UNSECURED REVOLVING CREDIT AGREEMENT

 

EXHIBITI 10.1

 

 

 

 

UNSECURED REVOLVING CREDIT AGREEMENT

 

DATED AS OF SEPTEMBER 21, 2006

 

AMONG

 

EQUITY INNS PARTNERSHIP, L.P.,

EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P.,

EQI ORLANDO 2, L.L.C.,

AND

EQI FINANCING PARTNERSHIP I, L.P.,

AS BORROWER

 

AND

 

JPMORGAN CHASE BANK, N.A.,

AS ADMINISTRATIVE AGENT,

 

J.P. MORGAN SECURITIES INC.,

AS CO-LEAD ARRANGER/SOLE BOOK MANAGER,

 

AND

 

CALYON NEW YORK BRANCH,

AS SYNDICATION AGENT AND CO-LEAD ARRANGER

 

AMSOUTH BANK

BANK OF AMERICA, N.A.

AND

KEYBANK NATIONAL ASSOCIATION

EACH AS DOCUMENTATION AGENT

 

AND

 

THE SEVERAL OTHER LENDERS

FROM TIME TO TIME PARTIES HERETO

 

 

 

TABLE OF CONTENTS

 

                                                                                                                        Page

 

 

 

 

EXHIBITS AND SCHEDULES

Exhibit A   Intentionally Deleted

Exhibit B   Form of Note

Exhibit C   Intentionally Deleted

Exhibit D   Form of 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   Intentionally Deleted

Exhibit K   Assignment and Assumption Agreement

Exhibit L   Amendment to Unsecured Revolving Credit Agreement

SCHEDULE 1.1   Schedule of Existing Letters of Credit

SCHEDULE 6.19   Environmental Compliance

SCHEDULE 6.24   Trade Names

SCHEDULE 6.25   Subsidiaries (Borrowers) Owning Unencumbered Assets

SCHEDULE 7.16   Subsidiaries (Guarantors) Owning Unencumbered Assets

 

 

 

 

UNSECURED REVOLVING CREDIT AGREEMENT

THIS UNSECURED REVOLVING CREDIT AGREEMENT is entered into as of September 21, 2006 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., 7700 Wolf River Boulevard, Germantown, Tennessee 38138 (“ 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., 7700 Wolf River Boulevard, Germantown, Tennessee 38138 (“ EIP/WV ”), the sole general partner of which is Equity Inns Services, L.L.C.., a Tennessee limited liability company which is wholly owned by Equity Inns, Inc.;

EQI ORLANDO 2, L.L.C., a Delaware limited liability company having its principal place of business c/o Equity Inns, Inc., 7700 Wolf River Boulevard, Germantown, Tennessee 38138 (“ EQI2 );

EQI FINANCING PARTNERSHIP I, L.P., a Tennessee limited partnership having its principal place of business c/o Equity Inns, Inc., 7700 Wolf River Boulevard, Germantown, Tennessee 38138 (“ EQI Financing ), the sole general partner of which is EQI Financing Corporation, a Tennessee corporation (the Operating Partnership, EIP/WV, EQI2, and EQI Financing being referred to herein collectively as the “ Borrower ”);

JPMORGAN CHASE BANK, N.A. (“ JPMorgan ”), (successor by merger to Bank One, NA (main office New York, New York)) a national bank organized under the laws of the United States of America having an office at 277 Park Avenue, Third Floor, New York, New York 10172; as Co-Lead Arranger and Administrative Agent (" Administrative Agent ") for the Lenders (as defined below);

J.P. MORGAN SECURITIES INC. ("JPMS"), as Sole Book Manager;

CALYON NEW YORK BRANCH (“ Calyon ”), the New York branch of a French banking corporation, having an office at 1301 Avenue of the Americas, New York, New York 10019, as Co-Lead Arranger and Syndication Agent (“ Syndication Agent ”);

BANK OF AMERICA, N.A. (“ B of A ”) having an office at 901 Main Street, 64 ^th floor, Dallas, Texas 75202, as Documentation Agent ("Documentation Agent");

KEYBANK NATIONAL ASSOCIATION (“ KeyBank ”) having an office at 1200 Abernathy Road, NE, Suite 1550, Atlanta, Georgia 30328, as Documentation Agent;

AMSOUTH BANK (“ AmSouth ”), a state banking corporation, having an office at 1900 Fifth Avenue North, AmSouth Sonat Tower, 9th Floor, Birmingham, Alabama 35203, as Documentation Agent;

 

U.S. BANK NATIONAL ASSOCIATION (" USBank ") having an office at 209 South LaSalle Street, Suite 410, Chicago, Illinois 60604; and

BRANCH BANKING AND TRUST COMPANY (" BB&T ") having an office at 200 West 2 ^nd Street; 16 ^th floor, Winston-Salem, NC 27101;

REGIONS BANK (“ Regions ”), having an office at 417 20 ^th Street North, Birmingham, Alabama, 35203.

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 Second Amended and Restated Secured Revolving Credit Agreement dated as of June 20, 2005 with respect to a secured credit facility in the amount of $125,000,000 (the “ Existing Facility ”).

C.   The Borrower has requested that the Lenders extend unsecured loans to the Borrower in the aggregate amount of $150,000,000 (with possible future increases to an amount up to $250,000,000) pursuant to the terms of this Agreement (the “Facility”), and that the Administrative Agent act as administrative agent for the Lenders and that the Existing Facility be terminated. The Administrative Agent and the Lenders have agreed to do so.

D.   J.P. Morgan Securities Inc. has acted as co-lead arranger/sole book manager and Calyon New York Branch has acted as co-lead arranger and have arranged the Facility between the Lenders and Borrower and coordinated the closing of the Facility.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto agree as follows:

 

DEFINITIONS AND ACCOUNTING TERMS

. 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 four percent (4%) of gross room revenue 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 four percent (4%) of gross room revenues for such Property.

“ Administrative Agent ” means JPMorgan, 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 $150,000,000 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 the Consolidated Group during such period.

“ Agreement ” means this Unsecured Revolving Credit Agreement and all amendments, modifications and supplements hereto.

“ Agreement Effective Date ” shall mean September ____, 2006.

“ 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 2.7 .

“ 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 .

“ Approved Management Agreement ” means a management agreement that contains substantially market standard terms.

“ Arrangers ” means JPMS and Calyon, collectively.

“ 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 JPMorgan 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 JPMorgan’s relevant LIBOR Advance and having a maturity equal to such Interest Period.

“ Borrower ” is defined in the Preambles.

“ Borrowing Base ” means, as of any date, 60% of Total Asset Value derived from Borrowing Base Assets, provided that the maximum value of any one Borrowing Base Asset will not exceed 20% of Total Asset Value derived from Borrowing Base Assets.

“ Borrowing Base Assets ” means Unencumbered Assets which (i) are wholly-owned in fee simple by Borrower or a Guarantor, except that up to 15% of the Borrowing Base may be comprised of Borrowing Base Assets owned by Qualifying Investment Affiliates in which the Borrower and/or Guarantors have an ownership percentage of at least 74.9%, and (ii) have been in service for at least 24 months.

“ 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 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 Moody’s Investors Service, Inc., or (iii) certificates of deposit issued by and time deposits with commercial banks (whether domestic or foreign) having capital and surplus in excess of $100,000,000.

“ Code ” means the Internal Revenue Code of 1986 as amended from time to time, or any replacement or successor statute, and the regulations promulgated thereunder from time to time.

“ Commitment ” means the obligation of each Lender, subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties herein, to make Advances not exceeding in the aggregate the amount set forth opposite its signature below, or the amount stated in any subsequent amendment hereto.

“ Commitment Fee ” is defined in Section 2.7 .

“ 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 three percent (3%) per annum.

“ Defaulting Lender ” means any Lender which fails or refuses to perform its obligations under this Agreement within the time period specified for performance of such obligation, or, if no time frame is specified, if such failure or refusal continues for a period of five Business Days after written notice from the Administrative Agent; provided that if such Lender cures such failure or refusal, such Lender shall cease to be a Defaulting Lender.

“ Dollars ” and “ $ ” mean United States Dollars.

“ EBITDA ” means (a) net income applicable to common shareholders 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, as adjusted by (i) excluding Preferred Stock Expense, (ii) excluding gains and losses from property sales, property write-downs, debt or equity restructurings and adjusting for the non-cash effect of straight-lining of rents, (iii) excluding the effect of discontinued operations, (iv) excluding the effect of income taxes, (v) excluding the effect of minority interests, (vi) adding back Interest Expense, (vii) straight-lining various ordinary operating expenses which are payable less frequently than monthly (e.g. real estate taxes and Ground Lease Expense) (viii) adding back depreciation, amortization and all non-cash items, and 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 EBITDA for such Property based on the applicable period of the time during the Measurement Period the Property was owned by the Consolidated Group and up to twelve months pre-acquisition (so that the total Measurement Period is twelve months). 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.

“ 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.

“ EQI Financing ” means EQI Financing Partnership I, L.P., a Tennessee limited partnership.

“ EQI2 ” means EQI Orlando 2, L.L.C., A Tennessee limited liability company.

“ Equity Inns ” means Equity Inns, Inc., a Tennessee corporation.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and regulations promulgated thereunder from time to time.

“ Event of Default ” means any event set forth in Article X hereof.

“ 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 difference between $35,000,000 and the amount of the Borrowing Base attributable to Properties Under Development.

“ Excluded Property ” means a Property that has been completed but has been in operation for less than 24 months.

“ Existing Agreement ” means that certain Second Amended and Restated Secured Revolving Credit Agreement dated as of June 20, 2005 by and between the Borrower, the Administrative Agent and certain of the other Lenders.

“ Existing Trust Preferred Securities ” means the fixed/floating preferred securities in an aggregate principal amount of $50,000,000 issued on or about June 17, 2005 by Equity Inns Statutory Trust, a wholly-owned subsidiary of Equity Inns Partnership, L.P., which mature on June 30, 2035.

“ Facility ” means the unsecured revolving credit facility as defined in Recital C and 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 as shown on Schedule 1.1 hereto.

“ 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 $25,000,000.

“ 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. (New York 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.

“ Funds From Operations ” means for any period, net income applicable to common shareholders as reported by the Consolidated Group in accordance with GAAP (reduced to eliminate any income from Investment Affiliates), as adjusted by (i) excluding gains and losses from property sales, property write-downs, debt or equity restructurings and adjusting for the non-cash effect of straight-lining of rents, (ii) excluding the effect of income taxes, (iii) excluding the effect of minority interests, (iv) straight-lining various ordinary operating expenses which are payable less frequently than monthly (e.g. real estate taxes and Ground Lease Expense, (v) adding back real estate-related depreciation and amortization, and (vi) excluding the effect of 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 and Equity Inns, Inc., a Tennessee corporation.

“ Guaranty ” means the Guaranty executed by the Guarantors in the form attached hereto as Exhibit D .

“ Indebtedness ” of any Person at any date means without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services (other than current trade liabilities and other accounts payable, and accrued expenses incurred in the ordinary course of business and payable in accordance with customary practices), to the extent such obligations constitute indebtedness for the purposes of GAAP, (c) any other indebtedness of such Person which is evidenced by a note, bond, debenture or similar instrument, (d) all obligations of such Person under financing leases and capital leases, (e) all obligations of such Person in respect of acceptances issued or created for the account of such Person, (f) all Guarantee Obligations of such Person (excluding in any calculation of consolidated indebtedness of such Person, Guarantee Obligations of such Person in respect of primary obligations of any of its Subsidiaries), (g) all reimbursement obligations of such Person for letters of credit and other contingent liabilities, (h) all liabilities secured by any Lien (other than Liens for taxes not yet due and payable) on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof, (i) any repurchase obligation or liability of such Person or any of its Subsidiaries with respect to accounts or notes receivable sold by such Person or any of its Subsidiaries, and (j) such Person’s pro rata share of debt in Investment Affiliates (other than Excluded Investment Affiliates) and any loans where such Person is liable as a general partner.

“ Insolvency ” means insolvency as defined in the United States Bankruptcy Code, as amended. “ Insolvent ” when used with respect to a Person, shall refer to a Person who satisfies the definition of Insolvency.

“ Interest Expense ” all interest expense of the Consolidated Group determined in accordance with GAAP plus (i) capitalized interest not covered by an interest reserve from a loan facility, plus (ii) the allocable portion (based on liability) of any accrued or paid interest incurred on any obligation for which any member of the Consolidated Group is wholly or partially liable under repayment, interest carry, or performance guarantees, or other relevant liabilities, plus (iii) the Consolidated Group Pro Rata Share of any accrued or paid interest incurred on any Indebtedness of any Investment Affiliate (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. JPMorgan shall be the sole Issuing Bank.

“ JPMorgan ” means JPMorgan Chase Bank, N.A.

“ Lenders ” means JPMorgan 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, or any other period as approved by all Lenders, 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).

“ Loan ” means, with respect to a Lender, such Lender’s portion of any Advance.

“ Loan Documents ” means this Agreement, the Notes, the Guaranty, and any and all other agreements or instruments required and/or provided to Lenders hereunder or thereunder, as any of the foregoing may be amended from time to time.

“ 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 September _____, 2010 (subject to extension in accordance with Section 2.21 ) 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 Moody’s Investors Service, Inc. and its successors.

“ 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, adding back 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).

“ Newly Acquired Properties ” means each Property acquired after the closing of the Facility for an effective cap rate greater than nine percent (9%) until such time as the purchase price for such Property divided by the Adjusted Net Operating Income for such Property for the trailing twelve month period, is equal to or less than 9.0.

“ 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.

“ 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 being used by Borrower.

“ 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 JPMorgan 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.

“ Qualifying Trust Preferred Securities ” means (i) the Existing Trust Preferred Securities, (ii) up to $50,000,000 of preferred securities issued to refinance the Existing Trust Preferred Securities and (iii) up to $50,000,000 of additional trust preferred securities, provided that the securities issued in accordance with clauses (ii) and (iii) must be subordinate to all senior debt of the Borrower, including the Facility, and be otherwise structured in substantially the same way as the Existing Trust Preferred Securities.

“ 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 sixty percent (60%) of the then current Aggregate Commitment or, if the Aggregate Commitment has been terminated, Lenders holding, in the aggregate, more than sixty percent (60%) of the aggregate unpaid principal amount of the outstanding Advances.

“ Reserve Requirement ” means, with respect to a LIBOR Interest Period, the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves) which is imposed under Regulation D on Eurocurrency liabilities.

“ S&P ” means Standard & Poor’s Ratings Group and its successors.

“ Subsidiary ” means as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person, and provided such corporation, partnership or other entity is consolidated with such Person for financial reporting purposes under GAAP.

“ 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 $20,000,000, which is included in, and is not in addition to, the Swingline Lender’s total Commitment hereunder.

“ Swingline Lender ” shall mean JPMorgan, 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 Asset Value ” means (a) Adjusted Net Operating Income from all Properties owned by the Consolidated Group (other than Excluded Properties and Newly Acquired Properties) for the trailing twelve month period divided by .09, plus (b) Consolidated Group Pro Rata Share of the Adjusted Net Operating Income from all Properties owned by Investment Affiliates (other than Excluded Properties and Newly Acquired Properties) for the trailing twelve month period divided by .09, plus (c) the amount by which Unrestricted Cash and Cash Equivalents exceeds $10,000,000, plus (d) the Total Cost for Properties Under Development, Excluded Properties, and Newly Acquired Properties.

“ 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 accumulated 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.

“ Unencumbered Asset ” means, with respect to any Property located in the United States and wholly owned by Borrower, any Guarantor or a Qualifying Investment Affiliate, which is in service or is a Property Under Development, at any date of determination, the circumstance that such asset on such date (a) is not subject to any Liens or claims (including restrictions on transferability or assignability) of any kind, (b) is not subject to any agreement (including any agreement governing Indebtedness incurred in order to finance or refinance the acquisition of such asset which prohibits or limits the ability of the Borrower or any Guarantor, as the case may be, to create, incur, assume or suffer to exist any Lien upon any assets or Capital Stock of the Borrower or Guarantor (c) is not subject to any agreement (including any agreement governing Indebtedness incurred in order to finance or refinance the acquisition of such asset) which entitles any Person to the benefit of any Lien on any assets or Capital Stock of the Borrower or any Guarantor or would entitle any Person to the benefit of any Lien (but excluding liens in favor of Lenders and other Permitted Liens identified in Section 9.6 (i) - (iv) and (vii) ) on such assets or Capital Stock upon the occurrence of any contingency (including, without limitation, pursuant to an “equal and ratable” clause), and (d) is compliant with the criteria set forth in Section 8.13 hereof. For the purposes of the foregoing, any Property owned by a Qualifying Investment Affiliate shall not be deemed to be an “Unencumbered Asset” unless (i) both such Property and all Capital Stock of such Qualifying Investment Affiliate, and of each entity in the chain of ownership between the Borrower and such Qualifying Investment Affiliate is unencumbered and (ii) such Qualifying Investment Affiliate and each intervening entity between the Borrower and such Qualifying Investment Affiliate does not have any Indebtedness for borrowed money or any Guarantee Obligations.

“ Unencumbered Asset Value ” means, subject to the limitations hereinafter set forth, as of the end of a quarter, (a) the value of all Unencumbered Assets determined by dividing the Adjusted Net Operating Income from Unencumbered Assets owned by the Consolidated Group and the Consolidated Group Pro Rata Share of Adjusted Net Operating Income from Unencumbered Assets owned by Qualifying Investment Affiliates, each for the trailing twelve month period (other than Excluded Properties and Newly Acquired Properties) by .09, plus (b) the amount by which Unrestricted Cash and Cash Equivalents exceeds $10,000,000, plus (c) the Total Cost for Unencumbered Assets which are Properties Under Development, Excluded Properties and Newly Acquired Properties. The inclusion of Unencumbered Assets in the calculation of Unencumbered Asset Value shall be subject to the following limitations:

 

 

 

 

“ Unrestricted Cash and Cash Equivalents ” means, in the aggregate, all cash, deposits with commercial banks or short term debt instruments issued by the U.S. Treasury or other highly creditworthy institutions described herein which are not pledged or otherwise restricted for the benefit of any creditor and which are owned by members of the Consolidated Group, to be valued for purposes of this Facility at 100% of their then-current book value, as determined under GAAP.

“ 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.

. 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.

 

THE FACILITY

. 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:

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 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, EIP/WV, EQI Financing and EQI2 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.

. 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.

. 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.

. 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.

. 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 .

. The ABR Applicable Margin and the LIBOR Applicable Margin to be used in calculating the interest rate applicable to different types of Advances shall vary from time to time in accordance with the ratio of Total Indebtedness to EBITDA:

 

The Applicable Margins will change 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.

. 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 (“ Unused Facility Amount ”)) payable quarterly in arrears on the last day of each calendar quarter hereafter beginning December 31, 2006 and ending on the Maturity Date. The Applicable Commitment Fee Percentage shall be equal to 0.15% for any period during which the average daily Unused Facility Amount for all Lenders is less than fifty percent (50%) of the Aggregate Commitment and 0.25% in all other cases. 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.

. 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.

(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. (New York 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. (New York time) on the Borrowing Date for each Swingline Loan, specifying:

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, provided , however , that with regard to delivering a compliance certificate with each Borrowing Notice, so long as all Borrowing Base Assets, as of the time of the last compliance certificate, continue to qualify as Borrowing Base Assets, a compliance certificate will not be required provided that Borrower’s request for an Advance or the issuance of a Facility Letter of Credit shall constitute its representation and warranty that it is in compliance with the covenants herein, including that the requested Advance or issuance of a Facility Letter of Credit will not result in a violation of any of the limitations set forth in Section 2.1 hereof. 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 (New York time) on each Borrowing Date, each Lender shall make available its Loan or Loans, in funds immediately available in New York to the Administrative Agent. Administrative Agent will promptly make the funds so received from the Lenders available to the Borrower.

. 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 JPMorgan 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.

. 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.

. 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.

. 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.

. In addition to the other options available to Borrower hereunder, up to $20,000,000 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 (New York 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.

. 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) or any integral multiple of Two Million Dollars (U.S. $2,000,000) 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.

. The Borrower shall also have the right from time to time to increase the Aggregate Commitment up to a maximum of $250,000,000 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 $250,000,000 without the approval of all of the Lenders.

. 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:

. Borrower shall have one (1) option to extend the Maturity Date for a period of one (1) year, upon satisfaction of the following conditions precedent:

 

THE LETTER OF CREDIT SUBFACILITY

. 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.

. The Issuing Bank shall not have any obligation to:

. 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:

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. (New York time) on the last Business Day on which notice can be given under this Section 3.4(a) .