First Amendment to Amended and Restated Secured Revolving Credit Agreement by and among Equity Inns Partnerships and Bank One, NA

Summary

This amendment, dated January 21, 2004, modifies the existing secured revolving credit agreement between Equity Inns Partnership, L.P. (and related entities) and Bank One, NA, along with other lenders. The amendment updates key financial definitions, adjusts leverage and dividend restrictions, and clarifies certain financial covenants. The parties confirm that the original agreement remains in effect except as changed by this amendment. The amendment is effective upon execution by all parties.

EX-10.1 2 exhibit101-2004.txt FIRST AMENDMENT TO CREDIT AGREEMENT EXHIBIT 10.1 FIRST AMENDMENT TO CREDIT AGREEMENT THIS FIRST AMENDMENT TO AMENDED AND RESTATED SECURED REVOLVING CREDIT AGREEMENT ("Amendment") is made as of January 21, 2004 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, 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., 7700 Wolf River Boulevard, Germantown, Tennessee 38138 ("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 1 Bank One Plaza, Chicago, Illinois 60670, as Administrative Agent ("Administrative Agent") and as a Lender; and Each of the remaining Lenders that are signatories hereto. RECITALS A. Borrower is primarily engaged in the business of the acquisition and development of premium limited service, premium extended stay and premium all-suite and full-service hotel properties. B. The parties hereto have entered into an Amended and Restated Secured Revolving Credit Agreement dated as of June 11, 2003 ("Credit Agreement") to make loans available to the Borrower pursuant to the terms thereof ("Facility"). All capitalized terms used herein and not otherwise defined shall have the meanings given to them in the Agreement. C. Borrower has requested a change in certain terms contained in the Credit Agreement and the Lenders have agreed to such a change on the terms contained herein. 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: AMENDMENTS 1. The foregoing recitals to this Amendment are incorporated into and made part of this Amendment. 2. The definition of "Applicable FCF Percentage" in Article I of the Credit Agreement is hereby amended and restated to read as follows: "Applicable FCF Percentage": means for any given fiscsal 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 fiscal quarter and shall change upon delivery of a compliance certificate to the Lenders in the form attached hereto. Ratio of Total Indebtedness Applicable FCF Percentage to EBITDA for preceding for current Quarter fiscal quarter current Quarter --------------------------------- ------------------------- Less than or equal to 4.5x 110% Over 4.5x, but less than or equal to 4.75x 105% Over 4.75x, but less than or equal to 5.00x 100% Over 5.0x, but less than or equal to 5.25x 90% 3. The definition of "Borrowing Base Availability" in Article I of the Credit Agreement is hereby amended and restated to read as follows: "Borrowing Base Availability" means, as of any date, the greater of: (I) 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; or (II) the lesser of: (a) 60% 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) 60% 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; or (c) six (6) times 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. 4. Section 9.3 is hereby amended and restated to read as follows: Section 9.3 Leverage; Additional Recourse Indebtedness. Permit or suffer: (a) From the Agreement Effective Date through December 31, 2004, the ratio of Total Indebtedness to EBITDA to exceed 5.50x; (b) From January 1, 2005 through December 31, 2005, the ratio of Total Indebtedness to EBITDA to exceed 5.25x; (c) From January 1, 2006 through December 31, 2006, the ratio of Total Indebtedness to EBITDA to exceed 5.00x; (d) From and after January 1, 2007, 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. 5. Section 9.4 is hereby amended to include the following subsection (d): (d) Notwithstanding the foregoing subsections (a), (b) and (c), the aggregate amount of dividends payable by Equity Inns (excluding Preferred Stock Expense) may be equal to an amount up to the amount of dividends paid by Equity Inns in the preceding fiscal quarter, provided that no share repurchases shall be permitted during such quarter if the dividends paid exceed the amount that would otherwise have been permitted pursuant to subsections (a), (b) and (c) of this Section 9.4 and the amount of dividends paid in a quarter pursuant to this subsection (d) may not exceed the amount of dividends that would otherwise have been permitted pursuant to subsections (a), (b) and (c) for more than two consecutive quarters. 6. Section 9.8 (b) is hereby amended and restated to read as follows: (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, 2004, and 1.50 to 1 thereafter; 7. Borrower hereby represents and warrants that: (a) no Default or Unmatured Default exists under the Loan Documents; (b) the Loan Documents are in full force and effect and Borrower has no defenses or offsets to, or claims or counterclaims relating to, its obligations under the Loan Documents; (c) there has been no material adverse change in the financial condition of Borrower as shown in its September 30, 2003 financial statements; (d) Borrower has full corporate power and authority to execute this Amendment and no consents are required for such execution other than any consents which have already been obtained; and (e) all representations and warranties contained in Article 6 of the Credit Agreement are true and correct as of the date hereof and all references therein to "the date of this Agreement" shall refer to "the date of this Amendment." 8. Except as specifically modified hereby, the Credit Agreement is and remains unmodified and in full force and effect and is hereby ratified and confirmed. All references in the Loan Documents to the "Credit Agreement" henceforth shall be deemed to refer to the Credit Agreement as amended by this Amendment. 9. 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. This Amendment 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. 10. This Amendment shall become effective when it has been executed by Borrower, Administrative Agent, and the Lenders. IN WITNESS WHEREOF, the Borrower, the Lenders and the Administrative Agent have executed this Amendment as of the date first above written. BORROWER: EQUITY INNS PARTNERSHIP, L.P. By: EQUITY INNS TRUST, its General Partner By: -------------------------------------- Title: -------------------------------------- EQUITY INNS/WEST VIRGINIA PARTNERSHIP, L.P. By: EQUITY INNS SERVICES, INC., its General Partner By: ----------------------------------- Title: ----------------------------------- EQUITY INNS PARTNERSHIP II, L.P. By: EQUITY INNS TRUST, its General Partner By: ----------------------------------- Title: ----------------------------------- LENDERS: BANK ONE, NA Individually and as Administrative Agent By: ----------------------------------- Title: ----------------------------------- Address for Notices: Corporate Real Estate Division 1 Bank One Plaza Chicago, Illinois 60670-0315 Attention: Patricia Leung Telephone: 312 ###-###-#### Telecopy: 312 ###-###-#### CREDIT LYONNAIS NEW YORK BRANCH Individually and as Syndication Agent and Co-Lead Arranger By: ----------------------------------- Title: ----------------------------------- Address for Notices: Lodging Group 1301 Avenue of the Americas New York, New York 10019 Attention: Dave Bowers Telephone: 212 ###-###-#### Telecopy: 212 ###-###-#### FLEET NATIONAL BANK Individually and as Documentation Agent By: ----------------------------------- Title: ----------------------------------- Address for Notices: 115 Perimeter Center Place N.E. Suite 500 Atlanta, Georgia 30342 Attention: George Ojanuga Telephone: 770 ###-###-#### Telecopy: 770 ###-###-#### NATIONAL BANK OF COMMERCE By: ----------------------------------- Title: ----------------------------------- Address for Notices: 7770 Poplar Avenue Suite 105 Germantown, Tennessee 38138 Attention: Jeremy Chism Telephone: 901 ###-###-#### Telecopy: 901 ###-###-#### AMSOUTH BANK By: ----------------------------------- Title: ----------------------------------- Address for Notices: 1900 Fifth Avenue North AmSouth-Sonat Tower, 9th Floor Birmingham, Alabama 35203 Attention: Lawrence Clark Telephone: 205 ###-###-#### Telecopy: 205 ###-###-#### UNION PLANTERS BANK, NATIONAL ASSOCIATION By: ----------------------------------- Title: ----------------------------------- Address for Notices: 6200 Poplar Avenue 3rd Floor Memphis, Tennessee 38119 Attention: James R. Gummel Telephone: 901 ###-###-#### Telecopy: 901 ###-###-#### The undersigned, Equity Inns, Inc. and Equity Inns Trust, are parties to the Credit Agreement for purposes of making the representations and warranties contained in Article VII thereof and agreeing to perform certain of the covenants described in Article VIII thereof and hereby confirm that the Credit Agreement remains in full force and effect and hereby consent to the terms of this Amendment. EQUITY INNS, INC. By: ----------------------------------- Title: ----------------------------------- EQUITY INNS TRUST By: ----------------------------------- Title: -----------------------------------