Exhibit 10.1

 

 

 

 

$75,000,000

CREDIT AGREEMENT

among

EXTENDED STAY AMERICA, INC.,

as Borrower,

The Several Lenders from Time to Time Parties Hereto,

DEUTSCHE BANK AG NEW YORK BRANCH, GOLDMAN SACHS LENDING PARTNERS LLC,

CITIBANK, N.A., BANK OF AMERICA, N.A., BARCLAYS BANK PLC, MORGAN STANLEY

SENIOR FUNDING, INC. AND MACQUARIE CAPITAL (USA) INC.

as Syndication Agents,

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

Dated as of November 18, 2013

 

 

 

J.P. MORGAN SECURITIES LLC, DEUTSCHE BANK SECURITIES, INC. AND GOLDMAN

SACHS LENDING PARTNERS LLC, as Joint Lead Arrangers and Joint Bookrunners

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TABLE OF CONTENTS

 

         Page   SECTION 1.   DEFINITIONS      1   

1.1

  Defined Terms      1   

1.2

  Other Definitional Provisions.      30   

1.3

  Classifications of Loans      31    SECTION 2.   AMOUNT AND TERMS OF REVOLVING
COMMITMENTS      31   

2.1

  Revolving Commitments.      31   

2.2

  Procedure for Revolving Loan Borrowing      31   

2.3

  Swingline Commitment.      32   

2.4

  Procedure for Swingline Borrowing; Refunding of Swingline Loans      32   

2.5

  Commitment Fees, etc.      33   

2.6

  Termination or Reduction of Revolving Commitments.      34   

2.7

  Repayment of Loans; Source of Funds; Evidence of Debt      34   

2.8

  Optional Prepayments      35   

2.9

  Mandatory Prepayments and Commitment Reductions.      35   

2.10

  Conversion and Continuation Options      35   

2.11

  Limitations on Eurodollar Tranches.      36   

2.12

  Interest Rates and Payment Dates.      36   

2.13

  Computation of Interest and Fees      36   

2.14

  Inability to Determine Interest Rate.      37   

2.15

  Pro Rata Treatment and Payments.      37   

2.16

  Sharing of Payments by Lenders      38   

2.17

  Change in Law.      39   

2.18

  Taxes.      40   

2.19

  Indemnity.      43   

2.20

  Change of Lending Office.      44   

2.21

  Replacement of Lenders.      44   

2.22

  Extension Options; Repricing Option      44   

2.23

  Defaulting Lenders.      49   

2.24

  Cash Collateral.      51   

2.25

  Trigger Event.      52    SECTION 3.   LETTERS OF CREDIT      53   

3.1

  L/C Commitment      53   

3.2

  Procedure for Issuance of Letter of Credit      53   

3.3

  Fees and Other Charges.      54   

3.4

  L/C Participations      54   

3.5

  Reimbursement Obligation of the Borrower      55   

3.6

  Obligations Absolute.      55   

3.7

  Letter of Credit Payments.      55   

3.8

  Applications.      56   

3.9

  Existing Letters of Credit      56   

 

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SECTION 4.

  REPRESENTATIONS AND WARRANTIES      56   

4.1

  Financial Condition.      56   

4.2

  No Change.      56   

4.3

  Existence; Compliance with Law      56   

4.4

  Power; Authorization; Enforceable Obligations.      56   

4.5

  No Legal Bar      57   

4.6

  Litigation      57   

4.7

  No Default      57   

4.8

  Ownership of Property; Liens.      57   

4.9

  Intellectual Property.      57   

4.10

  Taxes.      57   

4.11

  Federal Regulations.      58   

4.12

  ERISA      58   

4.13

  Investment Company Act; Other Regulations.      58   

4.14

  Subsidiaries.      58   

4.15

  Use of Proceeds      59   

4.16

  Environmental Matters.      59   

4.17

  Accuracy of Information, etc.      60   

4.18

  Collateral Documents.      60   

4.19

  Insurance      60   

4.20

  Anti-Corruption Laws and Sanctions.      61   

4.21

  Certain Documents.      61   

SECTION 5.

  CONDITIONS PRECEDENT      61   

5.1

  Conditions to Initial Extension of Credit.      61   

5.2

  Conditions to Each Extension of Credit.      65   

SECTION 6.

  AFFIRMATIVE COVENANTS      65   

6.1

  Financial Statements      65   

6.2

  Certificates; Other Information.      66   

6.3

  Payment of Obligations.      67   

6.4

  Taxes.      67   

6.5

  Maintenance of Existence; Compliance.      67   

6.6

  Maintenance of Property; Insurance      67   

6.7

  Inspection of Property; Books and Records; Discussions.      67   

6.8

  Notices.      67   

6.9

  Environmental Laws      68   

6.10

  Additional Collateral, etc      68   

6.11

  Use of Proceeds      69   

6.12

  Know Your Customer      70   

6.13

  Further Assurances.      70   

6.14

  [Reserved]      70   

6.15

  Trigger Event.      70   

6.16

  Cash Management Account.      70   

6.17

  Post-Closing Requirements      70   

 

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SECTION 7.

  NEGATIVE COVENANTS      71   

7.1

  Financial Condition Covenants.      71   

7.2

  Indebtedness      71   

7.3

  Liens.      73   

7.4

  Fundamental Changes      74   

7.5

  Restricted Payments.      74   

7.6

  Transactions with Affiliates.      75   

7.7

  Amendments to Subsidiary Loan Documents      75   

SECTION 8.

  EVENTS OF DEFAULT      75   

8.1

  Events of Default      75   

SECTION 9.

  THE AGENTS      78   

9.1

  Appointment.      78   

9.2

  Delegation of Duties      78   

9.3

  Exculpatory Provisions      78   

9.4

  Reliance by Administrative Agent.      79   

9.5

  Notice of Default      79   

9.6

  Non-Reliance on Agents and Other Lenders.      79   

9.7

  Indemnification.      80   

9.8

  Agent in Its Individual Capacity.      80   

9.9

  Successor Administrative Agent.      80   

9.10

  Lead Arrangers; Joint Bookrunners; Syndication Agents      81   

9.11

  Agents May File Proofs of Claim      81   

SECTION 10.

  MISCELLANEOUS      81   

10.1

  Amendments and Waivers.      81   

10.2

  Notices.      83   

10.3

  No Waiver; Cumulative Remedies.      84   

10.4

  Survival of Representations and Warranties.      84   

10.5

  Payment of Expenses; Damages Waiver.      84   

10.6

  Successors and Assigns; Participations and Assignments.      86   

10.7

  Adjustments; Set-off      90   

10.8

  Counterparts      90   

10.9

  Severability.      90   

10.10

  Integration      91   

10.11

  GOVERNING LAW.      91   

10.12

  Submission To Jurisdiction; Waivers.      91   

10.13

  Acknowledgements.      91   

10.14

  Interest Rate Limitation.      92   

10.15

  Releases of Liens      92   

10.16

  Confidentiality.      92   

10.17

  WAIVERS OF JURY TRIAL.      93   

10.18

  USA Patriot Act.      93   

 

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SCHEDULES:

1.1A

   Revolving Commitments

1.1B

   Immaterial Subsidiaries

1.1C

   Existing Letters of Credit

4.4

   Consents, Authorizations, Filings and Notices

4.14

   Subsidiaries

4.18

   Collateral Filings

6.16

   Mortgaged Properties

7.2

   Indebtedness

7.3

   Liens

EXHIBITS:

A

   Form of Subsidiary Guarantee

B

   Form of Security Agreement

C

   Form of Compliance Certificate

D

   Form of Secretary’s Certificate

E

   Form of Assignment and Assumption

F

   Form of Exemption Certificates (1-4)

G

   Form of Increasing Lender Agreement

H

   Form of New Lender Agreement

I

   Form of Account Control Agreement

J

   Form of Conditional Account Control Agreement

K

   Form of Subsidiary Perfection Certificate

L

   Form of Notice to Cash Management Agent

 

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CREDIT AGREEMENT (this “Agreement”), dated as of November 18, 2013, among
EXTENDED STAY AMERICA, INC., a Delaware corporation (the “Borrower”), the
several banks and other financial institutions or entities from time to time
parties to this Agreement (the “Lenders”), DEUTSCHE BANK AG NEW YORK BRANCH,
GOLDMAN SACHS LENDING PARTNERS LLC, CITIBANK, N.A., BANK OF AMERICA, N.A.,
BARCLAYS BANK PLC, MORGAN STANLEY SENIOR FUNDING, INC. AND MACQUARIE CAPITAL
(USA) INC. as syndication agents (in such capacities, the “Syndication Agents”),
and JPMORGAN CHASE BANK, N.A., as administrative agent.

The parties hereto hereby agree as follows:

SECTION 1. DEFINITIONS

1.1 Defined Terms. As used in this Agreement, the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.

“ABR”: for any day, a rate per annum (rounded upwards, if necessary, to the next
1/16 of 1%) equal to the greatest of (a) the Prime Rate in effect on such day,
(b) the Federal Funds Effective Rate in effect on such day plus  1⁄2 of 1% and
(c) the Eurodollar Rate that would be calculated as of such day (or, if such day
is not a Business Day, as of the next preceding Business Day) in respect of a
proposed Eurodollar Loan with a one-month Interest Period plus 1.0%. Any change
in the ABR due to a change in the Prime Rate, the Federal Funds Effective Rate
or such Eurodollar Rate shall be effective as of the opening of business on the
day of such change in the Prime Rate, the Federal Funds Effective Rate or such
Eurodollar Rate, respectively.

“ABR Loans”: Loans the rate of interest applicable to which is based upon the
ABR.

“Accepting Lender”: as defined in Section 2.22(c)(ii).

“Account”: the deposit account of the Borrower numbered 517611310 located at the
Account Bank.

“Account Bank”: the Administrative Agent.

“Account Control Agreement”: the Account Control Agreement, substantially in the
form of Exhibit I.

“Administrative Agent”: JPMorgan Chase Bank, N.A. as the administrative agent
for the Lenders under this Agreement and the other Loan Documents, together with
any of its successors.

“Affiliate”: as to any Person, any other Person that, directly or indirectly, is
in control of, is controlled by, or is under common control with, such Person or
is a director or officer of such Person or of an Affiliate of such Person. For
purposes of this definition, “control” of a Person means the possession,
directly or indirectly, of the power to direct or cause the direction of
management, policies or activities of a Person, whether through ownership of
voting securities, by contract or otherwise.

“Agents”: the collective reference to the Syndication Agents and the
Administrative Agent.

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“Aggregate Exposure”: with respect to any Lender at any time, an amount equal to
the amount of such Lender’s Revolving Commitment then in effect or, if the
Revolving Commitments have been terminated, the amount of such Lender’s
Revolving Extensions of Credit then outstanding.

“Aggregate Exposure Percentage”: with respect to any Lender at any time, the
ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such
time to the Aggregate Exposure of all Lenders at such time.

“Agreement”: as defined in the preamble hereto.

“Anti-Corruption Laws”: all laws, rules, and regulations of any jurisdiction
applicable to the Group Members concerning or relating to bribery or corruption.

“Applicable Margin”: for each Type of Loan, the rate per annum set forth under
the relevant column heading below, as may be modified from time to time pursuant
to Section 2.22(c):

 

     ABR Loans     Eurodollar Loans  

Revolving Loans and Swingline Loans

     2.75 %      3.75 % 

“Application”: an application, in such form as the Issuing Lender may specify
from time to time, requesting the Issuing Lender to open a Letter of Credit.

“Approved Fund”: as defined in Section 10.6(b).

“Assignee”: as defined in Section 10.6(b).

“Assignment and Assumption”: an Assignment and Assumption, substantially in the
form of Exhibit E.

“Available Revolving Commitment”: as to any Lender at any time, an amount equal
to the excess, if any, of (a) such Lender’s Revolving Commitment then in effect
over (b) such Lender’s Revolving Extensions of Credit then outstanding;
provided, that in calculating any Lender’s Revolving Extensions of Credit for
the purpose of determining such Lender’s Available Revolving Commitment pursuant
to Section 2.5(a), the aggregate principal amount of Swingline Loans then
outstanding shall be deemed to be zero.

“Award”: any compensation paid by any Governmental Authority in connection with
a Condemnation in respect of all or any part of any Supplemental Property.

“Benefitted Lender”: as defined in Section 10.7(a).

“Board”: the Board of Governors of the Federal Reserve System of the United
States (or any successor).

“Borrower”: as defined in the preamble hereto.

“Borrower Remainder Subaccount”: as defined in the Domestic Cash Management
Agreement.

“Borrowing Date”: any Business Day specified by the Borrower as a date on which
the Borrower requests the relevant Lenders to make Loans hereunder.

 

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“BREP”: collectively, Blackstone Real Estate Partners VI L.P., Blackstone Real
Estate Partners (AIV) VI L.P., Blackstone Real Estate Partners VI.TE.1 L.P.,
Blackstone Real Estate Partners VI.TE.2 L.P., Blackstone Real Estate Partners
VI.F L.P. and Blackstone Real Estate Holdings VI L.P., each a Delaware limited
partnership, together with their respective permitted successors and/or assigns.

“Business”: as defined in Section 4.16(b).

“Business Day”: a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close,
provided, that with respect to notices and determinations in connection with,
and payments of principal and interest on, Eurodollar Loans, such day is also a
day for trading by and between banks in Dollar deposits in the interbank
eurodollar market.

“Capital Expenditures”: for any period, the amount expended for items
capitalized under GAAP and the Uniform System of Accounts (including
expenditures for building improvements or major repairs) and non-recurring
expenses associated with rebranding and repositioning (including signage,
marketing, advertising and naming) relating to the Supplemental Properties.

“Capital Lease Obligations”: as to any Person, the obligations of such Person to
pay rent or other amounts under any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP and, for the purposes of this
Agreement, the amount of such obligations at any time shall be the capitalized
amount thereof at such time determined in accordance with GAAP; provided that
Capital Lease Obligations shall not include any obligations of any Person to pay
rent or other amounts under any lease (or other arrangement conveying the right
to use) of real or personal property, or a combination thereof which obligations
would be required to be classified and accounted for as an operating lease under
GAAP as in effect on the Closing Date.

“Capital Stock”: 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 (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.

“Cash Collateralize”: to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of one or more of the Issuing Lender or
Lenders, as collateral for L/C Obligations or obligations of Lenders to fund
participations in respect of L/C Obligations, cash or deposit account balances,
in each case pursuant to documentation in form and substance reasonably
satisfactory to the Administrative Agent and the Issuing Lender. “Cash
Collateral” shall have a meaning correlative to the foregoing and shall include
the proceeds of such cash collateral.

“Cash Equivalents”: (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition;
(b) certificates of deposit, time deposits, bankers’ acceptances, eurodollar
time deposits or overnight bank deposits having maturities of one year or less
from the date of acquisition issued by any Lender or by any commercial bank
organized under the laws of the United States or any state thereof having
combined capital and surplus of not less than $500,000,000; (c) commercial paper
of an issuer rated at least A-2 by Standard & Poor’s Ratings Services (“S&P”) or
P-2 by Moody’s Investors Service, Inc. (“Moody’s”), or carrying an equivalent
rating by a nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of commercial paper issuers generally, and
maturing within one year from the date of acquisition; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the requirements
of clause (b) of this definition, having a term of not more than 30 days, with

 

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respect to securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody’s; (f) securities with maturities of one year or less from
the date of acquisition backed by standby letters of credit issued by any Lender
or any commercial bank satisfying the requirements of clause (b) of this
definition; (g) money market mutual or similar funds that invest exclusively in
assets satisfying the requirements of clauses (a) through (f) of this
definition; or (h) money market funds that comply with the criteria set forth in
SEC Rule 2a-7 under the Investment Company Act of 1940, as amended.

“Cash Management Agent”: the “Agent” as defined in the Mortgage Loan Agreement.

“Casualty”: a fire or other casualty that damages or destroys, in whole or in
part, any Supplemental Property.

“Centerbridge”: Centerbridge Capital Partners, L.P., a Delaware limited
partnership, together with its permitted successors and assigns.

“Change in Law”: the occurrence, after the date of this Agreement (or with
respect to any Lender, if later, the date on which such Lender becomes a
Lender), of any of the following: (a) the adoption or taking effect of any law,
rule, regulation or treaty, (b) any change in any law, rule, regulation or
treaty or in the administration, interpretation or application thereof by any
Governmental Authority, or (c) the making or issuance of any request, rules,
guideline, requirement or directive (whether or not having the force of law) by
any Governmental Authority; provided however, that notwithstanding anything
herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines, requirements and directives
thereunder, issued in connection therewith or in implementation thereof, and
(ii) all requests, rules, guidelines, requirements and directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law” regardless of the date enacted,
adopted, issued or implemented.

“Change of Control”: the occurrence of any of the following events: (a) any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, but excluding the Sponsor or any employee
benefit plan of such person or its subsidiaries, and any person or entity acting
in its capacity as trustee, agent or other fiduciary or administrator of any
such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5
under the Securities Exchange Act of 1934, except that a person or group shall
be deemed to have “beneficial ownership” of all securities that such person or
group has the right to acquire, whether such right is exercisable immediately or
only after the passage of time (such right, an “option right”)), directly or
indirectly, of 35% or more of the equity securities of the Borrower entitled to
vote for members of the board of directors or equivalent governing body of the
Borrower on a fully-diluted basis (and taking into account all such securities
that such person or group has the right to acquire pursuant to any option right)
or (b) during any period of 12 consecutive months, a majority of the members of
the board of directors or other equivalent governing body of the Borrower cease
to be composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by

 

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individuals referred to in clauses (i) and (ii) above constituting at the time
of such election or nomination at least a majority of that board or equivalent
governing body (excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a member of
that board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal of
one or more directors by any person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of directors).

“Class”: when used in reference to any Loan, shall refer to whether such Loan is
an Existing Loan or Extended Loan (of the same Extension Series) and, when used
in reference to any Revolving Commitment, refers to whether such Revolving
Commitment is an Existing Commitment or an Extended Commitment (of the same
Extension Series).

“Closing Date”: the date on which the conditions precedent set forth in
Section 5.1 shall have been satisfied, which date is November 18, 2013.

“Code”: the Internal Revenue Code of 1986, as amended from time to time.

“Collateral”: all property of the Loan Parties, now owned or hereafter acquired,
upon which a Lien is purported to be created by the Collateral Documents.

“Collateral Documents”: collectively, the Security Agreement, the Account
Control Agreement, the Conditional Account Control Agreement, and any other
account control agreements, pledge agreements or other similar agreements
delivered to the Administrative Agent.

“Commitment Fee Rate”: (a) 0.175% per annum, if the average daily Total
Unutilized Commitment for the applicable period is less than 50% of the Total
Revolving Commitments, or (b) 0.35% per annum, if the average daily Total
Unutilized Commitment for the applicable period is equal to or greater than 50%
of the Total Revolving Commitments.

“Compliance Certificate”: a certificate duly executed by a Responsible Officer
substantially in the form of Exhibit C.

“Component A”: as defined in the Mortgage Loan Agreement.

“Component B”: as defined in the Mortgage Loan Agreement.

“Condemnation”: a temporary or permanent taking by any Governmental Authority as
the result or in lieu or in anticipation of the exercise of the right of
condemnation or eminent domain, of all or any part of any Supplemental Property,
or any interest therein or right accruing thereto, including any right of access
thereto or any change of grade affecting such Supplemental Property or any part
thereof.

“Conditional Account Control Agreement”: the Conditional Account Control
Agreement, substantially in the form of Exhibit J, or in such other form as is
reasonably acceptable to the Administrative Agent.

“Conditional Controlled Account”: the deposit account of the Borrower numbered
4427809495 located at the Conditional Controlled Account Bank or any successor
account that is subject to a Conditional Account Control Agreement executed by
the Borrower, the Administrative Agent and the applicable Conditional Controlled
Account Bank.

 

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“Conditional Controlled Account Bank”: Bank of America, N.A. or such other
depositary bank reasonably acceptable to the Administrative Agent, it being
understood and agreed that, following the second Trigger Event to occur
hereunder, the Borrower shall, upon the request of the Administrative Agent,
promptly (i) replace the existing Conditional Controlled Account Bank with a new
financial institution reasonably acceptable to the Borrower and the
Administrative Agent, (ii) cause such successor Conditional Controlled Account
to be subject to a control agreement in favor of the Administrative Agent in
form and substance reasonably acceptable to the Administrative Agent, which
control agreement shall be the Conditional Account Control Agreement specified
herein and (iii) cause its Subsidiaries to modify the Irrevocable Account
Direction to reference such successor Conditional Controlled Account.

“Connection Income Taxes”: Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

“Consolidated EBITDA”: for any period of four consecutive fiscal quarters (each,
a “Reference Period”), the ESA Net Operating Income for such Reference Period
(a) plus, without duplication, the sum of (i) any recurring cash income of the
Borrower or any of its Subsidiaries, (ii) to the extent reflected as a charge in
the statement of such ESA Net Operating Income for such Reference Period, any
non-cash expenses or losses and (iii) to the extent reflected as a charge in the
statement of such ESA Net Operating Income for such Reference Period, any
non-recurring or extraordinary expenses or losses, provided, that the amounts
referred to in this clause (a)(iii) shall not exceed $100,000,000 in the
aggregate after the Closing Date (net of any deductions pursuant to clause
(b)(iii) below), and (b) minus the sum of (i) all actual non-property level
management, marketing and other allocated general and administrative expenses of
the Borrower or any Subsidiary thereof and all other expenses that appear on the
income statement of the Borrower, (ii) to the extent included in the statement
of such ESA Net Operating Income for such Reference Period, any non-cash income
or gains, (iii) to the extent included in the statement of such ESA Net
Operating Income for such Reference Period, any non-recurring or extraordinary
income or gains (including, whether or not otherwise includable as a separate
item in the statement of such ESA Net Operating Income for such Reference
Period, gains on the sales of assets outside of the ordinary course of
business), and (iv) any cash payments made during such Reference Period in
respect of items described in clause (a)(iii) above subsequent to the fiscal
quarter in which the relevant non-cash expenses or losses were reflected as a
charge in the statement of ESA Net Operating Income, all as determined on a
consolidated basis. For the purposes of calculating Consolidated EBITDA for any
Reference Period pursuant to any determination of the Consolidated Leverage
Ratio, (i) if at any time during such Reference Period the Borrower or any
Subsidiary shall have made any Material Disposition, the Consolidated EBITDA for
such Reference Period shall be reduced by an amount equal to the Consolidated
EBITDA (if positive) attributable to the property that is the subject of such
Material Disposition for such Reference Period or increased by an amount equal
to the Consolidated EBITDA (if negative) attributable thereto for such Reference
Period and (ii) if at any time during such Reference Period the Borrower or any
Subsidiary shall have made a Material Acquisition, Consolidated EBITDA for such
Reference Period shall be calculated after giving pro forma effect thereto as if
such Material Acquisition occurred on the first day of such Reference Period. As
used in this definition, “Material Acquisition” means any acquisition of
property or series of related acquisitions of property that (a) constitutes
assets comprising all or substantially all of an operating unit of a business or
constitutes all or substantially all of the common stock of a Person and
(b) involves the payment of consideration by the Borrower or any of its
Subsidiaries in excess of $1,000,000; and “Material Disposition” means any
Disposition of property or series of related Dispositions of property that
yields gross proceeds to the Borrower or any of its Subsidiaries in excess of
$1,000,000.

“Consolidated Leverage Ratio”: as of the last day of any period, the ratio of
(a) Consolidated Total Debt on such day to (b) Consolidated EBITDA for such
period.

 

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“Consolidated Total Assets”: as of any date, the total assets of the Borrower
and its Subsidiaries, determined in accordance with GAAP, as set forth on the
consolidated balance sheet of the Borrower as of such date.

“Consolidated Total Debt”: at any date, the aggregate principal amount of all
Indebtedness (other than Indebtedness under clause (f) and (g) of the definition
thereof) of the Borrower and its Subsidiaries at such date, determined on a
consolidated basis in accordance with GAAP.

“Contractual Obligation”: as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which
such Person is a party or by which it or any of its property is bound.

“Debtor Relief Laws”: the Bankruptcy Code of the United States of America, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief laws of the United States of America or
other applicable jurisdictions from time to time in effect.

“Debt Yield”: as of any date of determination, the percentage obtained by
dividing:

(a) For all purposes other than those described in clause (b) of this
definition:

(i) the Net Operating Income for the trailing twelve (12) month period
immediately preceding the date of determination for any Mortgage Collateral as
of such date of determination as set forth in the financial statements required
hereunder, without including, for purposes of calculating the Operating Expense
component of Net Operating Income, (i) Management Fees incurred in connection
with the operation of the Subsidiary Properties except as set forth below and
(ii) amounts paid for Replacements, but including, for purposes of calculating
the Operating Expense component of Net Operating Income, (A) assumed Management
Fees, which include corporate overhead, non-property level management, marketing
and other centrally provided general and administrative expenses, equal to eight
percent (8.0%) of Gross Income from Operations in the aggregate and (B) assumed
costs of Replacements equal to four percent (4%) of Gross Income from
Operations; by

(ii) the sum of (i) the outstanding principal balances of (A) the Mortgage Loan
and (B) the Mezzanine Loans, and, in each case, any Permitted Refinancing
thereof, (ii) the aggregate Face Amount of any portion of any Mezzanine Loan
repaid pursuant to a Discounted Payoff; (iii) the aggregate outstanding Total
Revolving Extensions of Credit as of such date; and (iv) the aggregate
outstanding ESH Total Revolving Extensions of Credit as of such date; and

(b) For purposes of calculating Debt Yield under the definitions of “Trigger
Event” and “Trigger Event Cure”:

(i) the ESA Net Operating Income for the trailing twelve (12) month period
immediately preceding the date of determination for any Subsidiary Properties
and Supplemental Properties as of such date of determination (which, for any
calculation occurring between the Closing Date and the first anniversary of the
Closing Date, shall be calculated on a pro forma basis after giving effect to
the Restructuring) as set forth in the financial statements required hereunder,
without including, for purposes of calculating the ESA Operating Expense
component of ESA Net Operating Income, (i) Management

 

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Fees incurred in connection with the operation of the Subsidiary Properties
except as set forth below, (ii) Supplemental Management Fees incurred in
connection with the operation of the Supplemental Properties except as set forth
below, (iii) amounts paid for Replacements, and (iv) amounts paid for
Supplemental Replacements, but including, for purposes of calculating the ESA
Operating Expense component of ESA Net Operating Income, (A) assumed Management
Fees, which include corporate overhead, non-property level management, marketing
and other centrally provided general and administrative expenses, equal to eight
percent (8.0%) of Gross Income from Operations in the aggregate, (B) assumed
Supplemental Management Fees, which include corporate overhead, non-property
level management, marketing and other centrally provided general and
administrative expenses, equal to eight percent (8.0%) of Supplemental Gross
Income from Operations in the aggregate, (C) assumed costs of Replacements equal
to four percent (4%) of Gross Income from Operations, and (D) assumed costs of
Supplemental Replacements equal to four percent (4%) of Supplemental Gross
Income from Operations; by

(ii) the sum of (i) the outstanding principal balances of (A) the Mortgage Loan
and (B) the Mezzanine Loans, and, in each case, any Permitted Refinancing
thereof, (ii) the aggregate Face Amount of any portion of any Mezzanine Loan
repaid pursuant to a Discounted Payoff; (iii) the aggregate outstanding Total
Revolving Extensions of Credit as of such date; and (iv) the aggregate
outstanding ESH Total Revolving Extensions of Credit as of such date.

“Default”: any of the events specified in Section 8, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

“Defaulting Lender”: subject to Section 2.23(b), any Lender that (a) has failed
to (i) fund all or any portion of its Loans within two (2) Business Days of the
date such Loans were required to be funded hereunder unless such Lender notifies
the Administrative Agent and the Borrower in writing that such failure is the
result of such Lender’s determination that one or more conditions precedent to
funding (each of which conditions precedent, together with any applicable
default, shall be specifically identified in such writing) has not been
satisfied, or (ii) pay to the Administrative Agent, the Issuing Lender, the
Swingline Lender or any other Lender any other amount required to be paid by it
hereunder (including in respect of its participation in Letters of Credit or
Swingline Loans) within two (2) Business Days of the date when due, (b) has
notified the Borrower, the Administrative Agent, the Issuing Lender or the
Swingline Lender in writing that it does not intend to comply with its funding
obligations hereunder, or has made a public statement to that effect (unless
such writing or public statement relates to such Lender’s obligation to fund a
Loan hereunder and states that such position is based on such Lender’s
determination that a condition precedent to funding (which condition precedent,
together with any applicable default, shall be specifically identified in such
writing or public statement) cannot be satisfied), (c) has failed, within three
(3) Business Days after written request by the Administrative Agent or the
Borrower, to confirm in writing to the Administrative Agent and the Borrower
that it will comply with its prospective funding obligations hereunder (provided
that such Lender shall cease to be a Defaulting Lender pursuant to this clause
(c) upon receipt of such written confirmation by the Administrative Agent and
the Borrower), or (d) has, or has a direct or indirect parent company that has,
(i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had
appointed for it a receiver, custodian, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or assets, including the Federal
Deposit Insurance Corporation or any other state or federal regulatory authority
acting in such a capacity; provided that a Lender shall not be a Defaulting
Lender solely by virtue of the ownership or acquisition of any equity interest
in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so

 

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long as such ownership interest does not result in or provide such Lender with
immunity from the jurisdiction of courts within the United States of America or
from the enforcement of judgments or writs of attachment on its assets or permit
such Lender (or such Governmental Authority) to reject, repudiate, disavow or
disaffirm any contracts or agreements made with such Lender. Any determination
by the Administrative Agent that a Lender is a Defaulting Lender under any one
or more of clauses (a) through (d) above shall be conclusive and binding absent
manifest error, and such Lender shall be deemed to be a Defaulting Lender
(subject to Section 2.23(b)) upon delivery of written notice of such
determination to the Borrower, the Issuing Lender, the Swingline Lender and each
Lender.

“Deposit Account”: a “deposit account” (as defined in the Uniform Commercial
Code) and also means and includes all demand, time, savings, passbook or similar
accounts maintained by a Loan Party with a bank or other financial institution,
whether or not evidenced by an instrument, all cash and other funds held therein
and all passbooks related thereto and all certificates and instruments, if any,
from time to time representing, evidencing or deposited into such deposit
accounts, including without limitation the Account and the Conditional
Controlled Account.

“Discounted Payoff”: as defined in the Mortgage Loan Agreement.

“Disposition”: with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof. The
terms “Dispose” and “Disposed of” shall have correlative meanings.

“Disregarded Domestic Person”: any direct or indirect Domestic Subsidiary
substantially all of the assets of which consist of the equity of one or more
Foreign Subsidiaries.

“Dollars” and “$”: dollars in lawful currency of the United States.

“Domestic Cash Management Agreement”: as defined in the Mortgage Loan Agreement.

“Domestic Subsidiary”: any Subsidiary that is not a Foreign Subsidiary.

“Environmental Laws”: any and all foreign, Federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to 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.

“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from
time to time.

“ERISA Affiliate”: any trade or business (whether or not incorporated) that,
together with any Group Member, is treated as a single employer under
Section 414 of the Code.

“ERISA Event”: (a) any Reportable Event; (b) the existence with respect to any
Plan of a Prohibited Transaction; (c) any failure by any Pension Plan to satisfy
the minimum funding standards (within the meaning of Section 412 or 430 of the
Code or Section 302 of ERISA) applicable to such Pension Plan), whether or not
waived; (d) the filing of an application for a waiver of the minimum funding
standard with respect to any Pension Plan, the failure to make by its due date a
required installment under Section 430(j) of the Code with respect to any
Pension Plan or the failure by any Group Member or any ERISA Affiliate to make
any required contribution to a Multiemployer Plan; (e) the incurrence by any
Group Member or any ERISA Affiliate of any liability under Title IV of ERISA
with

 

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respect to the termination of any Pension Plan, including but not limited to the
imposition of any Lien in favor of the PBGC or any Pension Plan; (f) a
determination that any Pension Plan is in “at risk” status (within the meaning
of Title IV of ERISA); (g) the receipt by any Group Member or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to an
intention to terminate any Pension Plan or to appoint a trustee to administer
any Pension Plan under Section 4042 of ERISA; (h) the incurrence by any Group
Member or any ERISA Affiliate of any liability with respect to the withdrawal or
partial withdrawal from any Pension Plan or Multiemployer Plan; or (i) the
receipt by any Group Member or any ERISA Affiliate of any notice, or the receipt
by any Multiemployer Plan from a Group Member or any ERISA Affiliate of any
notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is Insolvent, in Reorganization or in endangered or
critical status, within the meaning of Section 432 of the Code or Section 305 or
Title IV of ERISA.

“ESA Gross Income from Operations”: the sum of (i) Gross Income from Operations
plus (ii) Supplemental Gross Income from Operations.

“ESA Group Member”: the collective reference to the Loan Parties and their
respective Subsidiaries.

“ESA Net Operating Income”: for any period the amount obtained by subtracting
ESA Operating Expenses for such period from ESA Gross Income from Operations for
such period.

“ESA Operating Expenses”: the sum of (i) the Operating Expenses and (ii) the
Supplemental Operating Expenses.

“ESA Properties”: the facilities and properties owned, leased or operated by any
ESA Group Member.

“Escrow Account”: the Deposit Account of ESH REIT subject to the Escrow
Agreement.

“Escrow Agreement”: an escrow agreement, in form and substance acceptable to the
Administrative Agent requiring that ESH REIT deposit an amount equal to the net
proceeds from the Extended Stay IPO into the Escrow Account and apply such
proceeds to repay the Mezzanine Loans.

“Escrow Bank”: a depositary bank acceptable to the Administrative Agent at which
ESH REIT will maintain the Escrow Account.

“ESH Conditional Controlled Account”: “Conditional Controlled Account” as
defined in the ESH Revolving Credit Agreement.

“ESH Parties”: the collective reference to ESH REIT and its Subsidiaries

“ESH REIT”: ESH Hospitality, Inc., a Delaware corporation.

“ESH Revolving Credit Agreement”: that certain Credit Agreement, dated as of the
date hereof, by and among ESH REIT, those lenders party thereto, the issuing
lender party thereto and JPMorgan Chase Bank, N.A., as administrative agent.

“ESH Total Revolving Extensions of Credit”: “Total Revolving Extensions of
Credit”, as defined in the ESH Revolving Credit Agreement.

 

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“Eurocurrency Reserve Requirements”: for any day as applied to a Eurodollar
Loan, the aggregate (without duplication) of the maximum rates (expressed as a
decimal fraction) of reserve requirements in effect on such day (including
basic, supplemental, marginal and emergency reserves) under any regulations of
the Board or other Governmental Authority having jurisdiction with respect
thereto dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Board) maintained by a member bank of the Federal Reserve System.

“Eurodollar Base Rate”: with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, the rate per annum (which shall at all times be
positive) determined on the basis of the rate for deposits in Dollars for a
period equal to such Interest Period commencing on the first day of such
Interest Period appearing on the Reuters Screen LIBOR01 Page as of 11:00 A.M.,
London time, two (2) Business Days prior to the beginning of such Interest
Period. In the event that such rate does not appear on such page (or otherwise
on such screen), the “Eurodollar Base Rate” shall be determined by reference to
such other comparable publicly available service for displaying eurodollar rates
as may be selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative Agent is
offered Dollar deposits at or about 11:00 A.M., New York City time, two
(2) Business Days prior to the beginning of such Interest Period in the
interbank eurodollar market where its eurodollar and foreign currency and
exchange operations are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised therein.

“Eurodollar Loans”: Loans the rate of interest applicable to which is based upon
the Eurodollar Rate.

“Eurodollar Rate”: with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula:

 

Eurodollar Base Rate 1.00 - Eurocurrency Reserve Requirements

“Eurodollar Tranche”: the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the same date and
end on the same later date (whether or not such Loans shall originally have been
made on the same day).

“Event of Default”: any of the events specified in Section 8, provided that any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

“Excluded Property”: (a) any fee owned real property with a value of less than
$2,000,000, and all leasehold interests (including landlord waivers, estoppels
and collateral access letters); (b) motor vehicles and other assets subject to
certificates of title, letter of credit rights and commercial tort claims with a
value of less than $2,000,000; (c) pledges and security interests prohibited by
law, rule regulation in each case for so long as such prohibition remains in
effect, or pursuant to any contractual obligation existing on the Closing Date
(or in the case of Indebtedness existing on the Closing Date, pursuant to any
Permitted Refinancing thereof); (d) equity interests of any Foreign Subsidiary
(other than 65% of the outstanding voting equity interests (and 100% of the
non-voting equity interests) of any first-tier Foreign Subsidiary); (e) any
lease, license or other agreement or any property subject to a purchase money
security interest or similar arrangement to the extent that a grant of a
security interest therein would violate or invalidate such lease, license or
agreement or purchase money arrangement or create a right of termination in
favor of, or require the consent of, any other party thereto (other than a Loan
Party) after giving effect to the applicable anti-assignment provisions of the
Uniform Commercial Code (in each case for so long as such prohibition remains in
effect), other than receivables and proceeds

 

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thereof, the assignment of which is expressly deemed effective under the Uniform
Commercial Code notwithstanding such prohibition; (f) interests in partnerships,
joint ventures and non-wholly owned Subsidiaries which cannot be pledged without
the consent of one or more third parties; (g) Exempt Deposit Accounts;
(h) equity interests of any Immaterial Subsidiaries; (i) those assets as to
which the Administrative Agent and the Borrower reasonably determine that the
burden or cost of obtaining such a security interest or perfection thereof
outweighs the benefit to the Lenders of the security to be afforded thereby; and
(j) assets located or titled in any non-U.S. jurisdiction.

“Excluded Subsidiaries”: (a) any Domestic Subsidiary that is prohibited by law,
regulation or by any contractual obligation existing on the Closing Date (or in
the case of Indebtedness existing on the Closing Date, pursuant to any
documentation included with respect to any Permitted Refinancing thereof) or on
the date such Subsidiary is acquired (so long as such prohibition is not
incurred in contemplation of such acquisition) from providing such guaranty or
that would require a governmental (including regulatory) consent, approval,
license or authorization in order to provide such guaranty or where the
provision of such guaranty would result in material adverse tax consequences as
reasonably determined by the Borrower, (b) any Subsidiary that is a Disregarded
Domestic Person, (c) any Domestic Subsidiary that is a direct or indirect
Subsidiary of a Foreign Subsidiary and any Domestic Subsidiary that is an
indirect Subsidiary of a Disregarded Domestic Person, (d) any Immaterial
Subsidiaries, (e) any subsidiary to the extent that the burden or cost of
providing a guaranty outweighs the benefit afforded thereby as reasonably
determined by the Administrative Agent and the Borrower, and (f) the ESH
Parties.

“Excluded Taxes”: any of the following Taxes imposed on or with respect to a
Recipient or required to be withheld or deducted from a payment to a Recipient:
(a) Taxes imposed on or measured by net income (however denominated), franchise
Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such
Recipient being organized under the laws of, or having its principal office or,
in the case of any Lender, its applicable lending office located in, the
jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan, a Revolving Commitment,
or a Swingline Commitment pursuant to a law in effect on the date on which
(i) such Lender acquires such interest in the Loan, Revolving Commitment, or
Swingline Commitment (other than pursuant to an assignment request by the
Borrower under Section 2.21) or (ii) such Lender changes its lending office,
except in each case to the extent that, pursuant to Section 2.18, amounts with
respect to such Taxes were payable either to such Lender’s assignor immediately
before such Lender became a party hereto or to such Lender immediately before it
changed its lending office, (c) Taxes attributable to such Recipient’s failure
to comply with Section 2.18(f) and (d) any U.S. federal withholding Taxes
imposed under FATCA.

“Exempt Deposit Accounts”: (i) Deposit Accounts the balance of which consists
exclusively of (A) withheld income taxes and federal, state or local employment
taxes in such amounts as are required in the reasonable judgment of the Borrower
to be paid to the Internal Revenue Service or state or local government agencies
with respect to employees of any of the Loan Parties, (B) amounts required to be
paid over to an employee benefit plan pursuant to DOL Reg. Sec. 2510.3-102 on
behalf of or for the benefit of employees of one or more Loan Parties and
(ii) all segregated Deposit Accounts constituting (and the balance of which
consists solely of funds set aside in connection with) taxes accounts, payroll
accounts, trust or similar accounts and (C) other non-concentration accounts
containing less than $100,000 individually and in the aggregate for all such
other non-concentration accounts.

“Existing Class”: as defined in Section 2.22(b)(ii).

“Existing Commitments”: as defined in Section 2.22(b)(ii).

 

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“Existing Issuing Lenders”: the “Issuing Lenders”, as defined in the Existing
REIT Credit Facility.

“Existing Letters of Credit”: the “Letters of Credit” (as defined in the
Existing REIT Credit Facility) issued under the Existing REIT Credit Facility
and scheduled on Schedule 1.1C.

“Existing REIT Credit Facility”: the Credit Agreement, dated as of November 30,
2012, by and among Extended Stay LLC, as borrower, JPMorgan Chase Bank, N.A., as
administrative agent, and the lenders, the issuing lender and the swingline
lender party thereto, as amended, restated or otherwise modified from time to
time.

“Extended Commitments”: as defined in Section 2.22(b)(ii).

“Extended Loans”: as defined in Section 2.22(b)(ii).

“Extended Stay IPO”: the initial Public Sale of Borrower and ESH REIT.

“Extending Lender”: as defined in Section 2.22(b)(iii).

“Extension Amendment”: as defined in Section 2.22(b)(iv).

“Extension Election”: as defined in Section 2.22(b)(iii).

“Extension Request”: as defined in Section 2.22(b)(ii).

“Extension Series”: all Extended Commitments that are established pursuant to
the same Extension Amendment (or any subsequent Extension Amendment to the
extent such Extension Amendment expressly provides that the Extended Commitments
are intended to be a part of any previously established Extension Series) and
that provide for the same interest margins, extension fees, maturity and other
terms.

“Face Amount”: as defined in the Mortgage Loan Agreement.

“FATCA”: Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with) and any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471(b)(1) of the Code.

“Federal Funds Effective Rate”: for any day, the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the quotations for
the day of such transactions received by JPMorgan Chase Bank, N.A. from three
federal funds brokers of recognized standing selected by it.

“Fee Payment Date”: (a) the last day of each March, June, September and December
and (b) the last day of the Revolving Commitment Period.

“Foreign Benefit Arrangement”: any employee benefit arrangement mandated by
non-U.S. law that is maintained or contributed to by any Group Member or any
ERISA Affiliate.

“Foreign Lender”: any Lender that is not a U.S. Person.

 

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“Foreign Plan”: each employee benefit plan (within the meaning of Section 3(3)
of ERISA, whether or not subject to ERISA) that is not subject to U.S. law and
is maintained or contributed to by any Group Member or any ERISA Affiliate.

“Foreign Subsidiary”: any Subsidiary that is incorporated or organized under the
laws of any jurisdiction other than the United States of America, any State
thereof or the District of Columbia.

“Fronting Exposure”: at any time there is a Defaulting Lender, (a) with respect
to the Issuing Lender, such Defaulting Lender’s Revolving Percentage of the
outstanding L/C Obligations with respect to the Letters of Credit other than L/C
Obligations as to which such Defaulting Lender’s participation obligation has
been reallocated to other Lenders or Cash Collateralized in accordance with the
terms hereof, and (b) with respect to the Swingline Lender, such Defaulting
Lender’s Revolving Percentage of outstanding Swingline Loans made by such
Swingline Lender other than Swingline Loans as to which such Defaulting Lender’s
participation obligation has been reallocated to other Lenders.

“Funding Office”: the office of the Administrative Agent specified in
Section 10.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.

“GAAP”: generally accepted accounting principles in the United States as in
effect from time to time, except that for purposes of Section 7.1, GAAP shall be
determined on the basis of such principles in effect on the date hereof and
consistent with those used in the preparation of the audited financial
statements referred to in Section 5.1(b)(i). In the event that any “Accounting
Change” (as defined below) shall occur and such change results in a change in
the method of calculation of financial covenants, standards or terms in this
Agreement, then the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
reflect equitably such Accounting Changes with the desired result that the
criteria for evaluating the Borrower’s financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Changes had not occurred. “Accounting
Changes” refers to changes in accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.

“Governing Documents”: (a) with respect to any corporation, the certificate or
articles of incorporation and the bylaws (or equivalent or comparable
constitutive documents with respect to any non-U.S. jurisdiction), (b) with
respect to any limited liability company, the certificate or articles of
formation or organization and operating agreement and (c) with respect to any
partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and, if applicable, any agreement, instrument, filing or notice
with respect thereto filed in connection with its formation or organization with
the applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

“Governmental Authority”: any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative functions of or pertaining to government,
any securities exchange and any self-regulatory organization (including the
National Association of Insurance Commissioners).

 

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“Gross Income from Operations”: as defined in the Mortgage Loan Agreement.

“Group Members”: the collective reference to the Loan Parties and their
respective Subsidiaries (other than the ESH Parties).

“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any
obligation, including a reimbursement, counterindemnity or similar obligation,
of the guaranteeing Person that guarantees or in effect guarantees, or which is
given to induce the creation of a separate obligation by another Person
(including any bank under any letter of credit) that guarantees or in effect
guarantees, 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 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 lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person’s maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.

“Immaterial Subsidiary”: any Subsidiary that, as of the last day of the fiscal
quarter of the Borrower most recently ended, (i) did not have assets with a
value in excess of 2.5% of the Consolidated Total Assets or revenues
representing in excess of 2.5% of total revenues of the Borrower and its
Subsidiaries on a consolidated basis as of such date and (ii) when taken
together with all other Immaterial Subsidiaries as of such date, did not have
assets with a value in excess of 7.5% of the Consolidated Total Assets or
revenues representing in excess of 7.5% of total revenues of the Borrower and
its Subsidiaries on a consolidated basis as of such date. Each Immaterial
Subsidiary as of the Closing Date shall be set forth in Schedule 1.1B.

“Increasing Lender Agreement”: an Increasing Lender Agreement, substantially in
the form of Exhibit G.

“Increasing Repriced Lender”: as defined in Section 2.22(c)(ii).

“Indebtedness”: of any Person at any date, 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 payables incurred in the ordinary course of such Person’s
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (other than customary reservations or
retentions of title under agreements entered into in the ordinary cause of
business), (e) all Capital Lease Obligations of such Person, (f) all obligations
of such Person, contingent or otherwise, as an account party or applicant under
or in respect of acceptances, letters of credit, surety bonds or similar
arrangements,

 

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(g) the liquidation value of all redeemable preferred Capital Stock of such
Person, (h) net obligations of such Person in respect of Swap Agreements,
(i) all Guarantee Obligations of such Person in respect of obligations of the
kind referred to in clauses (a) through (h) above, (j) all obligations of the
kind referred to in clauses (a) through (i) above secured by (or for which the
holder of such obligation has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including accounts and contract rights) owned
by such Person, whether or not such Person has assumed or become liable for the
payment of such obligation. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person’s ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness expressly provide that such
Person is not liable therefor. The amount of any net obligation under any Swap
Agreement on any date shall be deemed to be the Swap Termination Value thereof
as of such date. Notwithstanding the foregoing, Indebtedness shall not include
(A) deferred compensation arrangements, (B) earn-out obligations until matured
or earned or (C) non-compete or consulting obligations incurred in connection
with acquisitions permitted under this Agreement.

“Indemnified Taxes”: (a) Taxes, other than Excluded Taxes, imposed on or with
respect to any payment made by or on account of any obligation of any Loan Party
under any Loan Document and (b) to the extent not otherwise described in (a),
Other Taxes.

“Initial Revolving Termination Date”: November 18, 2016.

“Insolvency”: with respect to any Multiemployer Plan, the condition that such
Plan is insolvent within the meaning of Section 4245 of ERISA.

“Insolvent”: pertaining to a condition of Insolvency.

“Intellectual Property”: the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including copyrights,
copyright licenses, patents, patent licenses, trademarks, trademark licenses,
and intellectual property in technology, know-how and processes, and all rights
to sue at law or in equity for any infringement or other impairment thereof,
including the right to receive all proceeds and damages therefrom.

“Interest Payment Date”: (a) as to any ABR Loan (other than any Swingline Loan),
the last day of each March, June, September and December (or, if an Event of
Default is in existence, the last day of each calendar month) to occur while
such Loan is outstanding and the final maturity date of such Loan, (b) as to any
Eurodollar Loan having an Interest Period of three months or less, the last day
of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period
longer than three months, each day that is three months, or a whole multiple
thereof, after the first day of such Interest Period and the last day of such
Interest Period, (d) as to any Loan (other than any Revolving Loan that is an
ABR Loan and any Swingline Loan), the date of any repayment or prepayment made
in respect thereof and (e) as to any Swingline Loan, the day that such Loan is
required to be repaid.

“Interest Period”: as to any Eurodollar Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one, two, three or six months (or, if agreed
to by all Lenders of the Class participating therein, such other period that is
twelve months or less) thereafter, as selected by the Borrower in its notice of
borrowing or notice of conversion, as the case may be, given with respect
thereto; and (b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Eurodollar Loan and ending one,
two, three or six (or, if agreed to by all Lenders of the Class participating
therein, such other

 

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period that is twelve months or less) months thereafter, as selected by the
Borrower by irrevocable notice to the Administrative Agent not later than 11:00
A.M., New York City time, on the date that is three (3) Business Days prior to
the last day of the then current Interest Period with respect thereto; provided
that, all of the foregoing provisions relating to Interest Periods are subject
to the following:

(i) if any Interest Period would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall end on the
immediately preceding Business Day;

(ii) the Borrower may not select an Interest Period that would extend beyond the
Revolving Termination Date;

(iii) any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month; and

(iv) the Borrower shall select Interest Periods so as not to require a payment
or prepayment of any Eurodollar Loan during an Interest Period for such Loan.

“Irrevocable Account Direction”: as defined in Section 5.1(r).

“Issuing Lender”: each of JPMorgan Chase Bank, N.A. and any other Lender
approved by the Administrative Agent and the Borrower that has agreed in its
sole discretion to act as an “Issuing Lender” hereunder, or any of their
respective affiliates, in each case in its capacity as issuer of any Letter of
Credit. Each reference herein to “the Issuing Lender” shall be deemed to be a
reference to the relevant Issuing Lender.

“Joint Bookrunners”: the collective reference to J.P. Morgan Securities LLC,
Deutsche Bank Securities, Inc. and Goldman Sachs Lending Partners LLC.

“L/C Commitment”: $50,000,000.

“L/C Obligations”: at any time, an amount equal to the sum of (a) the aggregate
then undrawn and unexpired amount of the then outstanding Letters of Credit and
(b) the aggregate amount of drawings under Letters of Credit that have not then
been reimbursed pursuant to Section 3.5.

“L/C Participants”: the collective reference to all the Lenders other than the
Issuing Lender.

“Lead Arrangers”: the collective reference to J.P. Morgan Securities LLC,
Deutsche Bank Securities, Inc. and Goldman Sachs Lending Partners LLC.

“Lease”: with the exception of (a) any occupancy agreement with hotel guests at
any Supplemental Property, or (b) gas, oil or mineral rights leases with respect
to any Supplemental Property provided such lease does not have a material
adverse effect on the business operations or value of the applicable
Supplemental Property, any lease, sublease or subsublease, letting, license,
concession or other agreement (whether written or oral and whether now or
hereafter in effect), including, without limitation, the Supplemental Lease,
pursuant to which any Person is granted a possessory interest in, or right to
use

 

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or occupy all or any portion of any space in any Supplemental Property, and
every modification, amendment or other agreement relating to such lease,
sublease, subsublease, or other agreement entered into in connection with such
lease, sublease, subsublease, or other agreement and every guarantee of the
performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto.

“Lenders”: as defined in the preamble hereto.

“Letters of Credit”: as defined in Section 3.1(a).

“Lien”: any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge or other security interest or any
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement and any capital lease having substantially the same economic
effect as any of the foregoing).

“Loan”: any loan made by any Lender pursuant to this Agreement.

“Loan Documents”: this Agreement, the Subsidiary Guarantee, the Collateral
Documents, the Notes, any Increasing Lender Agreement, any New Lender Agreement
and any amendment, waiver, supplement or other modification to any of the
foregoing.

“Loan Parties”: the collective reference to the Borrower and the Subsidiary
Guarantors.

“Majority in Interest”: when used in reference to Lenders of any Class, means,
at any time the holders of more than 50% of the aggregate amount of the
Revolving Commitments of such Class then in effect or, if the Revolving
Commitments have been terminated, the aggregate amount of the Revolving
Extensions of Credit of such Class outstanding at such time; provided, that the
Revolving Commitments of, and the portion of the aggregate amount of the
Revolving Commitments held or deemed held by, any Defaulting Lender shall be
disregarded in determining Majority in Interest at any time.

“Management Fees”: as defined in the Mortgage Loan Agreement.

“Material Adverse Effect”: any material adverse change to or effect on (a) the
business, operations, properties or condition (financial or otherwise) of the
Group Members, taken as a whole, or (b) the validity or enforceability of this
Agreement or any of the other Loan Documents or the rights or remedies of the
Administrative Agent or the Lenders hereunder or thereunder.

“Materials of Environmental Concern”: 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 asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.

“Mezzanine Borrower”: as defined in the Mortgage Loan Agreement.

“Mezzanine Lender”: as defined in the Mortgage Loan Agreement.

“Mezzanine Loan Documents”: as defined in the Mortgage Loan Agreement.

“Mezzanine Loans”: as defined in the Mortgage Loan Agreement.

 

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“Minimum Collateral Amount”: at any time, (i) with respect to Cash Collateral
consisting of cash or deposit account balances provided to reduce or eliminate
Fronting Exposure during the existence of a Defaulting Lender, an amount equal
to 105% of the Fronting Exposure of the Issuing Lender with respect to Letters
of Credit issued and outstanding at such time, (ii) with respect to Cash
Collateral consisting of cash or deposit account balances provided in accordance
with Sections 2.9(a) or (c), 2.22(c)(iv), or 2.24(a)(i), (ii) or (iii), an
amount equal to 105% of the principal outstanding amount of all L/C Obligations
subject to such provision and (iii) with respect to Cash Collateral consisting
of cash or deposit account balances provided pursuant to the defined term
“Trigger Event Cure”, in accordance with Section 2.9(b) or 2.25, or for purposes
of determining the obligation of the Loan Parties to comply with the provisions
of Section 7.1, an amount equal to 105% of the principal outstanding amount of
all L/C Obligations.

“Mortgage Collateral”: the “Collateral” as defined in the Mortgage Loan
Agreement.

“Mortgage Loan”: the “Loan” as defined in the Mortgage Loan Agreement.

“Mortgage Loan Agreement”: that certain Loan Agreement, dated as of November 30,
2012 (as amended, restated, replaced, supplemented or otherwise modified from
time to time), among JPMorgan Chase Bank, National Association, German American
Capital Corporation, Citigroup Global Markets Realty Corp., Bank of America,
N.A. and Goldman Sachs Mortgage Company, as co-lenders, the Individual Borrowers
as indentified therein, ESA P Portfolio MD Trust, as the Maryland Owner, ESA
Canada Administrator L.L.C., as the Signatory Trustee, ESA Canada Properties
Trust, as the Canadian Trust, ESA P Portfolio Operating Lessee Inc. and ESA
Canada Operating Lessee Inc., as the Operating Lessee, and New ESA P Portfolio
Operating Lessee LLC and New ESA Canada Operating Lessee LLC, as the Operating
Lessee Holdco.

“Mortgage Loan Documents”: the “Loan Documents” as defined in the Mortgage Loan
Agreement.

“Mortgaged Properties”: the Real Properties owned in fee by the Loan Parties
that are set forth on Schedule 6.16 and each additional Real Property encumbered
by a Mortgage pursuant to Section 6.10.

“Mortgages”: collectively, the mortgages, trust deeds, deeds of trust, deeds to
secure debt, assignments of leases and rents, and other security documents
delivered with respect to Mortgaged Properties, in the form to be agreed to by
Administrative Agent and Borrower, as amended, supplemented or otherwise
modified from time to time.

“Multiemployer Plan”: a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

“Net Operating Income”: as defined in the Mortgage Loan Agreement.

“Net Sale Proceeds”: shall mean, the excess, if any, of the sales proceeds in an
arms’ length transaction over the sum of (a) actual out-of-pocket expenses
(including transfer taxes, brokerage commission, and reasonable and customary
transaction costs payable to unaffiliated third parties) incurred by, or on
behalf of, the applicable Group Member and (b) any contractual holdbacks,
escrows and similar amounts (which amounts shall constitute Net Sales Proceeds
if, as and when released to the applicable Group Member), in each case in
connection with the conveyance of any Supplemental Property

“New Repriced Lender”: as defined in Section 2.22(c)(ii).

 

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“New Lender Agreement”: a New Lender Agreement, substantially in the form of
Exhibit H.

“Non-Defaulting Lender”: at any time, each Lender that is not a Defaulting
Lender at such time.

“Notes”: the collective reference to any promissory note evidencing Loans.

“Obligations”: the unpaid principal of and interest on (including interest
accruing after the maturity of the Loans and Reimbursement Obligations and
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender,
whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document, the Letters of Credit, or any
other document made, delivered or given in connection herewith or therewith,
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including all fees, charges and disbursements of
counsel to the Administrative Agent or to any Lender that are required to be
paid by the Borrower pursuant hereto) or otherwise.

“OFAC”: the U.S. Department of the Treasury Office of Foreign Assets Control.

“Operating Expense”: as defined in the Mortgage Loan Agreement.

“Operating Forecast”: with respect to any Person and any period, a detailed
consolidated operating forecast for such Person and its consolidated
Subsidiaries for such period (including a projected consolidated balance sheet
of such Person and its consolidated Subsidiaries as of the end of such period,
the related consolidated statements of projected cash flow and projected income
and a description of the underlying assumptions applicable thereto).

“Operating Lease”: as defined in the Mortgage Loan Agreement.

“Other Charges”: all, maintenance charges, impositions other than Taxes, and any
other charges, including, without limitation, vault charges and license fees for
the use of vaults, chutes and similar areas adjoining any Supplemental Property,
now or hereafter levied or assessed or imposed against such Supplemental
Property or any part thereof.

“Other Connection Taxes”: with respect to any Recipient, Taxes imposed as a
result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes”: all present or future stamp, court or documentary, intangible,
recording, filing or similar Taxes that arise from any payment made under, from
the execution, delivery, performance, enforcement or registration of, from the
receipt or perfection of a security interest under, or otherwise with respect
to, any Loan Document, except any such Taxes that are Other Connection Taxes
imposed with respect to an assignment (other than an assignment made pursuant to
Section 2.21).

 

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“Participant”: as defined in Section 10.6(c).

“Participant Register”: as defined in Section 10.6(c).

“Patriot Act”: the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of
Pub. L. 107-56, Oct. 26, 2001).

“Paulson”: Paulson Advantage Plus Master Ltd., an Exempted Company incorporated
in the Cayman Islands with limited liability, together with its successors and
permitted assigns.

“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (or any successor).

“Pension Plan”: any Plan (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of
ERISA, and in respect of which any Group Member or any ERISA Affiliate is (or,
if such Plan were terminated, would under Section 4069 of ERISA be deemed to be)
an “employer” as defined in section 3(5) of ERISA.

“Permitted Refinancing”: with respect to any Person, any modification,
refinancing, refunding, renewal or extension of any Indebtedness of such Person;
provided that: (i) the principal amount (or accreted value, if applicable) of
the modifying, refinancing, refunding, renewing or extending Indebtedness (the
“Refinancing Indebtedness”) does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness so modified, refinanced, refunded,
renewed or extended (the “Refinanced Debt”) except by an amount equal to unpaid
accrued interest and premium thereon plus other reasonable amount paid, and fees
and expenses reasonably incurred, in connection with such modification,
refinancing, refunding, renewal or extension and by an amount equal to any
existing commitments unutilized thereunder; (ii) the Refinancing Indebtedness
has a final maturity date equal to or later than the final maturity date of, and
has a Weighted Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of, the Refinanced Indebtedness (excluding the effects
of nominal amortization in an amount no greater than one percent per annum);
(iii) if the Refinanced Indebtedness is subordinated to the Obligations, (A) to
the extent the Refinanced Indebtedness is subordinated in right of payment to
the Obligations, such Refinancing Indebtedness is subordinated in right of
payment to the Obligations on terms at least as favorable to the Secured Parties
as those contained in the documentation governing the Refinanced Indebtedness,
and (B) to the extent Liens securing such Refinanced Debt are subordinated to
Liens securing the Obligations, the Liens, if any, securing such Refinancing
Indebtedness are subordinated to the Liens securing the Obligations pursuant to
an intercreditor agreement (and an intercreditor agreement may be amended in a
manner acceptable to the Administrative Agent to provide for such Liens to be
subordinated to the Liens securing the Obligations on a basis consistent with
the intercreditor agreement prior to such modification, refinancing, refunding,
renewal or extension); (iv) the terms relating to principal amount,
amortization, maturity and collateral (if any), and other material terms taken
as a whole, of any Refinancing Indebtedness, and of any agreement entered into
and of any instrument issued in connection therewith, are no less favorable in
any material respect to the Loan Parties or the Lenders than the terms of any
agreement or instrument governing the Refinanced Indebtedness; (v) the direct or
any contingent obligor on the Refinanced Indebtedness is not changed as a result
of or in connection with such modification, refinancing, refunding, renewal or
extension; and (vi) the interest rate applicable to any such Refinancing
Indebtedness does not exceed the then applicable market interest rate.

“Person”: an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.

 

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“Plan”: any employee benefit plan as defined in Section 3(3) of ERISA, including
any employee welfare benefit plan (as defined in Section 3(1) of ERISA), any
employee pension benefit plan (as defined in Section 3(2) of ERISA), and any
plan which is both an employee welfare benefit plan and an employee pension
benefit plan, and in respect of which any Group Member or any ERISA Affiliate is
an “employer” as defined in Section 3(5) of ERISA.

“Prime Rate”: the rate of interest per annum publicly announced from time to
time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal
office in New York City (the Prime Rate not being intended to be the lowest rate
of interest charged by JPMorgan Chase Bank, N.A. in connection with extensions
of credit to debtors).

“Prohibited Transaction”: a non-exempt prohibited transaction as defined in
Section 406 of ERISA and Section 4975(f)(3) of the Code.

“Properties”: as defined in Section 4.16(a).

“Public Sale”: as defined in the Mortgage Loan Agreement.

“Public Vehicle”: a Person whose securities are listed and traded on a
nationally or internationally recognized securities exchange or quoted on a
nationally or internationally recognized automated quotation system and shall
include a majority owned subsidiary of any such Person or any operating
partnership through which such Person conducts all or substantially all of its
business.

“Real Property”: collectively, all right, title and interest (including any
leasehold estate) in and to any and all parcels of or interests in real property
owned in fee or leased by any Loan Party, together with, in each case, all
easements, hereditaments and appurtenances relating thereto, all improvements
and appurtenant fixtures incidental to the ownership or lease thereof.

“Recipient”: (a) the Administrative Agent, (b) any Lender, (c) the Issuing
Lender and (d) the Swingline Lender, as applicable.

“Refunded Swingline Loans”: as defined in Section 2.4(b).

“Register”: as defined in Section 10.6(b).

“Regulation U”: Regulation U of the Board as in effect from time to time.

“Reimbursement Obligation”: the obligation of the Borrower to reimburse the
Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of
Credit.

“REIT Distribution”: as defined in Section 7.5(c).

“Reorganization”: with respect to any Multiemployer Plan, the condition that
such plan is in reorganization within the meaning of Section 4241 of ERISA.

“Replacements”: as defined in the Mortgage Loan Agreement.

“Reportable Event”: any of the events set forth in Section 4043(c) of ERISA,
other than those events as to which the thirty day notice period is waived under
subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. § 4043, with
respect to a Pension Plan.

“Repriced Commitments”: as defined in Section 2.22(c)(ii).

 

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“Repricing Amendment”: as defined in Section 2.22(c)(iii).

“Repricing Election”: as defined in Section 2.22(c)(ii).

“Repricing Request”: as defined in Section 2.22(c)(i).

“Required Lenders”: at any time, the holders of more than 50% of the Total
Revolving Commitments then in effect or, if the Revolving Commitments have been
terminated, the Total Revolving Extensions of Credit then outstanding; provided,
that the Revolving Commitments of, and the portion of the Total Revolving
Extensions of Credit held or deemed held by, any Defaulting Lender shall be
disregarded in determining Required Lenders at any time.

“Requirement of Law”: as to any Person, the certificate of incorporation and
by-laws or other organizational or Governing Documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.

“Responsible Officer”: the chief executive officer, president, vice president or
chief financial officer of a Person, or, with respect to a Sponsor, a director,
authorized signatory, assistant secretary, managing director or assistant
treasurer thereof, but in any event, with respect to financial matters, the vice
president of the applicable Loan Party with financial knowledge of such Loan
Party.

“Restoration”: the repair and restoration of an Supplemental Property after a
Casualty or Condemnation as nearly as possible to the condition the Supplemental
Property was in immediately prior to such Casualty or Condemnation, with such
alterations as may be made in Borrower’s reasonable discretion.

“Restricted Payments”: as defined in Section 7.5.

“Restructuring”: as defined in the Mortgage Loan Agreement

“Revolving Commitment”: as to any Lender, the obligation of such Lender, if any,
to make Revolving Loans and participate in Swingline Loans and Letters of Credit
in an aggregate principal and/or face amount not to exceed the amount set forth
under the heading “Revolving Commitment” opposite such Lender’s name on Schedule
1.1A or in the Assignment and Assumption or the New Lender Agreement pursuant to
which such Lender became a party hereto, as the same may be changed from time to
time pursuant to the terms hereof. The original amount of the Total Revolving
Commitments is $75,000,000 provided that the Revolving Commitment shall be
reduced, pro rata among the Lenders, to $50,000,000 on the first anniversary of
the Closing Date.

“Revolving Commitment Period”: the period from and including the Closing Date to
the Revolving Termination Date; provided, that any day on which a Trigger Event
has occurred and is continuing shall be deemed not to fall within the Revolving
Commitment Period.

“Revolving Extensions of Credit”: as to any Lender at any time, an amount equal
to the sum of (a) the aggregate principal amount of all Revolving Loans held by
such Lender then outstanding, (b) such Lender’s Revolving Percentage of the L/C
Obligations then outstanding and (c) such Lender’s Revolving Percentage of the
aggregate principal amount of Swingline Loans then outstanding.

“Revolving Loans”: as defined in Section 2.1(a).

 

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“Revolving Percentage”: as to any Lender at any time, the percentage which such
Lender’s Revolving Commitment then constitutes of the Total Revolving
Commitments or, at any time after the Revolving Commitments shall have expired
or terminated, the percentage which the aggregate principal amount of such
Lender’s Revolving Loans then outstanding constitutes of the aggregate principal
amount of the Revolving Loans then outstanding, provided, that, in the event
that the Revolving Loans are paid in full prior to the reduction to zero of the
Total Revolving Extensions of Credit, the Revolving Percentages shall be
determined in a manner designed to ensure that the other outstanding Revolving
Extensions of Credit shall be held by the Lenders on a comparable basis.

“Revolving Termination Date”: the earlier to occur of (a) the Initial Revolving
Termination Date, as such date may be extended pursuant to Section 2.22(b), or
(b) if Component A or Component B remains outstanding at the time, June 4, 2017.

“Sanctioned Country”: at any time, a country or territory which is the subject
or target of any Sanctions.

“Sanctioned Person”: at any time, (a) any Person listed in any Sanctions-related
list of designated Persons maintained by the Office of Foreign Assets Control of
the U.S. Department of the Treasury, the U.S. Department of State, (b) any
Person operating, organized or resident in a Sanctioned Country or (c) any
Person controlled by any such Person.

“Sanctions”: economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by the U.S. government, including
those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State.

“SEC”: the Securities and Exchange Commission, any successor thereto and any
analogous Governmental Authority.

“Section 2.22(b) Additional Amendment”: as defined in Section 2.22(b)(iv).

“Secured Parties”: collectively, the Administrative Agent, the Lenders, the
Issuing Lender, and the other Persons the Obligations owing to which are or are
purported to be secured by the Collateral under the terms of the Collateral
Documents.

“Security Agreement”: the Security Agreement to be executed and delivered by the
Loan Parties on the Closing Date, substantially in the form of Exhibit B.

“Solvent”: when used with respect to any Person, means that, as of any date of
determination, (a) the amount of the “present fair saleable value” of the assets
of such Person will, as of such date, exceed the amount of all “liabilities of
such Person, contingent or otherwise”, as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable value
of the assets of such Person will, as of such date, be greater than the amount
that will be required to pay the liability of such Person on its debts as such
debts become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they mature. For
purposes of this definition, (i) “debt” means liability on a “claim”, and
(ii) “claim” means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or
(y) right to an equitable remedy for breach of performance if such breach gives
rise to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.

 

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“Specified Terms”: those terms and conditions of the Subsidiary Loan Documents
that (a) are defined in the Loan Documents with reference to a definition in the
Mortgage Loan Documents, and any constituent definitions component thereof,
(b) relate to the definition of “Cash Trap Event” (as defined in the Mortgage
Loan Document), the result of an occurrence of a Cash Trap Event including the
application of funds therefrom and any constituent definitions component
thereof, including, without limitation, the percentage of “Debt Yield” (as
defined in the Mortgage Loan Agreement) used for purposes of calculating a “Debt
Yield Trigger Event” (as defined in the Mortgage Loan Agreement), and (c) upon
any amendment, supplement or modification thereof, would result in the aggregate
principal amount of Indebtedness under the Subsidiary Loan Documents being
greater than such Indebtedness immediately prior to such amendment, supplement
or modification. Notwithstanding the above, after the occurrence and during the
continuation of a Trigger Event, terms and conditions of the Subsidiary Loan
Documents related to the restriction on amendment, termination or other
modification or waiver of the Operating Lease, including Section 5.2.12 of the
Mortgage Loan Agreement shall be deemed to be “Specified Terms” for the purpose
of this definition.

“Sponsor”: individually or collectively, as the context may require,
Centerbridge, Paulson and BREP.

“Subsidiary”: as to any Person, a corporation, partnership, limited liability
company 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. Unless otherwise qualified, all references to a
“Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary
or Subsidiaries of the applicable Loan Party.

“Subsidiary Guarantors”: each Domestic Subsidiary of the Borrower, whether
existing on the Closing Date or formed or acquired thereafter, in each case,
other than Excluded Subsidiaries.

“Subsidiary Guarantee”: the Subsidiary Guarantee to be made by the Subsidiary
Guarantors in favor of the Administrative Agent and the Lenders, substantially
in the form of Exhibit A.

“Subsidiary Loan Documents”: collectively, the Mortgage Loan Documents and the
Mezzanine Loan Documents.

“Subsidiary Properties”: the “Properties” as defined in the Mortgage Loan
Agreement.

“Supplemental Hotel Tax”: federal, provincial, state and municipal excise,
occupancy sales and use taxes collected by or on behalf of Borrower or any
Subsidiary of Borrower directly from patrons or guests of the Supplemental
Properties as part of or based on the sales price of any goods, services or
other items, such as gross receipts, room, admission, cabaret or equivalent
taxes and required to be paid to a Governmental Authority.

“Supplemental Lease”: collectively those certain Leases, other than the
Operating Leases, entered into from time to time, between Borrower or any
Subsidiary thereof, as lessor, and the Supplemental Lessee thereunder, as lessee
with respect to the Supplemental Properties.

“Supplemental Lessee”: collectively, those lessees party to the Supplemental
Leases from time to time.

 

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“Supplemental Gross Income from Operations”: without duplication, all income and
proceeds (whether in cash or on credit, and computed on an accrual basis)
received by or on behalf of Borrower, any Subsidiary of Borrower or Supplemental
Lessee, or by Supplemental Property Manager on behalf of Borrower, any
Subsidiary of Borrower or Supplemental Lessee for the use, occupancy or
enjoyment, or license to use, occupy or enjoy the Supplemental Properties, or
received by Borrower, any Subsidiary of Borrower or Supplemental Lessee, or by
Supplemental Property Manager on behalf of Borrower, any Subsidiary of Borrower
or Supplemental Lessee, for the sale of any goods, services or other items sold
on or provided from the Collateral in the ordinary course of the operation of
the Collateral, including, without limitation: (i) all income and proceeds
received from rental of rooms, Leases and commercial space, meeting, conference
and/or banquet space within the Supplemental Properties, if any, including
parking revenue; (ii) all income and proceeds received from food and beverage
operations and from catering services conducted from the Supplemental
Properties, if any, even though rendered outside of the Supplemental Properties;
(iii) all income and proceeds from business interruption, rental interruption
and use and occupancy insurance with respect to the operation of the
Supplemental Properties (after deducting therefrom all necessary costs and
expenses incurred in the adjustment or collection thereof); (iv) all Awards for
temporary use (after deducting therefrom all costs incurred in the adjustment or
collection thereof and in Restoration of the Supplemental Properties); (v) all
income and proceeds from judgments, settlements and other resolutions of
disputes with respect to matters which would be includable in this definition of
“Supplemental Gross Income from Operations” if received in the ordinary course
of the operation of the Supplemental Properties (after deducting therefrom all
necessary costs and expenses incurred in the adjustment or collection thereof);
(vi) interest on credit accounts, rent concessions or credits, and other
required pass-throughs and interest on any reserve funds related to such
Supplemental Properties; and (vii) all other income from operation of the
Supplemental Properties, including, without limitation, laundry and vending
income; but excluding, (1) gross receipts received by lessees (other than
Supplemental Lessee), licensees or concessionaires of the Supplemental
Properties, (2) consideration received at the Supplemental Properties for hotel
accommodations, goods and services to be provided at other hotels not
constituting, directly or indirectly, a portion of the Supplemental Properties,
although arranged by, for or on behalf of Borrower, any Subsidiary of Borrower
or Supplemental Lessee or Supplemental Property Manager; (3) income and proceeds
from the sale or other disposition of goods, capital assets and other items not
in the ordinary course of operation of the Supplemental Properties;
(4) Supplemental Hotel Taxes; (5) Awards (except to the extent provided in
clause (d) above); (6) refunds of amounts not included in Supplemental Operating
Expenses at any time and uncollectible accounts; (7) gratuities collected by the
employees at the Supplemental Properties; (8) the proceeds of any permitted
financing; (9) other income or proceeds resulting other than from the use or
occupancy of the Supplemental Properties, or any part thereof, or other than
from the sale of goods, services or other items sold on or provided from the
Supplemental Properties in the ordinary course of business; (10) any credits or
refunds made to customers, guests or patrons in the form of allowances or
adjustments to previously recorded revenues; (11) rent payments made and
received under the Supplemental Leases and (12) proceeds from the sale of any
Supplemental Property, including Net Sales Proceeds.

“Supplemental Management Agreement”: collectively, those management agreements
by and among the Supplemental Property Manager, the ESA Group Members party
thereto and those other parties party thereto from time to time.

“Supplemental Management Fees”: shall mean, collectively, all fees payable to
the Supplemental Manager pursuant to the Supplemental Management Agreement
(without duplication).

“Supplemental Operating Expenses”: without duplication, the sum of all costs and
expenses of operating, maintaining, directing, managing and supervising the
Supplemental Properties (excluding, (i) depreciation and amortization, (ii) any
interest payments payable on any mortgage or

 

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mezzanine Indebtedness incurred in connection with such Supplemental Properties
, (iii) any Capital Expenditures in connection with the Supplemental Properties,
(iv) deposits required to be made to any reserve funds related to such
Supplemental Properties, and (v) rent paid by Supplemental Lessee under the
Supplemental Lease) incurred by any ESA Group Member or Supplemental Lessee (or
by Supplemental Property Manager on behalf of Supplemental Lessee pursuant to
the Supplemental Management Agreement, for the account of any ESA Group Member
or Supplemental Lessee), or as otherwise specifically provided therein, which
are properly attributable to the period under consideration under such ESA Group
Member’s and/or Supplemental Property Manager’s system of accounting, including,
without limitation: (a) the cost of all food and beverages sold or consumed, if
any, and of all necessary chinaware, glassware, linens, flatware, uniforms,
utensils and other items of a similar nature, if any, including such items
bearing the name or identifying characteristics of the hotels as such ESA Group
Member, Supplemental Lessee and/or Supplemental Property Manager shall
reasonably consider appropriate (“Operating Equipment”) and paper supplies,
cleaning materials and similar consumable items (“Operating Supplies”) placed in
use (other than reserve stocks thereof in storerooms) (Operating Equipment and
Operating Supplies shall be considered to have been placed in use when they are
transferred from the storerooms of the Supplemental Properties to the
appropriate operating departments); (b) salaries and wages of personnel of the
Supplemental Properties (regardless of whether such personnel are employees of a
ESA Group Member, Supplemental Lessee or Supplemental Property Manager),
including costs of payroll taxes and employee benefits (which benefits may
include, without limitation, a pension plan, medical insurance, life insurance,
travel accident insurance and an executive bonus program) and the costs of
moving (i) employees of the Supplemental Properties whose primary duties consist
of the management of the Supplemental Properties or of a recognized department
or division thereof or (ii) personnel (A) who customarily and regularly direct
the work of five (5) or more other employees of the Supplemental Properties;
(B) who have authority with reference to the hiring, firing and advancement of
the employees of the Supplemental Properties; (C) who customarily and regularly
exercise discretionary powers; (D) who devote at least ninety five percent
(95%) of their work time to activities which are directly and closely related to
the performance of the work described in clauses (A) through (C) of clause
(ii) of this sentence; and (E) who are not compensated on an hourly basis (the
“Executive Hotel Personnel”), their families and their belongings to the area in
which the Supplemental Properties are located at the commencement of their
employment at the Supplemental Properties and all other expenses not otherwise
specifically referred to in this definition which are referred to as
“Administrative and General Expenses” in the Uniform System of Accounts; (c) the
cost of all other goods and services obtained by any ESA Group Member,
Supplemental Lessee or Supplemental Property Manager in connection with its
operation of the Supplemental Properties including, without limitation, heat and
utilities, office supplies and all services performed by third parties,
including leasing expenses in connection with telephone and data processing
equipment, and all existing and any future installations necessary for the
operation of the Improvements for hotel purposes (including, without limitation,
heating, lighting, sanitary equipment, air conditioning, laundry, refrigerating,
built-in kitchen equipment, telephone equipment, communications systems,
computer equipment and elevators, if any), Operating Equipment and existing and
any future furniture, furnishings, wall coverings, fixtures and hotel equipment
necessary for the operation of the building for hotel purposes which shall
include all equipment required for the operation of kitchens, bars, laundries,
(if any) and dry cleaning facilities (if any), office equipment, cleaning and
engineering equipment and vehicles; (d) the cost of repairs to and maintenance
of the Supplemental Properties; (e) insurance premiums for general liability
insurance, workers’ compensation insurance or insurance required by similar
employee benefits acts and such business interruption or other insurance as may
be provided for protection against claims, liabilities and losses arising from
the operation of the Supplemental Properties (as distinguished from any property
damage insurance on the Supplemental Properties building or its contents) and
losses incurred on any self-insured risks of the foregoing types, provided that
ESA Group Member and Supplemental Property Manager have specifically approved in
advance such self-insurance or insurance is unavailable to cover such risks
(premiums on policies for more than one year will be pro rated over the period
of insurance and

 

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premiums under blanket policies will be allocated among properties covered);
(f) all Taxes and Other Charges (other than federal, state or local income taxes
and franchise taxes or the equivalent) payable by or assessed against any ESA
Group Member, Supplemental Lessee or Supplemental Property Manager with respect
to the operation of the Supplemental Properties; (g) without duplication of any
amount paid or reimbursed under the Supplemental Management Agreement, legal
fees and fees of any firm of independent certified public accounts designated
from time to time by any ESA Group Member (the “Independent CPA”) for services
directly related to the operation of the Supplemental Properties; (h) without
duplication of any amount paid or reimbursed under the Supplemental Management
Agreement, the costs and expenses of technical consultants and specialized
operational experts for specialized services in connection with non-recurring
work on operational, legal, functional, decorating, design or construction
problems and activities; (i) without duplication of any amount paid or
reimbursed under the Supplemental Management Agreement all expenses for
advertising for the Supplemental Properties and all expenses of sales promotion
and public relations activities; (j) without duplication of any amount paid or
reimbursed under the Supplemental Management Agreement, all out-of-pocket
expenses and disbursements determined by the Independent CPA to have been
reasonably, properly and specifically incurred by any ESA Group Member,
Supplemental Lessee or any of their Affiliates pursuant to, in the course of and
directly related to, the management and operation of the Supplemental Properties
under the Supplemental Management Agreement (without limiting the generality of
the foregoing, such charges may include all reasonable travel, telephone,
telegram, radiogram, cablegram, air express and other incidental expenses, but,
shall exclude costs relating to the offices maintained by any ESA Group Member,
Supplemental Lessee or any of their Affiliates other than the offices maintained
at the Supplemental Property for the management of such Supplemental Property
and excluding transportation costs of ESA Group Members, Supplemental Lessee or
the Supplemental Property Manager related to meetings between the ESA Group
Member, Supplemental Lessee and Supplemental Property Manager with respect to
administration of the Supplemental Management Agreement or of the Supplemental
Properties involving travel away from such party’s principal executive offices);
(k) without duplication of any amount paid or reimbursed under the Supplemental
Management Agreement, the cost of any reservations system, any accounting
services or other group benefits, programs or services from time to time made
available to Supplemental Properties in ESA Group Member’s system; (l) the cost
associated with any retail Leases and all costs and expenses of owning,
maintaining, conducting and supervising the operation of the Supplemental
Properties to the extent such costs and expenses are not included above; and
(m) any management fees, basic and incentive fees or other fees and
reimbursables paid or payable to Supplemental Property Manager under the
Supplemental Management Agreement.

“Supplemental Properties”: ESA Properties other than the Subsidiary Properties.

“Supplemental Property Manager”: collectively, those certain managers engaged to
manage the Supplemental Properties.

“Supplemental Replacements”: collectively, the costs of replacements, repairs,
furniture, fixtures and hotel equipment required to be made to the Supplemental
Properties and any buildings, structures, fixtures, additions, enlargements,
extensions, modifications, repairs, replacements and improvements now and
hereafter erected or located on or with respect to the Supplemental Properties.

“Swap Agreement”: any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by
reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of any Loan Party or any of
their respective Subsidiaries shall be a “Swap Agreement”.

 

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“Swap Termination Value”: in respect of any one or more Swap Agreements, after
taking into account the effect of any legally enforceable netting agreement
relating to such Swap Agreements, (a) for any date on or after the date such
Swap Agreements have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Agreements, as determined based upon one
or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Agreements (which may include a Lender or any
Affiliate of a Lender).

“Swingline Commitment”: the obligation of the Swingline Lender to make Swingline
Loans pursuant to Section 2.3 in an aggregate principal amount at any one time
outstanding not to exceed $20,000,000.

“Swingline Lender”: JPMorgan Chase Bank, N.A., in its capacity as the lender of
Swingline Loans.

“Swingline Loans”: as defined in Section 2.3.

“Swingline Participation Amount”: as defined in Section 2.4(c).

“Syndication Agents”: as defined in the preamble hereto.

“Taxes”: any and all present or future taxes, levies, imposts, duties,
deductions, assessments, fees, charges or withholdings (including backup
withholding) imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.

“Total Revolving Commitments”: at any time, the aggregate amount of the
Revolving Commitments then in effect.

“Total Revolving Extensions of Credit”: at any time, the aggregate amount of the
Revolving Extensions of Credit of the Lenders outstanding at such time.

“Total Unused Commitment”: at any time, an amount equal to the remainder of
(x) the Total Revolving Commitments then in effect less (y) the Aggregate
Exposure at such time.

“Transferee”: any Assignee or Participant.

“Trigger Event”: shall have occurred if, (a) as of the last day of any calendar
month ending during the period from the Closing Date until, but excluding, the
first anniversary of the Closing Date, the Debt Yield is less than 11.50 % and
(b) as of the last day of any calendar month ending on or after the first
anniversary of the Closing Date, the Debt Yield is less than 12.00%; provided,
that a Trigger Event shall cease to exist following a Trigger Event Cure with
respect to such Trigger Event.

“Trigger Event Cure”: with respect to any Trigger Event, the occurrence of
(a) the repayment by the Borrower in full of all outstanding Loans, outstanding
Reimbursement Obligations and the Cash Collateralization of all L/C Obligations
in an amount not less than the Minimum Collateral Amount and (b) a Debt Yield of
equal to or greater than, as of the last day of each of the three calendar
months immediately succeeding the calendar month during which such Trigger Event
occurred, the required percentage for such calendar month described in the next
succeeding sentence. The required percentage referred to in the immediately
preceding sentence for any calendar month shall be (x) for each calendar month
ended prior to but excluding the first anniversary of the Closing Date, 11.50%,
and (y) for each calendar month ended on or after the first anniversary of the
Closing Date, 12.00%.

 

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“Type”: as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.

“Uniform System of Accounts”: as defined in the Mortgage Loan Agreement.

“United States”: the United States of America.

“U.S. Person”: any Person that in a “United States person” within the meaning of
Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate”: as defined in Section 2.18(f)(ii)(B)(3).

“Voting Stock”: with respect to any Person, shares of such Person’s Capital
Stock having the right to vote for the election of directors of such Person
under ordinary circumstances.

“Weighted Average Life to Maturity”: when applied to any Indebtedness at any
date, the number of years obtained by dividing: (i) the sum of the products
obtained by multiplying (x) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by (y) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment; by (ii) the then outstanding principal amount of
such Indebtedness.

“Withdrawal Liability”: any liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Title IV of ERISA.

1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all
terms defined in this Agreement shall have the defined meanings when used in the
other Loan Documents or any certificate or other document made or delivered
pursuant hereto or thereto.

(b) As used herein and in the other Loan Documents, and any certificate or other
document made or delivered pursuant hereto or thereto, (i) accounting terms
relating to any ESA Group Member not defined in Section 1.1 and accounting terms
partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP (provided that, notwithstanding
anything to the contrary herein, all accounting or financial terms used herein
shall be construed, and all financial computations pursuant hereto shall be
made, without giving effect to any election under Statement of Financial
Accounting Standards 159 (or any other Financial Accounting Standard having a
similar effect) to value any Indebtedness or other liabilities of any ESA Group
Member at “fair value”, as defined therein), (ii) the words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”, (iii) the word “incur” shall be construed to mean incur, create,
issue, assume, become liable in respect of or suffer to exist (and the words
“incurred” and “incurrence” shall have correlative meanings), (iv) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, Capital Stock, securities, revenues, accounts, leasehold
interests and contract rights, and (v) references to agreements or other
Contractual Obligations shall, unless otherwise specified, be deemed to refer to
such agreements or Contractual Obligations as amended, supplemented, restated or
otherwise modified from time to time.

(c) The words “hereof”, “herein” and “hereunder” and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.

 

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(d) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

(e) Unless the context requires otherwise, (i) any definition of or reference to
any agreement, instrument or other document (including any Governing Document)
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or in any other Loan Document), (ii) any reference herein to any Person shall be
construed to include such Person’s successors and assigns and (iii) any
reference to any law shall include all statutory and regulatory provisions
consolidating, amending, replacing or interpreting such law and any reference to
any law or regulation shall, unless otherwise specified, refer to such law or
regulation as amended, modified or supplemented from time to time.

1.3 Classifications of Loans. For purposes of this Agreement, Loans and
Commitments may be classified and referred to by Class (e.g., an “Existing
Loan”, “Extended Loan”, “Existing Commitment” or “Extended Commitment”) or by
Type (e.g., an “ABL Loan” or “Eurodollar Loan”).

SECTION 2. AMOUNT AND TERMS OF REVOLVING COMMITMENTS

2.1 Revolving Commitments. (a) Subject to the terms and conditions hereof, each
Lender severally agrees to make revolving credit loans (“Revolving Loans”) to
the Borrower from time to time during the Revolving Commitment Period in an
aggregate principal amount at any one time outstanding which, when added to such
Lender’s Revolving Percentage of the sum of (i) the L/C Obligations then
outstanding and (ii) the aggregate principal amount of the Swingline Loans then
outstanding, does not exceed the amount of such Lender’s Revolving Commitment.
During the Revolving Commitment Period the Borrower may use the Revolving
Commitments by borrowing, prepaying the Revolving Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. Subject to
Section 2.14, the Revolving Loans may from time to time be Eurodollar Loans or
ABR Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.2 and 2.10.

(b) The Borrower shall repay all outstanding Revolving Loans on the Revolving
Termination Date.

2.2 Procedure for Revolving Loan Borrowing. The Borrower may borrow under the
Revolving Commitments during the Revolving Commitment Period on any Business
Day, provided that the Borrower shall give the Administrative Agent irrevocable
notice (which notice must be received by the Administrative Agent prior to 11:00
A.M., New York City time, (a) three (3) Business Days prior to the requested
Borrowing Date, in the case of Eurodollar Loans, or (b) the requested Borrowing
Date, in the case of ABR Loans) (provided that any such notice of a borrowing of
ABR Loans to finance payments required by Section 3.5 may be given not later
than 10:00 A.M., New York City time, on the date of the proposed borrowing),
specifying (i) the amount, Class and Type of Revolving Loans to be borrowed,
(ii) the requested Borrowing Date and (iii) in the case of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Period therefor. Any Revolving Loans made on the Closing Date
shall initially be ABR Loans unless the Borrower has provided to the
Administrative Agent and the Lenders a funding indemnity in form and substance
reasonably satisfactory to the Administrative Agent. Each borrowing of Revolving
Loans shall be in an amount equal to (x) in

 

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the case of ABR Loans, $500,000 or a whole multiple of $100,000 in excess
thereof and (y) in the case of Eurodollar Loans, $3,000,000 or a whole multiple
of $1,000,000 in excess thereof; provided, that the Swingline Lender may
request, on behalf of the Borrower, borrowings of Revolving Loans that are ABR
Loans in other amounts pursuant to Section 2.4. Upon receipt of any such notice
from the Borrower, the Administrative Agent shall promptly notify each Lender of
the applicable Class thereof. Each Lender of the applicable Class will make the
amount of its pro rata share of each borrowing available to the Administrative
Agent for the account of the Borrower at the Funding Office prior to 1:00 P.M.,
New York City time, on the Borrowing Date requested by the Borrower in funds
immediately available to the Administrative Agent. Such borrowing will then be
made available to the Borrower by the Administrative Agent crediting the account
of the Borrower on the books of such office with the aggregate of the amounts
made available to the Administrative Agent by the Lenders and in like funds as
received by the Administrative Agent.

2.3 Swingline Commitment. (a) Subject to the terms and conditions hereof, the
Swingline Lender agrees to make a portion of the credit otherwise available to
the Borrower under the Revolving Commitments from time to time during the
Revolving Commitment Period by making swing line loans (“Swingline Loans”) to
the Borrower; provided that (i) the aggregate principal amount of Swingline
Loans outstanding at any time shall not exceed the Swingline Commitment then in
effect (notwithstanding that the Swingline Loans outstanding at any time, when
aggregated with the Swingline Lender’s other outstanding Revolving Loans, may
exceed the Swingline Commitment then in effect) and (ii) the Borrower shall not
request, and the Swingline Lender shall not make, any Swingline Loan if, after
giving effect to the making of such Swingline Loan, the aggregate amount of the
Available Revolving Commitments would be less than zero. During the Revolving
Commitment Period, the Borrower may use the Swingline Commitment by borrowing,
repaying and reborrowing, all in accordance with the terms and conditions
hereof. Swingline Loans shall be ABR Loans only.

(b) The Borrower shall repay to the Swingline Lender the then unpaid principal
amount of each Swingline Loan on the earlier of the Revolving Termination Date
and the date that is seven (7) Business Days after such Swingline Loan is made;
provided that on each date that a Revolving Loan is borrowed, the Borrower shall
repay all Swingline Loans then outstanding.

2.4 Procedure for Swingline Borrowing; Refunding of Swingline Loans.
(a) Whenever the Borrower desires that the Swingline Lender make Swingline Loans
it shall give the Swingline Lender irrevocable telephonic notice confirmed
promptly in writing (which telephonic notice must be received by the Swingline
Lender not later than 1:00 P.M., New York City time, on the proposed Borrowing
Date), specifying (i) the amount to be borrowed and (ii) the requested Borrowing
Date (which shall be a Business Day during the Revolving Commitment Period).
Each borrowing under the Swingline Commitment shall be in an amount equal to
$500,000 or a whole multiple of $100,000 in excess thereof. Not later than 3:00
P.M., New York City time, on the Borrowing Date specified in a notice in respect
of Swingline Loans, the Swingline Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to the amount of the Swingline Loan to be made by the Swingline
Lender. The Administrative Agent shall make the proceeds of such Swingline Loan
available to the Borrower on such Borrowing Date by depositing such proceeds in
the account of the Borrower with the Administrative Agent on such Borrowing Date
in immediately available funds.

(b) The Swingline Lender, at any time and from time to time in its sole and
absolute discretion may, on behalf of the Borrower (which hereby irrevocably
directs the Swingline Lender to act on its behalf), on one (1) Business Day’s
notice given by the Swingline Lender no later than 12:00 Noon, New York City
time, request each Lender to make, and each Lender hereby agrees to make, a
Revolving Loan, in an amount equal to such Lender’s Revolving Percentage of the
aggregate amount of the Swingline Loans (the “Refunded Swingline Loans”)
outstanding on the date of such notice, to repay the

 

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Swingline Lender. Each Lender shall make the amount of such Revolving Loan
available to the Administrative Agent at the Funding Office in immediately
available funds, not later than 10:00 A.M., New York City time, one (1) Business
Day after the date of such notice. The proceeds of such Revolving Loans shall be
immediately made available by the Administrative Agent to the Swingline Lender
for application by the Swingline Lender to the repayment of the Refunded
Swingline Loans. The Borrower irrevocably authorizes the Swingline Lender to
charge the Borrower’s accounts with the Administrative Agent (up to the amount
available in each such account) in order to immediately pay the amount of such
Refunded Swingline Loans to the extent amounts received from the Lenders are not
sufficient to repay in full such Refunded Swingline Loans.

(c) If prior to the time a Revolving Loan would have otherwise been made
pursuant to Section 2.4(b), one of the events described in Section 8.1(g) shall
have occurred and be continuing with respect to the Borrower or if for any other
reason, as determined by the Swingline Lender in its sole discretion, Revolving
Loans may not be made as contemplated by Section 2.4(b), each Lender shall, on
the date such Revolving Loan was to have been made pursuant to the notice
referred to in Section 2.4(b), purchase for cash an undivided participating
interest in the then outstanding Swingline Loans by paying to the Swingline
Lender an amount (the “Swingline Participation Amount”) equal to (i) such
Lender’s Revolving Percentage times (ii) the sum of the aggregate principal
amount of Swingline Loans then outstanding that were to have been repaid with
such Revolving Loans.

(d) Whenever, at any time after the Swingline Lender has received from any
Lender such Lender’s Swingline Participation Amount, the Swingline Lender
receives any payment on account of the Swingline Loans, the Swingline Lender
will distribute to such Lender its Swingline Participation 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 and, in
the case of principal and interest payments, to reflect such Lender’s pro rata
portion of such payment if such payment is not sufficient to pay the principal
of and interest on all Swingline Loans then due); provided, however, that in the
event that such payment received by the Swingline Lender is required to be
returned, such Lender will return to the Swingline Lender any portion thereof
previously distributed to it by the Swingline Lender.

(e) Each Lender’s obligation to make the Loans referred to in Section 2.4(b) and
to purchase participating interests pursuant to Section 2.4(c) shall be absolute
and unconditional and shall not be affected by any circumstance, including
(i) any setoff, counterclaim, recoupment, defense or other right that such
Lender or the Borrower may have against the Swingline Lender, the Borrower or
any other Person for any reason whatsoever, (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5, (iii) any adverse change in the condition
(financial or otherwise) of the Borrower, (iv) any breach of this Agreement or
any other Loan Document by the Borrower, any other Loan Party or any other
Lender or (v) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing.

2.5 Commitment Fees, etc. (a) The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee for the period from and
including the date hereof to the last day of the Revolving Commitment Period,
computed at the Commitment Fee Rate on the average daily amount of the Available
Revolving Commitment of such Lender during the period for which payment is made,
payable quarterly in arrears on each Fee Payment Date, commencing on the first
such date to occur after the date hereof. For the avoidance of doubt, each
Lender’s Revolving Commitment shall be deemed to be in effect for purposes of
this Section 2.5(a) regardless of the occurrence and continuance of a Trigger
Event except with respect to any of such Revolving Commitment that has been
permanently and irrevocable terminated pursuant to the terms hereof.

 

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(b) The Borrower agrees to pay to the Administrative Agent the fees in the
amounts and on the dates as set forth in any fee agreements with the
Administrative Agent and to perform any other obligations contained therein.

2.6 Termination or Reduction of Revolving Commitments. Subject to Section
2.22(b), the Borrower shall have the right, upon not less than three
(3) Business Days’ notice to the Administrative Agent, to terminate the
Revolving Commitments or, from time to time, to reduce the amount of the
Revolving Commitments; provided that no such termination or reduction of
Revolving Commitments shall be permitted if, after giving effect thereto and to
any prepayments of the Revolving Loans and Swingline Loans made on the effective
date thereof, either (a) the Total Revolving Extensions of Credit would exceed
the Total Revolving Commitments or (b) the aggregate amount of the Revolving
Extensions of Credit with respect to any Class outstanding at such time would
exceed the aggregate amount of the Revolving Commitments then in effect with
respect to such Class. Any such notice may state that such notice is conditioned
upon the occurrence or non-occurrence of any event specified therein (including
the effectiveness of other credit facilities), in which case such notice may be
revoked by the Borrower (by written notice to the Administrative Agent on or
prior to the specified effective date) if such condition is not satisfied. Any
such reduction shall be in an amount equal to $3,000,000, or a whole multiple of
$1,000,000 in excess thereof, and shall reduce permanently the Revolving
Commitments then in effect either (i) ratably among Classes or (ii) if not
inconsistent with the Extension Amendment relating to Extended Commitments,
first to the Revolving Commitments with respect to any Existing Commitments and
second to such Extended Commitments; provided that, with respect to the
Revolving Commitments of any Class, any such termination or reduction shall
apply ratably to the Revolving Commitment of each Lender of such Class.

2.7 Repayment of Loans; Source of Funds; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Loan of such
Lender on the applicable Revolving Termination Date.

(b) None of the funds or assets of the Borrower that are used to pay any amount
due on the Loans, Reimbursement Obligations or any other amounts due under this
Agreement shall constitute funds obtained from transactions with or relating to
Designated Persons or countries which are the subject of Sanctions.

(c) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrower to the appropriate
lending office of such Lender resulting from each Loan made by such lending
office of such Lender from time to time, including the amounts of principal and
interest payable and paid to such lending office of such Lender from time to
time under this Agreement.

(d) The Administrative Agent shall maintain the Register pursuant to
Section 10.6(b)(iv), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount of each Loan made
hereunder, whether such Loan is a Revolving Loan or a Swingline Loan, the Type
and Class of each Loan made and the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable
from the Borrower to each Lender, the Swingline Lender or the Administrative
Agent hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender’s share thereof.

(e) The entries made in the Register and accounts and subaccounts maintained
pursuant to paragraphs (c) and (d) of this Section 2.7 shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the Borrower therein recorded;

 

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provided, however, that the failure of any Lender or the Administrative Agent to
maintain such account, such Register or such subaccount, as applicable, or any
error therein, shall not in any manner affect the obligation of the Borrower to
repay (with applicable interest) the Loans made to the Borrower in accordance
with the terms of this Agreement.

(f) Any Lender may request that Loans of any Class made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to such Lender (or, if requested by
such Lender, to such Lender and its registered assigns) and in a form approved
by the Administrative Agent. Thereafter, the Loans evidenced by such promissory
note and interest thereon shall at all times (including after assignment
pursuant to Section 10.6) be represented by one or more promissory notes in such
form payable to the payee named therein (or, if such promissory note is a
registered note, to such payee and its registered assigns).

2.8 Optional Prepayments. The Borrower may at any time and from time to time
prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Administrative Agent no later than 11:00
A.M., New York City time, three (3) Business Days prior thereto, in the case of
Eurodollar Loans, and no later than 11:00 A.M., New York City time, on such
Business Day, in the case of ABR Loans, which notice shall specify the date and
amount of prepayment and whether the prepayment is of Eurodollar Loans or ABR
Loans; provided, that if a Eurodollar Loan is prepaid on any day other than the
last day of the Interest Period applicable thereto, the Borrower shall also pay
any amounts owing pursuant to Section 2.19. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant 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 (except in the case of
Revolving Loans that are ABR Loans and Swingline Loans) accrued interest to such
date on the amount prepaid. Partial prepayments of Revolving Loans shall be in
an amount equal to (x) in the case of ABR Loans, $500,000 or a whole multiple of
$100,000 in excess thereof and (y) in the case of Eurodollar Loans, $3,000,000
or a whole multiple of $1,000,000 in excess thereof. Partial prepayments of
Swingline Loans shall be in an aggregate principal amount of $100,000 or a whole
multiple thereof. Each prepayment pursuant to this Section 2.8 shall be
allocated pro rata to all Lenders according to their respective Revolving
Percentages.

2.9 Mandatory Prepayments and Commitment Reductions. (a) If for any reason the
Total Revolving Extensions of Credit at any time exceed the Total Revolving
Commitments then in effect, the Borrower shall immediately prepay Loans and/or
Cash Collateralize the L/C Obligations in an amount not less than the applicable
Minimum Collateral Amount multiplied by such excess amount; provided, however,
that, subject to Section 2.24(a), the Borrower shall not be required to Cash
Collateralize the L/C Obligations pursuant to this Section 2.9(a) unless after
the prepayment in full of the Loans, Total Revolving Extensions of Credit exceed
the Total Revolving Commitments then in effect.

(b) If on any date a Trigger Event has occurred and is continuing, the Borrower
shall prepay Loans and Cash Collateralize the L/C Obligations as set forth in
Section 2.25(b).

(c) The application of any prepayment pursuant to Section 2.9 shall be made,
first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the
Loans under Section 2.9 (except in the case of Revolving Loans that are ABR
Loans and Swingline Loans) shall be accompanied by accrued interest to the date
of such prepayment on the amount prepaid. Each prepayment and Revolving
Commitment reduction shall be allocated pro rata to all Lenders according to
their respective Revolving Percentages.

2.10 Conversion and Continuation Options. (a) The Borrower may elect from time
to time to convert Eurodollar Loans to ABR Loans by giving the Administrative
Agent prior irrevocable

 

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notice of such election no later than 11:00 A.M., New York City time, on the
Business Day preceding the proposed conversion date, provided that any such
conversion of Eurodollar Loans may only be made on the last day of an Interest
Period with respect thereto. The Borrower may elect from time to time to convert
ABR Loans to Eurodollar Loans by giving the Administrative Agent prior
irrevocable notice of such election no later than 11:00 A.M., New York City
time, on the third Business Day preceding the proposed conversion date (which
notice shall specify the length of the initial Interest Period therefor),
provided that no ABR Loan may be converted into a Eurodollar Loan when any Event
of Default has occurred and is continuing. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender of the
applicable Class thereof.

(b) Any Eurodollar Loan may be continued as such upon the expiration of the then
current Interest Period with respect thereto by the Borrower giving irrevocable
notice to the Administrative Agent, in accordance with the applicable provisions
of the term “Interest Period” set forth in Section 1.1, of the length of the
next Interest Period to be applicable to such Loans, provided that no Eurodollar
Loan may be continued as such when any Event of Default has occurred and is
continuing, and provided, further, that if the Borrower shall fail to give any
required notice as described above in this paragraph or if such continuation is
not permitted pursuant to the preceding proviso such Loans shall be
automatically converted to ABR Loans on the last day of such then expiring
Interest Period. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender of the applicable Class thereof.

2.11 Limitations on Eurodollar Tranches. Notwithstanding anything to the
contrary in this Agreement, all borrowings, conversions and continuations of
Eurodollar Loans and all selections of Interest Periods shall be in such amounts
and be made pursuant to such elections so that, (a) after giving effect thereto,
the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $3,000,000 or a whole multiple of
$1,000,000 in excess thereof and (b) no more than ten Eurodollar Tranches shall
be outstanding at any one time.

2.12 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.

(b) Each ABR Loan shall bear interest at a rate per annum equal to the ABR plus
the Applicable Margin.

(c) If all or a portion of the principal amount of, or any interest payable on,
any Loan or Reimbursement Obligation or any commitment fee or other amount
payable hereunder or under any Loan Document shall not be paid when due (whether
at the stated maturity, by acceleration or otherwise), such overdue amount shall
bear interest at a rate per annum equal to (x) in the case of the Loans, the
rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this Section plus 2% or (y) in the case of any other amount, the
rate applicable to ABR Loans plus 2%, in each case, from the date of such
non-payment until such amount is paid in full (after as well as before
judgment).

(d) Interest shall be payable in arrears on each Interest Payment Date, provided
that interest accruing pursuant to paragraph (c) of this Section shall be
payable from time to time on demand.

2.13 Computation of Interest and Fees. (a) Interest and fees payable pursuant
hereto shall be calculated on the basis of a 360-day year for the actual days
elapsed, except that, with respect to ABR Loans the rate of interest on which is
calculated on the basis of the Prime Rate or the Federal Funds Effective Rate,
the interest thereon shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the

 

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Borrower and the relevant Lenders of each determination of a Eurodollar Rate.
Any change in the interest rate on a Loan resulting from a change in the ABR or
the Eurocurrency Reserve Requirements shall become effective as of the opening
of business on the day on which such change becomes effective. The
Administrative Agent shall as soon as practicable notify the Borrower and the
relevant Lenders of the effective date and the amount of each such change in
interest rate.

(b) Each determination of an interest rate by the Administrative Agent pursuant
to any provision of this Agreement shall be conclusive and binding on the
Borrower and the Lenders in the absence of manifest error. The Administrative
Agent shall, at the request of the Borrower, deliver to the Borrower a statement
showing the quotations used by the Administrative Agent in determining any
interest rate pursuant to Section 2.12(a).

2.14 Inability to Determine Interest Rate. If prior to the first day of any
Interest Period:

(a) the Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, or

(b) the Administrative Agent shall have received notice from the Majority in
Interest of any Class that the Eurodollar Rate determined or to be determined
for such Interest Period will not adequately and fairly reflect the cost to such
Lenders (as conclusively certified by such Lenders) of making or maintaining
their affected Loans during such Interest Period,

the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans with respect to such Class requested to
be made on the first day of such Interest Period shall be made as ABR Loans,
(y) any Loans with respect to such Class that were to have been converted on the
first day of such Interest Period to Eurodollar Loans shall be continued as ABR
Loans and (z) any outstanding Eurodollar Loans with respect to such Class shall
be converted, on the last day of the then-current Interest Period, to ABR Loans.
Until such notice has been withdrawn by the Administrative Agent, no further
Eurodollar Loans with respect to such Class shall be made or continued as such,
nor shall the Borrower have the right to convert Loans to Eurodollar Loans with
respect to such Class.

2.15 Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower from
the Lenders hereunder and each payment by the Borrower on account of any
commitment fee shall be made pro rata according to the respective Revolving
Percentages of the Lenders. Any reduction of the Revolving Commitments of the
Lenders shall be made pro rata according to the respective Revolving Percentages
of the relevant Lenders except to the extent that this Agreement provides for
reductions to be disproportionately allocated to a group of Lenders with respect
to a particular Class pursuant to Section 2.6, in which case each reduction
shall be allocated to the Lenders in such Class pro rata according to the
respective Revolving Percentages of the relevant Lenders.

(b) Each payment (including each prepayment) by the Borrower on account of
principal of the Revolving Loans shall be made pro rata according to the
respective outstanding principal amounts of the Revolving Loans then held by the
Lenders. Each payment of interest on the Revolving Loans shall be made pro rata
according to the respective outstanding principal amounts of the Revolving Loans
then held by the Lenders, except to the extent that this Agreement provides that
different Classes of Revolving Loans shall have different Applicable Margins, in
which case each payment shall be allocated to the Lenders in such Class pro rata
according to the respective Revolving Percentages of the relevant Lenders.

 

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(c) All payments (including prepayments) to be made by the Borrower hereunder,
whether on account of principal, interest, fees or otherwise, shall be made
without setoff or counterclaim and shall be made prior to 12:00 Noon, New York
City time, on the due date thereof to the Administrative Agent, for the account
of the Lenders, at the Funding Office, in Dollars and in immediately available
funds. The Administrative Agent shall distribute such payments to each relevant
Lender promptly upon receipt in like funds as received, net of any amounts owing
by such Lender pursuant to Section 9.7. If any payment hereunder (other than
payments on the Eurodollar Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day. If any payment on a Eurodollar Loan becomes due and payable on a day other
than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the result of such extension would be to extend
such payment into another calendar month, in which event such payment shall be
made on the immediately preceding Business Day. In the case of any extension of
any payment of principal pursuant to the preceding two sentences, interest
thereon shall be payable at the then applicable rate during such extension.

(d) Unless the Administrative Agent shall have been notified in writing by any
Lender prior to a borrowing that such Lender will not make the amount that would
constitute its share of such borrowing available to the Administrative Agent,
the Administrative Agent may assume that such Lender is making such amount
available to the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. If such amount is not made available to the Administrative Agent by the
required time on the Borrowing Date therefor, such Lender shall pay to the
Administrative Agent, on demand, such amount with interest thereon, at a rate
equal to the greater of (i) the Federal Funds Effective Rate and (ii) a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation, for the period until such Lender makes such amount
immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this paragraph shall be conclusive in the absence of manifest error. If
such Lender’s share of such borrowing is not made available to the
Administrative Agent by such Lender within three (3) Business Days after such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to ABR Loans, on
demand, from the Borrower.

(e) Unless the Administrative Agent shall have been notified in writing by the
Borrower prior to the date of any payment due to be made by the Borrower
hereunder that the Borrower will not make such payment to the Administrative
Agent, the Administrative Agent may assume that the Borrower is making such
payment, and the Administrative Agent may, but shall not be required to, in
reliance upon such assumption, make available to the Lenders their respective
pro rata shares of a corresponding amount. If such payment is not made to the
Administrative Agent by the Borrower within three (3) Business Days after such
due date, the Administrative Agent shall be entitled to recover, on demand, from
each Lender to which any amount which was made available pursuant to the
preceding sentence, such amount with interest thereon at the rate per annum
equal to the daily average Federal Funds Effective Rate. Nothing herein shall be
deemed to limit the rights of the Administrative Agent or any Lender against the
Borrower.

2.16 Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans or participations in L/C
Obligations or Swingline Loans held by it resulting in such Lender receiving
payment of a proportion of the aggregate amount of such Loans or participations
and accrued interest thereon greater than its pro rata share thereof as provided
herein, then the Lender receiving such

 

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greater proportion shall (a) notify the Administrative Agent of such fact, and
(b) purchase (for cash at face value) participations in the Loans and
subparticipations in the L/C Obligations and Swingline Loans of the other
Lenders, or make such other adjustments as shall be equitable, so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them; provided that:

(i) if any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and

(ii) the provisions of this paragraph shall not be construed to apply to (x) any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement (including the application of funds arising from the
existence of a Defaulting Lender), (y) the application of Cash Collateral
provided for in Section 2.24 or (z) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans or subparticipations in L/C Obligations or Swingline Loans to any assignee
or participant, other than to the Borrower or any Subsidiary or Affiliate
thereof (as to which the provisions of this paragraph shall apply).

The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.

2.17 Change in Law. (a) If any Change in Law shall:

(i) subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto;

(ii) impose, modify or hold applicable any reserve, special deposit, compulsory
loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other extensions of
credit by, or any other acquisition of funds by, any office of such Recipient
that is not otherwise included in the determination of the Eurodollar Rate; or

(iii) impose on such Recipient any other condition;

and the result of any of the foregoing is to increase the cost to such
Recipient, by an amount that such Recipient deems to be material, of making,
converting into, continuing or maintaining Eurodollar Loans or issuing or
participating in Letters of Credit, or to reduce any amount receivable hereunder
in respect thereof, then, in any such case, the Borrower shall promptly pay such
Recipient, upon its demand, any additional amounts necessary to compensate such
Recipient for such increased cost or reduced amount receivable. If any Recipient
becomes entitled to claim any additional amounts pursuant to this paragraph, it
shall promptly notify the Borrower (with a copy to the Administrative Agent) of
the event by reason of which it has become so entitled.

(b) If any Lender shall have determined that any Change in Law regarding capital
adequacy or liquidity or in the interpretation or application thereof or
compliance by such Lender or any corporation controlling such Lender with any
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(whether or not having the force of law) from any Governmental Authority made
subsequent to the date hereof shall have the effect of reducing the rate of
return on such Lender’s or such corporation’s capital as a consequence of its
obligations hereunder or under or in respect of any Letter of Credit to a level
below that which such Lender or such corporation could have achieved but for
such Change in Law (taking into consideration such Lender’s or such
corporation’s policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, after submission by such
Lender to the Borrower (with a copy to the Administrative Agent) of a written
request therefor, the Borrower shall pay to such Lender such additional amount
or amounts as will compensate such Lender or such corporation for such
reduction.

(c) A certificate as to any additional amounts payable pursuant to this Section
submitted by any Lender to the Borrower (with a copy to the Administrative
Agent) shall be conclusive in the absence of manifest error. Notwithstanding
anything to the contrary in this Section, the Borrower shall not be required to
compensate a Lender pursuant to this Section for any amounts incurred more than
nine months prior to the date that such Lender notifies the Borrower of such
Lender’s intention to claim compensation therefor; provided that, if the
circumstances giving rise to such claim have a retroactive effect, then such
nine-month period shall be extended to include the period of such retroactive
effect. The obligations of the Borrower pursuant to this Section shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.

2.18 Taxes. (a) Any and all payments by or on account of any obligation of any
Loan Party under any Loan Document shall be made without deduction or
withholding for any Taxes, except as required by applicable law. If any
applicable law (as determined in the good faith discretion of an applicable
withholding agent) requires the deduction or withholding of any Tax from any
such payment by a withholding agent, then the applicable withholding agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with applicable law and, if such Tax is an Indemnified Tax, then the sum payable
by the applicable Loan Party shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section 2.18) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

(b) The Loan Parties shall timely pay to the relevant Governmental Authority in
accordance with applicable law, or at the option of the Administrative Agent
timely reimburse it for, Other Taxes.

(c) As soon as practicable after any payment of Taxes by any Loan Party to a
Governmental Authority pursuant to this Section 2.18, such Loan Party shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

(d) The Loan Parties shall jointly and severally indemnify each Recipient,
within 10 days after demand therefor, for the full amount of any Indemnified
Taxes (including Indemnified Taxes imposed or asserted on or attributable to
amounts payable under this Section 2.18) payable or paid by such Recipient or
required to be withheld or deducted from a payment to such Recipient and any
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to the Borrower by a Lender (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.

 

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(e) Each Lender shall severally indemnify the Administrative Agent, within 10
days after demand therefor, for (i) any Indemnified Taxes attributable to such
Lender (but only to the extent that any Loan Party has not already indemnified
the Administrative Agent for such Indemnified Taxes and without limiting the
obligation of the Loan Parties to do so), (ii) any Taxes attributable to such
Lender’s failure to comply with the provisions of Section 10.6(c) relating to
the maintenance of a Participant Register and (iii) any Excluded Taxes
attributable to such Lender, in each case, that are payable or paid by the
Administrative Agent in connection with any Loan Document, and any reasonable
expenses arising therefrom or with respect thereto, whether or not such Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to any Lender by the Administrative Agent shall be conclusive absent manifest
error. Each Lender hereby authorizes the Administrative Agent to set off and
apply any and all amounts at any time owing to such Lender under any Loan
Document or otherwise payable by the Administrative Agent to the Lender from any
other source against any amount due to the Administrative Agent under this
Section 2.18(e).

(f) (i) Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Loan Document shall
deliver to the Borrower and the Administrative Agent, at the time or times
reasonably requested by the Borrower or the Administrative Agent, such properly
completed and executed documentation reasonably requested by the Borrower or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 2.18(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

(ii) Without limiting the generality of the foregoing,

(A) any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), executed
originals of IRS Form W-9 certifying that such Lender is exempt from U.S.
federal backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), whichever of the following is applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “interest” article of such tax treaty and (y) with respect to
any other applicable payments under any Loan Document, IRS Form

 

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W-8BEN establishing an exemption from, or reduction of, U.S. Federal withholding
Tax pursuant to the “business profits” or “other income” article of such tax
treaty;

(2) executed originals of IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit F-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10
percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B)
of the Code, or a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and
(y) executed originals of IRS Form W-8BEN; or

(4) to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a
U.S. Tax Compliance Certificate substantially in the form of Exhibit F-2 or
Exhibit F-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit F-4 on
behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), executed originals of any other form prescribed by applicable law as a
basis for claiming exemption from or a reduction in U.S. federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrower or the Administrative Agent
to determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Administrative Agent such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
clause (D), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

 

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Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower and the Administrative
Agent in writing of its legal inability to do so.

(g) If any party determines, in its sole discretion exercised in good faith,
that it has received a refund of any Taxes as to which it has been indemnified
pursuant to this Section 2.18 (including by the payment of additional amounts
pursuant to this Section 2.18), it shall pay to the indemnifying party an amount
equal to such refund (but only to the extent of indemnity payments made under
this Section 2.18 with respect to the Taxes giving rise to such refund), net of
all out-of-pocket expenses (including Taxes) of such indemnified party and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund). Such indemnifying party, upon the
request of such indemnified party, shall repay to such indemnified party the
amount paid over pursuant to this Section 2.18(g) (plus any penalties, interest
or other charges imposed by the relevant Governmental Authority) in the event
that such indemnified party is required to repay such refund to such
Governmental Authority. Notwithstanding anything to the contrary in this
Section 2.18(g), in no event will the indemnified party be required to pay any
amount to an indemnifying party pursuant to this Section 2.18(g) the payment of
which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the indemnification
payments or additional amounts giving rise to such refund had never been paid.
This paragraph shall not be construed to require any indemnified party to make
available its Tax returns (or any other information relating to its Taxes that
it deems confidential) to the indemnifying party or any other Person.

(h) Each party’s obligations under this Section 2.18 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Revolving
Commitments and the Swingline Commitments and the repayment, satisfaction or
discharge of all Obligations under any Loan Document.

(i) For purposes of this Section 2.18, the term “Lender” includes the Issuing
Lender and the Swingline Lender.

2.19 Indemnity. The Borrower agrees to indemnify each Lender for, and to hold
each Lender harmless from, any loss or expense that such Lender may sustain or
incur as a consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment of or conversion
from Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day that is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest that would have accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank eurodollar market. A certificate as to any amounts payable
pursuant to this Section submitted to the Borrower by any Lender shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder for a period of 180 days.

 

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2.20 Change of Lending Office. Each Lender agrees that, upon the occurrence of
any event giving rise to the operation of Section 2.17 or 2.18 with respect to
such Lender, it will, if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
lending office for any Loans affected by such event with the object of avoiding
the consequences of such event; provided, that in the sole judgment of such
Lender, such designation (i) would eliminate or reduce amounts payable pursuant
to Section 2.17 or 2.18, as the case may be, in the future, and (ii) would not
subject such Lender to any unreimbursed costs or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation.

2.21 Replacement of Lenders. If any Lender (a) is entitled to additional
compensation under Section 2.17 or 2.18, (b) becomes a Defaulting Lender or
(c) does not consent to any proposed amendment, supplement, modification,
consent or waiver of any provision of this Agreement or any other Loan Document
that requires the consent of each of the Lenders or each of the Lenders affected
thereby (so long as the consent of the Required Lenders has been obtained), the
Borrower, at its sole expense and effort, may cause such Lender to (and, if the
Borrower so demands, such Lender shall) assign all of its rights and obligations
under this Agreement to one or more replacement financial institutions; provided
that (i) such replacement does not conflict with any Requirement of Law, (ii) in
the case of any such replacement resulting from a claim for compensation under
Section 2.17 or payments required to be made pursuant to Section 2.18, such
assignment will result in a reduction in such compensation or payments,
(iii) the replacement financial institution shall purchase, at par, all Loans
and other amounts owing to such replaced Lender on or prior to the date of
replacement, (iv) the Borrower shall be liable to such replaced Lender under
Section 2.19 if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(v) the replacement financial institution shall be reasonably satisfactory to
the Administrative Agent, the Swingline Lender and the Issuing Lender (such
consent not to be unreasonably withheld), (vi) the replaced Lender shall be
obligated to make such replacement in accordance with the provisions of
Section 10.6, (vii) until such time as such replacement shall be consummated,
the Borrower shall pay all additional amounts (if any) required pursuant to
Section 2.17 or 2.18, as the case may be, and (viii) any such replacement shall
not be deemed to be a waiver of any rights that the Borrower, the Administrative
Agent or any other Lender shall have against the replaced Lender. A Lender shall
not be required to make any such assignment if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment shall cease to apply.

2.22 Extension Options; Repricing Option.

(a) [Reserved]

(b) Extension Options. (i) The Borrower may, by written notice to the
Administrative Agent (such notice, an “Initial Extension Notice”) not earlier
than 60 days prior and not later than 30 days prior to the Initial Revolving
Termination Date, elect to extend the Initial Revolving Termination Date for an
additional twelve (12) months, subject to the terms of this Section 2.22(b). The
Administrative Agent shall distribute any such Extension Notice promptly to the
Lenders following its receipt thereof. As conditions precedent to such
extension, the Borrowers shall, on or prior to the Initial Revolving Termination
Date, satisfy each of the following requirements for such extension to become
effective:

(A) the Administrative Agent shall have received an Initial Extension Notice
within the period required under clause (i) above;

 

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(B) on the date of such Initial Extension Notice and both immediately before and
immediately after giving effect to such extension of the Revolving Termination
Date, no Default, Event of Default or Trigger Event shall have occurred and be
continuing;

(C) the Borrower shall have paid to the Administrative Agent, for the account of
each Lender, an extension fee in an amount equal to 0.25% of the Revolving
Commitment of such Lender on the Initial Revolving Termination Date; and

(D) each of the representations and warranties made by any Loan Party in or
pursuant to the Loan Documents shall be true and correct in all material
respects on and as of the date of such extension, before and after giving effect
to such extension, as if made on and as of such date.

(ii) The Borrower may, from time to time, request that all or a portion of the
Revolving Commitments existing at the time of such request (each, an “Existing
Commitment”, and Loans related thereto, “Existing Loans”) of any Class (an
“Existing Class”) be converted to extend the termination date thereof and the
scheduled maturity date(s) of any payment of principal with respect to all or a
portion of any principal amount of such Existing Loans (any such Existing Loans
which have been so extended, “Extended Loans”, and any such Existing Commitments
so extended, “Extended Commitments”), provided that any such extension may only
be requested after exercise of an extension pursuant to Section 2.22(b)(i) or
after the date such extension may no longer be requested. Prior to entering into
any Extension Amendment with respect to any Extended Commitments, the Borrower
shall provide a notice to the Administrative Agent (who shall provide a copy of
such notice to each of the Lenders of the applicable Existing Class and which
such request shall be offered equally to all such Lenders) (an “Extension
Request”) setting forth the proposed terms of the Extended Commitments to be
established thereunder, which terms shall be identical to the Revolving
Commitments of the Existing Class from which they are to be extended except that
(w) the scheduled final termination date of such Extended Commitments may be
delayed to later dates than the scheduled final termination date of such
Existing Class, (x) (A) the interest rates, interest margins, rate floors and
upfront fees with respect to the Extended Commitment may be different than those
for the Existing Commitments and/or (B) additional fees may be payable to the
Lenders providing such Extended Commitments in addition to or in lieu of any of
the items contemplated by the preceding clause (A), in each case, to the extent
provided in the applicable Extension Amendment, (y) (A) the undrawn revolving
commitment fee rate with respect to such Extended Commitments may be different
than such rate for such Existing Commitments and (B) the Extension Amendment may
provide for other covenants and terms that apply to any period after the latest
Revolving Termination Date in effect prior to giving effect to such Extension
Amendment, and (z) the terms of any Extended Commitments may also contain other
differences from the Existing Class from which they are to be extended as are
approved by the Administrative Agent, acting reasonably, so long as such
differences are not material and not adverse to the Lenders of such Existing
Class; provided that, notwithstanding anything to the contrary in this
Section 2.22(b) or otherwise, (1) the borrowing and repayment (other than in
connection with a permanent repayment and termination of commitments as set
forth in Section 2.6, treatment of which may be agreed between the Borrower and
the Lenders relating to an Extension Series, or upon the Revolving Termination
Date of a Class of Revolving Commitments) of Loans with respect to any Extended
Commitments shall be made on a pro rata basis with any borrowings and repayments
of the Existing Loans of the Class of Existing Commitments from which they were
extended (the mechanics for which may be implemented through the applicable
Extension Amendment and may include technical changes related to the borrowing,
replacement letter of credit and swingline procedures of such Class of Existing

 

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Commitments) and (2) assignments and participations of Extended Commitments and
Extended Loans shall be governed by the same assignment and participation
provisions applicable to Existing Classes set forth in Section 10.6. No Lender
shall have any obligation to agree to have any of its Revolving Commitments of
any Existing Class converted into Extended Commitments pursuant to any Extension
Request. Any Extended Commitments of any Extension Series shall constitute a
separate Class of Revolving Commitments from the Existing Class from which they
were converted and from any other Existing Commitments.

(iii) The Borrower shall provide the applicable Extension Request at least ten
(10) Business Days prior to the date on which Lenders under the applicable
Existing Class or Existing Classes are requested to respond, and shall agree to
such procedures, if any, as may be established by, or acceptable to, the
Administrative Agent, in each case acting reasonably, to accomplish the purpose
of this Section 2.22(b). Any Lender (an “Extending Lender”) wishing to have all
or a portion of its Revolving Commitments of the Existing Class or Existing
Classes subject to such Extension Request converted into Extended Commitments
shall notify the Administrative Agent (an “Extension Election”) on or prior to
the date specified in such Extension Request of the amount of its Revolving
Commitments of the Existing Class or Existing Classes subject to such Extension
Request that it has elected to convert into Extended Commitments (subject to any
minimum denomination requirements imposed by the Administrative Agent); provided
that if any Lenders of an Existing Class fail to respond, such Lenders will be
deemed to have declined to extend their Revolving Commitments. In the event that
the aggregate amount of Revolving Commitments of the Existing Class or Existing
Classes subject to Extension Elections exceeds the amount of Extended
Commitments requested pursuant to the Extension Request, Revolving Commitments
of the Existing Class or Existing Classes subject to Extension Elections shall
be converted to Extended Commitments on a pro rata basis based on the amount of
Revolving Commitments included in each such Extension Election (subject to
rounding). Notwithstanding the conversion of any Existing Commitment into an
Extended Commitment, such Extended Commitment shall be treated identically to
all other Revolving Commitments for purposes of the obligations of a Lender in
respect of Swingline Loans under Section 2.4 and Letters of Credit under
Section 3, except that the applicable Extension Amendment may provide that the
date on which the Swingline Loan has to be repaid and/or the last day for
issuing Letters of Credit may be extended and the related obligations to make
Swingline Loans and issue Letters of Credit may be continued (pursuant to
mechanics to be specified in the applicable Extension Amendment) so long as the
Swingline Lender and/or the Issuing Lender, as applicable, have consented to
such extensions (it being understood that no consent of any other Lender shall
be required in connection with any such extension).

(iv) Extended Commitments shall be established pursuant to an amendment (an
“Extension Amendment”) to this Agreement (which, except to the extent expressly
contemplated by the penultimate sentence of this Section 2.22(b)(iv) and
notwithstanding anything to the contrary set forth in Section 10.1, shall not
require the consent of any Lender other than the Extending Lenders with respect
to the Extended Commitments established thereby) executed by the Loan Parties,
the Administrative Agent and the Extending Lenders. No Extension Amendment shall
provide for any tranche of Extended Commitments in an aggregate principal amount
that is less than $25,000,000. Notwithstanding anything to the contrary in this
Section 2.22(b) and without limiting the generality or applicability of
Section 10.1 to any Section 2.22(b) Additional Amendments, any Extension
Amendment may provide for additional terms and/or additional amendments other
than those referred to or contemplated above (any such additional amendment, a
“Section 2.22(b) Additional Amendment”) to this Agreement and the other Loan
Documents; provided that such Section 2.22(b) Additional Amendments are within
the requirements of Section 2.22(b)(ii) and do not become effective prior to the
time that such

 

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Section 2.22(b) Additional Amendments have been consented to (including, without
limitation, pursuant to consents applicable to holders of any Extended
Commitments provided for in any Extension Amendment) by such of the Lenders,
Loan Parties and other parties (if any) as may be required in order for such
Section 2.22(b) Additional Amendments to become effective in accordance with
Section 10.1. Such Extension Amendment shall provide that each of the
representations and warranties made by an Loan Party in or pursuant to the Loan
Documents shall be true and correct in all material respects on and as of the
date of such extension, before and after giving effect to such extension, as if
made on and as of such date. In connection with any Extension Amendment, the
Borrower shall deliver an opinion of counsel reasonably acceptable to the
Administrative Agent (i) as to the enforceability of such Extension Amendment,
this Agreement as amended thereby, and such of the other Loan Documents (if any)
as may be amended thereby (in the case of such other Loan Documents as
contemplated by the immediately preceding sentence), (ii) to the effect that
such Extension Amendment, including the Extended Commitments provided for
therein, does not conflict with or violate the terms and provisions of
Section 10.1 of this Agreement and (iii) covering such other matters as the
Administrative Agent may reasonably request in connection therewith.

(c) Repricing Option. (i) The Borrower may at any time and from time to time
request that the Applicable Margin be modified. In order to modify the
Applicable Margin pursuant to this Section, the Borrower shall provide a notice
to the Administrative Agent (who shall provide a copy of such notice to each of
the Lenders) (a “Repricing Request”) setting forth the proposed new Applicable
Margin to be established. No Lender shall have any obligation to agree to
continue to have Revolving Commitments under this Agreement to which the new
Applicable Margin shall apply.

(ii) The Borrower shall provide the applicable Repricing Request at least ten
(10) Business Days prior to the date on which Lenders are requested to respond,
and shall agree to such procedures, if any, as may be established by, or
acceptable to, the Administrative Agent, in each case acting reasonably, to
accomplish the purpose of this Section 2.22(c). Any Lender (an “Accepting
Lender”) wishing to have all or a portion of its Revolving Commitments subject
to such Repricing Request shall notify the Administrative Agent (a “Repricing
Election”) on or prior to the date specified in such Repricing Request of the
amount of its Revolving Commitments that it has elected to continue subject to
the new Applicable Margin (the “Repriced Commitments”); provided that if any
Lenders fail to respond, such Lenders will be deemed to have declined to
continue their Revolving Commitments. In the event that the aggregate amount of
Repriced Commitments is less than the Total Revolving Commitments as then in
effect, the Borrower may arrange for any such shortfall to be provided by one or
more Lenders (each Lender so agreeing to an increase in its Revolving
Commitment, an “Increasing Repriced Lender”), and/or by one or more new banks,
financial institutions or other entities (each such new bank, financial
institution or other entity, a “New Repriced Lender”), increasing their existing
Revolving Commitments or extending Revolving Commitments, as the case may be;
provided, that (A) the amount of increased Revolving Commitment of each
Increasing Repriced Lender and each New Repriced Lender shall be subject to the
approval of the Borrower, the Administrative Agent, the Issuing Lender and the
Swingline Lender and (B)(1) in the case of an Increasing Repriced Lender, the
Loan Parties, the Administrative Agent, the Issuing Lender, the Swingline Lender
and such Increasing Repriced Lender shall have executed an Increasing Lender
Agreement and (2) in the case of a New Repriced Lender, the Loan Parties, the
Administrative Agent, the Issuing Lender, the Swingline Lender and such New
Repriced Lender shall have executed a New Lender Agreement. No consent of any
Lender (other than the Lenders participating in such repricing) shall be
required for any change in the Applicable Margin pursuant to this
Section 2.22(c).

 

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(iii) The modification of the definition of Applicable Margin shall be
established pursuant to an amendment (an “Repricing Amendment”) to this
Agreement (which notwithstanding anything to the contrary set forth in
Section 10.1, shall not require the consent of any Lender other than the
Accepting Lenders, Increasing Repriced Lenders and New Repriced Lenders)
executed by the Loan Parties, the Administrative Agent, the Accepting Lenders,
the Increasing Repriced Lenders and the New Repriced Lenders. No such Repricing
Amendment shall become effective unless (w) no Default, Event of Default or
Trigger Event shall have occurred and be continuing or would result after giving
effect to such increase, (x) the Borrower shall have paid all fees and other
amounts (including, without limitation, pursuant to Section 10.5) due and
payable by the Borrower in connection with such Repricing Amendment, (y) each of
the representations and warranties made by any Loan Party in or pursuant to the
Loan Documents shall be true and correct in all material respects on and as of
the date of such Repricing Amendment, before and after giving effect to such
Repricing Amendment, as if made on and as of such date, and (z) the
Administrative Agent shall have received (1) documents consistent with those
delivered on the Closing Date as to the corporate power and authority of the
Loan Parties to enter into the Repricing Amendment, Increasing Lender Agreement
and New Lender Agreement, as applicable, and to continue perform their
obligations under the Loan Documents and (2) the Borrower shall have delivered
or caused to be delivered customary legal opinions as reasonably requested by
the Administrative Agent in connection with any such transaction, including
(i) as to the enforceability of such Repricing Amendment, this Agreement as
amended thereby, and such of the other Loan Documents (if any) as may be amended
thereby (in the case of such other Loan Documents as contemplated by the
immediately preceding sentence), (ii) to the effect that such Repricing
Amendment does not conflict with or violate the terms and provisions of
Section 10.1 of this Agreement and (iii) covering such other matters as the
Administrative Agent may reasonably request in connection therewith.

(iv) On the effective date of any Repricing Amendment, (A) the Revolving
Commitments of any Lender that is not an Accepting Lender with respect to such
Repricing Amendment shall be permanently reduced to zero and terminated,
(B) each relevant Accepting Lender, Increasing Repriced Lender and New Repriced
Lender shall make available to the Administrative Agent, for the benefit of the
other Lenders, such amounts in immediately available funds as the Administrative
Agent shall determine as being required in order to cause, after giving effect
to such Repricing Amendment and the use of such amounts to make payments to such
other Lenders, each Lender’s portion of the outstanding Revolving Loans of all
the Lenders to equal its Revolving Percentage of such outstanding Revolving
Loans (including, for the avoidance of doubt, the repayment in full of the
principal on the Loans of any Lender that is not an Accepting Lender), (C) to
the extent that the Total Revolving Extensions of Credit would exceed the Total
Revolving Commitments after giving effect to any Repricing Amendment, the
Borrower shall immediately prepay Loans and/or Cash Collateralize the L/C
Obligations in an amount not less than the applicable Minimum Collateral Amount
multiplied by such excess amount, (D) the Borrower shall be deemed to have
repaid and reborrowed all outstanding Revolving Loans as of the date of any
Repricing Amendment (with such reborrowing to consist of the Types of Revolving
Loans, with related Interest Periods if applicable, specified in a notice
delivered by the Borrower, in accordance with the requirements of Section 2.2)
and (E) the participations in outstanding Letters of Credit and Swingline Loans
shall be adjusted to reflect the then-applicable Revolving Percentage of each
Lenders. The deemed payments made pursuant to clause (D) of the immediately
preceding sentence shall be accompanied by (1) payment of all accrued interest
on the amount prepaid and, in respect of each Eurodollar Loan, shall be subject
to indemnification by the Borrower pursuant to the provisions of Section 2.19 if
the deemed payment occurs other than on the last day of the related Interest
Periods and (2) payment of all other amounts owed to any Lender that is not an
Accepting Lender hereunder and under the other Loan Documents.

(v) Nothing contained in this Section 2.22(c) shall constitute, or otherwise be
deemed to be, a commitment on the part of any Lender to increase its Revolving
Commitment hereunder at any time.

 

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2.23 Defaulting Lenders.

(a) Defaulting Lender Adjustments. Notwithstanding anything to the contrary
contained in this Agreement, if any Lender becomes a Defaulting Lender, then,
until such time as such Lender is no longer a Defaulting Lender, to the extent
permitted by applicable law:

(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in the definition of Required Lenders.

(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or
other amounts received by the Administrative Agent for the account of such
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Section 8 or otherwise) or received by the Administrative Agent from a
Defaulting Lender pursuant to Section 10.7 shall be applied at such time or
times as may be determined by the Administrative Agent as follows: first, to the
payment of any amounts owing by such Defaulting Lender to the Administrative
Agent hereunder; second, to the payment on a pro rata basis of any amounts owing
by such Defaulting Lender to the Issuing Lender or to the Swingline Lender
hereunder; third, to Cash Collateralize the Issuing Lender’s Fronting Exposure
with respect to such Defaulting Lender in accordance with Section 2.24; fourth,
as the Borrower may request (so long as no Default or Event of Default exists),
to the funding of any Loan in respect of which such Defaulting Lender has failed
to fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent; fifth, if so determined by the Administrative Agent and
the Borrower, to be held in a deposit account and released pro rata in order to
(x) satisfy such Defaulting Lender’s potential future funding obligations with
respect to Loans under this Agreement and (y) Cash Collateralize the Issuing
Lender’s future Fronting Exposure with respect to such Defaulting Lender with
respect to future Letters of Credit issued under this Agreement, in accordance
with Section 2.24; sixth, to the payment of any amounts owing to the Lenders,
the Issuing Lender or the Swingline Lender as a result of any judgment of a
court of competent jurisdiction obtained by any Lender, the Issuing Lender or
the Swingline Lender against such Defaulting Lender as a result of such
Defaulting Lender’s breach of its obligations under this Agreement; seventh, so
long as no Default or Event of Default exists, to the payment of any amounts
owing to the Borrower as a result of any judgment of a court of competent
jurisdiction obtained by the Borrower against such Defaulting Lender as a result
of such Defaulting Lender’s breach of its obligations under this Agreement; and
eighth, to such Defaulting Lender or as otherwise directed by a court of
competent jurisdiction; provided that if (x) such payment is a payment of the
principal amount of any Loans or with respect to drawings made under Letters of
Credit in respect of which such Defaulting Lender has not fully funded its
appropriate share, and (y) such Loans were made or the related Letters of Credit
were issued at a time when the conditions set forth in Section 5.2 were
satisfied or waived, such payment shall be applied solely to pay the Loans of,
and the amount of such drawings owed to, all Non-Defaulting Lenders on a pro
rata basis prior to being applied to the payment of any Loans of, or the amount
of such drawings owed to, such Defaulting Lender until such time as all Loans
and funded and unfunded participations in L/C Obligations and Swingline Loans
are held by the Lenders pro rata in accordance with the Revolving Commitments
without giving effect to

 

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Section 2.23(a)(iv). Any payments, prepayments or other amounts paid or payable
to a Defaulting Lender that are applied (or held) to pay amounts owed by a
Defaulting Lender or to post Cash Collateral pursuant to this
Section 2.23(a)(ii) shall be deemed paid to and redirected by such Defaulting
Lender, and each Lender irrevocably consents hereto.

(iii) Certain Fees. (A) No Defaulting Lender shall be entitled to receive any
fees under Section 2.5(a) for any period during which that Lender is a
Defaulting Lender (and the Borrower shall not be required to pay any such fee
that otherwise would have been required to have been paid to that Defaulting
Lender).

(B) Each Defaulting Lender shall be entitled to receive fees under
Section 3.3(a) for any period during which that Lender is a Defaulting Lender
only to the extent allocable to its Revolving Percentage of the stated amount of
Letters of Credit for which it has provided Cash Collateral pursuant to
Section 2.24.

(C) With respect to any fee not required to be paid to any Defaulting Lender
pursuant to clause (A) or (B) above, the Borrower shall (x) pay to each
Non-Defaulting Lender that portion of any such fee otherwise payable to such
Defaulting Lender with respect to such Defaulting Lender’s participation in L/C
Obligations or Swingline Loans that has been reallocated to such Non-Defaulting
Lender pursuant to clause (iv) below, (y) pay to the Issuing Lender and the
Swingline Lender, as applicable, the amount of any such fee otherwise payable to
such Defaulting Lender to the extent allocable to the Issuing Lender’s or the
Swingline Lender’s Fronting Exposure to such Defaulting Lender, and (z) not be
required to pay the remaining amount of any such fee.

(iv) Reallocation of Participations to Reduce Fronting Exposure. All or any part
of such Defaulting Lender’s participation in L/C Obligations and Swingline Loans
shall be reallocated among the Non-Defaulting Lenders in accordance with their
respective Revolving Percentages (calculated without regard to such Defaulting
Lender’s Revolving Commitment) but only to the extent that (x) the conditions
set forth in Section 5.2 are satisfied at the time of such reallocation (and,
unless the Borrower shall have otherwise notified the Administrative Agent at
such time, the Borrower shall be deemed to have represented and warranted that
such conditions are satisfied at such time), and (y) such reallocation does not
cause the aggregate Revolving Extensions of Credit of any Non-Defaulting Lender
to exceed such Non-Defaulting Lender’s Revolving Commitment. No reallocation
hereunder shall constitute a waiver or release of any claim of any party
hereunder against a Defaulting Lender arising from that Lender having become a
Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of
such Non-Defaulting Lender’s increased exposure following such reallocation.

(v) Cash Collateral, Repayment of Swingline Loans. If the reallocation described
in clause (iv) above cannot, or can only partially, be effected, the Borrower
shall, without prejudice to any right or remedy available to it hereunder or
under law, (x) first, prepay Swingline Loans in an amount equal to the Swingline
Lender’s Fronting Exposure and (y) second, Cash Collateralize the Issuing
Lender’s Fronting Exposure in accordance with the procedures set forth in
Section 2.24.

(b) Defaulting Lender Cure. If the Borrower, the Administrative Agent, the
Swingline Lender and the Issuing Lender agree in writing that a Lender is no
longer a Defaulting Lender, the Administrative Agent will so notify the parties
hereto, whereupon as of the effective date specified in such notice and subject
to any conditions set forth therein (which may include arrangements with respect
to any Cash Collateral), that Lender will, to the extent applicable, purchase at
par that portion of

 

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outstanding Loans of the other Lenders or take such other actions as the
Administrative Agent may determine to be necessary to cause the Loans and funded
and unfunded participations in Letters of Credit and Swingline Loans to be held
pro rata by the Lenders in accordance with the Revolving Commitments under the
applicable Facility (without giving effect to Section 2.23(a)(iv)), whereupon
such Lender will cease to be a Defaulting Lender; provided that no adjustments
will be made retroactively with respect to fees accrued or payments made by or
on behalf of the Borrower while that Lender was a Defaulting Lender; and
provided, further, that except to the extent otherwise expressly agreed by the
affected parties, no change hereunder from Defaulting Lender to Lender will
constitute a waiver or release of any claim of any party hereunder arising from
that Lender’s having been a Defaulting Lender.

(c) New Swingline Loans/Letters of Credit. So long as any Lender is a Defaulting
Lender, (i) the Swingline Lender shall not be required to fund any Swingline
Loans unless it is satisfied that it will have no Fronting Exposure after giving
effect to such Swingline Loan and (ii) the Issuing Lender shall not be required
to issue, extend, renew or increase any Letter of Credit unless it is satisfied
that it will have no Fronting Exposure after giving effect thereto.

2.24 Cash Collateral.

(a) Delivery of Cash Collateral. If (i) the Issuing Lender has honored any full
or partial drawing request under any Letter of Credit and such amount has not
been reimbursed pursuant to Section 3.5, (ii) as of the date that is five
(5) Business Days prior to the Revolving Termination Date there are any issued
and outstanding Letters of Credit that have not been Cash Collateralized,
(iii) the Borrower shall be required to provide Cash Collateral pursuant to
Section 8, or (iv) there shall exist a Defaulting Lender, the Borrower shall
immediately (in the case of clause (iii) above), or within one (1) Business Day
following the written request of the Administrative Agent or the Issuing Lender
(with a copy to the Administrative Agent) (in all other cases), provide Cash
Collateral in an amount not less than the applicable Minimum Collateral Amount
(determined in the case of clause (iv) above after giving effect to
Section 2.23(a)(iv) and any Cash Collateral provided by the applicable
Defaulting Lender). In addition to the requirements pursuant to clauses (i)
through (iv) above, the Borrower shall provide Cash Collateral in an amount not
less than the applicable Minimum Collateral Amount on the terms and subject to
the conditions set forth in other provisions of this Agreement.

(b) Grant of Security Interest. The Borrower, and to the extent provided by any
Defaulting Lender, such Defaulting Lender, hereby grants to (and subjects to the
control of) the Administrative Agent, for the benefit of the Administrative
Agent, the Issuing Lender and the Lenders, and agrees to maintain, a first
priority security interest in all Cash Collateral as security for the
obligations which such Cash Collateral may be applied pursuant to
Section 2.24(c). If at any time the Administrative Agent determines that Cash
Collateral is subject to any right or claim of any Person other than the
Administrative Agent and the Issuing Lender as herein provided, or that the
total amount of such Cash Collateral is less than the Minimum Collateral Amount,
the Borrower will, promptly upon demand by the Administrative Agent, pay or
provide to the Administrative Agent additional Cash Collateral in an amount
sufficient to eliminate such deficiency (after giving effect to any Cash
Collateral provided by the Defaulting Lender). All Cash Collateral shall be
maintained in a blocked, non-interest-bearing deposit account at the
Administrative Agent. The Borrower shall pay on demand therefor from time to
time all customary account opening, activity and other administrative charges in
connection with the maintenance and disbursement of Cash Collateral.

(c) Application. Notwithstanding anything to the contrary contained in this
Agreement, Cash Collateral provided in respect of Letters of Credit shall be
held and applied to the satisfaction of the specific L/C Obligations,
obligations to fund participations therein (including, as to Cash Collateral
provided by a Defaulting Lender, any interest accrued on such obligation) and
other obligations for which the Cash Collateral was so provided, prior to any
other application of such property as may otherwise be provided for herein.

 

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(d) Termination of Requirement. Cash Collateral (or the appropriate portion
thereof) provided to reduce the Issuing Lender’s Fronting Exposure or to secure
other obligations shall no longer be required to be held as Cash Collateral
pursuant to this Section 2.24 following (i) the elimination of the applicable
Fronting Exposure or other obligations giving rise thereto (including by the
termination of Defaulting Lender status of the applicable Lender), or (ii) the
determination by the Administrative Agent and the Issuing Lender that there
exists excess Cash Collateral; provided that, subject to Section 2.23 the Person
providing Cash Collateral and the Issuing Lender may agree that Cash Collateral
shall be held to support future anticipated Fronting Exposure or other
obligations.

2.25 Trigger Event.

(a) In the event that a Trigger Event, Default or Event of Default has occurred
and is continuing:

(i) the Revolving Commitments and the Revolving Commitment Period shall be
suspended and none of the Administrative Agent, the Issuing Lender, the
Swingline Lender or any Lender shall make an extension of credit hereunder; and

(ii) the Administrative Agent shall direct the Conditional Controlled Account
Bank to transfer any amounts on deposit in the Conditional Controlled Account,
or any amounts that are deposited in the Conditional Controlled Account during
such period, to the Account.

(b) In the Event that a Trigger Event or an Event of Default has occurred and is
continuing, the Administrative Agent is authorized by the Borrower and shall
apply the amounts on deposit in the Account from time to time and all cash
distributions from any of the Borrower’s direct or indirect Subsidiaries on and
after the occurrence of a Trigger Event or an Event of Default, in the following
order:

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent) payable to the
Administrative Agent in its capacity as such;

Second, to payment of that portion of the Obligations constituting accrued and
unpaid fees (including pursuant to Sections 2.5 and 3.3), interest on the Loans,
L/C Obligations and other Obligations, indemnities and other amounts (other than
principal) payable to the Lenders, the Swingline Lender and the Issuing Lender
(including fees, charges and disbursements of counsel to the respective Lenders,
the Swingline Lender and the Issuing Lender), ratably among them in proportion
to the respective amounts described in this clause Second payable to them;

Third, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and Reimbursement Obligations, ratably among the Lenders,
the Swingline Lender and the Issuing Lender in proportion to the respective
amounts described in this clause Third held by them; and

Fourth, to the Administrative Agent for the account of the Issuing Lender, to
Cash Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit to the extent not otherwise Cash
Collateralized by the Borrower in an amount not less than the Minimum Collateral
Amount.

 

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(c) In the Event that a Trigger Event or an Event of Default has occurred and is
continuing, the Borrower shall cause each of its direct and indirect
Subsidiaries (other than the ESH Parties) to make the maximum amount of cash
distributions to its respective parent entity that it is not prohibited from
making under the terms of the Subsidiary Loan Documents directly into the
Account;

(d) Notwithstanding the foregoing in this Section 2.25, as long as no Trigger
Event, Default or Event of Default has occurred and is continuing, the
Administrative Agent shall direct that all amounts in the Account be remitted to
the Conditional Controlled Account.

SECTION 3. LETTERS OF CREDIT

3.1 L/C Commitment. (a) Subject to the terms and conditions hereof, the Issuing
Lender, in reliance on the agreements of the other Lenders set forth in
Section 3.4(a), agrees to issue letters of credit (“Letters of Credit”) for the
account of the Borrower on any Business Day during the Revolving Commitment
Period in such form as may be approved from time to time by the Issuing Lender;
provided that the Issuing Lender shall have no obligation to issue any Letter of
Credit if, after giving effect to such issuance, (i) the L/C Obligations would
exceed the L/C Commitment or (ii) the aggregate amount of the Available
Revolving Commitments would be less than zero. Each Letter of Credit shall
(i) be denominated in Dollars and (ii) expire no later than the earlier of
(x) the first anniversary of its date of issuance and (y) the date that is five
(5) Business Days prior to the Revolving Termination Date, provided that any
Letter of Credit with a one-year term may provide for the renewal thereof for
additional one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above).

(b) The Issuing Lender shall not at any time be obligated to issue any Letter of
Credit if (i) such issuance would conflict with, or cause the Issuing Lender or
any L/C Participant to exceed any limits imposed by, any applicable Requirement
of Law or (ii) any Lender is at that time a Defaulting Lender, unless the
Issuing Lender has entered into arrangements, including the delivery of Cash
Collateral, satisfactory to the Issuing Lender (in its sole discretion) with the
Borrower or such Lender to eliminate the Issuing Lender’s actual or potential
Fronting Exposure (after giving effect to Section 2.23(a)(iv)) with respect to
the Defaulting Lender arising from either the Letter of Credit then proposed to
be issued or that Letter of Credit and all other L/C Obligations as to which the
Issuing Lender has actual or potential Fronting Exposure, as it may elect in its
sole discretion.

3.2 Procedure for Issuance of Letter of Credit. The Borrower may from time to
time request that the Issuing Lender issue a Letter of Credit by delivering to
the Issuing Lender at its address for notices specified herein an Application
therefor, completed to the satisfaction of the Issuing Lender, and such other
certificates, documents and other papers and information as the Issuing Lender
may request. Upon receipt of any Application, the Issuing Lender will process
such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three (3) Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower promptly following the issuance thereof. The
Issuing Lender shall promptly furnish to the Administrative Agent, which shall
in turn promptly furnish to the Lenders, notice of the issuance of each Letter
of Credit (including the amount thereof).

 

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3.3 Fees and Other Charges. (a) The Borrower will pay a fee on all outstanding
Letters of Credit at a per annum rate equal to the Applicable Margin then in
effect with respect to Eurodollar Loans, shared ratably among the Lenders and
payable quarterly in arrears on each Fee Payment Date after the issuance date.

(b) In addition, the Borrower shall pay to the Issuing Lender for its own
account a fronting fee at a rate separately agreed between the Borrower and the
Issuing Lender on the undrawn and unexpired amount of each Letter of Credit,
payable quarterly in arrears on each Fee Payment Date after the issuance date.

(c) In addition to the foregoing fees, the Borrower shall pay or reimburse the
Issuing Lender for such normal and customary costs and expenses as are incurred
or charged by the Issuing Lender in issuing, negotiating, effecting payment
under, amending or otherwise administering any Letter of Credit.

3.4 L/C Participations. (a) The Issuing Lender irrevocably agrees to grant and
hereby grants to each L/C Participant, and, to induce the Issuing Lender to
issue Letters of Credit, each L/C Participant irrevocably agrees to accept and
purchase and hereby accepts and purchases from the Issuing Lender, on the terms
and conditions set forth below, for such L/C Participant’s own account and risk
an undivided interest equal to such L/C Participant’s Revolving Percentage in
the Issuing Lender’s obligations and rights under and in respect of each Letter
of Credit and the amount of each draft paid by the Issuing Lender thereunder.
Each L/C Participant agrees with the Issuing Lender that, if a draft is paid
under any Letter of Credit for which the Issuing Lender is not reimbursed in
full by the Borrower in accordance with the terms of this Agreement (or in the
event that any reimbursement received by the Issuing Lender shall be required to
be returned by it at any time), such L/C Participant shall pay (and the
Administrative Agent may apply Cash Collateral provided for this purpose) to the
Issuing Lender upon demand at the Issuing Lender’s address for notices specified
herein an amount equal to such L/C Participant’s Revolving Percentage of the
amount that is not so reimbursed (or is so returned). Each L/C Participant’s
obligation to pay such amount shall be absolute and unconditional and shall not
be affected by any circumstance, including (i) any setoff, counterclaim,
recoupment, defense or other right that such L/C Participant may have against
the Issuing Lender, the Borrower or any other Person for any reason whatsoever,
(ii) the occurrence or continuance of a Default or an Event of Default or the
failure to satisfy any of the other conditions specified in Section 5, (iii) any
adverse change in the condition (financial or otherwise) of the Borrower,
(iv) any breach of this Agreement or any other Loan Document by the Borrower,
any other Loan Party or any other L/C Participant or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.

(b) If any amount required to be paid by any L/C Participant to the Issuing
Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion of any
payment made by the Issuing Lender under any Letter of Credit is paid to the
Issuing Lender within three (3) Business Days after the date such payment is
due, such L/C Participant shall pay to the Issuing Lender on demand an amount
equal to the product of (i) such amount, times (ii) the daily average Federal
Funds Effective Rate during the period from and including the date such payment
is required to the date on which such payment is immediately available to the
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant to
Section 3.4(a) is not made available to the Issuing Lender by such L/C
Participant within three (3) Business Days after the date such payment is due,
the Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest

 

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thereon calculated from such due date at the rate per annum applicable to ABR
Loans. A certificate of the Issuing Lender submitted to any L/C Participant with
respect to any amounts owing under this Section shall be conclusive in the
absence of manifest error.

(c) Whenever, at any time after the Issuing Lender has made payment under any
Letter of Credit and has received from any L/C Participant its pro rata share of
such payment in accordance with Section 3.4(a), the Issuing Lender receives any
payment related to such Letter of Credit (whether directly from the Borrower or
otherwise, including proceeds of collateral applied thereto by the Issuing
Lender), or any payment of interest on account thereof, the Issuing Lender will
distribute to such L/C Participant its pro rata share thereof; provided,
however, that in the event that any such payment received by the Issuing Lender
shall be required to be returned by the Issuing Lender, such L/C Participant
shall return to the Issuing Lender the portion thereof previously distributed by
the Issuing Lender to it.

3.5 Reimbursement Obligation of the Borrower. If any draft is paid under any
Letter of Credit, the Borrower shall reimburse the Issuing Lender for the amount
of (a) the draft so paid and (b) any Taxes, fees, charges or other costs or
expenses incurred by the Issuing Lender in connection with such payment, not
later than 12:00 Noon, New York City time, on (i) the Business Day that the
Borrower receives notice of such draft, if such notice is received on such day
prior to 10:00 A.M., New York City time, or (ii) if clause (i) above does not
apply, the Business Day immediately following the day that the Borrower receives
such notice. Each such payment shall be made to the Issuing Lender at its
address for notices referred to herein in Dollars and in immediately available
funds. Interest shall be payable on any such amounts from the date on which the
relevant draft is paid until payment in full at the rate set forth in (x) until
the Business Day next succeeding the date of the relevant notice,
Section 2.12(b) and (y) thereafter, Section 2.12(c).

3.6 Obligations Absolute. The Borrower’s obligations under this Section 3 shall
be absolute and unconditional under any and all circumstances and irrespective
of any setoff, counterclaim or defense to payment that the Borrower may have or
have had against the Issuing Lender, any beneficiary of a Letter of Credit or
any other Person. The Borrower also agrees with the Issuing Lender that the
Issuing Lender shall not be responsible for, and the Borrower’s Reimbursement
Obligations under Section 3.5 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee. The Issuing Lender shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of the Issuing Lender. The Borrower agrees that
any action taken or omitted by the Issuing Lender under or in connection with
any Letter of Credit or the related drafts or documents, if done in the absence
of gross negligence or willful misconduct, shall be binding on the Borrower and
shall not result in any liability of the Issuing Lender to the Borrower.

3.7 Letter of Credit Payments. If any draft shall be presented for payment under
any Letter of Credit, the Issuing Lender shall promptly notify the Borrower of
the date and amount thereof. The responsibility of the Issuing Lender to the
Borrower in connection with any draft presented for payment under any Letter of
Credit shall, in addition to any payment obligation expressly provided for in
such Letter of Credit, be limited to determining that the documents (including
each draft) delivered under such Letter of Credit in connection with such
presentment are substantially in conformity with such Letter of Credit.

 

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3.8 Applications. To the extent that any provision of any Application related to
any Letter of Credit is inconsistent with the provisions of this Section 3, the
provisions of this Section 3 shall apply.

3.9 Existing Letters of Credit. On the Closing Date, without further action by
any party hereto (including the delivery of a request for a Letter of Credit or
any consent of, or confirmation by or to, the Administrative Agent), subject to
the terms of this Section 3.9, (i) each Existing Letter of Credit issued by an
Existing Issuing Lender hereunder shall become a Letter of Credit outstanding
under this Agreement, shall be deemed to be Letters of Credit issued under this
Agreement, on behalf of the Borrower, and shall be subject to the terms and
conditions hereof (including, without limitation Section 3.4(a)) as if each such
Existing Letters of Credit were issued by the applicable Issuing Lender pursuant
to this Agreement and (ii) each Existing Issuing Lender that has issued an
Existing Letter of Credit shall be deemed to have granted each L/C Participant,
and each L/C Participant shall be deemed to have acquired from such Existing
Issuing Lender, on the terms and conditions of Section 3.4 hereof, for such L/C
Participant’s own account and risk, an undivided participation interest in such
Existing Issuing Lender’s obligations and rights under each such Existing Letter
of Credit equal to such L/C Participant’s Revolving Percentage of (x) the
outstanding amount available to be drawn under such Existing Letter of Credit
and (y) the aggregate amount of any outstanding reimbursement obligations in
respect thereof.

SECTION 4. REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to enter into this Agreement
and to make the Loans and issue or participate in the Letters of Credit, the
Loan Parties hereby jointly and severally represent and warrant to the
Administrative Agent and each Lender that:

4.1 Financial Condition. The financial statements delivered pursuant to
Section 5.1(b) presents fairly, in all material respects, the consolidated
financial condition of the Borrower and its Subsidiaries or the Borrower and its
Subsidiaries, as applicable, as of the date of each such financial statement.
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved, subject to year-end audit adjustments.

4.2 No Change. Since December 31, 2012, there has been no development or event
that has had or could reasonably be expected to have a Material Adverse Effect.

4.3 Existence; Compliance with Law. Each Group Member (a) is duly organized,
validly existing and in good standing (to the extent such concept is applicable
in the relevant jurisdiction) under the laws of the jurisdiction of its
organization, (b) has the power and authority, and the legal right, to own and
operate its property, to lease the property it operates as lessee and to conduct
the business in which it is currently engaged except for where failure to do so
could not reasonable be expected to have a Material Adverse Effect, (c) is duly
qualified as a foreign corporation or other organization and in good standing
under the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification and (d) is
in compliance with all Requirements of Law except to the extent that the failure
to comply therewith could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.

4.4 Power; Authorization; Enforceable Obligations. Each Loan Party has the power
and authority, and the legal right, to make, deliver and perform the Loan
Documents to which it is a party and, in the case of the Borrower, to obtain
extensions of credit hereunder. Each Loan Party has taken all

 

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necessary organizational action to authorize the execution, delivery and
performance of the Loan Documents to which it is a party and, in the case of the
Borrower, to authorize the extensions of credit on the terms and conditions of
this Agreement. No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the extensions of credit hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the Loan Documents, except consents, authorizations, filings and
notices described in Schedule 4.4, which consents, authorizations, filings and
notices have been obtained or made and are in full force and effect. Each Loan
Document has been duly executed and delivered on behalf of each Loan Party party
thereto. This Agreement constitutes, and each other Loan Document upon execution
will constitute, a legal, valid and binding obligation of each Loan Party party
thereto, enforceable against each such Loan Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

4.5 No Legal Bar. The execution, delivery and performance of this Agreement and
the other Loan Documents, the issuance of Letters of Credit, the borrowings
hereunder and the use of the proceeds thereof will not violate any Requirement
of Law or any material Contractual Obligation of any Group Member and will not
result in, or require, the creation or imposition of any Lien on any of their
respective properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Collateral
Documents).

4.6 Litigation. No action, suit, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of any Loan
Party, threatened against or affecting any Loan Party or any of their respective
Subsidiaries or against any of their respective property as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined could reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.

4.7 No Default. No Default or Event of Default has occurred and is continuing.

4.8 Ownership of Property; Liens. Each Group Member has title in fee simple to,
or a valid leasehold interest in, all its real property, and good title to, or a
valid leasehold interest in, all its other property, and none of such property
is subject to any Lien except as permitted by Section 7.3.

4.9 Intellectual Property. Each Group Member owns, or is licensed to use, all
Intellectual Property necessary for the conduct of its business as currently
conducted, except to the extent that could not reasonably be expected to have a
Material Adverse Effect. No material claim has been asserted and is pending by
any Person challenging or questioning the use of any Intellectual Property or
the validity or effectiveness of any Intellectual Property, nor does any Loan
Party know of any valid basis for any such claim. The use of Intellectual
Property by each Group Member does not infringe on the rights of any Person
except to the extent that could not reasonably be expected to have a Material
Adverse Effect.

4.10 Taxes. Each Group Member has filed or caused to be filed all federal, state
and other material tax returns and reports that are required to have been filed
and has paid all Taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property, and all other material
Taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the relevant Group Member); no Tax Lien has been filed, and, to the
knowledge of the Loan Parties, no claim is being asserted, with respect to any
such Taxes, fees or other charges.

 

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4.11 Federal Regulations. No part of the proceeds of any Loans, and no other
extensions of credit hereunder, will be used (a) for the purpose, whether
immediate or ultimate, of “buying” or “carrying” any “margin stock” within the
respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect or (b) for any purpose that violates the
provisions of the Regulations of the Board.

4.12 ERISA. (a) Except as could not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect: (i) each Group Member and each
of their respective ERISA Affiliates is in compliance with the applicable
provisions of ERISA and the provisions of the Code relating to Plans and the
regulations and published interpretations thereunder; (ii) no ERISA Event has
occurred or is reasonably expected to occur; (iii) all amounts required by
applicable law with respect to, or by the terms of, any retiree welfare benefit
arrangement maintained by any Group Member or any ERISA Affiliate or to which
any Group Member or any ERISA Affiliate has an obligation to contribute have
been accrued in accordance with Statement of Financial Accounting Standards
No. 106; and (iv) the present value of all accumulated benefit obligations under
each Pension Plan (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than a
material amount the fair market value of the assets of such Pension Plan
allocable to such accrued benefits, and the present value of all accumulated
benefit obligations of all underfunded Pension Plans (based on the assumptions
used for purposes of Statement of Financial Accounting Standards No. 87) did
not, as of the date of the most recent financial statements reflecting such
amounts, exceed by more than a material amount the fair market value of the
assets of all such underfunded Pension Plans.

(b) Except as, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect, (i) all employer and employee contributions required by
applicable law or by the terms of any Foreign Benefit Arrangement or Foreign
Plan have been made, or, if applicable, accrued in accordance with normal
accounting practices; (ii) the accrued benefit obligations of each Foreign Plan
(based on those assumptions used to fund such Foreign Plan) with respect to all
current and former participants do not exceed the assets of such Foreign Plan;
(iii) each Foreign Plan that is required to be registered has been registered
and has been maintained in good standing with applicable regulatory authorities;
and (iv) each such Foreign Benefit Arrangement and Foreign Plan is in compliance
(A) with all material provisions of applicable law and all material applicable
regulations and published interpretations thereunder with respect to such
Foreign Benefit Arrangement or Foreign Plan and (B) with the terms of such plan
or arrangement.

4.13 Investment Company Act; Other Regulations. No Loan Party is an “investment
company”, or a company “controlled” by an “investment company”, within the
meaning of the Investment Company Act of 1940, as amended.

4.14 Subsidiaries. Except as disclosed to the Administrative Agent by the
Borrower in writing from time to time after the Closing Date, (a) Schedule 4.14
sets forth the name and jurisdiction of incorporation of each Subsidiary of a
Loan Party and, as to each such Subsidiary, the percentage of each class of
Capital Stock owned by any Loan Party or any Subsidiary of a Loan Party and
(b) there are no outstanding subscriptions, options, warrants, calls, rights or
other agreements or commitments (other than (i) stock options granted to
employees or directors, (ii) directors’ qualifying shares and (iii) springing
member interests held by independent managers) of any nature relating to any
Capital Stock of the Borrower or any Subsidiary.

 

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4.15 Use of Proceeds.

(a) The proceeds of the Revolving Loans and the Swingline Loans, and the Letters
of Credit, shall be used for general corporate purposes; provided, that such
proceeds may not be used (a) to buy back or pay down Indebtedness of any
Subsidiary of any Loan Party, (b) to pay dividends to shareholders of the
Borrower or (c) to make contributions to ESH REIT.

(b) The Borrower shall not, directly or indirectly, use the proceeds of the
Revolving Loans, Letter of Credit or the Swingline Loans, or request any
Revolving Loan, Swingline Loan or Letter of Credit the proceeds of which will be
used, or loaned, contributed, or otherwise made to any Subsidiary, joint venture
partner or, to the knowledge of the Borrower, other Person (i) in furtherance of
an offer, payment, promise to pay, or authorization of the payment or giving of
money, or anything else of value, to any Person in violation of any
Anti-Corruption Law, or to fund any activities or business of or with any
Sanctioned Person or in any country or territory that, at the time of such
funding, is the subject of any Sanctions or (ii) in any other manner that would
result in a violation of any Anti-Corruption Laws or Sanctions by any party to
this Agreement, with respect to (i) and (ii) to the extent prohibited by
Sanctions or Anti-Corruption Laws.

4.16 Environmental Matters. Except as, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect:

(a) the facilities and properties owned, leased or operated by any Group Member
(the “Properties”) do not contain, and have not previously contained, any
Materials of Environmental Concern in amounts or concentrations or under
circumstances that constitute or constituted an unresolved violation of, or
would reasonably be expected to give rise now or in the future to liability
under, any Environmental Law;

(b) no Group Member has received or is aware of any written notice of violation,
alleged violation, non-compliance, liability or potential liability regarding
matters arising under Environmental Laws or compliance with Environmental Laws
with regard to any of the Properties or the business operated by any Group
Member (the “Business”), nor does the Borrower have knowledge or reason to
believe that any such notice will be received or is being threatened;

(c) Materials of Environmental Concern have not been transported or disposed of
from the Properties in violation of, or in a manner or to a location that would
reasonably expected to give rise to liability under, any Environmental Law, nor
have any Materials of Environmental Concern been generated, treated, stored or
disposed of at, on or under any of the Properties in violation of, or in a
manner that would reasonably be expected to give rise to liability under, any
applicable Environmental Law;

(d) no judicial proceeding or governmental or administrative action is pending
or, to the knowledge of the Borrower, threatened, under any Environmental Law to
which any Group Member is or will be named as a party with respect to the
Properties or the Business, nor are there any judicial decrees, consent decrees,
consent orders, administrative orders or other governmental orders outstanding
under any Environmental Law with respect to the Properties or the Business;

(e) there has been no release or, to the knowledge of the Borrower, threat of
release of Materials of Environmental Concern at or from the Properties, or, to
the knowledge of the Borrower, arising from or related to the operations of any
Group Member in connection with the Properties or otherwise in connection with
the Business, in violation of or in amounts or in a manner that would reasonably
be expected to give rise to liability under Environmental Laws;

 

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(f) the Properties and all operations at the Properties are in compliance, and
have in the last five years been in compliance, with all applicable
Environmental Laws, and there is no contamination at, under or about the
Properties or violation of any Environmental Law with respect to the Properties
or the Business; and

(g) no Group Member has assumed any liability of any other Person under
Environmental Laws.

For purposes of this Section 4.16, “knowledge of the Borrower” includes all
facts disclosed in the Phase I environmental site assessment reports prepared by
EMG in 2012 for the Properties (the “EMG Reports”) to the extent such facts are
specifically and explicitly stated, it being understood by the parties that the
representations and warranties set forth in this Section 4.16 are not being
qualified by matters or conditions which are not included in such specific facts
but are being qualified only by the direct and natural consequences of the
explicit factual disclosures contained in the EMG Reports. For example, the
disclosure of a current or former storage tank does not have the effect of
disclosing contamination which may have leaked from such storage tank unless and
only to the extent that such EMG Report specifically states that the storage
tank leaked contamination.

4.17 Accuracy of Information, etc. All written information contained in this
Agreement, any other Loan Document or any other document, certificate or
statement furnished by or on behalf of any Loan Party to the Administrative
Agent or the Lenders, or any of them, for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents, other
than projections and information of a general economic or industry nature, is
and will be, when furnished, complete and correct in all material respects and
does not and will not, when furnished, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein not misleading in light of the circumstances under
which such statements were or are made. The projections contained in the
materials referenced above are prepared in good faith based upon reasonable
assumptions at the time made and at the time such projections are made, it being
recognized by the Lenders that such projections are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results, and such differences may be
material. There is no fact known to any Loan Party that could reasonably be
expected to have a Material Adverse Effect that has not been expressly disclosed
herein, in the other Loan Documents or in any other documents, certificates and
statements furnished to the Administrative Agent and the Lenders for use in
connection with the transactions contemplated hereby and by the other Loan
Documents.

4.18 Collateral Documents. The Security Agreement is effective to create in
favor of the Administrative Agent, for the benefit of the Lenders, a legal,
valid and enforceable security interest in the Collateral described therein and
proceeds thereof. In the case of the Pledged Securities described in the
Security Agreement, when stock certificates representing such Pledged Securities
are delivered to the Administrative Agent (together with a properly completed
and signed stock power or endorsement), and in the case of the other Collateral
described in the Security Agreement, when financing statements and other filings
specified on Schedule 4.18 in appropriate form are filed in the offices
specified on Schedule 4.18, the Security Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral and the proceeds thereof, as security for
the Obligations, in each case prior and superior in right to any other Person
(except, in the case of Collateral other than Pledged Securities and Deposit
Accounts, Liens permitted by Section 7.3).

4.19 Insurance. Each Group Member maintains with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks (but including in any event public liability,
product liability and business interruption) as are usually insured against in
the same general area by companies engaged in the same or a similar business.

 

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4.20 Anti-Corruption Laws and Sanctions. The Borrower has implemented and
maintains in effect policies and procedures reasonably designed to ensure
compliance by the Borrower, the other Group Members and their respective
directors, officers, employees and agents with Anti-Corruption Laws and
applicable Sanctions, and the Borrower, the other Group Members and their
respective officers and employees and, to the knowledge of the Borrower, its
directors and agents, are in compliance with Anti-Corruption Laws and applicable
Sanctions in all material respects. None of (a) the Borrower, any other Loan
Party or, to the knowledge of the Borrower, any of their respective directors,
officers or employees, or (b) to the knowledge of the Borrower, any agent of the
Borrower or any other Loan Party that will act in any capacity in connection
with or benefit from the credit facility established hereby, is a Sanctioned
Person. No borrowing or Letter of Credit, use of proceeds or other transaction
contemplated by this Agreement will violate Anti-Corruption Laws or applicable
Sanctions.

4.21 Certain Documents. The Borrower has delivered to the Administrative Agent a
complete and correct copy of the Subsidiary Loan Documents, including any
amendments, supplements or modifications with respect to any of the foregoing.

SECTION 5. CONDITIONS PRECEDENT

5.1 Conditions to Initial Extension of Credit. The agreement of each Lender to
make the initial extension of credit requested to be made by it is subject to
the satisfaction, prior to or concurrently with the making of such extension of
credit on the Closing Date, of the following conditions precedent:

(a) Credit Agreement; Subsidiary Guarantee and Collateral Documents. The
Administrative Agent shall have received

(i) this Agreement, executed and delivered by the Administrative Agent, the
Borrower and each Person listed on Schedule 1.1A,;

(ii) the Subsidiary Guarantee, executed and delivered by each of the Subsidiary
Guarantors;

(iii) the Collateral Documents, executed and delivered by each of the Loan
Parties party thereto.

(b) Financial Statements. The Lenders shall have received (i) an unaudited
consolidated income statement for the Borrower and its consolidated Subsidiaries
for its fiscal year ended December 31, 2012 calculated on a pro forma basis
after giving effect to the Restructuring and the repayment of Mezzanine Loans
with the net proceeds of the Extended Stay IPO and cash on hand of the Borrower
and its Subsidiaries; and (ii) unaudited interim consolidated financial
statements of the Borrower and its consolidated Subsidiaries for the
year-to-date period ended June 30, 2013, calculated on a pro forma basis after
giving effect to the Restructuring and the repayment of Mezzanine Loans with the
net proceeds of the Extended Stay IPO and cash on hand of the Borrower and its
Subsidiaries (it being understood that the filing with the SEC by the Borrower
of registration statements on Form S-1 (and amendments thereto) in connection
with the Extended Stay IPO by the Borrower shall satisfy the related requirement
of this Section 5.1(b) to the extent such registration statements include the
information specified herein)

(c) Operating Forecast. The Administrative Agent shall have received
satisfactory Operating Forecast of the Borrower through December 31, 2017.

 

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(d) Lien Searches. The Administrative Agent shall have received the results of a
recent Lien search with respect to each Loan Party, and such search shall reveal
no Liens on any of the assets of the Loan Parties except for Liens permitted by
Section 7.3 or discharged on or prior to the Closing Date pursuant to
documentation satisfactory to the Administrative Agent.

(e) Eurodollar Loans. The Administrative Agent shall have received not less than
three (3) Business Days prior to the Closing Date, an appropriately completed
request for any Eurodollar Loan to be made on the Closing Date, if any.

(f) Fees. The Lenders and the Administrative Agent shall have received all fees
required to be paid, and all expenses for which invoices have been presented
(including the reasonable fees and expenses of legal counsel), on or before the
Closing Date. All such amounts will be reflected in the funding instructions
given by the Borrower to the Administrative Agent on or before the Closing Date.

(g) Secretary’s Certificates. The Administrative Agent shall have received a
certificate of each Loan Party, dated the Closing Date, substantially in the
form of Exhibit D, with appropriate insertions and attachments, satisfactory in
form and substance to the Administrative Agent, executed by a Responsible
Officer and the Secretary or any Assistant Secretary of such Loan Party.

(h) Proceedings of the Loan Parties. The Administrative Agent shall have
received a copy of the resolutions, in form and substance satisfactory to the
Administrative Agent, of the Board of Directors of each Loan Party authorizing
(i) the execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party, (ii) the borrowings contemplated hereunder and
(iii) the granting by it of the Liens created pursuant to the Collateral
Documents, certified by the Secretary or an Assistant Secretary of such Loan
Party as of the Closing Date, which certification shall be included in the
certificate delivered in respect of such Loan Party pursuant to Section 5.1(g),
shall be in form and substance satisfactory to the Administrative Agent and
shall state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded.

(i) Incumbency Certificates. The Administrative Agent shall have received a
certificate of each Loan Party, dated the Closing Date, as to the incumbency and
signature of the officers of such Loan Party, as applicable, executing any Loan
Document, which certificate shall be included in the certificate delivered in
respect of such Loan Party pursuant to Section 5.1(g), shall be satisfactory in
form and substance to the Administrative Agent, and shall be executed by a
Responsible Officer and the Secretary or any Assistant Secretary of such Loan
Party.

(j) Governing Documents. The Administrative Agent shall have received true and
complete copies of the Governing Documents of each Loan Party certified as of
the Closing Date as complete and correct copies thereof by the Secretary or an
Assistant Secretary of such Loan Party, which certification shall be included in
the certificate delivered in respect of such Loan pursuant to Section 5.1(g) and
shall be in form and substance satisfactory to the Administrative Agent.

(k) Good Standing Certificates. The Administrative Agent shall have received
certificates dated as of a recent date from the Secretary of State or other
appropriate authority evidencing the good standing of each Loan Party (i) in the
jurisdiction of its organization or formation and (ii) in each other
jurisdiction where its ownership, lease or operation of Property or the conduct
of its business requires it to qualify as a foreign Person except, as to this
subclause (ii), where the failure to so qualify could not reasonably be expected
to have a Material Adverse Effect.

 

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(l) Legal Opinions. The Administrative Agent shall have received the executed
legal opinions of Fried, Frank, Harris, Shriver & Jacobson LLP, counsel to the
Loan Parties, in form and substance reasonably satisfactory to the
Administrative Agent.

(m) Closing Certificates. The Administrative Agent shall have received the
following certificates, dated the Closing Date, satisfactory in form and
substance to the Administrative Agent:

(i) a certificate executed by a Responsible Officer of each Loan Party
confirming, as of the Closing Date, that each of the representations and
warranties made by such Loan Party in or pursuant to the Loan Documents to which
it is a party shall be true and correct in all material respects on and as of
such date as if made on and as of such date;

(ii) a certificate executed by a Responsible Officer of the Borrower, confirming
as of the Closing Date that no Default or Event of Default has occurred and is
continuing on such date or would result from any extensions of credit under this
Agreement requested to be made on such date;

(iii) a certificate executed by a Responsible Officer of each Loan Party,
confirming as of the Closing Date that immediately before and after giving
effect to the transactions expected to occur on the Closing Date, including the
making of each Loan to be made on the Closing Date and the application of the
proceeds thereof and the issuance of each Letter of Credit to be issued on the
Closing Date, each of the Loan Parties and their respective Subsidiaries, on a
consolidated basis, is and will be Solvent;

(iv) a certificate executed by a Responsible Officer of the Borrower, confirming
as of the Closing Date that there has been no event or occurrence since
December 31, 2012 that has had or could reasonably be expected to have, either
individually or in aggregate, a Material Adverse Effect; and

(v) a compliance certificate executed by a Responsible Officer of the Borrower,
confirming that immediately before and after giving effect to the transactions
expected to occur on the Closing Date, including the making of each Loan to be
made on the Closing Date and the application of the proceeds thereof and the
issuance of each Letter of Credit to be issued on the Closing Date, that the
Borrower is and will be in pro forma compliance with the covenants set forth in
Section 7.1, including certification of customary supporting documentation and
supplemental reporting attached thereto.

(n) Know Your Customer. The Administrative Agent shall have received, at least
three (3) Business Days prior to the Closing Date, all documentation and other
information required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including, without
limitation, the Patriot Act, in each case as requested at least ten
(10) Business Days prior to the Closing Date.

(o) Pledged Securities; Stock Powers; Pledged Notes. The Administrative Agent
shall have received (i) the certificates representing the shares of Capital
Stock pledged pursuant to the Security Agreement, together with an undated stock
power for each such certificate executed in blank by a duly authorized officer
of the pledgor thereof and (ii) each promissory note (if any) pledged to the
Administrative Agent pursuant to the Security Agreement endorsed (without
recourse) in blank (or accompanied by an executed transfer form in blank) by the
pledgor thereof.

 

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(p) Filings, Registrations and Recordings. Each document (including any Uniform
Commercial Code financing statement) required by the Collateral Documents or
under law or reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the Administrative Agent,
for the benefit of the Lenders, a perfected Lien on the Collateral described
therein, prior and superior in right to any other Person (other than with
respect to Liens expressly permitted by Section 7.3), shall be in proper form
for filing, registration or recordation.

(q) Insurance. The Administrative Agent shall have received insurance
certificates satisfying the requirements of Section 4.8(b) of the Security
Agreement.

(r) The Account and the Conditional Controlled Account. The Administrative Agent
shall have received (i) evidence satisfactory to it that each of the Account and
the Conditional Controlled Account has been established and continues to exist,
(ii) the Account Control Agreement, executed and delivered by the Administrative
Agent, the Borrower and the Account Bank, (iii) the Conditional Account Control
Agreement, executed and delivered by the Administrative Agent, the Borrower and
the Conditional Controlled Account Bank and (iv) evidence that the Borrower has
given the Cash Management Agent irrevocable direction in the form of Exhibit L
that all amounts remitted to Group Members shall be remitted to the Conditional
Control Account (as may be amended, restated or modified from time to time the
“Irrevocable Account Direction”).

(s) Extended Stay IPO. The Extended Stay IPO shall have been consummated no
later than January 2, 2014 and at least $500,000,000 in gross proceeds shall
have been raised as a result thereof.

(t) Maximum Consolidated Total Debt. The Consolidated Total Debt shall be no
greater than the sum of (a) $3,600,000,000 plus (b) “Loans” and “L/C
Obligations” (as each is defined in the ESH Revolving Credit Agreement)
outstanding under the ESH Revolving Credit Agreement on the Closing Date plus
(c) Loans and L/C Obligations under this Agreement on the Closing Date.

(u) ESH Revolving Credit Agreement. The ESH Revolving Credit Agreement shall
have closed and all conditions precedent thereunder shall have been satisfied.

(v) Escrow Agreement; Escrow Account. The Administrative Agent shall have
received (i) the Escrow Agreement, executed and delivered by each of ESH REIT
and the Escrow Bank and (ii) evidence in form and substance acceptable to the
Administrative Agent that an amount equal to the net proceeds from the Extended
Stay IPO has been deposited into the Escrow Account.

(w) Existing REIT Credit Facility. The Administrative Agent shall have received
evidence in form and substance acceptable to it that the Existing REIT Credit
Facility has been terminated.

For the purpose of determining compliance with the conditions specified in this
Section 5.1, each Lender that has signed this Agreement shall be deemed to have
accepted, and to be satisfied with, each document or other matter required under
this Section 5.1 unless the Administrative Agent shall have received written
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

 

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5.2 Conditions to Each Extension of Credit. The agreement of each Lender to make
any extension of credit requested to be made by it on any date (including its
initial extension of credit) is subject to the satisfaction of the following
conditions precedent:

(a) Representations and Warranties. Each of the representations and warranties
made by any Loan Party in or pursuant to the Loan Documents shall be true and
correct in all material respects on and as of such date, before and after giving
effect to the extensions of credit requested to be made on such date and the
application of the proceeds therefrom, as if made on and as of such date.

(b) No Default or Trigger Event. No Default, Event of Default or Trigger Event
shall have occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.

Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.

SECTION 6. AFFIRMATIVE COVENANTS

The Loan Parties hereby jointly and severally agree that, so long as the
Revolving Commitments remain in effect, any Letter of Credit remains outstanding
or any Loan or other amount is owing to any Lender or the Administrative Agent
hereunder, each Loan Party shall and shall cause each of its Subsidiaries (other
than the ESH Parties) to:

6.1 Financial Statements. Furnish to the Administrative Agent and each Lender:

(a) as soon as available, but in any event within 90 days after the end of each
fiscal year of the Borrower, a copy of the audited consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at the end of such year and
the related audited consolidated statements of income and of cash flows for such
year, setting forth in each case in comparative form the figures for the
previous year, reported on without a “going concern” or like qualification or
exception, or qualification arising out of the scope of the audit (provided that
such report may contain a “going concern” or like qualification or exception, or
qualification arising out of the scope of the audit, if such qualification or
exception is related to the (i) occurrence of the Revolving Termination Date or
a (ii) a failure to satisfy financial covenants in this Agreement (whether or
not such failure has occurred)), by a “Big Four” accounting firm or other
independent certified public accountant acceptable to Lender in accordance with
the Uniform System of Accounts (or such other accounting basis acceptable to
Lender) and include such footnotes as required pursuant to GAAP (it being
understood that the filing with the SEC by the Borrower of annual reports of the
Borrower and its consolidated Subsidiaries on Form 10-K satisfy the related
requirement of this Section 6.1(a) to the extent such annual reports include the
information specified herein); and

(b) as soon as available, but in any event not later than 45 days after the end
of each of the first three quarterly periods of each fiscal year of the
Borrower, the unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and of cash flows for such quarter
and the portion of the fiscal year through the end of such quarter, setting
forth in each case in comparative form the figures for the previous year,
include such footnotes as required pursuant to GAAP, certified by a Responsible
Officer of the Borrower as being fairly stated in all material respects (subject
to normal year-end audit adjustments) (it being understood that the filing with
the SEC by the Borrower of quarterly reports of the Borrower and its
consolidated Subsidiaries on Form 10-Q satisfy the related requirement of this
Section 6.1(b) to the extent such quarterly reports include the information
specified herein).

All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied (except as approved by such accountants or officer, as the case may be,
and disclosed in reasonable detail therein) consistently throughout the periods
reflected therein and with prior periods.

 

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6.2 Certificates; Other Information. Furnish to the Administrative Agent and
each Lender (or, in the case of clause (f), to the relevant Lender):

(a) concurrently with the delivery of the financial statements referred to in
Section 6.1(a), a certificate of the independent certified public accountants
reporting on such financial statements stating that in making the examination
necessary therefor no knowledge was obtained of any Event of Default, except as
specified in such certificate;

(b) (i) concurrently with the delivery of any financial statements pursuant to
Section 6.1 and (ii) within 20 days after the end of each calendar month, (A) a
certificate of a Responsible Officer of the Borrower stating that, to the best
of such Responsible Officer’s knowledge, each Loan Party during such period has
observed or performed all of its covenants and other agreements, and satisfied
every condition contained in this Agreement and the other Loan Documents to
which it is a party to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate, (B) (x) a Compliance Certificate
containing all information and calculations necessary for determining compliance
by each Group Member with covenants set forth on Section 7.1 as of the last day
of the calendar month or fiscal quarter or fiscal year of such Loan Party, as
the case may be and (B) a narrative discussion and analysis of the financial
condition and results of operations of each Loan Party and its Subsidiaries for
the reporting period then ended and for the period from the beginning of the
then current fiscal year to the end of such period, as compared to the portion
of the Projections covering such periods and to the comparable periods of the
previous year, including occupancy figures and average daily rate calculations,
in each case, with respect to each of the properties of any Subsidiary of a Loan
Party;

(c) as soon as available, and in any event no later than 45 days after the end
of each fiscal year of a Loan Party, an Operating Forecast for such Loan Party
for the following fiscal year, and, as soon as available, significant revisions,
if any, of such Operating Forecast, each of which such Operating Forecasts shall
be accompanied by a certificate of a Responsible Officer of the applicable Loan
Party stating that such Operating Forecast is based on reasonable estimates,
information and assumptions and that such Responsible Officer has no reason to
believe that such Operating Forecast is incorrect or misleading in any material
respect;

(d) within five (5) days after the same are sent, copies of all financial
statements and similar reporting documents that any Group Member sends to the
holders of obligations under the Subsidiary Loan Documents;

(e) promptly following receipt thereof, copies of (i) any documents described in
Section 101(k) of ERISA that any Group Member or any ERISA Affiliate may request
with respect to any Multiemployer Plan and (ii) any notices described in
Section 101(l) of ERISA that any Group Member or any ERISA Affiliate may request
with respect to any Multiemployer Plan; provided, that if the relevant Group
Member or ERISA Affiliate has not requested such documents or notices from the
administrator or sponsor of the applicable Multiemployer Plan, then, upon
reasonable request of the Administrative Agent, such Group Member or the ERISA
Affiliate shall promptly make a request for such documents or notices from such
administrator or sponsor and the Borrower shall provide copies of such documents
and notices promptly after receipt thereof; and

(f) promptly, such additional financial and other information as any Lender may
from time to time reasonably request.

 

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6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its material
obligations of whatever nature, except (i) where the amount or validity thereof
is currently being contested in good faith by appropriate proceedings and
reserves in conformity with GAAP with respect thereto have been provided on the
books of the relevant Group Member, or (ii) where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

6.4 Taxes. File or cause to be filed all federal, state and other material tax
returns and reports that are required to be filed and pay all Taxes shown to be
due and payable on said returns or on any assessments made against it or any of
its property, and all other material Taxes, fees or other charges imposed on it
or any of its property by any Governmental Authority (other (i) than any the
amount or validity of which are contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP are
provided on the books of the relevant Group Member or (ii) where the failure to
do so could not reasonably be expected to have a Material Adverse Effect).

6.5 Maintenance of Existence; Compliance. (a)(i) Preserve, renew and keep in
full force and effect its organizational existence and (ii) take all reasonable
action to maintain all rights, privileges and franchises necessary or desirable
in the normal conduct of its business, except, in each case, as otherwise
permitted by Section 7.4 and except, in the case of clause (ii) above, to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect; (b) comply with all Contractual Obligations and Requirements of
Law except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect; and
(c) maintain in effect and enforce policies and procedures reasonably designed
to ensure compliance by the Borrower, the other Group Members and their
respective directors, officers and employees with Anti-Corruption Laws and
applicable Sanctions.

6.6 Maintenance of Property; Insurance. (a) Except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect keep all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted and (b) maintain with financially
sound and reputable insurance companies insurance on all its property in at
least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption) as are usually
insured against in the same general area by companies engaged in the same or a
similar business.

6.7 Inspection of Property; Books and Records; Discussions. (a) Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities and (b) permit
representatives of the Administrative Agent once each calendar year upon
reasonable prior notice and at a time mutually agreed with the Borrower (or,
after the occurrence and during the continuation of an Event of Default, at any
time or frequency) to visit and inspect its properties, to examine and make
extracts from its books and records (other than materials protected by
attorney-client privilege and materials which the Loan Parties or such
Subsidiary thereof, as applicable, may not disclose without violation of a
confidentiality agreement between the Loan Party, or such Subsidiary thereof, as
applicable, and any third party) and to discuss its affairs, finances and
condition with its officers, in each case, at the expense of the Borrower once
each calendar year (or, after the occurrence and during the continuation of an
Event of Default, at any time).

6.8 Notices. Promptly give notice to the Administrative Agent and each Lender
of:

(a) the occurrence of any Default or Event of Default;

 

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(b) any (i) default or event of default under any Contractual Obligation of any
Group Member or (ii) litigation, investigation or proceeding that may exist at
any time between any Group Member and any Governmental Authority, that in either
case, if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;

(c) any action, suit, investigation or proceeding affecting any Group Member
(i) that, if adversely determined, could reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect or (ii) which relates to any
Loan Document;

(d) an ERISA Event, as soon as possible and in any event within 10 days after
the Borrower knows or has reason to know thereof;

(e) any transaction or occurrence that results in the damage, destruction or
rendering unfit for normal use any of the Property of any Group Member, that
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect;

(f) any pending or threatened notice or claim, administrative, regulatory or
judicial action, suit, judgment, demand or other written communication by any
other Person alleging or asserting the liability of any Group Member for
investigatory costs, clean-up costs, governmental response costs, damages to
natural resources or other property, personal injuries, fines or penalties or
seeking injunctive relief, in each case (i) to the extent relating to the
presence, use or release of any Material of Environmental Concern or the
violation, or alleged violation, of any Environmental Law, and (ii) that, if
adversely determined, would reasonably be expected to have a Material Adverse
Effect;

(g) any cancellation or receipt of threatened cancellation of any insurance
required to be maintained under Section 6.6(b);

(h) any amendment or proposed amendment to any Subsidiary Loan Document; and

(i) any development or event that has had or could reasonably be expected to
have a Material Adverse Effect.

6.9 Environmental Laws. (a) Comply in all material respects with, and take
reasonable steps to ensure compliance in all material respects by all tenants
and subtenants, if any, with, all applicable Environmental Laws, and obtain and
comply in all material respects with and maintain, and take reasonable steps to
ensure that all tenants and subtenants obtain and comply in all material
respects with and maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws; in each
case, except for such compliance and failure to obtain and maintain that would
not reasonably be expected to have a Material Adverse Effect;

(b) Except as would no reasonably be expected to have a Material Adverse Effect,
(i) conduct and complete all investigations, studies, sampling and testing, and
all remedial, removal and other actions required under Environmental Laws and
(ii) promptly comply in all material respects with all lawful orders and
directives of all Governmental Authorities regarding Environmental Laws.

6.10 Additional Collateral, etc.

(a) With respect to any property acquired after the Closing Date by any Loan
Party (other than (x) any property described in paragraph (b) or (c) below,
(y) any property subject to a Lien expressly permitted by Section 7.3(f), and
(z) Excluded Property) as to which the Administrative Agent, for the benefit of
the Lenders, does not have a perfected Lien, promptly (and, in any event, within

 

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sixty (60) days, provided that such time period may be extended in the
reasonable discretion of the Administrative Agent) (i) execute and deliver to
the Administrative Agent such amendments to the Security Agreement or such other
documents as the Administrative Agent deems reasonably necessary or advisable to
grant to the Administrative Agent, for the benefit of the Lenders, a security
interest in such property and (ii) take all actions reasonably necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders,
a perfected first priority security interest in such property, including the
filing of Uniform Commercial Code financing statements in such jurisdictions as
may be required by the Security Agreement or by law or as may be requested by
the Administrative Agent.

(b) With respect to any new Domestic Subsidiary (other than an Excluded
Subsidiary) created or acquired after the Closing Date by any Loan Party (which,
for the purposes of this paragraph (b), shall include any existing Subsidiary
that ceases to be an Excluded Subsidiary), promptly (and, in any event, within
sixty (60) days, provided that such time period may be extended in the
reasonable discretion of the Administrative Agent) (i) execute and deliver to
the Administrative Agent such amendments to the Security Agreement as the
Administrative Agent deems necessary or advisable to grant to the Administrative
Agent, for the benefit of the Lenders, a perfected first priority security
interest in the Capital Stock of such new Subsidiary that is owned by any Loan
Party, (ii) deliver to the Administrative Agent the certificates representing
such Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the relevant Loan Party, and
(iii) cause such new Subsidiary (A) to become a party to the Subsidiary
Guarantee and Security Agreement as a Subsidiary Guarantor and a Pledgor,
respectively, (B) to take such actions necessary or advisable to grant to the
Administrative Agent for the benefit of the Lenders a perfected security
interest in the Collateral described in the Security Agreement with respect to
such new Subsidiary, including the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the Security Agreement or
by law or as may be requested by the Administrative Agent and (C) to deliver to
the Administrative Agent a certificate of such Subsidiary, substantially in the
form of Exhibit K, with appropriate insertions and attachments.

(c) With respect to any new Foreign Subsidiary (other than an Excluded
Subsidiary) created or acquired after the Closing Date by any Loan Party,
promptly (and, in any event, within sixty (60) days, provided that such time
period may be extended in the reasonable discretion of the Administrative Agent)
(i) execute and deliver to the Administrative Agent such amendments to the
Security Agreement as the Administrative Agent deems necessary or advisable to
grant to the Administrative Agent, for the benefit of the Lenders, a perfected
security interest in the Capital Stock of such new Subsidiary that is owned by
any such Loan Party (provided that in no event shall more than 65% of the total
outstanding voting Capital Stock of any such new Subsidiary be required to be so
pledged), and (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the relevant Loan Party,
and take such other action as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Administrative Agent’s security
interest therein.

Notwithstanding the above, (i) no Capital Stock of any Subsidiary which is
Excluded Property shall be required to be pledged as Collateral, and (ii) no
Loan Party will be required to take any action in any non-U.S. jurisdiction to
create any security interest in assets located or titled outside of the U.S. or
to perfect any security interests in such assets.

6.11 Use of Proceeds.

(a) The proceeds of the Revolving Loans and the Swingline Loans, and the Letters
of Credit, shall be used for general corporate purposes; provided, that such
proceeds may not be used (a) to buy back or pay down Indebtedness of any
Subsidiary of any Loan Party, (b) to pay dividends to shareholders of the
Borrower or (c) to make contributions to ESH REIT.

 

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(b) The Borrower shall not, directly or indirectly, use the proceeds of the
Revolving Loans, Letters of Credit or the Swingline Loans, or request any
Revolving Loan, Swingline Loan or Letter of Credit the proceeds of which will be
used, or loaned, contributed, or otherwise made to any Subsidiary, joint venture
partner or, to the knowledge of the Borrower, other Person (i) in furtherance of
an offer, payment, promise to pay, or authorization of the payment or giving of
money, or anything else of value, to any Person in violation of any
Anti-Corruption Law, or to fund any activities or business of or with any
Sanctioned Person or in any country or territory that, at the time of such
funding, is the subject of any Sanctions or (ii) in any other manner that would
result in a violation of any Anti-Corruption Laws or Sanctions by any party to
this Agreement, with respect to (i) and (ii) to the extent prohibited by
Sanctions or Anti-Corruption Laws.

6.12 Know Your Customer. The Borrower shall, promptly following a request by the
Administrative Agent, the Swingline Lender, the Issuing Lender or any Lender,
provide all documentation and other information that the Administrative Agent,
the Swingline Lender, the Issuing Lender or such Lender reasonably requests in
order to comply with its ongoing obligations under applicable “know your
customer” and anti-money laundering rules and regulations, including the PATRIOT
Act.

6.13 Further Assurances. The Borrower will execute and deliver to the
Administrative Agent such amendments to the Collateral Documents or such other
documents as the Administrative Agent deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Secured Parties, a legal, valid
and enforceable security interest in the Collateral and proceeds thereof.

6.14 [Reserved]

6.15 Trigger Event. After the occurrence and during the continuation of a
Trigger Event, the Borrower shall cause each of the Group Members to make the
maximum amount of cash distributions to its respective parent entity that it is
not prohibited from making under the terms of the Subsidiary Loan Documents
directly into the Account.

6.16 Cash Management Account. Borrower shall, or shall cause its Subsidiaries
to, (i) deliver to the Cash Management Agent monthly instructions with respect
to the disposition of funds in the Borrower Remainder Subaccount in accordance
with the Irrevocable Account Direction, it being understood that (x) the amounts
directed to the ESH Conditional Controlled Account represent the amounts payable
to the “Group Members” (as such term is defined in the ESH Revolving Credit
Agreement) and (y) the amounts directed to the Conditional Controlled Account
represent the amounts payable to Group Members; (ii) provide the Administrative
Agent with instructions described in clause (i) of this Section 6.16 promptly
after delivering such instructions to the Cash Management Agent; and
(iii) refrain from revoking, modifying or amending the Irrevocable Account
Direction without the prior written consent of the Administrative Agent.

6.17 Post-Closing Requirements. Within 90 days (or such longer period as the
Administrative Agent shall determine in its reasonable discretion) of the
Closing Date, the Administrative Agent shall have received counterparts of each
Mortgage to be entered into with respect to each Mortgaged Property set forth on
Schedule 6.16 duly executed and delivered by the record owner of such Mortgaged
Property and suitable for recording, together with all surveys, title insurance,
flood insurance, legal opinions and other documents, and take such other
actions, in each case as reasonably requested by the Administrative Agent in
connection therewith and in form and substance reasonably satisfactory to the
Administrative Agent.

 

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SECTION 7. NEGATIVE COVENANTS

Each Loan Party hereby jointly and severally agrees that, so long as the
Revolving Commitments remain in effect, any Letter of Credit remains outstanding
or any Loan or other amount is owing to any Lender or the Administrative Agent
hereunder, each Loan Party shall not, and shall not permit any of its
Subsidiaries (other than the ESH Parties) to, directly or indirectly:

7.1 Financial Condition Covenants.

(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as at
the last day of any period of four consecutive fiscal quarters of the Borrower
ending with any fiscal quarter set forth below to exceed the ratio set forth
below opposite such fiscal quarter:

 

Fiscal Quarter

   Consolidated
Leverage Ratio

Any fiscal quarter ended on or before December 31, 2015

   9.00 to 1.00

Any fiscal quarter ended on or after January 1, 2016

   8.75 to 1.00

(b) Debt Yield. Permit the Debt Yield as at the last day of any calendar month
to be less than 9.00%.

7.2 Indebtedness. Create, issue, incur, assume, become liable in respect of or
suffer to exist any Indebtedness, except:

(a) Indebtedness of any Loan Party pursuant to any Loan Document;

(b) Indebtedness of any Group Member in respect of the Mortgage Loan Documents
outstanding on the date hereof or any Permitted Refinancing thereof;

(c) Indebtedness of any Group Member in respect of the Mezzanine Loan Documents
outstanding on the date hereof or any Permitted Refinancing thereof;

(d) (i) Indebtedness of any Group Member incurred to finance the acquisition,
construction or improvement of any fixed or capital assets, including Capital
Lease Obligations and any Indebtedness assumed in connection with the
acquisition of any such assets (provided that such Indebtedness is incurred or
assumed prior to or within 90 days after such acquisition or the completion of
such construction or improvement and the principal amount of such Indebtedness
does not exceed the cost of acquiring, constructing or improving such fixed or
capital assets) and (ii) any extension, renewal, refinancing, refunding,
replacement or restructuring (or successive extensions, renewals, refinancings,
refundings, replacements or restructurings) of any such Indebtedness from time
to time (in whole or in part); provided, that at the time of incurrence,
assumption, extension, renewal, refinancing, refunding, replacement or
restructuring, as applicable, of any Indebtedness permitted by this
Section 7.2(d), and after giving effect thereto, (A) no Default, Event of
Default or Trigger Event shall have occurred and be continuing and (B) the Loan
Parties shall be in pro forma compliance with the financial covenants contained
in Section 7.1;

 

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(e) [Reserved]

(f) [Reserved]

(g) Indebtedness incurred or arising from or in connection with any bid,
performance, surety, statutory, completion, return-of-money or appeal bonds or
similar obligations issued, existing or incurred in the ordinary course of
business;

(h) Indebtedness arising from or in connection with accounts payable (for the
deferred purchase price of property or services) in the ordinary course of
business greater than 90 days past the invoice or billing date which are being
contested in good faith by appropriate proceedings and for which adequate
reserves shall have been established by the applicable Group Member in
conformity with GAAP;

(i) letters of credit, bank guarantees, warehouse receipts or similar
instruments issued to support performance obligations and trade letters of
credit (other than obligations in respect of other Indebtedness) in the ordinary
course of business;

(j) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business or other cash management services in
the ordinary course of business;

(k) obligations (contingent or otherwise) existing or arising under any Swap
Agreement entered into in the ordinary course of business not for a speculative
purpose;

(l) Indebtedness (x) of a Subsidiary of a Loan Party (other than an ESH Party)
owed to a Loan Party or a Subsidiary of a Loan Party (other than an ESH Party)
and (y) of a Loan Party owed to a Loan Party or a Subsidiary of a Loan Party
(other than an ESH Party), and any refinancing thereof;

(m) Indebtedness of the Group Members outstanding on the Closing Date and
disclosed on Schedule 7.2 and any refinancing thereof;

(n) Indebtedness consisting of Guarantee Obligations by the Group Members in
respect of Indebtedness, leases and other ordinary course obligations permitted
by the Loan Documents to be incurred by a Group Member;

(o) contingent liabilities in respect of any indemnification, adjustment of
purchase price, non-compete, consulting, deferred Taxes and similar obligations
of the Group Members incurred in connection with acquisitions or dispositions;

(p) Indebtedness owed to any Person providing property, casualty or liability
insurance to the Group Member, so long as such Indebtedness shall not be in
excess of the amount of the unpaid cost of, and shall be incurred only to defer
the cost of, such insurance for the year in which such Indebtedness is incurred
and such Indebtedness shall be outstanding only during such year;

(q) Indebtedness of the Group Members not otherwise permitted by this
Section 7.2 in an aggregate principal amount not to exceed $10,000,000 at any
time outstanding; and

 

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(r) Indebtedness incurred in connection with sale and leaseback transactions.

7.3 Liens. Create, incur, assume or suffer to exist any Lien upon any of the
property of any Loan Party, whether now owned or hereafter acquired, except:

(a) Liens for Taxes not yet due or that are being contested in good faith by
appropriate proceedings, provided that adequate reserves with respect thereto
are maintained on the books of the relevant Loan Party in conformity with GAAP;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business that are not overdue for a
period of more than 30 days or that are being contested in good faith by
appropriate proceedings;

(c) pledges or deposits in connection with workers’ compensation, unemployment
insurance and other social security legislation;

(d) deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds,
performance or payment bonds and other obligations of a like nature incurred in
the ordinary course of business;

(e) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business that, in the aggregate, are not
substantial in amount and that do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of any Group Member;

(f) Liens securing Indebtedness of any Group Member incurred pursuant to
Section 7.2(d) to finance the acquisition of fixed or capital assets, provided
that (i) such Liens shall be created substantially simultaneously with the
acquisition of such fixed or capital assets, (ii) such Liens do not at any time
encumber any property other than the property financed by such Indebtedness and
(iii) the amount of Indebtedness secured thereby is not increased;

(g) Liens created pursuant to the Collateral Documents;

(h) any interest or title of a lessor under any lease entered into by the
Borrower in the ordinary course of its business and covering only the assets so
leased;

(i) Liens existing on the Closing Date and listed on Schedule 7.3 hereto and any
modifications, replacements, renewals or extensions thereof; provided that
(A) the Lien does not extend to any additional property other than
(x) after-acquired property that is affixed or incorporated into the property
covered by such Lien or financed by Indebtedness permitted under Section 7.2 and
(y) proceeds and products thereof, (B) the amount secured or benefited thereby
is not increased except as contemplated by Section 7.2(m), (C) the direct or any
contingent obligor with respect thereto is not changed and (D) any renewal,
extension or modification of the obligations secured or benefited by such Liens
is permitted by Section 7.2(m);

(j) Liens securing judgments for the payment of money not constituting an Event
of Default under Section 8.1(i);

(k) Liens on property of a Person existing at the time such Person is merged
into or consolidated with a Loan Party; provided, that such Liens were not
created in contemplation of such merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated with the
relevant Loan Party, and the applicable Indebtedness secured by such Lien is
permitted pursuant to this Agreement;

 

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(l) Liens (A) of a collecting bank arising under Section 4-208 of the Uniform
Commercial Code on items in the course of collection, (B) attaching to commodity
trading accounts or other brokerage accounts incurred in the ordinary course of
business and (C) in favor of a banking institution arising as a matter of law
encumbering deposits (including the right of set-off) and which are within the
general parameters customary in the banking industry;

(m) pledges or deposits of cash and Cash Equivalents securing deductibles,
self-insurance, co-payment, co-insurance, retentions and similar obligations to
providers of insurance in the ordinary cause of business;

(n) (A) leases, licenses, subleases or sublicenses granted to other Persons in
the ordinary course of business which do not (x) interfere in any material
respect with the business of a Loan Party or (y) secure any Indebtedness and
(B) the rights reserved or vested in any Person by the terms of any lease,
license, franchise, grant or permit held by the Loan Parties or by a statutory
provision to terminate any such lease, license, franchise, grant or permit or to
require periodic payments as a condition to the continuance thereof;

(o) Liens arising from precautionary Uniform Commercial Code financing
statements regarding, and any interest or title of a licensor, lessor or
sublessor under, operating leases permitted by this Agreement;

(p) Liens on cash and Cash Equivalents securing Swap Agreements permitted
pursuant to Section 7.2(k) owing to one or more Persons; and

(q) other Liens in an aggregate principal amount not to exceed $10,000,000.

7.4 Fundamental Changes. Enter into any merger, consolidation or amalgamation,
or liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or reorganize itself in any non-U.S. jurisdiction, or Dispose of
all or substantially all of the property or business of the Group Member, except
that any Loan Party may be merged or consolidated with, or wholly acquired by,
any Person or Dispose of all or substantially all of its property or business,
if (a) the surviving Person or the Person to whom such property or business was
Disposed, as applicable, assumes all of the liabilities of the predecessor Loan
Party, including, without limitation, under any Loan Documents to which such
Loan Party is a party and (b) before and after giving effect to such merger,
consolidation, acquisition or Disposition, the Loan Parties shall be in pro
forma compliance with the financial covenants contained in Section 7.1.

7.5 Restricted Payments. Declare or pay any dividend (other than dividends
payable solely in Capital Stock of the Person making such dividend) on, or make
any payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other acquisition
of, any Capital Stock of any Group Member, whether now or hereafter outstanding,
or make any other distribution in respect thereof, either directly or
indirectly, whether in cash or property or in obligations of any Group Member
(collectively, “Restricted Payments”), except that:

(a) any Subsidiary of a Loan Party may make Restricted Payments to any other
Group Member; and

 

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(b) any Loan Party may make a Restricted Payment; provided, that at the time of
any such Restricted Payment and after giving effect thereto, (i) no Default,
Event of Default or Trigger Event shall have occurred and be continuing and
(ii) the Loan Parties shall be in pro forma compliance with the financial
covenants contained in Section 7.1.

7.6 Transactions with Affiliates. Enter into any transaction, including any
purchase, sale, lease or exchange of property, the rendering of any service or
the payment of any management, advisory or similar fees, with any Affiliate
(other than any Group Member) unless such transaction is (a) (i) otherwise
permitted under this Agreement, (ii) in the ordinary course of business of the
relevant Group Member and (iii) upon fair and reasonable terms no less favorable
to the relevant Group Member than it would obtain in a comparable arm’s length
transaction with a Person that is not an Affiliate, or (b) reimbursement of
reasonable out-of-pocket expenses of the Sponsors to the extent permitted as a
Restricted Payment pursuant to Section 7.5.

7.7 Amendments to Subsidiary Loan Documents. (a) Amend, supplement or otherwise
modify any of the Specified Terms of the Subsidiary Loan Documents, (b) amend,
supplement or modify any provision of any Subsidiary Loan Document providing
that cash distributions from any Subsidiary (other than ESH Parties) shall be
made with all available funds into the Conditional Controlled Account or make
any election or designation that would have the effect of making or allowing any
cash distributions from any Subsidiary (other than ESH Parties) to any Person or
into any account other than to the Borrower and into the Conditional Controlled
Account or (c) after the occurrence and during the continuation of a Trigger
Event, amend, supplement, terminate or otherwise modify any Operating Lease to
the extent prohibited pursuant to Section 5.2.12 of the Mortgage Loan Agreement
as in effect as of the date of such Trigger Event (without giving effect to any
consent of the lender under the Mortgage Loan Agreement or any amendment, waiver
or other modification of such Section 5.2.12 of the Mortgage Loan Agreement).

SECTION 8. EVENTS OF DEFAULT

8.1 Events of Default. If any of the following events shall occur and be
continuing:

(a) the Borrower shall fail to pay any principal of any Loan or Reimbursement
Obligation when due in accordance with the terms hereof; or the Borrower shall
fail to pay any interest on any Loan or Reimbursement Obligation, or any other
amount payable hereunder or under any other Loan Document, within five
(5) Business Days after any such interest or other amount becomes due in
accordance with the terms hereof; or

(b) any representation or warranty made or deemed made by any Loan Party herein
or in any other Loan Document or that is contained in any certificate, document
or financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Loan Document shall prove to
have been inaccurate in any material respect on or as of the date made or deemed
made; or

(c) any Loan Party shall default in the observance or performance of any
agreement contained in Section 2.25, Section 6.1, Section 6.2(a) through (d),
Section 6.5(a), Section 6.7(b), Section 6.8(a), Section 6.11, Section 6.14 or
Section 7 of this Agreement, Sections 1, 11 or 12 of the Subsidiary Guarantee or
Sections 3.2 through 3.6, 4.1 through 4.4, 4.6 or 5.1 of the Security Agreement;
or

(d) any Loan Party shall default in the observance or performance of any other
agreement contained in this Agreement or any other Loan Document (other than as
provided in paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days after notice to the Borrower from
the Administrative Agent or the Required Lenders; or

 

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(e) any Group Member shall (i) default in making any payment of any principal of
any Indebtedness (including any Guarantee Obligation, but excluding the Loans)
on the scheduled or original due date with respect thereto; or (ii) default in
making any payment of any interest on any such Indebtedness beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness was created; or (iii) default in the observance or performance of
any other agreement or condition relating to any such Indebtedness or contained
in any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) or,
in the case of a Swap Agreement, the applicable counterparty, to cause, with the
giving of notice if required, such Indebtedness to become due prior to its
stated maturity or (in the case of any such Indebtedness constituting a
Guarantee Obligation) to become payable or, in the case of a Swap Agreement, to
cause the termination thereof; provided, that a default, event or condition
described in clause (i), (ii) or (iii) of this paragraph (e) shall not at any
time constitute an Event of Default unless, at such time, one or more defaults,
events or conditions of the type described in clauses (i), (ii) and (iii) of
this paragraph (e) shall have occurred and be continuing with respect to
Indebtedness the aggregate outstanding principal amount of which (or, with
respect to any Swap Agreements, the Swap Termination Value of which) is
$100,000,000 or more; or

(f) any Group Member shall (i) default in making any payment of any principal of
any Indebtedness (including any Guarantee Obligation) incurred under the
Subsidiary Loan Documents on the scheduled or original due date with respect
thereto; or (ii) default in making any payment of any interest on any such
Indebtedness incurred under the Subsidiary Loan Documents beyond the period of
grace, if any, provided in the Subsidiary Loan Documents; or (iii) default in
the observance or performance of any other agreement or condition relating to
any such Indebtedness or contained in any Subsidiary Loan Document, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or (in the case of any such Indebtedness
constituting a Guarantee Obligation) to become payable;

(g) (i) any Group Member shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets; or (ii) there shall be commenced against any
Group Member any case, proceeding or other action of a nature referred to in
clause (i) above that (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed or undischarged for
a period of 60 days; or (iii) there shall be commenced against any Group Member
any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets that results in the entry of an order for any
such relief that shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) any Group Member
shall take any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) any Group Member shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as they become due; or
(vi) or any Group Member shall make a general assignment for the benefit of its
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(h) (i) an ERISA Event shall have occurred, (ii) a trustee shall be appointed by
a United States district court to administer any Pension Plan, (iii) the PBGC
shall institute proceedings to terminate any Pension Plan(s), (iv) any Loan
Party or any of their respective ERISA Affiliates shall have been notified by
the sponsor of a Multiemployer Plan that it has incurred or will be assessed
Withdrawal Liability to such Multiemployer Plan and such entity does not have
reasonable grounds for contesting such Withdrawal Liability or is not contesting
such Withdrawal Liability in a timely and appropriate manner or (v) any other
event or condition shall occur or exist with respect to a Pension Plan; and in
each case in clauses (i) through (v) above, such event or condition, together
with all other such events or conditions, if any, could, in the sole judgment of
the Required Lenders, reasonably be expected to have a Material Adverse Effect;
or

(i) one or more judgments or decrees shall be entered against any Group Member
involving in the aggregate a liability (not paid or fully covered by insurance
as to which the relevant insurance company has acknowledged coverage) of
$25,000,000 or more, and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within 30 days from the
entry thereof; or

(j) any provision of any Loan Document, at any time after its execution and
delivery and for any reason other than as expressly permitted hereunder or
thereunder or satisfaction in full of all the Obligations, ceases to be in full
force and effect; or any Group Member contests in any manner the validity or
enforceability of any provision of any Loan Document; or any Loan Party denies
that it has any or further liability or obligation under any Loan Document, or
purports to revoke, terminate or rescind any provision of any Loan Document;

(k) any Collateral Document shall cease to create a valid and perfected Lien,
with the priority required by the Collateral Documents, over any material
portion of the Collateral purported to be covered thereby, subject to Liens
permitted under Section 7.3, except to the extent that any such loss of
perfection or priority results from the failure of the Administrative Agent to
maintain possession of certificates actually delivered to it representing
securities pledged under the Collateral Documents or to file Uniform Commercial
Code continuation statements and except as to Collateral consisting of Real
Property to the extent such losses are covered by a lender’s title insurance
policy and such insurer has not denied coverage;

(l) the guarantee contained in Section 1 of the Subsidiary Guarantee shall
cease, for any reason, to be in full force and effect or any Loan Party or any
Affiliate of any Loan Party shall so assert; or

(m) a Change of Control;

(n) a payment default shall have occurred and be continuing beyond any
applicable cure period under any Operating Lease, provided however, if the
default is for the failure to pay rent under any such Operating Lease, it shall
not constitute a default thereunder until thirty (30) days following the
expiration of any applicable cure period under the applicable Operating Lease.

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (g) above with respect to the Borrower,
automatically the Revolving Commitments shall immediately terminate and the
Loans (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
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Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower declare the
Revolving Commitments to be terminated forthwith, whereupon the Revolving
Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to this
paragraph, the Borrower shall at such time Cash Collateralize the L/C
Obligations related thereto (in an amount equal to the Minimum Collateral Amount
with respect thereto). Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived by the Borrower.

SECTION 9. THE AGENTS

9.1 Appointment. Each Lender hereby irrevocably designates and appoints the
Administrative Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.

9.2 Delegation of Duties. The Administrative Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys in-fact
selected by it with reasonable care.

9.3 Exculpatory Provisions. Neither any Agent nor any of their respective
officers, directors, employees, agents, advisors, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person’s own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto to perform its obligations
hereunder or thereunder. The Agents shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.

 

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9.4 Reliance by Administrative Agent. The Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any instrument, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy or email
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including counsel to
any Loan Party), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance with a request
of the Required Lenders (or, if so specified by this Agreement, all Lenders),
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders and all future holders of the Loans.

9.5 Notice of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Administrative Agent has received notice from a Lender or Loan Party
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default”. In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
notice thereof to the Lenders. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Required Lenders (or, if so specified by this Agreement, all Lenders);
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.

9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly acknowledges
that neither the Agents nor any of their respective officers, directors,
employees, agents, advisors, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by any Agent hereafter
taken, including any review of the affairs of a Loan Party or any affiliate of a
Loan Party, shall be deemed to constitute any representation or warranty by any
Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any 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 analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, advisors, attorneys-in-fact
or affiliates.

 

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9.7 Indemnification. The Lenders agree to indemnify each Agent and its officers,
directors, employees, affiliates, agents, advisors and controlling persons
(each, an “Agent Indemnitee”) (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Revolving Commitments shall have terminated and
the Loans shall have been paid in full, ratably in accordance with such
Aggregate Exposure Percentages immediately prior to such date), from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever that
may at any time (whether before or after the payment of the Loans) be imposed
on, incurred by or asserted against such Agent Indemnitee in any way relating to
or arising out of, the Revolving Commitments, this Agreement, any of the other
Loan Documents or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by such Agent Indemnitee under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from such Agent Indemnitee’s gross negligence or willful misconduct. The
agreements in this Section shall survive the termination of this Agreement and
the payment of the Loans and all other amounts payable hereunder.

9.8 Agent in Its Individual Capacity. Each Agent and its affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
any Loan Party as though such Agent were not an Agent. With respect to its Loans
made or renewed by it and with respect to any Letter of Credit issued or
participated in by it, each Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not an Agent, and the terms “Lender” and “Lenders” shall
include each Agent in its individual capacity.

9.9 Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent upon 30 days’ notice to the Lenders and the Borrower. If
the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then upon any such resignation, the
Required Lenders shall have the right to appoint a successor, which successor
agent shall (unless an Event of Default under Section 8.1(a) or Section 8.1(g)
with respect to the Borrower shall have occurred and be continuing) be subject
to approval by the Borrower (which approval shall not be unreasonably withheld
or delayed), whereupon such successor agent shall succeed to the rights, powers
and duties of the Administrative Agent, and the term “Administrative Agent”
shall mean such successor agent effective upon such appointment and approval,
and the former Administrative Agent’s rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans. If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Administrative Agent gives notice of
its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Lender, appoint a successor Administrative Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank, which successor agent shall (unless (i) an Event of Default under
Section 8.1(a) or Section 8.1(g) with respect to the Borrower shall have
occurred and be continuing or (ii) such successor agent is a Lender) be subject
to approval by the Borrower (which approval shall not be withheld or delayed by
the Borrower except for a bona fide valid reason). Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by any Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between such Borrower
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Administrative Agent’s resignation hereunder, the provisions of this Article and
Section 10.5 shall continue in effect for the benefit of such retiring
Administrative Agent in respect of any actions taken or omitted to be taken by
any of them while it was acting as Administrative Agent. If no successor agent
has accepted appointment as Administrative Agent by the date that is 30 days
following a retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as a successor agent is
appointed as provided for above.

9.10 Lead Arrangers; Joint Bookrunners; Syndication Agents. No Lead Arranger,
Joint Bookrunner or Syndication Agent shall have any duties or responsibilities
hereunder in its capacity as such.

9.11 Agents May File Proofs of Claim. In case of the pendency of any proceeding
under any Debtor Relief Law or any other judicial proceeding relative to any
Loan Party, the Administrative Agent (irrespective of whether the principal of
any Loan or L/C Obligation shall then be due and payable as herein expressed or
by declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on the Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders, the Swingline
Lender, the Issuing Lender and the Administrative Agent (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Lenders, the Swingline Lender, the Issuing Lender and the Administrative Agent
and their respective agents and counsel and all other amounts due the Lenders,
the Swingline Lender, the Issuing Lender and the Administrative Agent under any
Loan Document) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender, the Swingline Lender and the Issuing Lender to make such payments
to the Administrative Agent and, in the event that the Administrative Agent
shall consent to the making of such payments directly to the Lenders, the
Swingline Lender and the Issuing Lender, to pay to the Administrative Agent any
amount due for the reasonable compensation, expenses, disbursements and advances
of the Administrative Agent and its agents and counsel, and any other amounts
due the Administrative Agent under Sections 2.5(b) and 10.5.

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender, the
Swingline Lender or the Issuing Lender any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of any Lender,
the Swingline Lender or the Issuing Lender to authorize the Administrative Agent
to vote in respect of the claim of any Lender, the Swingline Lender or the
Issuing Lender in any such proceeding.

SECTION 10. MISCELLANEOUS

10.1 Amendments and Waivers. Neither this Agreement, any other Loan Document,
nor any terms hereof or thereof may be amended, supplemented or modified except
in accordance with the provisions of this Section 10.1. The Required Lenders and
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Document may, or, with the written consent of the Required Lenders, the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Loan Parties hereunder or thereunder
or (b) waive, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any of
the requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall (i) forgive the
principal amount or extend the final scheduled date of maturity of any Loan,
reduce the stated rate of any interest or fee payable hereunder (except (x) in
connection with the waiver of applicability of any post-default increase in
interest rates (which waiver shall be effective with the consent of the Required
Lenders) and (y) that any amendment or modification of defined terms used in the
financial covenants in this Agreement shall not constitute a reduction in the
rate of interest or fees for purposes of this clause (i)) or extend the
scheduled date of any payment thereof, or increase the amount or extend the
expiration date of any Lender’s Revolving Commitment, in each case without the
written consent of each Lender directly affected thereby; (ii) eliminate or
reduce the voting rights of any Lender under this Section 10.1 without the
written consent of such Lender; (iii) reduce any percentage specified in the
definition of Required Lenders, consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement and the other
Loan Documents, release all or substantially all of the Collateral, release any
Subsidiary Guarantor from its obligations under any Subsidiary Guarantee, in
each case without the written consent of all Lenders; (iv) amend, modify or
waive the definition of “Trigger Event” or any provision of Sections 2.9, 2.15,
2.16, 2.25 or 7.7 (including any definition component thereof) without the
written consent of all Lenders; (v) change any provisions of any Loan Document
in a manner that by its terms adversely affects the payments due to Lenders
holding Loans of any Class differently than those holding Loans of any other
Class, without the written consent of Lenders representing a Majority in
Interest of each affected Class; (vi) amend, modify or waive any provision of
Section 9 or any other provision of any Loan Document that affects the
Administrative Agent without the written consent of the Administrative Agent;
(vii) amend, modify or waive any provision of Section 2.3 or 2.4 without the
written consent of the Swingline Lender; or (viii) amend, modify or waive any
provision of Section 3 without the written consent of the Issuing Lender;
provided, that any amendment, waiver or other modification of this Agreement
that by its terms affects the rights or duties under this Agreement of the
Lenders of a particular Class (but not the Lenders of any other Class), may be
effected by an agreement or agreements in writing entered into by the Borrower
and the Majority in Interest requisite number or percentage in interest of the
affected Class of Lenders that would be required to consent thereto under this
Section if such Class of Lenders were the only Class of Lenders hereunder at the
time. Any such waiver and any such amendment, supplement or modification shall
apply equally to each of the Lenders and shall be binding upon the Loan Parties,
the Lenders, the Administrative Agent and all future holders of the Loans. In
the case of any waiver, the Loan Parties, the Lenders and the Administrative
Agent shall be restored to their former position and rights hereunder and under
the other Loan Documents, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon. Notwithstanding the foregoing, the consent of the Lenders or the
Required Lenders, as the case may be, shall not be required to effect the
provisions of Section 2.22 in accordance with the terms thereof.

 

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10.2 Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy), and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered, or three (3) Business Days after being deposited
in the mail, postage prepaid, or, in the case of telecopy notice, when received,
addressed as follows in the case of the Borrower and the Administrative Agent,
and as set forth in an administrative questionnaire delivered to the
Administrative Agent in the case of the Lenders, or to such other address as may
be hereafter notified by the respective parties hereto:

 

Borrower:

  c/o ESA Management, LLC   11525 North Community House Road   Charlotte, North
Carolina 28277   Attention: Chief Legal Officer   Facsimile No.: (980) 335-3089
  Attention: Chief Financial Officer   Facsimile No.: (980) 345-2090

with a copy to:

  Centerbridge Partners, L.P.   375 Park Avenue   New York, New York 10152  
Attention: William D. Rahm   Facsimile No.: (212) 672-5001   Attention: General
Counsel and Scott Hopson   Facsimile No.: (212) 672-4501 and (212) 672-4526

and a copy to:

  Paulson & Co. Inc.   1251 Avenue of the Americas, 50th Floor   New York, New
York 10020   Attention: Michael Barr   Facsimile No.: (212) 351-5892  
Attention: General Counsel   Facsimile No.: (212) 977-9505

and a copy to:

  The Blackstone Group   345 Park Avenue   New York, New York 10154   Attention:
A.J. Agarwal   Facsimile No.: (212) 583-5725   Attention: General Counsel  
Facsimile No.: (646) 253-8983   Attention: William J. Stein   Facsimile No.:
(212) 583-5726

and a copy to:

  Fried, Frank, Harris, Shriver & Jacobson LLP   One New York Plaza   New York,
New York 10004   Attention: Viktor Okasmaa   Facsimile No.: (212) 859-4000
Administrative Agent:   JPMorgan Chase Bank, N.A.   500 Stanton Christiana Road,
Ops. 2, Floor 03   Newark, Delaware 19713-2107

 

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  Primary Operations Contact:   Brittany Duffy   Telephone No.: (302) 634-8814  
Facsimile No.: (302) 634-4733   Email: Brittany.duffy@jpmorgan.com   Secondary
Operations Contact:   John Enyam   Telephone No.: (302) 634-8833   Facsimile
No.: (302) 634-4733   Email: john.enyam@jpmorgan.com

with a copy to:

  JPMorgan Chase Bank, N.A.   383 Madison Avenue, 24th Floor   New York, New
York 10179   Attention: Kimberly Turner   Facsimile No.: (212) 270-2157

and a copy to:

  Cadwalader, Wickersham & Taft LLP   One World Financial Center   New York, New
York 10281   Attention: William P. McInerney, Esq.   Facsimile No.: (212)
504-6666

provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.

Notices and other communications to the Lenders hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Section 2 unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.

10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.

10.4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.

10.5 Payment of Expenses; Damages Waiver. The Borrower agrees (a) to pay or
reimburse the Lead Arrangers and the Administrative Agent for all their
reasonable out-of-pocket costs and expenses (including the reasonable fees and
expenses of legal counsel which shall be limited to one

 

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primary counsel for the Administrative Agent, one local counsel in each
applicable jurisdiction and, in the case of an actual or perceived conflict of
interest where the Person affected by such conflict informs you of such conflict
and thereafter, after receipt of your consent (which consent shall not be
unreasonably withheld, conditioned or delayed), retains its own counsel, of
another firm of counsel (and local counsel, if applicable) for such affected
Person) incurred in connection with the syndication, development, preparation
and execution of, and any amendment, supplement or modification to, this
Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including the reasonable fees and
disbursements of counsel to the Administrative Agent and filing and recording
fees and expenses, with statements with respect to the foregoing to be submitted
to the Borrower prior to the Closing Date (in the case of amounts to be paid on
the Closing Date) and from time to time thereafter on a quarterly basis or such
other periodic basis as the Administrative Agent shall deem appropriate, (b) to
pay or reimburse the Administrative Agent for all its costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, the other Loan Documents and any such other documents, including
the fees and disbursements of counsel (including the allocated fees and expenses
of in-house counsel) to the Administrative Agent, (c) to pay, indemnify, and
hold each Lender, the Swingline Lender, the Issuing Lender and the
Administrative Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other taxes, if any, that may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and
(d) to pay, indemnify, and hold each Lender, each Lead Arranger, the Swingline
Lender, the Issuing Lender, the Administrative Agent and their Affiliates and
each of their respective officers, directors, employees, agents, advisors and
controlling persons (each, an “Indemnitee”) harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the syndication, execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents
(including any Increasing Lender Agreement or New Lender Agreement) and any such
other documents, including any of the foregoing relating to the use of proceeds
of the Loans or the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of any Group Member or any of the
Properties and the reasonable fees and expenses of one primary counsel, one
local counsel in each applicable jurisdiction and, in the case of an actual or
perceived conflict of interest where the Indemnitee affected by such conflict
informs you of such conflict and thereafter, after receipt of your consent
(which consent shall not be unreasonably withheld, conditioned or delayed),
retains its own counsel, of another firm of counsel (and local counsel, if
applicable) for such affected Indemnitee in connection with claims, actions or
proceedings by any Indemnitee against any Loan Party under any Loan Document
(all the foregoing in this clause (d), collectively, the “Indemnified
Liabilities”), provided, that the Borrower shall have no obligation hereunder to
any Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities (i) are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee or (ii) arise out of any dispute brought
solely by an Indemnitee against another Indemnitee, do not arise out of or
relate to any request, act or omission by the Borrower, any other Loan Party or
any of their respective Subsidiaries or Affiliates and do not involve the
Administrative Agent, in its capacity as administrative agent, or any Lead
Arranger, in its capacity as a lead arranger. Without limiting the foregoing,
and to the extent permitted by applicable law, the Borrower agrees not to assert
and to cause its Subsidiaries not to assert, and hereby waives and agrees to
cause its Subsidiaries to waive, all rights for contribution or any other rights
of recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee. Notwithstanding anything herein to the
contrary, the foregoing indemnity and waiver shall specifically exclude any
Indemnified Liabilities

 

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and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements relating to (i) Materials of
Environmental Concern which are initially placed on, in or under the Property or
any surrounding areas, or any violation of Environmental Laws which first
occurs, or any condition first created, or any other acts which first occur,
after (x) foreclosure, a deed in lieu of foreclosure or other taking of title to
or Property by Lender or its designee, or (y) a foreclosure, assignment in lieu
of foreclosure or other taking of title to the ownership interests of a
Mezzanine Borrower by a Mezzanine Lender or its designee or (ii) the
circumstances set forth in Section 10.5(d)(i)-(ii) above. All amounts due under
this Section 10.5 shall be payable not later than 10 days after written demand
therefor. Statements payable by the Borrower pursuant to this Section 10.5 shall
be submitted to Peter Crage, c/o ESA Management, LLC, 11525 North Community
House Road, Charlotte, North Carolina 28277 (Telephone No. (980) 345-1653)
(Telecopy No. (980) 345-2090), at the address of the Borrower set forth in
Section 10.2, or to such other Person or address as may be hereafter designated
by the Borrower in a written notice to the Administrative Agent. None of any
Loan Party or any Indemnitee shall have any liability for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby or thereby, any
Loan or Letter of Credit or the use of the proceeds thereof; provided, however,
that nothing contained in this sentence will limit the indemnity and
reimbursement obligations of the Borrower set forth in this Section. The
agreements in this Section 10.5 shall survive the termination of this Agreement
and the repayment of the Loans and all other amounts payable hereunder. No
Indemnitee shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby.

10.6 Successors and Assigns; Participations and Assignments. (a) The provisions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby (including
any affiliate of the Issuing Lender that issues any Letter of Credit), except
that (i) the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section.

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees (each, an “Assignee”) all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Revolving Commitments and the Loans at the time owing to it) with
the prior written consent of:

(A) the Borrower (such consent not to be unreasonably withheld or delayed),
provided that (i) the Borrower shall be deemed to have consented to any such
assignment unless it shall object thereto by written notice to the
Administrative Agent within fifteen (15) Business Days after having received
notice thereof (provided that a second notice shall have been sent on the tenth
(10th) Business Day) and (ii) no consent of the Borrower shall be required for
an assignment to a Lender, an affiliate of a Lender, an Approved Fund (as
defined below) or, if an Event of Default has occurred and is continuing, any
other Person;

(B) the Administrative Agent (such consent not to be unreasonably withheld or
delayed); provided that no consent of the Administrative Agent shall be required
for an assignment to a Lender, an affiliate of a Lender or an Approved Fund;

 

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(C) the Issuing Lender (such consent not to be unreasonably withheld or
delayed); and

(D) the Swingline Lender (such consent not to be unreasonably withheld or
delayed).

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender, an affiliate of a Lender or
an Approved Fund or an assignment of the entire remaining amount of the
assigning Lender’s Revolving Commitments (which for this purpose includes Loans
outstanding thereunder) or, if the Revolving Commitments are not in effect, the
entire remaining principal outstanding balance of the assigning Lender’s Loans,
the amount of the Revolving Commitments (which for this purpose includes Loans
outstanding thereunder) or, if the Revolving Commitments are not in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent) shall
not be less than $5,000,000 and in whole integral multiples of $1,000,000 in
excess thereof unless each of the Borrower and the Administrative Agent
otherwise consent, provided that (1) no such consent of the Borrower shall be
required if an Event of Default has occurred and is continuing and (2) such
amounts shall be aggregated in respect of each Lender and its affiliates or
Approved Funds, if any;

(B) no assignment shall be made to (1) Sponsor, any Group Member or any
Affiliate or Subsidiary of any of the foregoing, (2) any Defaulting Lender,
(3) a natural Person or (4) any Person who, upon becoming a Lender hereunder,
would constitute any of the Persons described in clause (1) or (2) above;

(C) in connection with any assignment of rights and obligations of any
Defaulting Lender hereunder, no such assignment shall be effective unless and
until, in addition to the other conditions thereto set forth herein, the parties
to the assignment shall make such additional payments to the Administrative
Agent in an aggregate amount sufficient, upon distribution thereof as
appropriate (which may be outright payment, purchases by the assignee of
participations or subparticipations, or other compensating actions, including
funding, with the consent of the Borrower and the Administrative Agent, the
applicable pro rata share of Loans previously requested but not funded by the
Defaulting Lender, to each of which the applicable assignee and assignor hereby
irrevocably consent), to (x) pay and satisfy in full all payment liabilities
then owed by such Defaulting Lender to the Administrative Agent, the Issuing
Lender, the Swingline Lender and each other Lender hereunder (and interest
accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata
share of all Loans and participations in L/C Obligations and Swingline Loans in
accordance with its Revolving Percentage. Notwithstanding the foregoing, in the
event that any assignment of rights and obligations of any Defaulting Lender
hereunder shall become effective under applicable law without compliance with
the provisions of this paragraph, then the assignee of such interest shall be
deemed to be a Defaulting Lender for all purposes of this Agreement until such
compliance occurs;

(D) (1) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500 and (2) the assigning Lender shall have paid in
full any amounts owing by it to the Administrative Agent; and

(E) the Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an administrative questionnaire in which the Assignee
designates one or more credit contacts to whom all syndicate-level information
(which may contain material non-public information about the Borrower and its
Affiliates and their related parties or their respective securities) will be
made available and who may receive such information in accordance with the
assignee’s compliance procedures and applicable laws, including Federal and
state securities laws.

 

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For the purposes of this Section 10.6, “Approved Fund” means any Person (other
than a natural person) that is engaged in making, purchasing, holding or
investing in bank loans and similar extensions of credit in the ordinary course
of its business and that is administered or managed by (a) a Lender, (b) an
affiliate of a Lender or (c) an entity or an affiliate of an entity that
administers or manages a Lender.

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
below, from and after the effective date specified in each Assignment and
Assumption the Assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.17,
2.18, 2.19 and 10.5); provided, that except to the extent otherwise expressly
agreed by the affected parties, no assignment by a Defaulting Lender will
constitute a waiver or release of any claim of any party hereunder arising from
that Lender’s having been a Defaulting Lender. Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 10.6 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.

(iv) The Administrative Agent, acting for this purpose as a non-fiduciary agent
of the Borrower, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Revolving Commitments and Swingline
Commitments of, and principal amount (and stated interest) of the Loans and L/C
Obligations owing to, each Lender pursuant to the terms hereof from time to time
(the “Register”). The entries in the Register shall be conclusive absent
manifest error, and the Borrower, the Administrative Agent, the Issuing Lender
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Lender and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.

(v) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an Assignee, the Assignee’s completed administrative
questionnaire (unless the Assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.

 

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(c) Any Lender may, without the consent of the Borrower, the Issuing Lender, the
Swingline Lender or the Administrative Agent, sell participations to one or more
banks or other entities (a “Participant”) in all or a portion of such Lender’s
rights and obligations under this Agreement (including all or a portion of its
Revolving Commitments and the Loans owing to it); provided that (A) such
Lender’s obligations under this Agreement shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (C) the Borrower, the Administrative Agent,
the Issuing Lender, the Swingline Lender and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. Any agreement pursuant to which a
Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver that (1) requires
the consent of each Lender directly affected thereby pursuant to the proviso to
the second sentence of Section 10.1 and (2) directly affects such Participant.
The Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.17, 2.18 and 2.19 (subject to the requirements and limitations
therein, including the requirements under Section 2.18(f) (it being understood
that the documentation required under Section 2.18(f) shall be delivered to the
participating Lender)) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section;
provided that such Participant (A) agrees to be subject to the provisions of
Sections 2.20 and 2.21 as if it were an assignee under paragraph (b) of this
Section, and (B) shall not be entitled to receive any greater payment under
Section 2.17 or 2.18, with respect to any participation, than its participating
Lender would have been entitled to receive, except to the extent such
entitlement to receive a greater payment results from a Change in Law that
occurs after the Participant acquired the applicable participation. Each Lender
that sells a participation agrees, at the Borrower’s request and expense, to use
reasonable efforts to cooperate with the Borrower to effectuate the provisions
of Section 2.20 with respect to any Participant. To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 10.7(b) as
though it were a Lender, provided such Participant shall be subject to
Section 10.7(a) as though it were a Lender. Each Lender that sells a
participation shall, acting solely for this purpose as a non-fiduciary agent of
the Borrower, maintain a register on which it enters the name and address of
each Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Loans or other obligations under the Loan
Documents (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register (including
the identity of any Participant or any information relating to a Participant’s
interest in any Revolving Commitments, Loans, Letters of Credit or its other
obligations under any Loan Document) to any Person except to the extent that
such disclosure is necessary to establish that such Revolving Commitment, Loan,
L/C Obligations or other obligation is in registered form under
Section 5f.103-1(c) of the United States Treasury Regulations. The entries in
the Participant Register shall be conclusive absent manifest error, and such
Lender shall treat each Person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary. For the avoidance of doubt, the
Administrative Agent (in its capacity as Administrative Agent) shall have no
responsibility for maintaining a Participant Register.

(d) 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 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.

 

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(e) The Borrower, upon receipt of written notice from the relevant Lender,
agrees to issue Notes to any Lender requiring Notes to facilitate transactions
of the type described in paragraph (d) above.

10.7 Adjustments; Set-off. (a) Except to the extent that this Agreement or a
court order expressly provides for payments to be allocated to a particular
Lender, if any Lender (a “Benefitted Lender”) shall receive any payment of all
or part of the Obligations owing to it (other than in connection with an
assignment made pursuant to Section 10.6), or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 8.1(g), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of the Obligations owing to such other Lender, such
Benefitted Lender shall purchase for cash from the other Lenders a participating
interest in such portion of the Obligations owing to each such other Lender, or
shall provide such other Lenders with the benefits of any such collateral, as
shall be necessary to cause such Benefitted Lender to share the excess payment
or benefits of such collateral ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.

(b) In addition to any rights and remedies of the Lenders provided by law, each
Lender shall have the right, without notice to the Borrower, any such notice
being expressly waived by the Borrower to the extent permitted by applicable
law, upon any Obligations becoming due and payable by the Borrower (whether at
the stated maturity, by acceleration or otherwise), to apply to the payment of
such Obligations, by setoff or otherwise, any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender, any affiliate thereof or any of their respective branches
or agencies to or for the credit or the account of the Borrower; provided that
in the event that any Defaulting Lender shall exercise any such right of setoff,
(x) all amounts so set off shall be paid over immediately to the Administrative
Agent for further application in accordance with the provisions of Section 2.23
and, pending such payment, shall be segregated by such Defaulting Lender from
its other funds and deemed held in trust for the benefit of the Administrative
Agent, the Issuing Lender, the Swingline Lender and the Lenders, and (y) the
Defaulting Lender shall provide promptly to the Administrative Agent a statement
describing in reasonable detail the Obligations owing to such Defaulting Lender
as to which it exercised such right of setoff. Each Lender agrees promptly to
notify the Borrower and the Administrative Agent after any such application made
by such Lender, provided that the failure to give such notice shall not affect
the validity of such application.

10.8 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by email or
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.

10.9 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

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10.10 Integration. This Agreement and the other Loan Documents represent the
entire agreement of the Loan Parties, the Administrative Agent, the Swingline
Lender, the Issuing Lender and the Lenders with respect to the subject matter
hereof and thereof, and there are no promises, undertakings, representations or
warranties by the Administrative Agent or any Lender relative to the subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.

10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

10.12 Submission To Jurisdiction; Waivers. The Borrower, the Administrative
Agent and the Lenders hereby irrevocably and unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
exclusive general jurisdiction of the courts of the State of New York in New
York County, the courts of the United States for the Southern District of New
York, and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower, as the
case may be at its address set forth in Section 10.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto; and

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right of the
Administrative Agent, the Swingline Lender, the Issuing Lender or any other
Lender to sue or bring an enforcement action relating to this Agreement or any
other Loan Document, including any such action or proceeding in connection with
the exercise of remedies with respect to the Collateral, in any other
jurisdiction.

10.13 Acknowledgements. The Borrower hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents;

(b) none of the Administrative Agent, the Swingline Lender, the Issuing Lender,
any Lender, any Syndication Agent, any Lead Arranger or any Joint Bookrunner has
any fiduciary relationship with or duty to any Loan Party arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent, the Swingline Lender, the Issuing
Lender and Lenders, on one hand, and the Loan Parties, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Loan Parties and the Lenders.

 

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10.14 Interest Rate Limitation. Notwithstanding anything herein to the contrary,
if at any time the interest rate applicable to any Loan, together with all fees,
charges and other amounts that are treated as interest on such Loan under
applicable law (collectively the “Charges”), shall exceed the maximum lawful
rate (the “Maximum Rate”) that may be contracted for, charged, taken, received
or reserved by the Lender holding such Loan in accordance with applicable law,
the rate of interest payable in respect of such Loan hereunder, together with
all Charges payable in respect thereof, shall be limited to the Maximum Rate
and, to the extent lawful, the interest and Charges that would have been payable
in respect of such Loan but were not payable as a result of the operation of
this Section shall be cumulated and the interest and Charges payable to such
Lender in respect of other Loans or periods shall be increased (but not above
the Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall have
been received by such Lender.

10.15 Releases of Liens. At such time as the Loans, the Reimbursement
Obligations and the other obligations under the Loan Documents shall have been
paid in full, the Revolving Commitments have been terminated and no Letters of
Credit shall be outstanding, the Collateral shall be released from the Liens
created by the Collateral Documents, and the Collateral Documents and all
obligations (other than those expressly stated to survive such termination) of
the Administrative Agent and each Loan Party under the Collateral Documents
shall terminate, all without delivery of any instrument or performance of any
act by any Person.

10.16 Confidentiality. Each of the Administrative Agent and each Lender agrees
to keep confidential all non-public information provided to it by any Loan
Party, the Administrative Agent or any Lender pursuant to or in connection with
this Agreement that is designated by the provider thereof as confidential;
provided that nothing herein shall prevent the Administrative Agent or any
Lender from disclosing any such information (a) to the Administrative Agent, any
other Lender or any affiliate thereof, (b) subject to an agreement to comply
with the provisions of this Section, to any actual or prospective Transferee or
any direct or indirect counterparty to any Swap Agreement (or any professional
advisor to such counterparty), (c) to its employees, directors, agents,
attorneys, accountants and other professional advisors or those of any of its
affiliates, (d) upon the request or demand of any Governmental Authority, (e) in
response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (f) if requested or
required to do so in connection with any litigation or similar proceeding,
(g) that has been publicly disclosed other than as a result of a breach of this
Section, (h) to the National Association of Insurance Commissioners or any
similar organization or any nationally recognized rating agency that requires
access to information about a Lender’s investment portfolio in connection with
ratings issued with respect to such Lender, or (i) in connection with the
exercise of any remedy hereunder or under any other Loan Document, (j) to
another party to this Agreement or (k) if agreed by the Borrower in its sole
discretion, to any other Person; provided that, except with respect to any audit
or examination by bank accountants or by any governmental bank regulatory
authority or other Governmental Authority exercising examination or regulatory
authority, each of the Administrative Agent, the Issuing Lender and the Lenders
shall, to the extent practicable and not prohibited by applicable law, use
reasonable efforts to promptly notify the Borrower of disclosure pursuant to
clauses (d), (e), (f) or (h), above.

Each Lender acknowledges that information furnished to it pursuant to this
Agreement or the other Loan Documents may include material non-public
information concerning the Borrower and its Affiliates and their related parties
or their respective securities, and confirms that it has developed compliance
procedures regarding the use of material non-public information and that it will
handle such material non-public information in accordance with those procedures
and applicable law, including Federal and state securities laws.

 

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All information, including requests for waivers and amendments, furnished by the
Borrower or the Administrative Agent pursuant to, or in the course of
administering, this Agreement or the other Loan Documents will be
syndicate-level information, which may contain material non-public information
about the Borrower and its Affiliates and their related parties or their
respective securities. Accordingly, each Lender represents to the Borrower and
the Administrative Agent that it has identified in its administrative
questionnaire a credit contact who may receive information that may contain
material non-public information in accordance with its compliance procedures and
applicable law, including Federal and state securities laws.

10.17 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.

10.18 USA Patriot Act. Each Lender hereby notifies the Borrower that pursuant to
the requirements of the Patriot Act, it is required to obtain, verify and record
information that identifies the Borrower and the other Loan Parties, which
information includes the name and address of the Borrower and the other Loan
Parties and other information that will allow such Lender to identify the
Borrower and the other Loan Parties in accordance with the Patriot Act.

[Signature Pages Follow]

 

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--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.

 

EXTENDED STAY AMERICA, INC., as the Borrower

By:   LOGO [g631451ex10_2pg099.jpg]  

 

  Name:   Peter J. Crage   Title:   Chief Financial Officer

Corporate – Credit Agreement

--------------------------------------------------------------------------------

JPMORGAN CHASE BANK, N.A., as Administrative Agent, as a Lender and as an
Issuing Lender

By:   LOGO [g631451ex10_2pg100.jpg]  

 

  Name:   Kimberly Turner   Title:   Executive Director

Corporate – Credit Agreement

--------------------------------------------------------------------------------

DEUTSCHE BANK AG NEW YORK BRANCH, as a Syndication Agent and as a Lender

By:   LOGO [g631451ex10_2pg101a.jpg]  

 

  Name:   J.T. Johnston Coe   Title:   Managing Director By:   LOGO
[g631451ex10_2pg101b.jpg]  

 

  Name:  

LOGO [g631451ex10_2pg101c.jpg]

  Title:  

Corporate – Credit Agreement

--------------------------------------------------------------------------------

GOLDMAN SACHS LENDING PARTNERS LLC, as a Syndication Agent and as a Lender

By:   LOGO [g631451ex10_2pg102.jpg]  

 

  Name:   Robert Ehudin   Title:   Authorized Signatory

Corporate – Credit Agreement

--------------------------------------------------------------------------------

CITIBANK, N.A., as a Syndication Agent and as a Lender

By:   LOGO [g631451ex10_2pg103.jpg]  

 

  Name:   John C. Rowland   Title:   Vice President

Corporate – Credit Agreement

--------------------------------------------------------------------------------

BANK OF AMERICA, N.A., as a Syndication Agent and as a Lender

By:   LOGO [g631451ex10_2pg104.jpg]  

 

  Name:   Will. T. Bowers, Jr.   Title:   Senior Vice President

Corporate – Credit Agreement

--------------------------------------------------------------------------------

MORGAN STANLEY SENIOR FUNDING, INC., as a Syndication Agent

By:   LOGO [g631451ex10_2pg105a.jpg]  

 

  Name:   Michael King   Title:   Vice President

MORGAN STANLEY BANK, N.A., as a Lender

By:   LOGO [g631451ex10_2pg105b.jpg]  

 

  Name:   Michael King   Title:   Authorized Signatory

Corporate – Credit Agreement

--------------------------------------------------------------------------------

BARCLAYS BANK PLC, as a Lender

By:   LOGO [g631451ex10_2pg106.jpg]  

 

  Name:   Noam Azachi   Title:   Vice President

Corporate – Credit Agreement

--------------------------------------------------------------------------------

MACQUARIE CAPITAL (USA) INC, as a Syndication Agent

By:   LOGO [g631451ex10_2pg107a.jpg]  

 

  Name:   Ariel Jankelson   Title:   SVP By:   LOGO [g631451ex10_2pg107b.jpg]  

 

  Name:   T. Morgan Edwards II   Title:   Managing Director MIHI LLC, as a
Lender By:   LOGO [g631451ex10_2pg107c.jpg]  

 

  Name:   Andrew Underwood   Title:   Authorized Signatory By:   LOGO
[g631451ex10_2pg107d.jpg]  

 

  Name:   T. Morgan Edwards II   Title:   Authorized Signatory

Corporate – Credit Agreement

--------------------------------------------------------------------------------

EXHIBITS TO

CREDIT AGREEMENT

Dated as of November 18, 2013

(EXTENDED STAY AMERICA, INC.)

SCHEDULES

 

Schedule 1.1A

   Revolving Commitments

Schedule 1.1B

   Immaterial Subsidiaries

Schedule 4.4

   Consents, Authorizations, Filings and Notices

Schedule 4.14

   Subsidiaries

Schedule 4.18

   Collateral Filings

Schedule 6.16

   Mortgaged Properties

Schedule 7.2

   Indebtedness

Schedule 7.3

   Liens

EXHIBITS

 

Exhibit A

   Form of Subsidiary Guarantee

Exhibit B

   Form of Security Agreement

Exhibit C

   Form of Compliance Certificate

Exhibit D

   Form of Secretary’s Certificate

Exhibit E

   Form of Assignment and Assumption

Exhibit F

   Form of Exemption Certificates (1-4)

Exhibit G

   Form of Increasing Lender Agreement

Exhibit H

   Form of New Lender Agreement

Exhibit I

   Form of Account Control Agreement

Exhibit J

   Form of Conditional Account Control Agreement

Exhibit K

   Form of Subsidiary Perfection Certificate

Exhibit L

   Form of Notice to Cash Management Agent

--------------------------------------------------------------------------------

SCHEDULE 1.1A

REVOLVING COMMITMENTS

 

Lender

   Revolving
Commitment  

JPMorgan Chase Bank, N.A.

   $ 11,538,461.54   

Deutsche Bank AG New York Branch

   $ 11,538,461.54   

Goldman Sachs Lending Partners LLC

   $ 11,538,461.54   

Citibank, N.A.

   $ 9,576,923.08   

Bank of America, N.A.

   $ 9,230,769.23   

Morgan Stanley Bank, N.A.

   $ 8,653,846.15   

Barclays PLC

   $ 8,307,692.31   

Macquarie Capital (USA) Inc.

   $ 4,615,384.62      

 

 

 

Total:

   $ 75,000,000.00      

 

 

 

--------------------------------------------------------------------------------

SCHEDULE 1.1B

IMMATERIAL SUBSIDIARIES

None.

--------------------------------------------------------------------------------

SCHEDULE 4.4

CONSENTS, AUTHORIZATIONS, FILINGS AND NOTICES

None.

--------------------------------------------------------------------------------

SCHEDULE 4.14

SUBSIDIARIES

 

    

Subsidiary

  

Jurisdiction

  

Owner*

1.    Extended Stay America, Inc.    DE    — 2.    ESH Hospitality Strategies
LLC    DE    Extended Stay America, Inc. 3.    ESH Strategies Mezzanine B LLC   
DE    ESH Hospitality Strategies LLC 4.    ESH Strategies Mezzanine A LLC    DE
   ESH Strategies Mezzanine B LLC 5.    ESH Strategies Holdings LLC    DE    ESH
Strategies Mezzanine A LLC 6.    ESH Strategies Franchise LLC    DE    ESH
Strategies Mezzanine A LLC 7.    ESH Strategies Branding LLC    DE    ESH
Strategies Mezzanine A LLC 8.    ESA Management, LLC    DE    Extended Stay
America, Inc. 9.    HVM Canada Hotel Management ULC    Alberta    ESA
Management, LLC 10.    ESH Mezzanine 2 Holdings LLC    DE    Extended Stay
America, Inc. 11.    New ESA 2007 Operating Lessee LLC    DE    Extended Stay
America, Inc. 12.    ESA 2007 Operating Lessee LLC    DE    New ESA 2007
Operating Lessee LLC 13.    ESH Canada Mezzanine C-2 LLC    DE    ESH Mezzanine
Holdings 2 LLC 14.    ESH Mezzanine C-2 LLC    DE    ESH Mezzanine Holdings 2
LLC 15.    ESH Canada Mezzanine B-2 LLC    DE    ESH Canada Mezzanine C-2 LLC
16.    ESH Mezzanine B-2 LLC    DE    ESH Mezzanine C-2 LLC 17.    ESH Canada
Mezzanine A-2 LLC    DE    ESH Canada Mezzanine B-2 LLC 18.    ESH Mezzanine A-2
LLC    DE    ESH Mezzanine B-2 LLC 19.    New ESA Canada Operating Lessee LLC   
DE    ESH Canada Mezzanine A-2 LLC 20.    New ESA P Portfolio Operating Lessee
LLC    DE    ESH Mezzanine A-2 LLC 21.    ESA Canada Operating Lessee ULC    DE
   New ESA Canada Operating Lessee LLC 22.    ESA P Portfolio Operating Lessee
LLC    DE    New ESA P Portfolio Operating Lessee LLC

 

* Owner holds 100% of Capital Stock unless otherwise noted.

--------------------------------------------------------------------------------

SCHEDULE 4.18

COLLATERAL FILINGS

 

    

Entity

  

Filing

  

Filing Office

1.    Extended Stay America, Inc.    UCC-1 financing statement    Delaware
Secretary of State 2.    ESH Hospitality Strategies LLC    UCC-1 financing
statement    Delaware Secretary of State 3.    ESH Strategies Mezzanine B LLC   
UCC-1 financing statement    Delaware Secretary of State 4.    ESH Strategies
Mezzanine A LLC    UCC-1 financing statement    Delaware Secretary of State 5.
   ESH Strategies Franchise LLC    UCC-1 financing statement    Delaware
Secretary of State 6.    ESH Strategies Holdings LLC    UCC-1 financing
statement    Delaware Secretary of State 7.    ESA Management, LLC    UCC-1
financing statement    Delaware Secretary of State 8.    ESH Mezzanine 2
Holdings LLC    UCC-1 financing statement    Delaware Secretary of State 9.   
New ESA 2007 Operating Lessee LLC    UCC-1 financing statement    Delaware
Secretary of State 10.    ESA 2007 Operating Lessee LLC    UCC-1 financing
statement    Delaware Secretary of State

--------------------------------------------------------------------------------

SCHEDULE 6.16

MORTGAGED PROPERTIES

None.

--------------------------------------------------------------------------------

SCHEDULE 7.2

INDEBTEDNESS

Indebtedness attributable to the redemption of 8.0% preferred stock, issued by
the Extended Stay America, Inc. on November 15, 2013, in an amount not to exceed
$27,986,640.00.

--------------------------------------------------------------------------------

SCHEDULE 7.3

LIENS

None.

--------------------------------------------------------------------------------

EXHIBIT A

FORM OF SUBSIDIARY GUARANTEE

--------------------------------------------------------------------------------

EXECUTION COPY

SUBSIDIARY GUARANTEE

SUBSIDIARY GUARANTEE (as amended, supplemented or otherwise modified from time
to time, this “Guarantee”), dated as of November 18, 2013, made by each of the
entities signatory hereto (each a “Guarantor” and, collectively, the
“Guarantors”), in favor of the Administrative Agent (as defined below) for the
ratable benefit of the Guaranteed Parties (as defined below).

W I T N E S S E T H:

WHEREAS, Extended Stay America, Inc., a Delaware corporation (the “Borrower”),
has entered into that certain Credit Agreement, dated as of the date hereof (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”; capitalized terms not defined herein but defined therein being used
herein as therein defined), among the Borrower, the Lenders, including the
Swingline Lender and the Issuing Lender, party thereto, and JPMorgan Chase Bank,
N.A., as Administrative Agent (hereinafter, the “Administrative Agent”);

WHEREAS, the Lenders, the Swingline Lender, the Issuing Lender and the
Administrative Agent are herein referred to as the “Guaranteed Parties”;

WHEREAS, each Guarantor will derive substantial direct and indirect economic and
other benefit from the Loans, Swingline Loans and Letters of Credit under the
Credit Agreement; and

WHEREAS, it is a condition precedent to the obligation of the Lenders to make
Loans, the Swingline Lender to make Swingline Loans and the Issuing Lender to
issue Letters of Credit under the Credit Agreement that the Guarantors shall
have executed and delivered this Guarantee;

NOW, THEREFORE, in consideration of the premises and to induce the Lenders to
make Loans, the Swingline Lender to make Swingline Loans and the Issuing Lender
to issue Letters of Credit, and for other good and valuable consideration, the
receipt and legal sufficiency of which are hereby acknowledged, each Guarantor
hereby agrees as follows:

SECTION 1. Guarantee. Each Guarantor hereby unconditionally and irrevocably
guarantees the full and prompt payment when due, whether at stated maturity, by
acceleration or otherwise, of (a) the Obligations, whether now or hereafter
existing and whether for principal, interest, fees, expenses or otherwise,
(b) any and all costs and expenses incurred in connection with the enforcement
or preservation of any rights under this Guarantee, including the fees and
disbursements of counsel (including the allocated fees and expenses of in-house
counsel) and (c) all present and future amounts that would become due but for
the operation of any provision of bankruptcy or insolvency laws, and all present
and future accrued and unpaid interest, including, without limitation, all
post-petition interest if the Borrower or any Guarantor voluntarily or
involuntarily becomes subject to any Debtor Relief Law (the items set forth in
clauses (a), (b) and (c) immediately above being herein referred to as the
“Guaranteed Obligations”). Upon failure of the Borrower to pay any of the
Guaranteed Obligations when due after the expiration of any applicable notice
and/or cure period in each case provided for in the Loan Documents (whether at
stated maturity, by acceleration or otherwise), each Guarantor hereby further
agrees to promptly pay the same after such Guarantor’s receipt of notice from
the Administrative Agent of the Borrower’s failure to pay the same, without any
other demand or notice whatsoever, including without limitation, any notice
having been given to any Guarantor of either the acceptance by the Guaranteed
Parties of this Guarantee or the creation or incurrence of any of the
Obligations. This

--------------------------------------------------------------------------------

Guarantee is an absolute guarantee of payment of the Guaranteed Obligations and
not a guarantee of collection, meaning that it is not necessary for the
Guaranteed Parties, in order to enforce payment by the Guarantor, first or
contemporaneously to accelerate payment of any of the Guaranteed Obligations, to
institute suit or exhaust any rights against the Borrower, or to enforce any
rights against any collateral. Notwithstanding anything herein or in any other
Loan Document to the contrary, in any action or proceeding involving any state
corporate law or any state or federal bankruptcy, insolvency, reorganization or
other law affecting the rights of creditors generally, if, as a result of
applicable law relating to fraudulent conveyance or fraudulent transfer,
including Section 548 of Title 11 of the United States Code (the “Bankruptcy
Code”) or any applicable provisions of comparable state law (collectively,
“Fraudulent Transfer Laws”), the obligations of any Guarantor under this
Section 1 would otherwise, after giving effect to (x) all other liabilities of
such Guarantor, contingent or otherwise, that are relevant under such Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of such
Guarantor in respect of intercompany Indebtedness to the Borrower to the extent
that such Indebtedness would be discharged in an amount equal to the amount paid
by such Guarantor hereunder) and (y) the value of the assets of such Guarantor
(as determined under the applicable provisions of such Fraudulent Transfer Laws)
of any rights of subrogation, contribution, reimbursement, indemnity or similar
rights held by such Guarantor pursuant to applicable requirements of law or any
other contractual obligations providing for an equitable allocation among such
Guarantor and other Subsidiaries or Affiliates of the Borrower of obligations
arising under this Guarantee or other guaranties of the Obligations by such
parties, be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability under this Section 1, then the amount of such liability shall,
without any further action by such Guarantor, any Guaranteed Party or any other
Person, be automatically limited and reduced to the highest amount that is valid
and enforceable and not subordinated to the claims of other creditors as
determined in such action or proceeding.

SECTION 2. Guarantee Absolute. Each Guarantor guaranties that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the Loan
Documents, without set-off or counterclaim, and regardless of any applicable law
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Guaranteed Parties with respect thereto. The liability of each
Guarantor under this Guarantee shall be absolute and unconditional irrespective
of:

(a) any lack of validity or enforceability of any provision of any other Loan
Document or any other agreement or instrument relating to any Loan Document or
avoidance or subordination of any of the Guaranteed Obligations;

(b) any change in the time, manner or place of payment of, or in any other term
of, or any increase in the amount of, all or any of the Guaranteed Obligations,
or any other amendment or waiver of any term of, or any consent to departure
from any requirement of, the Loan Documents;

(c) any exchange, release or non-perfection of any Lien on any collateral for,
or any release of the Borrower or amendment or waiver of any term of any other
guarantee of, or any consent to departure from any requirement of any other
guarantee of, all or any of the Guaranteed Obligations;

(d) the absence of any attempt to collect any of the Guaranteed Obligations from
the Borrower or any other action to enforce the same or the election of any
remedy by any of the Guaranteed Parties;

(e) any waiver, consent, extension, forbearance or granting of any indulgence by
any of the Guaranteed Parties with respect to any provision of any other Loan
Document;

 

-2-

--------------------------------------------------------------------------------

(f) the election by any of the Guaranteed Parties in any proceeding under any
Debtor Relief Law;

(g) any borrowing or grant of a security interest by the Borrower, as
debtor-in-possession, under any Debtor Relief Law; or

(h) any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of the Borrower or the Guarantor other than payment or
performance of the Obligations.

SECTION 3. Waiver.

(a) Each Guarantor hereby (i) waives (A) promptness, diligence, notice of
acceptance and any and all other notices, including, without limitation, notice
of intent to accelerate and notice of acceleration, with respect to any of the
Obligations or this Guarantee, (B) any requirement that any of the Guaranteed
Parties protect, secure, perfect or insure any security interest in or other
Lien on any property subject thereto or exhaust any right or take any action
against the Borrower or any other Person or any collateral, (C) the filing of
any claim with a court in the event of receivership or bankruptcy of the
Borrower or any other Person, (D) except as otherwise provided herein, protest
or notice with respect to nonpayment of all or any of the Guaranteed
Obligations, (E) the benefit of any statute of limitations, (F) all demands
whatsoever (and any requirement that demand be made on the Borrower or any other
Person as a condition precedent to the Guarantor’s obligations hereunder),
(G) all rights by which the Guarantor might be entitled to require suit on an
accrued right of action in respect of any of the Guaranteed Obligations or
require suit against the Borrower or any other Person, (H) any defense based
upon an election of remedies by any Guaranteed Party, or (I) notice of any
events or circumstances set forth in clauses (a) through (h) of Section 2
hereof; and (ii) covenants and agrees that, except as otherwise agreed by the
parties, this Guarantee will not be discharged except (A) by complete payment of
the Guaranteed Obligations and any other obligations of the Guarantors contained
herein or (B) in accordance with Section 8 hereof.

(b) If, in the exercise of any of its rights and remedies, any of the Guaranteed
Parties shall forfeit any of its rights or remedies, including, without
limitation, its right to enter a deficiency judgment against the Borrower or any
other Person, whether because of any applicable law pertaining to “election of
remedies” or the like, each Guarantor hereby consents to such action by such
Guaranteed Party and waives any claim based upon such action. Any election of
remedies that results in the denial or impairment of the right of such
Guaranteed Party to seek a deficiency judgment against the Borrower shall not
impair the obligation of any Guarantor to pay the full amount of the Guaranteed
Obligations or any other obligation of such Guarantor contained herein.

(c) In the event any of the Guaranteed Parties shall bid at any foreclosure or
trustee’s sale or at any private sale permitted by law, under any of the Loan
Documents, to the extent not prohibited by applicable law, such Guaranteed Party
may bid all or less than the amount of the Guaranteed Obligations and the amount
of such bid, if successful, need not be paid by such Guaranteed Party but shall
be credited against the Guaranteed Obligations.

(d) Each Guarantor agrees that, notwithstanding the foregoing and without
limiting the generality of the foregoing, if, after the occurrence and during
the continuance of an Event of Default, the Guaranteed Parties are prevented by
applicable law from exercising their respective rights to accelerate the
maturity of the Guaranteed Obligations, to collect interest on the Guaranteed
Obligations, or to enforce or exercise any other right or remedy with respect to
the Guaranteed Obligations, or the Administrative Agent is prevented from taking
any action to realize on any collateral, such Guarantor

 

-3-

--------------------------------------------------------------------------------

agrees to pay to the Administrative Agent for the account of the Guaranteed
Parties, upon demand therefor, the amount that would otherwise have been due and
payable had such rights and remedies been permitted to be exercised by the
Guaranteed Parties.

(e) Each Guarantor hereby assumes responsibility for keeping itself informed of
the financial condition of the Borrower, and of all other circumstances bearing
upon the risk of nonpayment of the Guaranteed Obligations or any part thereof,
that diligent inquiry would reveal. Each Guarantor hereby agrees that the
Guaranteed Parties shall have no duty to advise such Guarantor of information
known to any of the Guaranteed Parties regarding such condition or any such
circumstance. In the event that any of the Guaranteed Parties in its sole
discretion undertakes at any time or from time to time to provide any such
information to any Guarantor, such Guaranteed Party shall be under no obligation
(i) to undertake any investigation not a part of its regular business routine,
(ii) to disclose any information which, pursuant to accepted or reasonable
banking or commercial finance practices, such Guaranteed Party wishes to
maintain as confidential, or (iii) to make any other or future disclosures of
such information or any other information to any Guarantor.

(f) Each Guarantor consents and agrees that the Guaranteed Parties shall be
under no obligation to marshal any assets in favor of such Guarantor or
otherwise in connection with obtaining payment of any or all of the Guaranteed
Obligations from any Person or source.

SECTION 4. Amendments, Etc. No amendment or waiver of any provision of this
Guarantee nor consent to any departure by any Guarantor herefrom shall in any
event be effective unless the same shall be in writing, approved by the Required
Lenders (or by all of the Lenders where the approval of each Lender is required
under the Credit Agreement) and signed by the Administrative Agent, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.

SECTION 5. Addresses for Notices. All notices and other communications provided
for hereunder shall be effectuated in the manner provided for in Section 10.2 of
the Credit Agreement, provided that if a notice or communication hereunder is
sent to any Guarantor, said notice shall be addressed to such Guarantor, in care
of the Borrower.

SECTION 6. No Waiver; Remedies.

(a) No failure on the part of any Guaranteed Party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by applicable
law or by any of the other Loan Documents.

(b) No waiver by the Guaranteed Parties of any Default shall operate as a waiver
of any other Default or the same Default on a future occasion, and no action by
any of the Guaranteed Parties permitted hereunder shall in way affect or impair
any of the rights of the Guaranteed Parties or the obligations of any Guarantor
under this Guarantee or under any of the other Loan Documents, except as
specifically set forth in any such waiver. To the extent permitted by applicable
law, any determination by a court of competent jurisdiction of the amount of any
principal and/or interest or other amount constituting any of the Guaranteed
Obligations shall be conclusive and binding on each Guarantor irrespective of
whether such Guarantor was a party to the suit or action in which such
determination was made provided that the Borrower was a party thereto.

 

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SECTION 7. Right of Set-off. To the extent permitted by the Credit Agreement, in
addition to any rights and remedies of the Guarantees Parties provided by law,
each Guaranteed Party shall have the right, without notice to any Guarantor, any
such notice being expressly waived by each Guarantor to the extent permitted by
applicable law, upon any Guaranteed Obligations becoming due and payable by any
such Guarantor (whether at the stated maturity, by acceleration or otherwise),
to apply to the payment of such Guaranteed Obligations, by setoff or otherwise,
any and all deposits (general or special, time or demand, provisional or final),
in any currency, and any other credits, indebtedness or claims, in any currency,
in each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Guaranteed Party, any affiliate
thereof or any of their respective branches or agencies to or for the credit or
the account of such Guarantor; provided that in the event that any Guaranteed
Party that is a Defaulting Lender shall exercise any such right of setoff,
(x) all amounts so set off shall be paid over immediately to the Administrative
Agent for further application in accordance with the provisions of Section 2.23
of the Credit Agreement and, pending such payment, shall be segregated by such
Defaulting Lender from its other funds and deemed held in trust for the benefit
of the other Guaranteed Parties, and (y) the Defaulting Lender shall provide
promptly to the Administrative Agent a statement describing in reasonable detail
the Guaranteed Obligations owing to such Defaulting Lender as to which it
exercised such right of setoff. Each Guaranteed Party shall promptly notify the
Guarantors and the Administrative Agent after any such application made by such
Guaranteed Party, provided that the failure to give such notice shall not affect
the validity of such application. The rights of each Guaranteed Party under this
Section 7 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Guaranteed Party may have.

SECTION 8. Continuing Guarantee; Release Date; Transfer of Notes. This Guarantee
is a continuing guarantee and shall (a) remain in full force and effect until
(the date of such occurrence, the “Release Date”) payment in full of all of the
Loans, Reimbursement Obligations and other Obligations, termination of the
Revolving Commitments and return or cancellation of all outstanding Letters of
Credit, (b) be binding upon each Guarantor, its permitted successors and
assigns, and (c) inure to the benefit of and be enforceable by the Guaranteed
Parties and their respective successors, permitted transferees, and permitted
assigns. Without limiting the generality of the foregoing clause (c), each of
the Guaranteed Parties may assign or otherwise transfer any Note held by it or
the Guaranteed Obligations owed to it to any other Person, and such other Person
shall thereupon become vested with all the rights in respect thereof granted to
such Guaranteed Party herein or otherwise with respect to such of the Notes and
the Guaranteed Obligations so transferred or assigned, subject, however, to
compliance with the provisions of Section 10.6 of the Credit Agreement in
respect of assignments. No Guarantor may assign any of its obligations under
this Guarantee without first obtaining the written consent of the Lenders as set
forth in the Credit Agreement.

SECTION 9. Reinstatement. This Guarantee shall remain in full force and effect
and continue to be effective should any petition be filed by or against any Loan
Party for liquidation or reorganization, should any Loan Party become insolvent
or make an assignment for the benefit of creditors or should a receiver or
trustee be appointed for all or any significant part of any Loan Party’s assets,
and shall, to the fullest extent permitted by applicable law, continue to be
effective or be reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by any obligees of the Obligations or such part thereof, whether as a “voidable
preference,” “fraudulent transfer,” or otherwise, all as though such payment or
performance had not been made. In the event that any payment or any part thereof
is rescinded, reduced, restored or returned, the Guaranteed Obligations shall,
to the fullest extent permitted by law, be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.

 

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SECTION 10. Representations and Warranties. Each Guarantor hereby makes for the
benefit of the Administrative Agent and each of the other Guaranteed Parties
each of the representations and warranties set forth in the Credit Agreement to
the extent any such representation or warranty applies to such Guarantor.

SECTION 11. Covenants.

(a) Each Guarantor hereby covenants and agrees with the Administrative Agent and
each of the other Guaranteed Parties that, until the Release Date, such
Guarantor shall comply with each of the covenants set forth in the Credit
Agreement to the extent that any such covenant applies to such Guarantor.

(b) Each Guarantor hereby covenants and agrees with the Administrative Agent and
each of the other Guaranteed Parties that, from and after the date of this
Guarantee until the Release Date, if any Guarantor shall at any time acquire any
Domestic Subsidiary which is not a Guarantor hereunder and is required to become
a Guarantor pursuant to Section 6.10(b) of the Credit Agreement, such Guarantor
and such Subsidiary shall promptly deliver to the Administrative Agent an
addendum to this Guarantee, substantially in the form of Exhibit A to this
Guarantee, duly completed.

SECTION 12. Subrogation and Subordination.

(a) Subrogation. Notwithstanding any reference to subrogation contained herein
to the contrary, until the Release Date, each Guarantor hereby irrevocably
agrees not to assert any claim or other rights which it may have or hereafter
acquire against the Borrower that arise from the existence, payment, performance
or enforcement of such Guarantor’s obligations under this Guarantee, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution, indemnification, any right to participate in any claim or remedy
of any Guaranteed Party against the Borrower or any collateral which any
Guaranteed Party now has or hereafter acquires, whether or not such claim,
remedy or right arises in equity, or under contract, statutes or common law,
including without limitation, the right to take or receive from the Borrower,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim or other rights. If any
amount shall be paid to any Guarantor in violation of the preceding sentence and
the Guaranteed Obligations shall not have been paid in full, such amount shall
be deemed to have been paid to such Guarantor for the benefit of, and held in
trust for the benefit of, the Guaranteed Parties, and shall forthwith be paid to
the Administrative Agent to be credited and applied upon the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms of the
Credit Agreement. Each Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by the Credit
Agreement and that the agreement set forth in this Section 12 is knowingly made
in contemplation of such benefits.

(b) Subordination. All debt and other liabilities of the Borrower to any or all
of the Guarantors (“Borrower Debt”) are expressly subordinate and junior to the
Guaranteed Obligations and any instruments evidencing the Borrower Debt to the
extent provided below.

(i) Until the Release Date, each Guarantor agrees that it will not request,
demand, accept, or receive (by set-off or other manner) any payment amount,
credit or reduction of all or any part of the amounts owing under the Borrower
Debt or any security therefor, except as specifically allowed pursuant to clause
(ii) below.

(ii) Notwithstanding the provisions of clause (i) above, the Borrower may pay to
a Guarantor, and such Guarantor may request, demand, accept and receive and
retain from the

 

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Borrower, payments, credits or reductions of all or any part of the amounts
owing under the Borrower Debt or any security therefor on the Borrower Debt,
provided that the Borrower’s right to pay and such Guarantor’s right to receive
any such amount shall automatically and be immediately suspended and cease
(A) upon the occurrence and during the continuance of an Event of Default or
(B) if, after taking into account the effect of such payment, an Event of
Default would occur and be continuing. Each Guarantor’s right to receive amounts
under this clause (ii) (including any amounts which theretofore may have been
suspended) shall automatically be reinstated at such time as the Event of
Default which was the basis of such suspension has been cured or waived
(provided that no subsequent Event of Default has occurred) or such earlier
date, if any, as the Administrative Agent gives notice to such Guarantor of
reinstatement by the Required Lenders, in the Required Lenders’ sole discretion.

(iii) If any Guarantor receives any payment on the Borrower Debt in violation of
this Guarantee, such Guarantor will hold such payment in trust for the
Guaranteed Parties and will promptly deliver such payment to the Administrative
Agent.

(iv) In the event of the commencement or joinder of any suit, action or
proceeding of any type (judicial or otherwise) or proceeding under any Debtor
Relief Law against the Borrower (an “Insolvency Proceeding”) and subject to
court orders issued pursuant to the Bankruptcy Code, the Guaranteed Obligations
shall first be paid and discharged in full before any payment is made upon the
Borrower Debt notwithstanding any other provisions which may be made in such
Insolvency Proceeding. In the event of any Insolvency Proceeding, each Guarantor
will at any time (A) file, at the request of any Guaranteed Party, any claim,
proof of claim or similar instrument necessary to enforce the Borrower’s
obligation to pay the Borrower Debt, and (B) hold in trust for and pay to the
Guaranteed Parties any and all monies, obligations, property, stock dividends or
other assets received in any such proceeding on account of the Borrower Debt in
order that the Guaranteed Parties may apply such monies or the cash proceeds of
such other assets to the Obligations.

SECTION 13. Right of Contribution. Each Guarantor hereby agrees that, to the
extent a Guarantor shall have paid more than its proportionate share of any
payment made hereunder or in respect of the Guaranteed Obligations, such
Guarantor shall be entitled to seek and receive contribution from and against
any other Guarantor hereunder which has not paid its proportionate share of such
payment. The provisions of this Section 13 shall be subject to the terms and
conditions of Section 12. The provisions of this Section 13 shall in no respect
limit the obligations and liabilities of any Guarantor to the Administrative
Agent and the Guaranteed Parties, and each Guarantor shall remain liable to the
Administrative Agent and the Guaranteed Parties for the full amount guaranteed
by it hereunder.

SECTION 14. GOVERNING LAW. THIS GUARANTEE AND THE RIGHTS AND OBLIGATIONS OF THE
GUARANTEED PARTIES AND THE GUARANTORS SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

SECTION 15. WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS GUARANTEE OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

SECTION 16. Submission to Jurisdiction; Waivers. Each Guarantor hereby
irrevocably and unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Guarantee and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States for the Southern District of New York, and appellate
courts from any thereof;

 

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(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, in accordance with
Section 5; and

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right of any
Guaranteed Party to sue or bring an enforcement action relating to this
Guarantee or any other Loan Document, including any such action or proceeding in
connection with the exercise of remedies with respect to the Collateral, in any
other jurisdiction.

SECTION 17. Section Titles. The Section titles contained in this Guarantee are
and shall be without substantive meaning or content of any kind whatsoever and
are not a part of this Guarantee.

SECTION 18. Execution in Counterparts. This Guarantee may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute one and the same Guarantee.

SECTION 19. Miscellaneous.

(a) All references herein to the Borrower or to any Guarantor shall include
their respective successors and assigns, including, without limitation, a
receiver, trustee or debtor-in-possession of or for the Borrower or such
Guarantor. All references to the singular shall be deemed to include the plural
where the context so requires.

(b) All payments made by any Guarantor hereunder shall be (i) made to the
Administrative Agent, for the account of the respective Guaranteed Party to
which such payment is owed, at the Administrative Agent’s office set forth in
the Credit Agreement in Dollars and in immediately available funds and
(ii) subject to the provisions of Section 2.18 of the Credit Agreement.

SECTION 20. Severability. Any provision of this Guarantee which is for any
reason prohibited or found or held invalid or unenforceable by any court or
governmental agency shall be ineffective to the extent of such prohibition or
invalidity or unenforceability, without invalidating the remaining provisions
hereof in such jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.

SECTION 21. ENTIRE AGREEMENT. TOGETHER WITH THE CREDIT AGREEMENT, THIS GUARANTEE
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES REGARDING THE SUBJECT MATTER
HEREIN AND MAY NOT BE CONTRADICTED

 

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BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

SECTION 22. Conflicts. If in the event of a conflict between the terms and
conditions of this Guarantee and the terms and conditions of the Credit
Agreement, the terms and conditions of the Credit Agreement shall control.

REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

 

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IN WITNESS WHEREOF, each of the Guarantors has caused this Guarantee to be duly
executed and delivered by its duly authorized officer on the date first above
written.

 

ESH HOSPITALITY STRATEGIES LLC By:   LOGO [g631451ex10_2pg127a.jpg]  

 

  Name:   Peter J. Crage   Title:   Vice President & Treasurer ESH STRATEGIES
MEZZANINE B LLC By:   LOGO [g631451ex10_2pg127b.jpg]  

 

  Name:   Peter J. Crage   Title:   Vice President & Treasurer ESH STRATEGIES
MEZZANINE A LLC By:   LOGO [g631451ex10_2pg127c.jpg]  

 

  Name:   Peter J. Crage   Title:   Vice President & Treasurer ESH STRATEGIES
HOLDINGS LLC By:   LOGO [g631451ex10_2pg127d.jpg]  

 

  Name:   Peter J. Crage   Title:   Vice President & Treasurer ESH STRATEGIES
FRANCHISE LLC By:   LOGO [g631451ex10_2pg127e.jpg]  

 

  Name:   Peter J. Crage   Title:   Vice President & Treasurer

[Signature Page to Subsidiary Guarantee]

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ESA MANAGEMENT, LLC By:   LOGO [g631451ex10_2pg128a.jpg]  

 

  Name:   Peter J. Crage   Title:   Vice President & Treasurer ESH MEZZANINE 2
HOLDINGS LLC By:   LOGO [g631451ex10_2pg128b.jpg]  

 

  Name:   Peter J. Crage   Title:   Vice President & Treasurer NEW ESA 2007
OPERATING LESSEE LLC By:   LOGO [g631451ex10_2pg128c.jpg]  

 

  Name:   Peter J. Crage   Title:   Vice President & Treasurer ESA 2007
OPERATING LESSEE LLC By:   LOGO [g631451ex10_2pg128d.jpg]  

 

  Name:   Peter J. Crage   Title:   Vice President & Treasurer

 

[Signature Page to Subsidiary Guarantee]

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EXHIBIT A

To Guarantee

ADDENDUM TO GUARANTEE

The undersigned,                     , a             , (“New Guarantor”):

(i) agrees to all of the provisions of the Subsidiary Guarantee, dated as of
November 18, 2013 (as amended, supplemented or otherwise modified prior to the
date hereof, the “Guarantee”), made by signatories thereto as Guarantors
(collectively, the “Guarantors”), in favor JPMorgan Chase Bank, N.A., as
administrative agent (in such capacity, the “Administrative Agent”), pursuant to
the Credit Agreement, dated as of November 18, 2013 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among Extended
Stay America, Inc., (the “Borrower”), the Lenders, including the Swingline
Lender and the Issuing Lender, party thereto, and the Administrative Agent; and

(ii) becomes a party to the Subsidiary Guarantee, as a Guarantor, effective on
the date hereof, with the same effect as if the undersigned were an original
signatory to the Subsidiary Guarantee (with the representations and warranties
contained therein being deemed to be made by the New Guarantor on and as of the
date hereof).

Terms defined in the Guarantee and the Credit Agreement shall have such defined
meanings when used herein.

Exhibit A to Subsidiary Guarantee

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By its acceptance hereof, each of the undersigned Guarantors hereby ratifies and
confirms its obligations under the Guarantee, as supplemented hereby.

 

[NAME OF NEW GUARANTOR] By:  

 

  Name:   Title:

 

Date: ACCEPTED AND AGREED: [NAMES OF EXISTING GUARANTORS] By:  

 

  Name:   Title: JPMORGAN CHASE BANK, N.A., as Administrative Agent By:  

 

  Name:   Title:

 

Exhibit A to Subsidiary Guarantee

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EXHIBIT B

FORM OF SECURITY AGREEMENT

--------------------------------------------------------------------------------

EXECUTION COPY

 

 

 

SECURITY AGREEMENT

By

EXTENDED STAY AMERICA, INC.,

as Borrower

and

THE SUBSIDIARY GUARANTORS PARTY HERETO

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

Dated as of November 18, 2013

 

 

 

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SCHEDULE 2.1    Commercial Tort Claims SCHEDULE 3.1(A)    Pledged Securities
SCHEDULE 3.1(B)    Intercompany Notes SCHEDULE 3.4(A)    Instruments & Tangible
Chattel Paper SCHEDULE 3.4(B)    Deposit Accounts SCHEDULE 3.4(C)    Securities
Accounts & Commodities Accounts SCHEDULE 3.4(D)    Electronic Chattel Paper &
Transferable Records SCHEDULE 6.1    Intellectual Property

 

EXHIBIT 1    Form of Issuer’s Acknowledgment EXHIBIT 2    Form of Securities
Pledge Amendment EXHIBIT 3    Form of Joinder Agreement EXHIBIT 4    Form of
Copyright Security Agreement EXHIBIT 5    Form of Patent Security Agreement
EXHIBIT 6    Form of Trademark Security Agreement

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SECURITY AGREEMENT

This SECURITY AGREEMENT dated as of November 18, 2013 (as amended, amended and
restated, supplemented or otherwise modified from time to time in accordance
with the provisions hereof, this “Agreement”) is made by EXTENDED STAY AMERICA,
INC., a Delaware corporation (the “Borrower”) and the subsidiary guarantors from
to time to time party hereto (the “Subsidiary Guarantors”), as pledgors,
assignors and debtors (the Borrower, together with the Subsidiary Guarantors, in
such capacities and together with any successors in such capacities, the
“Pledgors,” and each, a “Pledgor”), in favor of JPMORGAN CHASE BANK, N.A., in
its capacity as administrative agent pursuant to the Credit Agreement (as
hereinafter defined) (in such capacity and together with any successors in such
capacity, the “Administrative Agent”) for the ratable benefit of the Secured
Parties (as defined in the Credit Agreement referenced below).

R E C I T A L S:

A. Extended Stay America, Inc., as borrower, JP Morgan Chase Bank, N.A., as
issuing lender (the “Issuing Lender”), swingline lender and administrative
agent, J.P. Morgan Securities LLC, Deutsche Bank Securities, Inc. and Goldman
Sachs Bank USA, as joint lead arrangers and joint bookrunners, and the lending
institutions party thereto as lenders (the “Lenders”) have, in connection with
the execution and delivery of this Agreement, entered into that certain Credit
Agreement, dated as of the date hereof (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”).

B. Each Subsidiary Guarantor is a direct or indirect subsidiary of the Borrower
and has unconditionally guaranteed the Obligations (as defined in the Credit
Agreement) pursuant to that certain Subsidiary Guarantee, dated as of the date
hereof (as amended, amended and restated, supplemented or otherwise modified
from time to time, the “Subsidiary Guarantee”) by and among the Subsidiary
Guarantors and the Administrative Agent.

D. The Borrower and each Subsidiary Guarantor will receive substantial benefits
from the execution, delivery and performance of the Credit Agreement and the
other Loan Documents (as defined in the Credit Agreement) and the extensions of
credit from time to time made to the Borrower pursuant to the Credit Agreement
and each is, therefore, willing to enter into this Agreement.

E. This Agreement is given by each Pledgor in favor of the Administrative Agent
for the benefit of the Secured Parties to secure the payment and performance of
all of the Secured Obligations (as hereinafter defined).

F. It is a condition to (i) the obligations of the Lenders to make extensions of
credit under the Credit Agreement, and (ii) the obligations of the Issuing
Lender to issue, amend, renew or extend the Letters of Credit (as defined in the
Credit Agreement) that each Pledgor execute and deliver the applicable Loan
Documents, including this Agreement.

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A G R E E M E N T:

NOW THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor and the Administrative Agent hereby agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

Section 1.1. Definitions.

(a) Unless otherwise defined herein or in the Credit Agreement, capitalized
terms used herein that are defined in the UCC shall have the meanings assigned
to them in the UCC; provided that in any event, the following terms shall have
the meanings assigned to them in the UCC:

“Accounts”; “Bank”; “Chattel Paper”; “Commercial Tort Claim”; “Commodity
Account”; “Commodity Contract”; “Commodity Intermediary”; “Electronic Chattel
Paper”; “Entitlement Order”; “Equipment”; “Fixtures”; “Goods”, “Inventory”;
“Letter-of-Credit Rights”; “Letters of Credit”; “Money”; “Payment Intangibles”;
“Proceeds”; “Records”; “Securities Account”; “Securities Intermediary”;
“Security Entitlement”; “Supporting Obligations”; and “Tangible Chattel Paper.”

(b) Capitalized terms used but not otherwise defined herein that are defined in
the Credit Agreement shall have the meanings given to them in the Credit
Agreement.

(c) The following terms shall have the following meanings:

“Administrative Agent” shall have the meaning assigned to such term in the
Preamble hereof.

“Agreement” shall have the meaning assigned to such term in the Preamble hereof.

“Borrower” shall have the meaning assigned to such term in the Preamble hereof.

“Collateral Support” shall mean all property (real or personal) assigned,
hypothecated or otherwise securing any Pledged Collateral and shall include any
security agreement or other agreement granting a lien or security interest in
such real or personal property.

“Commodity Account Control Agreement” shall mean a control agreement in a form
that is reasonably satisfactory to the Administrative Agent establishing the
Administrative Agent’s Control with respect to any Commodity Account.

“Contracts” shall mean, collectively, with respect to each Pledgor, all sale,
service, performance, equipment or property lease contracts, agreements and
grants and all other contracts, agreements or grants (in each case, whether
written or oral, or third party or intercompany), between such Pledgor and any
third party, and all assignments, amendments, restatements, supplements,
extensions, renewals, replacements or modifications thereof.

“Control” shall mean (i) in the case of each Deposit Account, “control,” as such
term is defined in Section 9-104 of the UCC, (ii) in the case of any Security
Entitlement, “control,” as such term is defined in Section 8-106 of the UCC, and
(iii) in the case of any Commodity Contract, “control,” as such term is defined
in Section 9-106 of the UCC.

 

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“Control Agreements” shall mean, collectively, the Deposit Account Control
Agreements, the Securities Account Control Agreements and the Commodity Account
Control Agreements.

“Copyrights” shall mean, collectively, with respect to each Pledgor, all
copyrights (whether statutory or common law, whether established or registered
in the United States or any other country or any political subdivision thereof,
whether registered or unregistered and whether published or unpublished) and all
copyright registrations and applications made by such Pledgor, in each case,
whether now owned or hereafter created or acquired by or assigned to such
Pledgor, together with any and all (i) rights and privileges arising under
applicable law with respect to such Pledgor’s use of such copyrights,
(ii) reissues, renewals, continuations and extensions thereof and amendments
thereto, (iii) income, fees, royalties, damages, claims and payments now or
hereafter due and/or payable with respect thereto, including damages and
payments for past, present or future infringements thereof, (iv) rights
corresponding thereto throughout the world and (v) rights to sue for past,
present or future infringements thereof.

“Copyright Security Agreement” shall mean an agreement substantially in the form
of Exhibit 4 hereto.

“Credit Agreement” shall have the meaning assigned to such term in Recital A
hereof.

“Deposit Account Control Agreement” shall mean an agreement in a form that is
reasonably satisfactory to the Administrative Agent establishing the
Administrative Agent’s Control with respect to any Deposit Account.

“Distributions” shall mean, collectively, with respect to each Pledgor, all
dividends, cash, options, warrants, rights, instruments, distributions, returns
of capital or principal, income, interest, profits and other property, interests
(debt or equity) or proceeds, including as a result of a split, revision,
reclassification or other like change of the Pledged Securities, from time to
time received, receivable or otherwise distributed to such Pledgor in respect of
or in exchange for any or all of the Pledged Securities or Intercompany Notes.

“General Intangibles” shall mean, collectively, with respect to each Pledgor,
all “general intangibles,” as such term is defined in the UCC, of such Pledgor
and, in any event, shall include (i) all of such Pledgor’s rights, title and
interest in, to and under all Contracts and insurance policies (including all
rights and remedies relating to monetary damages, including indemnification
rights and remedies, and claims for damages or other relief pursuant to or in
respect of any Contract), (ii) all know-how and warranties relating to any of
the Pledged Collateral, (iii) any and all other rights, claims, choses-in-action
and causes of action of such Pledgor against any other person and the benefits
of any and all collateral or other security given by any other person in
connection therewith, (iv) all guarantees, endorsements and indemnifications on,
or of, any of the Pledged Collateral, (v) all lists, books, records,
correspondence, ledgers, printouts, files (whether in printed form or stored
electronically), tapes and other papers or materials containing information
relating to any of the Pledged Collateral, including all customer or tenant
lists, identification of suppliers, data, plans, blueprints, specifications,
designs, drawings, appraisals, recorded knowledge, surveys, studies, engineering
reports, test reports, manuals, standards, processing standards, performance
standards, catalogs, research data, computer and automatic machinery software
and programs and the like, field repair data, accounting information pertaining
to such Pledgor’s operations or any of the Pledged Collateral and all media in
which or on which any of the information or

 

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knowledge or data or records may be recorded or stored and all computer programs
used for the compilation or printout of such information, knowledge, records or
data, (vi) all licenses, consents, permits, variances, certifications,
authorizations and approvals, however characterized, now or hereafter acquired
or held by such Pledgor, including building permits, certificates of occupancy,
environmental certificates, industrial permits or licenses and certificates of
operation and (vii) all rights to reserves, deferred payments, deposits,
refunds, indemnification of claims and claims for tax or other refunds against
any Governmental Authority.

“Goodwill” shall mean, collectively, with respect to each Pledgor, the goodwill
connected with such Pledgor’s business including all goodwill owned by such
Pledgor that is connected with (i) the use of and symbolized by any Trademark or
Intellectual Property License with respect to any Trademark in which such
Pledgor has any interest, (ii) all know-how, trade secrets, customer and
supplier lists, proprietary information, inventions, methods, procedures,
formulae, descriptions, compositions, technical data, drawings, specifications,
name plates, catalogs, confidential information and the right to limit the use
or disclosure thereof by any person, pricing and cost information, business and
marketing plans and proposals, consulting agreements, engineering contracts and
such other assets which relate to such goodwill and (iii) all product lines of
such Pledgor’s business.

“Instruments” shall mean, collectively, with respect to each Pledgor, all
“instruments,” as such term is defined in Article 9, rather than Article 3, of
the UCC, and shall include all promissory notes, drafts, bills of exchange or
acceptances.

“Intellectual Property Collateral” shall mean, with respect to each Pledgor,
collectively, all of the Patents, Trademarks, Copyrights, Intellectual Property
Licenses and Goodwill of such Pledgor; provided that Intellectual Property
Collateral shall not include any Excluded Property.

“Intellectual Property Licenses” shall mean, collectively, with respect to each
Pledgor, all license and distribution agreements with, and covenants not to sue,
any other party with respect to any Patent, Trademark or Copyright or any other
patent, trademark or copyright, whether such Pledgor is a licensor or licensee,
distributor or distributee under any such license or distribution agreement,
together with any and all (i) renewals, extensions, supplements and
continuations thereof, (ii) income, fees, royalties, damages, claims and
payments now and hereafter due and/or payable thereunder and with respect
thereto including damages and payments for past, present or future infringements
or violations thereof, (iii) rights to sue for past, present and future
infringements or violations thereof and (iv) other rights to use, exploit or
practice any or all of the Patents, Trademarks or Copyrights or any other
patent, trademark or copyright.

“Intercompany Notes” shall mean, with respect to each Pledgor, all intercompany
notes held by such Pledgor and intercompany notes hereafter acquired by such
Pledgor and all certificates, instruments or agreements evidencing such
intercompany notes, and all assignments, amendments, restatements, supplements,
extensions, renewals, replacements or modifications thereof to the extent
permitted pursuant to the terms hereof.

“Investment Property” shall mean a security, whether certificated or
uncertificated, Security Entitlement, Securities Account, Commodity Contract or
Commodity Account.

“Issuing Lender” shall have the meaning assigned to such term in Recital A
hereof.

“Joinder Agreement” shall mean an agreement substantially in the form of Exhibit
3 hereto.

 

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“Patents” shall mean, collectively, with respect to each Pledgor, all patents
issued or assigned to, and all patent applications and registrations made by,
such Pledgor (whether established or registered or recorded in the United States
or any other country or any political subdivision thereof), together with any
and all (i) rights and privileges arising under applicable law with respect to
such Pledgor’s use of any patents, (ii) inventions and improvements described
and claimed therein, (iii) reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof and amendments thereto,
(iv) income, fees, royalties, damages, claims and payments now or hereafter due
and/or payable thereunder and with respect thereto including damages and
payments for past, present or future infringements thereof, (v) rights
corresponding thereto throughout the world and (vi) rights to sue for past,
present or future infringements thereof.

“Patent Security Agreement” shall mean an agreement substantially in the form of
Exhibit 5 hereto.

“Permitted Liens” shall mean each of the Liens permitted pursuant to Section 7.3
of the Credit Agreement.

“Permitted Prior Liens” shall mean each of the Permitted Liens that has priority
over the Liens granted pursuant to the Collateral Documents by operation of law
that grants special extraordinary priority.

“Pledge Amendment” shall have the meaning assigned to such term in Section 5.1
hereof.

“Pledged Collateral” shall have the meaning assigned to such term in Section 2.1
hereof.

“Pledged Securities” shall mean, collectively, with respect to each Pledgor,
(i) all issued and outstanding Capital Stock owned by such Pledgor and all
options, warrants, rights, agreements and additional Capital Stock of whatever
class of any such issuer acquired by such Pledgor (including by issuance),
together with all rights, privileges, authority and powers of such Pledgor
relating to such Capital Stock in each such issuer or under any Governing
Document of each such issuer, and the certificates, instruments and agreements
representing such Capital Stock and any and all interest of such Pledgor in the
entries on the books of any financial intermediary pertaining to such Capital
Stock, (ii) all Capital Stock of any issuer, which Capital Stock is hereafter
acquired by such Pledgor (including by issuance) and all options, warrants,
rights, agreements and additional Capital Stock of whatever class of any such
issuer acquired by such Pledgor (including by issuance), together with all
rights, privileges, authority and powers of such Pledgor relating to such
Capital Stock or under any Governing Document of any such issuer, and the
certificates, instruments and agreements representing such Capital Stock and any
and all interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such Capital Stock, from time to time acquired by
such Pledgor in any manner, and (iii) all Capital Stock issued in respect of the
Capital Stock referred to in clause (i) or (ii) upon any consolidation or merger
of any issuer of such Capital Stock; provided that Pledged Securities shall not
include any Capital Stock which constitutes Excluded Property.

“Pledgor” shall have the meaning assigned to such term in the Preamble hereof.

“Receivables” shall mean all (i) Accounts, (ii) Chattel Paper, (iii) Payment
Intangibles, (iv) General Intangibles, (v) Instruments and (vi) all other rights
to payment, whether or not earned by performance, for goods or other property
sold, leased, licensed, assigned or otherwise disposed of, or services rendered
or to be rendered, regardless of how classified under the UCC together with all
of Pledgors’ rights, if any, in any goods or other property giving rise to such
right to payment and all Collateral Support and Supporting Obligations related
thereto and all Records relating thereto.

 

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“Secured Obligations” shall mean, collectively, (i) the Obligations, and
(ii) the obligations of the Guarantors under the Subsidiary Guarantee.

“Securities Account Control Agreement” shall mean an agreement in a form that is
reasonably satisfactory to the Administrative Agent establishing the
Administrative Agent’s Control with respect to any Securities Account.

“Securities Collateral” shall mean, collectively, the Pledged Securities, the
Intercompany Notes and the Distributions.

“Subsidiary Guarantors” shall have the meaning assigned to such term in the
Preamble hereof.

“Trademarks” shall mean, collectively, with respect to each Pledgor, all
trademarks (including service marks), slogans, logos, certification marks, trade
dress, uniform resource locators (URL’s), domain names, corporate names and
trade names, whether registered or unregistered, owned by or assigned to such
Pledgor and all registrations and applications for the foregoing (whether
statutory or common law and whether established or registered in the United
States or any other country or any political subdivision thereof), together with
any and all (i) rights and privileges arising under applicable law with respect
to such Pledgor’s use of any trademarks, (ii) reissues, continuations,
extensions and renewals thereof and amendments thereto, (iii) income, fees,
royalties, damages and payments now and hereafter due and/or payable thereunder
and with respect thereto, including damages, claims and payments for past,
present or future infringements thereof, (iv) rights corresponding thereto
throughout the world and (v) rights to sue for past, present and future
infringements thereof.

“Trademark Security Agreement” shall mean an agreement substantially in the form
of Exhibit 6 hereto.

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in
the State of New York; provided, however, that, at any time, if by reason of
mandatory provisions of law, any or all of the perfection or priority of the
Administrative Agent’s and the Secured Parties’ security interest in any item or
portion of the Pledged Collateral is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than the State of New York, the term “UCC”
shall mean the Uniform Commercial Code as in effect, at such time, in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or priority and for purposes of definitions relating to such provisions.

Section 1.2. Interpretation. The rules of interpretation specified in the Credit
Agreement (including Section 1.2 thereof) shall be applicable to this Agreement.

ARTICLE II

GRANT OF SECURITY AND SECURED OBLIGATIONS

Section 2.1. Grant of Security Interest. As collateral security for the payment
and performance in full of all the Secured Obligations, each Pledgor hereby
pledges and grants to the Administrative Agent for the benefit of the Secured
Parties, a lien on and security interest in all of the right, title and interest
of such Pledgor in, to and under the following property, wherever located, and
whether now existing or hereafter arising or acquired from time to time
(collectively, the “Pledged Collateral”):

 

(i) all Accounts;

 

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(ii) all Equipment, Goods, Inventory and Fixtures;

 

(iii) all Documents, Instruments and Chattel Paper;

 

(iv) all Letter-of-Credit Rights;

 

(v) all Investment Property;

 

(vi) the Commercial Tort Claims described on Schedule 2.1 hereto;

 

(vii) all General Intangibles;

 

(viii) all Money and all Deposit Accounts;

 

(ix) all Supporting Obligations;

 

(x) all books and records; and

 

(xi) all other personal property of such Pledgor, whether tangible or
intangible, and all Proceeds and products of each of the foregoing and all
accessions to, substitutions and replacements for, and rents, profits and
products of, each of the foregoing, any and all Proceeds of any insurance,
indemnity, warranty or guaranty payable to such Pledgor from time to time with
respect to any of the foregoing.

Notwithstanding anything to the contrary contained in clauses (i) through
(xi) above, the security interest created by this Agreement shall not extend to,
and the term “Pledged Collateral” shall not include, any Excluded Property.

The Pledgors shall from time to time at the request of the Administrative Agent,
give written notice to the Administrative Agent identifying in reasonable detail
the Excluded Property and shall provide to the Administrative Agent such other
information regarding the Excluded Property as the Administrative Agent may
reasonably request.

Section 2.2. Filings.

(a) Each Pledgor hereby irrevocably authorizes the Administrative Agent at any
time and from time to time to file in any relevant jurisdiction any financing
statements (including fixture filings) and amendments thereto that contain the
information required by Article 9 of the UCC of each applicable jurisdiction for
the filing of any financing statement or amendment relating to the Pledged
Collateral, including (i) whether such Pledgor is an organization, the type of
organization and any organizational identification number issued to such
Pledgor, (ii) any financing or continuation statements or other documents
without the signature of such Pledgor where permitted by law, including the
filing of a financing statement describing the Pledged Collateral as “all assets
now owned or hereafter acquired by the Pledgor or in which Pledgor otherwise has
rights” or using words of similar import and (iii) in the case of a financing
statement filed as a fixture filing or covering Pledged Collateral constituting
minerals or the like to be extracted or timber to be cut, a sufficient
description of the real property to which such Pledged Collateral relates. Each
Pledgor agrees to provide all information described in the immediately preceding
sentence to the Administrative Agent promptly upon request by the Administrative
Agent.

(b) Each Pledgor (i) agrees, at the request of the Administrative Agent, to
enter into a Copyright Security Agreement, Patent Security Agreement and
Trademark Security Agreement in favor of the Administrative Agent and
(ii) hereby further authorizes the Administrative Agent to file filings with the
United States

 

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Patent and Trademark Office or United States Copyright Office (or any successor
office or any similar office in any other country), including the Copyright
Security Agreement, the Patent Security Agreement and the Trademark Security
Agreement, or other documents as may be necessary or reasonably deemed desirable
by the Administrative Agent for the purpose of perfecting, confirming,
continuing, enforcing or protecting the security interest granted by such
Pledgor hereunder, naming such Pledgor, as debtor, and the Administrative Agent,
as secured party.

ARTICLE III

PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES; USE OF PLEDGED COLLATERAL

Section 3.1. Securities Collateral Schedules. Schedule 3.1(a) hereto lists all
Pledged Securities of the Pledgors and sets forth the issuer, the owner, the
certificate number (if any), the percentage ownership and the percentage pledge
for any Capital Stock constituting Pledged Securities. Schedule 3.1(b) hereto
lists all Intercompany Notes of the Pledgors and sets forth the owner, the debt
issuer, the principal amount, the date of issuance, the maturity date and a
brief description of each such Intercompany Note.

Section 3.2. Delivery of Certificated Securities Collateral. Each Pledgor
represents and warrants that all certificates, agreements or instruments
representing or evidencing the certificated Securities Collateral in existence
on the date hereof have been delivered to the Administrative Agent in suitable
form for transfer by delivery or accompanied by duly executed instruments of
transfer or assignment in blank. Each Pledgor hereby agrees that all
certificates, agreements or instruments representing or evidencing certificated
Securities Collateral acquired by such Pledgor after the date hereof shall
promptly (but in any event within thirty days after receipt thereof by such
Pledgor) be delivered to and held by or on behalf of the Administrative Agent
pursuant hereto. All certificated Securities Collateral shall be in suitable
form for transfer by delivery or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Administrative Agent. The Administrative Agent shall have
the right, at any time upon the occurrence and during the continuance of any
Event of Default, to endorse, assign or otherwise transfer to or to register in
the name of the Administrative Agent or any of its nominees or endorse for
negotiation any or all of the certificated Securities Collateral, without any
indication that such certificated Securities Collateral is subject to the
security interest hereunder. In addition, upon the occurrence and during the
continuance of an Event of Default, the Administrative Agent shall have the
right at any time to exchange certificates representing or evidencing Securities
Collateral for certificates of smaller or larger denominations.

Section 3.3. Perfection of Uncertificated Securities Collateral. Each Pledgor
hereby agrees that if any of the Pledged Securities are at any time not
evidenced by certificates of ownership, then each applicable Pledgor shall, to
the extent permitted by applicable law, (i) at the Administrative Agent’s
request, either (A) cause the issuer of such Pledged Securities to execute and
deliver to the Administrative Agent an acknowledgment of the pledge of such
Pledged Securities substantially in the form of Exhibit 1 hereto or such other
form that is reasonably satisfactory to the Administrative Agent or (B) if
necessary or desirable to perfect a security interest in such Pledged
Securities, cause such pledge to be recorded on the equityholder register or the
books of the issuer, execute any customary pledge forms or other documents
necessary or appropriate to complete the pledge and give the Administrative
Agent the right to transfer such Pledged Securities under the terms hereof, and
(ii) after the occurrence and during the continuance of any Event of Default,
upon request by the Administrative Agent, (A) cause the Governing Documents of
each such issuer that is a Subsidiary of the Borrower to be amended to provide
that such Pledged Securities shall be treated as “securities” for purposes of
the UCC and (B) cause such Pledged Securities to become certificated and
delivered to the Administrative Agent in accordance with the provisions of
Section 3.1.

 

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Section 3.4. Financing Statements and Other Filings; Maintenance of Perfected
Security Interest. Each Pledgor agrees that at the sole cost and expense of the
Pledgors, such Pledgor will maintain the security interest created by this
Agreement in the Pledged Collateral as a perfected first priority security
interest subject only to Permitted Prior Liens, except to the extent that any
such loss of perfection or priority results from the failure of the
Administrative Agent to maintain possession of certificates actually delivered
to it representing securities pledged under the Collateral Documents or to file
Uniform Commercial Code continuation statements

Section 3.5. Other Actions. In order to further ensure the attachment,
perfection and priority of, and the ability of the Administrative Agent to
enforce, the Administrative Agent’s security interest in the Pledged Collateral,
each Pledgor represents and warrants (as to itself) as follows and agrees, in
each case at such Pledgor’s own expense, to take the following actions with
respect to the following Pledged Collateral:

(a) Instruments and Tangible Chattel Paper. Schedule 3.4(a) hereto lists each
Instrument and each item of Tangible Chattel Paper of the Pledgors. Each
Instrument and each item of Tangible Chattel Paper listed in Schedule 3.4(a)
hereto has been properly endorsed, assigned and delivered to the Administrative
Agent, accompanied by instruments of transfer or assignment duly executed in
blank. The requirement in the preceding sentence shall not apply to the extent
that the face amount of any such Instrument or Tangible Chattel Paper is less
than $1,000,000 in the aggregate for all Pledgors. If any amount then payable
under or in connection with any of the Pledged Collateral shall be evidenced by
any Instrument or Tangible Chattel Paper, and such amount, together with all
amounts payable evidenced by any Instrument or Tangible Chattel Paper not
previously delivered to the Administrative Agent exceeds $1,000,000 in the
aggregate for all Pledgors, the Pledgor acquiring such Instrument or Tangible
Chattel Paper shall promptly (but in any event within thirty days after receipt
thereof) endorse, assign and deliver the same to the Administrative Agent,
accompanied by such instruments of transfer or assignment duly executed in
blank.

(b) Deposit Accounts. Schedule 3.4(b) hereto lists each Deposit Account of the
Pledgors. Each Pledgor shall enter into and cause the applicable Bank to enter
into a Deposit Account Control Agreement with the Administrative Agent with
respect to each Deposit Account listed on Schedule 3.4(b) hereto, except for the
Exempt Deposit Accounts. No Pledgor shall hereafter establish and maintain any
Deposit Account (other than an Exempt Deposit Account and Deposit Accounts that
are held internally at the Administrative Agent) unless such Bank and such
Pledgor shall have duly executed and delivered to the Administrative Agent a
Deposit Account Control Agreement with respect to such Deposit Account within 15
Business Days of establishing such Deposit Account (or such longer period as the
Administrative Agent may agree in its reasonable discretion). The Administrative
Agent agrees with each Pledgor that the Administrative Agent shall not give any
instructions directing the disposition of funds from time to time credited to
any Deposit Account or withhold any withdrawal rights from such Pledgor with
respect to funds from time to time credited to any Deposit Account unless an
Event of Default has occurred and is continuing.

(c) Securities Accounts and Commodity Accounts. Schedule 3.4(c) hereto lists
each Securities Account and Commodities Account of the Pledgors. Each Pledgor
shall enter into and cause the applicable Securities Intermediary or Commodity
Intermediary to enter into a Control Agreement with the Administrative Agent
with respect to each Securities Account or Commodity Account listed on Schedule
3.4(c). No Pledgor shall hereafter establish and maintain any Securities Account
or Commodity Account with any Securities Intermediary or Commodity Intermediary
unless such Securities Intermediary or

 

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Commodity Intermediary, as the case may be, and such Pledgor shall have duly
executed and delivered a Control Agreement with respect to such Securities
Account or Commodity Account within 15 Business Days of establishing such
Securities Account or Commodity Account (or such longer period as the
Administrative Agent may agree in its reasonable discretion), as the case may
be. Each Pledgor shall accept any cash and Investment Property in trust for the
benefit of the Administrative Agent and within three (3) Business Days of actual
receipt thereof, deposit any and all cash and Investment Property received by it
into a Deposit Account or Securities Account subject to Administrative Agent’s
Control except for such cash as may be held in Exempt Deposit Accounts in
accordance with the terms of this Agreement. The Administrative Agent agrees
with each Pledgor that the Administrative Agent shall not give any Entitlement
Orders or instructions or directions to any issuer of uncertificated securities,
Securities Intermediary or Commodity Intermediary, and shall not withhold its
consent to the exercise of any withdrawal or dealing rights by such Pledgor,
unless an Event of Default has occurred and is continuing or, after giving
effect to any such investment and withdrawal rights, would occur, or unless
otherwise permitted pursuant to the Credit Agreement. No Pledgor shall grant
Control over any Investment Property to any person other than the Administrative
Agent. As between the Administrative Agent and the Pledgors, the Pledgors shall
bear the investment risk with respect to the Investment Property and Pledged
Securities, and the risk of loss of, damage to, or the destruction of the
Investment Property and Pledged Securities, whether in the possession of, or
maintained as a Security Entitlement or deposit by, or subject to the Control
of, the Administrative Agent, a Securities Intermediary, a Commodity
Intermediary, any Pledgor or any other person.

(d) Electronic Chattel Paper and Transferable Records. As of the date hereof, no
amount under or in connection with any of the Pledged Collateral is evidenced by
any Electronic Chattel Paper or any “transferable record” (as that term is
defined in Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act, or in Section 16 of the Uniform Electronic Transactions
Act as in effect in any relevant jurisdiction) other than such Electronic
Chattel Paper and transferable records listed in Schedule 3.4(d) hereto. If any
amount payable under or in connection with any of the Pledged Collateral shall
be evidenced by any Electronic Chattel Paper or any transferable record, the
Pledgor acquiring such Electronic Chattel Paper or transferable record shall
promptly notify the Administrative Agent thereof and shall take such action as
the Administrative Agent may reasonably request to vest in the Administrative
Agent control of such Electronic Chattel Paper under Section 9-105 of the UCC or
control under Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of such
transferable record. The requirement in the preceding sentence shall not apply
to the extent that such amount, together with all amounts payable evidenced by
Electronic Chattel Paper or any transferable record in which the Administrative
Agent has not been vested control within the meaning of the statutes described
in the immediately preceding sentence, does not exceed $1,000,000 in the
aggregate for all Pledgors. The Administrative Agent agrees with such Pledgor
that the Administrative Agent will arrange, pursuant to procedures satisfactory
to the Administrative Agent and so long as such procedures will not result in
the Administrative Agent’s loss of control, for the Pledgor to make alterations
to the Electronic Chattel Paper or transferable record permitted under
Section 9-105 of the UCC or, as the case may be, Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or Section 16 of the
Uniform Electronic Transactions Act, unless an Event of Default has occurred and
is continuing or would occur after taking into account any action by such
Pledgor with respect to such Electronic Chattel Paper or transferable record.

(e) Letter of Credit Rights. If any Pledgor is at any time a beneficiary under a
letter of credit now or hereafter issued, such Pledgor shall promptly notify the
Administrative Agent thereof and such Pledgor shall, at the reasonable request
of the Administrative Agent, pursuant to an agreement in form and substance
reasonably satisfactory to the Administrative Agent, either (i) use commercially
reasonable efforts to arrange for the issuer and any confirmer of such letter of
credit to consent to an assignment to

 

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the Administrative Agent of the proceeds of any drawing under the letter of
credit or (ii) arrange for the Administrative Agent to become the transferee
beneficiary of such letter of credit. The actions in the preceding sentence
shall not be required to the extent that perfection is achieved by filing a
financing statement under the UCC or the amount of any such letter of credit,
together with the aggregate amount of all other letters of credit for which the
actions described above in clause (i) and (ii) have not been taken, does not
exceed $1,000,000 in the aggregate for all Pledgors.

(f) Commercial Tort Claims. If any Pledgor shall at any time hold or acquire a
Commercial Tort Claim, such Pledgor shall promptly (and in any event, within
thirty (30) days) notify the Administrative Agent in writing signed by such
Pledgor of the brief details thereof and grant to the Administrative Agent in
such writing a security interest therein and in the Proceeds thereof, all upon
the terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to the Administrative Agent. The requirement in the
preceding sentence shall not apply to the extent that the amount of such
Commercial Tort Claim, together with the amount of all other Commercial Tort
Claims held by any Pledgor in which the Administrative Agent does not have a
security interest, does not exceed $1,000,000 in the aggregate for all Pledgors.

Section 3.6. Joinder of Additional Pledgors. The Pledgors shall cause each
Subsidiary of the Borrower which, from time to time, after the date hereof shall
be required to pledge any assets to the Administrative Agent for the benefit of
the Secured Parties pursuant to the provisions of the Loan Documents, to execute
and deliver to the Administrative Agent a Joinder Agreement substantially in the
form of Exhibit 3 hereto, in each case, within thirty (30) days of the date on
which it was acquired or created (or such longer period as the Administrative
Agent may agree in its reasonable discretion). Upon such execution and delivery,
such Subsidiary shall constitute a “Subsidiary Guarantor” and a “Pledgor” for
all purposes hereunder with the same force and effect as if originally named as
a Subsidiary Guarantor and Pledgor herein. The execution and delivery of such
Joinder Agreement shall not require the consent of any Pledgor hereunder. The
rights and obligations of each Pledgor hereunder shall remain in full force and
effect notwithstanding the addition of any new Subsidiary Guarantor and Pledgor
as a party to this Agreement.

Section 3.7. Supplements; Further Assurances. Each Pledgor shall take such
further actions, and execute and/or deliver to the Administrative Agent such
additional financing statements, amendments, assignments, agreements,
supplements, powers and instruments, as the Administrative Agent may in its
reasonable judgment deem necessary or appropriate in order to create, perfect,
preserve and protect the security interest in the Pledged Collateral as provided
herein and the rights and interests granted to the Administrative Agent
hereunder, to carry into effect the purposes hereof or better to assure and
confirm the validity, enforceability and priority of the Administrative Agent’s
security interest in the Pledged Collateral or permit the Administrative Agent
to exercise and enforce its rights, powers and remedies hereunder with respect
to any Pledged Collateral, including the filing of financing statements,
continuation statements and other documents (including this Agreement) under the
UCC (or other similar laws) in effect in any jurisdiction with respect to the
security interest created hereby and the execution and delivery of Control
Agreements, all in form reasonably satisfactory to the Administrative Agent and
in such offices (including the United States Patent and Trademark Office and the
United States Copyright Office) wherever required by law to perfect, continue
and maintain the validity, enforceability and priority of the security interest
in the Pledged Collateral as provided herein and to preserve the other rights
and interests granted to the Administrative Agent hereunder, as against third
parties, with respect to the Pledged Collateral. If an Event of Default has
occurred and is continuing, the Administrative Agent may institute and maintain,
in its own name or in the name of any Pledgor, such suits and proceedings as the
Administrative Agent may be advised by counsel shall be necessary or advisable
to prevent any impairment of the security interest in or the perfection thereof
in the Pledged Collateral. All of the foregoing shall be at the sole cost and
expense of the Pledgors.

 

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ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS

Each Pledgor represents, warrants and covenants as follows:

Section 4.1. Title. Except for the security interest granted to the
Administrative Agent for the benefit of the Secured Parties pursuant to this
Agreement and Permitted Liens, such Pledgor owns and has rights and, as to
Pledged Collateral acquired by it from time to time after the date hereof, will
own and have rights in each item of Pledged Collateral pledged by it hereunder,
free and clear of any and all claims or Liens of others. In addition, no Liens
or claims exist on the Securities Collateral, other than as permitted by the
Loan Documents.

Section 4.2. Validity of Security Interest. The security interest and Lien
granted to the Administrative Agent for the benefit of the Secured Parties
pursuant to this Agreement in and on the Pledged Collateral will at all times
constitute a perfected, continuing security interest therein, prior to all other
Liens on the Pledged Collateral except for Permitted Prior Liens.

Section 4.3. Defense of Claims; Transferability of Pledged Collateral. Subject
to the Loan Documents, each Pledgor shall, at its own cost and expense, take all
commercially reasonable actions necessary to defend title to the Pledged
Collateral pledged by it hereunder and the security interest therein and Lien
thereon granted to the Administrative Agent and the priority thereof against all
claims and demands of all persons, at its own cost and expense, at any time
claiming any interest therein adverse to the Administrative Agent or any other
Secured Party other than Permitted Liens.

Section 4.4. Other Financing Statements. It has not filed, nor authorized any
third party to file, any valid or effective financing statement (or similar
statement, instrument of registration or public notice under the law of any
jurisdiction) covering or purporting to cover any interest of any kind in the
Pledged Collateral, except such as have been filed in favor of the
Administrative Agent pursuant to this Agreement or in favor of any holder of a
Permitted Lien with respect to such Permitted Lien. No Pledgor shall execute or
authorize to be filed in any public office any financing statement (or similar
statement, instrument of registration or public notice under the law of any
jurisdiction) relating to any Pledged Collateral, except financing statements
and other statements and instruments filed or to be filed in respect of and
covering the security interests granted by such Pledgor to any holder of
Permitted Liens.

Section 4.5. Due Authorization and Issuance. All of the Pledged Securities
existing on the date hereof have been, and to the extent any Pledged Securities
are hereafter issued, such Pledged Securities will be, upon such issuance, duly
authorized, validly issued and fully paid and non-assessable to the extent
applicable. There is no amount or other obligation owing by any Pledgor to any
issuer of the Pledged Securities in exchange for or in connection with the
issuance of the Pledged Securities or any Pledgor’s status as a partner or a
member of any issuer of the Pledged Securities.

Section 4.6. Consents, etc. In the event that the Administrative Agent desires
to exercise any remedies, voting or consensual rights or attorney-in-fact powers
set forth in this Agreement and determines it necessary to obtain any approvals
or consents of any Governmental Authority or any other person therefor, then,
upon the reasonable request of the Administrative Agent, such Pledgor agrees to
use its commercially reasonable efforts to assist the Administrative Agent to
obtain as soon as practicable any necessary approvals or consents for the
exercise of any such remedies, rights and powers.

Section 4.7. Pledged Collateral. All information set forth herein, including the
schedules hereto, is accurate and complete in all material respects. The Pledged
Collateral described on the schedules hereto constitutes all of the property of
such type of Pledged Collateral owned or held by the Pledgors as of the Closing
Date.

 

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Section 4.8. Insurance. (a) None of the Pledged Collateral of any Pledgor
constitutes an interest or claim in or under any policy of insurance or contract
for annuity, except to the extent the same constitutes Proceeds.

(b) The Pledgors shall maintain the property and liability insurance specified
in Sections 4.19 and 6.6 of the Credit Agreement (including paying all premiums
in respect thereof), and shall provide certificates to the Administrative Agent
setting forth the coverage, the limits of liability, the name of the carrier,
the policy number, and the period of coverage. Such insurance certificates shall
be accompanied by endorsements of the related insurance policies which
endorsements shall (i) name the Administrative Agent, for the ratable benefit of
the Secured Parties, as lender loss payee, in the case of property or casualty
insurance, and as an additional insured, in the case of liability insurance, as
its interests may appear and (ii) provide that no cancellation thereof shall be
effective until at least thirty (30) days after receipt by the Administrative
Agent of written notice thereof.

(c) In the event that the net cash proceeds of any insurance claim are paid to
any Pledgor after the Administrative Agent has exercised its right to foreclose
after an Event of Default, such proceeds shall be held in trust for the benefit
of the Administrative Agent and promptly after receipt thereof shall be paid to
the Administrative Agent for application in accordance with the Loan Documents.

ARTICLE V

CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL

Section 5.1. Pledge of Additional Securities Collateral. Each Pledgor shall,
upon obtaining any Pledged Securities or Intercompany Notes of any person,
accept the same in trust for the benefit of the Administrative Agent and
promptly (but in any event within thirty days after receipt thereof) deliver to
the Administrative Agent a pledge amendment, duly executed by such Pledgor, in
substantially the form of Exhibit 2 hereto (each, a “Pledge Amendment”), and the
certificates and other documents required under Section 3.2 and Section 3.3
hereof in respect of the additional Pledged Securities or Intercompany Notes
which are to be pledged pursuant to this Agreement, and confirming the
attachment of the Lien hereby created on and in respect of such additional
Pledged Securities or Intercompany Notes. Each Pledgor hereby authorizes the
Administrative Agent to attach each Pledge Amendment to this Agreement and
agrees that all Pledged Securities or Intercompany Notes listed on any Pledge
Amendment delivered to the Administrative Agent shall for all purposes hereunder
be considered Pledged Collateral.

Section 5.2. Voting Rights; Distributions; etc.

(a) So long as no Event of Default shall have occurred and be continuing, and
except as otherwise provided in the Credit Agreement:

 

(i) Each Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Securities Collateral or any part thereof
for any purpose not inconsistent with the terms or purposes hereof, the Credit
Agreement or any other document evidencing the Secured Obligations; provided,
however, that no Pledgor shall in any event exercise such rights in any manner
which would reasonably be expected to have a Material Adverse Effect.

 

(ii)

Each Pledgor shall be entitled to receive and retain, and to utilize free and
clear of the Lien hereof, any and all Distributions, but only if and to the
extent made in accordance with the provisions of the Loan

 

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  Documents, including Section 7.5 of the Credit Agreement; provided, however,
that any and all such Distributions consisting of rights or interests in the
form of Securities Collateral shall be delivered to the Administrative Agent in
accordance with Section 3.2 and Section 3.3 hereof, as applicable.

(b) So long as no Event of Default or Trigger Event shall have occurred and be
continuing, the Administrative Agent shall be deemed without further action or
formality to have granted to each Pledgor all necessary consents relating to the
exercise of any and all voting rights and other rights which it is entitled to
exercise pursuant to Section 5.2(a)(i) hereof and shall, if necessary, upon
written request of any Pledgor and at the sole cost and expense of the Pledgors,
from time to time execute and deliver (or cause to be executed and delivered) to
such Pledgor all such instruments as such Pledgor may reasonably request in
order to permit such Pledgor to exercise the voting and other rights which it is
entitled to exercise pursuant to Section 5.2(a)(i) hereof and to receive the
Distributions which it is authorized to receive and retain pursuant to
Section 5.2(a)(ii) hereof.

(c) Upon the occurrence and during the continuance of any Event of Default and
prior written notice by the Administrative Agent to such Pledgor:

 

(i) All rights of each Pledgor to exercise the voting and other consensual
rights it would otherwise be entitled to exercise pursuant to Section 5.2(a)(i)
hereof shall immediately cease, and all such rights shall thereupon become
vested in the Administrative Agent, which shall thereupon have the sole right to
exercise such voting and other consensual rights.

 

(ii) All rights of each Pledgor to receive Distributions which it would
otherwise be authorized to receive and retain pursuant to Section 5.2(a)(ii)
hereof shall immediately cease and all such rights shall thereupon become vested
in the Administrative Agent, which shall thereupon have the sole right to
receive and hold as Pledged Collateral such Distributions.

(d) Each Pledgor shall, at its sole cost and expense, from time to time execute
and deliver to the Administrative Agent appropriate instruments as the
Administrative Agent may request in order to permit the Administrative Agent to
exercise the voting and other rights which it may be entitled to exercise
pursuant to Section 5.2(a)(i) hereof and to receive all Distributions which it
may be entitled to receive under Section 5.2(a)(ii) hereof.

(e) All Distributions which are received by any Pledgor contrary to the
provisions of Section 5.2(a)(ii) hereof shall be received in trust for the
benefit of the Administrative Agent, shall be segregated from other funds of
such Pledgor and shall immediately be paid over to the Administrative Agent as
Pledged Collateral in the same form as so received (with any necessary
endorsement).

Section 5.3. Defaults, etc. Each Pledgor hereby represents and warrants that
(i) such Pledgor is not in default in the payment of any portion of any
mandatory capital contribution, if any, required to be made under any agreement
to which such Pledgor is a party relating to the Pledged Securities pledged by
it, and such Pledgor is not in violation of any other provisions of any such
agreement to which such Pledgor is a party, or otherwise in default or violation
thereunder, (ii) no Securities Collateral pledged by such Pledgor is subject to
any defense, offset or counterclaim, nor have any of the foregoing been asserted
or alleged against such Pledgor by any person with respect thereto, and (iii) as
of the date hereof, there are no certificates, instruments, documents or other
writings (other than the Governing Documents and certificates representing such
Pledged Securities that have been delivered to the Administrative Agent) which
evidence any Pledged Securities of such Pledgor.

 

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Section 5.4. Certain Agreements of Pledgors As Issuers and Holders of Capital
Stock.

(a) In the case of each Pledgor which is an issuer of Securities Collateral,
such Pledgor agrees to be bound by the terms of this Agreement relating to the
Securities Collateral issued by it and will comply with such terms insofar as
such terms are applicable to it.

(b) In the case of each Pledgor which is a partner, shareholder or member, as
the case may be, in a partnership, limited liability company or other entity,
such Pledgor hereby consents to the extent required by the applicable Governing
Document to the pledge by each other Pledgor, pursuant to the terms hereof, of
the Pledged Securities in such partnership, limited liability company or other
entity and, upon the occurrence and during the continuance of an Event of
Default, to the transfer of such Pledged Securities to the Administrative Agent
or its nominee and to the substitution of the Administrative Agent or its
nominee as a substituted partner, shareholder or member in such partnership,
limited liability company or other entity with all the rights, powers and duties
of a general partner, limited partner, shareholder or member, as the case may
be.

ARTICLE VI

CERTAIN PROVISIONS CONCERNING INTELLECTUAL PROPERTY COLLATERAL

Section 6.1. Intellectual Property Collateral Schedule; Grant of Intellectual
Property License. Each item of registered Intellectual Property Collateral (and
applications therefor) of each Pledgor is set forth on Schedule 6.1 hereto. For
the purpose of enabling the Administrative Agent, during the continuance of an
Event of Default, to exercise rights and remedies under ARTICLE VIII hereof at
such time as the Administrative Agent shall be lawfully entitled to exercise
such rights and remedies and for no other purpose, each Pledgor hereby grants to
the Administrative Agent, during the continuance of an Event of Default, to the
extent it has the legal right to do so, an irrevocable (until the termination of
this Agreement; provided that any sublicenses granted by the Administrative
Agent during such period shall continue for their term as direct licenses from
the relevant Pledgor) and nonexclusive license to use, assign, license or
sublicense any of the Intellectual Property Collateral now owned or hereafter
acquired by such Pledgor, wherever the same may be located. Such license shall
include access to all media in which any of the licensed items may be recorded
or stored and to all computer programs used for the compilation or printout
hereof.

Section 6.2. After-Acquired Property. If any Pledgor shall at any time after the
date hereof obtain any rights to any additional Intellectual Property
Collateral, including any reissue, division, continuation, or
continuation-in-part of any Intellectual Property Collateral, or any improvement
on any Intellectual Property Collateral, the provisions hereof shall
automatically apply thereto and any such item enumerated in the preceding clause
shall automatically constitute Intellectual Property Collateral as if such would
have constituted Intellectual Property Collateral at the time of execution
hereof and be subject to the Lien and security interest created by this
Agreement without further action by any party. Each Pledgor shall promptly (and
in any event no less frequently than quarterly with submission of the financial
statements delivered pursuant to Section 6.1(b) of the Credit Agreement) provide
to the Administrative Agent written notice of any registrations of or
applications to register the foregoing and, at the Administrative Agent’s
request, confirm the attachment of the Lien and security interest created by
this Agreement to any of the foregoing by execution of an instrument in form
reasonably acceptable to the Administrative Agent and the filing of any
instruments or statements as shall be reasonably necessary to create, preserve,
protect or perfect the Administrative Agent’s security interest in such
Intellectual Property Collateral. Further, each Pledgor authorizes the
Administrative Agent to modify this Agreement by amending Schedule 6.1 to
include any Intellectual Property Collateral of such Pledgor acquired or arising
after the date hereof.

 

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Section 6.3. Litigation. Unless there shall occur and be continuing any Event of
Default, each Pledgor shall have the right to commence and prosecute in its own
name and in accordance with its reasonable business judgment, as the party in
interest, for its own benefit and at the sole cost and expense of the Pledgors,
such applications for protection of the Intellectual Property Collateral and
suits, proceedings or other actions to prevent the infringement, counterfeiting,
unfair competition, dilution, diminution in value or other damage as are
necessary to protect the Intellectual Property Collateral. Upon the occurrence
and during the continuance of any Event of Default, the Administrative Agent
shall have the right but shall in no way be obligated to file applications for
protection of the Intellectual Property Collateral and/or bring suit in the name
of any Pledgor, the Administrative Agent or the Secured Parties to enforce the
Intellectual Property Collateral and any license thereunder. In the event of
such suit, each Pledgor shall, at the reasonable request of the Administrative
Agent, do any and all lawful acts and execute any and all documents requested by
the Administrative Agent in aid of such enforcement and the Pledgors shall
promptly reimburse and indemnify the Administrative Agent for all costs and
expenses incurred by the Administrative Agent in the exercise of its rights
under this Section 6.3 in accordance with the Loan Documents. In the event that
the Administrative Agent shall elect not to bring suit as permitted pursuant to
this Section 6.3 to enforce the Intellectual Property Collateral upon the
occurrence and during the continuance of an Event of Default, each Pledgor
agrees, at the reasonable request of the Administrative Agent, to take all
commercially reasonable actions necessary, whether by suit, proceeding or other
action, to prevent the infringement, counterfeiting, unfair competition,
dilution, diminution in value of or other damage to any of the Intellectual
Property Collateral by any person.

ARTICLE VII

CERTAIN PROVISIONS CONCERNING RECEIVABLES

Section 7.1. Maintenance of Records. Each Pledgor shall keep and maintain at its
own cost and expense complete records of each Receivable, in a manner consistent
with prudent business practice, including records of all payments received, all
credits granted thereon and all other documentation relating thereto. Each
Pledgor shall, at such Pledgor’s sole cost and expense, upon the Administrative
Agent’s demand made at any time after the occurrence and during the continuance
of any Event of Default, deliver all tangible evidence of Receivables, including
all documents evidencing Receivables and any books and records relating thereto
to the Administrative Agent or to its representatives (copies of which evidence
and books and records may be retained by such Pledgor). Upon the occurrence and
during the continuance of any Event of Default, the Administrative Agent may
transfer a full and complete copy of any Pledgor’s books, records, credit
information, reports, memoranda and all other writings relating to the
Receivables to and for the use by any person that has acquired or is
contemplating acquisition of an interest in the Receivables or the
Administrative Agent’s security interest therein without the consent of any
Pledgor.

Section 7.2. Pledgors Remain Liable under Receivables and Contracts. Anything
herein to the contrary notwithstanding, each Pledgor shall remain liable under
each of the Receivables and Contracts to observe and perform all the conditions
and obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise to each such Receivable and in
accordance with and pursuant to the terms and provisions of each such Contract.
None of the Secured Parties shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) or under any Contract by
reason of or arising out of this Agreement or the receipt by the Administrative
Agent or any Secured Party of any payment relating to such Receivable or
Contract pursuant hereto, nor shall the Administrative Agent or any other
Secured Party be obligated in any manner to perform any of the obligations of
any Pledgor under or pursuant to any Receivable (or any agreement giving rise
thereto) or under or pursuant to any Contract, to make any payment, to make any
inquiry as to the nature or the

 

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sufficiency of any payment received by it or as to the sufficiency of any
performance by any party under any Receivable (or any agreement giving rise
thereto) or under any Contract, to present or file any claim, to take any action
to enforce any performance or to collect the payment of any amounts which may
have been assigned to it or to which it may be entitled at any time or times.

Section 7.3. Communication with and Notice to Receivable Obligors and
Contracting Parties. The Administrative Agent in its own name or in the name of
others may at any time after the occurrence and during the continuance of an
Event of Default communicate with account debtors on the Receivables and parties
to the Contracts to verify with them to the Administrative Agent’s satisfaction
the existence, amount and terms of any Receivables. Upon the request of the
Administrative Agent at any time after the occurrence and during the continuance
of an Event of Default, each Pledgor shall notify account debtors on the
Receivables and parties to the Contracts that the Receivables and the Contracts
have been assigned to the Administrative Agent on behalf and for the ratable
benefit of the Secured Parties and that payments in respect thereof shall be
made directly to the Administrative Agent. Such notification shall be
accomplished by each Pledgor by:

(i) notifying the account debtor of such assignment of proceeds and giving
irrevocable instructions to pay the proceeds, without offset or counterclaim or,
in the event there is an existing netting agreement with such account debtor,
the net proceeds to a Deposit Account subject to a Control Agreement in favor of
the Administrative Agent; or

(ii) causing the account debtor to send the Administrative Agent written
confirmation that such account debtor shall pay the proceeds to a Deposit
Account designated by the Administrative Agent without offset or counterclaim
or, in the event there is an existing netting agreement with such account
debtor, that the net proceeds shall be paid to such account; or

(iii) entering a valid, enforceable written agreement with the account debtor
relating to the assignment of proceeds, containing irrevocable payment
instructions for account debtor to pay the proceeds to a Deposit Account
designated by the Administrative Agent without offset or counterclaim or, in the
event there is an existing netting agreement with such account debtor, that the
net proceeds shall be paid to such account.

At any time after the occurrence and during the continuance of an Event of
Default, (a) the Administrative Agent, in its reasonable discretion, shall
determine whether each Pledgor has satisfactorily performed the notification of
assignment of the proceeds, and (b) in the event the Administrative Agent
determines that such notification has not been satisfactorily performed, the
Administrative Agent may, upon written notice to such Pledgor, give written
notification of the assignment of proceeds to the account debtor, indicating the
Lenders’ reliance on the account debtor to pay proceeds without offset or
counterclaim or, in the event there is an existing netting agreement with such
account debtor, the net proceeds to the Deposit Account designated by the
Administrative Agent.

Section 7.4. Collections on Receivables. The Administrative Agent hereby
authorizes each Pledgor to collect such Pledgor’s Receivables, subject to the
Administrative Agent’s direction and control, and the Administrative Agent may
curtail or terminate said authority at any time after the occurrence and during
the continuance of an Event of Default. If required by the Administrative Agent
at any time after the occurrence and during the continuance of an Event of
Default, any payments of Receivables, when collected by any Pledgor, (i) shall
be forthwith (and, in any event, within two (2) Business Days) deposited by such
Pledgor in the exact form received, duly endorsed by such Pledgor to the
Administrative Agent if required, in a special collateral account maintained by
the Administrative Agent,

 

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subject to withdrawal by the Administrative Agent for the account of the Secured
Parties only, as hereinafter provided, and (ii) until so turned over, shall be
held by such Pledgor in trust for the Administrative Agent and the other Secured
Parties, segregated from other funds of such Pledgor. Each such deposit of any
Proceeds constituting collections of Receivables shall be accompanied by a
report identifying in reasonable detail the nature and source of the payments
included in such deposit. All Proceeds constituting collections of Receivables
while held by the Administrative Agent (or by any Pledgor in trust for the
Administrative Agent and the other Secured Parties) shall continue to be
collateral security for all of the Secured Obligations and shall not constitute
payment thereof until applied as hereinafter provided. At any time after the
occurrence and during the continuance of an Event of Default, at the
Administrative Agent’s election, the Administrative Agent shall apply all or any
part of the funds on deposit in said collateral account on account of the
Secured Obligations in such order as the Administrative Agent may elect, and any
part of such funds which the Administrative Agent elects not so to apply and
deems not required as collateral security for the Secured Obligations shall be
paid over from time to time by the Administrative Agent to the Pledgors or to
whomsoever may be lawfully entitled to receive the same. At the Administrative
Agent’s request, each Pledgor shall deliver to the Administrative Agent all
original and other documents evidencing, and relating to, the agreements and
transactions which gave rise to such Pledgor’s Receivables, including, without
limitation, all original orders, invoices and shipping receipts.

Section 7.5. Certain Government Receivables. With respect to Receivables or
Contracts, in each case, that constitute Pledged Collateral, to which the
counterparty or obligor is a Governmental Authority, such Pledgor shall, as soon
as reasonably practicable after the request by the Administrative Agent, take
any commercially reasonable actions under the Assignment of Claims Act of 1940,
as amended from time to time (31 U.S.C. §3723, et seq.) or any similar law
required to permit or approve the assignment of the rights to payment thereunder
or thereon to the Administrative Agent on behalf of and for the benefit of the
Secured Parties.

ARTICLE VIII

REMEDIES

Section 8.1. Remedies. Upon the occurrence and during the continuance of any
Event of Default, the Administrative Agent may from time to time exercise in
respect of the Pledged Collateral, in addition to the other rights and remedies
provided for herein or otherwise available to it, the following remedies:

 

(i) Personally, or by agents or attorneys, immediately take possession of the
Pledged Collateral or any part thereof, from any Pledgor or any other person who
then has possession of any part thereof with or without notice or process of
law, and for that purpose may enter upon any Pledgor’s premises where any of the
Pledged Collateral is located, remove such Pledged Collateral, remain present at
such premises to receive copies of all communications and remittances relating
to the Pledged Collateral and use in connection with such removal and possession
any and all services, supplies, aids and other facilities of any Pledgor;

 

(ii) Demand, sue for, collect or receive any money or property at any time
payable or receivable in respect of the Pledged Collateral including instructing
the obligor or obligors on any agreement, instrument or other obligation
constituting part of the Pledged Collateral to make any payment required by the
terms of such agreement, instrument or other obligation directly to the
Administrative Agent, and in connection with any of the foregoing, compromise,
settle, extend the time for payment and make other modifications with respect
thereto; provided, however, that in the event that any such payments are made
directly to any Pledgor, prior to receipt by any such obligor of such
instruction, such Pledgor shall segregate all amounts received pursuant thereto
in trust for the benefit of the Administrative Agent and shall promptly (but in
no event later than five (5) Business Days after receipt thereof) pay such
amounts to the Administrative Agent;

 

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(iii) Sell, assign, grant a license to use or otherwise liquidate, or direct any
Pledgor to sell, assign, grant a license to use or otherwise liquidate, any and
all investments made in whole or in part with the Pledged Collateral or any part
thereof, and take possession of the proceeds of any such sale, assignment,
license or liquidation;

 

(iv) Take possession of the Pledged Collateral or any part thereof, by directing
any Pledgor in writing to deliver the same to the Administrative Agent at any
place or places so designated by the Administrative Agent, in which event such
Pledgor shall at its own expense: (A) forthwith cause the same to be moved to
the place or places designated by the Administrative Agent and therewith
delivered to the Administrative Agent, (B) store and keep any Pledged Collateral
so delivered to the Administrative Agent at such place or places pending further
action by the Administrative Agent and (C) while the Pledged Collateral shall be
so stored and kept, provide such security and maintenance services as shall be
necessary to protect the same and to preserve and maintain them in good
condition. Each Pledgor’s obligation to deliver the Pledged Collateral as
contemplated in this Section 8.1(iv) is of the essence. Upon application to a
court of equity having jurisdiction, the Administrative Agent shall be entitled
to a decree requiring specific performance by any Pledgor of such obligation;

 

(v) Withdraw all moneys, instruments, securities and other property in any bank,
financial securities, deposit or other account of any Pledgor constituting
Pledged Collateral for application to the Secured Obligations as provided in
ARTICLE IX hereof;

 

(vi) Retain and apply the Distributions to the Secured Obligations as provided
in ARTICLE IX hereof;

 

(vii) Exercise any and all rights as beneficial and legal owner of the Pledged
Collateral, including perfecting assignment of and exercising any and all
voting, consensual and other rights and powers with respect to any Pledged
Collateral; and

 

(viii)

Exercise all the rights and remedies of a secured party on default under the
UCC, and the Administrative Agent may also in its sole discretion, without
notice except as specified in Section 8.2 hereof, sell, assign or grant a
license to use the Pledged Collateral or any part thereof in one or more parcels
at public or private sale, at any exchange, broker’s board or at any of the
Administrative Agent’s offices or elsewhere, for cash, on credit or for future
delivery, and at such price or prices and upon such other terms as the
Administrative Agent may deem commercially reasonable. The Administrative Agent
or any other Secured Party or any of their respective Affiliates may be the
purchaser, licensee, assignee or recipient of the Pledged Collateral or any part
thereof at any such sale and shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of the
Pledged Collateral sold, assigned or licensed at such sale, to use and apply any
of the Secured Obligations owed to such person as a credit on account of the
purchase price of the Pledged Collateral or any part thereof payable by such
person at such sale. Each purchaser, assignee, licensee or recipient at any such
sale shall acquire the property sold, assigned or licensed absolutely free from
any claim or right on the part of any Pledgor, and each Pledgor hereby waives,
to the fullest extent permitted by law, all rights of redemption, stay and/or
appraisal which it now has or may at any time in the future have under any ride
of law or statute now existing or hereafter enacted. The Administrative Agent
shall not be obligated to make any sale of the Pledged Collateral or any part
thereof regardless of notice of sale having been given. The Administrative Agent
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned. Each Pledgor hereby
waives, to the fullest extent permitted by law, any claims against the
Administrative Agent arising by reason of the fact that the price at which the
Pledged

 

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Collateral or any part thereof may have been sold, assigned or licensed at such
a private sale was less than the price which might have been obtained at a
public sale, even if the Administrative Agent accepts the first offer received
and does not offer such Pledged Collateral to more than one offeree.

Section 8.2. Notice of Sale. Each Pledgor acknowledges and agrees that, to the
extent notice of sale or other disposition of the Pledged Collateral or any part
thereof shall be required by law, ten (10) days’ prior notice to such Pledgor of
the time and place of any public sale or of the time after which any private
sale or other intended disposition is to take place shall be commercially
reasonable notification of such matters. No notification need be given to any
Pledgor if it has signed, after the occurrence of an Event of Default, a
statement renouncing or modifying any right to notification of sale or other
intended disposition.

Section 8.3. Waiver of Notice and Claims. Each Pledgor hereby waives, to the
fullest extent permitted by applicable law, notice or judicial hearing in
connection with the Administrative Agent’s taking possession or the
Administrative Agent’s disposition of the Pledged Collateral or any part
thereof, including any and all prior notice and hearing for any prejudgment
remedy or remedies and any such right which such Pledgor would otherwise have
under law, and each Pledgor hereby further waives, to the fullest extent
permitted by applicable law: (i) all damages occasioned by such taking of
possession, (ii) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the Administrative
Agent’s rights hereunder and (iii) all rights of redemption, appraisal,
valuation, stay, extension or moratorium now or hereafter in force under any
applicable law. The Administrative Agent shall not be liable for any incorrect
or improper payment made pursuant to this ARTICLE VIII in the absence of gross
negligence or willful misconduct on the part of the Administrative Agent. Any
sale of, or the grant of options to purchase, or any other realization upon, any
Pledged Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the applicable Pledgor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Pledgor and against any and all persons claiming or attempting to claim the
Pledged Collateral so sold, optioned or realized upon, or any part thereof,
from, through or under such Pledgor.

Section 8.4. Certain Sales of Pledged Collateral.

(a) Each Pledgor recognizes that, by reason of certain prohibitions contained in
law, rules, regulations or orders of any Governmental Authority, the
Administrative Agent may be compelled, with respect to any sale of all or any
part of the Pledged Collateral, to limit purchasers to those who meet the
requirements of such Governmental Authority. Each Pledgor acknowledges that any
such sales may be at prices and on terms less favorable to the Administrative
Agent than those obtainable through a public sale without such restrictions,
and, notwithstanding such circumstances, agrees that any such restricted sale
shall be deemed to have been made in a commercially reasonable manner and that,
except as may be required by applicable law, the Administrative Agent shall have
no obligation to engage in public sales.

(b) Each Pledgor recognizes that, by reason of certain prohibitions contained in
the Securities Act of 1933, as amended (the “Securities Act”), and applicable
state securities laws, the Administrative Agent may be compelled, with respect
to any sale of all or any part of the Securities Collateral and Investment
Property, to limit purchasers to persons who will agree, among other things, to
acquire such Securities Collateral or Investment Property for their own account,
for investment and not with a view to the distribution or resale thereof. Each
Pledgor acknowledges that any such private sales may be at prices and on terms
less favorable to the Administrative Agent than those obtainable through a
public sale without such restrictions (including a public offering made pursuant
to a registration statement under the Securities Act), and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner and that the Administrative Agent shall
have no obligation to engage in public sales and no obligation to delay the sale
of any Securities

 

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Collateral or Investment Property for the period of time necessary to permit the
issuer thereof to register it for a form of public sale requiring registration
under the Securities Act or under applicable state securities laws, even if such
issuer would agree to do so.

(c) Notwithstanding the foregoing, each Pledgor shall, upon the occurrence and
during the continuance of any Event of Default, at the reasonable request of the
Administrative Agent, for the benefit of the Administrative Agent, cause any
registration, qualification under or compliance with any Federal or state
securities law or laws to be effected with respect to all or any part of the
Securities Collateral as soon as practicable and at the sole cost and expense of
the Pledgors. Each Pledgor will use its commercially reasonable efforts to cause
such registration to be effected (and be kept effective) and will use its
commercially reasonable efforts to cause such qualification and compliance to be
effected (and be kept effective) as may be so requested and as would permit or
facilitate the sale and distribution of such Securities Collateral including
registration under the Securities Act (or any similar statute then in effect),
appropriate qualifications under applicable blue sky or other state securities
laws and appropriate compliance with all other requirements of any Governmental
Authority. Each Pledgor shall use its commercially reasonable efforts to cause
the Administrative Agent to be kept advised in writing as to the progress of
each such registration, qualification or compliance and as to the completion
thereof, shall furnish to the Administrative Agent such number of prospectuses,
offering circulars or other documents incident thereto as the Administrative
Agent from time to time may reasonably request, and shall indemnify and shall
cause the issuer of the Securities Collateral to indemnify the Administrative
Agent and all others participating in the distribution of such Securities
Collateral against all claims, losses, damages and liabilities caused by any
untrue statement (or alleged untrue statement) of a material fact contained
therein (or in any related registration statement, notification or the like) or
by any omission (or alleged omission) to state therein (or in any related
registration statement, notification or the like) a material fact required to be
stated therein or necessary to make the statements therein not misleading.

(d) If the Administrative Agent determines to exercise its right to sell any or
all of the Securities Collateral or Investment Property, upon written request,
the applicable Pledgor shall from time to time furnish to the Administrative
Agent all such information as the Administrative Agent may request in order to
determine the number of securities included in the Securities Collateral or
Investment Property which may be sold by the Administrative Agent as exempt
transactions under the Securities Act and the rules of the Securities and
Exchange Commission thereunder, as the same are from time to time in effect.

(e) Each Pledgor further agrees that a breach of any of the covenants contained
in this Section 8.4 will cause irreparable injury to the Administrative Agent
and the other Secured Parties, that the Administrative Agent and the other
Secured Parties have no adequate remedy at law in respect of such breach and, as
a consequence, that each and every covenant contained in this Section 8.4 shall
be specifically enforceable against such Pledgor, and such Pledgor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred and
is continuing.

Section 8.5. No Waiver; Cumulative Remedies.

(a) No failure on the part of the Administrative Agent to exercise, no course of
dealing with respect to, and no delay on the part of the Administrative Agent in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power,
privilege or remedy hereunder preclude any other or further exercise thereof or
the exercise of any other right, power, privilege or remedy; nor shall the
Administrative Agent be required to look first to, enforce or exhaust any other
security, collateral or guaranties. All rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies provided by law or
otherwise available.

 

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(b) In the event that the Administrative Agent shall have instituted any
proceeding to enforce any right, power, privilege or remedy under this Agreement
or any other Loan Document by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Administrative Agent, then and in every
such case, the Pledgors, the Administrative Agent and each other Secured Party
shall be restored to their respective former positions and rights hereunder with
respect to the Pledged Collateral, and all rights, remedies, privileges and
powers of the Administrative Agent and the other Secured Parties shall continue
as if no such proceeding had been instituted.

Section 8.6. Certain Additional Actions Regarding Intellectual Property. If any
Event of Default shall have occurred and be continuing, upon the written demand
of the Administrative Agent, each Pledgor shall, at the Administrative Agent’s
request, execute and deliver to the Administrative Agent an assignment or
assignments of the registered Patents, Trademarks and/or Copyrights and Goodwill
and such other documents as are necessary or reasonably appropriate to carry out
the intent and purposes hereof. Within five (5) Business Days of written notice
thereafter from the Administrative Agent, each Pledgor shall make available to
the Administrative Agent, to the extent within such Pledgor’s power and
authority, such personnel in such Pledgor’s employ on the date of the Event of
Default as the Administrative Agent may reasonably designate for a reasonable
period to enable such Pledgor to continue, directly or indirectly, to produce,
advertise and sell the products and services sold by such Pledgor under the
registered Patents, Trademarks and/or Copyrights, and such persons shall be
available to perform their prior functions on the Administrative Agent’s behalf.

ARTICLE IX

APPLICATION OF PROCEEDS

Section 9.1. Application of Proceeds. The proceeds received by the
Administrative Agent in respect of any sale of, collection from or other
realization upon all or any part of the Pledged Collateral pursuant to the
exercise by the Administrative Agent of its remedies shall be applied, together
with any other sums then held by the Administrative Agent pursuant to this
Agreement, in accordance with the Credit Agreement.

ARTICLE X

MISCELLANEOUS

Section 10.1. Concerning Administrative Agent.

(a) The Administrative Agent has been appointed as Administrative Agent pursuant
to the Credit Agreement. The actions of the Administrative Agent hereunder are
subject to the provisions of the Credit Agreement. The Administrative Agent
shall have the right hereunder to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking action
(including the release or substitution of the Pledged Collateral), in accordance
with this Agreement and the Loan Documents. The Administrative Agent may employ
agents and attorneys-in-fact in connection herewith and shall not be liable for
the negligence or misconduct of any such agents or attorneys-in-fact selected by
it in good faith. The Administrative Agent may resign and a successor
Administrative Agent may be appointed in the manner provided in the Loan
Documents. Upon the acceptance of any appointment as the Administrative Agent by
a successor Administrative Agent, that successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent under this Agreement, and the
retiring Administrative Agent shall thereupon be

 

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discharged from its duties and obligations under this Agreement. After any
retiring Administrative Agent’s resignation, the provisions hereof shall inure
to its benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was the Administrative Agent.

(b) The Administrative Agent shall be deemed to have exercised reasonable care
in the custody and preservation of the Pledged Collateral in its possession if
such Pledged Collateral is accorded treatment substantially equivalent to that
which the Administrative Agent, in its individual capacity, accords its own
property consisting of similar instruments or interests, it being understood
that neither the Administrative Agent nor any of the other Secured Parties shall
have responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Securities Collateral, whether or not the Administrative Agent or any other
Secured Party has or is deemed to have knowledge of such matters or (ii) taking
any necessary steps to preserve rights against any person with respect to any
Pledged Collateral.

(c) The Administrative Agent shall be entitled to rely upon any written notice,
statement, certificate, order or other document or any telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper person, and, with respect to all matters pertaining to this
Agreement and its duties hereunder, upon advice of counsel selected by it.

(d) If any item of Pledged Collateral also constitutes collateral granted to the
Administrative Agent under any other deed of trust, mortgage, security
agreement, pledge or instrument of any type, in the event of any conflict
between the provisions hereof and the provisions of such other deed of trust,
mortgage, security agreement, pledge or instrument of any type in respect of
such collateral, the Administrative Agent, in its sole discretion, shall select
which provision or provisions shall control.

(e) The Administrative Agent may rely on advice of counsel as to whether any or
all UCC financing statements of the Pledgors need to be amended as a result of
any relevant change to any Pledgor or to the Collateral. If any Pledgor fails to
provide information to the Administrative Agent about such changes on a timely
basis, the Administrative Agent shall not be liable or responsible to any party
for any failure to maintain a perfected security interest in such Pledgor’s
property constituting Pledged Collateral, for which the Administrative Agent
needed to have information relating to such changes. The Administrative Agent
shall have no duty to inquire about such changes if any Pledgor does not inform
the Administrative Agent of such changes, the parties acknowledging and agreeing
that it would not be feasible or practical for the Administrative Agent to
search for information on such changes if such information is not provided by
any Pledgor.

Section 10.2. Administrative Agent May Perform; Administrative Agent Appointed
Attorney-in-Fact. If any Pledgor shall fail to perform any covenants contained
in this Agreement or the other Loan Documents (including such Pledgor’s
covenants to (i) pay the premiums in respect of all required insurance policies
hereunder and under the Credit Agreement, (ii) pay and discharge any taxes,
assessments and special assessments, levies, fees and governmental charges
imposed upon or assessed against, and landlords’, carriers’, mechanics’,
workmen’s, repairmen’s, laborers’, materialmen’s, suppliers’ and ware-housemen’s
Liens and other claims arising by operation of law against, all or any portion
of the Pledged Collateral, (iii) discharge Liens (except for Permitted Liens) or
(v) pay or perform any obligations of such Pledgor under any Pledged Collateral)
or if any representation or warranty on the part of any Pledgor contained herein
shall be breached, the Administrative Agent may (but shall not be obligated to)
do the same or cause it to be done or remedy any such breach, and may expend
funds for such purpose; provided, however, that the Administrative Agent shall
in no event be bound to inquire into the validity of any tax, Lien, imposition
or other obligation which such Pledgor fails to pay or perform as and when
required hereby and which such Pledgor does not contest in accordance with the
provisions of the Loan Documents. Any and all amounts so expended by the
Administrative Agent shall be paid by the

 

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Pledgors in accordance with the provisions of the Loan Documents. Neither the
provisions of this Section 10.2 nor any action taken by the Administrative Agent
pursuant to the provisions of this Section 10.2 shall prevent any such failure
to observe any covenant contained in this Agreement or any other Loan Document
nor any breach of representation or warranty from constituting an Event of
Default. Each Pledgor hereby appoints the Administrative Agent its
attorney-in-fact, with full power and authority in the place and stead of such
Pledgor and in the name of such Pledgor, or otherwise, from time to time in the
Administrative Agent’s discretion to take any action and to execute any
instrument consistent with the terms of the Loan Documents, this Agreement and
the other Collateral Documents which the Administrative Agent may deem necessary
to accomplish the purposes hereof (but the Administrative Agent shall not be
obligated to and shall have no liability to such Pledgor or any third party for
failure to so do or take action). The foregoing grant of authority is a power of
attorney coupled with an interest and such appointment shall be irrevocable for
the term hereof. Each Pledgor hereby ratifies all that such attorney shall
lawfully do or cause to be done by virtue hereof.

Section 10.3. Continuing Security Interest; Assignment. This Agreement shall
create a continuing security interest in the Pledged Collateral and shall (i) be
binding upon the Pledgors, their respective successors and assigns and
(ii) inure, together with the rights and remedies of the Administrative Agent
hereunder, to the benefit of the Administrative Agent and the other Secured
Parties and each of their respective successors, transferees and assigns. No
other persons (including any other creditor of any Pledgor) shall have any
interest herein or any right or benefit with respect hereto. Without limiting
the generality of the foregoing clause (ii), any Secured Party may assign or
otherwise transfer any indebtedness held by it secured by this Agreement to any
other person in accordance with and pursuant to the Credit Agreement and such
other person shall thereupon become vested with all the benefits in respect
thereof granted to such Secured Party, herein or otherwise, subject however, to
the provisions of the Credit Agreement Each of the Pledgors agrees that its
obligations hereunder and the security interest created hereunder shall continue
to be effective or be reinstated, as applicable, if at any time payment, or any
part thereof, of all or any part of the Secured Obligations is rescinded or must
otherwise be restored by the Secured Party upon the bankruptcy or reorganization
of any Pledgor or otherwise.

Section 10.4. Termination; Release. When all of the Secured Obligations have
been paid in full and the Revolving Commitments and the Swingline Commitments
have expired or been sooner terminated and all Letters of Credit issued under
the Credit Agreement have been terminated or Cash Collateralized in accordance
with the provisions of the Credit Agreement, this Agreement shall automatically,
and without any action by any party hereto, terminate. Upon termination of this
Agreement the Pledged Collateral shall be released from the Lien of this
Agreement. Upon any sale or other transfer by any Pledgor of any Collateral that
is permitted under the Credit Agreement, or upon the effectiveness of any
written consent to the release of the security interest granted hereby in any
Collateral pursuant to Section 10.01(b)(iii) of the Credit Agreement, the
security interest in such Collateral shall be automatically released. Upon such
release or any release of Pledged Collateral or any part thereof in accordance
with the provisions of the Credit Agreement, the Administrative Agent shall,
upon the request and at the sole cost and expense of the Pledgors, assign,
transfer and deliver to Pledgor, against receipt and without recourse to or
warranty by the Administrative Agent except as to the fact that the
Administrative Agent has not encumbered the released assets, such of the Pledged
Collateral or any part thereof to be released (in the case of a release) as may
be in the possession of the Administrative Agent and as shall not have been sold
or otherwise applied pursuant to the terms hereof, and, with respect to any
other Pledged Collateral, proper documents and instruments (including UCC-3
termination financing statements or releases) acknowledging the termination
hereof or the release of such Pledged Collateral, as the case may be.

Section 10.5. Modification in Writing. No amendment, modification, supplement,
termination or waiver of or to any provision hereof, nor consent to any
departure by any Pledgor therefrom, shall be

 

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effective unless the same shall be made in accordance with the terms of the
Credit Agreement and unless in writing and signed by the Administrative Agent.
Any amendment, modification or supplement of or to any provision hereof, any
waiver of any provision hereof and any consent to any departure by any Pledgor
from the terms of any provision hereof in each case shall be effective only in
the specific instance and for the specific purpose for which made or given.
Except where notice is specifically required by this Agreement or any other
document evidencing the Secured Obligations, no notice to or demand on any
Pledgor in any case shall entitle any Pledgor to any other or further notice or
demand in similar or other circumstances.

Section 10.6. Notices. Unless otherwise provided herein or in the Credit
Agreement, any notice or other communication herein required or permitted to be
given shall be given in the manner and become effective as set forth in the
Credit Agreement, as to any Pledgor, addressed to it at the address of the
Borrower set forth in the Credit Agreement and as to the Administrative Agent,
addressed to it at the address set forth in the Credit Agreement, or in each
case at such other address as shall be designated by such party in a written
notice to the other party complying as to delivery with the terms of this
Section 10.6.

Section 10.7. Governing Law, Consent to Jurisdiction and Service of Process;
Waiver of Jury Trial. Sections 10.11, 10.12 and 10.17 of the Credit Agreement
are incorporated herein, mutatis mutandis, as if a part hereof.

Section 10.8. Severability of Provisions. Any provision hereof which is invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without invalidating the remaining provisions hereof or affecting the validity,
legality or enforceability of such provision in any other jurisdiction.

Section 10.9. Execution in Counterparts. This Agreement and any amendments,
waivers, consents or supplements hereto may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original, but all
such counterparts together shall constitute one and the same agreement. Delivery
of any executed counterpart of a signature page of this Agreement by facsimile
or other electronic transmission shall be effective as delivery of a manually
executed counterpart of this Agreement.

Section 10.10. Business Days. In the event any time period or any date provided
in this Agreement ends or falls on a day other than a Business Day, then such
time period shall be deemed to end and such date shall be deemed to fall on the
next succeeding Business Day, and performance herein may be made on such
Business Day, with the same force and effect as if made on such other day.

Section 10.11. No Credit for Payment of Taxes or Imposition. Such Pledgor shall
not be entitled to any credit against the principal, premium, if any, or
interest payable under the Credit Agreement, and such Pledgor shall not be
entitled to any credit against any other sums which may become payable under the
terms thereof or hereof, by reason of the payment of any Taxes on the Pledged
Collateral or any part thereof.

Section 10.12. No Claims Against Administrative Agent. Nothing contained in this
Agreement shall constitute any consent or request by the Administrative Agent,
express or implied, for the performance of any labor or services or the
furnishing of any materials or other property in respect of the Pledged
Collateral or any part thereof, nor as giving any Pledgor any right, power or
authority to contract for or permit the performance of any labor or services or
the furnishing of any materials or other property in such fashion as would
permit the making of any claim against the Administrative Agent in respect
thereof or any claim that any Lien based on the performance of such labor or
services or the furnishing of any such materials or other property is prior to
the Lien hereof.

 

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Section 10.13. No Release. Nothing set forth in this Agreement or any other Loan
Document, nor the exercise by the Administrative Agent of any of the rights or
remedies hereunder, shall relieve any Pledgor from the performance of any term,
covenant, condition or agreement on such Pledgor’s part to be performed or
observed under or in respect of any of the Pledged Collateral or from any
liability to any person under or in respect of any of the Pledged Collateral or
shall impose any obligation on the Administrative Agent or any other Secured
Party to perform or observe any such term, covenant, condition or agreement on
such Pledgor’s part to be so performed or observed or shall impose any liability
on the Administrative Agent or any other Secured Party for any act or omission
on the part of such Pledgor relating thereto or for any breach of any
representation or warranty on the part of such Pledgor contained in this
Agreement, the Credit Agreement or the other Loan Documents, or under or in
respect of the Pledged Collateral or made in connection herewith or therewith.
Anything herein to the contrary notwithstanding, neither the Administrative
Agent nor any other Secured Party shall have any obligation or liability under
any contracts, agreements and other documents included in the Pledged Collateral
by reason of this Agreement, nor shall the Administrative Agent or any other
Secured Party be obligated to perform any of the obligations or duties of any
Pledgor thereunder or to take any action to collect or enforce any such
contract, agreement or other document included in the Pledged Collateral
hereunder. The obligations of each Pledgor contained in this Section 10.13 shall
survive the termination hereof and the discharge of such Pledgor’s other
obligations under this Agreement, the Credit Agreement and the other Loan
Documents.

Section 10.14. Obligations Absolute. All obligations of each Pledgor hereunder
shall be absolute and unconditional irrespective of:

 

(i) any bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation or the like of any other Pledgor;

 

(ii) any lack of validity or enforceability of the Credit Agreement, or any
other Loan Document, or any other agreement or instrument relating thereto;

 

(iii) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Secured Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit Agreement, or any other Loan
Document or any other agreement or instrument relating thereto;

 

(iv) any pledge, exchange, release or non-perfection of any other collateral, or
any release or amendment or waiver of or consent to any departure from any
guaranty, for all or any of the Secured Obligations;

 

(v) any exercise, non-exercise or waiver of any right, remedy, power or
privilege under or in respect hereof, the Credit Agreement, or any other Loan
Document; or

 

(vi) any other circumstances which might otherwise constitute a defense
available to, or a discharge of, any Pledgor.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

 

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IN WITNESS WHEREOF, each Pledgor and the Administrative Agent have caused this
Agreement to be duly executed and delivered by their duly authorized officers as
of the date first above written.

 

EXTENDED STAY AMERICA, INC., as a Pledgor

By:   LOGO [g631451ex10_2pg160a.jpg]  

 

  Name:   Peter J. Crage   Title:   Chief Financial Officer

ESH HOSPITALITY STRATEGIES LLC, as a Pledgor

By:   LOGO [g631451ex10_2pg160b.jpg]  

 

  Name:   Peter J. Crage   Title:   Vice President & Treasurer

ESH STRATEGIES MEZZANINE B LLC, as a Pledgor

By:   LOGO [g631451ex10_2pg160c.jpg]  

 

  Name:   Peter J. Crage   Title:   Vice President & Treasurer

ESH STRATEGIES MEZZANINE A LLC, as a Pledgor

By:   LOGO [g631451ex10_2pg160d.jpg]  

 

  Name:   Peter J. Crage   Title:   Vice President & Treasurer

ESH STRATEGIES HOLDINGS LLC, as a Pledgor

By:   LOGO [g631451ex10_2pg160e.jpg]  

 

  Name:   Peter J. Crage   Title:   Vice President & Treasurer

[Signature Page to Security Agreement]

--------------------------------------------------------------------------------

ESH STRATEGIES FRANCHISE LLC, as a Pledgor

By:   LOGO [g631451ex10_2pg161a.jpg]  

 

  Name:   Peter J. Crage   Title:   Vice President & Treasurer

ESA MANAGEMENT, LLC, as a Pledgor

By:   LOGO [g631451ex10_2pg161b.jpg]  

 

  Name:   Peter J. Crage   Title:   Vice President & Treasurer

ESH MEZZANINE 2 HOLDINGS LLC, as a Pledgor

By:   LOGO [g631451ex10_2pg161c.jpg]  

 

  Name:   Peter J. Crage   Title:   Vice President & Treasurer

NEW ESA 2007 OPERATING LESSEE LLC, as a Pledgor

By:   LOGO [g631451ex10_2pg161d.jpg]  

 

  Name:   Peter J. Crage   Title:   Vice President & Treasurer

ESA 2007 OPERATING LESSEE LLC, as a Pledgor

By:   LOGO [g631451ex10_2pg161e.jpg]  

 

  Name:   Peter J. Crage   Title:   Vice President & Treasurer

[Signature Page to Security Agreement]

--------------------------------------------------------------------------------

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

By:   LOGO [g631451ex10_2pg162.jpg]  

 

  Name:   Kimberly L. Turner   Title:   Executive Director

[Signature Page to Security Agreement]

--------------------------------------------------------------------------------

Schedule 2.1

Commercial Tort Claims

None.

--------------------------------------------------------------------------------

Schedule 3.1(a)

Pledged Securities

 

Pledgor Name

  

Equity Interests Owned

   Percentage
Owned     Certificate
Number    Percentage
Pledged  

Extended Stay America, Inc.

   ESH Hospitality Strategies LLC      100 %    N/A      100 %    

 

ESA Management, LLC

     100 %    N/A      100 %    

 

New ESA 2007 Operating Lessee LLC

     100 %    N/A      100 %    

 

ESH Hospitality, Inc.

  

 

 
 
 

 

55% of
common
stock

 

  
  
  

  N/A   

 

 
 
 

 

55% of
common
stock

 

  
  
  

ESH Hospitality Strategies LLC

   ESH Strategies Mezzanine B LLC      100 %    N/A      100 % 

ESH Strategies Mezzanine B LLC

   ESH Strategies Mezzanine A LLC      100 %    N/A      100 % 

ESH Strategies Mezzanine A LLC

   ESH Strategies Franchise LLC      100 %    N/A      100 %    

 

ESH Strategies Holdings LLC

     100 %    N/A      100 % 

ESA Management, LLC

   HVM Canada Hotel Management ULC      100 %    N/A      65 % 

New ESA 2007 Operating Lessee LLC

   ESA 2007 Operating Lessee LLC      100 %    N/A      100 % 

--------------------------------------------------------------------------------

Schedule 3.1(b)

Intercompany Notes

None.

--------------------------------------------------------------------------------

Schedule 3.4(a)

Instruments & Tangible Chattel Paper

None.

--------------------------------------------------------------------------------

Schedule 3.4(b)

Deposit Accounts

 

Name

  Depositary Institution   Account Name   Account No.   Account Purpose  
Average
Balance     Security
Interest

Extended Stay America, Inc.

  Bank of America, N.A.   Extended Stay
America, Inc.   XXX XXX XXXX   Conditional
Controlled Account   $ 5 million      DACA w/JPM  

 

Bank of America, N.A.

 

 

Extended Stay
America, Inc.

  XXX XXX XXXX
  Operating Account   $ 25 million      DACA w/JPM  

 

JPMorgan Chase Bank,
N.A.

 

 

Extended Stay
America, Inc.

  XXX XXX XXXX
  JPM “Account”   $ 0      DACA w/JPM

ESA Management, LLC

  Bank of America, N.A.   ESA Management,
LLC   XXX XXX XXXX
  Operating Acct   $ 3 million      DACA w/JPM  

 

Bank of America, N.A.

 

 

ESA Management,
LLC

  XXX XXX XXXX
  AP Controlled Disb.   $ 0      N/A  

 

Bank of America, N.A.

 

 

ESA Management,
LLC

  XXX XXX XXXX
  Payroll   $ 0      N/A  

 

Bank of America, N.A.

 

 

ESA Management,
LLC

  XXX XXX XXXX
  Tax   $ 0      N/A

ESA 2007 Operating Lessee LLC

  Bank of America, N.A.   ESA 2007 Operating
Lessee Inc.   XXX XXX XXXX
  Operating Acct   $ 360k      DACA w/JPM   Bank of America, N.A.  

 

ESA 2007 Operating
Lessee Inc.

  XXX XXX XXXX
  Site depository/credit
card settlement   $ 0      N/A   Fifth Third Bank  

 

ESA 2007 Operating
Lessee Inc.

  XXX XXX XXXX
  Site depository   $ 0      N/A

--------------------------------------------------------------------------------

Schedule 3.4(c)

Securities Accounts & Commodities Accounts

None.

--------------------------------------------------------------------------------

Schedule 3.4(d)

Electronic Chattel Paper & Transferable Records

None.

--------------------------------------------------------------------------------

Schedule 6.1

Intellectual Property

None.

--------------------------------------------------------------------------------

EXHIBIT l

[Form of]

ISSUER’S ACKNOWLEDGMENT

The undersigned hereby (i) acknowledges receipt of the Security Agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Security Agreement”; capitalized terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Security
Agreement), dated as of November 18, 2013, made by EXTENDED STAY AMERICA, INC.,
a Delaware corporation (the “Borrower”) and the subsidiary guarantors from time
to time party thereto (the “Subsidiary Guarantors”) and JPMORGAN CHASE BANK,
N.A., as administrative agent (in such capacity and together with any successors
in such capacity, the “Administrative Agent”), (ii) agrees promptly to note on
its books the security interests granted to the Administrative Agent and
confirmed under the Security Agreement, (iii) agrees that it will comply with
prior written instructions of the Administrative Agent with respect to the
applicable Securities Collateral (including all Equity Interests of the
undersigned) without further consent by the applicable Pledgor, and (iv) agrees
to notify the Administrative Agent upon obtaining knowledge of any interest in
favor of any person in the applicable Securities Collateral that is adverse to
the interest of the Administrative Agent therein.

 

[                    ] By:  

 

  Name:     Title:  

--------------------------------------------------------------------------------

EXHIBIT 2

[Form of]

SECURITIES PLEDGE AMENDMENT

This Securities Pledge Amendment, dated as of [            ], 201[    ], is
delivered pursuant to Section 5.1 of the Security Agreement (as amended, amended
and restated, supplemented or otherwise modified from time to time, the
“Security Agreement”; capitalized terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Security Agreement), dated
as of November 18, 2013, made by EXTENDED STAY AMERICA, INC., a Delaware
corporation (the “Borrower”) and the subsidiary guarantors from time to time
party thereto (the “Subsidiary Guarantors”) and JPMORGAN CHASE BANK, N.A., as
administrative agent (in such capacity and together with any successors in such
capacity, the “Administrative Agent”). The undersigned hereby agrees that this
Securities Pledge Amendment may be attached to the Security Agreement and that
the Pledged Securities and/or Intercompany Notes listed on this Securities
Pledge Amendment shall be deemed to be and shall become part of the Pledged
Collateral and shall secure all Secured Obligations.

PLEDGED SECURITIES

 

ISSUER

   CLASS
OF STOCK
OR
INTERESTS    PAR
VALUE    CERTIFICATE
NO(S).    NUMBER OF
SHARES
OR
INTERESTS    PERCENTAGE OF
ALL ISSUED CAPITAL
OR OTHER EQUITY
INTERESTS OF ISSUER                                             

--------------------------------------------------------------------------------

INTERCOMPANY NOTES

 

ISSUER

   PRINCIPAL
AMOUNT    DATE OF
ISSUANCE    INTEREST
RATE    MATURITY
DATE                                    

 

[                    ],
as Pledgor

By:  

 

  Name:     Title:  

 

AGREED TO AND ACCEPTED:

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

By:  

 

  Name:     Title:  

 

-2-

--------------------------------------------------------------------------------

EXHIBIT 3

[Form of]

JOINDER AGREEMENT

[Name of New Pledgor]

[Address of New Pledgor]

[Date]

 

    

    

    

    

Ladies and Gentlemen:

Reference is made to the Security Agreement (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Security Agreement”;
capitalized terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the Security Agreement), dated as of November 18,
2013, made by EXTENDED STAY AMERICA, INC., a Delaware corporation (the
“Borrower”) and the subsidiary guarantors from time to time party thereto (the
“Subsidiary Guarantors”) and JPMORGAN CHASE BANK, N.A., as administrative agent
(in such capacity and together with any successors in such capacity, the
“Administrative Agent”).

This Joinder Agreement supplements the Security Agreement and is delivered by
the undersigned, [            ] (the “New Pledgor”), pursuant to Section 3.6 of
the Security Agreement. The New Pledgor hereby agrees to be bound as a
Subsidiary Guarantor and as a Pledgor party to the Security Agreement by all of
the terms, covenants and conditions set forth in the Security Agreement to the
same extent that it would have been bound if it had been a signatory to the
Security Agreement on the date of the Security Agreement. Without limiting the
generality of the foregoing, the New Pledgor hereby grants and pledges to the
Administrative Agent, as collateral security for the full, prompt and complete
payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations, a Lien on and security interest in, all
of its right, title and interest in, to and under the Pledged Collateral and
expressly assumes all obligations and liabilities of a Subsidiary Guarantor and
Pledgor thereunder. The New Pledgor hereby makes each of the representations and
warranties and agrees to each of the covenants applicable to the Pledgors
contained in the Security Agreement.

Annexed hereto are supplements to each of the schedules to the Security
Agreement with respect to the New Pledgor. Such supplements shall be deemed to
be part of the Security Agreement.

This Joinder Agreement and any amendments, waivers, consents or supplements
hereto may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original, but all such counterparts together shall
constitute one and the same agreement.

THIS JOINDER AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT
WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the New Pledgor has caused this Joinder Agreement to be
executed and delivered by its duly authorized officer as of the date first above
written.

 

[NEW PLEDGOR] By:  

 

  Name:   Title:

 

AGREED TO AND ACCEPTED:

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

By:  

 

  Name:   Title:

[Schedules to be attached]

 

-2-

--------------------------------------------------------------------------------

EXHIBIT 4

[Form of]

Copyright Security Agreement

Copyright Security Agreement, dated as of [            ], 201[    ], by
[            ] and [            ] (individually, a “Pledgor”, and, collectively,
the “Pledgors”), in favor of JPMORGAN CHASE BANK, N.A., in its capacity as
administrative agent pursuant to the Credit Agreement (in such capacity, the
“Administrative Agent”).

W I T N E S S E T H:

WHEREAS, the Pledgors are party to a Security Agreement, dated as of
November 18, 2013 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Security Agreement”), in favor of the
Administrative Agent pursuant to which the Pledgors are required to execute and
deliver this Copyright Security Agreement;

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, for the benefit of the Secured Parties, to enter into the
Credit Agreement, the Pledgors hereby agree with the Administrative Agent as
follows:

SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the
Security Agreement and used herein have the meaning given to them in the
Security Agreement.

SECTION 2. Grant of Security Interest in Copyright Collateral. As collateral
security for the payment and performance in full of all of the Secured
Obligations, each Pledgor hereby pledges and grants to the Administrative Agent
for the benefit of the Secured Parties a lien on and security interest in and to
all of its right, title and interest in, to and under all the following Pledged
Collateral of such Pledgor:

 

  (a) Copyrights of such Pledgor listed on Schedule I1 attached hereto: and

 

  (b) all Proceeds of any and all of the foregoing (other than Excluded
Property).

SECTION 3. Security Agreement. The security interest granted pursuant to this
Copyright Security Agreement is granted in conjunction with the security
interest granted to the Administrative Agent pursuant to the Security Agreement
and Pledgors hereby acknowledge and affirm that the rights and remedies of the
Administrative Agent with respect to the security interest in the Copyrights
made and granted hereby are more fully set forth in the Security Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein. In the event that any provision of this Copyright Security
Agreement is deemed to conflict with the Security Agreement, the provisions of
the Security Agreement shall control.

SECTION 4. Termination. Upon the payment in full of the Secured Obligations and
termination of the Security Agreement, the Administrative Agent shall execute,
acknowledge, and deliver to the Pledgors an instrument in writing in recordable
form releasing the collateral pledge, grant, assignment, lien and security
interest in the Copyrights under this Copyright Security Agreement.

 

1  Should include same Copyrights listed on Schedule 8(b) of the Perfection
Certificate.

--------------------------------------------------------------------------------

SECTION 5. Counterparts. This Copyright Security Agreement may be executed in
any number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Copyright Security Agreement
by signing and delivering one or more counterparts.

SECTION 6. Governing Law. This Copyright Security Agreement shall be construed
in accordance with and governed by the law of the State of New York, without
regard to conflicts of law principles that would require the application of the
laws of another jurisdiction.

[signature page follows]

 

-2-

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Pledgor has caused this Copyright Security Agreement to
be executed and delivered by its duly authorized officer as of the date first
set forth above.

 

Very truly yours, [PLEDGORS] By:  

 

  Name:   Title:

 

AGREED TO AND ACCEPTED:

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

By:  

 

  Name:   Title:

 

-3-

--------------------------------------------------------------------------------

SCHEDULE I

to

COPYRIGHT SECURITY AGREEMENT

COPYRIGHT REGISTRATIONS AND COPYRIGHT APPLICATIONS

Copyright Registrations:

 

OWNER

  

REGISTRATION

NUMBER

  

TITLE

                 

Copyright Applications:

 

OWNER

  

TITLE

        

 

-4-

--------------------------------------------------------------------------------

EXHIBIT 5

[Form of]

Patent Security Agreement

Patent Security Agreement, dated as of [            ], 201[    ], by
[            ] and [            ] (individually, a “Pledgor”, and, collectively,
the “Pledgors”), in favor of JPMORGAN CHASE BANK, N.A., in its capacity as
administrative agent pursuant to the Credit Agreement (in such capacity, the
“Administrative Agent”).

W I T N E S S E T H:

WHEREAS, the Pledgors are party to a Security Agreement, dated as of
November 18, 2013 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Security Agreement”), in favor of the
Administrative Agent pursuant to which the Pledgors are required to execute and
deliver this Patent Security Agreement;

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, for the benefit of the Secured Parties, to enter into the
Credit Agreement, the Pledgors hereby agree with the Administrative Agent as
follows:

SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the
Security Agreement and used herein have the meaning given to them in the
Security Agreement.

SECTION 2. Grant of Security Interest in Patent Collateral. As collateral
security for the payment and performance in full of all of the Secured
Obligations, each Pledgor hereby pledges and grants to the Administrative Agent
for the benefit of the Secured Parties a lien on and security interest in and to
all of its right, title and interest in, to and under all the following Pledged
Collateral of such Pledgor:

(a) Patents of such Pledgor listed on Schedule 12 attached hereto; and

(b) all Proceeds of any and all of the foregoing (other than Excluded Property).

SECTION 3. Security Agreement. The security interest granted pursuant to this
Patent Security Agreement is granted in conjunction with the security interest
granted to the Administrative Agent pursuant to the Security Agreement and
Pledgors hereby acknowledge and affirm that the rights and remedies of the
Administrative Agent with respect to the security interest in the Patents made
and granted hereby are more fully set forth in the Security Agreement, the terms
and provisions of which are incorporated by reference herein as if fully set
forth herein. In the event that any provision of this Patent Security Agreement
is deemed to conflict with the Security Agreement, the provisions of the
Security Agreement shall control.

SECTION 4. Termination. Upon the payment in full of the Secured Obligations and
termination of the Security Agreement, the Administrative Agent shall execute,
acknowledge, and deliver to the Pledgors an instrument in writing in recordable
form releasing the collateral pledge, grant, assignment, lien and security
interest in the Patents under this Patent Security Agreement.

 

2  Should include same Patents listed on Schedule 8(a) of the Perfection
Certificate.

--------------------------------------------------------------------------------

SECTION 5. Counterparts. This Patent Security Agreement may be executed in any
number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Patent Security Agreement by
signing and delivering one or more counterparts.

SECTION 6. Governing Law. This Patent Security Agreement shall be construed in
accordance with and governed by the law of the State of New York, without regard
to conflicts of law principles that would require the application of the laws of
another jurisdiction.

[signature page follows]

 

-2-

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Pledgor has caused this Patent Security Agreement to be
executed and delivered by its duly authorized officer as of the date first set
forth above.

 

Very truly yours, [PLEDGORS] By:  

 

  Name:   Title:

 

AGREED TO AND ACCEPTED:

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

By:  

 

  Name:   Title:

 

-3-

--------------------------------------------------------------------------------

SCHEDULE I

to

PATENT SECURITY AGREEMENT

PATENT REGISTRATIONS AND PATENT APPLICATIONS

Patent Registrations:

 

OWNER

  

REGISTRATION

NUMBER

  

NAME

                 

Patent Applications:

 

OWNER

  

APPLICATION

NUMBER

  

NAME

                 

 

-4-

--------------------------------------------------------------------------------

EXHIBIT 6

[Form of]

Trademark Security Agreement

Trademark Security Agreement, dated as of [            ], 201[    ], by
[            ] and [            ] (individually, a “Pledgor”, and, collectively,
the “Pledgors”), in favor of JPMORGAN CHASE BANK, N.A., in its capacity as
Administrative Agent pursuant to the Credit Agreement (in such capacity, the
“Administrative Agent”).

W I T N E S S E T H:

WHEREAS, the Pledgors are party to a Security Agreement, dated as of
November 18, 2013 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Security Agreement”), in favor of the
Administrative Agent pursuant to which the Pledgors are required to execute and
deliver this Trademark Security Agreement;

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, for the benefit of the Secured Parties, to enter into the
Credit Agreement, the Pledgors hereby agree with the Administrative Agent as
follows:

SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the
Security Agreement and used herein have the meaning given to them in the
Security Agreement.

SECTION 2. Grant of Security Interest in Trademark Collateral. As collateral
security for the payment and performance in full of all of the Secured
Obligations, each Pledgor hereby pledges and grants to the Administrative Agent
for the benefit of the Secured Parties a lien on and security interest in and to
all of its right, title and interest in, to and under all the following Pledged
Collateral of such Pledgor;

 

  (a) Trademarks of such Pledgor listed on Schedule I attached hereto;

 

  (b) all Goodwill associated with such Trademarks; and

 

  (c) all Proceeds of any and all of the foregoing (other than Excluded
Property).

SECTION 3. Security Agreement. The security interest granted pursuant to this
Trademark Security Agreement is granted in conjunction with the security
interest granted to the Administrative Agent pursuant to the Security Agreement
and Pledgors hereby acknowledge and affirm that the rights and remedies of the
Administrative Agent with respect to the security interest in the Trademarks
made and granted hereby are more fully set forth in the Security Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein. In the event that any provision of this Trademark Security
Agreement is deemed to conflict with the Security Agreement, the provisions of
the Security Agreement shall control.

--------------------------------------------------------------------------------

SECTION 4. Termination. Upon the payment in full of the Secured Obligations and
termination of the Security Agreement, the Administrative Agent shall execute,
acknowledge, and deliver to the Pledgors an instrument in writing in recordable
form releasing the collateral pledge, grant, assignment, lien and security
interest in the Trademarks under this Trademark Security Agreement.

SECTION 5. Counterparts. This Trademark Security Agreement may be executed in
any number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Trademark Security Agreement
by signing and delivering one or more counterparts.

SECTION 6. Governing Law. This Trademark Security Agreement shall be construed
in accordance with and governed by the law of the State of New York, without
regard to conflicts of law principles that would require the application of the
laws of another jurisdiction.

[signature page follows]

 

-2-

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Pledgor has caused this Trademark Security Agreement to
be executed and delivered by its duly authorized officer as of the date first
set forth above.

 

Very truly yours, [PLEDGORS] By:  

 

  Name:   Title:

 

Accepted and Agreed:

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

By:  

 

  Name:   Title:

 

-3-

--------------------------------------------------------------------------------

SCHEDULE I

to

TRADEMARK SECURITY AGREEMENT

TRADEMARK REGISTRATIONS AND TRADEMARK APPLICATIONS

Trademark Registrations:

 

OWNER

  

REGISTRATION

NUMBER

  

TRADEMARK

                 

Trademark Applications:

 

OWNER

  

APPLICATION

NUMBER

  

TRADEMARK

                 

 

-4-

--------------------------------------------------------------------------------

EXHIBIT C

[FORM OF] COMPLIANCE CERTIFICATE

[The form of this Compliance Certificate has been prepared for convenience only,
and is not to affect, or to be taken into consideration in interpreting, the
terms of the Credit Agreement referred to below. The obligations of the Borrower
under the Credit Agreement are as set forth in the Credit Agreement, and nothing
in this Compliance Certificate, or the form hereof, shall modify such
obligations or constitute a waiver of compliance therewith in accordance with
the terms of the Credit Agreement. In the event of any conflict between the
terms of this Compliance Certificate and the terms of the Credit Agreement, the
terms of the Credit Agreement shall govern and control, and the terms of this
Compliance Certificate are to be modified accordingly.]

Reference is made to the Credit Agreement, dated as of November 18, 2013 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”; capitalized terms not defined herein but defined therein
being used herein as therein defined), among Extended Stay America, Inc. (the
“Borrower”), the Lenders, including the Swingline Lender and the Issuing Lender,
party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent (in such
capacity, the “Administrative Agent”).

The undersigned hereby certifies, in his capacity as [                    ] of
[                    ] and not in a personal capacity, as follows:

1. I am the [                    ] of [                    ].

2. [Attached as Schedule I hereto are the consolidated financial statements of
the Borrower required to be delivered pursuant to Section 6.1(a) of the Credit
Agreement as at the end of and for the fiscal year ended [                    ]
and the related audited consolidated statements of income and of cash flows for
such year, setting forth in each case in comparative form the figures for the
previous year, together with an audit opinion thereon of
[                            ]1 required to be delivered pursuant to
Section 6.1(a) of the Credit Agreement.]2

[or]

[Attached as Schedule I hereto are the consolidated financial statements of the
Borrower required to be delivered pursuant to Section 6.1(b) of the Credit
Agreement as at the end of and for the fiscal quarter ended
[                    ] and the related consolidated statements of income and of
cash flows for such quarter, and, in each case, for the portion of the fiscal
year through the end of such quarter, setting forth in each case in comparative
form the figures for the corresponding period or periods of (or, in the case of
the balance sheet, as of the end of) the previous year. Such financial
statements present fairly, in all material respects, the financial position,
results of operations and cash flows of each Loan Party and its consolidated
Subsidiaries on a consolidated basis as of the end of and for such fiscal
quarter and such portion of the fiscal year in accordance with GAAP, subject to
normal year-end audit adjustments.]3

 

1  A “Big Four” accounting firm or other independent certified public accountant
acceptable to the Administrative Agent in accordance with Section 6.1(a) of the
Credit Agreement.

2  Such information may be provided by the filing of a Form 10-K annual report
with the SEC by the Borrower.

3  Such information may be provided by the filing of a Form 10-Q quarterly
report with the SEC by the Borrower.

--------------------------------------------------------------------------------

[or]

Attached as Schedule I hereto is all information necessary for determining
compliance by each Group Member with the covenants set forth in Section 7.1 of
the Credit Agreement as of the last day of the [calendar month] [fiscal quarter]
of [            ]. All such information is, when furnished, complete and correct
in all material respects and does not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the information
contained therein not misleading in light of the circumstances under which such
information was provided.

3. Schedule II hereto includes a narrative discussion and analysis of the
financial condition and results of operations of each Loan Party and its
Subsidiaries for the reporting period ended as of the date of this Compliance
Certificate and for the period from the beginning of the then current fiscal
year to the end of such period, as compared to the portion of the Projections
covering such periods and to the comparable periods of the previous year,
including occupancy figures and average daily rate calculations, in each case,
with respect to each of the properties of any Subsidiary of a Loan Party.

4. To the best of my knowledge, each Loan Party during the accounting period
covered by the attached financial statements or information and as of the date
of this Compliance Certificate has observed or performed all of its covenants
and other agreements, and satisfied every condition contained in the Credit
Agreement and the other Loan Documents to which it is a party to be observed,
performed or satisfied by it.

5. I have obtained no knowledge of any Default or Event of Default except as
specified in this Compliance Certificate.

6. [The [financial covenant analysis and other] information set forth on Annex A
hereto are true and accurate on and as of the date of this Compliance
Certificate.]4

 

4  Calculation of Consolidated Leverage Ratio to be included only if this
Compliance Certificate is delivered with financial statements required under
Section 6.1(a) or 6.1(b) of the Credit Agreement.

 

-2-

--------------------------------------------------------------------------------

The foregoing certifications are made and delivered on [            , 201    ],
pursuant to Section 6.1 and Section 6.2(b) of the Credit Agreement.

 

By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

SCHEDULE I TO

COMPLIANCE CERTIFICATE

[Provided Separately]

--------------------------------------------------------------------------------

SCHEDULE II TO

COMPLIANCE CERTIFICATE

[Insert narrative description]

--------------------------------------------------------------------------------

ANNEX A TO

COMPLIANCE CERTIFICATE

FOR THE FISCAL [QUARTER] [YEAR] ENDED [mm/dd/yy].

 

I. ESA Net Operating Income (a – b)    Total for Last Four Fiscal
Quarters  

(a) ESA Gross Income from Operations (x + y)

  

(x) Gross Income from Operations, the sum of5

  

(i) all income and proceeds received from rental of rooms, Leases and commercial
space, meeting, conference and/or banquet space within the Properties, if any,
including parking revenue

     [             ] 

(ii) all income and proceeds received from food and beverage operations and from
catering services conducted from the Properties, if any, even though rendered
outside of the Properties

     [             ] 

(iii) all income and proceeds from business interruption, rental interruption
and use and occupancy insurance with respect to the operation of the Collateral
(after deducting therefrom all necessary costs and expenses incurred in the
adjustment or collection thereof)

     [             ] 

(iv) all Awards for temporary use (after deducting therefrom all costs incurred
in the adjustment or collection thereof and in Restoration of the Properties)

     [             ] 

(v) all income and proceeds from judgments, settlements and other resolutions of
disputes with respect to matters which would be includable in this definition of
“Gross Income from Operations” if received in the ordinary course of the
operation of the Collateral (after deducting therefrom all necessary costs and
expenses incurred in the adjustment or collection thereof)

     [             ] 

(vi) interest on credit accounts, rent concessions or credits, and other
required pass-throughs and interest on Reserve Funds

     [             ] 

(vii) all other income from operation of the Collateral, including, without
limitation, laundry and vending income

     [             ] 

 

5  Capitalized terms used and not defined in this “Gross Income from Operations”
calculation shall have the meanings set forth in the Mortgage Loan Agreement.

--------------------------------------------------------------------------------

(viii) [Other]6

     [             ] 

(y) Supplemental Gross Income from Operations, the sum of

  

(i) all income and proceeds received from rental of rooms, Leases and commercial
space, meeting, conference and/or banquet space within the Supplemental
Properties, if any, including parking revenue

     [             ] 

(ii) all income and proceeds received from food and beverage operations and from
catering services conducted from the Supplemental Properties, if any, even
though rendered outside of the Supplemental Properties

     [             ] 

(iii) all income and proceeds from business interruption, rental interruption
and use and occupancy insurance with respect to the operation of the
Supplemental Properties (after deducting therefrom all necessary costs and
expenses incurred in the adjustment or collection thereof)

     [             ] 

(iv) all Awards for temporary use (after deducting therefrom all costs incurred
in the adjustment or collection thereof and in Restoration of the Supplemental
Properties)

     [             ] 

(v) all income and proceeds from judgments, settlements and other resolutions of
disputes with respect to matters which would be includable in this definition of
“Supplemental Gross Income from Operations” if received in the ordinary course
of the operation of the Supplemental Properties (after deducting therefrom all
necessary costs and expenses incurred in the adjustment or collection thereof)

     [             ] 

(vi) interest on credit accounts, rent concessions or credits, and other
required pass-throughs and interest on any reserve funds related to such
Supplemental Properties

     [             ] 

(vii) all other income from operation of the Supplemental Properties, including,
without limitation, laundry and vending income

     [             ] 

(viii) [Other]7

     [             ] 

 

6  Excluding (1) gross receipts received by lessees (other than Operating
Lessee), licensees or concessionaires of the Properties; (2) consideration
received at the Properties for hotel accommodations, goods and services to be
provided at other hotels not constituting, directly or indirectly, a portion of
the Collateral, although arranged by, for or on behalf of Borrower, any other
Loan Party, Manager; (3) income and proceeds from the sale or other disposition
of goods, capital assets and other items not in the ordinary course of operation
of the Collateral; (4) Hotel Taxes; (5) Awards (except to the extent provided in
clause (d) above); (6) refunds of amounts not included in Operating Expenses at
any time and uncollectible accounts; (7) gratuities collected by the employees
at the Properties; (8) the proceeds of any permitted financing; (9) other income
or proceeds resulting other than from the use or occupancy of the Properties, or
any part thereof, or other than from the sale of goods, services or other items
sold on or provided from the Collateral in the ordinary course of business;
(10) any credits or refunds made to customers, guests or patrons in the form of
allowances or adjustments to previously recorded revenues; (11) rent payments
made and received under the Operating Lease; and (12) proceeds from the sale of
any Individual Property, including Net Sales Proceeds.

7  Excluding (1) gross receipts received by lessees (other than Supplemental
Lessee), licensees or concessionaires of the Supplemental Properties,
(2) consideration received at the Supplemental Properties for hotel
accommodations, goods and services to be provided at other hotels not
constituting, directly or indirectly, a portion of the Supplemental Properties,
although arranged by, for or on behalf of Borrower, any Subsidiary of Borrower
or Supplemental Lessee or Supplemental Property Manager; (3) income and proceeds
from the sale or other disposition of goods, capital assets and other items not
in the ordinary course of operation of the Supplemental Properties;
(4) Supplemental Hotel Taxes; (5) Awards (except to the extent provided in
clause (d) above); (6) refunds of amounts not included in Supplemental Operating
Expenses at any time and uncollectible accounts; (7) gratuities collected by the
employees at the Supplemental Properties; (8) the proceeds of any permitted
financing; (9) other income or proceeds resulting other than from the use or
occupancy of the Supplemental Properties, or any part thereof, or other than
from the sale of goods, services or other items sold on or provided from the
Supplemental Properties in the ordinary course of business; (10) any credits or
refunds made to customers, guests or patrons in the form of allowances or
adjustments to previously recorded revenues; (11) rent payments made and
received under the Supplemental Leases and (12) proceeds from the sale of any
Supplemental Property, including Net Sales Proceeds.

 

-2-

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(b) ESA Operating Expenses (x + y)

  

(x) Operating Expenses, the sum of8

  

(i) the cost of all food and beverages sold or consumed, if any, and of all
Operating Equipment and Operating Supplies placed in use (other than reserve
stocks thereof in storerooms) (Operating Equipment and Operating Supplies shall
be considered to have been placed in use when they are transferred from the
storerooms of the Properties to the appropriate operating departments)

     [             ] 

(ii) salaries and wages of personnel of the Properties (regardless of whether
such personnel are employees of a Loan Party or Manager), including costs of
payroll taxes and employee benefits (which benefits may include, without
limitation, a pension plan, medical insurance, life insurance, travel accident
insurance and an executive bonus program) and the costs of moving (i) employees
of the Properties whose primary duties consist of the management of the
Properties or of a recognized department or division thereof or (ii) Executive
Hotel Personnel, their families and their belongings to the area in which the
Properties are located at the commencement of their employment at the Properties
and all other expenses not otherwise specifically referred to in this definition
which are referred to as “Administrative and General Expenses” in the Uniform
System of Accounts

    
[            
] 

 

8  Capitalized terms used and not defined in this “Operating Expenses”
calculation shall have the meanings set forth in the Mortgage Loan Agreement.

 

-3-

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(iii) the cost of all other goods and services obtained by any Loan Party or
Manager in connection with its operation of the Properties including, without
limitation, heat and utilities, office supplies and all services performed by
third parties, including leasing expenses in connection with telephone and data
processing equipment, and all existing and any future installations necessary
for the operation of the Improvements for hotel purposes (including, without
limitation, heating, lighting, sanitary equipment, air conditioning, laundry,
refrigerating, built-in kitchen equipment, telephone equipment, communications
systems, computer equipment and elevators, if any), Operating Equipment and
existing and any future furniture, furnishings, wall coverings, fixtures and
hotel equipment necessary for the operation of the building for hotel purposes
which shall include all equipment required for the operation of kitchens, bars,
laundries, (if any) and dry cleaning facilities (if any), office equipment,
cleaning and engineering equipment and vehicles

     [             ] 

(iv) the cost of repairs to and maintenance of the Properties

     [             ] 

(v) insurance premiums for general liability insurance, workers’ compensation
insurance or insurance required by similar employee benefits acts and such
business interruption or other insurance as may be provided for protection
against claims, liabilities and losses arising from the operation of the
Properties (as distinguished from any property damage insurance on the
Properties building or its contents) and losses incurred on any self-insured
risks of the foregoing types, provided that Borrower, Property Owner and Manager
have specifically approved in advance such self-insurance or insurance is
unavailable to cover such risks (premiums on policies for more than one year
will be pro rated over the period of insurance and premiums under blanket
policies will be allocated among properties covered)

     [             ] 

(vi) all Taxes and Other Charges (other than federal, state or local income
taxes and franchise taxes or the equivalent) payable by or assessed against any
Loan Party or Manager with respect to the operation of the Properties

     [             ] 

(vii) without duplication of any amount paid or reimbursed under the Management
Agreement, legal fees and fees of the Independent CPA for services directly
related to the operation of the Properties

     [             ] 

(viii) without duplication of any amount paid or reimbursed under the Management
Agreement, the costs and expenses of technical consultants and specialized
operational experts for specialized services in connection with non-recurring
work on operational, legal, functional, decorating, design or construction
problems and activities, including the reasonable fees of Guarantor or any
Guarantor subsidiary or division in connection therewith, provided that such
employment of Guarantor or of any such subsidiary or division of Guarantor is
approved in advance by Borrower and Property Owner

     [             ] 

(ix) without duplication of any amount paid or reimbursed under the Management
Agreement all expenses for advertising for the Properties and all expenses of
sales promotion and public relations activities

     [             ] 

(x) without duplication of any amount paid or reimbursed under the Management
Agreement, all out-of-pocket expenses and disbursements determined by the
Independent CPA to have been reasonably, properly and specifically incurred by
any Loan Party, Manager, Guarantor or any of their Affiliates pursuant to, in
the course of and directly related to, the management and operation of the
Properties under the Management

     [             ] 

 

-4-

--------------------------------------------------------------------------------

Agreement (without limiting the generality of the foregoing, such charges may
include all reasonable travel, telephone, telegram, radiogram, cablegram, air
express and other incidental expenses, but, shall exclude costs relating to the
offices maintained by any Loan Party, Manager, Guarantor or any of their
Affiliates other than the offices maintained at the Individual Property for the
management of such Individual Property and excluding transportation costs of
Borrower, Property Owner, Operating Lessee, or Manager related to meetings
between the Borrower, the other Loan Parties, and Manager with respect to
administration of the Management Agreement or of the Properties involving travel
away from such party’s principal executive offices)

  

(xi) without duplication of any amount paid or reimbursed under the Management
Agreement, the cost of any reservations system, any accounting services or other
group benefits, programs or services from time to time made available to
properties in Borrower’s and Property Owner’s system

     [             ] 

(xii) the cost associated with any retail Leases and all costs and expenses of
owning, maintaining, conducting and supervising the operation of the Properties
to the extent such costs and expenses are not included above

     [             ] 

(xiii) any management fees, basic and incentive fees or other fees and
reimbursables paid or payable to Manager under the Management Agreement

     [             ] 

(iv) [Other]9

     [             ] 

(y) Supplemental Operating Expenses, the sum of

  

(i) the cost of all food and beverages sold or consumed, if any, and of all
necessary chinaware, glassware, linens, flatware, uniforms, utensils and other
items of a similar nature, if any, including such items bearing the name or
identifying characteristics of the hotels as such ESA Group Member, Supplemental
Lessee and/or Supplemental Property Manager shall reasonably consider
appropriate (“Operating Equipment”) and paper supplies, cleaning materials and
similar consumable items (“Operating Supplies”) placed in use (other than
reserve stocks thereof in storerooms) (Operating Equipment and Operating
Supplies shall be considered to have been placed in use when they are
transferred from the storerooms of the Supplemental Properties to the
appropriate operating departments)

     [             ] 

(ii) salaries and wages of personnel of the Supplemental Properties (regardless
of whether such personnel are employees of a ESA Group Member, Supplemental
Lessee or Supplemental Property Manager), including costs of payroll taxes and
employee benefits (which benefits may include, without limitation, a pension
plan, medical insurance, life insurance, travel accident insurance and an
executive bonus program) and the costs of

     [             ] 

 

9  Excluding (i) depreciation and amortization, (ii) any Debt Service in
connection with the Loan and the Mezzanine Loans, (iii) any Capital Expenditures
in connection with the Properties, (iv) deposits required to be made to the
Reserve Funds, and (v) rent paid by Operating Lessee under the Operating Lease.

 

-5-

--------------------------------------------------------------------------------

moving (i) employees of the Supplemental Properties whose primary duties consist
of the management of the Supplemental Properties or of a recognized department
or division thereof or (ii) personnel (A) who customarily and regularly direct
the work of five (5) or more other employees of the Supplemental Properties; (B)
who have authority with reference to the hiring, firing and advancement of the
employees of the Supplemental Properties; (C) who customarily and regularly
exercise discretionary powers; (D) who devote at least ninety five percent (95%)
of their work time to activities which are directly and closely related to the
performance of the work described in clauses (A) through (C) of clause (ii) of
this sentence; and (E) who are not compensated on an hourly basis (the
“Executive Hotel Personnel”), their families and their belongings to the area in
which the Supplemental Properties are located at the commencement of their
employment at the Supplemental Properties and all other expenses not otherwise
specifically referred to in this definition which are referred to as
“Administrative and General Expenses” in the Uniform System of Accounts

  

(iii) the cost of all other goods and services obtained by any ESA Group Member,
Supplemental Lessee or Supplemental Property Manager in connection with its
operation of the Supplemental Properties including, without limitation, heat and
utilities, office supplies and all services performed by third parties,
including leasing expenses in connection with telephone and data processing
equipment, and all existing and any future installations necessary for the
operation of the Improvements for hotel purposes (including, without limitation,
heating, lighting, sanitary equipment, air conditioning, laundry, refrigerating,
built-in kitchen equipment, telephone equipment, communications systems,
computer equipment and elevators, if any), Operating Equipment and existing and
any future furniture, furnishings, wall coverings, fixtures and hotel equipment
necessary for the operation of the building for hotel purposes which shall
include all equipment required for the operation of kitchens, bars, laundries,
(if any) and dry cleaning facilities (if any), office equipment, cleaning and
engineering equipment and vehicles

     [             ] 

(iv) the cost of repairs to and maintenance of the Supplemental Properties

     [             ] 

(v) insurance premiums for general liability insurance, workers’ compensation
insurance or insurance required by similar employee benefits acts and such
business interruption or other insurance as may be provided for protection
against claims, liabilities and losses arising from the operation of the
Supplemental Properties (as distinguished from any property damage insurance on
the Supplemental Properties building or its contents) and losses incurred on any
self-insured risks of the foregoing types, provided that ESA Group Member and
Supplemental Property Manager have specifically approved in advance such
self-insurance or insurance is unavailable to cover such risks (premiums on
policies for more than one year will be pro rated over the period of insurance
and premiums under blanket policies will be allocated among properties covered)

     [             ] 

(vi) all Taxes and Other Charges (other than federal, state or local income
taxes and franchise taxes or the equivalent) payable by or assessed against any
ESA Group Member, Supplemental Lessee or Supplemental Property Manager with
respect to the operation of the Supplemental Properties

     [             ] 

(vii) without duplication of any amount paid or reimbursed under the
Supplemental Management Agreement, legal fees and fees of any firm of
independent certified public accounts designated from time to time by any ESA
Group Member (the “Independent CPA”) for services directly related to the
operation of the Supplemental Properties

     [             ] 

 

-6-

--------------------------------------------------------------------------------

(viii) without duplication of any amount paid or reimbursed under the
Supplemental Management Agreement, the costs and expenses of technical
consultants and specialized operational experts for specialized services in
connection with non-recurring work on operational, legal, functional,
decorating, design or construction problems and activities

     [             ] 

(ix) without duplication of any amount paid or reimbursed under the Supplemental
Management Agreement all expenses for advertising for the Supplemental
Properties and all expenses of sales promotion and public relations activities

     [             ] 

(x) without duplication of any amount paid or reimbursed under the Supplemental
Management Agreement, all out-of-pocket expenses and disbursements determined by
the Independent CPA to have been reasonably, properly and specifically incurred
by any ESA Group Member, Supplemental Lessee or any of their Affiliates pursuant
to, in the course of and directly related to, the management and operation of
the Supplemental Properties under the Supplemental Management Agreement (without
limiting the generality of the foregoing, such charges may include all
reasonable travel, telephone, telegram, radiogram, cablegram, air express and
other incidental expenses, but, shall exclude costs relating to the offices
maintained by any ESA Group Member, Supplemental Lessee or any of their
Affiliates other than the offices maintained at the Supplemental Property for
the management of such Supplemental Property and excluding transportation costs
of ESA Group Members, Supplemental Lessee or the Supplemental Property Manager
related to meetings between the ESA Group Member, Supplemental Lessee and
Supplemental Property Manager with respect to administration of the Supplemental
Management Agreement or of the Supplemental Properties involving travel away
from such party’s principal executive offices)

     [             ] 

(xi) without duplication of any amount paid or reimbursed under the Supplemental
Management Agreement, the cost of any reservations system, any accounting
services or other group benefits, programs or services from time to time made
available to Supplemental Properties in ESA Group Member’s system

     [             ] 

(xii) the cost associated with any retail Leases and all costs and expenses of
owning, maintaining, conducting and supervising the operation of the
Supplemental Properties to the extent such costs and expenses are not included
above

     [             ] 

(xiii) any management fees, basic and incentive fees or other fees and
reimbursables paid or payable to Supplemental Manager under the Supplemental
Management Agreement

     [             ] 

(xiv) [Other]10

     [             ] 

 

10  Excluding (i) depreciation and amortization, (ii) any interest payments
payable on any mortgage or mezzanine Indebtedness incurred in connection with
such Supplemental Properties, (iii) any Capital Expenditures in connection with
the Supplemental Properties, (iv) deposits required to be made to any reserve
funds related to such Supplemental Properties, and (v) rent paid by Supplemental
Lessee under the Supplemental Lease.

 

-7-

--------------------------------------------------------------------------------

II. Consolidated Leverage Ratio (a ÷ b)    Total for Last 4 Fiscal
Quarters

(a) Consolidated Total Debt as of such date

  

(i) the aggregate principal amount of all Indebtedness of the Borrower and its
Subsidiaries at such date, determined on a consolidated basis in accordance with
GAAP

   [            ]    minus

(ii) all obligations of the Borrower and its Subsidiaries, contingent or
otherwise, as an account party or applicant under or in respect of acceptances,
letters of credit, surety bonds or similar arrangements

   [            ]    minus

(iii) the liquidation value of all redeemable preferred Capital Stock of the
Borrower and its Subsidiaries

   [            ]

(b) Consolidated EBITDA1112 for the applicable Reference Period

  

(i) ESA Net Operating Income for such Reference Period

   [            ]    plus

(ii) without duplication, the sum of

   [            ]

(A) any recurring cash income of the Borrower or any of its Subsidiaries

   [            ]

(B) to the extent reflected as a charge in the statement of such ESA Net
Operating Income for such Reference Period, any non-cash expenses or losses

   [            ]

 

11  If at any time during such Reference Period the Borrower or any Subsidiary
shall have made any Material Disposition, the Consolidated EBITDA for such
Reference Period shall be reduced by an amount equal to the Consolidated EBITDA
(if positive) attributable to the property that is the subject of such Material
Disposition for such Reference Period or increased by an amount equal to the
Consolidated EBITDA (if negative) attributable thereto for such Reference
Period.

12  If during such Reference Period the Borrower or any Subsidiary shall have
made a Material Acquisition, Consolidated EBITDA for such Reference Period shall
be calculated after giving pro forma effect thereto as if such Material
Acquisition occurred on the first day of such Reference Period.

 

-8-

--------------------------------------------------------------------------------

(C) to the extent reflected as a charge in the statement of such ESA Net
Operating Income for such Reference Period, any non-recurring or extraordinary
expenses or losses13

   [            ]    minus

(iii) without duplication, the sum of

   [            ]

(A) all actual non-property level management, marketing and other allocated
general and administrative expenses of the Borrower or any Subsidiary thereof
and all other expenses that appear on the income statement of the Borrower

   [            ]

(B) to the extent included in the statement of such ESA Net Operating Income for
such Reference Period, any non-cash income or gains

   [            ]

(C) to the extent included in the statement of such ESA Net Operating Income for
such Reference Period, any non-recurring or extraordinary income or gains
(including, whether or not otherwise includable as a separate item in the
statement of such ESA Net Operating Income for such Reference Period, gains on
the sales of assets outside of the ordinary course of business)

   [            ]

(D) any cash payments made during such Reference Period in respect of items
described in row (b)(ii)(C) above subsequent to the fiscal quarter in which the
relevant non-cash expenses or losses were reflected as a charge in the statement
of ESA Net Operating Income, all as determined on a consolidated basis

   [            ]

Ratio (a ÷ b)

  

Required Consolidated Leverage Ratio

   [9.00][8.75] to 1.0

Compliance

   [Yes][No]

 

13  Not to exceed $100,000,000 in the aggregate after the Closing Date (net of
any deductions pursuant to row (b)(iii)(C) below).

 

-9-

--------------------------------------------------------------------------------

Debt Yield

   Total for Trailing Twelve
Month Period

(a) Net Operating Income for the trailing twelve (12) month period

  

(i) Net Operating Income, (I(a)(x) – I(b)(x) as calculated above)

      plus

(ii) to the extent included therein, the sum of

  

(A) Management Fees incurred in connection with the operation of the Subsidiary
Properties

   [            ]

(B) amounts paid for Replacements

   [            ]    minus

(ii) to the extent not included therein, the sum of

  

(A) assumed Management Fees, which include corporate overhead, non-property
level management, marketing and other centrally provided general and
administrative expenses, equal to eight percent (8.0%) of Gross Income from
Operations in the aggregate

   [            ]

(B) assumed costs of Replacements equal to four percent (4%) of Gross Income
from Operations

   [            ]    over

(b) the sum of (i) the outstanding principal balances of (A) the Mortgage Loan
and (B) the Mezzanine Loans, (ii) the aggregate Face Amount of any portion of
any Mezzanine Loan repaid pursuant to a Discounted Payoff, (iii) the aggregate
outstanding Total Revolving Extensions of Credit as of such date and (iv) the
aggregate outstanding ESH Total Revolving Extensions of Credit as of such date.

  

Percentage (a ÷ b)

  

Required Debt Yield

   9%

Compliance

   [Yes][No]

 

-10-

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EXHIBIT D

[FORM OF]

SECRETARY’S CERTIFICATE

EXTENDED STAY AMERICA, INC.

November 18, 2013

I, [                    ], the undersigned, do hereby certify that I am the
Secretary of EXTENDED STAY AMERICA, INC. (the “Company”) and, in such capacity,
and not individually, on behalf of the Company, that:

1. Attached hereto as Exhibit A are true, correct and complete copies of the
Certificate of Incorporation, together with any and all amendments thereto (the
“Filed Charter Documents”), of the Company as on file as of the date hereof with
the Secretary of State of the State of Delaware. As of the date of this
Certificate, the Filed Charter Documents have not been amended, modified,
revoked or rescinded in any respect, no other charter documents have been filed
with the Secretary of State of the State of Delaware, and no amendment,
modification, revocation or rescission in any respect of the Filed Charter
Documents has been authorized on behalf of the Company.

2. Attached hereto as Exhibit B are true, correct and complete copies of the
bylaws of the Company, together with any and all amendments thereto, as in full
force and effect as of the date hereof. Except as set forth in Exhibit B, such
bylaws have not been amended, modified, revoked or rescinded in any respect and
remain in full force and effect as of the date hereof.

3. Attached hereto as Exhibit C are true, correct and complete copies of all the
resolutions adopted by unanimous written consent of the Board of Directors of
the Company relating to the Transactions (as defined in the Credit Agreement (as
defined herein)) and such resolutions have not since their adoption been in any
way modified or rescinded and are in full-force and effect on the date hereof.
As of the date hereof, there were no vacancies or unfilled newly-created
directorships on the Board. The resolutions attached hereto as Exhibit C are the
only resolutions adopted by the Board of Directors or any committee thereof
relating to the execution, delivery and performance of the Transactions to which
the Company is a party and the transactions contemplated thereby and have been
filed with the minutes of the proceedings of the Board of Directors.

[Remainder of Page Intentionally Left Blank]

--------------------------------------------------------------------------------

4. The following persons are, as of the date hereof, the duly elected,
qualified, and acting officers of the Company, holding the offices set forth
beside their names, and the signature appearing next to each name is the genuine
signature of such officer:

 

Name    Office   Signature [                    ]    [                    ]  

 

[                    ]    [                    ]  

 

Each person above is authorized to execute and deliver on behalf of the Company
the Loan Documents (as defined in that certain Credit Agreement, dated as of the
date hereof (the “Credit Agreement”), among the Company, as Borrower, the
lenders from time to time party thereto (the “Lenders”) and JPMorgan Chase Bank,
N.A., as administrative agent for the Lenders), and any other document,
certificate, or instrument to be delivered in connection therewith
(collectively, the “Transaction Documents”). The Transaction Documents have been
duly executed and delivered by one or more of such authorized persons acting on
behalf of the Company.

5. Attached hereto as Exhibit D is a true and correct copy of a certificate of
good standing of the Company issued by the Secretary of State of the State of
Delaware. As of the date hereof, no corporate action has been taken or notice
received from a government official looking to the dissolution or liquidation of
the Company.

[Remainder of Page Intentionally Left Blank]

 

Incumbency – Corporate Borrower

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, I have hereunto signed my name as of the date first written
above.

 

By:  

 

  Name:     Title:   Secretary

 

Secretary’s Certificate – Corporate Borrower

--------------------------------------------------------------------------------

I, [                    ], [title] of the Company, do hereby certify that
[                    ] is the duly elected, qualified and acting Secretary of
the Company, and that the signature set forth above is the true and genuine
signature of [                    ].

IN WITNESS WHEREOF, I have hereunto signed my name as of the date first written
above.

 

By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

EXHIBIT E

[FORM OF] ASSIGNMENT AND ASSUMPTION

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 the
Assignor (as defined below) and the Assignee (as defined below). Capitalized
terms used but not defined herein shall have the meanings given to them in the
Credit Agreement identified below (the “Credit Agreement”), receipt of a copy of
which is hereby acknowledged by the Assignee. The Standard 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
Administrative Agent as contemplated below (i) 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 to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including any Letters of Credit, guarantees, and Swingline
Loans included in such facilities) and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other
right of the Assignor (in its capacity as a Lender) 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 or in any way based on or related to any of the
foregoing, including contract claims, tort claims, malpractice claims, statutory
claims and all other claims at law or in equity related to the rights and
obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as 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.

(a) Assignor:                                 

(b) Assignor [is][is not] a Defaulting Lender

(c) Assignee:                             

     [and is an Affiliate/Approved Fund of [Identify Lender]]1

(d) Borrower: Extended Stay America, Inc.

(e) Administrative Agent: JPMorgan Chase Bank, N.A.

(f) Credit Agreement: The Credit Agreement, dated as of November 18, 2013 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among the Borrower, the Lenders, including the Swingline
Lender and the Issuing Lender, party thereto, and JPMorgan Chase Bank, N.A., as
Administrative Agent.

 

1  Select as applicable.

--------------------------------------------------------------------------------

(g) Assigned Interest:2

 

Facility Assigned

   Aggregate Amount of
Revolving
Commitment/
Revolving Loans for all
Lenders      Amount of Revolving
Commitment/
Revolving Loans
Assigned      Percentage Assigned
of Revolving
Commitment/
Revolving Loans3  

Revolving

   $                    $                           % 

Commitment/Revolving

        

Loans

        

Effective Date:                  , 201     [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR]

The Assignee, if not already a Lender, agrees to deliver to the Administrative
Agent a completed administrative questionnaire in which the Assignee designates
one or more credit contacts to whom all syndicate-level information (which may
contain material non-public information) will be made available and who may
receive such information in accordance with the Assignee’s compliance procedures
and applicable law, including federal, state and foreign securities laws.

 

2  Must comply with the minimum assignment amount set forth in
Section 10.6(b)(ii)(A) of the Credit Agreement, to the extent such minimum
assignment amounts are applicable.

3  Set forth, to at least nine decimals, as a percentage of the Revolving
Commitments/ Revolving Loans of all Lenders.

 

-2-

--------------------------------------------------------------------------------

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

[NAME OF ASSIGNOR], as Assignor, By:  

 

  Name:   Title: [NAME OF ASSIGNEE], as Assignee, By:  

 

  Name:   Title:

 

-3-

--------------------------------------------------------------------------------

[Consented to and Accepted:]4

 

JPMORGAN CHASE BANK, N.A., as Administrative Agent, By:  

 

  Name:   Title: Consented to: [ISSUING LENDER], as Issuing Lender By:  

 

  Name:   Title: [SWINGLINE LENDER], as Swingline Lender, By:  

 

  Name:   Title: [Consented to:]5 [EXTENDED STAY AMERICA, INC., as Borrower,]
By:  

 

  Name:   Title:

 

4  To be included only if the consent of the Administrative Agent is required by
Section 10.6(b)(i)(B) or Section 10.6(b)(ii)(A) of the Credit Agreement.

5  To be included only if the consent of the Borrower is required by
Section 10.6(b)(i)(A) or Section 10.6(b)(ii)(A) of the Credit Agreement.

 

-4-

--------------------------------------------------------------------------------

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

SECTION 1. REPRESENTATIONS AND WARRANTIES.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) it is or is not a Defaulting
Lender as indicated on this Assignment and Assumption, (iii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iv) 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 (b) assumes no responsibility with respect
to (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 or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of
any Loan Party, any of any Loan Party’s Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document or (iv) the performance or
observance by any Loan Party, any of any Loan Party’s Subsidiaries or Affiliates
or any other Person of any of their respective obligations under any Loan
Document.

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) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) 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, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 6.1 thereof (or, prior to the
first such delivery, the financial statements referred to in Section 5.1
thereof), 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
Administrative Agent or any other Lender, and (v) if it is a Lender that is a
U.S. Person, attached to this Assignment and Assumption is IRS Form W-9
certifying that such Lender is exempt from United States federal backup
withholding tax, (vi) if it is a Foreign Lender, attached to this Assignment and
Assumption is any documentation required to be delivered by it pursuant to
Section 2.18 of the Credit Agreement, duly completed and executed by the
Assignee, and (vii) it does not bear a relationship to the Borrower as described
in Section 108(e)(4) of the Code; and (b) agrees that (i) it will, independently
and without reliance on the Administrative 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.

SECTION 2. PAYMENTS. FROM AND AFTER THE EFFECTIVE DATE, THE ADMINISTRATIVE AGENT
SHALL MAKE ALL PAYMENTS IN RESPECT OF THE ASSIGNED INTEREST (INCLUDING PAYMENTS
OF PRINCIPAL, INTEREST, FEES AND OTHER AMOUNTS) TO THE ASSIGNEE WHETHER SUCH
AMOUNTS HAVE ACCRUED PRIOR TO OR ON OR AFTER THE EFFECTIVE DATE. THE ASSIGNOR
AND THE ASSIGNEE SHALL MAKE ALL APPROPRIATE ADJUSTMENTS IN PAYMENTS BY THE
ADMINISTRATIVE AGENT FOR PERIODS PRIOR TO THE EFFECTIVE DATE OR WITH

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RESPECT TO THE MAKING OF THIS ASSIGNMENT DIRECTLY BETWEEN THEMSELVES.
NOTWITHSTANDING THE FOREGOING, THE ADMINISTRATIVE AGENT SHALL MAKE ALL PAYMENTS
OF INTEREST, FEES OR OTHER AMOUNTS PAID OR PAYABLE IN KIND FROM AND AFTER THE
EFFECTIVE DATE TO THE ASSIGNEE.

SECTION 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
COUNTERPARTS (AND BY DIFFERENT PARTIES HERETO ON DIFFERENT COUNTERPARTS), EACH
OF WHICH SHALL CONSTITUTE AN ORIGINAL, BUT ALL OF WHICH WHEN TAKEN TOGETHER
SHALL CONSTITUTE A SINGLE CONTRACT. DELIVERY OF AN EXECUTED COUNTERPART OF A
SIGNATURE PAGE OF THIS ASSIGNMENT AND ASSUMPTION BY FACSIMILE OR OTHER
ELECTRONIC IMAGING SHALL BE EFFECTIVE AS DELIVERY OF A MANUALLY EXECUTED
COUNTERPART OF THIS ASSIGNMENT AND ASSUMPTION. THIS ASSIGNMENT AND ASSUMPTION
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK.

 

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EXHIBIT F-1

FORM OF EXEMPTION CERTIFICATE

FOR FOREIGN LENDERS THAT ARE NOT

PARTNERSHIPS FOR U.S. FEDERAL INCOME TAX PURPOSES

Reference is made to the Credit Agreement, dated as of November 18, 2013 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”; capitalized terms not defined herein but defined therein
being used herein as therein defined), among Extended Stay America, Inc., as
borrower (the “Borrower”), the Lenders party thereto from time to time,
including the Swingline Lender and the Issuing Lender, party thereto, and
JPMorgan Chase Bank, N.A., as Administrative Agent (in such capacity, the
“Administrative Agent”).

Pursuant to the provisions of Section 2.18 of the Credit Agreement, the
undersigned hereby certifies that (a) it is the sole record and beneficial owner
of the Loan(s) (as well as any promissory note(s) evidencing such Loan(s)) in
respect of which it is providing this certificate, (b) it is not a bank within
the meaning of Section 881(c)(3)(A) of the Code, (c) it is not a ten percent
shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the
Code and (d) it is not a controlled foreign corporation related to the Borrower
as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with a
certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this
certificate, the undersigned agrees that (a) if the information provided on this
certificate changes, the undersigned shall promptly so inform the Borrower and
the Administrative Agent and (b) the undersigned shall have at all times
furnished the Borrower and the Administrative Agent with a properly completed
and currently effective certificate in either the calendar year in which any
payment is to be made to the undersigned, or in either of the two calendar years
preceding any such payment.

 

[NAME OF LENDER], By:  

 

  Name:   Title: Date:                    , 201[    ]

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EXHIBIT F-2

FORM OF EXEMPTION CERTIFICATE

FOR FOREIGN PARTICIPANTS THAT ARE

PARTNERSHIPS FOR U.S. FEDERAL INCOME TAX PURPOSES

Reference is made to the Credit Agreement, dated as of November 18, 2013 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”; capitalized terms not defined herein but defined therein
being used herein as therein defined), among Extended Stay America, Inc., as
borrower (the “Borrower”), the Lenders party thereto from time to time,
including the Swingline Lender and the Issuing Lender, party thereto, and
JPMorgan Chase Bank, N.A., as Administrative Agent (in such capacity, the
“Administrative Agent”).

Pursuant to the provisions of Section 2.18 of the Credit Agreement, the
undersigned hereby certifies that (a) it is the sole record owner of the
participation in respect of which it is providing this certificate, (b) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (c) with respect such participation, neither the undersigned nor
any of its direct or indirect partners/members is a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (d) none of its
direct or indirect partners/members is a ten percent shareholder of the Borrower
within the meaning of Section 871(h)(3)(B) of the Code and (e) none of its
direct or indirect partners/members is a controlled foreign corporation related
to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (a) an IRS Form W-8BEN or (b) an
IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (a) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Lender and (b) the undersigned shall have at all times furnished
such Lender with a properly completed and currently effective certificate in
either the calendar year in which any payment is to be made to the undersigned,
or in either of the two calendar years preceding any such payment.

 

[NAME OF LENDER], By:  

 

  Name:   Title: Date:                    , 201[    ]

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EXHIBIT F-3

FORM OF EXEMPTION CERTIFICATE

FOR FOREIGN PARTICIPANTS THAT ARE

NOT PARTNERSHIPS FOR U.S. FEDERAL INCOME TAX PURPOSES

Reference is made to the Credit Agreement, dated as of November 18, 2013 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”; capitalized terms not defined herein but defined therein
being used herein as therein defined), among Extended Stay America, Inc., as
borrower (the “Borrower”), the Lenders party thereto from time to time,
including the Swingline Lender and the Issuing Lender, party thereto, and
JPMorgan Chase Bank, N.A., as Administrative Agent (in such capacity, the
“Administrative Agent”).

Pursuant to the provisions of Section 2.18 of the Credit Agreement, the
undersigned hereby certifies that (a) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate,
(b) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(c) it is not a ten percent shareholder of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code and (d) it is not a controlled foreign
corporation related to the Borrower as described in Section 881(c)(3)(C) of the
Code.

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the
undersigned agrees that (a) if the information provided on this certificate
changes, the undersigned shall promptly so inform such Lender in writing and
(b) the undersigned shall have at all times furnished such Lender with a
properly completed and currently effective certificate in either the calendar
year in which any payment is to be made to the undersigned, or in either of the
two calendar years preceding any such payment.

 

[NAME OF LENDER], By:  

 

  Name:   Title: Date:                    , 201[    ]

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EXHIBIT F-4

FORM OF EXEMPTION CERTIFICATE

FOR FOREIGN LENDERS THAT ARE

PARTNERSHIPS FOR U.S. FEDERAL INCOME TAX PURPOSES

Reference is made to the Credit Agreement, dated as of November 18, 2013 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”; capitalized terms not defined herein but defined therein
being used herein as therein defined), among Extended Stay America, Inc., as
borrower (the “Borrower”), the Lenders party thereto from time to time,
including the Swingline Lender and the Issuing Lender, party thereto, and
JPMorgan Chase Bank, N.A., as Administrative Agent (in such capacity, the
“Administrative Agent”).

Pursuant to the provisions of Section 2.18 of the Credit Agreement, the
undersigned hereby certifies that (a) it is the sole record owner of the Loan(s)
(as well as any promissory note(s) evidencing such Loan(s)) in respect of which
it is providing this certificate, (b) its direct or indirect partners/members
are the sole beneficial owners of such Loan(s) (as well as any promissory
note(s) evidencing such Loan(s)), (c) with respect to the extension of credit
pursuant to the Credit Agreement or any other Loan Document, neither the
undersigned nor any of its direct or indirect partners/members is a bank
extending credit pursuant to a loan agreement entered into in the ordinary
course of its trade or business within the meaning of Section 881(c)(3)(A) of
the Code, (d) none of its direct or indirect partners/members is a ten percent
shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the
Code and (e) none of its direct or indirect partners/members is a controlled
foreign corporation related to the Borrower as described in Section 881(c)(3)(C)
of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with IRS
Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio exemption: (a) an IRS Form
W-8BEN or (b) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of
such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(a) if the information provided on this certificate changes, the undersigned
shall promptly so inform the Borrower and the Administrative Agent and (b) the
undersigned shall have at all times furnished the Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which any payment is to be made to
the undersigned, or in either of the two calendar years preceding any such
payment.

 

[NAME OF LENDER], By:  

 

  Name:   Title: Date:                    , 201[    ]

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EXHIBIT G

FORM OF INCREASING LENDER AGREEMENT

INCREASING LENDER AGREEMENT, dated             , 201     (this “Agreement”), by
and among each of the signatories hereto, to the Credit Agreement, dated as of
November 18, 2013 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”; capitalized terms not defined herein but
defined therein being used herein as therein defined), among Extended Stay
America, Inc. (the “Borrower”), the Lenders, including the Swingline Lender and
the Issuing Lender, party thereto, and JPMorgan Chase Bank, N.A., as
Administrative Agent (in such capacity, the “Administrative Agent”).

W I T N E S S E T H:

WHEREAS, pursuant to Section 2.22(c) of the Credit Agreement, in the event that
the aggregate amount of Revolving Commitments of the Accepting Lenders with
respect to a Repricing Election is less than the Total Revolving Commitments as
then in effect, the Borrower has the right, subject to the terms and conditions
thereof, to arrange for such shortfall to be provided by one or more Accepting
Lenders agreeing to increase the amount of their Revolving Commitment; and

WHEREAS, pursuant to Section 2.22(c) of the Credit Agreement, the undersigned
Increasing Lender now desires to increase the amount of its Revolving Commitment
under the Credit Agreement by executing and delivering to the Borrower and the
Administrative Agent this Agreement;

NOW, THEREFORE, each of the parties hereto hereby agrees as follows:

1. Increase Agreement. The undersigned Increasing Lender agrees, subject to the
terms and conditions of the Credit Agreement, that on the date of this Agreement
it shall have its Revolving Commitment increased by $[        ], thereby making
the aggregate amount of its total Revolving Commitments equal to $[        ].

2. Conditions Precedent. This Agreement shall become effective upon the date
(the “Increase Effective Date” on which the following conditions precedent have
been satisfied:

(a) Increase Documents. The Administrative Agent shall have received (each of
the following documents being referred to herein as an “Increase Document”):

(i) this Agreement, executed and delivered by a duly authorized officer of the
Borrower, the Increasing Lender, the Administrative Agent, the Swingline Lender
and the Issuing Lender;

(ii) if the Increasing Lender requests the same, a Note of the Borrower
conforming to the requirements of the Credit Agreement and reflecting the
Revolving Commitments of the Increasing Lender after giving effect to this
Agreement, executed by a duly authorized officer of the Borrower;

(iii) a reaffirmation of the Subsidiary Guarantee, executed and delivered by a
duly authorized officer of each party thereto; and

(iv) a reaffirmation of the Security Agreement, the Account Control Agreement,
and the other Collateral Documents, executed and delivered by a duly authorized
officer of the Borrower.

--------------------------------------------------------------------------------

(b) Increasing Lender. The Administrative Agent shall have received from the
Increasing Lender the amounts required to be paid by the Increasing Lender to
Section 2.22 of the Credit Agreement.

(c) Secretary’s Certificates. The Administrative Agent shall have received, with
a counterpart for the Increasing Lender, a certificate of each Loan Party, dated
as of the Increase Effective Date, substantially in the form of Exhibit D to the
Credit Agreement, with appropriate insertions and attachments, reasonably
satisfactory in form and substance to the Administrative Agent.

(d) Proceedings of the Loan Parties. The Administrative Agent shall have
received a copy of the resolutions, in form and substance reasonably
satisfactory to the Administrative Agent, of the board of directors (or
analogous body) of each Loan Party authorizing (i) the execution, delivery and
performance of this Agreement and the Notes delivered on the Increase Effective
Date and the other Increase Documents, and the reaffirmations of the applicable
Loan Documents to which it is a party, and (ii) the reaffirmation by it of the
Liens created pursuant to the Account Control Agreement, certified by the
secretary or an assistant secretary of such Loan Party or, if applicable, of the
general partner or managing member or members of such Loan Party as of the
Increase Effective Date, which certification shall be in form and substance
reasonably satisfactory to the Administrative Agent and shall state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded.

(e) Incumbency Certificates. To the extent the following have been amended,
supplemented or otherwise modified since the Closing Date, the Administrative
Agent shall have received, with a counterpart for the Increasing Lender, a
certificate of each Loan Party, dated as of the date hereof, as to the
incumbency and signature of the officers of such Loan Party, executing any
Increase Document, which certificate shall be included in the certificate
delivered in respect of such Loan Party pursuant to Section 4(c), shall be
reasonably satisfactory in form and substance to the Administrative Agent.

(f) Organizational Documents. To the extent the following have been amended,
supplemented or otherwise modified since the Closing Date, the Administrative
Agent shall have received, with a counterpart for the Increasing Lender, true
and complete copies of the Governing Documents of each Loan Party, certified as
of the date hereof as complete and correct copies thereof by the secretary or an
assistant secretary of such Loan Party, which certification shall be included in
the certificate delivered in respect of such Loan Party pursuant to Section 3(c)
and shall be in form and substance reasonably satisfactory to the Administrative
Agent.

(g) Good Standing Certificates. The Administrative Agent shall have received,
with a copy for the Increasing Lender, certificates dated as of a recent date
from the secretary of state or other appropriate authority, evidencing the good
standing of each Loan Party (i) in the jurisdiction of its organization or
formation and (ii) in each other jurisdiction where its ownership, lease or
operation of Property or the conduct of its business requires it to qualify as a
foreign Person except, as to this subclause (ii), where the failure to so
qualify could not reasonably be expected to have a Material Adverse Effect.

(h) Legal Opinions. The Administrative Agent shall have received, with a
counterpart for the Increasing Lender, the executed legal opinion of counsel to
the Loan Parties, in form and substance reasonably satisfactory to the
Administrative Agent. The legal opinion shall cover such matters incident to the
transactions contemplated by this Agreement as the Administrative Agent and the
Increasing Lender may reasonably require.

 

-2-

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(i) Fees. The Administrative Agent shall have received all fees and other
amounts (including, without limitation, pursuant to Section 10.5 of the Credit
Agreement) due and payable by the Borrower in connection with the effectiveness
of this Agreement.

(j) Representations and Warranties. Each of the representations and warranties
set forth in Section 3 hereof shall be true and correct.

(k) No Default, Event of Default or Trigger Event. No Default, Event of Default
or Trigger Event shall have occurred and be continuing or would result after
giving effect to such increase in Revolving Commitments.

3. Representations and Warranties. To induce the Increasing Lender to enter into
this Agreement, the Borrower hereby represents and warrants that, before and
after giving effect to the increase of the Revolving Commitments of such
Increasing Lender, the representations and warranties contained in the Credit
Agreement and the other Loan Documents will be true and correct in all material
respects as of the date hereof, as if made on and as of such date.

4. Disclaimer. The Increasing Lender acknowledges and agrees that neither the
Administrative Agent nor any Lender party to the Credit Agreement (i) has made
any representation or warranty and shall have no responsibility with respect to
any statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, any other Loan
Documents or any other instrument or document furnished pursuant thereto; or
(ii) has made any representation or warranty and shall have no responsibility
with respect to the financial condition of any Loan Party or any other obligor
or the performance or observance by any Loan Party or any obligor of any of such
Loan Party’s obligations under the Credit Agreement or any other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto. The
Increasing Lender represents and warrants that it is legally authorized to enter
into this Agreement.

5. Miscellaneous.

(a) This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York.

(b) This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same document. Delivery of an executed signature page of
this Agreement by facsimile transmission or electronic transmission (e.g., “pdf”
or “tif”) shall be effective as delivery of a manually executed counterpart
hereof.

(c) This Agreement contains the entire understanding of the parties relating to
the matters contemplated hereby, superseding all prior agreements or
understandings with respect thereto.

 

-3-

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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be
executed and delivered by a duly authorized officer on the date first above
written.

 

[INSERT NAME OF INCREASING LENDER] By:  

 

  Name:   Title: Accepted and agreed to as of the date first written above:
EXTENDED STAY AMERICA, INC.,

as Borrower

By:  

 

  Name:   Title: Acknowledged as of the date first written above: JPMORGAN CHASE
BANK, N.A.

as Administrative Agent

By:  

 

  Name:   Title: Consented to as of the date first written above: [ISSUING
LENDER]

as the Issuing Lender

By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

[SWINGLINE LENDER]

as the Swingline Lender

By:  

 

  Name:   Title:

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EXHIBIT H

FORM OF NEW LENDER AGREEMENT

NEW LENDER AGREEMENT, dated             , 201     (this “Agreement”), to the
Credit Agreement, dated as of November 18, 2013 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Extended Stay America, Inc. (the “Borrower”), the Lenders, including the
Swingline Lender and the Issuing Lender, party thereto, and JPMorgan Chase Bank,
N.A., as Administrative Agent (in such capacity, the “Administrative Agent”).

W I T N E S S E T H:

WHEREAS, pursuant to Section 2.22(c) of the Credit Agreement, in the event that
the aggregate amount of Revolving Commitments of the Accepting Lenders with
respect to a Repricing Election is less than the Total Revolving Commitments as
then in effect, the Borrower has the right, subject to the terms and conditions
thereof, to arrange for such shortfall to be provided by one or more banks,
financial institutions or other entities agreeing to extend Revolving
Commitments; and

WHEREAS, the undersigned New Lender was not an original party to the Credit
Agreement but now desires to become a party thereto;

NOW, THEREFORE, each of the parties hereto hereby agrees as follows:

1. Extension Agreement. The undersigned New Lender agrees to be bound by the
provisions of the Credit Agreement and agrees that it shall, on the date of this
Agreement, become a Lender for all purposes of the Credit Agreement to the same
extent as if originally a party thereto, with a Revolving Commitment of
$[        ].

2. Conditions Precedent. This Agreement shall become effective upon the date
(the “New Lender Effective Date” on which the following conditions precedent
have been satisfied:

(d) New Lender Documents. The Administrative Agent shall have received (each of
the following documents being referred to herein as an “New Lender Document”):

(i) this Agreement, executed and delivered by a duly authorized officer of the
Borrower, the New Lender, the Administrative Agent, the Swingline Lender and the
Issuing Lender;

(ii) if the New Lender requests the same, a Note of the Borrower conforming to
the requirements of the Credit Agreement and reflecting the Revolving
Commitments of the New Lender after giving effect to this Agreement, executed by
a duly authorized officer of the Borrower;

(iii) a reaffirmation of the Guaranty, executed and delivered by a duly
authorized officer of each party thereto; and

(iv) a reaffirmation of the Security Agreement, the Account Control Agreement,
and the other Collateral Documents, executed and delivered by a duly authorized
officer of the Borrower.

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(e) New Lender. The Administrative Agent shall have received from the New Lender
(i) the amounts required to be paid by the New Lender to Section 2.22 of the
Credit Agreement and (ii) an administrative questionnaire in which the New
Lender designates one or more credit contacts to whom all syndicate-level
information (which may contain material non-public information) will be made
available and who may receive such information in accordance with the New
Lender’s compliance procedures and applicable law, including federal, state and
foreign securities laws.

(f) Secretary’s Certificates. The Administrative Agent shall have received, with
a counterpart for the New Lender, a certificate of each Loan Party, dated as of
the New Lender Effective Date, substantially in the form of Exhibit D to the
Credit Agreement, with appropriate insertions and attachments, reasonably
satisfactory in form and substance to the Administrative Agent.

(g) Proceedings of the Loan Parties. The Administrative Agent shall have
received a copy of the resolutions, in form and substance reasonably
satisfactory to the Administrative Agent, of the board of directors (or
analogous body) of each Loan Party authorizing (i) the execution, delivery and
performance of this Agreement and the Notes delivered on the New Lender
Effective Date and the other New Lender Documents, and the reaffirmations of the
applicable Loan Documents to which it is a party, and (ii) the reaffirmation by
it of the Liens created pursuant to the Account Control Agreement, certified by
the secretary or an assistant secretary of such Loan Party or, if applicable, of
the general partner or managing member or members of such Loan Party, as of the
New Lender Effective Date, which certification shall be in form and substance
reasonably satisfactory to the Administrative Agent and shall state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded.

(h) Incumbency Certificates. To the extent the following have been amended,
supplemented or otherwise modified since the Closing Date, the Administrative
Agent shall have received, with a counterpart for the New Lender, a certificate
of each Loan Party, dated as of the date hereof, as to the incumbency and
signature of the officers of such Loan Party executing any New Lender Document,
which certificate shall be included in the certificate delivered in respect of
such Loan Party pursuant to Section 4(c), shall be reasonably satisfactory in
form and substance to the Administrative Agent.

(i) Organizational Documents. To the extent the following have been amended,
supplemented or otherwise modified since the Closing Date, the Administrative
Agent shall have received, with a counterpart for the New Lender, true and
complete copies of the Governing Documents of each Loan Party, certified as of
the date hereof as complete and correct copies thereof by the secretary or an
assistant secretary of such Loan Party, which certification shall be included in
the certificate delivered in respect of such Loan Party pursuant to Section 3(c)
and shall be in form and substance reasonably satisfactory to the Administrative
Agent.

(j) Good Standing Certificates. The Administrative Agent shall have received,
with a copy for the New Lender, certificates dated as of a recent date from the
secretary of state or other appropriate authority, evidencing the good standing
of each Loan Party (i) in the jurisdiction of its organization or formation and
(ii) in each other jurisdiction where its ownership, lease or operation of
Property or the conduct of its business requires it to qualify as a foreign
Person except, as to this subclause (ii), where the failure to so qualify could
not reasonably be expected to have a Material Adverse Effect.

(k) Legal Opinions. The Administrative Agent shall have received, with a
counterpart for the New Lender, the executed legal opinion of counsel to the
Loan Parties, in form and substance reasonably satisfactory to the
Administrative Agent. The legal opinion shall cover such matters incident to the
transactions contemplated by this Agreement as the Administrative Agent and the
New Lender may reasonably require.

 

-2-

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(l) Fees. The Administrative Agent shall have received all fees and other
amounts (including, without limitation, pursuant to Section 10.5 of the Credit
Agreement) due and payable by the Borrower in connection with the effectiveness
of this Agreement.

(m) Representations and Warranties. Each of the representations and warranties
set forth in Section 3 hereof shall be true and correct.

(n) No Default, Event of Default or Trigger Event. No Default, Event of Default
or Trigger Event shall have occurred and be continuing or would result after
giving effect to such extension of Revolving Commitments.

3. Representations and Warranties. To induce the New Lender to enter into this
Agreement, the Borrower hereby represents and warrants that, before and after
giving effect to the extension of Revolving Commitments of such New Lender, the
representations and warranties contained in the Credit Agreement and the other
Loan Documents will be true and correct in all material respects as of the date
hereof, as if made on and as of such date.

4. Disclaimer. The New Lender acknowledges and agrees that neither the
Administrative Agent nor any Lender party to the Credit Agreement (i) has made
any representation or warranty and shall have no responsibility with respect to
any statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, any other Loan
Documents or any other instrument or document furnished pursuant thereto; or
(ii) has made any representation or warranty and shall have no responsibility
with respect to the financial condition of any Loan Party or any other obligor
or the performance or observance by any Loan Party or any obligor of any of such
Loan Party’s obligations under the Credit Agreement or any other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto. The
New Lender represents and warrants that it is legally authorized to enter into
this Agreement, and the New Lender (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements delivered
pursuant to Section 5.1(c) and Section 6.1 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Agreement; (ii) agrees that it will, independently
and without reliance upon the Lenders or the Administrative Agent 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 Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (iii) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are incidental thereto; and (iv) agrees that it will be bound by the
provisions of the Credit Agreement and will perform in accordance with its terms
all the obligations which by the terms of the Credit Agreement are required to
be performed by it as a Lender.

5. Miscellaneous.

(a) This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York.

 

-3-

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(b) This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same document. Delivery of an executed signature page of
this Agreement by facsimile transmission or electronic transmission (e.g., “pdf”
or “tif”) shall be effective as delivery of a manually executed counterpart
hereof.

(c) This Agreement contains the entire understanding of the parties relating to
the matters contemplated hereby, superseding all prior agreements or
understandings with respect thereto.

 

-4-

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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be
executed and delivered by a duly authorized officer on the date first above
written.

 

[INSERT NAME OF NEW LENDER] By:  

 

  Name:   Title: Accepted and agreed to as of the date first written above:
EXTENDED STAY AMERICA, INC.,

as Borrower

By:  

 

  Name:   Title: Acknowledged as of the date first written above: JPMORGAN CHASE
BANK, N.A.

as Administrative Agent

By:  

 

  Name:   Title: Consented to as of the date first written above: [ISSUING
LENDER]

as the Issuing Lender

By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

[SWINGLINE LENDER]

as the Swingline Lender

By:  

 

  Name:   Title:

 

-2-

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EXHIBIT I

FORM OF ACCOUNT CONTROL AGREEMENT

--------------------------------------------------------------------------------

Blocked Account Control

   Agreement (“Lending Control”)  |  JPMORGAN CHASE BANK, N.A.      

 

 

 

V1.4_0410

 

  

AGREEMENT dated as of November 18, 2013, by and among Extended Stay America,
Inc. (“Company”), JPMorgan Chase Bank, N.A., as administrative agent under the
Credit Agreement (as defined below) (“Agent”), and JPMorgan Chase Bank, N.A.
(“Depositary”).

The parties hereto refer to Account No. 517611310 in the name of Company
maintained at Depositary (the “Account”) and hereby agree as follows:

 

1. Company and Agent are party to that certain Credit Agreement, dated as of the
date hereof (as amended, restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), by and among Company, as borrower, the lenders
from time to time party thereto and Agent, as administrative agent. As
collateral security for the prompt and complete payment and performance when due
by Company of each of its obligations under the Credit Agreement and the other
Loan Documents (as defined in the Credit Agreement), Company hereby grants to
Agent, for the ratable benefit of the lenders, issuing lender and swingline
lender under the Credit Agreement and Agent, a security interest in the Account,
all funds on deposit from time to time therein and all proceeds and products of
the foregoing. Depositary hereby acknowledges being so notified of such security
interest.

 

2. Depositary shall honor only withdrawal, payment, transfer or other fund
disposition or other instructions which the Company would be entitled to give
under the Account Documentation (as hereinafter defined) save for the provisions
of this Agreement (collectively, “instructions”) received from the Agent
(without Company’s consent) concerning the Account. The Company shall have no
right to issue instructions or any other right or ability to access or withdraw
or transfer funds from the Account.

Agent hereby agrees with Company that Agent shall provide instructions to
Depositary at the request of Company at any time neither (i) a Trigger Event (as
defined in the Credit Agreement) has occurred and is continuing nor (ii) an
Event of Default (as defined in the Credit Agreement) has occurred and is
continuing. Agent and Company hereby agree that the foregoing sentence creates
rights and obligations and liabilities solely and exclusively between the two of
them and that Depositary’s duties and responsibilities under this Agreement
(including without limitation with respect to any instruction given to
Depositary by Agent) are determined without any reference whatsoever to the
foregoing sentence, any knowledge the Depositary may have or be deemed to have
of the existence thereof or any claim by Company or Agent that the Depositary
must take such sentence into account.

 

3. This Agreement supplements, rather than replaces, Depositary’s deposit
account agreement, terms and conditions and other standard documentation in
effect from time to time with respect to the Account or services provided in
connection with the Account (the “Account Documentation”), which Account
Documentation will continue to apply to the Account and such services, and the
respective rights, powers, duties, obligations, liabilities and responsibilities
of the parties thereto and hereto, to the extent not expressly conflicting with
the provisions of this Agreement (however, in the event of any such conflict,
the provisions of this Agreement shall control). Prior to issuing any
instructions, Agent shall provide Depositary with such documentation as
Depositary may reasonably request to establish the identity and authority of the
individuals issuing instructions on behalf of Agent. Agent may request the
Depositary to provide other services (such as automatic daily transfers) with
respect to the Account; however, if such services are not authorized or
otherwise covered under the Account Documentation, Depositary’s decision to
provide any such services shall be made in its sole discretion (including
without limitation being subject to Company and/or Agent executing such Account
Documentation or other documentation as Depositary may require in connection
therewith).

 

4. Depositary agrees not to exercise or claim any right of offset, banker’s lien
or other like right against the Account for so long as this Agreement is in
effect except with respect to (i) returned or charged-back items, reversals or
cancellations of payment orders and other electronic fund transfers or other
corrections or adjustments to the Account or transactions therein,
(ii) overdrafts in the Account or (iii) Depositary’s charges, fees and expenses
with respect to the Account or the services provided hereunder.

 

5. Notwithstanding anything to the contrary in this Agreement: (i) Depositary
shall have only the duties and responsibilities with respect to the matters set
forth herein as is expressly set forth in writing herein and shall not be deemed
to be an agent, bailee or fiduciary for any party hereto; (ii) Depositary shall
be fully protected in acting or refraining from acting in good faith without
investigation on any notice, instruction or request purportedly furnished to it
by Company or Agent in accordance with the terms hereof, in which case the
parties hereto agree that Depositary has no duty to make any further inquiry
whatsoever; (iii) it is hereby acknowledged and agreed that Depositary has no
knowledge of (and is not required to know) the terms and provisions of the
separate agreement referred to in paragraph 1 above or any other related
documentation or whether any actions by Agent, Company or any other person or
entity are permitted or a breach thereunder or consistent or inconsistent
therewith, (iv) Depositary shall not be liable to any party hereto or any other
person for any action or failure to act under or in connection with this
Agreement except to the extent such conduct constitutes its own willful
misconduct or gross negligence (and to the maximum extent permitted by law,
shall under no circumstances be liable for any incidental, indirect, special,
consequential or punitive damages); and (v) Depositary shall not be liable for
losses or delays caused by force majeure, interruption or malfunction of
computer, transmission or communications facilities, labor difficulties, court
order or decree, the commencement of bankruptcy or other similar proceedings or
other matters beyond Depositary’s reasonable control.

 

6. Company hereby agrees to indemnify, defend and save harmless Depositary
against any loss, liability or expense (including reasonable fees and
disbursements of counsel who may be an employee of Depositary) (collectively,
“Covered Items”) incurred in connection with this Agreement or the Account
(except to the extent due to Depositary’s willful misconduct or gross
negligence) or any interpleader proceeding relating thereto or incurred as a
result of following Company’s direction or instruction. Agent hereby agrees to
indemnify, defend and save harmless Depositary against any Covered Items
incurred (i) in connection with this Agreement or the Account (except to the
extent due to Depositary’s willful misconduct or gross negligence) or any
interpleader proceeding related thereto, (ii) as a result of following Agent’s
direction or instruction or (iii) due to any claim by Agent of an interest in
the Account or the funds on deposit therein.

--------------------------------------------------------------------------------

7. Depositary may terminate this Agreement (i) in its discretion upon the
sending of at least thirty (30) days’ advance written notice to the other
parties hereto or (ii) because of a material breach by Company or Agent of any
of the terms of this Agreement or the Account Documentation, upon the sending of
at least five (5) days advance written notice to the other parties hereto. Agent
may terminate this Agreement in its discretion upon the sending of at least
three (3) days advance written notice to the other parties hereto, provided that
Depositary may shorten or waive the requirement that Agent’s notice be in
advance and any such shortening or waiver shall be binding on all parties. Any
other termination or any amendment or waiver of this Agreement shall be effected
solely by an instrument in writing executed by all the parties hereto. The
provisions of paragraphs 5 and 6 above shall survive any such termination.

 

8. Company shall compensate Depositary for the opening and administration of the
Account and services provided hereunder in accordance with Depositary’s fee
schedules from time to time in effect. Payment will be effected by a direct
debit to the Account.

 

9. This Agreement: (i) may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument; (ii) shall become effective when
counterparts hereof have been signed by the parties hereto; and (iii) shall be
governed by and construed in accordance with the laws of the State of New York.
All parties hereby waive all rights to a trial by jury in any action or
proceeding relating to the Account or this Agreement. All notices under this
Agreement shall be in writing and sent (including via emailed pdf or similar
file or facsimile transmission) to the parties hereto at their respective
addresses, email address or fax numbers set forth below (or to such other
address, email address or fax number as any such party shall designate in
writing to the other parties from time to time). Regardless of any provision in
any other agreement, the State of New York shall be deemed to be the
Depositary’s “jurisdiction” for purposes of Section 9-304 of the State of New
York Uniform Commercial Code.

[Signature Pages Follow]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above written.

 

EXTENDED STAY AMERICA, INC., as Company   JPMORGAN CHASE BANK, N.A., as Agent
By:   LOGO [g631451ex10_2pg231.jpg]   Date:   By:     Date: Name:   Peter J.
Crage     Name:     Title:   Chief Financial Officer     Title:     Address for
Notices:   Address for Notices: Fax No.:   Fax No.: Email Address:   Email
Address: JPMORGAN CHASE BANK, N.A., as Depositary       By:     Date:      
Name:           Title:          

 

Address For Termination Notices:

  Address for Instructions and other Notices: JPMorgan Chase Bank, N.A.  
JPMorgan Chase Bank, N.A. Global TS Contracts & Documentation   Attn: Susan M
Vijil Attn: Blocked Accounts   1 Chase Manhattan Plaza, Floor 58 420 W Van Buren
Street, 9th floor Suite IL1-0199   New York, NY 10005-1401 Chicago, IL
60606-3534   Email: susan.m.vijil@jpmorgan.com Email:
blocked.account.contracts@jpmchase.com   Fax No.: 312.954.3516  

 

[Signature Page to Blocked Account Control Agreement (JPM)]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above written.

 

EXTENDED STAY AMERICA, INC., as Company   JPMORGAN CHASE BANK, N.A., as Agent
By:     Date:   By:   LOGO [g631451ex10_2pg232.jpg]   Date: 11/13/13 Name:      
Name:   Kimberly L. Turner   Title:       Title:   Executive Director   Address
for Notices:  

Address for Notices:  383 Madison Avenue, 24th Floor

                                    New York, New York 10179

Fax No.:   Fax No.: (212) 270-2157 Email Address:   Email Address:
turner_kimberly@jpmorgan.com JPMORGAN CHASE BANK, N.A., as Depositary       By:
    Date:       Name:           Title:          

 

Address For Termination Notices:   Address for Instructions and other Notices:
JPMorgan Chase Bank, N.A.   JPMorgan Chase Bank, N.A. Global TS Contracts &
Documentation   Attn: Susan M Vijil Attn: Blocked Accounts   1 Chase Manhattan
Plaza, Floor 58 420 W Van Buren Street, 9th floor Suite IL1-0199   New York, NY
10005-1401 Chicago, IL 60606-3534   Email: susan.m.vijil@jpmorgan.com Email:
blocked.account.contracts@jpmchase.com   Fax No.: 312.954.3516  

 

[Signature Page to Blocked Account Control Agreement (JPM)]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above written.

 

EXTENDED STAY AMERICA, INC., as Company   JPMORGAN CHASE BANK, N.A., as Agent
By:     Date:   By:     Date: Name:       Name:   Kimberly L. Turner   Title:  
    Title:   Executive Director   Address for Notices:  

Address for Notices:  383 Madison Avenue, 24th Floor

                                    New York, New York 10179

Fax No.:   Fax No.: (212) 270-2157 Email Address:   Email Address:
turner_kimberly@jpmorgan.com JPMORGAN CHASE BANK, N.A., as Depositary       By:
  LOGO [g631451ex10_2pg233.jpg]   Date: 11-15-13       Name:   Bethany L. Peyer
        Title:   Associate        

 

Address For Termination Notices:   Address for Instructions and other Notices:
JPMorgan Chase Bank, N.A.   JPMorgan Chase Bank, N.A. Global TS Contracts &
Documentation   Attn: Susan M Vijil Attn: Blocked Accounts   1 Chase Manhattan
Plaza, Floor 58 420 W Van Buren Street, 9th floor Suite IL1-0199   New York, NY
10005-1401 Chicago, IL 60606-3534   Email: susan.m.vijil@jpmorgan.com Email:
blocked.account.contracts@jpmchase.com   Fax No.: 312.954.3516  

 

[Signature Page to Blocked Account Control Agreement (JPM)]

--------------------------------------------------------------------------------

EXHIBIT J

FORM OF CONDITIONAL ACCOUNT CONTROL AGREEMENT

--------------------------------------------------------------------------------

(Account – With Multiple Activation)

DEPOSIT ACCOUNT CONTROL AGREEMENT

 

 

This Deposit Account Control Agreement (the “Agreement”) is entered into as of
November 18, 2013, among Extended Stay America, Inc. (“Company”), JPMorgan Chase
Bank, N.A., as administrative agent under the Credit Agreement (as defined
below) (“Agent”) and Bank of America, N.A. (“Bank”) with respect to the
following:

RECITALS:

A. Bank has agreed to establish and maintain for Company certain deposit
account(s) identified as number(s) 4427809495 (referred to individually and
collectively, as the “Account”).

B. Company and Agent are party to that certain Credit Agreement, dated as of the
date hereof (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), by and among Company, as
borrower, the lenders from time to time party thereto and Agent, as
administrative agent.

C. Company and Agent are party to that certain Security Agreement, dated as of
the date hereof (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Security Agreement”), by and between Company,
as borrower, and Agent, as administrative agent.

D. Pursuant to the Security Agreement, Company has assigned to Agent a security
interest in the Account and in any checks, automated clearinghouse (“ACH”)
transfers, wire transfers, instruments and other payment items (collectively,
“Funds”) deposited in the Account.

E. Company and Agent have requested Bank to enter into this Agreement to
evidence Agent’s security interest in the Account and to provide for the
disposition of the Funds deposited in the Account.

F. Bank is willing to enter into this Agreement for the benefit of Company and
Agent pursuant to the terms to and conditions set forth herein.

Accordingly, Company, Agent and Bank agree as follows:

1. Agent’s Control over the Account.

(a) This Agreement evidences Agent’s control over the Account. Notwithstanding
any contrary duties owed by Bank to the Company under any other deposit account
agreements, terms and conditions or other documentation entered into by and
between Bank and the Company governing the Account and any cash management or
similar services provided by Bank or an

--------------------------------------------------------------------------------

affiliate of Bank in connection with the Account, including without limitation,
services in connection with any “Lockbox”, as defined below (collectively, the
“Account Related Agreements”), Bank will comply with instructions originated by
Agent as set forth herein directing the disposition of Funds in the Account
without further consent of the Company. Bank may follow such instructions even
if doing so results in the dishonoring by Bank of items presented for payment
from the Account or Bank otherwise not complying with any instruction from
Company directing the disposition of any Funds in the Account.

(b) Company represents and warrants to Agent and Bank that it has not assigned
or granted a security interest in the Account or any Funds deposited in the
Account, except to Agent and Bank.

(c) Company will not permit any Account to become subject to any other pledge,
assignment, lien, charge or encumbrance of any kind (“Charges”), other than
Agent’s security interest referred to herein, Bank’s setoffs and the Charges
permitted hereinafter.

(d) Company covenants to Agent that it will not close the Account prior to the
termination of this Agreement. Bank shall have no liability in the event Company
breaches this covenant to Agent.

2. Company Access to the Account. Except as otherwise provided in this Section 2
of the Agreement, prior to an “Activation Effective Time” (as defined below)
Bank may honor withdrawal, payment, transfer, or other instructions originated
by the Company concerning the disposition of Funds in the Account (collectively,
“Company Instructions”). On and after each Activation Effective Time until
termination of such Activation Effective Time as provided in Section 3, Bank
shall only honor instructions originated by Agent concerning the disposition of
Funds in the Account (“Agent Instructions”) without further consent from the
Company and Company shall have no right or ability to access, withdraw or
transfer Funds from the Account. Except as provided herein, no Agent Instruction
may be rescinded or modified without Bank’s consent, except Agent may terminate
the Activation Effective Time as provided in this Agreement. Both Agent and
Company acknowledge that Bank may, without liability, (i) comply with any
Company Instruction or otherwise complete a transaction involving the Account
that Bank or an affiliate had started to process before an Activation Effective
Time and (ii) commence to solely honor Agent’s Instructions at any time or from
time to time after Bank becomes aware that Agent has sent to Bank the Activation
Notice (as defined below) even if prior to an Activation Effective Time
(including without limitation halting, reversing or redirection of any
transaction), which actions (under (i) and/or (ii)) shall not, in any way,
affect the commencement of an Activation Effective Time. The Account may receive
merchant card deposits and chargebacks. Company acknowledges and agrees that
upon commencement of the Activation Effective Time, chargebacks may be blocked
from debiting the Account.

For purposes hereof, and notwithstanding anything to the contrary in this
agreement, each “Activation Effective Time” shall commence upon the opening of
business on the second Banking Day (as defined below) following the Banking Day
on which a notice purporting to be signed by Agent in substantially the form of
Exhibit A-1 and sent to the location of Bank to which Agent is required
hereunder to send the Activation Notice, with a copy of this Agreement attached
(an “Activation Notice”) is received by the Bank; provided, however, that if
such Activation Notice is

--------------------------------------------------------------------------------

received on any day after 12:00 noon, eastern time, such Activation Notice shall
be deemed to have been received on the next Banking Day. A “Banking Day” is any
day other than a Saturday, Sunday or other day on which Bank is or is authorized
or required by law to be closed.

Within a reasonable time, after commencement of each Activation Effective Time
and continuing on each Banking Day thereafter, Bank shall wire transfer all
immediately available Funds (other than the Retained Balance provided in
Section 15(i) below) in the Account to the account specified by Agent in the
Activation Notice. In the event Agent requests in writing a change to the wire
transfer instructions provided to Bank in the Activation Notice by sending a
written notice in substantially the form of Exhibit B and sent to the location
of Bank to which Agent is required hereunder to send the Activation Notice to
Bank to the location set forth hereunder, any such change requested by Agent
shall commence no later than the opening of business on the second Banking Day
following the Banking Day on which such notice is received by the Bank;
provided, however, that if such notice is received on any day after 12:00 noon,
eastern time, such notice shall be deemed to have been received on the next
Banking Day. Funds are not available if (i) they are not available pursuant to
Bank’s funds availability policy as set forth in the Account Related Agreements
or (ii) in the reasonable determination of Bank, (A) they are subject to hold,
dispute or a binding order, judgment, decree or injunction or a garnishment,
restraining notice or other legal process directing or prohibiting or otherwise
restricting, the disposition of the Funds in the Account or (B) the transfer of
such Funds would result in Bank failing to comply with a statute, rule or
regulation.

3. Multiple Agent Activations Permitted. Agent shall be entitled to send no more
than three separate Activation Notices to the Bank. After a “Termination
Effective Time” as defined below and prior to commencement of a subsequent
Activation Effective Time, Company may operate and transact business through the
Account in its normal fashion, including issuing Company Instructions to the
Bank. Each of the three Activation Effective Times shall commence as described
in Section 2 of this Agreement and until the termination of each such Activation
Effective Time, Bank shall only honor Agent Instructions. Each Activation
Effective Time may be terminated by Agent by sending Bank a notice of
termination (the “Activation Termination Notice”) in the form of Exhibit A-2.
Each termination shall become effective on the Termination Effective Time. The
third and final Activation Effective Time will terminate concurrently with the
termination of the Agreement in accordance with the terms of Section 13. Each
“Termination Effective Time” shall commence upon the opening of business on the
second Banking Day (as defined below) following the Banking Day on which an
Activation Termination Notice purporting to be signed by Agent in substantially
the form of Exhibit A-2, is received by the Bank; provided, however, that if
such notice is received on any day after 12:00 noon, eastern time, such notice
shall be deemed to have been received on the next Banking Day. The Bank shall
have a reasonable after the Termination Effective Time to halt further transfers
from the Account to the account specified by Agent in the Activation Effective
Notice.

4. Returned Items. Agent and Company understand and agree that the face amount
(“Returned Item Amount”) of each Returned Item (as defined herein) may be paid
by Bank debiting the Account to which the Returned Item was originally credited,
without prior notice to Agent or Company. As used in this Agreement, the term
“Returned Item” means (i) any item deposited to an Account and returned unpaid
or otherwise uncollected, whether for insufficient funds or for any other
reason, and without regard to timeliness of the return or the occurrence or
timeliness of any

--------------------------------------------------------------------------------

drawee’s notice of non-payment; (ii) any item subject to, a claim against Bank
of breach of transfer or presentment warranty under the Uniform Commercial Code
(as adopted in the applicable state), Regulation CC (12 C.F.R. §229), clearing
house operating rules or NACHA as in effect from time to time; (iii) any ACH
entry credited to the Account and returned unpaid or subject to an adjustment
entry under applicable clearing house rules, whether for insufficient funds or
for any other reason, and without regard to timeliness of the return or
adjustment; (iv) any credit to the Account from a merchant card transaction,
against which a contractual demand for chargeback has been made; and (v) any
credit to the Account made in error and any other adjustments including those
due to encoding errors or other items posted to the account in error.

5. Settlement Items. Agent and Company understand and agree that Bank may pay
the face amount (“Settlement Item Amount”) of each Settlement Item (as defined
herein) by debiting the applicable Account, without prior notice to Agent or
Company. As used in this Agreement, the term “Settlement Item” means (i) each
check or other payment order drawn on or payable against any controlled
disbursement account, a Controlled Balance Account (as defined below) or other
deposit account at any time linked to any Account by a controlled balance
arrangement (each a “Linked Account”), which Bank takes for deposit or value,
cashes or exchanges for a cashier’s check or official check in the ordinary
course of business prior to an Activation Effective Time and which is presented
for settlement against the Account (after having been presented against the
Linked Account) during an Activation Effective Time, (ii) each check or other
payment order drawn on or payable against an Account, which, prior to an
Activation Effective Time, Bank takes for deposit or value, assures payment
pursuant to a banker’s acceptance, cashes or exchanges for a cashier’s check or
official check in the ordinary course of business after Bank’s cutoff time for
posting, (iii) each ACH credit entry initiated by Bank, as originating
depository financial institution, on behalf of Company, as originator, prior to
an Activation Effective Time, which ACH credit entry settles during an
Activation Effective Time, and (iv) any other payment order drawn on or payable
against an Account, which Bank has paid or funded prior to an Activation
Effective Time, and which is first presented for settlement against the Account
in the ordinary course of business during an Activation Effective Time. Company
and Agent acknowledge and agree that if there are Linked Accounts not subject to
this Agreement, that upon commencement of an Activation Effective Time any such
Linked Accounts will be de-linked and will no longer transfer balances to or
from the Account. “Controlled Balance Account” is a deposit account that is
linked to one or more other deposit accounts in order to allow transfers to be
made between such accounts on an automated basis, pursuant to the Company’s
instructions, in order to maintain a specified balance in one or more of the
Linked Accounts, including, without limitation, zero balance arrangements where
transfers are made to a subaccount from a master account or from a subaccount to
a master account at the end of each Banking Day in order to maintain a zero
balance in such subaccount at the end of such Banking Day.

6. Account Related Agreements. This Agreement supplements, rather than replaces,
the Account Related Agreements. The Account Related Agreements will continue to
apply to the Account and cash management or similar services provided by Bank or
any affiliate of Bank in connection with the Account to the extent not directly
in conflict with the provisions of this Agreement (provided, however, that in
the event of any such conflict, the provisions of this Agreement shall control).

--------------------------------------------------------------------------------

7. Lockboxes. To the extent that any Funds to be deposited to the Account have
been received in one or more post office lockboxes maintained for Company by
Bank (each a “Lockbox”) and have been or will be processed by Bank for deposit
to the Account in accordance with the terms of the applicable Account Related
Agreement (the “Remittances”), Company acknowledges that Company has granted to
Agent a security interest in all Remittances. Company agrees that after Bank
receives the Activation Notice, Company will not instruct Bank regarding the
receipt, processing or deposit of Remittances nor will it attempt to change or
redirect the items deposited in the Lockbox. Company and Agent acknowledge and
agree that Bank’s operation of each Lockbox, and the receipt, retrieval,
processing and deposit of Remittances, will at all times be governed by Bank’s
Account Related Agreements.

8. Bank Subordination and Permitted Debits. Bank agrees that, during any
Activation Effective Time, Bank shall not offset, charge, deduct, debit or
otherwise withdraw funds from the Account, except as permitted by this
Section 8, until Bank has been advised in writing by Agent that this Agreement
has been terminated. Agent shall notify Bank promptly in writing upon payment in
full of Company’s obligations by means of a Termination Notice (defined below).

During any Activation Effective Time, Bank is permitted to debit the Account
for:

(a) Bank’s fees and charges relating to the Account or associated with this
Agreement and any other charges, fees, expenses, payments and other amounts for
treasury management services or card services provided by Bank to the Company in
connection with the Account or the Lockboxes, including, without limitation,
funds transfer (origination or receipt), trade, merchant card, lockbox, stop
payment, positive pay, automatic investment, imaging, and information services
(collectively “Bank Fees”);

(b) any Returned Item Amounts;

(c) any Settlement Item Amounts; and

(d) chargebacks regarding merchant card deposits and debits related to cash
vault coin and currency requests (“Permitted Debits”).

Bank’s right to debit the Account under this Section 8 shall exist
notwithstanding any obligation of the Company or Agent to reimburse or indemnify
Bank.

9. Company and Agent Responsibilities.

(a) If the balances in the Account are not sufficient to compensate Bank for any
Bank Fees, Company agrees to pay Bank on demand the amount due Bank. If Company
fails to so pay Bank and such Bank Fees are incurred during an Activation
Effective Time, Agent agrees to pay Bank within five (5) Banking Days after
Bank’s demand to Agent with respect to such Bank Fees. The failure of Company or
Agent to so pay Bank shall constitute a breach of this Agreement.

(b) If the balances in the Account are not sufficient to compensate Bank for any
Returned Item Amounts or Settlement Item Amounts, Company agrees to pay Bank on
demand the amount due Bank. If Company fails to so pay Bank immediately upon
demand and such Returned Item Amounts of Settlement Item Amounts are incurred
during an Activation Effective Time,

--------------------------------------------------------------------------------

Agent agrees to pay Bank the amount due within five (5) Banking Days after
Bank’s demand to Agent to pay such amount up to any amount transferred to an
account designated by Agent. The failure by Company or Agent to so pay Bank
shall constitute a breach of this Agreement.

(c) Bank is authorized, without prior notice and without regard to the
Activation Notice under this Agreement or any other control agreement with
Agent, from time to time to debit any other account Company may have with Bank
for the amount or amounts due Bank under this Agreement or any other Account
Related Agreement.

(d) At the request of Bank, Company agrees to provide Bank with annual
company-prepared financial statements within 120 days of year-end, to Bank’s
address set forth below.

10. Bank Statements. Upon written request by Agent, in addition to the original
Bank statement for the Account provided to Company, Bank will provide Agent with
a duplicate of such statement.

11. Bank’s Responsibility/Limitation of Liability.

(a) Bank will not be liable to Company or Agent for any expense, claim, loss,
damage or cost (“Damages”) arising out of or relating to its performance or
failure to perform under this Agreement other than those Damages to the extent
resulting directly from Bank’s acts or omissions constituting gross negligence
or intentional misconduct as determined in a court of competent jurisdiction in
a final non-appealable order. Bank’s obligations hereunder shall be that of a
depository bank, and nothing in this Agreement shall create custodial or bailee
obligations. (b) In no event will Bank or Agent be liable for any special,
indirect, exemplary, punitive or consequential damages, including but not
limited to lost profits.

(c) Bank will be excused from any failure to act or delay in acting, and no such
failure or delay shall constitute a breach of this Agreement or otherwise give
rise to any liability of Bank, if (i) such failure or delay is caused by
circumstances beyond Bank’s reasonable control, including but not limited to
legal constraint, emergency conditions, action or inaction of governmental,
civil or military authority, fire, strike, lockout or other labor dispute, war,
riot, theft, acts of terrorism, flood, earthquake or other natural disaster,
breakdown of public or private or common carrier communications or transmission
facilities, equipment failure, or negligence or default of Company or Agent or
(ii) such failure or delay resulted from Bank’s reasonable belief that the
action would have violated any of Bank’s guidelines or policies, or rule or
regulation of any governmental authority.

(d) Bank shall have no duty to inquire or determine whether Company’s
obligations to Agent are in default or whether Agent is entitled to provide the
Activation Notice or any Agent Instructions to Bank. Bank may rely on notices
and communications it believes in good faith to be genuine and given by the
appropriate party. Bank may accept, acknowledge or act upon any notice,
instructions or other directions hereunder that contain minor mistakes or other
irregularities, including notices that fail to attach an accurate copy of this
Agreement.

--------------------------------------------------------------------------------

(e) Notwithstanding any of the other provisions in this Agreement, in the event
of the commencement of a case pursuant to Title 11, United States Code, filed by
or against Company, or in the event of the commencement of any similar case
under then applicable federal or state law providing for the relief of debtors
or the protection of creditors by or against Company, Bank may act as Bank deems
reasonably necessary to comply with all applicable provisions of governing
statutes and shall not be in violation of this Agreement as a result.

(f) Bank shall be permitted to comply with any writ, levy, order or other
similar judicial or regulatory order or process concerning the Account or any
Funds and shall not be in violation of this Agreement for so doing.

12. Indemnities.

(a) Company shall indemnify, defend and hold harmless Bank against all
liabilities, expense, claim, loss, damage or cost of any nature (including but
not limited to allocated costs of in-house legal services and other reasonable
attorney’s fees) and any other fees and expenses, whether to Bank or to third
parties (“Losses”) in any way arising out of or relating to this Agreement,
including all costs of settlement of claims. This section does not apply to any
Losses to the extent directly attributable to gross negligence or intentional
misconduct of Bank as determined by a court of competent jurisdiction in a final
non-appealable order.

(b) To the extent such obligations of indemnity are not satisfied by Company
within five (5) Banking Days after demand on Company by Bank, Agent shall
indemnify, defend and hold harmless Bank against all Losses Bank may suffer or
incur as a result of following any instructions received from Agent pursuant to
the Activation Notice other than Losses to the extent directly attributable to
Bank’s gross negligence or intentional misconduct as determined by a court of
competent jurisdiction in a final non-appealable order.

(c) Company shall pay to Bank, upon receipt of Bank’s invoice, all costs,
expenses and attorneys’ fees (including allocated costs for in-house legal
services) incurred by Bank in connection with the enforcement of this Agreement
or any related instrument or agreement, including but not limited to any costs,
expenses and fees arising out of the resolution of any conflict, dispute, motion
regarding entitlement to rights or rights of action, or other action relating to
Bank’s rights or obligations in a case arising under Title 11, United States
Code. Company agrees to pay Bank, upon receipt of Bank’s invoice, all costs,
expenses and attorneys’ fees (including allocated costs for in-house legal
services) incurred by Bank in the preparation and administration of this
Agreement or any related instrument or agreement (including any amendments
thereto).

13. Termination and Assignment of this Agreement.

(a) Agent may terminate this Agreement by providing notice substantially in the
form of Exhibit C (“Termination Notice”) together with a copy of this Agreement
to Company and Bank, provided that Bank shall have a reasonable time to act on
such termination. Agent may assign this Agreement by providing 10 days’ prior
written notice of such assignment together with a copy of this Agreement to
Company and Bank. Bank may terminate this Agreement upon 30 days’ prior written
notice to Company and Agent. Company may not terminate this Agreement except
with the written consent of Agent and upon prior written notice to Bank.

--------------------------------------------------------------------------------

(b) Notwithstanding subsection 13(a), Bank may terminate this Agreement at any
time by written notice to Company and Agent if either Company or Agent breaches
any of the terms of this Agreement, provided that, all Funds will be sent via
wire transfer to an another account of the Company specified (i) at any time
other than during an Activation Effective Time, jointly by the Agent and the
Company or (ii) during an Activation Effective Time, by the Agent.

(c) Sections 9, 11 and 12 shall survive any termination of this Agreement;
provided that Agent’s reimbursement obligations under Sections 9, 11 shall
terminate on the date which is one hundred twenty (120) days after the date of
termination of this Agreement, except with respect to claims made by Bank prior
to expiration of such one hundred twenty (120) day period.

14. Representations and Warranties.

(a) Each party represents and warrants to the other parties that (i) this
Agreement constitutes its duly authorized, legal, valid, binding and enforceable
obligation; (ii) the performance of its obligations under this Agreement and the
consummation of the transactions contemplated hereunder will not (A) constitute
or result in a breach of its certificate or articles of incorporation, by-laws
or partnership agreement, as applicable, or the provisions of any material
contract to which it is a party or by which it is bound or (B) result in the
violation of any law, regulation, judgment, decree or governmental order
applicable to it; and (iii) all approvals and authorizations required to permit
the execution, delivery, performance and consummation of this Agreement and the
transactions contemplated hereunder have been obtained.

(b) Company agrees that it shall be deemed to make and renew each representation
and warranty in subsection 14(a) on and as of each day on which Company uses the
services set forth in this Agreement. Agent agrees it shall be deemed to make
and renew each representation and warranty in subsection 14(a) upon sending the
Activation Notice or sending any Agent’s Instructions to Bank.

15. Miscellaneous.

(a) This Agreement may be amended only by a writing signed by Company, Agent and
Bank; except that Bank Fees are subject to change by Bank upon 30 days’ prior
written notice to Company.

(b) This Agreement may be executed in counterparts; all such counterparts shall
constitute but one and the same agreement. This Agreement shall become effective
when it shall have been executed by Bank and when Bank shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto. Delivery of an executed counterpart of a signature
page of this Agreement by telecopy or other electronic imaging means shall be
effective as delivery of a manually executed counterpart of this Agreement.

(c) This Agreement controls in the event of any conflict between this Agreement
and any other document or written or oral statement. This Agreement supersedes
all prior understandings, writings, proposals, representations and
communications, oral or written, of any party relating to the subject matter
hereof.

--------------------------------------------------------------------------------

(d) This Agreement shall be interpreted in accordance with New York law, without
reference to that state’s conflict of law principles.

(e) Any written notice or other written communication to be given under this
Agreement shall be addressed or faxed to each party at its address or fax number
set forth on the signature page of this Agreement or to such other address or
fax numbers a party may specify in writing in accordance with this Section 15.
Except as otherwise expressly provided herein, any such notice sent via (i) mail
or overnight courier shall be effective upon receipt or (ii) fax transmission
shall be effective upon successful transmission thereof, provided such notice is
also sent via overnight courier.

(f) Nothing contained in the Agreement shall create any agency, fiduciary, joint
venture or partnership relationship among any of Bank, Company or Agent, and
nothing in this Agreement shall create custodial or bailee obligations of Bank
to any party. Company and Agent agree that nothing contained in this Agreement,
nor any course of dealing among the parties to this Agreement, shall constitute
a commitment or other obligation on the part of Bank to extend credit or
services to Company or Agent.

(g) Each party hereto intentionally, knowingly and voluntarily irrevocably
waives any right to trial by jury in any proceeding related to this Agreement.

(h) The Bank hereby confirms and agrees that the Account is a demand deposit
account maintained by Company with Bank in Bank’s ordinary course of business,
that the Bank is a national banking association and that the Bank’s
“jurisdiction” shall be deemed to be New York for the purposes of Section 9-304
of the Uniform Commercial Code of the State of New York.

(i) During the term hereof, there shall remain at all times a Retained Balance
of $25,000.00 in the Account for the benefit of Bank to pay amounts owed, if
any, to bank under Sections 8, 9 11, and 12.

The remainder of this page is intentionally left blank.

--------------------------------------------------------------------------------

In Witness Whereof, the parties hereto have executed this Agreement by their
duly authorized officers as of the day and year first above written.

 

Extended Stay America, Inc.

(“Company”)

    By:   LOGO [g631451ex10_2pg244.jpg]    

Address for notices:

11525 N. Community House Road

Suite 100

Charlotte, NC 28277

Name:   Peter J. Crage     Title:   Chief Financial Officer    

 

[Signature Page to Deposit Account Control Agreement–Extended Stay America, Inc.
Controlled Account]

--------------------------------------------------------------------------------

JPMorgan Chase Bank, N.A. (“Agent”)    

By:

  LOGO [g631451ex10_2pg245.jpg]     Address for notices:

Name:

  Kimberly L. Turner    

Title:

  Executive Director     JPMorgan Chase Bank, N.A.       500 Stanton Christiana
Road, Ops. 2, Floor 03       Newark, Delaware 19713-2107       Primary
Operations Contact:       Brittany Duffy       Telephone No.: (302) 634-8814    
  Facsimile No.: (302) 634-4733       Email: brittany.duffy@jpmorgan.com      
Secondary Operations Contact:       John Enyam       Telephone No.: (302)
634-8833       Facsimile No.: (302) 634-4733       Email:
john.enyam@jpmorgan.com       with a copy to:       383 Madison Avenue, 24th
Floor       New York, New York 10179       Attention: Kimberly Turner      
Facsimile No.: (212) 270-2157       and a copy to:       Cadwalader, Wickersham
& Taft LLP       One World Financial Center       New York, New York 10281      
Attention: William P. McInerney, Esq.       Facsimile No.: (212) 504-6666

 

[Signature Page to Deposit Account Control Agreement–Extended Stay America, Inc.
Controlled Account]

--------------------------------------------------------------------------------

Bank of America, N.A. (“Bank”)     By:   LOGO [g631451ex10_2pg246.jpg]    
Address for notices:  

 

    Name:   Christopher L Weyrick     Bank of America. N.A.  

 

    Title:   Associate     2001 Clayton Road, Building B  

 

          Concord, CA 94520-2425       Attn: Blocked Account Support       Mail
Code: CA4-702-02-37       Telephone: 925.681.6165       Facsimile: 877.207.2524

 

[Signature Page to Deposit Account Control Agreement–Extended Stay America, Inc.
Controlled Account]

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EXHIBIT A-1

DEPOSIT ACCOUNT CONTROL AGREEMENT

[First] [Second] [Third and Final] Activation Notice

[Letterhead of Agent]

 

To:   Bank of America, N.A.  

[Address]

    Re:    Extended Stay America, Inc.        Account No. 4427809495

Ladies and Gentlemen:

Reference is made to the Deposit Account Control Agreement dated November 18,
2013 (the “Agreement”) among Extended Stay America, Inc., us and you regarding
the above-described account (the “Account”), a copy of which is attached hereto.
In accordance with Section 2 of the Agreement, we hereby give you notice of our
[first] [second] [third and final] exercise of control of the Account and we
hereby instruct you to transfer funds to the below account as follows:

 

Bank Name:  

 

Bank Address:  

 

ABA No.:  

 

Account Name:  

 

Account No.:  

 

Beneficiary’s Name:  

 

 

Very truly yours,

 

as Agent By:  

 

Name:  

 

Title:  

 

--------------------------------------------------------------------------------

ACKNOWLEDGED AND AGREED: BANK OF AMERICA, N.A., as Bank By:  

 

Name:  

 

Title:  

 

Date:  

 

--------------------------------------------------------------------------------

EXHIBIT A – 2

DEPOSIT ACCOUNT CONTROL AGREEMENT

Notice of Termination of The [First] [Second] Activation Effective Time

[Letterhead of Agent]

 

To:   Bank of America, N.A.   [Address]   Re:    Extended Stay America, Inc.  
   Account No. 4427809495

Ladies and Gentlemen:

Reference is made to (i) the Deposit Account Control Agreement dated
November 18, 2013 (the “Agreement”) among Extended Stay America, Inc., us and
you regarding the above-described account (the “Account”) and (ii) the
Activation Notice dated                      in respect of the Agreement and the
Account (the “Activation Notice”). In accordance with Section 3 of the
Agreement, we hereby terminate the [First] [Second] Activation Effective Time
initiated by the Activation Notice and agree that the Company may operate and
transact business through the Account in its normal fashion, including making
withdrawals from the Account.

 

Very truly yours,

 

as Agent By:  

 

Name:  

 

Title:  

 

--------------------------------------------------------------------------------

ACKNOWLEDGED AND AGREED: BANK OF AMERICA, N.A., as Bank By:  

 

Name:  

 

Title:  

 

Date:  

 

--------------------------------------------------------------------------------

EXHIBIT B

DEPOSIT ACCOUNT CONTROL AGREEMENT

[Letterhead of Agent]

 

To:   Bank of America, N.A.   [Address]     Re:    Extended Stay America, Inc.  
     Account No. 4427809495

Ladies and Gentlemen:

Reference is made to the Deposit Account Control Agreement dated November 18,
2013 (the “Agreement”) among Extended Stay America, Inc., us and you regarding
the above-described account (the “Account”). In accordance with Section 2 of the
Agreement, we hereby give you notice of our request to change the wire transfer
instructions provided to Bank in the Activation Notice, and we hereby instruct
you to transfer funds to the below account as follows:

 

Bank Name:  

 

Bank Address:  

 

ABA No.:  

 

Account Name:  

 

Account No.:  

 

Beneficiary’s Name:  

 

 

Very truly yours,

 

as Agent By:  

 

Name:  

 

Title:  

 

--------------------------------------------------------------------------------

ACKNOWLEDGED AND AGREED: BANK OF AMERICA, N.A., as Bank By:  

 

Name:  

 

Title:  

 

Date:  

 

--------------------------------------------------------------------------------

EXHIBIT C

DEPOSIT ACCOUNT CONTROL AGREEMENT

Letterhead of Secured Party

 

                 , 20     Bank of America, N.A.

 

 

Attn:  

 

 

Re: Termination of Deposit Account Control Agreement

Account(s): 4427809495

Ladies and Gentlemen:

Reference is made to that certain Deposit Account Control Agreement dated as of
November 18, 2013 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the “Agreement”) among you, Extended Stay America,
Inc. (the “Company”), and us as (‘Agent”), a copy of which is attached hereto.

You are hereby notified that the Agreement is terminated with respect to the
undersigned, and you have no further obligations to the undersigned thereunder
and Agent is terminating its security interest in the Account. Notwithstanding
any previous instructions to you, you are hereby instructed to accept all future
directions with respect to the Account from the Company.

This notice terminates any obligations you may have to the undersigned with
respect to the Account.

 

Very truly yours,

 

as Agent

--------------------------------------------------------------------------------

EXHIBIT K

FORM OF SUBSIDIARY PERFECTION CERTIFICATE

PERFECTION CERTIFICATE

OF

[                    ] AND [                    ]

Reference is made to the Credit Agreement, dated as of November 18, 2013 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Extended Stay America, Inc. (the “Borrower”), the
Lenders, including the Swingline Lender and the Issuing Lender, party thereto,
and JPMorgan Chase Bank, N.A., as Administrative Agent (in such capacity, the
“Administrative Agent”). Capitalized terms used herein, but not defined herein
shall have the meanings set forth in the Credit Agreement.

Pursuant to Section 6.10(b) of the Credit Agreement, certain Subsidiaries
created or acquired by the Loan Parties after the Closing Date are required to
complete and execute this perfection certificate.

The following information (in the form of separate schedules for each of them)
is provided by and on behalf of [                    ] and
[                    ] (each an “Obligor” and together the “Obligors”), each a
Subsidiary of a Loan Party, in connection with the Credit Agreement and the
other Loan Documents.

 

1. Identity. Schedule I hereto sets forth with respect to each Obligor:

 

  (i) the current jurisdiction of organization of such Obligor and each state in
which such Obligor is qualified to do business as a foreign entity;

 

  (ii) (A) the exact name of the Obligor as it appears in its organizational
documents1 and (B) if such name was different at any time during the last three
years, the exact spelling of each such other name and the date on which such
other name was adopted as the name of such Obligor;

 

  (iii) (A) the organizational identification number of such Obligor or (B) that
it has none;

 

  (iv) whether such Obligor does business under any other names, and if so, each
such other name; and

 

  (v) whether such Obligor has or uses any trade names or trade styles, and if
so, each such trade name and trade style.

 

1  Please provide copies of the organizational documents for each Obligor.

--------------------------------------------------------------------------------

2. Organizational Structure. Schedule II hereto sets forth with respect to each
Obligor:

 

  (i) whether, during the last three years, such Obligor has ever changed its
structure or form of organization (e.g., a change from a general partnership or
limited partnership to a corporation or limited liability company), and if so,
the name and nature of the predecessor entity;

 

  (ii) whether, during the last three years, such Obligor was ever incorporated
or otherwise organized in any different state or other jurisdiction from its
current jurisdiction of organization, and if so, the date of such other
organization and the name and the jurisdiction of organization of the
predecessor entity; and

 

  (iii) whether, during the last three years, such Obligor was ever the subject
of a merger or consolidation with or into another entity, and if so, the name,
nature and jurisdiction of organization of each predecessor entity and the
nature of the transaction.

 

3. Chief Executive Office; Places of Business. Schedule III sets forth with
respect to each Obligor:

 

  (i) the current address (including county) of such Obligor’s chief executive
office;

 

  (ii) if different from the information in the preceding clause (i), the place
where such Obligor keeps its books and records (including computer records)
relating to its accounts, contracts, chattel paper, general intangibles or other
property;

 

  (iii) whether any of the books and records (including computer records)
relating to any of its property are maintained with a third-party (including,
without limitation, a computer service firm), and if so, the name and address
(including county) of such third-party; and

 

  (iv) the address (including county) of each place of business of such Obligor
other than those listed in (i) through (iii) above or in 4 below, the nature of
the activity conducted at each such location.

 

4. Equity, Other Investments and Loans. Schedule IV sets forth (i) all equity
interests owned by each Obligor, including information regarding percentage
ownership, certificate numbers (if applicable) and whether or not each such
equity interest is certificated and (ii) all intercompany loans and other
investments (other than Investment Property listed in Schedule IX) and whether
such investments are evidenced by promissory notes or other instruments.

 

5. Accounts and Contracts. Schedule V sets forth with respect to each Obligor
(as applicable):

(i) whether any of such Obligor’s accounts receivable are payable by (a) the
United States of America or any state or any department or agency of any thereof
or (b) by an insurance company under or pursuant to any policy of insurance, and
in such case if so, the aggregate amount thereof and the percentage that such
amount represents of such Obligor’s accounts, in each case as of a recent
specified date;

(ii) A list of all contracts and agreements of each Obligor entered into outside
the ordinary course of business which the Borrower in its sole discretion,
exercised in good faith, deems to be material.

 

-3-

--------------------------------------------------------------------------------

6. Inventory, Equipment and Other Goods. Schedule VI sets forth, as of
            , 2013, with respect to each Obligor: the address (including county)
of each location where such party keeps or maintains inventory or other goods,
and whether such location is owned by such party or leased by such party, or
whether such inventory or other goods are held by a third party (and if so,
information indicating the nature of such third party’s possession of such
inventory or other goods).

 

7. Intellectual Property. Schedule VII sets forth, as of             , 2013,
descriptions, registration numbers, application numbers, registration dates and
other recordation information with respect to intellectual property, including
patents, trademarks, trade names and copyrights, in each case owned or licensed
by any Obligor.

 

8. Special Property. Schedule VIII sets forth, as of             , 2013, with
respect to each Obligor: whether any of the Obligor’s property includes
automotive equipment, ships and other vessels, aircraft or railroad locomotives
and other rolling stock, whether owned or leased.

 

9. Deposit Accounts, Commodity Accounts, Securities Accounts. Schedule IX sets
forth:

(i) Deposit Accounts. A list of all deposit accounts in which any of the
Obligors has any interest (including the name of the depositary institution, the
name of the account, the account number, the purpose of the account, the
approximate average balance of the account, and any other interests (including
security interests) held by any person in the account). Indicate whether any
person (including any person with a security interest in a deposit account) has
control rights over such deposit accounts, and if so the source of such rights.

(ii) Commodity Accounts. A list of all commodity accounts in which any of the
Obligors has any interest (including the name of the commodity broker or other
institution at which the commodity account is maintained, the name of the
account, the account number, the purpose of the account, the type of commodity
contracts held in the account, the approximate average balance of the account,
and any other interests (including security interests) held by any person in the
account). Indicate whether any person (including any person with a security
interest in a commodity account) has control rights over such commodity
accounts, and if so the source of such rights.

(iii) Securities Accounts. A list of all securities accounts in which any of the
Obligors has any interest (including the name of the securities intermediary or
other institution at which such securities account is maintained, the name of
the account, the account number, the purpose of the account, the types of
securities and other financial assets held in such account and the approximate
average balance of the account, and any other interests (including security
interests) held by any person in the account). Indicate whether any person
(including any person with a security interest in a securities account) has
control rights over such securities accounts, and if so the source of such
rights.

 

10. Real Property. Schedule X sets forth all locations of real property owned or
leased by any Obligor.

 

11. Litigation. Schedule XI sets forth, with respect to each Obligor:

 

(i) A description of all material lawsuits pending or threatened in writing
against any such party, including estimated damages if such lawsuit is adversely
determined.

 

-4-

--------------------------------------------------------------------------------

(ii) A description of all material infringement actions or challenged to
ownership of patents, trademarks, service marks or copyrights issued to, applied
for or owned by any such party.

 

(iii) A description of all material consent decrees, judgments, orders and
injunctions outstanding against any such party.

 

(iv) A description of all material settlement agreements pursuant to which any
such party will be obligated to make payments to or will be entitled to receive
payments from a third party.

 

12. Representation and Warranty; Acknowledgment. Each of the undersigned hereby
represents and warrants that the information set forth in this Perfection
Certificate is true, correct and complete. Each of the undersigned acknowledges
that this Perfection Certificate is provided in connection with the Credit
Agreement, and that the Lenders and the Agent will rely upon the information
contained herein (including the Schedules attached hereto). Each of the
undersigned further acknowledges and agrees that the information so contained
herein shall be deemed to be a representation and warranty by the Borrower under
the Credit Agreement, and that any material misstatements or omissions contained
herein may constitute an Event of Default under the Credit Agreement.

[SIGNATURE PAGE FOLLOWS]

 

-5-

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, we have hereunto set our hands this      day of
            , 20    .

 

OBLIGOR:   [                    ]   By:  

 

  Name:         Title:

--------------------------------------------------------------------------------

EXHIBIT L

FORM OF NOTICE TO CASH MANAGEMENT AGENT

--------------------------------------------------------------------------------

Notice to Cash Management Agent

November 18, 2013

Wells Fargo Bank, National Association

550 S. Tryon Street, 14th Floor

Charlotte, NC 28202

Attn: Extended Stay America Trust 2010-ESH Asset Manager

Midland Loan Services, a division of PNC Bank, National Association

Two Live Oak

Mail Stop: XX-XTLV-01-1

3445 Peachtree Road NE, Suite 1150

Atlanta, GA 30326

Re: Direction of amounts in Borrower Remainder Subaccount

References is made to the Domestic Cash Management Agreement, dated as of
November 30, 2012, by an among Wells Fargo, N.A. as agent (the “Cash Management
Agent”) , ESA P Portfolio L.L.C. (“ESA LLC”), ESA P Portfolio MD Borrower L.L.C.
(“ESA MD LLC”), ESH/TN Properties L.L.C. (“ESHTN”, and together with ESA LLC and
ESA MD LLC, the “Mortgage Borrower”), ESA P Portfolio MD Trust, ESA P Portfolio
Operating Lessee, Inc., New ESA P Portfolio Operating Lessee LLC, ESH Mezzanine
A LLC, ESH Mezzanine A-2 LLC, ESH Mezzanine B LLC, ESH Mezzanine B-2 LLC, ESH
Mezzanine C LLC, ESH Mezzanine C-2 LLC, HVM L.L.C., and the other parties party
thereto from time to time (as may be amended, restated or otherwise modified
from time to time, the “Domestic Cash Management Agreement”). Capitalized terms
used herein and not defined shall have the meaning ascribed to such terms in the
Domestic Cash Management Agreement.

Whereas, pursuant to Section 4.1(b)(xii) of the Domestic Cash Management
Agreement, the Mortgage Borrower may direct the Cash Management Agent to
disburse amounts in the Borrower Remainder Subaccount to such accounts as
directed by Mortgage Borrower.

Mortgage Borrower hereby gives instructions to Cash Management Agent to remit
amounts in the Borrower Remainder Subaccount to (i) Account No. 4427817131 held
at Bank of America, N.A. (the “ESH Conditional Controlled Account”) and/or
(ii) Account No. 4427809495 held at Bank of America, N.A. (the “ESA Conditional
Controlled Account”).

The division of funds in the Borrower Remainder Subaccount between the ESH
Conditional Controlled Account and the ESA Conditional Controlled Account shall
be set forth in subsequent monthly instructions delivered by Mortgage Borrower
to the Domestic Cash Management Agent in accordance with the Domestic Cash
Management Agreement. In the absence of any subsequent monthly instructions,
Cash Management Agent is instructed to deposit in the ESH Conditional Controlled
Account the same amount as was deposited in such account during the previous
month and to deposit into the ESA Conditional Controlled Account any excess
amounts in the Borrower Remainder Subaccount.

[Signatures Continue on Following Page]

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This Notice is delivered to the Cash Management Agent as of the date first
appearing above.

 

ESA P PORTFOLIO L.L.C. By:   LOGO [g631451ex10_2pg262a.jpg]  

 

  Name:   Ross W. McCanless   Title:   Vice President & Secretary ESA P
PORTFOLIO MD BORROWER L.L.C. By:   LOGO [g631451ex10_2pg262b.jpg]  

 

  Name:   Ross W. McCanless   Title:   Vice President & Secretary ESH/TN
PROPERTIES L.L.C. By:   LOGO [g631451ex10_2pg262c.jpg]  

 

  Name:   Ross W. McCanless   Title:   Vice President & Secretary

Notice to Cash Management Agent