Document:

Exhibit 10.1 to September 21, 2006 Form 8-K

    
      

      

    

    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

     

    
      	
              ARTICLE
                I.

            	
              DEFINITIONS
                AND ACCOUNTING TERMS

            	
              2

            
	
              Section
                1.1.

            	
              Definitions

            	
              2

            
	
              Section
                1.2.

            	
              Financial
                Standards

            	
              18

            
	 	 	 
	
              ARTICLE
                II.

            	
              THE
                FACILITY

            	
              18

            
	
              Section
                2.1.

            	
              The
                Facility; Limitations on Borrowing

            	
              18

            
	
              Section
                2.2.

            	
              Maturity
                Date

            	
              19

            
	
              Section
                2.3.

            	
              Requests
                for Advances; Responsibility for Advances

            	
              19

            
	
              Section
                2.4.

            	
              Evidence
                of Credit Extensions

            	
              19

            
	
              Section
                2.5.

            	
              Ratable
                and Non Ratable Loans

            	
              19

            
	
              Section
                2.6.

            	
              Applicable
                Margins and Fees

            	
              19

            
	
              Section
                2.7.

            	
              Commitment
                Fee

            	
              20

            
	
              Section
                2.8.

            	
              Other
                Fees

            	
              20

            
	
              Section
                2.9.

            	
              Minimum
                Amount of Each Advance

            	
              20

            
	
              Section
                2.10.

            	
              Interest

            	
              20

            
	
              Section
                2.11.

            	
              Selection
                of Rate Options and LIBOR Interest Periods

            	
              21

            
	
              Section
                2.12.

            	
              Method
                of Payment

            	
              23

            
	
              Section
                2.13.

            	
              Default

            	
              24

            
	
              Section
                2.14.

            	
              Lending
                Installations

            	
              24

            
	
              Section
                2.15.

            	
              Non
                Receipt of Funds by Administrative Agent

            	
              24

            
	
              Section
                2.16.

            	
              Swingline
                Loans

            	
              24

            
	
              Section
                2.17.

            	
              Voluntary
                Reduction of Aggregate Commitment Amount

            	
              25

            
	
              Section
                2.18.

            	
              Increase
                in Aggregate Commitment

            	
              26

            
	
              Section
                2.19.

            	
              Optional
                Prepayments; Mandatory Prepayments

            	
              26

            
	
              Section
                2.20.

            	
              Application
                of Moneys Received

            	
              27

            
	
              Section
                2.21.

            	
              Extension
                of Maturity Date

            	
              27

            
	 	 	 
	
              ARTICLE
                III.

            	
              THE
                LETTER OF CREDIT SUBFACILITY

            	
              28

            
	
              Section
                3.1.

            	
              Obligation
                to Issue

            	
              28

            
	
              Section
                3.2.

            	
              Types
                and Amounts

            	
              28

            
	
              Section
                3.3.

            	
              Conditions

            	
              28

            
	
              Section
                3.4.

            	
              Procedure
                for Issuance of Facility Letters of Credit

            	
              29

            
	
              Section
                3.5.

            	
              Reimbursement
                Obligations; Duties of Issuing Bank

            	
              30

            
	
              Section
                3.6.

            	
              Participation

            	
              31

            
	
              Section
                3.7.

            	
              Payment
                of Reimbursement Obligations

            	
              32

            
	
              Section
                3.8.

            	
              Compensation
                for Facility Letters of Credit

            	
              33

            
	
              Section
                3.9.

            	
              Letters
                of Credit Collateral Account

            	
              33

            
	 	 	 
	
              ARTICLE
                IV.

            	
              CHANGE
                IN CIRCUMSTANCES

            	
              34

            
	
              Section
                4.1.

            	
              Yield
                Protection

            	
              34

            
	
              Section
                4.2.

            	
              Changes
                in Capital Adequacy Regulations

            	
              34

            
	
              Section
                4.3.

            	
              Availability
                of LIBOR Advances

            	
              35

            
	
              Section
                4.4.

            	
              Funding
                Indemnification

            	
              35

            
	
              Section
                4.5.

            	
              Lender
                Statements; Survival of Indemnity

            	
              35

            
	 	 	 
	
              ARTICLE
                V.

            	
              CONDITIONS
                PRECEDENT

            	
              36

            
	
              Section
                5.1.

            	
              Conditions
                Precedent to Closing

            	
              36

            
	
              Section
                5.2.

            	
              Conditions
                Precedent to Subsequent Advances and Issuance

            	
              38

            
	 	 	 
	
              ARTICLE
                VI.

            	
              REPRESENTATIONS
                AND WARRANTIES

            	
              39

            
	
              Section
                6.1.

            	
              Existence

            	
              39

            
	
              Section
                6.2.

            	
              Corporate/Partnership
                Powers

            	
              39

            
	
              Section
                6.3.

            	
              Power
                of Officers

            	
              39

            
	
              Section
                6.4.

            	
              Government
                and Other Approvals

            	
              39

            
	
              Section
                6.5.

            	
              Solvency

            	
              39

            
	
              Section
                6.6.

            	
              Compliance
                with Laws

            	
              40

            
	
              Section
                6.7.

            	
              Enforceability
                of Agreement

            	
              40

            
	
              Section
                6.8.

            	
              Title
                to Property

            	
              40

            
	
              Section
                6.9.

            	
              Litigation

            	
              41

            
	
              Section
                6.10.

            	
              Events
                of Default

            	
              41

            
	
              Section
                6.11.

            	
              Investment
                Company Act of 1940

            	
              41

            
	
              Section
                6.12.

            	
              [Intentionally
                Omitted]

            	
              41

            
	
              Section
                6.13.

            	
              Regulation
                U

            	
              41

            
	
              Section
                6.14.

            	
              No
                Material Adverse Financial Change

            	
              41

            
	
              Section
                6.15.

            	
              Financial
                Information

            	
              41

            
	
              Section
                6.16.

            	
              [Intentionally
                Omitted]

            	
              41

            
	
              Section
                6.17.

            	
              ERISA

            	
              41

            
	
              Section
                6.18.

            	
              Taxes

            	
              42

            
	
              Section
                6.19.

            	
              Environmental
                Matters

            	
              42

            
	
              Section
                6.20.

            	
              Insurance

            	
              42

            
	
              Section
                6.21.

            	
              No
                Brokers

            	
              43

            
	
              Section
                6.22.

            	
              No
                Violation of Usury Laws

            	
              43

            
	
              Section
                6.23.

            	
              Not
                a Foreign Person

            	
              43

            
	
              Section
                6.24.

            	
              No
                Trade Name

            	
              43

            
	
              Section
                6.25.

            	
              Subsidiaries

            	
              43

            
	
              Section
                6.26.

            	
              Unencumbered
                Assets

            	
              44

            
	
              Section
                6.27.

            	
              Borrowing
                Base Assets

            	
              44

            
	 	 	 
	
              ARTICLE
                VII.

            	
              ADDITIONAL
                REPRESENTATIONS AND WARRANTIES

            	
              44

            
	
              Section
                7.1.

            	
              Existence

            	
              44

            
	
              Section
                7.2.

            	
              Corporate
                or Trust Powers

            	
              44

            
	
              Section
                7.3.

            	
              Power
                of Officers

            	
              44

            
	
              Section
                7.4.

            	
              Government
                and Other Approvals

            	
              44

            
	
              Section
                7.5.

            	
              Compliance
                with Laws

            	
              45

            
	
              Section
                7.6.

            	
              Enforceability
                of Guaranty

            	
              45

            
	
              Section
                7.7.

            	
              Liens;
                Consents

            	
              45

            
	
              Section
                7.8.

            	
              Litigation

            	
              45

            
	
              Section
                7.9.

            	
              Investment
                Company Act of 1940

            	
              45

            
	
              Section
                7.10.

            	
              [Intentionally
                Omitted]

            	
              45

            
	
              Section
                7.11.

            	
              No
                Material Adverse Financial Change

            	
              45

            
	
              Section
                7.12.

            	
              Financial
                Information

            	
              45

            
	
              Section
                7.13.

            	
              [Intentionally
                Omitted]

            	
              46

            
	
              Section
                7.14.

            	
              ERISA

            	
              46

            
	
              Section
                7.15.

            	
              Taxes

            	
              46

            
	
              Section
                7.16.

            	
              Subsidiaries

            	
              46

            
	
              Section
                7.17.

            	
              Status

            	
              46

            
	 	 	 
	
              ARTICLE
                VIII.

            	
              AFFIRMATIVE
                COVENANTS

            	
              46

            
	
              Section
                8.1.

            	
              Notices

            	
              46

            
	
              Section
                8.2.

            	
              Financial
                Statements, Reports, Etc.

            	
              47

            
	
              Section
                8.3.

            	
              Existence
                and Conduct of Operations; Limitations on Investments

            	
              49

            
	
              Section
                8.4.

            	
              Maintenance
                of Properties

            	
              49

            
	
              Section
                8.5.

            	
              Insurance

            	
              50

            
	
              Section
                8.6.

            	
              Payment
                of Obligations

            	
              50

            
	
              Section
                8.7.

            	
              Compliance
                with Laws

            	
              50

            
	
              Section
                8.8.

            	
              Adequate
                Books

            	
              50

            
	
              Section
                8.9.

            	
              ERISA

            	
              50

            
	
              Section
                8.10.

            	
              Maintenance
                of Status

            	
              50

            
	
              Section
                8.11.

            	
              Use
                of Proceeds

            	
              50

            
	
              Section
                8.12.

            	
              Pre
                Acquisition Environmental Investigations

            	
              50

            
	
              Section
                8.13.

            	
              Unencumbered
                Assets

            	
              50

            
	
              Section
                8.14.

            	
              Management
                Agreements and Permitted Operating Leases

            	
              51

            
	 	 	 
	
              ARTICLE
                IX.

            	
              NEGATIVE
                COVENANTS

            	
              52

            
	
              Section
                9.1.

            	
              Change
                of Borrower Ownership

            	
              52

            
	
              Section
                9.2.

            	
              Use
                of Proceeds

            	
              52

            
	
              Section
                9.3.

            	
              Leverage;
                Additional Recourse Indebtedness

            	
              52

            
	
              Section
                9.4.

            	
              Dividends

            	
              52

            
	
              Section
                9.5.

            	
              Floating
                Rate Debt

            	
              52

            
	
              Section
                9.6.

            	
              Liens

            	
              53

            
	
              Section
                9.7

            	
              FF&E
                Expenditures

            	
              53

            
	
              Section
                9.8

            	
              Indebtedness,
                Coverage and Net Worth Covenants

            	
              54

            
	
              Section
                9.9

            	
              Qualifying
                Trust Preferred Securities

            	
              54

            
	 	 	 
	
              ARTICLE
                X.

            	
              DEFAULTS

            	
              54

            
	
              Section
                10.1.

            	
              Nonpayment
                of Principal

            	
              54

            
	
              Section
                10.2.

            	
              Certain
                Covenants

            	
              55

            
	
              Section
                10.3.

            	
              Nonpayment
                of Interest and Other Obligations

            	
              55

            
	
              Section
                10.4.

            	
              Cross
                Default

            	
              55

            
	
              Section
                10.5.

            	
              Loan
                Documents

            	
              55

            
	
              Section
                10.6.

            	
              Representations
                or Warranty

            	
              55

            
	
              Section
                10.7.

            	
              Covenants,
                Agreements and Other Conditions

            	
              55

            
	
              Section
                10.8.

            	
              No
                Longer General Partner

            	
              56

            
	
              Section
                10.9.

            	
              Material
                Adverse Financial Change

            	
              56

            
	
              Section
                10.10.

            	
              Bankruptcy

            	
              56

            
	
              Section
                10.11.

            	
              Legal
                Proceedings

            	
              56

            
	
              Section
                10.12.

            	
              ERISA

            	
              56

            
	
              Section
                10.13.

            	
              Failure
                to Satisfy Judgments

            	
              57

            
	
              Section
                10.14.

            	
              Environmental
                Remediation

            	
              57

            
	
              Section
                10.15.

            	
              REIT
                Status; Stock Exchange Listing

            	
              57

            
	 	 	 
	
              ARTICLE
                XI.

            	
              ACCELERATION,
                WAIVERS, AMENDMENTS AND REMEDIES

            	
              57

            
	
              Section
                11.1.

            	
              Acceleration

            	
              57

            
	
              Section
                11.2.

            	
              Preservation
                of Rights; Amendments

            	
              58

            
	 	 	 
	
              ARTICLE
                XII.

            	
              THE
                ADMINISTRATIVE AGENT

            	
              58

            
	
              Section
                12.1.

            	
              Appointment

            	
              58

            
	
              Section
                12.2.

            	
              Powers

            	
              58

            
	
              Section
                12.3.

            	
              General
                Immunity

            	
              58

            
	
              Section
                12.4.

            	
              No
                Responsibility for Loans, Recitals, Etc.

            	
              58

            
	
              Section
                12.5.

            	
              Action
                on Instructions of Lenders

            	
              59

            
	
              Section
                12.6.

            	
              Employment
                of Administrative Agents and Counsel

            	
              59

            
	
              Section
                12.7.

            	
              Reliance
                on Documents; Counsel

            	
              59

            
	
              Section
                12.8.

            	
              Administrative
                Agent’s Reimbursement and Indemnification

            	
              59

            
	
              Section
                12.9.

            	
              Rights
                as a Lender

            	
              60

            
	
              Section
                12.10.

            	
              Lender
                Credit Decision

            	
              60

            
	
              Section
                12.11.

            	
              Successor
                Administrative Agent

            	
              60

            
	
              Section
                12.12.

            	
              Notice
                of Defaults

            	
              61

            
	
              Section
                12.13.

            	
              Requests
                for Approval

            	
              61

            
	
              Section
                12.14.

            	
              Copies
                of Documents

            	
              61

            
	
              Section
                12.15.

            	
              Defaulting
                Lenders

            	
              61

            
	
              Section
                12.16.

            	
              Co-Agents;
                Lead Managers

            	
              62

            
	 	 	 
	
              ARTICLE
                XIII.

            	
              BENEFIT
                OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

            	
              62

            
	
              Section
                13.1.

            	
              Successors
                and Assigns

            	
              62

            
	
              Section
                13.2.

            	
              Participations

            	
              62

            
	
              Section
                13.3.

            	
              Assignments

            	
              63

            
	
              Section
                13.4.

            	
              Dissemination
                of Information

            	
              64

            
	
              Section
                13.5.

            	
              Tax
                Treatment

            	
              64

            
	
              Section
                13.6.

            	
              USA
                Patriot Act

            	
              64

            
	 	 	 
	
              ARTICLE
                XIV.

            	
              GENERAL
                PROVISIONS

            	
              65

            
	
              Section
                14.1.

            	
              Survival
                of Representations

            	
              65

            
	
              Section
                14.2.

            	
              Governmental
                Regulation

            	
              65

            
	
              Section
                14.3.

            	
              Taxes

            	
              65

            
	
              Section
                14.4.

            	
              Headings

            	
              65

            
	
              Section
                14.5.

            	
              No
                Third Party Beneficiaries

            	
              65

            
	
              Section
                14.6.

            	
              Expenses;
                Indemnification

            	
              65

            
	
              Section
                14.7.

            	
              Severability
                of Provisions

            	
              66

            
	
              Section
                14.8.

            	
              Nonliability
                of the Lenders

            	
              66

            
	
              Section
                14.9.

            	
              Choice
                of Law

            	
              66

            
	
              Section
                14.10.

            	
              Consent
                to Jurisdiction

            	
              66

            
	
              Section
                14.11.

            	
              Waiver
                of Jury Trial

            	
              66

            
	
              Section
                14.12.

            	
              Entire
                Agreement; Modification of Agreement

            	
              67

            
	
              Section
                14.13.

            	
              Dealings
                with the Borrower

            	
              67

            
	
              Section
                14.14.

            	
              Set-Off

            	
              68

            
	
              Section
                14.15.

            	
              Counterparts

            	
              68

            
	
              Section
                14.16.

            	
              Limitation
                on Liability of EIP/WV

            	
              68

            
	 	 	 
	
              ARTICLE
                XV.

            	
              NOTICES

            	
              69

            
	
              Section
                15.1.

            	
              Giving
                Notice

            	
              69

            
	
              Section
                15.2.

            	
              Change
                of Address

            	
              70

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    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, 64th
      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 2nd
      Street;
      16th
      floor,
      Winston-Salem, NC 27101; 

     

    REGIONS
      BANK (“Regions”),
      having an office at 417 20th
      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:

     

    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 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
      Investment Affiliate”
means
      any Subsidiary or Investment Affiliate with respect to which (i) the
      Borrower or one of its Wholly-Owned Subsidiaries has management control of
      the
      Subsidiary or Investment Affiliate and each of its assets and (ii) the
      Borrower or such Wholly-Owned Subsidiary, as the case may be, is not subject
      to
      restrictions contained in the organizational documents of any of such entities
      (or any such restrictions have expired) on its ability to sell or finance the
      real property owned by such Subsidiary or Investment Affiliate or its interest
      in the Subsidiary or Investment Affiliate. In no event shall a Subsidiary or
      Investment Affiliate be a Qualifying Investment Affiliate if it has Indebtedness
      that is recourse to the Subsidiary or Investment Affiliate (excluding
      Indebtedness that is recourse to the Subsidiary or Investment Affiliate only
      for
      customary non-recourse carve-outs).

     

    “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.

     

    “Total
      Secured Indebtedness”
means
      as of any date, the aggregate principal amount of that portion of Total
      Indebtedness that is secured by a Lien on the Property of any member of the
      Consolidated Group or any Investment Affiliate.

     

    “Total
      Unsecured Indebtedness”
means
      as of any date, the aggregate principal amount of that portion of Total
      Indebtedness that is not secured by a Lien on the Property of any member of
      the
      Consolidated Group or any Investment Affiliate.

     

    “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:

     

    
      	·  	
              85%
                of the Unencumbered Asset Value shall be from assets that are wholly-owned
                and controlled by the Borrower and the remaining amount shall be
                from
                assets owned by Qualifying Investment Affiliates (or Borrower or
                a
                Guarantor);

            

    

    

    
      	·  	
              90%
                of the Unencumbered Asset Value shall be from assets that are, directly
                or
                indirectly, held in fee simple by Borrower or a Wholly-Owned
                Subsidiary;

            

    

    

    
      	·  	
              The
                maximum aggregate value of Properties Under Development and Excluded
                Properties included in the Unencumbered Asset Value will not exceed
                20% of
                the Unencumbered Asset Value; and 

            

    

    

    
      	·  	
              No
                more than 30% of the total Unencumbered Asset Value may be derived
                from
                assets that are (i) not wholly-owned and controlled by the Borrower
                (ii)
                not directly or indirectly, held in fee simple by Borrower or a
                Wholly-Owned Subsidiary, (iii) Properties Under Development, and
                (iv) Excluded Properties. 

            

    

    

    “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.

     

    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; 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 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.

     

    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

     

    .
      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:

     

    
      	
              Ratio
                of Total Indebtedness to EBITDA

               

            	
              LIBOR
                Applicable Margin

               

            	
              ABR
                Applicable Margin

               

            
	
              Less
                than 4.5x

               

            	
              1.25%

               

            	
              0.25%

               

            
	
              4.5x
                or over, but less than 5.00x

               

            	
              1.375%

               

            	
              0.375%

               

            
	
              5.00x
                or over, but less than 5.50x

               

            	
              1.50%

               

            	
              0.50%

               

            
	
              5.50x
                or over, but less than 6.0x

               

            	
              1.875%

               

            	
              0.875%

               

            

    

    

     

    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.

     

    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 (“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.

     

    Section
      2.8.  Other
      Fees.

     

    (a)  The
      Borrower agrees to pay all fees payable to the Administrative Agent and JPMorgan
      Securities, 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 (New York 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. (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:

     

    (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, 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.

     

    (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. (New York 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. (New York 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 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.

     

    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 $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.

     

    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) 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.

     

    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 $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.

     

    Section
      2.19.  Optional
      Prepayments; Mandatory Prepayments

     

    (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 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 (30) 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.

     

    Section
      2.20.  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
      2.21.  Extension
      of Maturity Date

     

    .
      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:

     

    (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 0.20%
      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, 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. (New York 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, on
      or after the date of this Agreement, 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 repaid the Existing Agreement
      in
      full, (ii) the Borrower shall have paid all fees then due and payable to the
      Lenders, and the Administrative Agent hereunder, (iii) all of the conditions
      set
      forth in Section
      5.2 are
      satisfied, and (iv) 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.

     

    (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).

     

    (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 New York Counsel.
      A
      written opinion, from New York outside counsel for the Borrower and the
      Guarantors in form and substance satisfactory to Administrative
      Agent.

     

    (i)  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, 2005;

     

    (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

     

    (j)  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.

     

    (k)  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,
      judgment 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.

     

    (l)  Borrowing
      Notice.
      The
      Administrative Agent shall have received a Borrowing Notice in accordance with
      Section
      2.11
      hereunder.

     

    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; and

     

    (b)  The
      representations and warranties contained in Article
      VI and VII
      are true
      and correct as of such borrowing date, Issuance Date, or date of conversion
      and/or continuation as and to the extent set forth therein, except to the extent
      any such representation or warranty is stated to relate solely to an earlier
      date, in which case such representation or warranty shall be true and correct
      on
      and as of such earlier date.

     

    Subject
      to the last grammatical paragraphs of Article
      VI and VII
      hereof,
      each Borrowing Notice, Letter of Credit Request, and Conversion/Continuation
      Notice shall constitute a representation and warranty by the Borrower that
      the
      conditions contained in Sections
      5.2(a) and (b)
      have
      been satisfied.

     

    Article
      VI.  

     

    

     

    REPRESENTATIONS
      AND WARRANTIES

     

    Each
      of
      the entities comprising the Borrower hereby represents and warrants that:

     

    Section
      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, 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, EQI2 is a limited liability company duly organized
      and existing under the laws of the State of Delaware, with its principal place
      of business in the State of Tennessee and EQI Financing is a Tennessee 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, EIP/WV, EQI2 and EQI Financing is duly
      qualified as a foreign limited partnership or a foreign limited liability
      company as applicable, 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 or limited liability
      company authority of such entities and the corporate or trust powers of the
      general partners or managers 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 any 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 or the manager 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)  None
      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.   

     

    [Intentionally
      Omitted].

     

    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

     

    (i)  .
      Borrower
      shall, and shall cause each of its Subsidiaries to maintain with financially
      sound and reputable insurance companies, insurance in the amounts and against
      such risks as are customarily maintained by companies engaged in the same or
      similar businesses operating in the same or similar locations.

     

    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 that own Unencumbered Assets, setting forth their respective
      jurisdictions of formation, the percentage of their respective Capital Stock
      owned by Borrower 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.  Unencumbered
      Assets 

     

    Each
      of
      the assets included as an Unencumbered Asset for purposes of the covenants
      contained herein, satisfies each of the requirements for an Unencumbered Asset
      set forth in the definition thereof.

     

    Section
      6.27.  Borrowing
      Base Assets. 

     

    Each
      of
      the assets included as a Borrowing Base Asset for purposes of determining the
      Borrowing Base satisfies each requirement for a Borrowing Base Asset set forth
      in the definition thereof.

     

    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 or issuance of a Facility Letter of Credit 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

     

    .
      Either
      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.   [

     

    Intentionally
      Omitted].

     

    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 that own Unencumbered Assets, setting forth their respective
      jurisdictions of formation, the percentage of their respective Capital Stock
      owned by Guarantor 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
      report listing and describing all newly acquired Properties, 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; notwithstanding the
      foregoing, Borrowers and Guarantors shall not be required to provide copies
      of
      Form 10Ks and 10Qs to the extent same are available at no cost on the
      internet;

     

    (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 ninety (90) days
      after the close of each fiscal year, reports in form and substance satisfactory
      to the Lenders, certified by a Qualified Officer, containing a recap of Net
      Operating Income, less (i) Agreed FF&E Reserves, (ii) real estate taxes and
      (iii) Ground Lease Expense, as applicable, for each individual Property owned
      by
      the Borrower or a Wholly-Owned Subsidiary and included in the Borrowing
      Base;

     

    (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 by a Qualified 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 Borrowing
      Base Asset, a statement describing such fire, casualty or condemnation and
      the
      action Borrower intends to take with respect thereto;

     

    (x)  Such
      other information (including, without limitation, non financial information)
      as
      the Administrative Agent or any Lender may from time to time reasonably request;
      and

     

    (xi)  Within
      ten (10) Business Days after the request of the Administrative Agent, a
      financial statement showing Adjusted EBITDA, Ground Lease Expense, Fixed
      Charges, and Interest Expense for the period of twelve (12) full months ending
      immediately prior to the date of such request.

     

    Section
      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 Total Cost of all Properties
      Under Development and Excluded Properties 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

     

    .
      The
      Borrower will, and will cause each of its Subsidiaries to, maintain insurance
      which is consistent with the representation contained in Section 6.20
      on all
      their Property and the Borrower will furnish to any Lender upon reasonable
      request full information as to the insurance carried.

     

    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 consistent
      with that used by institutional purchasers of similar type
      properties.

     

    Section
      8.13.  Unencumbered
      Assets

     

    .
      Cause
      the Unencumbered Assets to at all times meet the following requirements (in
      addition to the other requirements set forth in the definition of Unencumbered
      Assets):

     

    (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 third party Liens on such Property, 

     

    (vii) such
      Property is operated as one of the following: a Hampton Inn, a Holiday Inn,
      a
      Homewood Suites, a Hyatt, a Residence Inn, an AmeriSuites, or a hotel, resort
      or
      inn in the Marriott, Hilton, Global Hyatt Corporation, Choice Hotels,
      Intercontinental Hotel Group or Starwood line or any other nationally recognized
      franchise approved in writing by the Required Lenders, 

     

    (viii) the
      franchise agreement with the franchisor identified by Borrower for such Property
      in compliance with clause (vii) above shall be in full force and effect and
      no
      default by either party shall have occurred and be continuing thereunder,
      and

     

    (ix) such
      Property meets all of Administrative Agent’s customary due diligence
      requirements for hotel properties provided that Borrower shall not have any
      obligation to provide copies of any due diligence documentation unless
      specifically requested by Administrative Agent.

     

    Section
      8.14.  Management
      Agreements and Permitted Operating Leases

     

    .
      Cause
      each Property 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, EQI Financing and EQI2,
      (ii)
      Equity Inns Services, L.L.C. 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 Equity Inns
      Services, L.L.C., (iv) any pledge of, other encumbrance on, assignment of
      membership interest of or conversion to limited partnership interests of, any
      of
      the general partnership interests or membership interest 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
      and
      after the Agreement Effective Date, the ratio of Total Indebtedness to EBITDA
      to
      exceed 6.00x;

     

    (b)  At
      any
      time, the aggregate amount of the secured Recourse Indebtedness of the
      Consolidated Group to exceed $50,000,000.

     

    Section
      9.4.  Dividends

     

    .
      Permit
      or suffer, 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 95% of the Funds
      From Operations of Equity Inns for such fiscal quarter as determined on a
      consistent basis with the prior financial statements of Equity Inns, as approved
      by the Administrative Agent, provided that Equity Inns may, so long as an Event
      of Default does not exist, pay the minimum amount of dividends required to
      maintain its tax status as a real estate investment trust under the
      Code.

     

    Section
      9.5.  Floating
      Rate Debt

     

    .
      Permit
      the Consolidated Group to have outstanding Indebtedness for borrowed money
      that
      bears interest at a floating rate (excluding this Facility) in excess of 25%
      of
      Total Indebtedness 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;

     

    (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;

     

    (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 Consolidated Group’s Tangible Net Worth, plus accumulated depreciation,
      to be less than the sum of (i) eighty percent (80%) of the Consolidated Group’s
      Tangible Net Worth, plus accumulated depreciation, as of December 31, 2005
      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, 2005 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 the
      last day of any fiscal quarter, Total Secured Indebtedness to exceed fifty
      percent (50%) of Total Asset Value, provided that such percentage may be up
      to
      fifty-five percent (55%) for up to two consecutive quarters once during the
      term
      of the Facility; 

     

    (c)  as
      of the
      last day of any fiscal quarter, Total Unsecured Indebtedness to exceed sixty
      percent (60%) of Unencumbered Asset Value, provided that for purposes of this
      Section
      9.8 (c)
      only,
      Total Unsecured Indebtedness shall not include Indebtedness resulting from
      the
      issuance of Qualifying Trust Preferred Securities; 

     

    (d)  as
      of any
      day, Adjusted EBITDA derived from Unencumbered Assets to be less than 2.0 times
      Interest Expense associated with Total Unsecured Indebtedness; and

     

    (e)  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 1.50 to 1.

     

    Section
      9.9.  Qualifying
      Trust Preferred Securities

     

    .
      Permit,
      as of any day in which a Event of Default exists, or a notice of a monetary
      default has been given and not cured, any payments to be made on subordinated
      notes issued in connection with the sale of Qualifying Trust Preferred
      Securities, or the redemption of the Qualifying Trust Preferred
      Securities.

     

    Section
      9.10.  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.

     

    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 Article 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 four entities constituting the
      Borrower.

     

    Section
      10.9.  Material
      Adverse Financial Change

     

    .
      Any one
      of the Operating Partnership, EIP/WV, EQI2, EQI Financing, 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.

     

    

     

    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 JPMorgan 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.

     

    Article
      XII.  

     

    

     

    THE
      ADMINISTRATIVE AGENT

     

    Section
      12.1.  Appointment

     

    .
      JPMorgan 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 JPMorgan shall serve as Administrative Agent at all times
      during the term of this Facility, except that JPMorgan may resign as
      Administrative Agent in the event (x) JPMorgan 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)
      JPMorgan shall determine, in its sole reasonable discretion, that because of
      its
      other banking relationships with the Consolidated Group at the time of such
      decision JPMorgan’s resignation as Administrative Agent would be necessary in
      order to avoid creating an appearance of impropriety on the part of JPMorgan.
      JPMorgan (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 JPMorgan (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 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.

     

    (a)  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.

     

    (b)  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.

     

    (a)  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 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)), 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.

     

    (b)  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.(b),
      subject
      to 13.3.(a),
      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.

     

    (c)  Any
      Lender may at any time pledge or assign a security interest in all or any
      portion of its rights under this Agreement to secure obligations of such Lender,
      including without limitation any pledge or assignment to secure obligations
      to a
      Federal Reserve Bank, and this Section shall not apply to any such pledge or
      assignment of a security interest; provided
      that no
      such pledge or assignment of a security interest shall release a Lender from
      any
      of its obligations hereunder or substitute any such pledgee or assignee for
      such
      Lender as a party hereto.

     

    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.

     

    Section
      13.6.  USA
      Patriot Act

     

    .
      Each
      Lender hereby notifies the Borrower that pursuant to the requirements of the
      USA
      Patriot Act (Title III of Pub. L 107-56 (signed into law October 26, 2001))
      (the
“Act”), it is required to obtain, verify and record information that identifies
      the Borrower, which information includes the name and address of the Borrower
      and other information that will allow such Lender to identify the Borrower
      in
      accordance with the Act. Any Lender may request additional information with
      respect to any Borrower in connection with such Lender’s “know your customer”
procedures.

     

    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,
      and (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. 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 NEW YORK, 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 NEW YORK STATE COURT SITTING IN NEW YORK COUNTY, NEW
      YORK 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 NEW YORK, NEW YORK.

     

    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)  changes
      the definition of Required Lenders or Supermajority Lenders or modifies any
      requirement for consent by each of the Lenders; or

     

    (vii)  modifies
      the definition of “Borrowing Base”; or

     

    (viii)  modifies
      this Section
      14.12(a);
      or

     

    (b)  the
      Supermajority Lenders, if such amendment or waiver modifies or waives the
      covenant in Section
      9.10;
      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.

    7700
      Wolf
      River Boulevard

    Germantown,
      Tennessee 38138

    Attention: J.
      Mitchell Collins

    Telecopy: (901)
      754-2374

     

    To
      Guarantors:

     

    Equity
      Inns, Inc.

    7700
      Wolf
      River Boulevard

    Germantown,
      Tennessee 38138

    Attention: J.
      Mitchell Collins

    Telecopy: (901)
      754-2374

     

    To
      each
      Lender:

    

    As
      shown
      below the Lenders’ signatures.

     

    To
      the
      Administrative Agent:

     

    JPMorgan
      Chase Bank, N.A.

    Real
      Estate Investment Banking

    277
      Park
      Avenue, 3rd Floor

    New
      York,
      NY 10172

    Attention: Donald
      Shokrian

    Telecopy: (646)
      534-0574

    

    With
      a
      copy to:

     

    Sonnenschein
      Nath & Rosenthal LLP

    7800
      Sears Tower

    Chicago,
      Illinois 60606

    Attention: Steven
      R.
      Davidson, Esq.

    Telecopy: (312)
      876-7934

     

    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.

     

    
      
        
          

           

          

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    [remainder
      of this page intentionally blank]

     

    
      
        
          

          

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    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:
      ________________________________

    Name:
      J.
      Mitchell Collins

    Title: Executive
      VP

     

    EQUITY
      INNS/WEST VIRGINIA PARTNERSHIP, L.P.

     

    By: Equity
      Inns Services, L.L.C., its  General
      Partner

     

    By:
      ________________________________

    Name:
      J.
      Mitchell Collins

    Title: __________________________

     

    

    EQI
      ORLANDO 2, L.L.C.

     

    By:
      ________________________________

    Name:
      J.
      Mitchell Collins

    Its: ____________________________

    

    EQI
      FINANCING PARTNERSHIP I, L.P.

     

    
      	 	
              By:

            	
              EQI
                Financing Corporation, its General
                Partner

            

    

     

    By:
      ________________________________

    Name:
      J.
      Mitchell Collins

    Title: Executive
      VP

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    LENDERS: JPMORGAN
      CHASE BANK, N.A. 

    Individually
      and as Administrative Agent

    

    

    

    By:
      ________________________________

    Name:
       Donald
      Shokrian

    Title: Managing
      Director

    

    Commitment:
      $25,000,000

    

     

    Address
      for Notices:

    

    Real
      Estate Investment Banking

    277
      Park
      Avenue, 3rd Floor

    New
      York,
      NY 10172

    Attention:
      Donald Shokrian

    Telephone:
      212/622-2166

    Telecopy:
      646/534-0574

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CALYON
      NEW YORK BRANCH

    Co-Lead
      Arranger and as Syndication Agent

     

    By: ________________________________

    Name:
           

    Title:     

    

    

    By:
      ________________________________

    Name:
           

    Title:     

    

    Commitment:
      $25,000,000

    

     

    Address
      for Notices:

    

    Calyon
      New York Branch

    Lodging
      Group

    1301
      Avenue of the Americas, 18th
      Floor

    New
      York,
      New York 10019

    Attention:
      David Bowers

    Telephone:
      212/261-7831

    Telecopy:
      212/261-7532

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    BANK
      OF
      AMERICA, N.A.

    Individually
      and as Documentation Agent

     

    By: ________________________________

    Name:
       Roger
      C.
      Davis

    Title: Senior
      Vice President

    

    Commitment:
      $22,000,000

    

    Address
      for Notices:

    

    Bank
      of
      America, N.A.

    901
      Main
      St. 64th
      Floor

    Dallas,
      TX 75202

    Attention:
      Roger C. Davis

    Telephone:
      214/209-9505

    Telecopy:
      214/209-0085

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    KEYBANK
      NATIONAL ASSOCIATION

    Individually
      and as Documentation Agent

     

    By: ________________________________

    Name:
       ________________________________

    Title: ________________________________

    

    Commitment:
      $22,000,000

    

     

    Address
      for Notices:

    

    KeyBank
      National Association

    1200
      Abernathy Road NE, Suite 1550

    Atlanta,
      Georgia 30328

    Phone:
      770/510-2102

    Telephone:
      770/510-2195

    Telecopy:
      Daniel Stegemoeller

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    AMSOUTH
      BANK 

    Individually
      and as Documentation Agent

     

    By: ________________________________

    Name:
       ________________________________

    Title: ________________________________

    

    Commitment:
      $15,000,000

    

     

    Address
      for Notices:

    

    AmSouth
      Bank

    1900
      5th
      Avenue
      North, BAC-15

    Birmingham,
      AL 35203

    Attention:
      Ryan Presley

    Telephone:
      205/326-4783

    Telecopy:
      205/326-4075

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    U.S.
      BANK
      NATIONAL ASSOCIATION

    

     

    By: ________________________________

    Name:
       Dennis
      J.
      Redpath

    Title: Senior
      Vice President

    

    Commitment:
      $19,000,000

    

     

    Address
      for Notices:

    

    U.S.
      Bank
      National Association

    209
      S.
      LaSalle Street, Suite 410

    Chicago,
      IL 60604

    Attention:
      Dennis J. Redpath

    Telephone:
      312/325-8875

    Telecopy:
      312/325-8852

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    BRANCH
      BANKING AND TRUST COMPANY

    

     

    By: ________________________________

    Name:
       Robert
      Searson

    Title: Senior
      Vice President

    

    Commitment:
      $15,000,000

    

    Address
      for Notices:

    

    Branch
      Banking and Trust Company

    200
      West
      2nd
      Street;
      16th
      Floor

    Winston-Salem,
      NC 27101

    Attention:
      Robert Searson

    Telephone:
      336/733-2771

    Telecopy:
      336/733-2740

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    REGIONS
      BANK

    

     

    By: ________________________________

    Name:
       ________________________________

    Title: ________________________________

    

    Commitment:
      $7,000,000

    

     

    Address
      for Notices:

    

    Regions
      Bank

    6200
      Poplar Avenue

    Memphis,
      Tennessee 38119

    Attention:
      James Gummel

    Telephone:
      901/580-5437

    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:
      ___________________________

    Name: J.
      Mitchell Collins

    Title: Executive
      VP

     

    EQUITY
      INNS TRUST

     

    By:
      _____________________________

    Name: J.
      Mitchell Collins

    Title: Executive
      VP

    

    EXHIBIT
      A

     

     

    INTENTIONALLY
      DELETED

     

    

     

    

     

    
      
        
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            A
            - Page 

          

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      B

     

    FORM
      OF NOTE

     

    

     

    _________,
      2006

     

    On
      or
      before the Maturity Date, as defined in that certain Unsecured Revolving Credit
      Agreement dated as of ___________, 2006 (the “Agreement”)
      among
      EQUITY INNS PARTNERSHIP, L.P., a Tennessee limited partnership, EQUITY INNS/WEST
      VIRGINIA PARTNERSHIP, L.P., a Tennessee limited partnership, EQI ORLANDO 2,
      L.L.C., a Delaware limited liability company, and EQI FINANCING PARTNERSHIP
      I,
      L.P., a Tennessee limited partnership (collectively, “Borrower”),
      CALYON NEW YORK BRANCH, individually and as _____________ Agent , JPMORGAN
      CHASE
      BANK, N.A., 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 New York, New York, 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 New
      York.

     

    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:     

    Name:     

    Title:
      _________________________

    

    EQUITY
      INNS/WEST VIRGINIA PARTNERSHIP, L.P., a Tennessee limited
      partnership

     

    By: Equity
      Inns Services, L.L.C., its general  partner

     

    By:     

    Name:
      ________________________

    Its:     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EQI
      ORLANDO 2, L.L.C.

     

    By:
      ________________________________

    Name:
      J.
      Mitchell Collins

    Its:
      ______________________________

    

    

    EQI
      FINANCING PARTNERSHIP I, L.P.

     

    
      	 	
              By:

            	
              EQI
                Financing Corporation, its General
                Partner

            

    

     

    By:
      ________________________________

    Name:
      J.
      Mitchell Collins

    Title: ______________________________

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    
      	
              Date

               

            	
              Unpaid
                

               

              Principal
                

               

              Balance

               

            	
              Notation
                

               

              Made
                by

               

            
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

    

    

     

    

     

    
      
        
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            B
            - Page 

          

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      C

     

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            C
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    EXHIBIT
      D

     

    FORM
      OF GUARANTY

     

    See
      Guaranty of even date.

     

    

     

    
      
        
          Exhibit
            D
            - Page 

          

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

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      E

     

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            E
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    EXHIBIT
      F

     

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            F
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    EXHIBIT
      G

     

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            G
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    EXHIBIT
      H

     

    WIRING
      INSTRUCTIONS

     

    
      	
              To:

               

            	
              JPMorgan
                Chase Bank, N.A., as Administrative Agent (the “Agent”) under the Credit
                Agreement Described Below

               

            
	
              Re:

               

            	
              Unsecured
                Revolving Credit Agreement, dated as of _________, 2006 (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., EQI Orlando 2, L.L.C. and EQI Financing Partnership I, L.P.
                (collectively, the “Borrower”), JPMorgan Chase Bank, N.A., individually
                and as Administrative Agent, Calyon New York Branch, as Co-Lead Arranger,
                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.
      EQI Orlando 2, L.L.C. and EQI Financing Partnership I, L.P. 

     

    Transfer
      Funds To: JPMorgan Chase Bank, N.A.

     

    

     

    For
      Account No.           

     

    Reference/Attention
      To          

     

    Authorized
      Officer (Customer Representative) Date

     

     

    (Please
      Print)      Signature

    

    Bank
      Officer Name     Date

     

     

    (Please
      Print)      Signature

    

    (Deliver
      Completed Form to Credit Support Staff For Immediate Processing)

     

    

     

    
      
        
          Exhibit
            H
            - Page 

          

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      I

     

    FORM
      OF COMPLIANCE CERTIFICATE

     

    Under
      that certain Unsecured Revolving Credit Agreement dated as of _________ 2006,
      (the “Credit Agreement”), between 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. (“JPMorgan”) as
      Administrative agent, Calyon New York Branch as Co-Lead Arranger and the Lenders
      defined therein (the “Credit Agreement”).

     

    The
      undersigned, as _________________ of Equity Inns Partnership L.P., as
      _________________ of Equity Inn / West Virginia Partnership L.P., as
      ______________ of EQI Orlando 2, L.L.C. and as _________________ of EQI
      Financing Partnership I, L.P., pursuant to Section
      8.2
      of the
      Credit Agreement, hereby certify to JPMorgan 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 as of ______________, 20__,
                together
                with the supporting schedule attached hereto is true and
                correct:

            

    

     

    A. Total
      Asset Value derived from Borrowing Base Assets  

    (See
      Attached Schedule of Borrowing Base Assets)     $   

    

    B. 60.0%
      of
      A              $   

     

    

    C. Value
      of
      Asset which makes up greatest percentage of the Borrowing Base

     

    $   

    

    D. C
      divided
      by A is less than 20%        %

    

    E. Allocated
      Facility Amount     $   

    

    F.
      B is
      equal to or more than E ____ Yes ____ No

    

    
      	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. Total
                Cost of all Properties Under Development and Excluded
                Properties

            	
               

               

              $  

            
	 	
              B. 10%
                of Total Cost of all Properties

            	
              $  

               

              A
                must be less than or equal to B

            
	 	 	 
	
              Unencumbered

              Asset
                Value

              Definition

            	
              Limitations
                on Unencumbered Asset Value

               

              Wholly-Owned
                Assets

               

              A. Unencumbered
                Asset Value (See Attached Schedule)

               

              B. Total
                Values of Properties which are, directly or indirectly, wholly owned
                and
                controlled by Borrower

               

              C. B
                divided by A

               

               

               

              Fee
                Simple Assets

               

              D. Total
                Asset Value attributed to Properties which are, directly or indirectly,
                held in fee simple by Borrower or a Wholly-Owned Subsidiary

               

              E. D
                divided by A

               

              Properties
                Under Development and Excluded Properties

               

              F. Total
                Asset Value attributable to Properties Under Development and Excluded
                Properties

               

              G. F
                divided by A

               

              H. Total
                Amount of Unencumbered Asset Value derived from Collateral Pool Asset
                that
                are:

              (i)
                not directly or indirectly, wholly owned and controlled by the Borrower;
                (ITEM B) plus

              (ii)
                not directly or indirectly, held in fee simple by the Borrower or
                a
                Wholly-Owned Subsidiary (ITEM D) plus

              (iii)
                Properties Under Development and Excluded Properties (Item
                F)

            	
               

               

               

               

              $  

               

               

              $  

               

              %

              C
                must be greater than or equal to 85%

               

               

               

               

              $  

               

              %

              E
                must be greater than or equal to 90%

               

               

              $  

               

              %

              G
                must be less than or equal to 20%

               

               

               

               

               

              $  

            
	 	
               

              I. H
                divided by A

            	
               

              %

              I
                must be less than 30%

            
	
              9.3

            	
              Leverage.

               

              A. Total
                Indebtedness

              B. EBITDA

              C. A
                divided by B

              D. 6.00

            	
               

               

              $  

              $  

               

              C
                must be less than or equal to D 

            
	
               

              9.3

            	
               

              Secured
                Recourse Indebtedness

               

              A. Recourse
                Secured Indebtedness of the Consolidated Group

              B. $50,000,000

            	
               

               

               

              $  

              $  

               

              A
                must be less than or equal to B

            
	
              9.4

            	
              Dividends

            	 
	
              9.4

            	
              A. Total
                dividends for the past four quarters (excluding Preferred Stock
                Expense)

              B. 95%
                of the Funds From Operations for the past four quarters

            	
               

              $  

              $  

              A
                must be less than or equal to B

            
	 	 	 
	
              9.5

            	
              Floating
                Rate Debt

               

              A. 25%
                of Total Indebtedness

              B. 
                Floating Rate Debt, excluding the Facility

            	
               

               

              $  

              $  

              B
                must be less than A

            
	
              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)

            	
              9.8(a)Minimum
                Tangible Net Worth.

               

              A. Tangible
                Net Worth of the Consolidated Group

               

              B. 80%
                of Tangible Net Worth at 12/31/05

               

              C. 75%
                of equity interest issued after 12/31/05

               

              D. Sum
                of B and C

            	
               

               

              $  

               

              $  

               

              $  

               

              $  

              A
                must be greater than or equal to D

            
	
              9.8(b)

            	
              9.8(b)Maximum
                Total Secured Indebtedness.

               

              A. Total
                Secured Indebtedness at last day of most recent fiscal
                quarter

               

              B. Total
                Asset Value at last day of most recent fiscal quarter

               

              C. A
                divided by B

            	
               

               

               

              $  

               

              $  

               

              %

               

              C
                must be less than or equal to 50% (or 55% for up two consecutive
                quarters)
                

            
	
              9.8(c)

            	
              9.8(c)
                Maximum Total Unsecured Indebtedness.

               

              A. Total
                Unsecured Indebtedness at last day of most recent fiscal
                quarter

               

              B.
                Indebtedness resulting from the issuance of Qualifying Trust Preferred
                Securities

               

              C.
                A minus B

               

              D. Total
                Unencumbered Asset Value at last day of most recent fiscal
                quarter

               

              E. C
                divided by D

            	
               

               

               

              $  

               

               

              $  

               

              $  

               

               

              $  

               

              %

               

              E
                must be less than or equal to 60% 

            
	
              9.8(d)

            	
              Maximum
                Interest Expense for Unsecured Debt

               

              A. EBITDA
                derived from Unencumbered Assets for the most recent 12 calendar
                months

               

              B. Agreed
                FF&E Reserve for Unencumbered Assets for the most recent 12 calendar
                months

               

              C. A
                minus B (Adjusted EBITDA derived from Unencumbered Assets)

               

              D. Interest
                Expense associated with Total Unsecured Indebtedness for the most
                recent
                12 calendar months

               

              E. C
                divided by D

            	
               

               

               

              $  

               

               

              $  

               

               

              $  

               

               

               

               

              E
                must be equal to or greater than 2.0 to 1.0

            
	 	 	 
	
              9.8(e)

            	
              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 1.5 to
                1.0

            
	
              The
                following computation of the limits imbedded in the definitions,
                together
                with the supporting schedule attached hereto, is true and
                correct.

               

            	 
	
              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.

            	
              $35,000,000

            	
              $  

            
	
              D.

            	
              The
                amount of the Borrowing Base attributable to Properties Under
                Development

            	
               

              $  

            
	
              E.

            	
              C
                minus D

            	
              $  

              B
                must be less than or equal to
                E

            

    

    

     

    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.

            	
              Total
                Cost

              A. Book
                Value of all Newly Acquired Properties, Excluded Properties and Properties
                under Development owned by the Consolidated Group

               

              B. Accumulated
                Depreciation on such Properties

               

              C. Consolidated
                Group Pro Rata Share of the book value of all Newly Acquired Properties,
                Excluded Properties and Properties under Development 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

            	
               

               

              $  

               

              $  

               

               

               

              $  

               

               

              $  

               

              $  

            
	
              2.

            	
              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

            	
               

               

               

              $  

              $  

              $  

              $  

               

              $  

               

               

               

               

               

              $  

              $  

              $  

              $  

               

              $  

               

              $  

            
	
              3.

            	
              EBITDA
                for the most recent four quarters

               

              A. Net
                income of the Consolidated Group applicable to common shareholders
                excluding income from Investment Affiliates

               

              B. Consolidated
                Group Pro Rata Share of net income of Investment Affiliates other
                than
                Excluded Investment Affiliates

               

              C. Preferred
                Stock Expense

               

              D. All
                gains or losses from sale of assets, write downs, debt or equity
                restructure, adjusting for non-cash effect of straight lining of
                rents

               

              E. Effect
                of discontinued operations

               

              F. Effect
                of income taxes

               

              G. Effect
                of minority interests

               

              H. Interest
                Expense

               

              I. Depreciation,
                amortization and non cash items

               

              J. Adjustment
                for Properties not owned during whole period

               

              K. Sum
                of (A plus B) plus sum of (C plus D plus E plus F plus G plus H plus
                I
                plus J) equals EBITDA. 

               

              Note:
                For: C, D, E, F, G, H, I, and J only the Consolidate Group Pro Rata
                Share
                shall be added back to the extent the foregoing items relate to Investment
                Affiliates.

            	
               

               

               

              $  

               

               

              $  

               

              $  

               

               

              $  

               

              $  

               

              $  

               

              $  

               

              $  

               

              $  

               

              $  

               

               

              $  

            
	
              4.

            	
              Adjusted
                EBITDA for any period

               

              A. EBITDA
                for any period

               

              B. Agreed
                FF&E Reserve for all Properties of the Consolidated Group  during
                such period

               

              C. Consolidated
                Group Pro Rata Share of 4% of gross room revenues for such period
                on each
                Property owned by Investment Affiliates

               

              D. A
                minus the sum of B plus C equals Adjusted EBITDA

            	
               

               

              $  

               

               

              $  

               

               

              $  

               

              $  

            
	
              5.

            	
              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

            	
               

               

              $  

               

               

              $  

               

               

              $  

               

              $  

               

              $  

               

              $  

            

    

    

     

    

     

    
      
        
          Exhibit
            I
            - Page 

          

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      J

     

    Intentionally
      Deleted

     

    

     

    
      
        
          Exhibit
            J
            - Page 

          

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    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 
      Select as Applicable

     

    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:

     

    
      	
              Facility
                Assigned

            	
              Aggregate
                Amount of Commitment/Loans for all Lenders*

            	
              Amount
                of Commitment/Loans Assigned*

            	
              Percentage
                Assigned of Commitment/Loans2 

            
	
              ____________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.

     

    [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 New York.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ADMINISTRATIVE
      QUESTIONNAIRE

     

    (Schedule
      to be supplied by Closing Unit or Trading Documentation Unit)

     

    

     

    

      

      
        1

      

      
        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.

      

    

    
      
        
          Exhibit
            K
            - Page 

          

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      L

     

    AMENDMENT
      TO UNSECURED REVOLVING CREDIT AGREEMENT

     

    This
      Amendment to Unsecured Revolving Credit Agreement (the “Amendment”)
      is
      made as of    ,
      2006,
      by and among Equity Inns Partnership, L.P., a Tennessee limited partnership,
      Equity Inns/West Virginia Partnership, L.P., a Tennessee limited partnership,
      EQI Orlando 2, L.L.C., a Delaware limited liability company and EQI Financing
      Partnership I, L.P., a Tennessee limited partnership (collectively,
“Borrower”)
      Equity
      Inns Trust, Equity Inns Services, L.L.C. and Equity Inns, Inc. (collectively,
      “Guarantor”),
      JPMorgan Chase Bank, N.A., 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 a Unsecured
      Revolving Credit Agreement dated as of __________, 2006 (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 $150,000,000. 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
      date
      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 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:      

    Name:
      ______________________________

    Title:      

    

    EQUITY
      INNS/WEST VIRGINIA PARTNERSHIP, L.P.

    

    
      	 	
              By:

            	
              Equity
                Inns Services, L.L.C., its General
                Partner

            

    

    

    By:      

    Name:      

    Its:      

    

    EQI
      ORLANDO 2, L.L.C.

     

    By:
      ________________________________

    Name:
      J.
      Mitchell Collins

    Its: ______________________________

    

    

    EQI
      FINANCING PARTNERSHIP I, L.P.

     

    
      	 	
              By:

            	
              EQI
                Financing Corporation, its General
                Partner

            

    

     

    By:
      ________________________________

    Name:
      J.
      Mitchell Collins

    Title: Executive
      VP

    

    EQUITY
      INNS, INC.

    

    By:      

    Title:      

    

    EQUITY
      INNS TRUST

    

    By:      

    Title:      

    

    EQUITY
      INNS SERVICES, L.L.C.

    

    By:      

    Its:      

    

    JPMORGAN
      CHASE BANK, N.A., Individually and as Administrative Agent

    

    

    By:      

    Print
      Name:     

    Title:      

    

    

    277
      Park
      Avenue, 3rd Floor

    New
      York,
      NY 10172

    Facsimile:
      646/ 534-0574

    Attention:
      Donald Shokrian

    Amount
      of
      Commitment: $   

    

    [NAME
      OF NEW LENDER]

    

    

    By:      

    Print
      Name:     

    Title:      

    

    [Address
      of New Lender]

    Phone:     

    Facsimile:    

    Attention:    

    

    

     

    
      
        
          Exhibit
            L
            - Page 

          

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    SCHEDULE
      1.1

     

    Existing
      Letters of Credit

     

    

     

    
      	
              JPM
                Reference Number

               

            	
              Original
                B1 L/C Number

               

            	
              Booking
                Party Name

               

            	
              Beneficiary
                Name

               

            	
              Liab
                Outstanding Amount

               

            	
              Issue
                / Advising Date

               

            	
              Current
                Expiration Date

               

            
	
              CPCS-214002

               

            	
              -

               

            	
              EQUITY
                INNS PARTNERSHIP LP

               

            	
              WACHOVIA
                BANK, NATIONAL ASSOCIATION

               

            	
              600,000.00
                

               

            	
              NOV
                15, 2005

               

            	
              NOV
                14, 2006

               

            
	
              CPCS-214003

               

            	
              -

               

            	
              EQUITY
                INNS PARTNERSHIP LP

               

            	
              WELLS
                FARGO BANK, N.A., AS TRUSTEE

               

            	
              1,072,000.00
                

               

            	
              NOV
                15, 2005

               

            	
              NOV
                14, 2006

               

            
	
              CPCS-214005

               

            	
              -

               

            	
              EQUITY
                INNS PARTNERSHIP LP

               

            	
              WACHOVIA
                BANK, NATIONAL ASSOCIATION

               

            	
              600,000.00
                

               

            	
              NOV
                15, 2005

               

            	
              NOV
                14, 2006

               

            
	
              CPCS-634814

               

            	
              SLT323375

               

            	
              EQUITY
                INNS PARTNERSHIP LP

               

            	
              GE
                CAPITAL CORP C/O GEMSA LOAN

               

            	
              113,730.00
                

               

            	
              FEB
                15, 2002

               

            	
              OCT
                24, 2007

               

            
	
              CPCS-634815

               

            	
              SLT323377

               

            	
              EQUITY
                INNS PARTNERSHIP LP

               

            	
              GE
                CAPITAL CORP C/O GEMSA LOAN

               

            	
              149,270.00
                

               

            	
              FEB
                15, 2002

               

            	
              OCT
                24, 2007

               

            
	
              CPCS-634909

               

            	
              SLT326051

               

            	
              EQUITY
                INNS PARTNERSHIP LP

               

            	
              LASALLE
                NAT. BANK,

               

            	
              357,504.28
                

               

            	
              FEB
                15, 2002

               

            	
              OCT
                24, 2006

               

            
	
              Total

               

            	
               

               

            	
               

               

            	
               

               

            	
              $2,892,504.28
                

               

            	
               

               

            	
               

               

            

    

    

     

    
      
        
          Schedule
            1.1 - Page 

          

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    SCHEDULE
      6.19

     

    ENVIRONMENTAL
      COMPLIANCE

     

    All
      environmental matters identified in the environmental reports delivered to
      Administrative Agent in connection with the Facility.

     

    

     

    
      
        
          Schedule
            6.19 - Page 

          

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    SCHEDULE
      6.24

     

    TRADE
      NAMES

     

    

     

    
      
        
          Schedule
            6.24 - Page 

          

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    SCHEDULE
      6.25

     

    SUBSIDIARIES
      (BORROWERS) OWNING UNENCUMBERED ASSETS

     

    

    
      	
              Name

            	
              Entity
                Type

            	
              Percentage
                Ownership

            	
              Property
                Owned

            
	
              Equity
                Inns Partnership, L.P.(1)

            	
              Tennessee
                limited partnership

            	 	 
	
              Equity
                Inns/West Virginia Partnership, L.P.(1)

            	
              Tennessee
                limited partnership

            	
              Operating
                Partnership owns 99% LP interest

            	
              Holiday
                Inn/Bluefield*

              Holiday
                Inn/Oak Hill*

            
	
              EQI
                Orlando 2, L.L.C.(1)

            	
              Delaware
                limited liability company

            	
              Operating
                Partnership owns 100% interest

            	
              Embassy
                Suites/Orlando*

            
	
              EQI
                Financing Partnership I, L.P.(1)

            	
              Tennessee
                limited partnership

            	
              Operating
                Partnership owns 99% LP interest

            	
              Hampton
                Inn/Cleveland, OH*

              Hampton
                Inn/Columbus, GA*

              Hampton
                Inn/Gurnee, IL*

              Hampton
                Inn/Gastonia, NC*

              Residence
                Inn/Omaha, NE*

              Hampton
                Inn/Fayetteville, NC*

              Holiday
                Inn/Mt. Pleasant, SC*

            

    

    _______________________

    *
      Borrowing Base Asset under this Agreement.

    (1)
      Entity
      is
      a Borrower under this Agreement.

    

     

    
      
        
          Schedule
            6.25 - Page 

          

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    SCHEDULE
      7.16

     

    SUBSIDIARIES
      OF GUARANTORS OWNING UNENCUMBERED ASSETS

     

    
      	
              Name

            	
              Entity
                Type

            	
              Percentage
                Ownership

            	
              Property
                Owned

            
	
              Equity
                Inns, Inc. 

            	
              Tennessee
                corporation

            	 	 
	
              Equity
                Inns Trust

            	
              Maryland
                real estate investment trust

            	
              100%
                of outstanding common shares owned by Equity Inns, Inc.

            	 
	
              Equity
                Inns Partnership, L.P.

            	
              Tennessee
                limited partnership

            	
              Trust
                owns approximately 96% general partnership interest in the Operating
                Partnership

            	
              Residence
                Inn/Burlington*

              Residence
                Inn/Colorado Springs*

              Hampton
                Inn/Pickwick*

              Hampton
                Inn/Addison*

              Hampton
                Inn/Columbia*

              Homewood
                Suites/Augusta*

              AmeriSuites/Cincinnati-Blue
                Ash*

              AmeriSuites/Miami*

              AmeriSuites/Baton
                Rouge*

              AmeriSuites/Las
                Vegas*

              AmeriSuites/Miami*

              AmeriSuites/Minneapolis*

              AmeriSuites/Nashville*

              Homewood/Seattle*(

              Homewood/Chicago*

              Hampton
                Inn/Urbana*

              Hampton
                Inn/East Lansing*

              Hampton
                Inn/Grand Rapids*

              SpringHill
                Suites/Grand Rapids*

              Hampton
                Inn/Nashville-Briley Pkwy(1)

              Courtyard/Houston(1)

              Hampton
                Inn/Boca Raton(1)

              Hampton
                Inn & Suites/Boynton Beach(1)

              Hampton
                Inn/Deerfield Beach(1)

              Hampton
                Inn/Palm Beach Gardens(1)

              Hampton
                Inn/West Palm Beach(1)

              Hampton
                Inn/Orlando*

              Residence
                Inn/Sarasota(1)

              Courtyard/Sarasota(1)

              Residence
                Inn/Ft. Myers(1)

              Hampton
                Inn/Peabody(1)

              Homewood
                Suites/Peabody*

              SpringHill
                Suites/Sarasota*

              TownPlace
                Suites/Savannah*

              Courtyard/Orlando
                Maitland(1)

              Residence
                Inn/Tampa North(1)

              Residence
                Inn/Mobile(1)

              Fairfield
                Inn/Atlanta*

              SpringHill
                Suites/Houston*

              SpringHill
                Suites/San Antonio*

            
	
              Equity
                Inns/West Virginia Partnership, L.P.

            	
              Tennessee
                Limited Partnership

            	
              1%
                GP interest held by Equity Inns Services, L.L.C. and 99% limited
                partnership interest held by the Operating Partnership

            	
              Holiday
                Inn/Bluefield*

              Holiday
                Inn/Oak Hill*

            
	
              EQI
                Orlando 2, L.L.C.

            	
              Delaware
                limited liability company

            	
              Operating
                Partnership owns 100% interest

            	
              Embassy
                Suites/Orlando*

            
	
              EQI
                Financing Partnership I, L.P.

            	
              Tennessee
                limited partnership

            	
              Approximately
                1% general partnership owned by EQI Financing Corporation and 99%
                limited
                partnership interest held by Operating Partnership

            	
              Hampton
                Inn/Cleveland, OH*

              Hampton
                Inn/Columbus, GA*

              Hampton
                Inn/Gurnee, IL*

              Hampton
                Inn/Gastonia, NC*

              Residence
                Inn/Omaha, NE*

              Hampton
                Inn/Fayetteville, NC*

              Holiday
                Inn/Mt. Pleasant, SC*

            

    

    *
      Borrowing Base Asset under this Agreement.

    
      	(1)  	
              Hotel
                is currently encumbered by mortgage debt and is not a Borrowing Base
                Asset
                under this Agreement.sec document

                                                                    Exhibit 10.1

          AMENDMENT NO. 1 TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT

         Amendment No. 1 ("Amendment") dated September 19, 2006 to Amended and
Restated Employment Agreement effective as of August 10, 2004 (the "Employment
Agreement") by and between NuCO2 Inc. (the "Corporation") and Michael E.
DeDomenico (the "Executive").

         WHEREAS, the Corporation and the Executive are parties to the
Employment Agreement; and

         WHEREAS, the Corporation and the Executive wish to amend the Employment
Agreement to make certain modifications thereto;

         NOW, THEREFORE, for Ten Dollars ($10) and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged by each of
the parties, the Corporation and the Executive hereby agree as follows:

         1.    Paragraph 1.5 of the Employment Agreement is hereby amended in
               its entirety to read as follows:

               "1.5 The term of the Executive's employment hereunder shall
               continue, except as otherwise provided herein, through June 30,
               2009."

         2.    The first sentence of Paragraph 2(a) of the Employment Agreement
               is hereby amended in its entirety to read as follows:

               "A base salary ("Base Salary") at the rate of $432,600 per annum
               or such greater rate as may from time to time be authorized by
               the Board, payable in accordance with the Corporation's regular
               payment schedule for its employees."

         3.    Paragraph 2(b) of the Employment Agreement immediately preceding
               subparagraph (i) thereof is hereby amended in its entirety to
               read as follows:

               "During the Term of this Agreement and subject to the provisions
               hereof, the Executive shall be entitled, at the end of each
               fiscal year of the Corporation (each June 30 during the Term of
               this Agreement), to an annual bonus based upon the relative
               performance of the Corporation and the Executive for the
               applicable fiscal year. The bonus may be comprised of options to
               purchase the Corporation's common stock, $.001 par value per
               share (the "Common Stock"), granted in accordance with the
               provisions of the Corporation's 2005 Executive Management Stock
               Option Plan and cash payments, the relative amounts of which will
               be determined by the Board as follows:"

         4.    The first paragraph of Paragraph 4.1(c) of the Employment
               Agreement is hereby amended in its entirety to read as follows:

                    "(c) at the option of the Corporation, upon thirty (30)
               days' prior written notice thereof to the Executive specifying
               the basis thereof, in the event that the Executive (i) engages in
               any criminal conduct constituting a felony and criminal charges
               are brought against the Executive by a governmental authority,
               (ii) knowingly and willfully fails or refuses to perform his
               duties and responsibilities in a manner consistent with his
               position and other officers of similar position in the

               Corporation to the reasonable satisfaction of the Board, or (iii)
               knowingly and willfully engage in activities which would
               constitute a material breach of any term of this Agreement, or
               any applicable policies, rules or regulations of the Corporation
               or result in a material injury to the business condition,
               financial or otherwise, results of operation or prospects of the
               Corporation, as determined in good faith by the Board ("Cause"),
               and such activity is not cured by the Executive within the thirty
               (30) day notice period provided to the Executive. For purposes of
               this Agreement, termination pursuant to this Paragraph 4.1(c)
               shall be deemed a termination "for cause"."

         5.    Paragraph 6.1(c) of the Employment Agreement is hereby amended in
               its entirety to read as follows:

               "(c) An amount equal to the greater of (i) two (2) times (y) the
               Executive's then current annual Base Salary and (z) the
               Executive's Target Cash Bonus for the then current year and (ii)
               one million four hundred seventy thousand eight hundred forty
               dollars ($1,470,840), to be paid within sixty (60) days of
               termination of employment."

         6.    Immediately following Paragraph 7.7 of the Agreement, a new
               Paragraph 7.8 is hereby added as follows:

               "7.8 SECTION 409A. It is the intention of the parties hereto that
               this Agreement comply strictly with the provisions of Section
               409A of the Internal Revenue Code of 1986, as amended, and
               Treasury Regulations and other Internal Revenue Service guidance
               (the "Section 409A Rules"). Accordingly, this Agreement,
               including, but not limited to, any provision relating to
               severance payments, Change in Control payments or the terms of
               any grants of stock options hereunder, including, but not limited
               to, the timing of payments, may be amended from time to time with
               the consent of the Executive as may be necessary or appropriate
               to comply with, and to avoid adverse tax consequences under the
               Section 409A Rules."

         7.    Except as herein provided, the Employment Agreement shall remain
               unchanged and in full force and effect.

         IN WITNESS WHEREOF, the Corporation and the Executive have executed
this Amendment as of the day and year first above written.

                                                   NUCO2 INC.

                                                   By: /s/ Daniel Raynor
                                                      --------------------------
                                                      Daniel Raynor, Director

                                                   /s/ Michael E. Dedomenico
                                                   -----------------------------
                                                   MICHAEL E. DEDOMENICO

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