDA to exceed 5.00x;
(d) From and after January 1, 2006, the ratio of Total Indebtedness to EBITDA to
exceed 4.75x;
(e) At any time, the aggregate Recourse Indebtedness of the Consolidated Group
to exceed the sum of (a) the then-outstanding Advances hereunder plus (b)
$50,000,000.
Section 9.4 Dividends. Permit or suffer:
(a) At any time after the Agreement Effective Date, the aggregate amount of
dividends paid by Equity Inns (excluding Preferred Stock Expense) for the most
recent four fiscal quarters for which financial reports are available, to exceed
90% of the Funds From Operations of Equity Inns for such four fiscal quarters,
as determined on a consistent basis with the prior financial statements of
Equity Inns, as approved by the Administrative Agent, provided that Equity Inns
may, so long as an Event of Default does not exist, pay the minimum amount of
dividends required to maintain its tax status as a real estate investment trust
under the Code.
(b) For each fiscal quarter, the aggregate amount of dividends paid by Equity
Inns (excluding Preferred Stock Expense) for the most recent four fiscal
quarters for which financial reports are available, to exceed the Applicable FCF
Percentage of Free Cash Flow of the Consolidated Group for such four fiscal
quarters, as determined on a consistent basis with the prior financial
statements of Equity Inns, as approved by the Administrative Agent, provided
that Equity Inns may, so long as an Event of Default does not exist, pay the
minimum amount of dividends required to maintain its tax status as a real estate
investment trust under the Code.
(c) For any given fiscal quarter, if the ratio of Total Indebtedness to EBITDA
for the immediately preceding fiscal quarter exceeds 5.25x, then the aggregate
amount of dividends paid by Equity Inns, (excluding Preferred Stock Expense)
shall not exceed the amount of dividends paid in the prior fiscal quarter, and
no share repurchases shall be permitted during such quarter.
Section 9.5 Floating Rate Debt. Permit the Consolidated Group to have
outstanding Indebtedness for borrowed money that bears interest at a floating
rate (including this Facility) in excess of $150,000,000 at all times during any
six (6) month period, unless such excess shall thereafter be covered by a swap,
interest rate cap or other interest rate protection product reasonably
satisfactory to the Administrative Agent.
Section 9.6 Liens. Create, incur, or suffer to exist (or permit any of the
Consolidated Group to create, incur, or suffer to exist) any Lien in, of or on
the Properties of the Consolidated Group except:
(i) Liens for taxes, assessments or governmental charges or levies
on their Property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings
and for which adequate reserves shall have been set aside on
their books;
(ii) Liens which arise by operation of law, such as carriers',
warehousemen's, landlords', materialmen and mechanics' liens
and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than 30
days past due or which are being contested in good faith by
appropriate proceedings and for which adequate reserves shall
have been set aside on its books and, in the case of any
mechanic's lien on a Collateral Pool Asset, for which an
affirmative endorsement to the Lender's title insurance policy
has been provided to the Administrative Agent;
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar
legislation;
(iv) Utility easements and such other encumbrances or charges
against real property as are of a nature generally existing
with respect to properties of a similar character and which do
not in any material way affect the marketability of the same
or interfere with the use thereof in the business of the
Borrower or its Subsidiaries, provided that Collateral Pool
Assets shall only be subject to such matters as are listed as
exceptions to the title insurance policies for such Collateral
Pool Assets which have been submitted to and approved by the
Administrative Agent;
(v) Liens of any member of the Consolidated Group in favor of the
Borrower or the Guarantors which are junior to any Lien for
the benefit of Lenders;
(vi) Liens arising in connection with any Indebtedness permitted
hereunder to the extent such Liens will not result in a
violation of any of the provisions of this Agreement; and
(vii) Liens which are Permitted Operating Leases.
Liens permitted pursuant to this Section 9.6 shall be deemed to be "Permitted
Liens".
Section 9.7 FF&E Expenditures. Permit, as of the last day of any fiscal quarter,
the sum of (i) the actual expenditures of the Consolidated Group for FF&E
replacement and capital improvements (of the types approved by the
Administrative Agent) at the Properties during the immediately preceding four
(4) consecutive full fiscal quarters plus (ii) the difference between the amount
of reserves maintained by the Consolidated Group for FF&E replacement and
capital improvements as of the last day of such fiscal quarter as shown on the
Consolidated Group's financial statements for such quarter and the amount of
such reserves maintained on the first day of such quarter, to be less than four
percent (4%) of the gross room revenues from such Properties for such four (4)
full fiscal quarters.
Section 9.8 Indebtedness, Coverage and Net Worth Covenants. Permit or suffer:
(a) as of any day, the Tangible Net Worth of the Consolidated Group, to be less
than the sum of (i) eighty percent (80%) of the Consolidated Group's Tangible
Net Worth as of December 31, 2002 plus (ii) seventy-five percent (75%) of the
aggregate proceeds received (net of customary related fees and expenses) in
connection with any offering or sale after December 31, 2002 of equity interests
in the Borrower or the Guarantors, whether common stock, preferred stock,
limited partnership units or other forms of equity ownership;
(b) as of any day, the ratio of (A) the sum of (i) Adjusted EBITDA for the most
recent four quarters plus (ii) Ground Lease Expense for such period to (B) Fixed
Charges for such period to be less than 1.45 to 1 for the period beginning with
the Agreement Execution Date and ending December 31, 2003, and 1.50 to 1
thereafter;
(c) as of any day, the ratio of Adjusted EBITDA of the Consolidated Group for
the most recent four quarters to Interest Expense for such period to be less
than 2.00 to 1 for the period from the Agreement Execution Date through December
31, 2004, 2.15 to 1 for the period from January 1, 2005 through December 31,
2005, and 2.25 to 1 thereafter.
Section 9.9 Mergers. Enter into any merger, consolidation, reorganization or
liquidation or transfer or otherwise dispose of all or a substantial portion of
the Consolidated Group's Properties, except for such transactions that occur
between members of the Consolidated Group or as otherwise approved in advance by
the Supermajority Lenders.
Section 9.10 Minimum Borrowing Base. Permit, as of any date, the
then-current Borrowing Base to be less than $125,000,000.
Section 9.11 Share Repurchase. For each fiscal quarter, the aggregate amount
paid by Equity Inns for the repurchase of shares of common stock during such
quarter shall not exceed the Dividend Allotment for such quarter, minus the
amount of dividends paid during such quarter.
Article X.
DEFAULTS
The occurrence of any one or more of the following events shall
constitute an Event of Default:
Section 10.1 Nonpayment of Principal. The Borrower fails to pay any
principal portion of the Obligations when due, whether on the Maturity Date or
otherwise.
Section 10.2 Certain Covenants. Any one or more of the Borrower, the Guarantors
and the Consolidated Group, as the case may be, is not in compliance with any
one or more of Sections 8.3 or 8.10 or any Section of Article IX hereof.
Section 10.3 Nonpayment of Interest and Other Obligations. The Borrower fails to
pay any interest or other portion of the Obligations, other than payments of
principal, and such failure continues for a period of five (5) days after the
date such payment is due, provided that the first occurrence of any such
non-payment during any calendar year shall not constitute an Event of Default
unless such failure continues for one (1) Business Day after written notice to
the Borrower from the Administrative Agent of such failure.
Section 10.4 Cross Default. Any monetary default occurs (after giving effect to
any applicable cure period) under any other Indebtedness (which includes
Guarantee Obligations) of any members of the Consolidated Group, singly or in
the aggregate, in excess of Ten Million Dollars ($10,000,000).
Section 10.5 Loan Documents. Any Loan Document is not in full force and effect
or a default has occurred and is continuing thereunder after giving effect to
any cure or grace period in any such document.
Section 10.6 Representation or Warranty. At any time or times hereafter any
representation or warranty set forth in Articles VI or VII of this Agreement or
in any other Loan Document or in any statement, report or certificate now or
hereafter made by the Borrower or the Guarantors to the Lenders or the
Administrative Agent is not true and correct in any material respect and such
noncompliance is not cured within thirty (30) days after the Borrower receives
written notice thereof, provided, however, that if such Default is susceptible
of cure but cannot by the use of reasonable efforts be cured within such thirty
(30) day period, such Default shall not constitute an Event of Default under
this Section 10.6 so long as (i) the Borrower or the Guarantors, as the case may
be, have commenced a cure within such thirty-day period and (ii) thereafter,
Borrower or Guarantors, as the case may be, are proceeding to cure such default
continuously and diligently and in a manner reasonably satisfactory to Lenders
and (iii) such default is cured not later than sixty (60) days after the
expiration of such thirty (30) day period.
Section 10.7 Covenants, Agreements and Other Conditions. The Borrower fails to
perform or observe any of the other covenants, agreements and conditions
contained in 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 10.8 No Longer General Partner. Equity Inns shall no longer, directly or
indirectly, hold 100% of the general partnership interests in the three entities
constituting the Borrower.
Section 10.9 Material Adverse Financial Change. Any one of the Operating
Partnership, EIP/WV, Equity Inns or Equity Inns Trust has suffered a Material
Adverse Financial Change or is Insolvent.
Section 10.10 Bankruptcy.
(a) Any member of the Consolidated Group shall (i) have an order for relief
entered with respect to it under the Federal bankruptcy laws as now or hereafter
in effect, (ii) make an assignment for the benefit of creditors, (iii) apply
for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
substantial portion of its Property, (iv) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it as a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v)
take any corporate action to authorize or effect any of the foregoing actions
set forth in this Section 10.10(a), (vi) fail to contest in good faith any
appointment or proceeding described in Section 10.10(b) or (vii) not pay, or
admit in writing its inability to pay, its debts generally as they become due;
(b) A receiver, trustee, examiner, liquidator or similar official shall be
appointed for any member of the Consolidated Group or any substantial portion of
any of their Properties, or a proceeding described in Section 10.10(a)(iv) shall
be instituted against any member of the Consolidated Group and such appointment
continues undischarged or such proceeding continues undismissed or unstayed for
a period of sixty (60) consecutive days.
Section 10.11 Legal Proceedings. Any member of the Consolidated Group is
enjoined, restrained or in any way prevented by any court order or judgment or
if a notice of lien, levy, or assessment is filed of record with respect to all
or any part of the Properties by any governmental department, office or agency,
which could materially adversely affect the performance of the obligations of
such parties hereunder or under the Loan Documents, as the case may be, or if
any proceeding is filed or commenced seeking to enjoin, restrain or in any way
prevent the foregoing parties from conducting all or a substantial part of their
respective business affairs and failure to vacate, stay, dismiss, set aside or
remedy the same within sixty (60) days after the occurrence thereof.
Section 10.12 ERISA. Any member of the Consolidated Group is deemed to hold
"plan assets" within the meaning of ERISA or any regulations promulgated
thereunder of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code).
Section 10.13 Failure to Satisfy Judgments. Any member of the Consolidated Group
shall fail within sixty (60) days to pay, bond or otherwise discharge any
judgments or orders for the payment of money in an amount which, when added to
all other judgments or orders outstanding against such member of the
Consolidated Group would exceed $2,000,000 in the aggregate, which have not been
stayed on appeal or otherwise appropriately contested in good faith, unless the
liability is insured against and the insurer has not challenged coverage of such
liability.
Section 10.14 Environmental Remediation. Failure to remediate within the time
period required by law or governmental order, (or within a reasonable time in
light of the nature of the problem if no specific time period is so
established), environmental problems in violation of applicable law related to
Properties of any member of the Consolidated Group where the estimated cost of
remediation is in the aggregate in excess of $2,000,000, in each case after all
administrative hearings and appeals have been concluded.
Section 10.15 REIT Status; Stock Exchange Listing. Failure of either Equity Inns
or Equity Inns Trust to maintain (i) its status as a real estate investment
trust under the Code and (ii) Equity Inns' listing on the New York Stock
Exchange, American Stock Exchange, or NASDAQ.
Section 10.16 Mortgage Default. There shall be an Event of Default (as
defined in the Mortgages) under any of the Mortgages.
Section 10.17 Enforceability of Security Documents. (i) Any of the Security
Documents shall cease, for any reason, to be in full force and effect, or the
Borrower or any other Loan Party which is a party to any of the Security
Documents shall so assert or (ii) the Lien created by any of the Security
Documents shall cease to be enforceable or of the same effect and priority
purported to be created thereby.
Article XI.
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
Section 11.1 Acceleration.
If any Event of Default described in Section 10.10 hereof occurs, the
obligation of the Lenders to make Advances and of the Issuing Bank to issue
Facility Letters of Credit hereunder shall automatically terminate and the
Obligations shall immediately become due and payable. If any other Event of
Default described in Article X hereof occurs, such obligation to make Advances
and to issue Facility Letters of Credit shall be terminated and at the election
of the Required Lenders, the Obligations may be declared to be due and payable.
In addition to the foregoing, following the occurrence of an Event of
Default and so long as any Facility Letter of Credit has not been fully drawn
and has not been cancelled or expired by its terms, upon demand by the Required
Lenders the Borrower shall deposit in the Letter of Credit Collateral Account
cash in an amount equal to the aggregate undrawn face amount of all outstanding
Facility Letters of Credit and all fees and other amounts due or which may
become due with respect thereto. The Borrower shall have no control over funds
in the Letter of Credit Collateral Account, which funds shall be invested by the
Administrative Agent from time to time in its discretion in certificates of
deposit of Bank One having a maturity not exceeding thirty (30) days. Such funds
shall be promptly applied by the Administrative Agent to reimburse the Issuing
Bank for drafts drawn from time to time under the Facility Letters of Credit.
Such funds, if any, remaining in the Letter of Credit Collateral Account
following the payment of all Obligations in full shall, unless the
Administrative Agent is otherwise directed by a court of competent jurisdiction,
be promptly paid over to the Borrower.
Section 11.2 Preservation of Rights; Amendments. No delay or omission of the
Lenders in exercising any right under the Loan Documents shall impair such right
or be construed to be a waiver of any Default or an acquiescence therein, and
the making of an Advance notwithstanding the existence of a Default or the
inability of the Borrower to satisfy the conditions precedent to such Advance
shall not constitute any waiver or acquiescence. Any single or partial exercise
of any such right shall not preclude other or further exercise thereof or the
exercise of any other right, and no waiver, amendment or other variation of the
terms, conditions or provisions of the Loan Documents whatsoever shall be valid
unless in writing signed by the Administrative Agent and the number of Lenders
required hereunder and then only to the extent in such writing specifically set
forth. All remedies contained in the Loan Documents or by law afforded shall be
cumulative and all shall be available to the Lenders until the Obligations have
been paid in full.
Section 11.3 Foreclosure. The Lenders hereby agree to the following in the event
of foreclosure under any of the Mortgages or any other attempt at realization of
the security thereunder:
(a) To subscribe to and accept its Percentage of the ownership
interests in any entity organized to hold title to the
Collateral Pool Assets and that the nature of such entity
shall be determined by the Required Lenders, subject to each
Lender's right to hold its interests in such entity in, and
assign such interests to, any affiliate of such Lender or any
other entity required by laws or regulations governing such
Lender. The Administrative Agent is hereby authorized to act
for and on behalf of the Lenders in all day-to-day matters
with respect to the exercise of rights described herein such
as the supervision of attorneys, accountants, appraisers or
others acting for the benefit of all of the Lenders in
connection with litigation, foreclosure or realization of all
or any security given as Collateral for the Obligations or
other similar actions.
(b) If the Lenders acquire the Collateral Pool Assets either by
foreclosure or deed in lieu of foreclosure, to negotiate in
good faith to reach agreement in writing relating to the
ownership, operation, maintenance, marketing and sale of such
Collateral Pool Assets and that such agreement shall be
consistent with the following:
(i) The Collateral Pool Assets will not be held as a long-term
investment but will be marketed in an attempt to sell them in
a time period consistent with the regulations applicable to
national banks for owning real estate. Current appraisals of
the Collateral Properties shall be obtained by the
Administrative Agent from time to time during the ownership
period at Lenders' expense (without diminishing or releasing
any obligation of the Borrower to pay for such costs) and an
appraised value shall be established and updated from time to
time based on such appraisals.
(ii) Certain decisionmaking with respect to the day-to-day
operations of the Properties will be delegated to management
and leasing agents. All agreements with such management and
leasing agents will be subject to the approval of the Required
Lenders. The day-to-day supervision of such agents shall be
done by the Administrative Agent.
(iii) Except as provided in the following sentences, all decisions
as to whether to sell the Collateral Pool Assets shall be
subject to the approval of all the Lenders. Notwithstanding
the foregoing, the Lenders agree that if the Administrative
Agent receives a bona fide "all cash" offer from an entity not
affiliated with the Borrower or any Lender for the purchase of
any of the Collateral Pool Assets and such offer equals or
exceeds ninety percent (90%) of the most recent appraised
value of such Collateral Pool Asset as established by an
appraisal prepared in accordance with the standards
established in this Agreement that has been completed within
six months of such offer, then the Administrative Agent shall
give written notice of such offer to the Lenders and request
their approval for sale at such a price. If the Required
Lenders approve of such a sale (or are deemed to approve of
such a sale) then the Administrative Agent, acting on behalf
of the Lenders, is irrevocably authorized to accept such
offer.
(iv) All expenses incurred by the Administrative Agent and Lenders
in connection with the ownership, operation, maintenance,
marketing and sale of the Collateral Pool Assets shall be
allocated among the Lenders pro rata in accordance with their
respective Percentages.
(v) All expenditures and other actions taken with respect to the
Collateral Pool Assets shall at all times be subject to the
regulations and requirements pertaining to national banks
applicable thereto. Without limiting the generality of the
foregoing, all necessary approvals from regulatory authorities
in connection with any expenditure of funds by the Lenders
shall be a condition to such expenditure.
Article XII.
THE ADMINISTRATIVE AGENT
Section 12.1 Appointment. Bank One is hereby appointed Administrative Agent
hereunder and under each other Loan Document, and each of the Lenders authorizes
the Administrative Agent to act as the agent of such Lender. The Administrative
Agent agrees to act as such upon the express conditions contained in this
Article XII. The Administrative Agent shall not have a fiduciary relationship in
respect of any Lender by reason of this Agreement, except to the extent the
Administrative Agent acts as an agent with respect to the receipt or payment of
funds hereunder.
Section 12.2 Powers. The Administrative Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders to take any
action thereunder except any action specifically provided by the Loan Documents
to be taken by the Administrative Agent.
Section 12.3 General Immunity. Neither the Administrative Agent (in its capacity
as Administrative Agent) nor any of its directors, officers, agents or employees
shall be liable to the Borrower, the Lenders or any Lender for any action taken
or omitted to be taken by it or them hereunder or under any other Loan Document
or in connection herewith or therewith, except for its or their own gross
negligence or willful misconduct.
Section 12.4 No Responsibility for Loans, Recitals, etc. Neither the
Administrative Agent (in its capacity as Administrative Agent) nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into, or verify (i) any statement, warranty or
representation made in connection with any Loan Document or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document; (iii) the satisfaction of any
condition specified in Article V, except receipt of items required to be
delivered to the Administrative Agent; or (iv) the validity, effectiveness or
genuineness of any Loan Document or any other instrument or writing furnished in
connection therewith.
Section 12.5 Action on Instructions of Lenders. The Administrative Agent shall
exercise its rights on behalf of the Lenders hereunder at the direction of the
Required Lenders or all of the Lenders, as the case may be, and shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by
the Required Lenders or all Lenders, as the case may be, and such instructions
and any action taken or failure to act pursuant thereto shall be binding on all
of the Lenders and on all holders of Notes. The Administrative Agent shall be
fully justified in failing or refusing to take any action hereunder and under
any other Loan Document unless it shall first be indemnified to its reasonable
satisfaction by the Lenders pro rata against any and all liability, cost and
expense that it may incur by reason of taking or continuing to take any such
action.
Section 12.6 Employment of Administrative Agents and Counsel. The Administrative
Agent may execute any of its duties as Administrative Agent hereunder and under
any other Loan Document by or through employees, agents, and attorneys-in-fact
and shall not be answerable to the Lenders, except as to money or securities
received by it or its authorized agents, for the default or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care. The
Administrative Agent shall be entitled to advice of counsel concerning all
matters pertaining to the agency hereby created and its duties hereunder and
under any other Loan Document.
Section 12.7 Reliance on Documents; Counsel. The Administrative Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document reasonably believed by it to be genuine
and correct and to have been signed or sent by the proper person or persons,
and, in respect to legal matters, upon the opinion of outside counsel selected
by the Administrative Agent.
Section 12.8 Administrative Agent's Reimbursement and Indemnification. The
Lenders agree to reimburse and indemnify the Administrative Agent ratably in
accordance with their respective Percentages (i) for any amounts not reimbursed
by the Borrower for which the Administrative Agent is entitled to reimbursement
by the Borrower under the Loan Documents, (ii) for any other reasonable out of
pocket expenses incurred by the Administrative Agent on behalf of the Lenders,
in connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents, if not paid by Borrower, and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative Agent (in its
capacity as Administrative Agent and not as a Lender) in any way relating to or
arising out of the Loan Documents or any other document delivered in connection
therewith or the transactions contemplated thereby, or the enforcement of any of
the terms thereof or of any such other documents, provided that no Lender shall
be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Administrative Agent.
Section 12.9 Rights as a Lender. With respect to the Commitment, Advances made
by it and the Note issued to it, the Administrative Agent shall have the same
rights and powers hereunder and under any other Loan Document as any Lender and
may exercise the same as though it were not the Administrative Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Administrative Agent in its individual capacity. The Administrative
Agent, in its individual capacity, may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person.
Section 12.10 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
Section 12.11 Successor Administrative Agent. Each Lender agrees that Bank One
shall serve as Administrative Agent at all times during the term of this
Facility, except that Bank One may resign as Administrative Agent in the event
(x) Bank One and Borrower shall mutually agree in writing or (y) an Event of
Default shall occur under the Loan Documents (irrespective of whether such Event
of Default subsequently is waived), or (z) Bank One shall determine, in its sole
reasonable discretion, that because of its other banking relationships with the
Consolidated Group at the time of such decision Bank One's resignation as
Administrative Agent would be necessary in order to avoid creating an appearance
of impropriety on the part of Bank One. Bank One (or any successor
Administrative Agent) may be removed as Administrative Agent by written notice
received by Administrative Agent from the Required Lenders at any time with
cause (e.g., a breach by Bank One (or any successor Administrative Agent) of its
duties as Administrative Agent hereunder). Upon any such resignation or removal,
the Required Lenders shall appoint, on behalf of the Borrower and the Lenders, a
successor Administrative Agent with the consent of the Borrower, which consent
shall not be unreasonably withheld or delayed and shall not be required if an
Event of Default has occurred. If such appointed successor Administrative
Agent's Commitment and outstanding Advances is less than the Commitment and
outstanding Advances of Credit Lyonnais, then in order to become the successor
Administrative Agent, such appointed successor Administrative Agent must
purchase a portion of Credit Lyonnais' Commitment and outstanding Advances such
that the amount of the appointed successor Administrative Agent's new Commitment
and outstanding Advances shall be in an amount greater than or equal to the
Commitment and outstanding Advances of Credit Lyonnais. If no successor
Administrative Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within thirty days after the retiring
Administrative Agent's giving notice of resignation, then the retiring
Administrative Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Administrative Agent. Such successor Administrative Agent shall be a
commercial bank having capital and retained earnings of at least $100,000,000.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent (including the right to receive
any fees for performing such duties which accrue thereafter), and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Article XII shall continue in effect for its benefit and that of the other
Lenders in respect of any actions taken or omitted to be taken by it while it
was acting as the Administrative Agent hereunder and under the other Loan
Documents.
Section 12.12 Notice of Defaults. If a Lender becomes aware of a Default or
Event of Default, such Lender shall notify the Administrative Agent of such
fact. Upon receipt of such notice that a Default or Event of Default has
occurred, the Administrative Agent shall notify each of the Lenders of such
fact.
Section 12.13 Requests for Approval. Unless a specific time period for approval
is set forth elsewhere in this Agreement, if the Administrative Agent requests
in writing the consent or approval of a Lender, such Lender shall respond and
either approve or disapprove definitively in writing to the Administrative Agent
within ten (10) Business Days (or sooner if such notice specifies a shorter
period, but in no event less than five Business Days for responses based on
Administrative Agent's good faith determination that circumstances exist
warranting its request for an earlier response) after such written request from
the Administrative Agent. If the Lender does not so respond, that Lender shall
be deemed to have approved the request. Upon request, the Administrative Agent
shall notify the Lenders which Lenders, if any, failed to respond to a request
for approval.
Section 12.14 Copies of Documents. Administrative Agent shall promptly deliver
to each of the Lenders copies of all notices of default and other formal notices
sent or received and according to Section 15.1 of this Agreement. Administrative
Agent shall deliver to Lenders within fifteen (15) Business Days following
receipt, copies of all financial statements, certificates and notices received
regarding the Operating Partnership's or Equity Inns' ratings except to the
extent such items are required to be furnished directly to the Lenders by
Borrower hereunder. Within fifteen (15) Business Days after a request by a
Lender to the Administrative Agent for other documents furnished to the
Administrative Agent by the Borrower, the Administrative Agent shall provide
copies of such documents to such Lender except where this Agreement obligates
Administrative Agent to provide copies in a shorter period of time.
Section 12.15 Defaulting Lenders. At such time as a Lender becomes a Defaulting
Lender, such Defaulting Lender's right to vote on matters which are subject to
the consent or approval of the Required Lenders, such Defaulting Lender or all
Lenders shall be immediately suspended until such time as the Lender is no
longer a Defaulting Lender. If a Defaulting Lender has failed to fund its
Percentage of any Advance and until such time as such Defaulting Lender
subsequently funds its Percentage of such Advance, all Obligations owing to such
Defaulting Lender hereunder shall be subordinated in right of payment, as
provided in the following sentence, to the prior payment in full of all
principal of, interest on and fees relating to the Loans funded by the other
Lenders in connection with any such Advance in which the Defaulting Lender has
not funded its Percentage (such principal, interest and fees being referred to
as "Senior Loans" for the purposes of this section). All amounts paid by the
Borrower and otherwise due to be applied to the Obligations owing to such
Defaulting Lender pursuant to the terms hereof shall be distributed by the
Administrative Agent to the other Lenders in accordance with their respective
Percentages (recalculated for the purposes hereof to exclude the Defaulting
Lender) until all Senior Loans have been paid in full. At that point, the
"Defaulting Lender" shall no longer be deemed a Defaulting Lender. After the
Senior Loans have been paid in full equitable adjustments will be made in
connection with future payments by the Borrower to the extent a portion of the
Senior Loans had been repaid with amounts that otherwise would have been
distributed to a Defaulting Lender but for the operation of this Section 12.15.
This provision governs only the relationship among the Administrative Agent,
each Defaulting Lender and the other Lenders; nothing hereunder shall limit the
obligation of the Borrower to repay all Loans in accordance with the terms of
this Agreement. The provisions of this Section 12.15 shall apply and be
effective regardless of whether a Default occurs and is continuing, and
notwithstanding (i) any other provision of this Agreement to the contrary, (ii)
any instruction of the Borrower as to its desired application of payments or
(iii) the suspension of such Defaulting Lender's right to vote on matters as
provided above.
Section 12.16 Co-Agents: Lead Managers. None of the Lenders identified on the
facing page or signature pages of this Agreement as a "documentation agent,"
"syndication agent' or "co-lead arranger/book manager" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of Lenders so identified as a "documentation agent," "syndication agent" or
"co-lead arranger/book manager" shall have or be deemed to have any fiduciary
relationship with any Lenders. Each Lender acknowledges that it has not relied,
and will not rely, on any of Lenders so identified in deciding to enter into
this Agreement or in taking or not taking action hereunder.
Article XIII.
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
Section 13.1 Successors and Assigns.
The terms and provisions of the Loan Documents shall be
binding upon and inure to the benefit of Borrower and the Lenders and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights or obligations under the Loan Documents without the
consent of all the Lenders and any assignment by any Lender must be made in
compliance with Section 13.3. The Administrative Agent and Borrower may treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until such payee complies with Section 13.3 in the case of an assignment thereof
or, in the case of any other transfer, a written notice of the transfer is filed
with the Administrative Agent and Borrower. Any assignee or transferee of a Note
agrees by acceptance thereof to be bound by all the terms and provisions of the
Loan Documents. Any request, authority or consent of any Person who at the time
of making such request or giving such authority or consent is the holder of any
Note, shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange therefor.
Section 13.2 Participations.
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 13.3 Assignments.
13.3.1 Permitted Assignments. Any Lender may, with the prior
written consent of Administrative Agent and Borrower (which consents
shall not be unreasonably withheld or delayed), in accordance with
applicable law, at any time assign to one or more banks or other
entities (collectively, "Purchasers") all or any part of its rights and
obligations under the Loan Documents, except that no consent of
Borrower shall be required if an Event of Default has occurred and is
continuing and that no consent of Administrative Agent or Borrower
shall ever be required for (i) any assignment to a Person directly or
indirectly controlling, controlled by or under direct or indirect
common control with the assigning Lender or (ii) the pledge or
assignment by a Lender of such Lender's Note and other rights under the
Loan Documents to any Federal Reserve Bank in accordance with
applicable law. No assignment to a Purchaser shall be for less than
$10,000,000 of the Aggregate Commitment. Such assignments and
assumptions shall be substantially in the form of Exhibit K hereto. The
Borrower shall execute any and all documents which are customarily
required by such Lender (including, without limitation, a replacement
promissory note or notes in the forms provided hereunder (upon receipt
of the original note that is being replaced), and a modification to the
Mortgages if required by Administrative Agent) in connection with any
such assignment, but Borrower shall not be obligated to pay any fees
and expenses incurred by any Lender in connection with any assignment
pursuant to this Section. Any Lender selling all or any part of its
rights and obligation hereunder in a transaction requiring the consent
of the Administrative Agent shall pay to the Administrative Agent a fee
of $3,500.00 per assignee to reimburse Administrative Agent for its
involvement in such assignment, plus the cost of recording fees and
taxes applicable to the replacement notes and modification of the
Mortgages and any applicable endorsement of the title insurance
policies. Notwithstanding anything to the contrary in this Agreement or
Exhibit K, so long as any portion of the Collateral Pool Assets is
located in the State of Texas, no replacement note or notes will be
issued that would require a modification to the Mortgages or such
Collateral Pool Assets unless the selling Lender pays for replacement
title insurance policies therefor.
13.3.2 Effect; Effective Date of Assignment. Upon delivery to
the Administrative Agent and Borrower of a notice of assignment
executed by the assigning Lender and the Purchaser, such assignment
shall become effective on the effective date specified in such notice
of assignment. The notice of assignment shall contain a representation
by the Purchaser to the effect that none of the consideration used to
make the purchase of the Commitment and the Loan under the applicable
assignment agreement are "plan assets" as defined under ERISA and that
the rights and interests of the Purchaser in and under the Loan
Documents will not be "plan assets" under ERISA. On and after the
effective date of such assignment, such Purchaser shall for all
purposes be a Lender party to this Agreement and any other Loan
Document executed by the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same extent as
if it were an original party hereto, and no further consent or action
by Borrower, the Lenders or the Administrative Agent shall be required
to release the transferor Lender for matters arising after such sale
with respect to the percentage of the Commitment and Advances assigned
to such Purchaser. Upon the consummation of any assignment to a
Purchaser pursuant to this Section 13.3.2, subject to 13.3.1, the
transferor Lender, the Administrative Agent and Borrower shall make
appropriate arrangements so that replacement Notes are issued to such
transferor Lender and new Notes or, as appropriate, replacement Notes,
are issued to such Purchaser, in each case in principal amounts
reflecting their respective Commitments, as adjusted pursuant to such
assignment.
Section 13.4 Dissemination of Information. Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of Borrower and Guarantors. Each Transferee
shall agree in writing to keep confidential any such information which is not
publicly available. The Lenders agree not to make any transfers to a transferee
if such transfer would constitute a public offering which would impose any
obligation on the Borrower to incur liabilities and make disclosures,
representations or undertakings beyond those expressly provided for herein,
unless the Borrower has consented in writing thereto.
Section 13.5 Tax Treatment. If any interest in any Loan Document is transferred
to any Transferee which is organized under the laws of any jurisdiction other
than the United States or any State thereof, the transferor Lender shall cause
such Transferee, concurrently with the effectiveness of such transfer, to comply
with all applicable provisions of the Code with respect to withholding and other
tax matters.
Article XIV.
GENERAL PROVISIONS
Section 14.1 Survival of Representations. All representations and warranties
contained in this Agreement shall survive delivery of the Notes and the making
of the Advances herein contemplated.
Section 14.2 Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
Section 14.3 Taxes. Any recording and other taxes (excluding franchise, income
or similar taxes) or other similar assessments or charges payable or ruled
payable by any governmental authority incurred in connection with the
consummation of the transactions contemplated by this Agreement shall be paid by
the Borrower, together with interest and penalties, if any.
Section 14.4 Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
Section 14.5 No Third Party Beneficiaries. This Agreement shall not be construed
so as to confer any right or benefit upon any Person other than the parties to
this Agreement and their respective successors and assigns.
Section 14.6 Expenses; Indemnification. Subject to the provisions of this
Agreement, Borrower will pay (a) all out-of-pocket costs and expenses incurred
by the Administrative Agent (including the reasonable fees, out-of-pocket
expenses and other reasonable expenses of counsel, which counsel may be
employees of Administrative Agent) in connection with the preparation, execution
and delivery of this Agreement, the Notes, the Loan Documents and any other
agreements or documents referred to herein or therein and any amendments
thereto, (b) all out-of-pocket costs and expenses incurred by the Administrative
Agent and the Lenders (including the reasonable fees, out-of-pocket expenses and
other reasonable expenses of counsel to the Administrative Agent and the
Lenders, which counsel may be employees of Administrative Agent or the Lenders)
in connection with the enforcement and protection of the rights of the Lenders
under this Agreement, the Notes, the Loan Documents or any other agreement or
document referred to herein or therein, (c) all reasonable and customary costs
and expenses of periodic audits by the Administrative Agent's personnel of the
Borrower's books and records provided that prior to an Event of Default,
Borrower shall be required to pay for only one such audit during any year, (d)
all out-of-pocket expenses incurred by the Administrative Agent in connection
with Collateral Pool Assets, including, without limitation, the ordering and
review of Appraisals, environmental reports and engineering reports with
reference to the Collateral Pool Assets, and (e) all title premiums, recording
fees and taxes (including documentary, intangible, and similar taxes and fees)
related to the Mortgages and Notes, and similar costs related to the Loan
Documents. The Borrower further agrees to indemnify the Lenders, their
directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and reasonable expenses (including, without
limitation, all expenses of litigation or preparation therefor whether or not
the Lenders are a party thereto) which any of them may pay or incur arising out
of or relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Advance hereunder, except that the foregoing
indemnity shall not apply to a Lender to the extent that any losses, claims,
etc. are the result of such Lender's gross negligence or willful misconduct. The
obligations of the Borrower under this Section shall survive the termination of
this Agreement.
Section 14.7 Severability of Provisions. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
Section 14.8 Nonliability of the Lenders. The relationship between the Borrower
and the Lenders shall be solely that of borrower and lender. The Lenders shall
not have any fiduciary responsibilities to the Borrower. The Lenders undertake
no responsibility to the Borrower to review or inform the Borrower of any matter
in connection with any phase of the Borrower's business or operations.
Section 14.9 Choice of Law. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
Section 14.10 Consent to Jurisdiction. THE BORROWER HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR 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 14.11 Waiver of Jury Trial. THE BORROWER, THE GUARANTORS, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
Section 14.12 Entire Agreement; Modification of Agreement. The Loan Documents
embody the entire agreement among the Borrower, Guarantors, Administrative
Agent, and Lenders and supersede all prior conversations, agreements,
understandings, commitments and term sheets among any or all of such parties
with respect to the subject matter hereof. Any provisions of this Agreement may
be amended or waived if, but only if, such amendment or waiver is in writing and
is signed by the Borrower, and Administrative Agent if the rights or duties of
Administrative Agent are affected thereby, and
(a) each of the Lenders if such amendment or waiver
(i) reduces or forgives any payment of principal or interest on
the Obligations or any fees payable by Borrower to such Lender
hereunder, or modifies the provisions of Section 2.6 regarding
the calculation of such interest and fees; or
(ii) postpones the date fixed for any payment of principal of or
interest on the Obligations or any fees payable by Borrower to
such Lender hereunder; or
(iii) changes the amount of such Lender's Commitment (other than
pursuant to a voluntary reduction of the Aggregate Commitment
under Section 2.17 or an assignment permitted under Section
13.3) or the unpaid principal amount of such Lender's Note; or
(iv) extends the Maturity Date; or
(v) releases or limits the liability of any Borrower or Guarantor
under the Loan Documents; or
(vi) releases the Mortgage encumbering any Collateral Pool Asset or
any Collateral, except expressly provided for herein; or
(vii) changes the definition of Required Lenders or Supermajority
Lenders or modifies any requirement for consent by each of the
Lenders; or
(viii) modifies the definition of "Borrowing Base Availability" or
"Collateral Pool Asset Value"; or
(ix) modifies this Section 14.12(a); or
(b) the Supermajority Lenders, if such amendment or waiver
modifies or waives the covenant in Section 9.9; or
(c) the Required Lenders, to the extent expressly provided for
herein and in the case of all other waivers or amendments if
no percentage of Lenders is specified herein.
Section 14.13 Dealings with the Borrower. The Lenders and their affiliates may
accept deposits from, extend credit to and generally engage in any kind of
banking, trust or other business with the Borrower or the Guarantors or any
other member of the Consolidated Group regardless of the capacity of the Lenders
hereunder.
Section 14.14 Set-Off.
(a) If an Event of Default shall have occurred, with the consent of all the
Lenders, each Lender (and with the consent of all the Lenders, if permitted,
pursuant to a participation agreement, each such participant) shall have the
right, at any time and from time to time without notice to the Borrower, any
such notice being hereby expressly waived, to set-off and to appropriate or
apply any and all deposits of money or property or any other indebtedness at any
time held or owing by such Lender to or for the credit or the account of the
Borrower against and on account of all outstanding Obligations and all
Obligations which from time to time may become due hereunder and all other
obligations and liabilities of the Borrower under this Agreement, irrespective
of whether or not such Lender shall have made any demand hereunder and whether
or not said obligations and liabilities shall have matured.
(b) Each Lender agrees that if it shall, by exercising any right of set-off or
counterclaim or otherwise, receive payment of a proportion of the aggregate
amount of principal, interest or fees due with respect to any Note held by it
which is greater than the proportion received by any other Lender in respect of
the aggregate amount of principal, interest or fees due with respect to any Note
held by such other Lender, the Lender receiving such proportionately greater
payment shall purchase such participations in the Notes held by the other
Lenders and such other adjustments shall be made as may be required so that all
such payments of principal, interest or Fees with respect to the Notes held by
the Lenders shall be shared by the Lenders pro rata according to their
respective Commitments.
Section 14.15 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by the
Borrower and each of the Lenders shown on the signature pages hereof.
Section 14.16 Limitation on Liability of EIP/WV. The liability of each entity
comprising the Borrower under this Agreement for the Obligations shall be joint
and several. However, notwithstanding the foregoing, the Lenders agree that, the
liability of EIP/WV under this Agreement shall not exceed the amount by which
(A) the portion of the then-current fair market value of the Properties owned by
EIP/WV exceeds (B) the then-current outstanding principal balance of all
Indebtedness (other than the Obligations) of EIP/WV permitted under this
Agreement, calculated in each case as of the Maturity Date or the date of any
earlier acceleration of the Obligations, as applicable. Such maximum liability
of EIP/WV shall be allocated on a pro rata basis among the Notes in accordance
with the Lenders' respective Percentages.
Article XV.
NOTICES
Section 15.1 Giving Notice. All notices and other communications provided to any
party hereto under this Agreement or any other Loan Document shall be in writing
or by telex or by facsimile and addressed or delivered to such party at its
address set forth below or at such other address as may be designated by such
party in a notice to the other parties. Any notice, if mailed and properly
addressed with postage prepaid, shall be deemed given when received; any notice,
if transmitted by telex or facsimile, shall be deemed given when transmitted
(answerback confirmed in the case of telexes). Notice may be given as follows:
To the Borrower:
Equity Inns, Inc.
0000 Xxxx Xxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: 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
To each Lender:
As shown below the Lenders' signatures.
To the Administrative Agent:
Bank One, NA
Corporate Real Estate Division
0 Xxxx Xxx 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: Xxxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
Section 15.2 Change of Address. Each party may change the address for
service of notice upon it by a notice in writing to the other parties hereto.
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 Vice President
----------------------------------
EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P.
By: EQUITY INNS SERVICES, INC.,
its General Partner
By: /s/Xxxxxx X. Xxxxxxx
----------------------------------
Title: Executive Vice President
----------------------------------
EQUITY INNS PARTNERSHIP II, L.P.
By: EQUITY INNS TRUST, its General Partner
By: /s/Xxxxxx X. Xxxxxxx
----------------------------------
Title: Executive Vice President
----------------------------------
LENDERS: BANK ONE, NA
Individually and as Administrative Agent
By: /s/Xxxxxxxx Xxxxx
----------------------------------
Title: Director, Capital Markets
----------------------------------
Commitment: $24,000,000
Percentage of Aggregate Commitment: 21.818181818%
Address for Notices:
Corporate Real Estate Division
0 Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxxx Xxxxx
Telephone: 312/000-0000
Telecopy: 312/732-5939
CREDIT LYONNAIS NEW YORK BRANCH
Individually and as Syndication Agent and
Co-Lead Arranger
By: /s/Xxxxx Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
Commitment: $24,000,000
Percentage of Aggregate Commitment: 21.818181818%
Address for Notices:
Lodging Group
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
Telephone: 212/000-0000
Telecopy: 212/261-7532
FLEET NATIONAL BANK
Individually and as Documentation Agent
By: /s/Xxxxxx Xxxxxxx
----------------------------------
Title: Vice President
----------------------------------
Commitment: $22,000,000
Percentage of Aggregate Commitment: 20.000000000%
Address for Notices:
000 Xxxxxxxxx Xxxxxx Xxxxx X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telephone: 000-000-0000
Telecopy: 770-391-9811
NATIONAL BANK OF COMMERCE
By: /s/Xxxxxx Xxxxx
----------------------------------
Title: AVP
----------------------------------
Commitment: $20,000,000
Percentage of Aggregate Commitment: 18.181818182%
Address for Notices:
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telephone: 901/000-0000
Telecopy: 901/757-4883
AMSOUTH BANK
By: /s/Xxxxxxxx Xxxxx
----------------------------------
Title: Vice President
----------------------------------
Commitment: $15,000,000
Percentage of Aggregate Commitment: 13.636363636%
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
UNION PLANTERS BANK, NATIONAL ASSOCIATION
By: /s/Xxxxx X. Xxxxxx
----------------------------------
Title: SVP
----------------------------------
Commitment: $5,000,000
Percentage of Aggregate Commitment: 4.545454545%
Address for Notices:
0000 Xxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone: 901/000-0000
Telecopy: 901/580-5451
The undersigned, Equity Inns, Inc. and Equity Inns Trust, join in this
Agreement for purposes of making the representations and warranties contained in
Article VII hereof and agreeing to perform certain of the covenants described in
Article VIII hereof.
EQUITY INNS, INC.
By: /s/Xxxxxx X. Xxxxxxx
----------------------------------
Title: Executive Vice President
----------------------------------
EQUITY INNS TRUST
By: /s/Xxxxxx X. Xxxxxxx
----------------------------------
Title: Executive Vice President
----------------------------------
EXHIBIT A
FORM OF INDEMNITY AGREEMENT
See Indemnity Agreement of even date herewith.
EXHIBIT B
FORM OF NOTE
[Banks in Existing Facility will receive an Amended and Restated Note]
_________, 2000
On or before the Maturity Date, as defined in that certain Amended and
Restated Secured Revolving Credit Agreement dated as of June ___, 2003 (the
"Agreement") among EQUITY INNS PARTNERSHIP, L.P., a Tennessee limited
partnership, EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P., a Tennessee limited
partnership and EQUITY INNS PARTNERSHIP II, L.P., a Tennessee limited
partnership (collectively, "Borrower"), CREDIT LYONNAIS NEW YORK BRANCH,
individually and as Syndication Agent, Bank One, NA, a national bank organized
under the laws of the United States of America, individually and as
Administrative Agent for the Lenders (as such terms are defined in the
Agreement), and the other Lenders listed on the signature pages of the
Agreement, Borrower promises to pay to the order of _________________________
(the "Lender"), or its successors and assigns, the aggregate unpaid principal
amount of all Loans made by the Lender to the Borrower pursuant to Section 2.1
of the Agreement, in immediately available funds at the office of the
Administrative Agent in Chicago, Illinois, together with interest on the unpaid
principal amount hereof at the rates and on the dates set forth in the
Agreement. The Borrower shall pay this Promissory Note ("Note") in full on or
before the Maturity Date in accordance with the terms of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Advance and the date and amount of each principal
payment hereunder.
This Note is issued pursuant to, and is entitled to the security under
and benefits of, the Agreement and the other Loan Documents, to which Agreement
and Loan Documents, as they may be amended from time to time, reference is
hereby made for, inter alia, a statement of the terms and conditions under which
this Note may be prepaid or its maturity date accelerated. Capitalized terms
used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement. This Note is not negotiable.
If there is an Event of Default or Default under the Agreement or any
other Loan Document and Lender exercises its remedies provided under the
Agreement and/or any of the Loan Documents, then in addition to all amounts
recoverable by the Lender under such documents, Lender shall be entitled to
receive reasonable attorneys fees and expenses incurred by Lender in exercising
such remedies.
Borrower and all endorsers severally waive presentment, protest and
demand, notice of protest, demand and of dishonor and nonpayment of this Note
(except as otherwise expressly provided for in the Agreement), and any and all
lack of diligence or delays in collection or enforcement of this Note, and
expressly agree that this Note, or any payment hereunder, may be extended from
time to time, and expressly consent to the release of any party liable for the
obligation secured by this Note, the release of any of the security of this
Note, the acceptance of any other security therefor, or any other indulgence or
forbearance whatsoever, all without notice to any party and without affecting
the liability of the Borrower and any endorsers hereof.
This Note shall be governed and construed under the internal laws of
the State of Illinois.
All liability of the entities comprising the Borrower hereunder shall
be joint and several. However, the liability of Equity Inns/West Virginia
Partnership, L.P. under this Note is limited as described in Section 14.16 of
the Agreement.
BORROWER AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHT UNDER THIS PROMISSORY NOTE OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO
OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS NOTE AND
AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
EQUITY INNS PARTNERSHIP, L.P., a Tennessee
limited partnership
By: Equity Inns Trust, its general partner
By:
-----------------------------------
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
Form of Limited Recourse Guaranty
See form of Limited Recourse Guaranty of even date herewith
delivered by E.I.P. Orlando, L.P.
EXHIBIT D
FORM OF AMENDED AND RESTATED GUARANTY
See Amended and Restated Guaranty of even date.
EXHIBIT E
Intentionally Deleted
EXHIBIT F
Intentionally Deleted
EXHIBIT G
Intentionally Deleted
EXHIBIT H
WIRING INSTRUCTIONS
To: Bank One, NA,
as Administrative Agent (the "Agent")
under the Credit Agreement Described Below
Re: Secured Revolving Credit Agreement, dated as of _________, 2003
(as amended, modified, renewed or extended from time to time,
the "Agreement"), among Equity Inns Partnership, L.P., Equity
Inns/West Virginia Partnership, L.P. and Equity Inns Partnership
II, L.P. (collectively, the "Borrower"), Bank One, NA,
individually and as Administrative Agent, Credit Lyonnais New
York Branch, individually and as Syndication Agent, Fleet Bank,
as Documentation Agent, and the Lenders named therein. Terms
used herein and not otherwise defined shall have the meanings
assigned thereto in the Credit Agreement.
The Administrative Agent is specifically authorized and directed to act
upon the following standing money transfer instructions with respect to the
proceeds of Advances or other extensions of credit from time to time until
receipt by the Administrative Agent of a specific written revocation of such
instructions by the Borrower, provided, however, that the Administrative Agent
may otherwise transfer funds as hereafter directed in writing by the Borrower in
accordance with Section 15.1 of the Agreement or based on any telephonic notice
made in accordance with the Agreement.
Facility Identification Number(s)
-----------------------------------------------
Customer/Account Name: Equity Inns Partnership, L.P., Equity Inns/West Virginia
Partnership, L.P. and Equity Inns Partnership II, L.P.
Transfer Funds To: Bank One, NA
For Account No.
-----------------------------------------------------------------
Reference/Attention To
----------------------------------------------------------
Authorized Officer (Customer Representative) Date
-------------------------
--------------------------------- -------------------------------
(Please Print) Signature
Bank Officer Name Date
-------------------------
--------------------------------- -------------------------------
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
EXHIBIT I
FORM OF COMPLIANCE CERTIFICATE
Under Credit Agreement dated as of _________________, 2003, between Equity Inns
Partnership, L.P., Equity Inns / West Virginia Partnership, L.P. and Equity Inns
Partnership II, L.P., as Borrower and Bank One, NA ("Bank One") as
Administrative agent, Credit Lyonnais New York Branch as Syndication Agent and
Co-Lead Arranger, Fleet Bank, as Documentation Agent, and the Lenders defined
therein (the "Credit Agreement").
The undersigned, as _____________ of Equity Inns Partnership L.P., and as
___________ of Equity Inn / West Virginia Partnership L.P., pursuant to Section
8.2 of the Credit Agreement, hereby certify to Bank One as Administrative Agent
as follows:
1. A review of the activities of Borrower during the most recent ended
fiscal quarter (which quarter ended _______) of the Borrower has been
made under my supervision.
2. As of the date hereof, all of the representations and warranties of
Borrower contained in the Credit Agreement and each of the Loan
Documents (as defined in the Credit Agreement) are true and correct in
all material respects (except to the extent that they speak to a
specific date or are based on facts which have changed by transactions
expressly contemplated or permitted by the Credit Agreement).
3. No event has occurred and is continuing which constitutes an Event of
Default or a potential Event of Default.
4. The following Borrowing Base computation for the most recent ended
fiscal quarter, together with the supporting schedule attached hereto is
true and correct:
A. Total Collateral Pool Asset Values
$----------------------
B. 55% of A
$----------------------
C. The principal amount which would
produce an Included Collateral
Pool Debt Service Coverage Ratio
of 1.75 (from 1L of Schedule I)
$----------------------
D. 55% of the total Collateral Pool
Asset Values of the Excluded
Properties and Properties Under
Development
$----------------------
E. C plus D
$----------------------
F. The lesser of B and E
$----------------------
G. Allocated Facility Amount
$----------------------
G must be less than or
Equal to F
5. The following covenant computations, for the most recent ended fiscal
quarter, together with the supporting schedule attached hereto, are true
and correct:
8.3 Limitations on Properties Under Development
A. Aggregate Total Cost of all
Properties Under Development
$----------------------
B. 10% of Total Cost of all Properties
owned by the Consolidated Group
$----------------------
A must be less than or
equal to B
9.3 Leverage.
A. Total Indebtedness
$----------------------
B. EBITDA
$----------------------
C. A divided by B
$----------------------
D. 5.50
E. 5.25 C must be less than or
F. 5.00 equal to: D through
G. 4.75 12/31/03; E from
1/1/04 through
12/31/04; F from
1/1/05 through
12/31/05; and G
thereafter
9.3 Additional Recourse Indebtedness
A. Recourse Indebtedness of the
Consolidated Group
$----------------------
B. Allocated Facility Amount
$----------------------
C. $50,000,000 D. B plus C
$----------------------
A must be less than or
equal to D
9.4 Dividends
9.4(a) A. Total dividends for the past four quarters
(excluding Preferred Stock Expense) $______________________
B. 90% of the Funds From Operations for the
past four quarters
$----------------------
A must be less than or
equal to B
9.4(b) A. Total dividends for the past four quarters
(excluding Preferred Stock Expense)
$----------------------
B. Applicable FCF Percentage of Free Cash Flow
$----------------------
A must be less than or
equal to B
9.4(c) A. Amount of Dividends preceding quarter
(excluding Preferred Stock Expense)
$----------------------
B. Amount of Dividends This Quarter
$----------------------
B must be less than or
equal to A if the
ratio of Total
Indebtedness to
EBITDA exceeds 5.25x
9.5 Floating Rate Debt
A. Floating Rate Debt
$----------------------
Must be less than
$150mm
9.7 FF&E Expenditures.
A. Total actual expenditures of the
Consolidated Group for FF&E
replacement and approved capital
improvements for the Properties
for the past four quarters.
$----------------------
B. Amount of reserves maintained on
the balance sheet on the last day
of the period by the Consolidated
Group for FF&E replacement and
approved capital improvements less
the amount of such reserves maintained
as of the first day of the period.
$----------------------
C. Sum of A plus B
$----------------------
D. 4% of gross room revenues for the
past four quarters for the Properties
$----------------------
C must be greater than
or equal to D
9.8(a) Minimum Tangible Net Worth.
A. Tangible Net Worth of the
Consolidated Group
$----------------------
B. 80% of Tangible Net Worth at 12/31/02
$----------------------
C. 75% of equity interest issued after
12/31/02
$----------------------
D. Sum of B and C
$----------------------
A must be greater than
or equal to D
9.8(b) Minimum Fixed Charge Coverage
A. Adjusted EBITDA for the most recent
12 calendar months
$----------------------
B. Ground Lease Expense for the most
recent 12 calendar months
$----------------------
C. Sum of A plus B
$----------------------
D. Fixed Charges for the most recent
12 calendar months
$----------------------
E. C divided by D
-----------------------
E must be greater than
or equal to the amount
specified in Section
9.8(b) for the
applicable time period
9.8(c) Minimum Interest Coverage
A. Adjusted EBITDA for the most recent
12 calendar months
$----------------------
B. Interest Expense for the most recent
12 calendar months
$----------------------
C. A divided by B
-----------------------
C must be greater than
or equal to the amount
specified in Section
9.8(c) for the
applicable time period
9.11 Share Repurchase
A. Total amount paid by Equity Inns
for stock repurchase during the
most recently completed quarter
$----------------------
B. Amount Available for dividend payments
during such quarter
$----------------------
C. Amount of Dividends paid during such
quarter
$----------------------
A must be less than
B-C
The following computation of the limits imbedded in the definitions, together
with the supporting schedule attached hereto, is true and correct.
Limitations in Borrowing Base (See definition of "Eligible Property")
Borrower Properties
A. Borrowing Base
$----------------------
B. Total Collateral Pool Asset Values
of Properties which are, directly
or indirectly, wholly owned and
controlled by Borrower
$----------------------
C. B divided by A
----------------------%
C must be greater than
or equal to 90%
Fee Simple Properties
D. Total Collateral Pool Asset Values
of Properties which are, directly
or indirectly, held in fee simple
by Borrower or a Wholly-Owned
Subsidiary
$----------------------
E. D divided by A
----------------------%
E must be greater than
or equal to 90%
State Concentration
F. Total Collateral Pool Asset Values of
all Collateral Pool Assets located in
the state containing the Properties
which makes up the greatest percentage
of the Borrowing Base
$----------------------
G. F divided by A
----------------------%
G must be less than or
equal to 25%
Individual Asset Concentration
H. Collateral Pool Asset Value of the
Collateral Pool Asset which makes
up the greatest percentage of the
Borrowing Base
$----------------------
I. H divided by A
----------------------%
I must be less than or
equal to 20%
Properties Under Development
J. Total amount of the Borrowing Base
attributable to Properties Under
Development
$----------------------
J must be less than
$25,000,000
K. Total Amount of Borrowing Base
attributable to Excluded Properties
$----------------------
J plus K must be less
than $35,000,000
Limitation on Excluded Investment Affiliates (see definition)
Ownership Percentage
A. The largest Consolidated Group
Pro Rata Share of any Investment Affiliate $______________________
A must be less than
20%
Book Value
B. The aggregate book value of the Consolidated
Group's investment in all Excluded Investment
Affiliates $______________________
C. $20,000,000
D. $25,000,000
E. The amount of the Borrowing Base attributable
to Properties Under Development $______________________
F. D minus E $______________________
G. The lesser of C and F $______________________
B must be less than or
equal to G
In addition, the Consolidated Group does not have voting control of, or the
ability to otherwise direct the actions of any Investment Affiliate, and no
Investment Affiliate has Indebtedness which is recourse to, or guaranteed by,
any member of the Consolidated Group.
Date:
------------------------------------
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
SCHEDULE I
CALCULATION OF COVENANTS
1. Included Collateral Pool Debt Service Coverage Ratio
A. Net Operating Income of all Included
Collateral Pool Assets for the past four
quarters $______________________
B. Agreed FF&E Reserve for the past four quarters
$----------------------
C. A minus B
$----------------------
D. C divided by 1.75 = annual debt service
payment amount resulting in 1.75 Included
Collateral Pool Debt Service Coverage Raio
$----------------------
E. Average Interest Rate for the Facility for
the past 4 quarters
----------------------%
F. D divided by E
$----------------------
G. Yield on 10-year Treasuries as of the last
Business Day of the most recently completed
quarter.
----------------------%
H. 2.50%
I. G plus H
----------------------%
J. 6.75%
----------------------%
K. Higher of I or J
----------------------%
L. Debt Service Constant for loan with equal
monthly payments and an interest rate equal
to K above and a 25 year amortization
Schedule.
----------------------%
M. D divided by L
$----------------------
N. The lesser of F and M (The principal amount
which would produce an Included Collateral
Pool Debt Service Coverage Ratio of 1.75)
$----------------------
2. Total Cost
A. Book Value of all Properties owned by the
Consolidated Group
$----------------------
B. Accumulated Depreciation on such Properties
$----------------------
C. Consolidated Group Pro Rata Share of the
book value of all properties owned by
Investment Affiliates
$----------------------
D. Consolidated Group Pro Rata Share of the
depreciation associated with such Properties
owned by Investment Affiliates
$----------------------
E. Sum of A, B, C, and D
$======================
3. Total Indebtedness
A. Indebtedness of the Consolidated Group
1. indebtedness for borrowed money
$----------------------
2. obligations under financing and capital
leases
$----------------------
3. Guarantee Obligations
$----------------------
4. Letters of credit
$----------------------
5. Other items which constitute Indebtedness
not included in the above
$----------------------
B. Consolidated Group Pro Rata Share of all Indebtedness of any Investment
Affiliate other than Excluded Investment Affiliates (to the extent not
included in A)
1. Indebtedness for borrowed money
$----------------------
2. Obligations under financing and capital
leases
$----------------------
3. Guarantee Obligations
$----------------------
4. Letters of Credit
$----------------------
5. Other items which constitute Indebtedness
not included in the above
$----------------------
C. Sum of A and B equals Total Indebtedness
$----------------------
4. EBITDA for the most recent four quarters
A. EBITDA of the Consolidated Group excluding
income from Investment Affiliates
$----------------------
B. Consolidated Group Pro Rata Share of EBITDA
of Investment Affiliates other than Excluded
Investment Affiliates
$----------------------
C. All extraordinary items included in A or B
$----------------------
D. All gains or losses from sale of assets
$----------------------
E. Adjustment for Properties not owned during
whole period
$----------------------
F. Sum of A plus B less sum of C plus D plus
or minus E equals EBITDA
$----------------------
5. Adjusted EBITDA for the most recent four quarters
A. EBITDA for the most recent four quarters
$----------------------
B. 4% of gross room revenues for the past
four quarters on all Properties
$----------------------
C. A minus B equals Adjusted EBITDA
$----------------------
6. Interest Expense for the most recent four quarters
A. Interest Expense of the Consolidated Group
$----------------------
B. Consolidated Group Pro Rata Share of any accrued
or paid interest of an Investment Affiliate
(other than Excluded Investment Affiliates)
$----------------------
C. Sum of A plus B equals Interest Expense
$----------------------
7. Fixed Charges for the most recent four quarters
A. Interest Expense
$----------------------
B. Regularly scheduled principal payments of
Indebtedness of the Consolidated Group
$----------------------
C. Consolidated Group Pro Rata Share of any
regularly scheduled principal payments of an
Investment Affiliate (other than Excluded
Investment Affiliates)
$----------------------
D. Preferred Stock Expense
$----------------------
E. Ground Lease Expense
$----------------------
F. Sum of A, B, C, D, and E equals
Fixed Charges
$----------------------
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 the sum of C and D equals Free
Cash Flow
$----------------------
EXHIBIT J
MINIMUM SPECIFICATIONS FOR ENVIRONMENTAL INVESTIGATIONS
The following are Guidelines for the qualification of firms
and environmental professionals and for information to be included in
Environmental Site Assessments. These standards include the minimum elements
common to acceptable site assessments. Generally, it is intended for the
standards to be consistent with those outlined in the American Society for
Testing and Materials ("ASTM") Designation: E 1527-93.
Qualifications of Investigating Firm
The firm or environmental professional must have 5 years of
experience in hazardous substances investigation. The environmental professional
supervising and signing the report should be experienced in environmental site
investigations, and should have relevant environmental experience and technical
qualifications, such as demonstrated by professional registration and/or
advanced education in related disciplines. The firm or environmental
professional performing the work should have adequate professional liability
insurance. Borrower and Lenders may agree in advance on qualified firms or
environmental professionals that will conduct the Phase I Reports. Borrower may
from time to time select other firms or environmental professionals that meet
the minimum qualifications set out above to conduct a Phase I Report, subject to
approval of the Administrative Agent, which approval shall not be unreasonably
withheld or delayed.
Depth of Reporting Required
Phase I - consists of site description, review of historical
and regulatory data and physical inspection. The firm or environmental
professional will follow the standard practices set out in the ASTM E 1527-93
guidelines in conducting the Phase I Site Assessment and drafting the Report and
in preparing the Findings and Conclusions. All deletions and deviations from the
ASTM E 1527-93 guidelines shall be listed individually and in detail. As an
additional component of the Phase I Site Assessment, the firm or environmental
professional will conduct an asbestos survey or inspection in accordance with
the protocols set by OSHA under the Occupational Safety & Health Act (including
protocols set forth under the Asbestos Hazard Emergency Response Act (AHERA)
that are incorporated into the OSHA protocols) unless an alternate protocol is
approved by the Administrative Agent. In all events such survey or inspection
shall comply with all applicable Environmental Laws, including, but not limited
to, 29 C.F.R. ss. 1910.1001. The firm or environmental professional will also
conduct a lead-based paint survey or inspection when necessary, including but
not limited to prior to demolition or renovation work and as required by all
applicable Environmental Laws, including, but not limited to 29 C.F.R. ss. ss.
1910.1025 and 1926.62. If no potential contamination is indicated, the report
should so state, and a specific statement should be made that no further
investigation is required.
Phase II - If a Phase I examination indicates the presence of
recognized environmental conditions which would warrant further appropriate
inquiry, the consultant should document the basis for that conclusion, recommend
a testing program for further evaluation, including the areas to be tested and,
if appropriate, the hazardous constituents of concern, sampling procedures to be
used and methods used to assess the samples. If after evaluating the
recommendation, the Borrower determines that a Phase II is necessary, then the
Borrower will request the firm or environmental professional to prepare a bid,
and may solicit competitive bids from other firms or environmental
professionals. The Phase II Report should document the extent, and, if possible,
source, of contamination so that the Borrower can assess whether remediation is
required under applicable Environmental Laws. If the Borrower plans to conduct
remediation estimated to cost more than $250,000 for any Project, the Borrower
will promptly provide written notice to the Administrative Agent. If the
Borrower does not follow the recommendation of the firm or environmental
professional to conduct a Phase II investigation or remediation for any Project,
the Borrower will promptly provide written notice to the Administrative Agent.
Reliance on Phase I Report
The Phase I Report shall include a statement that the firm or
environmental professional acknowledges that the Lenders will be relying on the
Report.
EXHIBIT K
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption (the "Assignment and Assumption") is
dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor] (the "Assignor") and [Insert name of Assignee]
(the "Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Agent as contemplated below, the interest in and to all of the Assignor's
rights and obligations in its capacity as a Lender under the Credit Agreement
and any other documents or instruments delivered pursuant thereto that
represents the amount and percentage interest identified below of all of the
Assignor's outstanding rights and obligations under the respective facilities
identified below (including without limitation any letters of credit, guaranties
and swingline loans included in such facilities and, to the extent permitted to
be assigned under applicable law, all claims (including without limitation
contract claims, tort claims, malpractice claims, statutory claims and all other
claims at law or in equity), suits, causes of action and any other right of the
Assignor against any Person whether known or unknown arising under or in
connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby) (the
"Assigned Interest"). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.
1. Assignor:
2. Assignee: _____________________________ [and is an Affiliate/Approved Fund of
[identify Lender]1
3. Borrower(s):
4. Agent: ____________________________, as the agent under the Credit Agreement.
5. Credit Agreement: The [amount] Credit Agreement dated as of _______________
among ____________________________ [name of Borrower(s)], the Lenders party
thereto, [name of Agent], as Agent, and the other agents party thereto.
6. Assigned Interest:
------------------------ ------------------------ -------------------------- ----------------------
Aggregate Amount of Amount of Commitment/Loans Percentage Assigned of
Facility Assigned Commitment/Loans for all Commitment/Loans Commitment/Loans2
Lenders* Assigned*
------------------------ ------------------------ -------------------------- -----------------------
3 $ $ %
7. Trade Date: _____________________________________________4
Effective Date: ____________________, 20__ [TO BE INSERTED BY AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER BY THE AGENT.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:
-----------------------------
Title:
-----------------------------
ASSIGNEE
[NAME OF ASSIGNEE]
By:
-----------------------------
Title:
-----------------------------
[Consented to and]5 Accepted:
[NAME OF AGENT], as Agent
By:
--------------------------------------
Title:
--------------------------------------
[Consented to:]6
*Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Effective Date.
2 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.
3 Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g. "Revolving
Credit Commitment," "Term Loan Commitment,", etc.)
4 Insert if satisfaction of minimum amounts is to be determined as of the Trade
Date.
5 To be added only if the consent of the Agent is required by the terms of the
Credit Agreement.
6 To be added only if the consent of the Borrower and/or other parties (e.g.
Swingline Lender, L/C Issuer) is required by the terms of the Credit Agreement.
[NAME OF RELEVANT PARTY]
By:
--------------------------------------
Title:
--------------------------------------
ANNEX 1
TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor represents and warrants that (i) it is the
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby. Neither the Assignor nor any of its officers, directors,
employees, agents or attorneys shall be responsible for (i) any statements,
warranties or representations made in or in connection with the Credit Agreement
or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency, perfection, priority, collectibility,
or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document, (iv) the performance or
observance by the Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document, (v)
inspecting any of the property, books or records of the Borrower, or any
guarantor, or (vi) any mistake, error of judgment, or action taken or omitted to
be taken in connection with the Loans or the Loan Documents.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) from
and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of the Assigned Interest,
shall have the obligations of a Lender thereunder, (iii) agrees that its payment
instructions and notice instructions are as set forth in Schedule 1 to this
Assignment and Assumption, (iv) confirms that none of the funds, monies, assets
or other consideration being used to make the purchase and assumption hereunder
are "plan assets" as defined under ERISA and that its rights, benefits and
interests in and under the Loan Documents will not be "plan assets" under ERISA,
(v) agrees to indemnify and hold the Assignor harmless against all losses, costs
and expenses (including, without limitation, reasonable attorneys' fees) and
liabilities incurred by the Assignor in connection with or arising in any manner
from the Assignee's non-performance of the obligations assumed under this
Assignment and Assumption, (vi) it has received a copy of the Credit Agreement,
together with copies of financial statements and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the
Assigned Interest on the basis of which it has made such analysis and decision
independently and without reliance on the Agent or any other Lender, and (vii)
attached as Schedule 1 to this Assignment and Assumption is any documentation
required to be delivered by the Assignee with respect to its tax status pursuant
to the terms of the Credit Agreement, duly completed and executed by the
Assignee and (b) agrees that (i) it will, independently and without reliance on
the Agent, the Assignor or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Documents, and
(ii) it will perform in accordance with their terms all of the obligations which
by the terms of the Loan Documents are required to be performed by it as a
Lender.
2. Payments. The Assignee shall pay the Assignor, on the Effective
Date, the amount agreed to by the Assignor and the Assignee. From and after the
Effective Date, the Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignor for amounts which have accrued to but excluding the Effective Date
and to the Assignee for amounts which have accrued from and after the Effective
Date.
3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of Illinois.
ADMINISTRATIVE QUESTIONNAIRE
(Schedule to be supplied by Closing Unit or Trading Documentation Unit)
EXHIBIT L
AMENDMENT TO AMENDED AND RESTATED
SECURED REVOLVING CREDIT AGREEMENT
This Amendment to the Secured Revolving Credit Agreement (the
"Agreement") is made as of __________________, __________, by and among Equity
Inns Partnership, L.P., a Tennessee limited partnership, Equity Inns/West
Virginia Partnership, L.P., a Tennessee limited partnership and Equity Inns
Partnership II, L.P., a Tennessee limited partnership (collectively, "Borrower")
Equity Inns Trust, Equity Inns Services, Inc. and Equity Inns, Inc.
(collectively, "Guarantor"), Bank One, NA, individually and as "Administrative
Agent," and one or more new or existing "Lenders" shown on the signature pages
hereof.
R E C I T A L S
A. Borrower, Administrative Agent and certain other Lenders have entered into an
Amended and Restated Secured Revolving Credit Agreement dated as of __________,
2003 (as amended, the "Credit Agreement"). All capitalized terms used herein and
not otherwise defined shall have the meanings given to them in the Credit
Agreement.
B. Pursuant to the terms of the Credit Agreement, the Lenders initially agreed
to provide Borrower with a revolving credit facility in an aggregate principal
amount of up to $110,000,000. The Borrower, the Administrative Agent and the
Lenders now desire to amend the Credit Agreement in order to, among other things
(i) increase the Aggregate Commitment to $__________________; and (ii) admit
[name of new banks] as "Lenders" under the Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing Recitals and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
AGREEMENTS
1. The foregoing Recitals to this Amendment hereby are incorporated into and
made part of this Amendment.
2. From and after _________, ____ (the "Effective Date") (i) [name of new banks]
shall be considered as "Lenders" under the Credit Agreement and the Loan
Documents, and (ii) [name of existing lenders] shall each be deemed to have
increased its Commitment to the amount shown next to their respective signatures
on the signature pages of this Amendment, each having a Commitment in the amount
shown next to their respective signatures on the signature pages of this
Amendment. The Borrower shall, on or before the Effective Date, execute and
deliver to each of such new or existing Lenders a new or Note in the amount of
such Commitment.
3. From and after the Effective Date, the Aggregate Commitment shall equal
__________ Million Dollars ($___,000,000).
4. For purposes of Section 15.1 of the Credit Agreement (Giving Notice), the
address(es) and facsimile number(s) for [name of new banks] shall be as
specified below their respective signature(s) on the signature pages of this
Amendment.
5. The Borrower hereby represents and warrants that, as of the Effective Date,
there is no Default or Event of Default, the representations and warranties
contained in Articles VI and VII of the Credit Agreement are true and correct as
of such and the Borrower has no offsets or claims against any of the Lenders.
6. As expressly modified as provided herein, the Credit Agreement shall continue
in full force and effect.
7. This Amendment may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Amendment by signing any such counterpart.
IN WITNESS WHEREOF, the parties have executed and delivered this Amendment as of
the date first written above.
EQUITY INNS PARTNERSHIP, L.P.
By: EQUITY INNS TRUST, its General Partner
By: Xxxxxx X. Xxxxxxx
-----------------------------
Title: Executive Vice President
-----------------------------
EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P.
By: EQUITY INNS SERVICES, INC., its General Partner
By: Xxxxxx X. Xxxxxxx
--------------------------------------
Title: Executive Vice President
--------------------------------------
EQUITY INNS PARTNERSHIP II, L.P.
By: EQUITY INNS TRUST, its General Partner
By: Xxxxxx X. Xxxxxxx
--------------------------------------
Title: Executive Vice President
--------------------------------------
EQUITY INNS, INC.
By: Xxxxxx X. Xxxxxxx
--------------------------------------
Title: Executive Vice President
--------------------------------------
EQUITY INNS TRUST
By: Xxxxxx X. Xxxxxxx
--------------------------------------
Title: Executive Vice President
--------------------------------------
EQUITY INNS SERVICES, INC.
By: Xxxxxx X. Xxxxxxx
--------------------------------------
Title: Executive Vice President
--------------------------------------
BANK ONE, NA, Individually and as Administrative Agent
By:
Print Name:
Title:
0 Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: 312/732-5939
Attention: Corporate Real Estate
Amount of Commitment: $
[NAME OF NEW LENDER]
By:
Print Name:
Title:
[Address of New Lender]
Phone:
Facsimile:
Attention:
EXHIBIT M
FORM OF MORTGAGE
(see attached)
EXHIBIT N
FORM OF MORTGAGE AMENDMENT
EXHIBIT O
ASSIGNMENT OF CONTRACTS
See Assignment of Contract of even date herewith.
EXHIBIT P
FORM OF SUBORDINATION LANGUAGE FOR MANAGEMENT AGREEMENTS
This Agreement shall be subordinate to any mortgage encumbering a
Hotel, and Manager agrees to enter into a lender-manager agreement with respect
to each Hotel, which agreement shall contain reasonable lender-manager
provisions, including, without limitation, Manager's acknowledgment that its
real estate interest in and to a Hotel, if any, created by this Agreement is
subordinate to any mortgage encumbering such Hotel, including providing any
purchaser of such Hotel at a foreclosure sale or deed-in-lieu of foreclosure
(including the lender) with the right to terminate this Agreement with respect
to such Hotel; provided, however, in no event will Manager agree to subordinate
or waive its right to receive fees, reimbursements or indemnification payments
under this Agreement arising prior to termination (but (a) if this Agreement is
terminated by the lender or such purchaser with respect to such Hotel, Manager
shall not look to the lender for payment of such fees, reimbursements or
indemnification payments and Manager's right to receive such fees,
reimbursements or indemnification payments shall be subordinated to the lender's
rights and (b) if this Agreement is not terminated by the lender or such
purchaser with respect to such Hotel, then such fees, reimbursements or
indemnification payments shall be payable by the lender or such purchaser).
EXHIBIT Q
FORM OF SUBORDINATION
AGREEMENT FOR PERMITTED OPERATING LEASES (AFFILIATES)
This Subordination and Attornment Agreement (the "Agreement") is dated
as of January 1, 2001, among BANK ONE, NA, a national banking association, not
individually but as "Agent" for the benefit of the lenders from time to time
under the Credit Facility described below (the "Lenders"), ___________________.,
a Delaware corporation (the "Tenant") and EQUITY INNS PARTNERSHIP, L.P.(the
"Landlord").
RECITALS
A. The Landlord is the legal or beneficial owner of a fee or leasehold
estate in the hotel properties listed on Schedule 1, which Schedule is attached
hereto and made a part hereof by this reference (individually a "Property" or
collectively the "Properties" or the "Premises").
B. The Lenders have extended to Landlord and its affiliates a certain
secured revolving facility (the "Credit Facility") in the initial maximum
principal sum of $110,000,000, subject to further increase to $175,000,000, on
the terms, covenants and provisions contained in a certain Secured Revolving
Credit Agreement dated as of October 26, 2000 as amended and modified from time
to time (as so modified and amended, and as the same may hereafter be modified
and amended, the "Credit Agreement").
C. The Credit Facility is secured by various mortgages, deeds of trust,
deeds to secure debt, and similar instruments in favor of the Agent for the
benefit of the Lenders (collectively, the "Mortgages") encumbering the
Properties and certain other hotel properties owned by the Landlord and its
affiliates. The Mortgages and any other documents now and hereafter evidencing,
securing or otherwise relating to the Credit Facility are hereinafter
collectively referred to as the "Security Documents."
D. Tenant is the lessee of all of the Properties by the terms of
certain lease agreements described in Schedule 2 which is attached hereto and
made a part hereof, as amended and modified from time to time (as so modified
and amended, and as the same may hereafter be modified and amended as expressly
permitted in accordance with the terms and provisions hereof, individually a
"Lease" and collectively the "Leases").
E. The intent of the parties is that this Agreement shall be construed
as a separate subordination and attornment agreement for each Lease and for each
Property.
AGREEMENT
For mutual consideration, including the mutual covenants and agreements
set forth below, the Lenders' consent to Landlord's execution and delivery of
the Leases and the substantial economic benefit Tenant will derive from the
extension of the Credit Facility by Lenders to Landlord and its affiliates, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Subordination. Tenant agrees that each Lease and all of the terms,
covenants and provisions thereof and all rights, remedies and options of Tenant
thereunder, including, without limitation, (a) any right of Tenant to purchase
all or part of the Property demised under such Lease and any right of first
offer available to Tenant to purchase all or part of the Property demised under
such Lease (such rights, collectively, the "Options"), (b) any renewal options
for the benefit of Tenant, (c) Tenant's interest, if any, in the Capital
Expenditure Reserve Account (as defined in such Lease) and (d) any right to
insurance proceeds or condemnation awards, shall at all times be subject and
subordinate to the Security Documents and the lien thereof and to all present or
future advances under the Credit Facility and all renewals, amendments,
modifications, consolidations, replacements and extensions of the Credit
Facility and the Security Documents, to the full extent of all amounts secured
by the Security Documents from time to time. Said subordination is to have the
same force and effect as if the Security Documents and such renewals,
modifications, consolidations, replacements and extensions thereof have been
executed, acknowledged, delivered and recorded prior to such Lease, any
amendments or modifications thereof and any notice thereof.
2. Tenant Options. Notwithstanding anything to the contrary contained
in this Agreement, provided Tenant is not then in default under terms of the
related Lease or this Agreement, Tenant may exercise any of the Options or
renewal rights granted to it under, and in strict accordance with the terms of,
such Lease; provided, however, Tenant acknowledges that Landlord's ability to
convey all or any portion of the Premises free and clear of the lien of the
Security Documents shall be subject to the fulfillment by Landlord of all terms,
provisions and conditions contained in Section 2.19(c) of the Credit Agreement.
3. Lack of Nondisturbance. Tenant acknowledges that the Agent shall
have the right to terminate each of the Leases pursuant to a foreclosure of the
related Mortgage, notwithstanding anything to the contrary in Article XXX of the
Lease or in any other provision thereof or in this Agreement.
4. Attornment. Tenant agrees that, at the written election of the Agent
given to Tenant which election may be given or withheld in the Agent's sole
discretion, in the event of a foreclosure of any or all of the Security
Documents by Agent or the acceptance of an assignment or deed in lieu of
foreclosure by Agent on behalf of the Lenders (or any assignee, nominee,
designee or successor of Agent or the Lenders) to ownership of a fee or
leasehold (as the case may be) interest or interests in any of the Premises,
Tenant will attorn to and recognize as its landlord the party which thereby
takes title (whether fee or leasehold, as the case may be) to all or any part of
the premises subject to the related Lease or Leases for the remainder of the
term of such Lease or Leases (including all extension periods which have been or
are hereafter exercised in accordance with the provisions of such Lease) upon
the same terms and conditions as are set forth in such Leases, which will
thenceforth be deemed direct leases between such party and Tenant, and Tenant
hereby agrees to pay and perform all of the obligations of Tenant pursuant to
such Leases. If such written election is made, Agent or such other party, by
virtue of such foreclosure, shall be deemed to have assumed and agreed to be
bound, as substitute landlord, by the terms and conditions of such Leases
(including, without limitation, any obligations with respect to the maintenance
and use of the Capital Expenditure Reserve Account) until the sale or other
disposition of its interest, except that such assumption shall not be deemed of
itself an acknowledgment by such new landlord of the validity of any then
existing claims of Tenant against any prior landlord (including Landlord);
provided however, that the Agent, the Lenders, and any such assignee, nominee,
designee or successor of the Agent or the Lenders, as the case may be, shall not
be (i) liable for any accrued obligation of Landlord, or for an act or omission
of Landlord, whether prior to or after such foreclosure or transfer by
assignment or deed in lieu of foreclosure not arising by, through or under such
new landlord, in effectuating such transfer or foreclosure, (ii) required to
make (or to permit proceeds of insurance or condemnation awards to be used by
Tenant to pay for) any repairs to the Premises required as a result of fire or
other casualty or by reason of condemnation unless such new landlord shall be
expressly obligated under the Lease to make such repairs (or permit such
proceeds or awards to be used for such purposes) and shall have received
sufficient casualty insurance proceeds or condemnation awards to finance the
completion of such repairs, (iii) required to make any capital improvements to
the Premises which Landlord may have agreed to make, but had not completed, or
to perform or provide any services not related to possession or quiet enjoyment
of the Premises, unless in each case such new landlord shall be expressly
obligated to do so under such Lease, or (iv) subject to any offsets or
counterclaims which shall have accrued to Tenant against Landlord prior to the
date upon which such new landlord shall become the owner of all or part of the
Premises. If the Agent so elects in writing to require Tenant's attornment,
except as set forth to the contrary in clause (i) or (iv) of this paragraph 5
above, all rights and obligations under such Leases shall continue as though
such foreclosure proceedings had not been brought or as though a deed or
assignment in lieu of foreclosure had not been granted, and such new landlord
shall recognize all of Tenant's rights under such Leases except as expressly
provided otherwise in this Agreement. Tenant acknowledges and agrees that, from
and after the date on which such new landlord becomes the owner of all or part
of the Properties, for purposes of calculating the "Minimum Price" under the
Leases with respect to such Properties, the date on which such new landlord
becomes the owner shall be deemed to be the date of acquisition, the "equity" of
such new landlord under clause (a) of the definition of "Minimum Price" shall be
deemed to be the greater of (i) that portion of the aggregate Obligations under
the Credit Agreement reasonably allocated to such Property by the Agent or (ii)
the purchase price paid for such Property at the foreclosure sale, such Property
shall be deemed to be free of encumbrances as of such date and all further
adjustments to the "Minimum Price" for such Property will be made from such
initial "equity" amount.
5. Tenant Rights upon Landlord Security Documents Default. The Agent
acknowledges the rights of Tenant to cure any defaults of Landlord under the
Mortgages contained in Section 34.2 of each of the Leases. In furtherance
thereof, the Agent shall (a) give Tenant the same notice, if any, given to
Landlord of any default or acceleration of any obligation secured by any such
Mortgage or other Security Document or any sale in foreclosure thereunder, (b)
permit Tenant to cure any such default on Landlord's behalf within any
applicable cure period (and seek reimbursement of all costs associated therewith
from Landlord) and (c) permit Tenant to appear by its representative and to bid
at any sale in foreclosure made with respect to any of the Security Documents.
6. Tenant Estoppel. Tenant hereby represents and warrants to Agent that
as of the date hereof (i) Tenant is the owner and holder of the lessee's
interest under the Leases, (ii) none of the Leases have been modified or
amended, (iii) each of the Leases is in full force and effect, (iv) Tenant has
taken possession of the Premises on a rent-paying basis, (v) to the best of
Tenant's knowledge and belief, neither Tenant nor Landlord is in default under
any of the terms, covenants or provisions of any of the Leases, and (vi) neither
Tenant nor, to the best of Tenant's knowledge and belief, Landlord has commenced
any action or given or received any notice for the purposes of terminating any
of the Leases.
7. Landlord Lease Default. Tenant shall notify Agent of any default by
Landlord under any Lease which could or would entitle Tenant to cancel such
Lease or xxxxx the rent (or any portion thereof) payable to Landlord thereunder.
Tenant agrees that, notwithstanding any provisions of any Lease to the contrary,
no notice of cancellation shall be effective unless Agent shall have received
notice of the default giving rise to such cancellation and shall have failed
within thirty (30) days after receipt of such notice to cure such default, or if
such default cannot be cured within thirty (30) days, shall have failed within
thirty (30) days after receipt of such notice to commence and to thereafter
diligently pursue any action necessary to cure such default; provided, however,
in no event shall such cure period extend beyond ninety (90) days after such
notice. Nothing contained in this paragraph 8 shall be construed as imposing any
obligation on Agent to cure any default by Landlord under any Lease.
8. (a) Tenant Notices and Agent Audit Access. Tenant hereby
acknowledges and agrees that, from and after the date hereof (and without regard
to whether any default then exists under any Lease or whether Agent has
exercised any other rights available to it hereunder or under the Security
Documents), (i) Tenant shall deliver to Agent copies of any and all notices
delivered to Landlord pursuant to or otherwise in connection with any Lease,
simultaneously with Tenant's delivery of the same to Landlord, and (ii) all of
the audit, examination, inspection, transcription and related rights of Landlord
pursuant to Section 3.9 and Article 25 of each of the Leases shall inure to the
benefit of Agent and may be exercised by Agent at all the times and to the full
extent provided therein with respect to Landlord.
(b) Agent Receipt of Rents. In the event Tenant receives
written notice from Agent that rentals and/or other monies due under any of the
Leases are to be paid to Agent, Tenant shall pay to Agent, or as otherwise
directed by Agent, by check made payable solely to Agent or as otherwise
directed by Agent, all rentals and other monies due or to become due under such
Leases, and Landlord hereby expressly authorizes Tenant to make such payments to
Agent, or as otherwise directed by Agent and Landlord hereby releases and
discharges Tenant of and from any liability to Landlord on account of any such
payments. Should Tenant fail to make payment as directed by Agent after receipt
of any such notice from Agent, Tenant shall remain liable to Agent for all
amounts so paid after receipt of such notice.
9. Insurance, Casualty and Condemnation. Notwithstanding any contrary
or inconsistent provisions contained in any Lease or in the Credit Agreement,
with respect to each and every Property which is both (a) part of the Collateral
Pool Assets under the Credit Facility and (b) demised to Tenant pursuant to a
Lease, the following provisions will apply:
A. Insurance Requirements. During the term of the Credit
Facility and for so long as any portion of the Obligations (as defined in the
Credit Agreement) shall remain outstanding, Tenant shall maintain the types of
insurance with respect to the Premises as are required by the provisions of
Article 13 of each of the Leases and shall otherwise perform its obligations set
forth in such Article 13. Notwithstanding anything contained in any Lease to the
contrary, Tenant shall not be permitted to acquire insurance through insurance
companies which are Affiliates (as defined in the Leases) of Tenant even if
insurance otherwise satisfies the requirements of Section 13.6 of the Leases.
Without limiting the generality of the foregoing, all insurance policies
insuring against casualty and business interruption and other appropriate
policies required under the Leases shall include noncontributing mortgagee
endorsements in favor of Agent with loss payable to Agent, as well as standard
waiver of subrogation endorsements, and shall provide that the coverage shall
not be terminated or modified, nor a risk changed without thirty (30) days'
advance written notice to Landlord and Agent. If any portion of the insured
risks are re-insured, the re-insurance policies shall contain "cut-through"
endorsements reasonably satisfactory to Agent. Tenant shall pay the premiums for
such insurance policies as the same become due and payable. Not later than ten
(10) days prior to the expiration date of each of such insurance policies,
Tenant will deliver to Agent certificates of insurance for a renewal policy or
policies marked "premium paid" or accompanied by other evidence of payment of
premium reasonably satisfactory to Agent. If any insurance policy or part
thereof shall expire or be withdrawn or become void by reason of the failure or
impairment of the capital of any company in which the insurance shall be
carried, or if at any time Agent is not in receipt of written evidence that all
insurance required hereunder is in force and effect or if for any reason
whatsoever the insurance shall be reasonably unsatisfactory to Agent, Agent
shall have the absolute and unconditional right without prior notice to Landlord
or Tenant to take such action as Agent deems necessary to protect the interest
of Agents in the Premises, including without limitation, the obtaining of such
insurance coverage as Agent deems appropriate, and Landlord agrees to pay to
Agent and upon demand by Agent all expenses incurred by Agent in connection with
such action or by Agents in obtaining such insurance and keeping it in effect,
together with interest thereon at the Default Rate (as defined in the Credit
Agreement). Except as otherwise hereinafter specifically provided below in
subparagraph B, if any portion of the Premises shall be damaged or destroyed, in
whole or in part, by fire or other property hazard or casualty, Tenant shall
give prompt notice thereof to Agent and Landlord and one hundred (100%) percent
of the net amount of all insurance proceeds received by Agent, Tenant or
Landlord as a result of such damage or destruction, after deduction of
reasonable costs and expenses, if any, in collecting the same, shall be applied
in reduction of Obligations (as such term is defined in the Credit Agreement)
under the Credit Facility.
B. Application of Insurance to Repair. Tenant will give Agent
and Landlord prompt notice of any loss or damage to all or any portion of the
Premises, and in the event of any such loss or damage, the ollowing provisions
shall apply:
(i) Settlement. In case of loss or damage covered by any of
the insurance policies required under Article 13 of any Lease, Tenant
shall not have the right to settle and adjust any claim under such
insurance policies without the consent of Agent (which consent shall
not be unreasonably withheld or delayed); provided, however, that so
long as no default or event of default under such Lease has occurred
and is continuing, Tenant shall have the right, without the consent of
Agent, to settle and adjust claims relating to an insurance loss of
less than $10,000. Tenant shall, in good faith and with due diligence,
file and prosecute its claim or claims for any such loss or damage
covered by the insurance policies, and shall cause the same to be
collected and paid over to Agent; provided, however, Tenant (and, to
the extent provided in such Lease, Landlord) shall have the right to
receive the proceeds of claims of less than $10,000 as long as no
default or event of default under such Lease shall have occurred and
shall be continuing; and provided, further, that such proceeds are
applied to reimburse Tenant for the cost of restoring, repairing,
replacing or rebuilding (herein generally called "Restoration") the
Premises or the affected portion thereof subsequent to such damage or
destruction, in accordance with subparagraph (xiv) below. Each of
Tenant and Landlord hereby appoints Agent its attorney-in-fact to
endorse any checks, drafts or other instruments representing any
proceeds of such insurance.
(ii) Restoration. Notwithstanding anything to the contrary
contained in subparagraph (i) above, if at any one time during the term
of the Credit Facility, up to (but not more than) three (3) Properties
shall have been damaged or destroyed by fire or other casualty such
that, simultaneously, any three (3) Properties are not substantially
complete and open for occupancy, provided that the aggregate book value
plus depreciation (i.e., "Total Cost" as defined in the Credit
Agreement) of such Property or Properties (in each case immediately
prior to the casualty in question) shall not exceed 10% of the
aggregate Total Cost of all the Properties immediately prior to such
casualty, then Agent shall, in accordance with the provisions of this
paragraph hereinafter set forth, make available to Tenant for
Restoration the net amount ("Net Proceeds") of all insurance proceeds
received by Agent as a result of such damage or destruction, after
deduction of the reasonable costs and expenses in collecting the
insurance proceeds; provided, further, that (a) no default or event of
default under such Lease shall have occurred and shall be continuing;
(b) Tenant shall, as soon as reasonably practicable after such casualty
and, in any event, in accordance with the applicable provisions of such
Lease, commence and shall thereafter diligently pursue to completion
the Restoration of the Premises to a condition as near as possible to
the condition of Premises immediately prior to such casualty; (c) Agent
shall have determined that the applicable hotel franchise or license
agreement shall not be terminated with respect to any Property as a
result of such fire or other casualty, but will remain in full force
and effect during and after the completion of the repair and
restoration of such Property or that an alternative franchise agreement
or commitment therefor from a nationally recognized franchisor of
comparable or better reputation will be secured for the Property within
sixty (60) days of such casualty; and (d) such Lease shall not be
terminated with respect to any Property as a result of such fire or
other casualty, but shall remain in full force and effect during and
after the completion of the Restoration of such Property(ies).
(iii) Tenant Termination/Purchase Option. Nothing contained in
this paragraph shall be construed to limit, modify, vitiate or
otherwise affect the rights of Tenant pursuant to Article 14 of any
Lease to elect to terminate such Lease, to require Landlord to offer
the affected Property or Properties for sale to Tenant, or to purchase
(or offer to purchase) the affected Property or Properties, in each
case in accordance with the terms and provisions of such Article 14, it
being understood and agreed that if Tenant shall exercise any such
right or option to terminate such Lease (except in connection with an
acquisition of a Property or Properties as provided in Article 14 of
such Lease), or if such Lease is otherwise terminated pursuant to the
provisions of Article 14 of such Lease, Agent shall have the absolute
and unconditional right to apply the Net Proceeds to the payment of the
Obligations under the Credit Facility. Notwithstanding the foregoing,
unless Landlord shall have obtained, in accordance with the provisions
of Section 2.19(c) of the Credit Agreement, Agent's approval of any
such acquisition by Tenant pursuant to Article 14 of such Lease, such
acquisition shall constitute an Event of Default and the subject
Property shall remain subject to the lien of the Security Documents
after the consummation of such acquisition. In any event, the entire
amount of the Rejectable Offer Price (as defined in such Lease) for any
such acquisition shall be paid to Agent for application to the
Obligations in accordance with the provisions of Section 2.19(c) of the
Credit Agreement.
(iv) Tenant Purchase Note Proceeds. In the event Lender makes
Net Proceeds available to Tenant for Restoration of any of the
Properties, Tenant shall be obligated to use such Net Proceeds solely
for Restoration in accordance with the provisions of the related Leases
and this paragraph. If Tenant acquires the affected Property or
Properties in accordance with the provisions of Article 14 of the
related Leases (which acquisition shall be subject to the provision of
the foregoing clause (iii)), Agent shall disburse the Net Proceeds to
Tenant (or, at Tenant's option, cause the same to be applied to the
Obligations and credit the amount of such Net Proceeds against the
Rejectable Offer Price payable to Agent pursuant to clause (iii)
above).
(v) Approved Work, Deficiency Deposit and Construction Funds.
In the event that Agent makes Net Proceeds available to Tenant for
Restoration of any of the Properties, Tenant hereby covenants to
restore the same in accordance with plans and specifications reasonably
approved by Agent, and Tenant shall cause to be prepared and presented
to Agent and Landlord a certified construction statement, acceptable to
Agent, showing the total estimated cost of the Restoration (the work
being certified in such statement being hereinafter referred to as the
"Approved Work"); if such cost exceeds the available insurance
proceeds, Landlord shall pay the excess of the amount of such cost over
the amount of the available insurance proceeds, in cash, to Agent, as a
condition precedent to any disbursement of Net Proceeds by Agent. Such
excess (the "Deficiency Deposit") shall be held and disbursed by Agent
pursuant to the provisions of this paragraph (Net Proceeds and any
Deficiency Deposit paid to Agent being hereinafter referred to
collectively as the "Construction Funds"). Any such Deficiency Deposit
shall be disbursed prior to the disbursement of any Net Proceeds.
(vi) Construction Funds Account Interest. Construction Funds
shall be held by Agent in an interest-bearing account selected by Agent
in its sole and absolute discretion and may be commingled with any
other accounts of Agent and until so disbursed (in strict accordance
with the terms hereof), shall constitute additional security for the
Obligations. Upon the final disbursement of the Construction Funds, the
party or parties entitled thereto shall receive their respective pro
rata share of any interest earned thereon.
(vii) Monthly Disbursement. The Construction Funds shall be
made available to Tenant, not more frequently than once every 30 days,
as the Restoration of the Property or Properties in question
progresses.
(viii) Consultant; Casualty Retainage. In no event shall Agent
be obligated to make disbursements of the Construction Funds in excess
of an amount equal to the costs actually incurred from time to time for
work in place as part of the repair and restoration of the
Improvements, as certified by an independent consulting engineer
reasonably acceptable to Agent and Landlord (the "Consultant"), minus
the Casualty Retainage. The term "Casualty Retainage" as used in this
paragraph shall mean an amount equal to 10% of the costs actually
incurred for work in place as part of the Restoration of a particular
Property, as certified by the Consultant. Notwithstanding the
foregoing, the Casualty Retainage being held by Agent with respect to
work or materials supplied by any subcontractor or materialman in
connection with the Approved Work will be released by Agent, upon
request by Tenant, provided (a) no default or event of default has
occurred and is continuing under the Security Documents, (b) Consultant
verifies to Agent that such subcontractor or materialman has completed
100% of all work and has supplied 100% of all the material under such
materialman's subcontract and in conformity with the plans and
specifications therefor accepted by Agent, Tenant and Consultant, (c)
such subcontractor or materialman will be paid in full upon the release
of the portion of the Casualty Retainage being held with respect to
such subcontractor or materialman, (d) such subcontractor or
materialman executes and delivers all lien waivers which may be
reasonably requested or required by Agent or by the title company
insuring the lien waivers which may be reasonably requested or required
by Agent or by the title company insuring the lien of the Security
Documents to induce such title company to insure the lien of the
Security Documents against any mechanic's or materialman's lien which
may be filed by such subcontractor or materialman, and (e) if a surety
bond is in place in accordance with the provisions of this Agreement,
such release of such portion of the Casualty Retainage shall be
approved by any surety company which has issued a payment or
performance bond with respect to such subcontractor or materialman.
Construction Funds may be disbursed by Agent directly or through a
third party escrow agent, such as, but not limited to, a title
insurance company, or its agents, as Agent may determine in its sole
discretion.
(ix) Contractor Certificates and Lien Waivers. Tenant shall
deliver or cause to be delivered to Agent, with each such Consultant's
certificate, sworn statements and lien waivers from the general
contractor and such subcontractors as Agent shall determine in its sole
discretion, in an amount at least equal to the amount of Construction
Funds to be paid out to Tenant pursuant to each Consultant's
certificate and dated as of the date of the disbursement to which they
relate.
(x) Plans and Costs. Tenant shall deliver or cause to be
delivered to Agent such other evidence as Agent may reasonably request,
from time to time, during the Restoration, as to the progress of the
work, compliance with the approved plans and specifications, the cost
of the work and the total amount needed to complete the work.
(xi) Progress Reports. Tenant shall deliver or cause to be
delivered to Agent, at no cost to Agent, such other evidence as Agent
may reasonably request from time to time (including, without
limitation, a current title rundown), showing that there are no liens
against the Premises filed in connection with the Restoration (other
than liens which will be paid with the Construction Funds, provided
that Agent shall not have previously disbursed Construction Funds to
Tenant for the payment of the items which are the subject of such
liens), that the remaining Construction Funds are sufficient to
complete the Restoration, and that the Security Documents, including
the Mortgages, remain insured as a first priority lien or liens on the
Premises with the same priority as on the date of the initial
execution, delivery and recording of the same.
(xii) Excess Net Proceeds Deficiency Deposit. The excess, if
any, of the Net Proceeds, together with interest thereon, after the
Consultant has certified to Agent that the Restoration of the Property
or Properties in question has been completed in accordance with the
provisions of this paragraph, and Lender has received evidence
satisfactory to Agent that all costs incurred in connection with
Restoration have been paid in full, shall be disbursed to Tenant, and
the remaining balance, if any, of the Deficiency Deposit shall be
remitted by Agent to Landlord.
(xiii) Failure to Perform. In the event Tenant or Landlord at
any time shall fail to promptly and fully perform the conditions and
covenants set forth in this paragraph, or in the event that during the
Restoration a default or an event of default under the related Lease
shall occur, Agent may, at its option, immediately cease making any
further payments to Tenant for such Restoration, and may further, at
its option, apply the Construction Funds then in its possession either
to the Obligations in such order, priority and proportions as Lender
shall elect in its sole and absolute discretion or to Restoration in
the manner above provided and notwithstanding any such default or event
of default, without affecting the liens of the Security Documents and
the obligations thereunder or hereunder.
(xiv) Minor Casualty. Notwithstanding anything to the contrary
contained in this paragraph, if the Net Proceeds allocable to any
individual Property shall be less than $10,000 and if the costs of
completing the Restoration shall be less than $10,000, such Net
Proceeds shall be disbursed by Agent to Tenant upon receipt, provided
that no default or event of default under the Lease shall have occurred
and be continuing, and provided further, that Tenant delivers to Agent
a written undertaking expeditiously to commence the Restoration and to
complete the same with due diligence, in a manner reasonably
satisfactory to Agent and otherwise in accordance with the provisions
of this paragraph. Upon completion of the Restoration, Tenant shall
deliver to Agent evidence reasonably satisfactory to Agent, including,
upon request of Agent, lien waivers, that such proceeds have been
expended for the Restoration and the Restoration has been completed in
good and workmanlike manner, free of liens (other than those held by
Agent) and in compliance with law.
C. Application of Condemnation Award to Repair.
(i) Award. If all or any portion of the Premises is taken by
any public or quasi-public authority through eminent domain or
otherwise, Agent is hereby authorized to collect and receive from the
condemnation authorities the aggregate amount of all awards or payments
received as a result of such taking, less the reasonable costs and
expenses, if any, incurred in collecting the same (such net amount, the
"Award"). Agent is hereby authorized to give appropriate receipts and
acquittances therefor. Tenant and Landlord shall give Agent immediate
notice of the actual or threatened commencement of any condemnation or
eminent domain proceedings affecting all or any part of any of the
Premises and shall deliver to Agent copies of any and all papers served
in connection with any such proceedings upon receipt of the same.
(ii) Application of Award. The Agent shall be entitled to
apply the amount of any Award made with respect to the Premises or for
loss of rent, or for Landlord's loss of business beyond the term of the
related Lease, in reduction of the Obligations under the Credit
Facility. Any part of an Award made for loss of Tenant's business
during the remaining term of such Lease, if any, for the taking of
Tenant's Personal Property (as defined in such Lease), or for removal
and relocation expenses of Tenant in any such proceedings shall be paid
over to Tenant. Tenant may also make a claim for any additional award
to the extent it does not diminish any portion of the Award due and
payable for the account of Landlord.
(iii) Notwithstanding the foregoing, if up to (but not more
than) three (3) Properties shall have been affected by such takings
such that simultaneously, any three (3) Properties are not
substantially complete and open for occupancy, provided that the
aggregate book value plus depreciation (i.e., "Total Cost" as defined
in the Credit Agreement) of such Property or Properties (in each case
immediately prior to the taking in question) shall not exceed 10% of
the aggregate Total Cost of all of the Properties immediately prior to
such casualty, then Agent shall, in accordance with the provisions of
this paragraph, make the Award available to Landlord for Restoration of
the Premises, provided that (a) no default or event of default under
the related Leases shall have occurred and shall be continuing; (b)
Tenant shall, as soon as reasonably practicable after suck taking and,
in any event, in accordance with applicable provisions of such related
Leases, commence and shall thereafter diligently pursue to completion
the Restoration of the Premises to a condition as near as possible to
the condition of the Premises immediately prior to such taking; (c)
Agent shall have determined that the applicable hotel franchise or
license agreement shall not be terminated with respect to any Property
as a result of such taking, but will remain in full force and effect
during and after the completion of the repair and restoration of such
Property or that an alternative franchise agreement or commitment
therefor from a nationally recognized franchisor of comparable or
better reputation will be secured for such Property within sixty (60)
days of such taking; and (d) the related Leases shall not be terminated
as a result of such taking, but shall remain in full force and effect
during and after the completion of the Restoration of such Property.
(iv) Administration of Award for Restoration. Any such Award
shall be held or disbursed and applied to Restoration in the same
manner as is provided in subparagraph B above with respect to the
application of Net Proceeds (it being understood that for purposes of
this subparagraph C, the term "Construction Funds" shall mean,
collectively, the Award and any Deficiency Deposit which may be
required to be deposited with Agent as a result of the insufficiency of
the Award to pay the cost of Restoration, and the term "Restoration"
shall mean the restoring, repairing, replacing or rebuilding of the
Premises or any part thereof subsequent to a taking by condemnation or
eminent domain of all or any part of the Premises, such Restoration to
be completed free of liens (other than the liens held by Agent), in
compliance with all applicable law and otherwise in accordance with the
provisions of the related Lease and this Agreement). Any Construction
Funds resulting from the receipt of any Award shall be held and
disbursed by Agent in the manner provided in subparagraph B above with
respect to Net Proceeds and shall constitute additional security for
the Obligations under the Credit Facility. The balance of any Award
remaining after the completion of Restoration in accordance with this
paragraph shall be applied to Obligations under the Credit Facility,
unless a partial condemnation materially impairs the operations or
financial performance of the Property, in which case the Award shall be
equitably apportioned as provided in Section 15.5 of the related Lease,
and Landlord's share thereof shall be applied to Obligations under the
Credit Facility.
(v) Nothing contained in this paragraph shall be construed to
limit, modify, vitiate or otherwise affect the rights of Tenant or
Landlord pursuant to Article XV of any Lease to elect to terminate such
Lease, it being understood and agreed that if Tenant or Landlord shall
exercise any such right or option to terminate such Lease, Agent shall
have the absolute and unconditional right to apply the Award to the
payment of the Obligations under the Credit Facility.
D. Provisions of Credit Agreement and Lease. Except as
expressly provided to the contrary in subparagraphs A through C above, the
provisions of Section 5 of each of the Mortgages and Articles 14 and 15 of each
of the Leases remain in full force and effect and the obligations of Landlord
thereunder shall not be modified by the terms and provisions of this Agreement.
In the event of any conflict between the terms and provisions of the Credit
Agreement or the Leases (as the case may be) and the terms and provisions of
this paragraph, the terms of this paragraph shall control.
10. Notices. Any notice, election, communication, request or other
document or demand required or permitted under this Agreement shall be in
writing and shall be deemed delivered on the earlier to occur of (a) receipt, or
(b) the date of delivery, refusal or nondelivery indicated on the return
receipt, if deposited in a United States Postal Service depository, postage
prepaid, sent certified or registered mail, return receipt requested, or if sent
via a recognized commercial courier service providing for a receipt, addressed
to Tenant or Agent, as the case may be, at the following addresses:
If to Tenant:
--------------------------------------------
--------------------------------------------
--------------------------------------------
Attn:
-------------------------------------
with a copy to:
--------------------------------------------
--------------------------------------------
--------------------------------------------
Attn:
-------------------------------------
If to Agent: Bank One, NA
Corporate Real Estate Division
1 Bank Xxx Xxxxx, 00xx Xxxxx
Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxxxxx Xxxxx
with a copy to: Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxx Xxxxxx Xxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esquire
Any party may change its address for purposes of notices hereunder by delivery
of written notice to the other fifteen (15) days prior to the effective date of
such change.
11. Successors. The term "Agent" as used herein includes any successor
or assign of the named Agent herein, including without limitation, any purchaser
at a foreclosure sale and any transferee pursuant to an assignment or deed in
lieu of foreclosure, and their successors and assigns, and the term "Tenant" as
used herein includes any successor and assign of the named Tenant herein;
provided, however, that such reference to Tenant's successors and assigns shall
not be construed as Agent's consent to any assignment or other transfer by
Tenant. The term "Premises" as used herein shall include land and improvements
now or hereafter thereon, and estates therein encumbered by the Security
Documents, and shall mean, unless the context otherwise requires, any individual
hotel property.
12. Further Assurances. Each of the parties hereto hereby covenants and
agrees to sign, execute and deliver, or cause to be signed, executed and
delivered, and to do or make, or cause to be done or made, upon reasonable
request of the other party hereto or Landlord, any and all agreements,
instruments, papers, deeds, acts or things, supplemental, confirmatory or
otherwise, as may be reasonably required by the requesting party for the purpose
of or in connection with provisions of this Agreement.
13. Partial Validity. If any provision of this Agreement is held to be
invalid or unenforceable by a court of competent jurisdiction, such provision
shall be deemed modified to the extent necessary to be enforceable, or if such
modification is not practicable, such provision shall be deemed deleted from
this Agreement, and the other provisions of this Agreement shall remain in full
force and effect, and shall be liberally construed in favor of Agent.
14. Amendments. Neither this Agreement nor any of the terms hereof may
be terminated, amended, supplemented, waived or modified orally, but only by an
instrument in writing executed by the party against which enforcement of the
termination, amendment, supplement, waiver or modification is sought.
Additionally, the Leases shall not be modified or amended, nor shall the same be
terminated other than in strict accordance with the terms and provisions
thereof, without the advance prior written consent of Agent in each instance.
15. Nonrecourse. Notwithstanding anything contained to the contrary in
this Agreement or under the terms of the Leases, in the event Agent, the Lenders
or any assignee, nominee, designee or successor of the Agent or the Lenders
takes possession of all or any portion of the Premises by virtue of a
foreclosure or deed or assignment in lieu of foreclosure, such party's liability
as "Landlord/Lessor" under the related Leases shall be expressly limited to its
interest in the Properties demised under such Leases..
16. Counterparts. This Agreement may be executed in a number of
identified counterparts. If so executed, each of such counterparts is to be
deemed an original for all purposes, and all such counterparts shall,
collectively, constitute one agreement, but in making proof of this Agreement,
it shall not be necessary to produce or account for more than one such
counterpart.
17. Governing Law. With respect to each Lease and Mortgage, this
Agreement shall be construed in accordance with the laws of the state wherein
the related Property is located.
[Balance of Page Intentionally Left Blank]
SIGNATURE PAGE
SUBORDINATION AND ATTORNMENT AGREEMENT
BANK ONE, NA, not individually but
as Agent as aforesaid
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
STATE OF ILLINOIS,
COUNTY OF XXXX, to-wit:
The foregoing instrument was acknowledged before me in the County of
Xxxx, State of Illinois, this ____ day of __________, 200_, by
____________________________________, as _____________________________________
of Bank One, NA, on behalf of the bank.
My commission expires: ______________________.
---------------------------
Notary Public
[NOTARIAL SEAL]
SIGNATURE PAGE
SUBORDINATION AND ATTORNMENT AGREEMENT
TENANT:
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
STATE OF ,
----------------------
CITY/COUNTY OF , to-wit:
----------------------
The foregoing instrument was acknowledged before me in the City/County
of _____________, State of _________________ this ___ day of ____________, 200_,
by ___________________, as ___________________ of ____________________________,
a Delaware corporation, on behalf of the company.
My commission expires: ______________________.
---------------------------
Notary Public
[NOTARIAL SEAL]
SIGNATURE PAGE
SUBORDINATION AND ATTORNMENT AGREEMENT
EQUITY INNS PARTNERSHIP, L.P.
By: Equity Inns Trust, its general partner
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
STATE OF ,
----------------------
CITY/COUNTY OF , to-wit:
----------------------
The foregoing instrument was acknowledged before me in the City/County
of , State of this ___ day of _______________, 200_, by , as of Equity Inns
Trust, a Maryland real estate investment trust, as general partner of Equity
Inns Partnership, L.P., a Tennessee limited partnership, on behalf of the
partnership.
My commission expires: ______________________.
---------------------------
Notary Public
[NOTARIAL SEAL]
SCHEDULE 1 - [Equity Inns Affiliates]
PREMISES
Name and Location
SCHEDULE 2
DESCRIPTION OF LEASE
1. Consolidated Lease Agreement dated as of January 1, 200_ between Equity Inns
Partnership, L.P. and ___________________________________ [insert hotel location
and repeat].
SCHEDULE 1
LIST OF INITIAL COLLATERAL POOL ASSETS
ALABAMA ILLINOIS TEXAS
HAMPTON INN (Vestavia) HOMEWOOD SUITES HAMPTON INN (Dallas)
0000 Xxxxxxxxxx Xxxxxxx 40 East Grand Avenue 4555 Beltway
Birmingham, AL 35216 Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
ARIZONA LOUISIANA COMFORT INN
HAMPTON INN AMERISUITES 000 X X-00
0000 Xxxxx Xxxxxx Xxxxx 0000 Xxxxxxxxxx Xxxx. Xxxxxxxxx, XX 00000
Scottsdale, AZ Xxxxx Xxxxx, XX 00000
ARKANSAS MINNESOTA VERMONT
HAMPTON INN AMERISUITES (Minneapolis-MOA) Residence Inn
500 West 29 0000 Xxxxxxxxxxxxx Xxxxx 0 Xxxxxxxxx Xxxx
Xxxxx Xxxxxx Xxxx, XX 00000 Xxxxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
COLORADO NEVADA WASHINGTON
XXXXXXXXX XXX XXXXXXXXXXX XXXXXXXX XXXXXX
0000 Xxxxxxx Xxxx. 0000 Xxxxxxxx Xxxx 000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxxx Xxxxxxx, XX 00000 Xxx Xxxxx, XX 00000 Xxxxxxx, XX 00000
HAMPTON INN NORTH CAROLINA WEST VIRGINIA
0000 Xxxxxxxx Xxxxx XXXXXXX INN HOLIDAY INN
Xxxxxxxx Xxxxxxx, XX 00000 1740 Highway 15-501 0000 Xxx Xxxxxx Xxxxxxx
Xxxxxx Xxxx, XX 00000 Xxxxxxxxx, XX 00000
FLORIDA OHIO
AMERISUITES AMERISUITES (Cincinnati) HOLIDAY INN
0000 XX 00xx Xxxxxx 11435 Xxxx Xxxxxxx Highway 000 Xxxxx Xxxxxx
Xxxxx, XX 00000 Xxxx Xxx, XX 00000 Xxx Xxxx, XX 00000
AMERISUITES (Xxxxxxx) SOUTH CAROLINA
11520 S.W. 88th Street HAMPTON INN
Xxxxx, XX 00000 0000 Xxxxx Xxxxx
Xxxx Xxxxxxxx, XX 00000
HOMEWOOD SUITES TENNESSEE
0000 Xxxxxxxxxxxxx Xxxxx XXXXXXXXXXX (Xxxxxxxxx-Xxxx Spr)
Xxxxxxx, XX 00000 000 Xxxxxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
XXXXXXX XXXXXXX INN
HAMPTON INN 1585 Sycamore View
0000 Xxxxxxxxx Xxxxxxx Xxxxxxx, XX 00000
Xxxxxxx, XX 00000
HOMEWOOD SUITES HAMPTON INN
0000 Xxxxxxx Xxxxx Xxxx Xxxxxx xx Xxx, 00 & Xxx Xxxxx
Xxxxxxx, XX 00000 Xxxxxxxx Xxx, XX 00000
SCHEDULE 2
LIST OF DOCUMENTS TO BE DELIVERED TO ADMINISTRATIVE AGENT
WITH PROPOSAL FOR ADDITION OF COLLATERAL PROPERTIES
A. Survey
B. Title Insurance Commitment
C. Copies of All Recorded Documents
X. Xxxxx Insurance, if applicable
E. Evidence of Casualty and Liability Insurance (or commitment to issue)
F. Environmental Report/Certification
G. Permitted Operating Lease (or draft thereof)
H. Management Agreement (or draft thereof), if applicable
I. Property Condition Report
J. Lessee/Manager financials, if applicable
K. Occupancy Certificate, if available in that jurisdiction
L. 2 years of Historical Operating Statements, unless new construction or
new acquisition, to the extent Borrower has owned the Property during
such 2 year period
M. Pro-Forma Operating Statements, unless new construction or new
acquisition
N. Capital Expenditure Budget, unless new construction or new acquisition
O. Franchisor Commitment
All items shall meet substantially the same standards as the prior deliveries
for the Initial Collateral Properties.
SCHEDULE 3
LIST OF ITEMS TO BE COMPLETED TO
FINALIZE ADDITION OF COLLATERAL PROPERTIES
A. Execution, delivery and recording of applicable Mortgage together with
a Limited Recourse Guaranty and joinders to the other security
documents if the applicable Owner is a Wholly Owned Subsidiary
B. Organizational Documents for the Owner
C. Opinion of Counsel for Owner
D. Resolution regarding authority of Owner
E. Incumbency Certificate regarding Owner
F. UCC-1 Financing Statements from Owner
X. Xxxx Searches
H. Issuance of Title Insurance Policy and Endorsements, including
insurance over possible mechanic's lien claims and such amendments as
may be necessary and available to existing title policies to assure
cross-collateralization.
I. Receipt of Estoppel Certificates from ground lessor, if applicable
J. Subordination Agreements with lessee under Permitted Operating Lease
together with a joinder to the Security Agreement
K. Lender-Manager Agreement, if applicable
L. Receipt of Appraisal and confirmation that it conforms to requirements
O. Franchise Agreement
P. Permitted Operating Lease
Q. Evidence of Casualty and Liability Insurance
SCHEDULE 6.19
ENVIRONMENTAL COMPLIANCE
All environmental matters identified in the environmental reports
delivered to Administrative Agent in connection with the Facility.
SCHEDULE 6.24
TRADE NAMES
None.
SCHEDULE 6.25
SUBSIDIARIES (BORROWERS)
Name Entity Type Percentage Ownership
------------------------------------------- ----------------------------- ----------------------------------
Equity Inns Partnership, L.P. Tennessee limited partnership
Equity Inns Partnership II, L.P. Tennessee limited partnership 99% limited partner of this entity
Equity Inns/West Virginia Tennessee limited partnership 99% limited partner of this entity
Partnership, L.P.
EIP Orlando, L.P. Tennessee limited partnership 99% limited partner of this entity
EQI Financing Partnership I, L.P. Tennessee limited partnership 99% limited partner of this entity
EQI Financing Partnership II, L.P. Tennessee limited partnership 99% limited partner of this entity
EQI Financing Partnership III, L.P. Tennessee limited partnership 99% limited partner of this entity
EQI Financing Partnership IV, L.P. Tennessee limited partnership 99% limited partner of this entity
EQI Financing Partnership V, L.P. Tennessee limited partnership 99% limited partner of this entity
EQI/WV Financing Partnership, L.P. Tennessee limited partnership 99% limited partner of this entity
EQI/WV Financing Partnership II, L.P. Tennessee limited partnership 99% limited partner of this entity
Equity Inns TRS Holdings, Inc. Tennessee corporation 100% of outstanding shares
ENN Leasing Company, Inc. Tennessee corporation 100% of outstanding shares by
Equity Inns TRS Holdings, Inc.
ENN Leasing Company I, L.L.C. Delaware SP V limited 100% owned by Equity Inns TRS
liability company Holdings, Inc.
ENN Leasing Company II, L.L.C. Delaware SP V limited 100% owned by Equity Inns TRS
liability company Holdings, Inc.
ENN Leasing Company III, L.L.C. Delaware SP V limited 100% owned by Equity Inns TRS
liability company Holdings, Inc.
ENN Leasing Company IV, L.L.C. Delaware SP V limited 100% owned by Equity Inns TRS
liability company Holdings, Inc.
ENN Leasing Company V, L.L.C. Delaware SP V limited 100% owned by Equity Inns TRS
liability company Holdings, Inc.
Equity Inns Partnership II, L.P. Tennessee limited partnership
None
Equity Inns/West Virginia Partnership, L.P. Tennessee limited partnership
None
SCHEDULE 7.16
SUBSIDIARIES (GUARANTORS)
Name Entity Type Percentage Ownership
------------------------------------------ -------------------------------------- -------------------------------
Equity Inns, Inc. Tennessee corporation
Equity Inns Services, Inc Tennessee corporation 100% of outstanding shares
Equity Inns Trust Maryland real estate investment trust 100% of all interests
Equity Inns Services, Inc. Tennessee corporation
Equity Inns/West Virginia Tennessee Limited Partnership 1% of general partnership
Partnership, L.P. interest
E. Inns Orlando, Inc. Tennessee corporation 100% of outstanding shares
E.I.P. Orlando, L.P. Tennessee limited partnership E. Inns Orlando, Inc. an 1%
general partnership interest
in EIP Orlando, L.P. and
Equity Inns Partnership, L.P.
is a 99% limited partner of
this entity
Equity Inns Trust Maryland real estate investment trust
Equity Inns Partnership, L.P. Tennessee limited partnership Approximately 96% general
partnership interest in the
Operating Partnership.
Equity Inns Partnership II, L.P. Tennessee limited partnership 1% general partnership
interest
EQI Financing Corporation Tennessee corporation 100% of outstanding shares
EQI Financing Partnership I, L.P. Tennessee limited partnership Approximately 1% general
partnership by EQI Financing
corporation
EQI Financing Corporation II Tennessee corporation 100% of outstanding shares
EQI/WV Financing Partnership, L.P. Tennessee limited partnership 1% general partnership
interest owned by EQI
Financing Corporation II
EQI Financing Partnership II, L.P. Tennessee corporation 1% general partnership
interest owned by EQI
Financing Corporation II
EQI Financing Corporation III Tennessee corporation 100% outstanding shares
EQI Financing Partnership III, L.P. Tennessee limited partnership 1% general partnership
interest by EQI Financing
Corporation III
EQI/WV Financing Corporation Tennessee corporation 100% of outstanding shares
EQI/WV Financing Partnership II, L.P. Tennessee limited partnership 1% general partnership
interest by EQI/WV Financing
Corporation
EQI Financing Corporation IV Tennessee corporation 100% of outstanding shares
EQI Financing Partnership IV, L.P. Tennessee limited partnership 1% general partnership
interest by EQI/WV Financing
Corporation IV
EQI Financing Corporation V Tennessee corporation 100% of outstanding shares
EQI Financing Partnership V, L.P. Tennessee limited partnership 1% general partnership
interest by EQI/WV Financing
Corporation V
Table of Contents
Page
SECURED REVOLVING CREDIT AGREEMENT.............................................1
RECITALS.......................................................................2
Article I. DEFINITIONS AND ACCOUNTING TERMS....................................2
SECTION 1.1 DEFINITIONS................................................2
SECTION 1.2 FINANCIAL STANDARDS.......................................19
Article II. THE FACILITY......................................................19
SECTION 2.1 THE FACILITY; LIMITATIONS ON BORROWING....................19
SECTION 2.2 MATURITY DATE.............................................20
SECTION 2.3 REQUESTS FOR ADVANCES; RESPONSIBILITY FOR ADVANCES........20
SECTION 2.4 EVIDENCE OF CREDIT EXTENSIONS.............................20
SECTION 2.5 RATABLE AND NON-RATABLE LOANS.............................20
SECTION 2.6 APPLICABLE MARGINS AND FEES...............................20
SECTION 2.7 COMMITMENT FEE............................................21
SECTION 2.8 OTHER FEES................................................21
SECTION 2.9 MINIMUM AMOUNT OF EACH ADVANCE............................21
SECTION 2.10 INTEREST..................................................22
SECTION 2.11 SELECTION OF RATE OPTIONS AND LIBOR INTEREST PERIODS......22
SECTION 2.12 METHOD OF PAYMENT.........................................24
SECTION 2.13 DEFAULT...................................................25
SECTION 2.14 LENDING INSTALLATIONS.....................................25
SECTION 2.15 NON-RECEIPT OF FUNDS BY ADMINISTRATIVE AGENT..............25
SECTION 2.16 SWINGLINE LOANS...........................................25
SECTION 2.17 VOLUNTARY REDUCTION OF AGGREGATE COMMITMENT AMOUNT........26
SECTION 2.18 INCREASE IN AGGREGATE COMMITMENT..........................27
SECTION 2.19 OPTIONAL PREPAYMENTS; MANDATORY PREPAYMENTS;
RELEASE OF PROPERTIES.....................................27
SECTION 2.20 PROCEDURES FOR ADDITION OF COLLATERAL POOL ASSETS.........28
SECTION 2.21 APPLICATION OF MONEYS RECEIVED............................30
SECTION 2.22 EXTENSION OF MATURITY DATE................................31
Article III. THE LETTER OF CREDIT SUBFACILITY.................................31
SECTION 3.1 OBLIGATION TO ISSUE.......................................31
SECTION 3.2 TYPES AND AMOUNTS.........................................31
SECTION 3.3 CONDITIONS................................................31
SECTION 3.4 PROCEDURE FOR ISSUANCE OF FACILITY LETTERS OF CREDIT......32
SECTION 3.5 REIMBURSEMENT OBLIGATIONS; DUTIES OF ISSUING BANK.........33
SECTION 3.6 PARTICIPATION.............................................34
SECTION 3.7 PAYMENT OF REIMBURSEMENT OBLIGATIONS......................35
SECTION 3.8 COMPENSATION FOR FACILITY LETTERS OF CREDIT...............36
SECTION 3.9 LETTER OF CREDIT COLLATERAL ACCOUNT.......................36
Article IV. CHANGE IN CIRCUMSTANCES...........................................37
SECTION 4.1 YIELD PROTECTION..........................................37
SECTION 4.2 CHANGES IN CAPITAL ADEQUACY REGULATIONS...................37
SECTION 4.3 AVAILABILITY OF LIBOR ADVANCES............................38
SECTION 4.4 FUNDING INDEMNIFICATION...................................38
SECTION 4.5 LENDER STATEMENTS; SURVIVAL OF INDEMNITY..................38
Article V. CONDITIONS PRECEDENT...............................................39
SECTION 5.1 CONDITIONS PRECEDENT TO CLOSING...........................39
SECTION 5.2 CONDITIONS PRECEDENT TO SUBSEQUENT ADVANCES AND ISSUANCE..43
Article VI. REPRESENTATIONS AND WARRANTIES....................................43
SECTION 6.1 EXISTENCE.................................................43
SECTION 6.2 CORPORATE/PARTNERSHIP POWERS..............................44
SECTION 6.3 POWER OF OFFICERS.........................................44
SECTION 6.4 GOVERNMENT AND OTHER APPROVALS............................44
SECTION 6.5 SOLVENCY..................................................44
SECTION 6.6 COMPLIANCE WITH LAWS......................................45
SECTION 6.7 ENFORCEABILITY OF AGREEMENT...............................45
SECTION 6.8 TITLE TO PROPERTY.........................................45
SECTION 6.9 LITIGATION................................................45
SECTION 6.10 EVENTS OF DEFAULT.........................................45
SECTION 6.11 INVESTMENT COMPANY ACT OF 1940............................46
SECTION 6.12 PUBLIC UTILITY HOLDING COMPANY ACT........................46
SECTION 6.13 REGULATION U..............................................46
SECTION 6.14 NO MATERIAL ADVERSE FINANCIAL CHANGE......................46
SECTION 6.15 FINANCIAL INFORMATION.....................................46
SECTION 6.16 [INTENTIONALLY OMITTED]...................................46
SECTION 6.17 ERISA.....................................................46
SECTION 6.18 TAXES.....................................................46
SECTION 6.19 ENVIRONMENTAL MATTERS.....................................46
SECTION 6.20 INSURANCE.................................................48
SECTION 6.21 NO BROKERS................................................48
SECTION 6.22 NO VIOLATION OF USURY LAWS................................48
SECTION 6.23 NOT A FOREIGN PERSON......................................48
SECTION 6.24 NO TRADE NAME.............................................48
SECTION 6.25 SUBSIDIARIES..............................................48
SECTION 6.26 SECURITY INTERESTS........................................48
SECTION 6.27 COLLATERAL POOL ASSETS....................................48
Article VII. ADDITIONAL REPRESENTATIONS AND WARRANTIES........................50
SECTION 7.1 EXISTENCE.................................................50
SECTION 7.2 CORPORATE OR TRUST POWERS.................................50
SECTION 7.3 POWER OF OFFICERS.........................................50
SECTION 7.4 GOVERNMENT AND OTHER APPROVALS............................51
SECTION 7.5 COMPLIANCE WITH LAWS......................................51
SECTION 7.6 ENFORCEABILITY OF GUARANTY................................51
SECTION 7.7 LIENS; CONSENTS...........................................51
SECTION 7.8 LITIGATION................................................51
SECTION 7.9 INVESTMENT COMPANY ACT OF 1940............................51
SECTION 7.10 PUBLIC UTILITY HOLDING COMPANY ACT........................51
SECTION 7.11 NO MATERIAL ADVERSE FINANCIAL CHANGE......................51
SECTION 7.12 FINANCIAL INFORMATION.....................................51
SECTION 7.13 [INTENTIONALLY OMITTED]...................................52
SECTION 7.14 ERISA.....................................................52
SECTION 7.15 TAXES.....................................................52
SECTION 7.16 SUBSIDIARIES..............................................52
SECTION 7.17 STATUS....................................................52
Article VIII. AFFIRMATIVE COVENANTS...........................................52
SECTION 8.1 NOTICES...................................................53
SECTION 8.2 FINANCIAL STATEMENTS, REPORTS, ETC........................53
SECTION 8.3 EXISTENCE AND CONDUCT OF OPERATIONS; LIMITATIONS
ON INVESTMENTS............................................55
SECTION 8.4 MAINTENANCE OF PROPERTIES.................................56
SECTION 8.5 INSURANCE.................................................56
SECTION 8.6 PAYMENT OF OBLIGATIONS....................................56
SECTION 8.7 COMPLIANCE WITH LAWS......................................56
SECTION 8.8 ADEQUATE BOOKS............................................56
SECTION 8.9 ERISA.....................................................56
SECTION 8.10 MAINTENANCE OF STATUS.....................................56
SECTION 8.11 USE OF PROCEEDS...........................................57
SECTION 8.12 PRE-ACQUISITION ENVIRONMENTAL INVESTIGATIONS..............57
SECTION 8.13 ELIGIBLE PROPERTIES.......................................57
SECTION 8.13 MANAGEMENT APPROVAL.......................................57
Article IX. NEGATIVE COVENANTS................................................57
SECTION 9.1 CHANGE OF BORROWER OWNERSHIP..............................57
SECTION 9.2 USE OF PROCEEDS...........................................58
SECTION 9.3 LEVERAGE; ADDITIONAL RECOURSE INDEBTEDNESS................58
SECTION 9.4 DIVIDENDS.................................................58
SECTION 9.5 FLOATING RATE DEBT........................................59
SECTION 9.6 LIENS.....................................................59
SECTION 9.7 FF&E EXPENDITURES.........................................60
SECTION 9.8 INDEBTEDNESS, COVERAGE AND NET WORTH COVENANTS............60
SECTION 9.9 MERGERS...................................................60
SECTION 9.10 MINIMUM BORROWING BASE....................................60
SECTION 9.11 SHARE REPURCHASE..........................................60
Article X. DEFAULTS...........................................................61
SECTION 10.1 NONPAYMENT OF PRINCIPAL...................................61
SECTION 10.2 CERTAIN COVENANTS.........................................61
SECTION 10.3 NONPAYMENT OF INTEREST AND OTHER OBLIGATIONS..............61
SECTION 10.4 CROSS DEFAULT.............................................61
SECTION 10.5 LOAN DOCUMENTS............................................61
SECTION 10.6 REPRESENTATION OR WARRANTY................................61
SECTION 10.7 COVENANTS, AGREEMENTS AND OTHER CONDITIONS................61
SECTION 10.8 NO LONGER GENERAL PARTNER.................................62
SECTION 10.9 MATERIAL ADVERSE FINANCIAL CHANGE.........................62
SECTION 10.10 BANKRUPTCY................................................62
SECTION 10.11 LEGAL PROCEEDINGS.........................................62
SECTION 10.12 ERISA.....................................................63
SECTION 10.13 FAILURE TO SATISFY JUDGMENTS..............................63
SECTION 10.14 ENVIRONMENTAL REMEDIATION.................................63
SECTION 10.15 REIT STATUS; STOCK EXCHANGE LISTING.......................63
SECTION 10.16 MORTGAGE DEFAULT..........................................63
SECTION 10.17 ENFORCEABILITY OF SECURITY DOCUMENTS......................63
Article XI. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES....................63
SECTION 11.1 ACCELERATION..............................................63
SECTION 11.2 PRESERVATION OF RIGHTS; AMENDMENTS........................64
SECTION 11.3 FORECLOSURE...............................................64
Article XII. THE ADMINISTRATIVE AGENT.........................................66
SECTION 12.1 APPOINTMENT...............................................66
SECTION 12.2 POWERS....................................................66
SECTION 12.3 GENERAL IMMUNITY..........................................66
SECTION 12.4 NO RESPONSIBILITY FOR LOANS, RECITALS, ETC................66
SECTION 12.5 ACTION ON INSTRUCTIONS OF LENDERS.........................66
SECTION 12.6 EMPLOYMENT OF ADMINISTRATIVE AGENTS AND COUNSEL...........67
SECTION 12.7 RELIANCE ON DOCUMENTS; COUNSEL............................67
SECTION 12.8 ADMINISTRATIVE AGENT'S REIMBURSEMENT AND INDEMNIFICATION..67
SECTION 12.9 RIGHTS AS A LENDER........................................67
SECTION 12.10 LENDER CREDIT DECISION....................................67
SECTION 12.11 SUCCESSOR ADMINISTRATIVE AGENT............................68
SECTION 12.12 NOTICE OF DEFAULTS........................................68
SECTION 12.13 REQUESTS FOR APPROVAL.....................................69
SECTION 12.14 COPIES OF DOCUMENTS.......................................69
SECTION 12.15 DEFAULTING LENDERS........................................69
SECTION 12.16 CO-AGENTS: LEAD MANAGERS..................................70
Article XIII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS...............70
SECTION 13.1 SUCCESSORS AND ASSIGNS....................................70
SECTION 13.2 PARTICIPATIONS............................................70
SECTION 13.3 ASSIGNMENTS...............................................71
SECTION 13.4 DISSEMINATION OF INFORMATION..............................72
SECTION 13.5 TAX TREATMENT.............................................72
Article XIV. GENERAL PROVISIONS...............................................73
SECTION 14.1 SURVIVAL OF REPRESENTATIONS...............................73
SECTION 14.2 GOVERNMENTAL REGULATION...................................73
SECTION 14.3 TAXES.....................................................73
SECTION 14.4 HEADINGS..................................................73
SECTION 14.5 NO THIRD PARTY BENEFICIARIES..............................73
SECTION 14.6 EXPENSES; INDEMNIFICATION.................................73
SECTION 14.7 SEVERABILITY OF PROVISIONS................................74
SECTION 14.8 NONLIABILITY OF THE LENDERS...............................74
SECTION 14.9 CHOICE OF LAW.............................................74
SECTION 14.10 CONSENT TO JURISDICTION...................................74
SECTION 14.11 WAIVER OF JURY TRIAL......................................74
SECTION 14.12 ENTIRE AGREEMENT; MODIFICATION OF AGREEMENT...............75
SECTION 14.13 DEALINGS WITH THE BORROWER................................76
SECTION 14.14 SET-OFF...................................................76
SECTION 14.15 COUNTERPARTS..............................................76
SECTION 14.16 LIMITATION ON LIABILITY OF EIP/WV.........................76
Article XV. NOTICES...........................................................77
SECTION 15.1 GIVING NOTICE.............................................77
SECTION 15.2 CHANGE OF ADDRESS.........................................78
Exhibit A Form of Indemnity Agreement
Exhibit B Form of Note
Exhibit C Form of Limited Recourse Guaranty
Exhibit D Form of Amended and Restated Guaranty
Exhibit E Intentionally Deleted
Exhibit F Intentionally Deleted
Exhibit G Intentionally Deleted
Exhibit H Wiring Instructions
Exhibit I Form of Compliance Certificate
Schedule I Calculation of Covenants
Exhibit J Minimum Specifications for Environmental Investigations
Exhibit K Assignment and Assumption Agreement
Exhibit L Amendment to Amended and Restated Secured Revolving Credit
Agreement
Exhibit M Form of Mortgage
Exhibit N Form of Mortgage Amendment
Exhibit O Assignment of Contracts
Exhibit P Form of Subordination Language for Management Agreements
Exhibit Q Form of Subordination Agreement for Permitted Operating Leases
(Affiliates)
SCHEDULE 1 LIST OF INITIAL COLLATERAL POOL ASSETS
SCHEDULE 2 LIST OF DOCUMENTS TO BE DELIVERED TO ADMINISTRATIVE AGENT WITH
PROPOSAL FOR ADDITION OF COLLATERAL PROPERTIES
SCHEDULE 3 LIST OF ITEMS TO BE COMPLETED TO FINALIZE ADDITION OF
COLLATERAL PROPERTIES
SCHEDULE 6.19 Environmental Compliance
SCHEDULE 6.24 Trade Names
SCHEDULE 6.25 Subsidiaries (Borrowers)
SCHEDULE 7.16 Subsidiaries (Guarantors)
