Exhibit 10.1

Loan Number: 104239

 

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EXECUTION COPY

 

 

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of November 20, 2012

by and among

DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP,

                                                                     as
Borrower,

DIAMONDROCK HOSPITALITY COMPANY,

                                                                 as Parent,

THE FINANCIAL INSTITUTIONS PARTY HERETO

AND THEIR ASSIGNEES UNDER SECTION 13.6.,

                                                                 as Lenders,

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

                                         as Administrative Agent,

 

 

BANK OF AMERICA, N.A.,

                                                             as Syndication
Agent,

CITIBANK, N.A.,

                                                             as Documentation
Agent,

WELLS FARGO SECURITIES, LLC and

MERRILL LYNCH, PIERCE, FENNER AND SMITH INCORPORATED,

                                                                 
                        as Joint Lead Arrangers and

                                                                            
             Joint Lead Bookrunners

 

 

 

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TABLE OF CONTENTS

 

Article I. Definitions

     1   

Section 1.1. Definitions

     1   

Section 1.2. General; References to Pacific Time

     27   

Section 1.3. Financial Attributes of Non-Wholly Owned Subsidiaries

     27   

Article II. Credit Facility

     28   

Section 2.1. Loans

     28   

Section 2.2. Letters of Credit

     29   

Section 2.3. Swingline Loans

     33   

Section 2.4. Rates and Payment of Interest on Loans

     35   

Section 2.5. Number of Interest Periods

     36   

Section 2.6. Repayment of Revolving Loans

     36   

Section 2.7. Prepayments

     36   

Section 2.8. Continuation

     37   

Section 2.9. Conversion

     37   

Section 2.10. Notes

     38   

Section 2.11. Voluntary Reductions of the Commitment

     38   

Section 2.12. Extension of Termination Date

     39   

Section 2.13. Expiration Date of Letters of Credit Past Commitment Termination

     39   

Section 2.14. Amount Limitations

     40   

Section 2.15. Increase in Commitments

     40   

Section 2.16. Funds Transfer Disbursements

     41   

Article III. Payments, Fees and Other General Provisions

     42   

Section 3.1. Payments

     42   

Section 3.2. Pro Rata Treatment

     43   

Section 3.3. Sharing of Payments, Etc

     43   

Section 3.4. Several Obligations

     44   

Section 3.5. Fees

     44   

Section 3.6. Computations

     45   

Section 3.7. Usury

     45   

Section 3.8. Statements of Account

     45   

Section 3.9. Defaulting Lenders

     46   

Section 3.10. Taxes; Foreign Lenders

     49   

Article IV. Unencumbered Borrowing Base Properties

     51   

Section 4.1. Eligibility of Properties

     51   

Section 4.2. Reclassification of Properties

     53   

Article V. Yield Protection, Etc

     54   

Section 5.1. Additional Costs; Capital Adequacy

     54   

Section 5.2. Suspension of LIBOR Loans

     55   

Section 5.3. Illegality

     56   

Section 5.4. Compensation

     56   

Section 5.5. Treatment of Affected Loans

     57   

Section 5.6. Change of Lending Office

     57   

Section 5.7. Assumptions Concerning Funding of LIBOR Loans

     57   

Section 5.8. Affected Lenders

     58   

 

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Article VI. Conditions Precedent

     58   

Section 6.1. Initial Conditions Precedent

     58   

Section 6.2. Conditions Precedent to All Loans and Letters of Credit

     60   

Article VII. Representations and Warranties

     61   

Section 7.1. Representations and Warranties

     61   

Section 7.2. Survival of Representations and Warranties, Etc

     67   

Article VIII. Affirmative Covenants

     67   

Section 8.1. Preservation of Existence and Similar Matters

     67   

Section 8.2. Compliance with Applicable Law and Material Contracts

     68   

Section 8.3. Maintenance of Property

     68   

Section 8.4. Conduct of Business

     68   

Section 8.5. Insurance

     68   

Section 8.6. Payment of Taxes and Claims

     68   

Section 8.7. Inspections

     69   

Section 8.8. Use of Proceeds; Letters of Credit

     69   

Section 8.9. Environmental Matters

     69   

Section 8.10. Books and Records

     70   

Section 8.11. Further Assurances

     70   

Section 8.12. REIT Status

     70   

Section 8.13. Exchange Listing

     70   

Section 8.14. Additional Guarantors

     70   

Section 8.15. Release of Guarantors

     71   

Article IX. Information

     71   

Section 9.1. Quarterly Financial Statements

     71   

Section 9.2. Year-End Statements

     72   

Section 9.3. Compliance Certificate

     72   

Section 9.4. Other Information

     73   

Section 9.5. Electronic Delivery of Certain Information

     75   

Section 9.6. Public/Private Information

     75   

Section 9.7. USA Patriot Act Notice; Compliance

     76   

Article X. Negative Covenants

     76   

Section 10.1. Financial Covenants

     76   

Section 10.2. Restricted Payments

     77   

Section 10.3. Indebtedness

     77   

Section 10.4. Certain Permitted Investments

     77   

Section 10.5. Investments Generally

     78   

Section 10.6. Negative Pledge

     78   

Section 10.7. Merger, Consolidation, Sales of Assets and Other Arrangements

     79   

Section 10.8. Fiscal Year

     80   

Section 10.9. Modifications of Material Contracts

     80   

Section 10.10. Modifications of Organizational Documents

     80   

Section 10.11. Transactions with Affiliates

     81   

Section 10.12. ERISA Exemptions

     81   

Section 10.13. Environmental Matters

     81   

Section 10.14. Derivatives Contracts

     81   

 

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Article XI. Default

     81   

Section 11.1. Events of Default

     81   

Section 11.2. Remedies Upon Event of Default

     84   

Section 11.3. Remedies Upon Default

     86   

Section 11.4. Marshaling; Payments Set Aside

     86   

Section 11.5. Allocation of Proceeds

     86   

Section 11.6. Letter of Credit Collateral Account

     87   

Section 11.7. Performance by Administrative Agent

     88   

Section 11.8. Rights Cumulative

     88   

Article XII. The Administrative Agent

     89   

Section 12.1. Appointment and Authorization

     89   

Section 12.2. Administrative Agent’s Reliance

     90   

Section 12.3. Notice of Events of Default

     90   

Section 12.4. Wells Fargo as Lender

     91   

Section 12.5. Approvals of Lenders

     91   

Section 12.6. Lender Credit Decision, Etc

     92   

Section 12.7. Indemnification of Administrative Agent

     92   

Section 12.8. Successor Administrative Agent

     93   

Section 12.9. Titled Agents

     94   

Article XIII. Miscellaneous

     94   

Section 13.1. Notices

     94   

Section 13.2. Expenses

     96   

Section 13.3. Stamp, Intangible and Recording Taxes

     97   

Section 13.4. Setoff

     97   

Section 13.5. Litigation; Jurisdiction; Other Matters; Waivers

     98   

Section 13.6. Successors and Assigns

     99   

Section 13.7. Amendments and Waivers

     102   

Section 13.8. Nonliability of Administrative Agent and Lenders

     104   

Section 13.9. Confidentiality

     105   

Section 13.10. Indemnification

     105   

Section 13.11. Termination; Survival

     107   

Section 13.12. Severability of Provisions

     107   

Section 13.13. GOVERNING LAW

     107   

Section 13.14. Counterparts

     107   

Section 13.15. Obligations with Respect to Loan Parties

     108   

Section 13.16. Independence of Covenants

     108   

Section 13.17. Limitation of Liability

     108   

Section 13.18. Entire Agreement

     108   

Section 13.19. Construction

     108   

Section 13.20. Headings

     108   

Section 13.21. No Novation

     109   

Section 13.22. New York Mortgages

     109   

 

SCHEDULE I    Commitments SCHEDULE 1.1.    List of Loan Parties SCHEDULE 4.1.   
Initial Unencumbered Borrowing Base Properties SCHEDULE 7.1.(b)    Ownership
Structure

 

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SCHEDULE 7.1.(f)    Title to Properties; Occupancy Rates; Liens SCHEDULE 7.1.(g)
   Existing Indebtedness; Total Indebtedness SCHEDULE 7.1.(h)    Material
Contracts SCHEDULE 7.1.(i)    Litigation EXHIBIT A    Form of Assignment and
Assumption Agreement EXHIBIT B    Form of Guaranty EXHIBIT C    Form of
Revolving Note EXHIBIT D    Form of Notice of Borrowing EXHIBIT E    Form of
Notice of Continuation EXHIBIT F    Form of Notice of Conversion EXHIBIT G   
Form of Notice of Swingline Borrowing EXHIBIT H    Form of Swingline Note
EXHIBIT I    Form of Transfer Authorizer Designation Form EXHIBIT J    Form of
Opinion of Counsel EXHIBIT K    Form of Compliance Certificate

 

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THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) dated as of
November 20, 2012, by and among DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP, a
limited partnership formed under the laws of the State of Delaware (the
“Borrower”), DIAMONDROCK HOSPITALITY COMPANY, a corporation formed under the
laws of the State of Maryland (the “Parent”), each of the financial institutions
initially a signatory hereto together with their successors and assignees under
Section 13.6. (the “Lenders”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as
Administrative Agent (the “Administrative Agent”), with BANK OF AMERICA, N.A.,
as Syndication Agent (the “Syndication Agent”), CITIBANK, N.A., as Documentation
Agent (the “Documentation Agent”), and each of WELLS FARGO SECURITIES, LLC, and
MERRILL LYNCH, PIERCE FENNER AND SMITH INCORPORATED, as Joint Lead Arrangers and
Joint Lead Bookrunners (collectively, the “Lead Arrangers”).

WHEREAS, certain of the Lenders and other financial institutions have made
available to the Borrower a revolving credit facility in the amount of
$200,000,000, including a $30,000,000 letter of credit subfacility, on the terms
and conditions contained in that certain Second Amended and Restated Credit
Agreement dated as of August 6, 2010 (as amended and in effect immediately prior
to the date hereof, the “Existing Credit Agreement”) by and among the Parent,
the Borrower, such Lenders, certain other financial institutions, the
Administrative Agent and the other parties thereto; and

WHEREAS, the Administrative Agent, the Issuing Bank and the Lenders desire to
amend and restate the terms of the Existing Credit Agreement to make available
to the Borrower a revolving credit facility in the initial amount of
$200,000,000, which will include a $35,000,000 letter of credit subfacility and
a $40,000,000 swingline subfacility, on the terms and conditions contained
herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties hereto, the parties hereto agree
that the Existing Credit Agreement is amended and restated in its entirety as
follows:

ARTICLE I. DEFINITIONS

Section 1.1. Definitions.

In addition to terms defined elsewhere herein, the following terms shall have
the following meanings for the purposes of this Agreement:

“Accession Agreement” means an Accession Agreement substantially in the form of
Annex I to the Guaranty.

“Accommodation Subsidiary” has the meaning given that term in Section 4.1.(d).

“Additional Costs” has the meaning given that term in Section 5.1.(b).

“Adjusted EBITDA” means, for any given period, (a) the EBITDA of the Parent and
its Subsidiaries determined on a consolidated basis for such period, minus
(b) FF&E Reserves for such period.

“Adjusted Funds From Operations” means, with respect to a Person and for a given
period, (a) net income (loss) of such Person determined on a consolidated basis
for such period minus (or plus) (b) gains (or losses) from debt restructuring
and sales of property during such period plus (c) depreciation with respect to
such Person’s real estate assets and amortization of such Person for such
period, all after adjustment for unconsolidated partnerships and joint ventures.
The following shall be excluded from Adjusted Funds From Operations (but only to
the extent otherwise included above): (i) Interest Expense; (ii) income tax
expense; (iii) extraordinary or non-recurring gains and losses; (iv) closing
costs expensed which are directly attributable to the acquisition of Property;
(v) severance costs; and (vi) other non-cash charges including, without
limitation, impairment charges (other than non-cash charges that constitute an
accrual of a reserve for future cash payments). Adjustments for Unconsolidated
Affiliates will be calculated to reflect funds from operations on the same
basis.

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“Adjusted NOI” means, for any Property and for any period (or if no applicable
period is stated, the period of twelve consecutive fiscal months then ended),
Net Operating Income for such Property for such period minus the greater of
(a) the actual amount of franchise fees paid with respect to such Property
during such period and (b) an imputed franchise fee in the amount of four
percent (4.0%) of the gross revenues for such Property for such period; provided
however, for purposes of this definition, no imputed franchise fee shall be
deducted from Net Operating Income with respect to any Property that is not
subject to a franchise agreement. If a Property has not continuously operated
the immediately preceding period of twelve consecutive months, then the Adjusted
NOI of such Property shall be calculated by annualizing the historical Net
Operating Income of such Property for the most recently ending period for which
it has been in continuous operation, determined on a pro forma basis reasonably
acceptable to the Administrative Agent.

“Adjusted Total Asset Value” means Total Asset Value determined exclusive of
assets that are owned by Excluded Subsidiaries, Foreign Subsidiaries and
Unconsolidated Affiliates.

“Administrative Agent” means Wells Fargo Bank, National Association as
contractual representative of the Lenders under this Agreement, or any successor
Administrative Agent appointed pursuant to Section 12.8.

“Administrative Questionnaire” means the Administrative Questionnaire completed
by each Lender and delivered to the Administrative Agent in a form supplied by
the Administrative Agent to the Lenders from time to time.

“Affected Lender” has the meaning given that term in Section 5.8.

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. In no event
shall the Administrative Agent or any Lender be deemed to be an Affiliate of the
Borrower.

“Agreement Date” means the date as of which this Agreement is dated.

“Applicable Law” means all international, foreign, federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes, executive
orders, and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority.

“Applicable Margin” means the percentage rate set forth below corresponding to
the Pricing Ratio in effect at such time:

 

2

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Level

  

Pricing Ratio

   Applicable
Margin  

1

   Less than 4.00 to 1.00      1.75 % 

2

   Greater than or equal to 4.00 to 1.00 but less than 5.00 to 1.00      1.90 % 

3

   Greater than or equal to 5.00 to 1.00 but less than 5.50 to 1.00      2.10 % 

4

   Greater than or equal to 5.50 to 1.00 but less than 6.00 to 1.00      2.20 % 

5

   Greater than or equal to 6.00 to 1.00 but less than 6.50 to 1.00      2.50 % 

6

   Greater than or equal to 6.50 to 1.00      2.75 % 

The Applicable Margin shall be determined by the Administrative Agent from time
to time, based on the Pricing Ratio as set forth in the Compliance Certificate
most recently delivered by the Borrower pursuant to Section 9.3. Any adjustment
to the Applicable Margin shall be effective as of the first day of the calendar
month immediately following the month during which the Borrower delivers to the
Administrative Agent the applicable Compliance Certificate pursuant to
Section 9.3. If the Borrower fails to deliver a Compliance Certificate pursuant
to Section 9.3., the Applicable Margin shall equal the percentage corresponding
to Level 6 until the first day of the calendar month immediately following the
month that the required Compliance Certificate is delivered. Notwithstanding the
foregoing, for the period from the Effective Date through but excluding the date
on which the Administrative Agent first determines the Applicable Margin for
Loans as set forth above, the Applicable Margin shall be determined based on
Level 2. Thereafter, the Applicable Margin shall be adjusted from time to time
as set forth in this definition. The provisions of this definition shall be
subject to Section 2.4.(c).

“Appraisal” means, with respect to any Property, an M.A.I. appraisal (reasonably
acceptable to the Administrative Agent as to form, substance and appraisal
date), prepared by a professional appraiser reasonably acceptable to the
Administrative Agent, and determining the “as is” market value of such Property
as between a willing buyer and a willing seller.

“Appraised Value” means, with respect to any Property, the “as is” market value
of such Property as reflected in the most recent Appraisal of such Property as
the same may have been reasonably adjusted by the Administrative Agent based
upon its internal review of such Appraisal which is based on criteria and
factors then generally used and considered by the Administrative Agent in
determining the value of similar real estate Properties.

“Approved Accounting Firm” means Deloitte LLP, KPMG LLP, PricewaterhouseCoopers
International Limited, Ernst & Young LLP or such other independent certified
public accountant of recognized national standing reasonably acceptable to the
Administrative Agent.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender, or (c) an entity or an Affiliate of any entity
that administers or manages a Lender.

 

3

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“Approved Manager” means Highgate Hotels, L.P., Marriott International, Inc.,
Hilton Worldwide, Inc., Interstate Hotels & Resorts, Inc., Davidson Hotel
Company, HEI Hospitality, LLC, Crestline Hotels & Resorts, Inc., Starwood
Hotels & Resorts Worldwide, Inc., Noble Investment Group, Hyatt Hotels
Corporation, Kimpton Hotel & Restaurant Group, LLC, Vail Resorts Management
Company, Alliance Hospitality Management LLC, Joie de Vivre Hospitality, LLC,
Denihan Hospitality Group, Viceroy Hotel Group, Magna Hospitality Group, L.C.,
Hersha Hospitality Management any Affiliate of any of the foregoing and any
other nationally recognized third-party property management company approved by
the Administrative Agent in writing.

“Assignment and Assumption” means an Assignment and Assumption Agreement among a
Lender, an Eligible Assignee and the Administrative Agent, substantially in the
form of Exhibit A.

“Bankruptcy Code” means the Bankruptcy Code of 1978, as amended.

“Base Rate” means the LIBOR Market Index Rate; provided, that if for any reason
the LIBOR Market Index Rate is unavailable, Base Rate shall mean the per annum
rate of interest equal to the Federal Funds Rate plus one and one-half percent
(1.50%).

“Base Rate Loan” means a Revolving Loan (or any portion thereof) bearing
interest at a rate based on the Base Rate.

“Benefit Arrangement” means at any time an employee benefit plan within the
meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and
which is maintained or otherwise contributed to by any member of the ERISA
Group.

“Borrower” has the meaning set forth in the introductory paragraph hereof and
shall include the Borrower’s successors and permitted assigns.

“Borrower Information” has the meaning given that term in Section 2.4.(c).

“Business Day” means (a) a day of the week (but not a Saturday, Sunday or
holiday) on which the offices of the Administrative Agent in San Francisco,
California are open to the public for carrying on substantially all of the
Administrative Agent’s business functions, and (b) if such day relates to a
LIBOR Loan, any such day that is also a day on which dealings in Dollars are
carried on in the London interbank market. Unless specifically referenced in
this Agreement as a Business Day, all references to “days” shall be to calendar
days.

“Capitalization Rate” means (a) 7.75% (or such higher percentage to which this
rate may be increased pursuant to Section 2.12.) for Properties developed with
hotels categorized as Upscale Select-Service, Upper Upscale or above
Full-Service and located within the central business districts of Boston,
Massachusetts, Chicago, Illinois, Borough of Manhattan, New York, Washington,
D.C., and San Francisco, California or (b) 8.25% (or such higher percentage to
which this rate may be increased pursuant to Section 2.12.) for all other
Properties. Categorization of hotels shall be as determined by Smith Travel
Research or as otherwise requested by the Borrower and consented to in writing
by the Requisite Lenders.

“Capitalized Lease Obligation” means obligations under a lease that are required
to be capitalized for financial reporting purposes in accordance with GAAP. The
amount of a Capitalized Lease Obligation is the capitalized amount of such
obligation as would be required to be reflected on a balance sheet of the
applicable Person prepared in accordance with GAAP as of the applicable date.

 

4

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“Cash Collateralize” means, to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the Issuing Bank or the Lenders, as
collateral for Letter of Credit Liabilities or obligations of Lenders to fund
participations in respect of Letter of Credit Liabilities, cash or deposit
account balances or, if the Administrative Agent and the Issuing Bank shall
agree in their sole discretion, other credit support, in each case pursuant to
documentation in form and substance satisfactory to the Administrative Agent and
the Issuing Bank. “Cash Collateral” shall have a meaning correlative to the
foregoing and shall include the proceeds of such cash collateral and other
credit support.

“Cash Equivalents” means: (a) securities issued, guaranteed or insured by the
United States of America or any of its agencies with maturities of not more than
one year from the date acquired; (b) certificates of deposit with maturities of
not more than one year from the date acquired issued by a United States federal
or state chartered commercial bank of recognized standing, or a commercial bank
organized under the laws of any other country which is a member of the
Organisation for Economic Co-operation and Development, or a political
subdivision of any such country, acting through a branch or agency, which bank
has capital and unimpaired surplus in excess of $500,000,000 and which bank or
its holding company has a short-term commercial paper rating of at least A-2 or
the equivalent by S&P or at least P-2 or the equivalent by Moody’s; (c) reverse
repurchase agreements with terms of not more than seven days from the date
acquired, for securities of the type described in clause (a) above and entered
into only with commercial banks having the qualifications described in
clause (b) above; (d) commercial paper issued by any Person incorporated under
the laws of the United States of America or any State thereof and rated at least
A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof
by Moody’s, in each case with maturities of not more than one year from the date
acquired; and (e) investments in money market funds registered under the
Investment Company Act of 1940, as amended, which have net assets of at least
$500,000,000 and at least 85% of whose assets consist of securities and other
obligations of the type described in clauses (a) through (d) above.

“Commitment” means, as to each Lender (other than the Swingline Lender), such
Lender’s obligation to make Revolving Loans pursuant to Section 2.1., to issue
(in the case of the Issuing Bank) and to participate (in the case of the other
Lenders) in Letters of Credit pursuant to Section 2.2.(i), and to participate in
Swingline Loans pursuant to Section 2.3.(e), in an amount up to, but not
exceeding, the amount set forth for such Lender on Schedule I as such Lender’s
“Commitment Amount” or as set forth in the applicable Assignment and Assumption
or agreement executed by a Person becoming a Lender pursuant to Section 2.15.,
as the same may be reduced from time to time pursuant to Section 2.11. or
increased or reduced as appropriate to reflect any assignments to or by such
Lender effected in accordance with Section 13.6.

“Commitment Percentage” means, as to each Lender, the ratio, expressed as a
percentage, of (a) the amount of such Lender’s Commitment to (b) the aggregate
amount of the Commitments of all Lenders; provided, however, that if at the time
of determination the Commitments have been terminated or been reduced to zero,
the “Commitment Percentage” of each Lender shall be the Commitment Percentage of
such Lender in effect immediately prior to such termination or reduction.

“Compliance Certificate” has the meaning given that term in Section 9.3.

“Continue”, “Continuation” and “Continued” each refers to the continuation of a
LIBOR Loan from one Interest Period to another Interest Period pursuant to
Section 2.8.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

 

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“Convert”, “Conversion” and “Converted” each refers to the conversion of a Loan
of one Type into a Loan of another Type pursuant to Section 2.9. or the
amendment of a Letter of Credit that extends the maturity, or increases the
Stated Amount, of such Letter of Credit.

“Credit Event” means any of the following: (a) the making (or deemed making) of
any Loan, (b) the Conversion of a Base Rate Loan into a LIBOR Loan and (c) the
issuance of a Letter of Credit.

“Credit Rating” means the rating assigned by a Rating Agency to the senior
unsecured long term Indebtedness of a Person.

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

“Default” means any of the events specified in Section 11.1., whether or not
there has been satisfied any requirement for the giving of notice, the lapse of
time, or both.

“Defaulting Lender” means, subject to Section 3.9.(f), any Lender that (a) has
failed to (i) fund all or any portion of its Loans within 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 good faith 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 Bank, 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 2 Business Days of the date when due, (b) has notified
the Borrower, the Administrative Agent, the Issuing Bank 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 good faith 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 satisified), (c) has failed, within 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 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 3.9.(f)) upon delivery of written notice of such
determination to the Borrower, the Issuing Bank, the Swingline Lender and each
Lender.

 

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“Derivatives Contract” means any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement. Not in limitation of the
foregoing, the term “Derivatives Contract” includes any and all transactions of
any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement, including any such
obligations or liabilities under any such master agreement.

“Derivatives Support Document” means (i) any Credit Support Annex comprising
part of (and as defined in) any Specified Derivatives Contract, and (ii) any
document or agreement, pursuant to which cash, deposit accounts, securities
accounts or similar financial asset collateral are pledged to or made available
for set-off by, a Specified Derivatives Provider, including any banker’s lien or
similar right, securing or supporting Specified Derivatives Obligation.

“Derivatives Termination Value” means, in respect of any one or more Derivatives
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Derivatives Contracts, (a) for any date on or
after the date such Derivatives Contracts 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 Derivatives Contracts, as
determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Derivatives Contracts
(which may include the Administrative Agent or any Lender).

“Development Property” means, as of any date of determination, any Property on
which the existing building or other improvements are undergoing renovation and
redevelopment that will either (a) disrupt the occupancy of at least 15% of the
rentable rooms of such Property or (b) temporarily reduce the Net Operating
Income attributable to such Property by more than 15% as compared to the
immediately preceding comparable prior period. Notwithstanding the foregoing,
(i) during planned renovations scheduled to commence in 2013, the Lexington New
York City located in New York City, New York, and (ii) during planned
renovations scheduled to commence in 2014 or 2015, the Chicago Marriott located
in Chicago, Illinois, shall not be treated as a Development Property, if in each
case, the Borrower has provided written notice to the Administrative Agent of
the Borrower’s election to have the applicable Property not treated as a
Development Property and the date on which such election is to become effective.
Upon the effective date of such an election with respect to a Property
referenced in (i) or (ii) above, the Operating Property Value of such Property
shall be determined pursuant to clause (b) of the definition of such term based
upon the period of four consecutive fiscal quarters most recently ending prior
to such election date . Any such election shall be effective for a period of 12
consecutive months. Thereafter, such Property shall be valued as a Seasoned
Property. A Property shall cease to be a Development Property once all
improvements related to the renovation or redevelopment of such Property have
been substantially completed.

“Dollars” or “$” means the lawful currency of the United States of America.

 

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“Domestic Subsidiary” means any Subsidiary that is incorporated or organized
under the laws of any state of the United States or the District of Columbia.

“EBITDA” means, with respect to a Person for any period (without duplication):
(a) net income (loss) of such Person for such period determined on a
consolidated basis (before minority interests), exclusive of the following (but
only to the extent included in determination of such net income (loss)):
(i) depreciation and amortization expense; (ii) Interest Expense; (iii) income
tax expense; (iv) extraordinary or non-recurring gains and losses; (v) closing
costs expensed which are directly attributable to the acquisition of Property;
(vi) severance costs; and (vii) other non-cash charges including, without
limitation, impairment charges (other than non-cash charges that constitute an
accrual of a reserve for future cash payments) plus (b) such Person’s Ownership
Share of EBITDA of its Unconsolidated Affiliates. EBITDA shall be adjusted to
remove any impact from (x) non-cash amortization of stock grants to members of
the Parent’s management, (y) straight line rent leveling adjustments required
under GAAP and (z) amortization of intangibles pursuant to FASB ASC 805.

“Effective Date” means the later of (a) the Agreement Date or (b) the date on
which all of the conditions precedent set forth in Section 6.1. shall have been
fulfilled or waived.

“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an
Approved Fund and (d) any other Person (other than a natural person) approved by
the Administrative Agent.

“Eligible Unencumbered Borrowing Base Property” means a Property which satisfies
all of the following requirements: (a) such Property (i) is either an
(x) Upper-Upscale or Luxury (as defined by Smith Travel Research) full-service
hotel with not less than 150 keys or (y) a Select-Service (as defined by Smith
Travel Research) hotel located in a major urban market and (ii) other than the
Properties listed on Schedule 4.1, is located in a top 50 metropolitan
statistical area or, subject to the written approval of the Requisite Lenders, a
destination resort; (b) such Property is currently open for business to the
public and has been continuously operating for the immediately preceding
twelve-month period; (c) such Property is (i) branded by a nationally recognized
hotel company or an Affiliate of such a company or (ii) operated as an
independent hotel located in a central business district; (d) such Property is
located in one of the 48 contiguous States of the United States of America, the
State of Hawaii, or in the District of Columbia; (e) such Property is owned in
fee simple or leased under a Ground Lease entirely by the Borrower or a
Subsidiary; (f) neither such Property, nor any interest of the Borrower or any
Subsidiary therein, is subject to any Lien (other than Permitted Liens (but not
Liens of the types described in clauses (f), (g) and (h) of the definition of
Permitted Liens)) or a Negative Pledge; (g) if such Property is owned or leased
by a Subsidiary (i) none of the Borrower’s direct or indirect ownership interest
in such Subsidiary is subject to any Lien (other than Permitted Liens (but not
Liens of the types described in clauses (f), (g) and (h) of the definition of
Permitted Liens)) or to a Negative Pledge; and (ii) the Borrower directly, or
indirectly through a Subsidiary, has the right to take the following actions
without the need to obtain the consent of any Person: (x) to sell, transfer or
otherwise dispose of such Property and (y) to create a Lien on such Property as
security for Indebtedness of the Borrower or such Subsidiary, as applicable;
(h) such Property is managed by an Approved Manager pursuant to a Property
Management Agreement acceptable to the Administrative Agent; provided however
that any Property Management Agreement with Marriott International, Inc. or one
of its Affiliates that is substantially in the same form as another Property
Management Agreement with Marriott International, Inc. or one of its Affiliates
approved previously by the Administrative Agent shall be deemed acceptable to
Administrative Agent; (i) such Property is free of all structural defects, title
defects, environmental conditions or other adverse matters except for defects,
deficiencies, conditions or other matters individually or collectively which are
not material to the profitable operation of such Property; (j) such Property is
covered by property insurance in amounts and upon terms that satisfy criteria
set forth in Section 8.5., (k) such Property has all material occupancy and
operating permits and licenses required by Applicable Law and (l) the
Administrative Agent has received, in form and substance satisfactory to the
Administrative Agent, information and reports regarding such Property as
required under Section 4.1.(b).

 

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“Environmental Laws” means any Applicable Law relating to environmental
protection or the manufacture, storage, remediation, disposal or clean-up of
Hazardous Materials including, without limitation, the following: Clean Air Act,
42 U.S.C. § 7401 et seq.; Federal Water Pollution Control Act, 33 U.S.C. § 1251
et seq.; Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act, 42 U.S.C. § 6901 et seq.; Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601 et seq.; National Environmental
Policy Act, 42 U.S.C. § 4321 et seq.; regulations of the Environmental
Protection Agency, any applicable rule of common law relating primarily to the
environment or Hazardous Materials, and any analogous or comparable state or
local laws, regulations or ordinances that concern Hazardous Materials or
protection of the environment.

“Equity Interest” means, with respect to any Person, any share of capital stock
of (or other ownership or profit interests in) such Person, any warrant, option
or other right for the purchase or other acquisition from such Person of any
share of capital stock of (or other ownership or profit interests in) such
Person, any security convertible into or exchangeable for any share of capital
stock of (or other ownership or profit interests in) such Person or warrant,
right or option for the purchase or other acquisition from such Person of such
shares (or such other interests), and any other ownership or profit interest in
such Person (including, without limitation, partnership, member or trust
interests therein), whether voting or nonvoting, and whether or not such share,
warrant, option, right or other interest is authorized or otherwise existing on
any date of determination.

“Equity Issuance” means any issuance by a Person of any Equity Interest in such
Person and shall in any event include the issuance of any Equity Interest upon
the conversion or exchange of any security constituting Indebtedness that is
convertible or exchangeable, or is being converted or exchanged, for Equity
Interests.

“ERISA” means the Employee Retirement Income Security Act of 1974, as in effect
from time to time.

“ERISA Event” means, with respect to the ERISA Group, (a) any “reportable event”
as defined in Section 4043 of ERISA with respect to a Plan (other than an event
for which the 30-day notice period is waived); (b) the withdrawal of a member of
the ERISA Group from a Plan subject to Section 4063 of ERISA during a plan year
in which it was a “substantial employer” as defined in Section 4001(a)(2) of
ERISA or a cessation of operations that is treated as such a withdrawal under
Section 4062(e) of ERISA; (c) the incurrence by a member of the ERISA Group of
any liability with respect to the withdrawal or partial withdrawal from any
Multiemployer Plan; (d) the incurrence by any member of the ERISA Group of any
liability under Title IV of ERISA with respect to the termination of any Plan or
Multiemployer Plan; (e) the institution of proceedings to terminate a Plan or
Multiemployer Plan by the PBGC; (f) the failure by any member of the ERISA Group
to make when due required contributions to a Multiemployer Plan or Plan unless
such failure is cured within 30 days or the filing pursuant to Section 412(c) of
the Internal Revenue Code or Section 302(c) of ERISA of an application for a
waiver of the minimum funding standard; (g) any other event or condition that
might reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan
or Multiemployer Plan or the imposition of liability under Section 4069 or
4212(c) of ERISA; (h) the receipt by any member of the ERISA Group of any notice
or the receipt by any Multiemployer Plan from any member of the ERISA Group of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent (within the
meaning of Section 4245 of ERISA), in reorganization (within the meaning of
Section 4241 of ERISA), or in “critical” status (within the meaning of
Section 432 of the Internal Revenue Code or Section 305 of ERISA); (i) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon any member of
the ERISA Group or the imposition of any Lien in favor of the PBGC under Title
IV of ERISA; or (j) a determination that a Plan is, or is reasonably expected to
be, in “at risk” status (within the meaning of Section 430 of the Internal
Revenue Code or Section 303 of ERISA).

 

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“ERISA Group” means the Borrower, the Parent and all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
under common control, which, together with the Borrower or the Parent, are
treated as a single employer under Section 414 of the Internal Revenue Code.

“Event of Default” means any of the events specified in Section 11.1., provided
that any requirement for notice or lapse of time or any other condition has been
satisfied.

“Excluded Subsidiary” means any Subsidiary as to which both of the following
apply (a) such Subsidiary holds title to, or beneficially owns, assets which are
or are intended to become collateral for any Secured Indebtedness of such
Subsidiary, or is a direct or indirect beneficial owner of a Subsidiary holding
title to or beneficially owning such assets (but having no material assets other
than such beneficial ownership interests); and (b) which (i) is, or is expected
to be, prohibited from Guarantying the Indebtedness of any other Person pursuant
to any document, instrument or agreement evidencing such Secured Indebtedness or
(ii) is prohibited from Guarantying the Indebtedness of any other Person
pursuant a provision of such Subsidiary’s organizational documents which
provision was included in such Subsidiary’s organizational documents as a
condition to the extension of such Secured Indebtedness.

“Extended Letter of Credit” has the meaning given that term in Section 2.2.(b).

“Existing Credit Agreement” has the meaning given such term in the first
“WHEREAS” clause of this Agreement.

“Fair Market Value” means, (a) with respect to a security listed on a national
securities exchange or the NASDAQ National Market, the price of such security as
reported on such exchange or market by any widely recognized reporting method
customarily relied upon by financial institutions and (b) with respect to any
other property, the price which could be negotiated in an arm’s-length free
market transaction, for cash, between a willing seller and a willing buyer,
neither of which is under pressure or compulsion to complete the transaction.

“FASB ASC” means the Accounting Standards Codification of the Financial
Accounting Standards Board.

“FATCA” means Sections 1471 through 1474 of the Internal Revenue 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.

“Federal Funds Rate” means, for any day, the rate per annum (rounded upward to
the nearest 1/100th of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day, provided
that (a) if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the immediately preceding Business
Day, and (b) if no such rate is so published on such Business Day, the Federal
Funds Rate for such day shall be the average rate quoted to the Administrative
Agent by federal funds dealers selected by the Administrative Agent on such day
on such transaction as determined by the Administrative Agent.

 

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“Fee Letter” means that certain fee letter dated as of October 16, 2012, by and
among the Borrower, the Parent, the Lead Arrangers and the other parties
thereto.

“Fees” means the fees and commissions provided for or referred to in
Section 3.5. and any other fees payable by the Borrower hereunder, under any
other Loan Document or under the Fee Letter.

“FF&E Reserves” means, for any period and with respect to a Property, an amount
equal to the greater of (a) 4.0% of total gross revenues for such Property for
such period and (b) the aggregate amount of reserves in respect to furniture,
fixtures and equipment required under any Property Management Agreement or
Franchise Agreement applicable to such Properties for such period. If the term
FF&E Reserves is used without reference to a specific Property, then the amount
shall be determined on an aggregate basis with respect to all Properties of the
Parent and its Subsidiaries and a proportionate share of all Properties of all
Unconsolidated Affiliates.

“Fixed Charges” means, for any period, the sum of the following (without
duplication): (a) Interest Expense of the Parent and its Subsidiaries determined
on a consolidated basis for such period, (b) all regularly scheduled principal
payments made with respect to Indebtedness of the Parent and its Subsidiaries
during such period, other than any balloon, bullet or similar principal payment
which repays such Indebtedness in full, (c) all Preferred Dividends paid during
such period on Preferred Equity Interests not owned by the Parent or any of its
Subsidiaries and (d) payments in respect of Capitalized Lease Obligations. The
Parent’s pro rata share of the Fixed Charges of Unconsolidated Affiliates of the
Parent shall be included in determinations of Fixed Charges.

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes.
For purposes of this definition, the United States of America, each State
thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.

“Foreign Subsidiary” means a Subsidiary that is not a Domestic Subsidiary.

“Franchise Agreement” means an agreement permitting the use of the applicable
hotel brand name, hotel system trademarks, trade names and any related rights in
connection with the ownership or operation of a Property.

“Fronting Exposure” means, at any time there is a Defaulting Lender, with
respect to the Issuing Bank, such Defaulting Lender’s Commitment Percentage of
the outstanding Letter of Credit Liabilities other than Letter of Credit
Liabilities as to which such Defaulting Lender’s participation obligation has
been reallocated to other Lenders or Cash Collateralized in accordance with the
terms hereof.

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

“GAAP” means generally accepted accounting principles in the United States of
America set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by a significant
segment of the accounting profession in the United States of America, which are
applicable to the circumstances as of the date of determination.

 

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“Governmental Approvals” means all authorizations, consents, approvals, licenses
and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.

“Governmental Authority” means any national, state or local government (whether
domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory instrumentality,
authority, body, agency, bureau, commission, board, department or other
comparable authority (including, without limitation, the Federal Deposit
Insurance Corporation, the Comptroller of the Currency or the Federal Reserve
Board, any central bank or any comparable authority) or any arbitrator with
authority to bind a party at law.

“Ground Lease” means a ground lease containing the following terms and
conditions: (a) a remaining term (exclusive of any unexercised extension
options) of 50 years or more from the Agreement Date; (b) the right of the
lessee to mortgage and encumber its interest in the leased property without the
consent of the lessor, or, if consent is required, such consent has been
obtained or is required to be given upon the satisfaction of conditions
reasonably acceptable to the Administrative Agent; (c) the obligation of the
lessor to give the holder of any mortgage Lien on such leased property written
notice of any defaults on the part of the lessee and agreement of such lessor
that such lease will not be terminated until such holder has had a reasonable
opportunity to cure or complete foreclosures, and fails to do so;
(d) transferability of the lessee’s interest under such lease, including ability
to sublease without lessor consent or, if consent is required, such consent is
required to be given upon the satisfaction of conditions reasonably acceptable
to the Administrative Agent; and (e) such other rights customarily required by
mortgagees making a loan secured by the interest of the holder of the leasehold
estate demised pursuant to a ground lease.

“Guarantor” means any Person that is a party to the Guaranty as a “Guarantor”
and, in any event, shall include each Material Subsidiary (other than Excluded
Subsidiaries and Foreign Subsidiaries).

“Guaranty”, “Guaranteed”, “Guarantying” or to “Guarantee” as applied to any
obligation means and includes: (a) a guaranty (other than by endorsement of
negotiable instruments for collection or deposit in the ordinary course of
business), directly or indirectly, in any manner, of any part or all of such
obligation, or (b) an agreement, direct or indirect, contingent or otherwise,
and whether or not constituting a guaranty, the practical effect of which is to
assure the payment or performance (or payment of damages in the event of
nonperformance) of any part or all of such obligation whether by: (i) the
purchase of securities or obligations, (ii) the purchase, sale or lease (as
lessee or lessor) of property or the purchase or sale of services primarily for
the purpose of enabling the obligor with respect to such obligation to make any
payment or performance (or payment of damages in the event of nonperformance) of
or on account of any part or all of such obligation, or to assure the owner of
such obligation against loss, (iii) the supplying of funds to or in any other
manner investing in the obligor with respect to such obligation, (iv) repayment
of amounts drawn down by beneficiaries of letters of credit (including Letters
of Credit), or (v) the supplying of funds to or investing in a Person on account
of all or any part of such Person’s obligation under a Guaranty of any
obligation or indemnifying or holding harmless, in any way, such Person against
any part or all of such obligation. Obligations in respect of customary
performance guaranties and Guaranties constituting Nonrecourse Indebtedness
shall not be deemed to give rise to Indebtedness or otherwise constitute a
Guaranty except as otherwise provided in the definition of “Nonrecourse
Indebtedness”. As the context requires, “Guaranty” shall also mean the Amended
and Restated Guaranty executed and delivered pursuant to Section 6.1. and
substantially in the form of Exhibit B.

 

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“Hazardous Materials” means all or any of the following: (a) substances that are
defined or listed in, or otherwise classified pursuant to, any applicable
Environmental Laws as “hazardous substances”, “hazardous materials”, “hazardous
wastes”, “toxic substances” or any other formulation intended to define, list or
classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, “TCLP”
toxicity, or “EP toxicity”; (b) oil, petroleum or petroleum derived substances,
natural gas, natural gas liquids or synthetic gas and drilling fluids, produced
waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (c) any flammable
substances or explosives or any radioactive materials; (d) asbestos in any form;
(e) toxic mold; and (f) electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million.

“Implied Debt Service” means (a) a given principal balance of Indebtedness
multiplied by (b) the greatest of (i) 10% per annum, (ii) the highest per annum
interest rate then applicable to any of the outstanding principal balance of the
Loans and (iii) a mortgage debt constant for a loan calculated using a per annum
interest rate equal to the yield on a 10 year United States Treasury Note at
such time as determined by the Administrative Agent plus 3.50% and amortizing in
full in a 25-year period.

“Indebtedness” means, with respect to a Person, at the time of computation
thereof, all of the following (without duplication): (a) all obligations of such
Person in respect of money borrowed (other than trade debt incurred in the
ordinary course of business which is not more than 180 days past due); (b) all
obligations of such Person, whether or not for money borrowed (other than trade
debt incurred in the ordinary course of business which is not more than 180 days
past due) (i) represented by notes payable, or drafts accepted, in each case
representing extensions of credit, (ii) evidenced by bonds, debentures, notes or
similar instruments, or (iii) constituting purchase money indebtedness,
conditional sales contracts, title retention debt instruments or other similar
instruments, upon which interest charges are customarily paid or that are issued
or assumed as full or partial payment for property or services rendered;
(c) Capitalized Lease Obligations of such Person; (d) all reimbursement
obligations of such Person under any letters of credit or acceptances (whether
or not the same have been presented for payment); (e) all Off-Balance Sheet
Obligations of such Person; (f) all obligations of such Person to purchase,
redeem, retire, defease or otherwise make any payment in respect of any
Mandatorily Redeemable Stock issued by such Person or any other Person, valued
at the greater of its voluntary or involuntary liquidation preference plus
accrued and unpaid dividends; (g) all obligations of such Person in respect of
any (i) purchase obligation, repurchase obligation or takeout commitment, in
each case evidenced by a binding agreement and to the extent such obligation is
to acquire Equity Interests of another Person, assets of another Person that
constitute the business or a division or operating unit of such Person, real
estate, bonds, debentures, notes or similar instruments or (ii) forward equity
commitment evidenced by a binding agreement (provided, however that this clause
(g) shall exclude any such obligation to the extent the obligation can be
satisfied by the issuance of Equity Interests (other than Mandatorily Redeemable
Stock)); (h) net obligations under any Derivatives Contract not entered into as
a hedge against Indebtedness existing from time to time, in an amount equal to
the Derivatives Termination Value thereof; (i) all Indebtedness of other Persons
which such Person has Guaranteed or is otherwise recourse to such Person (except
for Guaranties constituting Nonrecourse Indebtedness); (j) all Indebtedness of
another Person secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on property
or assets owned by such Person, even though such Person has not assumed or
become liable for the payment of such Indebtedness or other payment obligation
and (k) such Person’s Ownership Share of the Indebtedness of any Unconsolidated
Affiliate of such Person. Indebtedness of any Person shall include Indebtedness
of any partnership or joint venture in which such Person is a general partner or
joint venturer to the extent of such Person’s Ownership Share of the ownership
of such partnership or joint venture (except if such Indebtedness, or portion

 

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thereof, is recourse (other than in respect of exceptions referred to in the
definition of Nonrecourse Indebtedness) to such Person, in which case the
greater of such Person’s Ownership Share of such Indebtedness or the amount of
such recourse portion of the Indebtedness, shall be included as Indebtedness of
such Person). All Loans and Letter of Credit Liabilities shall constitute
Indebtedness of the Borrower. Notwithstanding the foregoing, (A) in the case of
any Nonrecourse Indebtedness as to which recourse for payment thereof is
expressly limited to the property or asset on which a Lien is granted, such
Indebtedness shall be valued at the lesser of (i) the stated or determinable
amount of the Indebtedness that is so secured or, if not stated or determinable,
the maximum reasonably anticipated liability in respect thereof subject to
confirmation by the Administrative Agent in its reasonable discretion and
(ii) the Fair Market Value of such property or asset; and (B) in the case of any
Indebtedness of other Persons which such Person has Guaranteed, the amount of
such Indebtedness attributable to such Person shall be equal to the lesser of
the stated or determinable amount of the Indebtedness such Person Guaranteed or,
if the amount of such Indebtedness is not stated or determinable, the maximum
reasonably anticipated liability in respect thereof subject to confirmation by
the Administrative Agent in its reasonable discretion. The calculation of
Indebtedness shall not include any fair value adjustments to the carrying value
of liabilities to record such Indebtedness at fair value pursuant to electing
the fair value option election under FASB ASC 825-10-25 (formerly known as FAS
159, The Fair Value Option for Financial Assets and Financial Liabilities) or
other FASB standards allowing entities to elect fair value option for financial
liabilities. Therefore, the amount of Indebtedness shall be the historical cost
basis, which generally is the contractual amount owed adjusted for amortization
or accretion of any premium or discount.

“Intellectual Property” has the meaning given that term in Section 7.1.(t).

“Interest Expense” means, with respect to a Person and for any period, and
without duplication (a) all paid, accrued or capitalized interest expense
(including, without limitation, capitalized interest expense (other than
capitalized interest funded from a construction loan interest reserve account
held by another lender and not included in the calculation of cash for balance
sheet reporting purposes) and interest expense attributable to Capitalized Lease
Obligations) of such Person and in any event shall include all letter of credit
fees and all interest expense with respect to any Indebtedness in respect of
which such Person is wholly or partially liable whether pursuant to any
repayment, interest carry, performance guarantee or otherwise, plus (b) to the
extent not already included in the foregoing clause (a), such Person’s Ownership
Share of all paid, accrued or capitalized interest expense for such period of
Unconsolidated Affiliates of such Person. The term “Interest Expense” shall
exclude all costs and expenses of defeasing any Indebtedness encumbering any
Property following the acquisition thereof.

“Interest Period” means with respect to each LIBOR Loan, each period commencing
on the date such LIBOR Loan is made, or in the case of the Continuation of a
LIBOR Loan the last day of the preceding Interest Period for such Loan, and
ending on the numerically corresponding day in the first, third or sixth
calendar month thereafter, as the Borrower may select in a Notice of Borrowing,
Notice of Continuation or Notice of Conversion, as the case may be, except that
each Interest Period that commences on the last Business Day of a calendar month
(or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month. Notwithstanding the foregoing: (i) if any
Interest Period would otherwise end after the Termination Date, such Interest
Period shall end on the Termination Date; and (ii) each Interest Period that
would otherwise end on a day which is not a Business Day shall end on the
immediately following Business Day (or, if such immediately following Business
Day falls in the next calendar month, on the immediately preceding Business
Day).

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.

 

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“Investment” means, with respect to any Person, any acquisition or investment
(whether or not of a controlling interest) by such Person, by means of any of
the following: (a) the purchase or other acquisition of any Equity Interest in
another Person, (b) a loan, advance or extension of credit to, capital
contribution to, Guaranty of Indebtedness of, or purchase or other acquisition
of any Indebtedness of, another Person, including any partnership or joint
venture interest in such other Person, or (c) the purchase or other acquisition
(in one transaction or a series of transactions) of assets of another Person
that constitute the business or a division or operating unit of another Person.
Any binding commitment to make an Investment in any other Person, as well as any
option of another Person to require an Investment in such Person, shall
constitute an Investment. Except as expressly provided otherwise, for purposes
of determining compliance with any covenant contained in a Loan Document, the
amount of any Investment shall be the amount actually invested, without
adjustment for subsequent increases or decreases in the value of such
Investment.

“Issuing Bank” means Wells Fargo in its capacity as the issuer of Letters of
Credit pursuant to Section 2.2.

“L/C Commitment Amount” has the meaning given that term in Section 2.2.(a).

“L/C Disbursement” has the meaning given to that term in Section 3.9.(b).

“Lender” means each financial institution from time to time party hereto as a
“Lender”, together with its respective successors and permitted assigns, and, as
the context requires, includes the Swingline Lender; provided, however, that the
term “Lender” except as otherwise expressly provided herein, shall exclude any
Lender (or its Affiliates) in its capacity as a Specified Derivatives Provider.

“Lending Office” means, for each Lender and for each Type of Loan, the office of
such Lender specified in such Lender’s Administrative Questionnaire or in the
applicable Assignment and Assumption, or such other office of such Lender as
such Lender may notify the Administrative Agent in writing from time to time.

“Letter of Credit” has the meaning given that term in Section 2.2.(a).

“Letter of Credit Collateral Account” means a special deposit account maintained
by the Administrative Agent, for the benefit of the Administrative Agent, the
Issuing Bank and the Lenders and under its sole dominion and control.

“Letter of Credit Documents” means, with respect to any Letter of Credit,
collectively, any application therefor, any certificate or other document
presented in connection with a drawing under such Letter of Credit and any other
agreement, instrument or other document governing or providing for (a) the
rights and obligations of the parties concerned or at risk with respect to such
Letter of Credit or (b) any collateral security for any of such obligations.

“Letter of Credit Liabilities” means, without duplication, at any time and in
respect of any Letter of Credit, the sum of (a) the Stated Amount of such Letter
of Credit plus (b) the aggregate unpaid principal amount of all Reimbursement
Obligations of the Borrower at such time due and payable in respect of all
drawings made under such Letter of Credit. For purposes of this Agreement, a
Lender (other than the Lender then acting as Issuing Bank) shall be deemed to
hold a Letter of Credit Liability in an amount equal to its participation
interest under Section 2.2. in the related Letter of Credit, and the Lender then
acting as the Issuing Bank shall be deemed to hold a Letter of Credit Liability
in an amount equal to its retained interest in the related Letter of Credit
after giving effect to the acquisition by the Lenders (other than the Lender
then acting as the Issuing Bank) of their participation interests under such
Section.

 

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“LIBOR” means, for the Interest Period for any LIBOR Loan, the rate of interest,
rounded up to the nearest whole multiple of one-hundredth of one percent
(0.01%), obtained by dividing (i) the rate of interest, rounded upward to the
nearest whole multiple of one-sixteenth of one percent (0.0625%), referred to as
the BBA (British Bankers’ Association) LIBOR rate as set forth by any service
selected by the Administrative Agent that has been nominated by the British
Bankers’ Association as an authorized information vendor for the purpose of
displaying such rate for deposits in U.S. Dollars at approximately 9:00 a.m.
Pacific time, two (2) Business Days prior to the date of commencement of such
Interest Period for purposes of calculating effective rates of interest for
loans or obligations making reference thereto, for an amount approximately equal
to the applicable LIBOR Loan and for a period of time approximately equal to
such Interest Period by (ii) a percentage equal to 1 minus the stated maximum
rate (stated as a decimal) of all reserves, if any, required to be maintained
with respect to Eurocurrency funding (currently referred to as “Eurocurrency
liabilities”) as specified in Regulation D of the Board of Governors of the
Federal Reserve System (or against any other category of liabilities which
includes deposits by reference to which the interest rate on LIBOR Loans is
determined or any applicable category of extensions of credit or other assets
which includes loans by an office of any Lender outside of the United States of
America). Any change in such maximum rate shall result in a change in LIBOR on
the date on which such change in such maximum rate becomes effective. For the
avoidance of doubt, the calculation of LIBOR is not subject to a “minimum” or
“floor” rate of interest.

“LIBOR Loan” means a Revolving Loan (or any portion thereof) (other than a Base
Rate Loan) bearing interest at a rate based on LIBOR.

“LIBOR Market Index Rate” means, for any day, LIBOR as of that day that would be
applicable for a LIBOR Loan having a one-month Interest Period determined at
approximately 9:00 a.m. Pacific time for such day (or if such day is not a
Business Day, the immediately preceding Business Day). The LIBOR Market Index
Rate shall be determined on a daily basis.

“Lien” as applied to the property of any Person means: (a) any security
interest, encumbrance, mortgage, deed to secure debt, deed of trust, assignment
of leases and rents, pledge, lien, charge or lease constituting a Capitalized
Lease Obligation, conditional sale or other title retention agreement, or other
security title or encumbrance of any kind in respect of any property of such
Person, or upon the income, rents or profits therefrom; (b) any arrangement,
express or implied, under which any property of such Person is transferred,
sequestered or otherwise identified for the purpose of subjecting the same to
the payment of Indebtedness or performance of any other obligation in priority
to the payment of the general, unsecured creditors of such Person; (c) the
filing of any financing statement under the Uniform Commercial Code or its
equivalent in any jurisdiction, other than any precautionary filing not
otherwise constituting or giving rise to a Lien, including a financing statement
filed (i) in respect of a lease not constituting a Capitalized Lease Obligation
pursuant to Section 9-505 (or a successor provision) of the Uniform Commercial
Code or its equivalent as in effect in an applicable jurisdiction or (ii) in
connection with a sale or other disposition of accounts or other assets not
prohibited by this Agreement in a transaction not otherwise constituting or
giving rise to a Lien; and (d) any agreement by such Person to grant, give or
otherwise convey any of the foregoing.

“Loan” means a Revolving Loan or a Swingline Loan.

“Loan Document” means this Agreement, each Note, each Letter of Credit Document,
the Guaranty, and each other document or instrument now or hereafter executed
and delivered by a Loan Party in connection with, pursuant to or relating to
this Agreement (excluding the Fee Letter).

 

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“Loan Party” means the Borrower, the Parent and each other Guarantor.
Schedule 1.1. sets forth the Loan Parties in addition to the Borrower and the
Parent as of the Agreement Date.

“Mandatorily Redeemable Stock” means, with respect to any Person, any Equity
Interest of such Person which by the terms of such Equity Interest (or by the
terms of any security into which it is convertible or for which it is
exchangeable or exercisable), upon the happening of any event or otherwise
(a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation
or otherwise (other than an Equity Interest to the extent redeemable in exchange
for common stock or other equivalent common Equity Interests), (b) is
convertible into or exchangeable or exercisable for Indebtedness or Mandatorily
Redeemable Stock, or (c) is redeemable at the option of the holder thereof, in
whole or in part (other than an Equity Interest which is redeemable solely in
exchange for common stock or other equivalent common Equity Interests), in each
case on or prior to the date on which all Loans are scheduled to be due and
payable in full.

“Marketable Securities” means (a) bank deposits and certificates of deposit from
a bank rated Baa1 or BBB+ or better by a Rating Agency; (b) government
obligations; and (c) commercial paper rated A1 or P1 by a Rating Agency.

“Material Adverse Effect” means a materially adverse effect on (a) the business,
assets, liabilities, financial condition or results of operations of the Parent
and its Subsidiaries, or the Borrower and its Subsidiaries, in each case, taken
as a whole, (b) the ability of the Borrower or any other Loan Party to perform
its obligations under any Loan Document to which it is a party, (c) the validity
or enforceability of any of the material provisions of the Loan Documents, or
(d) the material rights and remedies of the Lenders and the Administrative Agent
under any of the Loan Documents.

“Material Contract” means any contract or other arrangement (other than Loan
Documents), whether written or oral, to which the Parent, the Borrower, or any
other Subsidiary is a party as to which the breach, nonperformance, cancellation
or failure to renew by any party thereto could reasonably be expected to have a
Material Adverse Effect.

“Material Subsidiary” means any Subsidiary (a) that owns in fee simple, or
leases pursuant to a ground lease, an Unencumbered Borrowing Base Property or
(b) to which more than 5% of Total Asset Value is attributable on an individual
basis.

“Maximum Loan Availability” means, at any time, the lesser of (a) 60% of the
Unencumbered Borrowing Base Value or (b) the aggregate principal balance of
Indebtedness (excluding Nonrecourse Indebtedness and Indebtedness to the extent
owing among the Parent and/or any of its Subsidiaries but including Secured
Recourse Indebtedness and the aggregate principal amount of all Loans and the
aggregate amount of all Letter of Credit Liabilities) of the Parent and the
Ownership share of all such Indebtedness of its Subsidiaries that would cause
the ratio of (A) Adjusted NOI of the Unencumbered Borrowing Base Properties at
such time to (B) Implied Debt Service for such period determined with respect to
such principal balance of Indebtedness to equal 1.30 to 1.00.

“Moody’s” means Moody’s Investors Service, Inc. and its successors.

“Mortgage” means a mortgage, deed of trust, deed to secure debt or similar
security instrument made by a Person owning an interest in real property
granting a Lien on such interest in real property as security for the payment of
Indebtedness of such Person or another Person.

 

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“Mortgage Receivable” means a promissory note secured by a Mortgage of which the
Parent, the Borrower or another Subsidiary is the holder and retains the rights
of collection of all payments thereunder.

“Multiemployer Plan” means at any time a multiemployer plan within the meaning
of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then
making or accruing an obligation to make contributions or has within the
preceding six plan years made contributions, including for these purposes any
Person which ceased to be a member of the ERISA Group during such six-year
period.

“Negative Pledge” means, with respect to a given asset, any provision of a
document, instrument or agreement (other than any Loan Document or Specified
Derivatives Contract) which prohibits or purports to prohibit the creation or
assumption of any Lien on such asset as security for Indebtedness of the Person
owning such asset or any other Person; provided, however, that an agreement that
conditions a Person’s ability to encumber its assets upon the maintenance of one
or more specified ratios that limit such Person’s ability to encumber its assets
but that do not generally prohibit the encumbrance of its assets, or the
encumbrance of specific assets, shall not constitute a Negative Pledge.

“Net Operating Income” or “NOI” means, for any Property and for a given period,
the sum of the following (without duplication and determined on a consistent
basis with prior periods): (a) gross revenues received in the ordinary course
from such Property minus (b) all expenses paid (excluding interest but including
an appropriate accrual for property taxes and insurance) related to the
ownership, operation or maintenance of such Property, including but not limited
to property taxes, assessments and the like, insurance, utilities, payroll
costs, maintenance, repair and landscaping expenses, marketing expenses, and
general and administrative expenses (including an appropriate allocation for
legal, accounting, advertising, marketing and other expenses incurred in
connection with such Property, but specifically excluding general overhead
expenses of the Borrower or any Subsidiary and any property management fees)
minus (c) the FF&E Reserves for such Property as of the end of such period minus
(d) the greater of (i) the actual property management fee paid during such
period and (ii) an imputed management fee in the amount of three percent
(3.0%) of the gross revenues for such Property for such period.

“Net Tangible Proceeds” means with respect to any Equity Issuance by a Person,
the aggregate amount of all cash and the Fair Market Value of all other property
(other than (a) securities of such Person being converted or exchanged in
connection with such Equity Issuance and (b) assets separately classified as
intangible assets under GAAP) received by such Person in respect of such Equity
Issuance net of investment banking fees, legal fees, accountants’ fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred by such Person in connection with such Equity Issuance.

“New Property” means each Property on which a hotel is located acquired by the
Parent, the Borrower, any Subsidiary or Unconsolidated Affiliate from the date
of acquisition until the Seasoned Date in respect thereof; provided, however,
that, upon the Seasoned Date for any New Property, such New Property shall be
converted to a Seasoned Property and shall cease to be a New Property. For
purposes of clarification, any Property acquired by the Parent, Borrower, any
Subsidiary or any Unconsolidated Affiliate during the calendar year 2012 shall
qualify as a New Property until its applicable Seasoned Date, from which time
such New Property shall, for an avoidance of doubt, be considered a Seasoned
Property.

“Non-Defaulting Lender” means a Lender that is not a Defaulting Lender.

 

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“Nonrecourse Indebtedness” means, with respect to a Person, (a) Indebtedness for
borrowed money in respect of which recourse for payment (except for customary
exceptions for fraud, misapplication of funds, environmental indemnities,
voluntary bankruptcy, collusive involuntary bankruptcy and other similar
exceptions to nonrecourse liability) is contractually limited to specific assets
of such Person encumbered by a Lien securing such Indebtedness, (b) obligations
in respect of guaranties of customary exceptions for fraud, misapplication of
funds, environmental indemnities, voluntary bankruptcy, collusive involuntary
bankruptcy and other similar exceptions to nonrecourse liability, provided that,
once any such obligation shall cease to be contingent, then such obligation
shall cease to be Nonrecourse Indebtedness, or (c) if such Person is a Single
Asset Entity, any Indebtedness for borrowed money of such Person.

“Note” means a Revolving Note or a Swingline Note.

“Notice of Borrowing” means a notice substantially in the form of Exhibit D (or
such other form reasonably acceptable to the Administrative Agent and containing
the information required in such Exhibit) to be delivered to the Administrative
Agent pursuant to Section 2.1.(b) evidencing the Borrower’s request for a
borrowing of Revolving Loans.

“Notice of Continuation” means a notice substantially in the form of Exhibit E
(or such other form reasonably acceptable to the Administrative Agent and
containing the information required in such Exhibit) to be delivered to the
Administrative Agent pursuant to Section 2.8. evidencing the Borrower’s request
for the Continuation of a LIBOR Loan.

“Notice of Conversion” means a notice substantially in the form of Exhibit F (or
such other form reasonably acceptable to the Administrative Agent and containing
the information required in such Exhibit) to be delivered to the Administrative
Agent pursuant to Section 2.9. evidencing the Borrower’s request for the
Conversion of a Loan from one Type to another Type.

“Notice of Swingline Borrowing” means a notice substantially in the form of
Exhibit G (or such other form reasonably acceptable to the Administrative Agent
and containing the information required in such Exhibit) to be delivered to the
Swingline Lender pursuant to Section 2.3.(b) evidencing the Borrower’s request
for a Swingline Loan.

“Obligations” means, individually and collectively: (a) the aggregate principal
balance of, and all accrued and unpaid interest on, all Loans; (b) all
Reimbursement Obligations and all other Letter of Credit Liabilities; and
(c) all other indebtedness, liabilities, obligations, covenants and duties of
the Borrower and the other Loan Parties owing to the Administrative Agent, the
Issuing Bank or any Lender of every kind, nature and description, under or in
respect of this Agreement or any of the other Loan Documents or the Fee letter,
including, without limitation, the Fees and indemnification obligations, whether
direct or indirect, absolute or contingent, due or not due, contractual or
tortious, liquidated or unliquidated, and whether or not evidenced by any
promissory note. The term “Obligations” does not include any Specified
Derivatives Obligations.

“OFAC” has the meaning given that term in Section 7.1.(z).

“Off-Balance Sheet Obligations” means liabilities and obligations of the Parent,
any Subsidiary or any other Person in respect of “off-balance sheet
arrangements” (as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated
under the Securities Act) which the Parent would be required to disclose in the
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” section of the Parent’s report on Form 10-Q or Form 10-K (or their
equivalents) which the Parent is required to file with the Securities and
Exchange Commission (or any Governmental Authority substituted therefor).

 

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“Operating Property Value” means, at any date of determination, (a) for each New
Property (until the Seasoned Date), the Appraised Value of such Property; or
(b) for each Seasoned Property, (A) the Adjusted NOI of such Property for the
period of four consecutive fiscal quarters most recently ending divided by
(B) the applicable Capitalization Rate.

“Ownership Share” means, with respect to any Subsidiary of a Person (other than
a Wholly Owned Subsidiary) or any Unconsolidated Affiliate of a Person, the
greater of (a) such Person’s relative nominal direct and indirect ownership
interest (expressed as a percentage) in such Subsidiary or Unconsolidated
Affiliate or (b) such Person’s relative direct and indirect economic interest
(calculated as a percentage) in such Subsidiary or Unconsolidated Affiliate
determined in accordance with the applicable provisions of the declaration of
trust, articles or certificate of incorporation, articles of organization,
partnership agreement, joint venture agreement or other applicable
organizational document of such Subsidiary or Unconsolidated Affiliate.

“Parent” has the meaning given such term in the introductory paragraph hereof.

“Participant” has the meaning given that term in Section 13.6.(d).

“Participant Register” has the meaning given that term in Section 13.6.(d).

“Patriot Act” means The Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).

“PBGC” means the Pension Benefit Guaranty Corporation and any successor agency.

“Permitted Liens” means, as to any Person: (a) Liens securing taxes, assessments
and other charges or levies imposed by any Governmental Authority (excluding any
Lien imposed pursuant to any of the provisions of ERISA or pursuant to any
Environmental Laws) or the claims of materialmen, mechanics, carriers,
warehousemen or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, which are not at the time required to be paid
or discharged under Section 8.6.; (b) Liens consisting of deposits or pledges
made, in the ordinary course of business, in connection with, or to secure
payment of, obligations under workers’ compensation, unemployment insurance or
similar Applicable Laws; (c) Liens consisting of encumbrances in the nature of
zoning restrictions, easements, and rights or restrictions of record on the use
of real property, which do not materially detract from the value of such
property or impair the intended use thereof in the business of such Person;
(d) the rights of tenants under leases or subleases or licenses not interfering
with the ordinary conduct of business of such Person; (e) Liens in favor of the
Administrative Agent for the benefit of the Lenders; (f) Liens in favor of the
Borrower or a Guarantor securing obligations owing by a Subsidiary to the
Borrower or a Guarantor; (g) Liens in existence as of the Agreement Date and set
forth in Part II of Schedule 7.1.(f); (h) Liens arising out of judgments or
awards in respect of the Parent or any of its Subsidiaries not constituting an
Event of Default under Section 11.1.(i); (i) any interest or title of a lessor
under any lease of equipment (not constituting a fixture) entered into by the
Borrower or any Subsidiary in the ordinary course of its business and covering
only the assets so leased; (j) Liens arising in the ordinary course of business
by virtue of any contractual, statutory or common law provision relating to
banker’s liens, rights of set-off or similar rights and remedies covering
deposit or securities accounts (including funds or other assets credited
thereto); and (k) Liens securing the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of business
and not securing any Indebtedness.

 

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“Person” means any natural person, corporation, limited partnership, general
partnership, joint stock company, limited liability company, limited liability
partnership, joint venture, association, company, trust, bank, trust company,
land trust, business trust or other organization, whether or not a legal entity,
or any other nongovernmental entity, or any Governmental Authority.

“Plan” means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (a) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (b) has at any time within the
preceding six years been maintained, or contributed to, by any Person which was
at such time a member of the ERISA Group for employees of any Person which was
at such time a member of the ERISA Group.

“Post-Default Rate” means, in respect of any principal of any Loan or any other
Obligation, a rate per annum equal to the Base Rate as in effect from time to
time plus the Applicable Margin plus two (2.0%).

“Preferred Dividends” means, for any period and without duplication, all
Restricted Payments paid during such period on Preferred Equity Interests issued
by the Parent or a Subsidiary. Preferred Dividends shall not include dividends
or distributions (a) paid or payable solely in Equity Interests (other than
Mandatorily Redeemable Stock) payable to holders of such class of Equity
Interests, (b) paid or payable to the Parent or a Subsidiary, or
(c) constituting or resulting in the redemption of Preferred Equity Interests,
other than scheduled redemptions not constituting balloon, bullet or similar
redemptions in full.

“Preferred Equity Interests” means, with respect to any Person, Equity Interests
in such Person which are entitled to preference or priority over any other
Equity Interest in such Person in respect of the payment of dividends or
distribution of assets upon liquidation or both.

“Pricing Ratio” means the ratio of (i) Total Indebtedness as of any date of
determination to (ii) the EBITDA of the Parent and its Subsidiaries determined
on a consolidated basis for the period of twelve consecutive fiscal months most
recently ending; provided, however, solely for purposes of determining the
Pricing Ratio, (a) if a Property has not continuously operated for the
immediately preceding period of twelve consecutive months, then the EBITDA of
such Person attributable to such Property shall be calculated by annualizing the
historical EBITDA attributable to such Property for the most recently ending
period for which it has been in continuous operation, determined on a pro forma
basis reasonably acceptable to the Administrative Agent, (b) EBITDA of such
Person attributable to any Property that was acquired during the period of
twelve consecutive fiscal months most recently ending shall include EBITDA
attributable to such Property during any portion of such period that occurred
prior to such acquisition, as determined by the Borrower (subject to the
reasonable approval of the Administrative Agent), based on the operating
statements received from the prior owner or operator, (c) Total Indebtedness
shall be determined net of the amount of unrestricted and Lien-free cash and
Cash Equivalents in excess of $15,000,000, including Lien-free cash and Cash
Equivalents resulting from any disposition referred to in clause (e) below,
regardless of whether such cash or Cash Equivalents were received after the end
of the applicable calculation period, (d) Total Indebtedness shall not include
purchase obligations of the Parent and any of its Subsidiaries in respect of
136-140 West 42nd Street, New York, New York prior to the acquisition of such
Property by the Parent or any of its Subsidiaries and (e) EBITDA shall be
adjusted in a manner acceptable to the Administrative Agent and the Borrower to
reflect acquisitions and dispositions of Properties by the Borrower or any
Subsidiary during the period of twelve consecutive fiscal months most recently
ending.

“Principal Office” means the office of the Administrative Agent located at
NorthStar East Building, MAC:N9303-110, 608 Second Avenue S., Minneapolis,
Minnesota 55402, or any other subsequent office that the Administrative Agent
shall have specified as the Principal Office by written notice to the Borrower
and the Lenders.

 

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“Property” means any parcel of real property owned or leased (in whole or in
part) or operated by the Parent, the Borrower, any other Subsidiary or any
Unconsolidated Affiliate of the Parent and which is located in a state of the
United States of America or the District of Columbia.

“Property Management Agreement” means, collectively, all agreements entered into
by a Loan Party pursuant to which such Loan Party engages a Person to advise it
with respect to the management of an Unencumbered Borrowing Base Property or to
provide management services with respect to the same.

“Qualified Plan” means a Benefit Arrangement or Plan that is intended to be
tax-qualified under Section 401(a) of the Internal Revenue Code.

“Qualified REIT Subsidiary” shall have the meaning given to such term in the
Internal Revenue Code.

“Rating Agencies” means S&P and Moody’s.

“Register” has the meaning given that term in Section 13.6.(c).

“Regulatory Change” means, with respect to any Lender, any change effective
after the Agreement Date in Applicable Law (including without limitation,
Regulation D of the Board of Governors of the Federal Reserve System) or the
adoption or making after such date of any interpretation, directive or request
applying to a class of banks, including such Lender, of or under any Applicable
Law (whether or not having the force of law and whether or not failure to comply
therewith would be unlawful) by any Governmental Authority or monetary authority
charged with the interpretation or administration thereof or compliance by any
Lender with any request or directive regarding capital adequacy. Notwithstanding
anything herein to the contrary, (a) the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, guidelines or directives
thereunder or issued in connection therewith and (b) all requests, rules,
guidelines or 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 “Regulatory Change”,
regardless of the date enacted, adopted or issued.

“Reimbursement Obligation” means the absolute, unconditional and irrevocable
obligation of the Borrower to reimburse the Issuing Bank for any drawing honored
by the Issuing Bank under a Letter of Credit.

“REIT” means a Person qualifying for treatment as a “real estate investment
trust” under the Internal Revenue Code.

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, shareholders, directors, officers, employees, agents, counsel,
other advisors and representatives of such Person and of such Person’s
Affiliates.

“Requisite Lenders” means, as of any date, (a) Lenders having more than 51.0% of
the aggregate amount of the Commitments, or (b) if the Commitments have been
terminated or reduced to zero, Lenders holding more than 51.0% of the principal
amount of the aggregate outstanding Loans and Letter of Credit Liabilities;
provided that (i) in determining such percentage at any given time, all then
existing Defaulting Lenders will be disregarded and excluded and (ii) at all
times when two or more Lenders (excluding Defaulting Lenders) are party to this
Agreement, the term “Requisite Lenders” shall in no event mean less than two
Lenders. For purposes of this definition, a Lender shall be deemed to hold a
Swingline Loan or a Letter of Credit Liability to the extent such Lender has
acquired a participation therein under the terms of this Agreement and has not
failed to perform its obligations in respect of such participation.

 

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“Responsible Officer” means with respect to the Parent, the Borrower or any
Subsidiary, the chief executive officer, the chief financial officer, chief
operating officer or general counsel of the Parent, the Borrower or such
Subsidiary.

“Restricted Payment” means: (a) any dividend or other distribution, direct or
indirect, on account of any Equity Interest of the Parent, the Borrower or any
Subsidiary now or hereafter outstanding, except a dividend payable solely in
Equity Interests; (b) any redemption, conversion, exchange, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct or
indirect, of any Equity Interest of the Parent, the Borrower or any Subsidiary
now or hereafter outstanding; and (c) any payment made to retire, or to obtain
the surrender of, any outstanding warrants, options or other rights to acquire
any Equity Interests of the Parent, the Borrower or any Subsidiary now or
hereafter outstanding.

“Revolving Credit Exposure” means, as to any Lender at any time, the aggregate
principal amount at such time of its outstanding Revolving Loans and such
Lender’s participation in Letter of Credit Liabilities and Swingline Loans at
such time.

“Revolving Loan” means a loan made by a Lender to the Borrower pursuant to
Section 2.1.(a).

“Revolving Note” means a promissory note of the Borrower substantially in the
form of Exhibit C, payable to the order of a Lender in a principal amount equal
to the amount of such Lender’s Commitment.

“Seasoned Date” means the first day on which an acquired Property on which a
hotel is located has been owned for five (5) full fiscal quarters following the
date of acquisition by the Parent, the Borrower, a Subsidiary or an
Unconsolidated Affiliate.

“Seasoned Property” means Property on which a hotel is located that is not a New
Property.

“Secured Indebtedness” means, with respect to any Person, (a) all Indebtedness
of such Person that is secured in any manner by any Lien on any Property plus
(b) such Person’s pro rata share of the Secured Indebtedness of any of such
Person’s Unconsolidated Affiliates.

“Secured Recourse Indebtedness” means all Indebtedness (including Guaranties of
Secured Indebtedness) that is Secured Indebtedness and is not Nonrecourse
Indebtedness.

“Securities Act” means the Securities Act of 1933, as amended from time to time,
together with all rules and regulations issued thereunder.

“Significant Subsidiary” means any Subsidiary to which more than $15,000,000 of
Total Asset Value is attributable.

 

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“Single Asset Entity” means a Person (other than an individual) that (a) only
owns a single Property; (b) is engaged only in the business of owning,
developing and/or leasing such Property; and (c) receives substantially all of
its gross revenues from such Property. In addition, if the assets of a Person
consist solely of (i) Equity Interests in one or more Single Asset Entities that
directly or indirectly own such single Property and (ii) cash and other assets
of nominal value incidental to such Person’s ownership of the other Single Asset
Entity, such Person shall also be deemed to be a Single Asset Entity for
purposes of this Agreement.

“Solvent” means, when used with respect to any Person, that (a) the fair value
and the fair salable value of its assets (excluding any Indebtedness due from
any Affiliate of such Person) are each in excess of the fair valuation of its
total liabilities (including all contingent liabilities computed at the amount
which, in light of all the facts and circumstances existing at such time,
represents the amount that could reasonably be expected to become an actual and
matured liability); (b) such Person is able to pay its debts or other
obligations in the ordinary course as they mature; and (c) such Person has
capital not unreasonably small to carry on its business and all business in
which it proposes to be engaged.

“Specified Derivatives Contract” means any Derivatives Contract, together with
any Derivatives Support Document relating thereto, that is made or entered into
at any time, or in effect at any time now or hereafter, whether as a result of
an assignment or transfer or otherwise, between the Parent, the Borrower or any
Subsidiary of the Parent and an Specified Derivatives Provider.

“Specified Derivatives Obligations” means all indebtedness, liabilities,
obligations, covenants and duties of the Parent, the Borrower or any
Subsidiaries under or in respect of any Specified Derivatives Contract, whether
direct or indirect, absolute or contingent, due or not due, liquidated or
unliquidated, and whether or not evidenced by any written confirmation.

“Specified Derivatives Provider” means any Lender, or any Affiliate of a Lender
that is a party to a Derivatives Contract at the time the Derivatives Contract
is entered into.

“S&P” means Standard & Poor’s Rating Services, a Standard & Poor’s Financial
Services LLC business and its successors.

“Stated Amount” means the amount available to be drawn by a beneficiary under a
Letter of Credit from time to time, as such amount may be increased or reduced
from time to time in accordance with the terms of such Letter of Credit.

“Subsidiary” means, for any Person, any corporation, partnership, limited
liability company or other entity of which at least a majority of the Equity
Interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other individuals performing similar functions of
such corporation, partnership, limited liability company or other entity
(without regard to the occurrence of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person, and
shall include all Persons the accounts of which are consolidated with those of
such Person pursuant to GAAP.

“Swingline Commitment” means the Swingline Lender’s obligation to make Swingline
Loans pursuant to Section 2.3. in an amount up to, but not exceeding the amount
set forth in the first sentence of Section 2.3.(a), as such amount may be
reduced from time to time in accordance with the terms hereof.

“Swingline Lender” means Wells Fargo Bank, National Association, together with
its respective successors and assigns.

“Swingline Loan” means a loan made by the Swingline Lender to the Borrower
pursuant to Section 2.3.

 

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“Swingline Maturity Date” means the date which is 7 Business Days prior to the
Revolving Termination Date.

“Swingline Note” means the promissory note of the Borrower substantially in the
form of Exhibit H, payable to the order of the Swingline Lender in a principal
amount equal to the amount of the Swingline Commitment as originally in effect
and otherwise duly completed.

“Tangible Net Worth” means, as of any given time: (a) the unallocated gross book
value (exclusive of depreciation and amortization) of all real estate assets of
the Parent and its Subsidiaries that constitute Properties at such time; plus
(b) the book value of other assets (excluding any real estate assets but
including Investments in Unconsolidated Affiliates) of the Parent and its
Subsidiaries; less (c) all amounts appearing on the assets side of a
consolidated balance sheet of the Parent for assets separately classified as
intangible assets under GAAP (except for allocations of property purchase prices
pursuant to FASB ASC 805); less (d) all Total Indebtedness of the Parent and its
Subsidiaries (excluding such Person’s Ownership Share of Indebtedness of any
Unconsolidated Affiliate to the extent included in Total Indebtedness)
determined on a consolidated basis; less (e) all other liabilities of the Parent
and its Subsidiaries determined on a consolidated basis (except liabilities
resulting from allocations of property purchase prices pursuant to FASB ASC
805).

“Taxable REIT Subsidiary” means any corporation (other than a REIT) in which the
Parent directly or indirectly owns stock and the Parent and such corporation
have jointly elected that such corporation be treated as a taxable REIT
subsidiary of the Parent under and pursuant to Section 856 of the Internal
Revenue Code.

“Taxes” has the meaning given that term in Section 3.10.

“Termination Date” means January 2, 2017, or such later date to which the
Termination Date may be extended pursuant to Section 2.12.

“Titled Agents” has the meaning given that term in Section 12.9.

“Total Asset Value” means the sum of all of the following of the Borrower and
its Subsidiaries (without duplication) on a consolidated basis determined in
accordance with GAAP applied on a consistent basis: (a) unrestricted and
lien-free cash and Cash Equivalents and Marketable Securities, plus (b) the
Operating Property Value of all Properties of the Parent, the Borrower, and
their Subsidiaries on which a hotel is located, plus (c) the book value of
Unimproved Land, Mortgage Receivables and other promissory notes, plus (d) the
Borrower’s Ownership Share of the preceding items for its Unconsolidated
Affiliates (excluding assets of the type described in the immediately preceding
clause (a)), plus (e) the contractual purchase price of any real property
subject to a purchase obligation, repurchase obligation or forward commitment
which at such time could be specifically enforced by the seller of such real
property, but only to the extent such obligations are included in the
Indebtedness of the Borrower and its Subsidiaries on a consolidated basis, plus
(f) in the case of any real property subject to a purchase obligation,
repurchase obligation or forward commitment which at such time could not be
specifically enforced by the seller of such real property, the aggregate amount
of due diligence deposits, earnest money payments and other similar payments
made under the applicable contract which, at such time, would be subject to
forfeiture upon termination of the contract, but only to the extent such amounts
are included in the Indebtedness of the Borrower and its Subsidiaries on a
consolidated basis. Notwithstanding the foregoing, for purposes of determining
Total Asset Value, the amount, if any, by which the value of Marketable
Securities included under the immediately preceding clause (a) would account for
more than 10% of Total Asset Value shall be excluded. The percentage of Total
Asset Value attributable to a given Subsidiary shall be equal to the ratio
expressed as a percentage of (x) an amount equal to Total Asset Value calculated
solely with respect to assets owned directly by such Subsidiary to (y) Total
Asset Value. For purposes of determining Total Asset Value, Adjusted NOI from
Properties disposed of by the Borrower or any Subsidiary during the immediately
preceding period of four consecutive fiscal quarters of the Borrower shall be
excluded.

 

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“Total Indebtedness” means all Indebtedness of the Parent, the Borrower and all
other Subsidiaries of the Parent determined on a consolidated basis.

“Transfer Authorizer Designation Form” means a form substantially in the form of
Exhibit I to be delivered to the Administrative Agent pursuant to
Section 6.1.(a), as the same may be amended, restated or modified from time to
time with the prior written approval of the Administrative Agent.

“Type” with respect to any Revolving Loan, refers to whether such Loan or
portion thereof is a LIBOR Loan or a Base Rate Loan.

“UCC” means the Uniform Commercial Code as in effect in any applicable
jurisdiction.

“Unconsolidated Affiliate” means, with respect to any Person, any other Person
in whom such Person holds an Investment, which Investment is accounted for in
the financial statements of such Person on an equity basis of accounting and
whose financial results would not be consolidated under GAAP with the financial
results of such Person on the consolidated financial statements of such Person.

“Unencumbered Borrowing Base Property” means a Property which is to be included
in calculations of the Unencumbered Borrowing Base Value pursuant to
Section 4.1. A Property shall cease to be an Unencumbered Borrowing Base
Property if at any time such Property shall cease to be an Eligible Unencumbered
Borrowing Base Property unless otherwise agreed by the Requisite Lenders.

“Unencumbered Borrowing Base Value” means, at any time of determination, the
aggregate Operating Property Values of the Unencumbered Borrowing Base
Properties at such time. For purposes of this definition, the Adjusted NOI for
any Unencumbered Borrowing Base Property shall be reduced by an amount equal to
the greater of (x) the amount by which the Adjusted NOI of such Unencumbered
Borrowing Base Property would exceed 30.0% of the aggregate Adjusted NOI of all
Unencumbered Borrowing Base Properties and (y) the amount by which the Adjusted
NOI of Unencumbered Borrowing Base Properties located in the same metropolitan
statistical area as such Property would exceed 40.0% of the aggregate Adjusted
NOI of all Unencumbered Borrowing Base Properties. In addition, to the extent
that Unencumbered Borrowing Base Value attributable to Properties leased under
Ground Leases (excluding the Boston Westin Waterfront Hotel in Boston,
Massachusetts) would exceed 33.0% of Unencumbered Borrowing Base Value, such
excess shall be excluded. For purposes of determining Unencumbered Borrowing
Base Value, Adjusted NOI from Properties disposed of by the Borrower or any
Subsidiary during the immediately preceding period of four consecutive fiscal
quarters of the Borrower shall be excluded.

“Unimproved Land” means land on which no development (other than improvements
that are not material and are temporary in nature) has occurred and for which no
development is scheduled in the following 12 months. Unimproved Land shall not
include any undeveloped parcels of a Property that has been developed unless and
until the Borrower intends to develop such parcel.

“Unsecured Indebtedness” means with respect to a Person as of any given date,
(a) the aggregate principal amount of (a) all Indebtedness of such Person
outstanding at such date that is not Secured Indebtedness plus (b) all
Nonrecourse Indebtedness which such Person has Guaranteed but only to the extent
of such Guaranty (excluding obligations in respect of Guaranties of customary
exceptions to nonrecourse liability).

 

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“Wells Fargo” means Wells Fargo Bank, National Association, and its successors
and assigns.

“Wholly Owned Subsidiary” means any Subsidiary of a Person in respect of which
all of the Equity Interests (other than, in the case of a corporation,
directors’ qualifying shares) are at the time directly or indirectly owned or
controlled by such Person or one or more other Subsidiaries of such Person or by
such Person and one or more other Subsidiaries of such Person.

“Withdrawal Liability” means any liability as a result of a complete or partial
withdrawal from a Multiemployer Plan as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.

Section 1.2. General; References to Pacific Time.

Unless otherwise indicated, all accounting terms, ratios and measurements shall
be interpreted or determined in accordance with GAAP; provided that, if at any
time any change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and either the Borrower or the
Requisite Lenders shall so request, the Administrative Agent, the Lenders and
the Borrower shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject to
the approval of the appropriate Lenders pursuant to Section 13.7.); provided
further that, until so amended, (i) such ratio or requirement shall continue to
be computed in accordance with GAAP prior to such change therein and (ii) the
Borrower shall provide to the Administrative Agent and the Lenders financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change in GAAP.
References in this Agreement to “Sections”, “Articles”, “Exhibits” and
“Schedules” are to sections, articles, exhibits and schedules herein and hereto
unless otherwise indicated. References in this Agreement to any document,
instrument or agreement (a) shall include all exhibits, schedules and other
attachments thereto, (b) shall include all documents, instruments or agreements
issued or executed in replacement thereof, to the extent permitted hereby and
(c) shall mean such document, instrument or agreement, or replacement or
predecessor thereto, as amended, supplemented, restated or otherwise modified
from time to time to the extent not prohibited hereby and in effect at any given
time. Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter. Unless explicitly set forth to the
contrary, a reference to “Subsidiary” means a Subsidiary of the Parent or a
Subsidiary of such Subsidiary and a reference to an “Affiliate” means a
reference to an Affiliate of the Parent. Titles and captions of Articles,
Sections, subsections and clauses in this Agreement are for convenience only,
and neither limit nor amplify the provisions of this Agreement. Unless otherwise
indicated, all references to time are references to Pacific time. The
calculation of liabilities shall not include any fair value adjustments to the
carrying value of liabilities to record such liabilities at fair value pursuant
to electing the fair value option election under FASB ASC 825-10-25 (formerly
known as FAS 159, The Fair Value Option for Financial Assets and Financial
Liabilities) or other FASB standards allowing entities to elect fair value
option for financial liabilities. Therefore, the amount of liabilities shall be
the historical cost basis, which generally is the contractual amount owed
adjusted for amortization or accretion of any premium or discount.

Section 1.3. Financial Attributes of Non-Wholly Owned Subsidiaries.

When determining compliance by the Borrower or the Parent with any financial
covenant contained in any of the Loan Documents, only the Ownership Share of the
Borrower or the Parent, as applicable, of the financial attributes of a
Subsidiary that is not a Wholly Owned Subsidiary shall be included.

 

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ARTICLE II. CREDIT FACILITY

Section 2.1. Loans.

(a) Making of Revolving Loans. Subject to the terms and conditions set forth in
this Agreement, including without limitation, Section 2.14., each Lender
severally and not jointly agrees to make Revolving Loans to the Borrower during
the period from and including the Effective Date to but excluding the
Termination Date, in an aggregate principal amount at any one time outstanding
up to, but not exceeding, such Lender’s Commitment. Each borrowing of Base Rate
Loans shall be in an aggregate minimum amount of $500,000 and integral multiples
of $100,000 in excess thereof. Notwithstanding the immediately preceding two
sentences but subject to Section 2.14., a borrowing of Revolving Loans may be in
the aggregate amount of the unused Commitments. Within the foregoing limits and
subject to the terms and conditions of this Agreement, the Borrower may borrow,
repay and reborrow Revolving Loans.

(b) Requests for Revolving Loans. Not later than 9:00 a.m. Pacific time at least
one Business Day prior to a borrowing of Revolving Loans that are to be Base
Rate Loans and not later than 9:00 a.m. Pacific time at least three Business
Days prior to a borrowing of Revolving Loans that are to be LIBOR Loans, the
Borrower shall deliver to the Administrative Agent a Notice of Borrowing. Each
Notice of Borrowing shall specify the aggregate principal amount of the
Revolving Loans to be borrowed, the date such Revolving Loans are to be borrowed
(which must be a Business Day), a general description of the use of the proceeds
of such Revolving Loans, the Type of the requested Revolving Loans, and if such
Revolving Loans are to be LIBOR Loans, the initial Interest Period for such
Revolving Loans. Each Notice of Borrowing shall be irrevocable once given and
binding on the Borrower. Prior to delivering a Notice of Borrowing, the Borrower
may (without specifying whether a Revolving Loan will be a Base Rate Loan or a
LIBOR Loan) request that the Administrative Agent provide the Borrower with the
most recent LIBOR available to the Administrative Agent. The Administrative
Agent shall provide such quoted rate to the Borrower on the date of such request
or as soon as possible thereafter.

(c) Funding of Revolving Loans. Promptly after receipt of a Notice of Borrowing
under the immediately preceding subsection (b), the Administrative Agent shall
notify each Lender of the proposed borrowing. Each Lender shall deposit an
amount equal to the Revolving Loan to be made by such Lender to the Borrower
with the Administrative Agent at the Principal Office, in immediately available
funds not later than 9:00 a.m. Pacific time on the date of such proposed
Revolving Loans. Subject to fulfillment of all applicable conditions set forth
herein, the Administrative Agent shall make available to the Borrower in the
account specified in the Transfer Authorizer Designation Form, not later than
12:00 noon Pacific time on the date of the requested borrowing of Revolving
Loans, the proceeds of such amounts received by the Administrative Agent.

(d) Assumptions Regarding Funding by Lenders. With respect to Revolving Loans to
be made after the Effective Date, unless the Administrative Agent shall have
been notified by any Lender that such Lender will not make available to the
Administrative Agent a Revolving Loan to be made by such Lender in connection
with any borrowing, the Administrative Agent may assume that such Lender will
make the proceeds of such Revolving Loan available to the Administrative Agent
in accordance with this Section, and the Administrative Agent may (but shall not
be obligated to), in reliance upon such assumption, make available to the
Borrower the amount of such Revolving Loan to be provided by such Lender. In
such event, if such Lender does not make available to the Administrative Agent
the proceeds of such Revolving Loan, then such Lender and the Borrower severally
agree to pay to the

 

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Administrative Agent on demand the amount of such Loan with interest thereon,
for each day from and including the date such Revolving Loan is made available
to the Borrower but excluding the date of payment to the Administrative Agent,
at (i) in the case of a payment to be made by such Lender, the greater of the
Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation and (ii) in the
case of a payment to be made by the Borrower, the interest rate applicable to
Base Rate Loans. If the Borrower and such Lender shall pay the amount of such
interest to the Administrative Agent for the same or overlapping period, the
Administrative Agent shall promptly remit to the Borrower the amount of such
interest paid by the Borrower for such period. If such Lender pays to the
Administrative Agent the amount of such Revolving Loan, the amount so paid shall
constitute such Lender’s Revolving Loan included in the borrowing. Any payment
by the Borrower shall be without prejudice to any claim the Borrower may have
against a Lender that shall have failed to make available the proceeds of a
Revolving Loan to be made by such Lender.

Section 2.2. Letters of Credit.

(a) Letters of Credit. Subject to the terms and conditions of this Agreement,
including without limitation, Section 2.14., the Issuing Bank, on behalf of the
Lenders, agrees to issue for the account of the Borrower during the period from
and including the Effective Date to, but excluding, the date 30 days prior to
the Termination Date, one or more standby letters of credit (each a “Letter of
Credit”) up to a maximum aggregate Stated Amount at any one time outstanding not
to exceed $35,000,000, as such amount may be reduced from time to time in
accordance with the terms hereof (the “L/C Commitment Amount”).

(b) Terms of Letters of Credit. At the time of issuance, the amount, form, terms
and conditions of each Letter of Credit, and of any drafts or acceptances
thereunder, shall be subject to approval by the Issuing Bank and the Borrower.
Notwithstanding the foregoing, in no event may (i) the expiration date of any
Letter of Credit extend beyond the date that is 30 days prior to the Termination
Date, or (ii) any Letter of Credit have an initial duration in excess of one
year; provided, however, a Letter of Credit may contain a provision providing
for the automatic extension of the expiration date in the absence of a notice of
non-renewal from the Issuing Bank but in no event shall any such provision
permit the extension of the expiration date of such Letter of Credit beyond the
date that is thirty (30) days prior to the Termination Date; provided, further,
that a Letter of Credit (any such Letter of Credit being referred to as an
“Extended Letter of Credit”) may, as a result of its express terms or as the
result of the effect of an automatic extension provision, have an expiration
date of not more than one year beyond the date that is 30 days prior to the
Termination Date so long as the Borrower delivers to the Administrative Agent
for the benefit of the Issuing Bank no later than 30 days prior to the
Termination Date Cash Collateral for such Letter of Credit for deposit into the
Letter of Credit Collateral Account in an amount equal to the Stated Amount of
such Letter of Credit; provided, that the obligations of the Borrower under this
Section in respect of such Extended Letters of Credit shall survive the
termination of this Agreement and shall remain in effect until no such Extended
Letters of Credit remain outstanding. If the Borrower fails to provide Cash
Collateral with respect to any Extended Letter of Credit by the date 30 days
prior to the Termination Date, such failure shall be treated as a drawing under
such Extended Letter of Credit (in an amount equal to the maximum Stated Amount
of such Letter of Credit), which shall be reimbursed (or participations therein
funded) by the Lenders in accordance with the immediately following
subsections (i) and (j), with the proceeds being utilized to provide Cash
Collateral for such Letter of Credit. The initial Stated Amount of each Letter
of Credit shall be at least $100,000 (or such lesser amount as may be reasonably
acceptable to the Administrative Agent and the Issuing Bank).

 

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(c) Requests for Issuance of Letters of Credit. The Borrower shall give the
Issuing Bank and the Administrative Agent written notice at least 5 Business
Days prior to the requested date of issuance of a Letter of Credit, such notice
to describe in reasonable detail the proposed terms of such Letter of Credit and
the nature of the transactions or obligations proposed to be supported by such
Letter of Credit, and in any event shall set forth with respect to such Letter
of Credit the proposed (i) initial Stated Amount, (ii) beneficiary, and
(iii) expiration date. The Borrower shall also execute and deliver such
customary applications and agreements for standby letters of credit, and other
forms as requested from time to time by the Issuing Bank. Provided the Borrower
has given the notice prescribed by the first sentence of this subsection and
delivered such application and agreements referred to in the preceding sentence,
subject to the other terms and conditions of this Agreement, including the
Issuing Bank’s approval of the form of the requested Letter of Credit pursuant
to Section 2.2.(b) and the satisfaction of any applicable conditions precedent
set forth in Article VI, the Issuing Bank shall issue the requested Letter of
Credit on the requested date of issuance for the benefit of the stipulated
beneficiary but in no event prior to the date 5 Business Days following the date
after which the Issuing Bank has received all of the items required to be
delivered to it under this subsection. The Issuing Bank shall not at any time be
obligated to issue any Letter of Credit if such issuance would conflict with, or
cause the Issuing Bank or any Lender to exceed any limits imposed by, any
Applicable Law. References herein to “issue” and derivations thereof with
respect to Letters of Credit shall also include extensions or modifications of
any outstanding Letters of Credit, unless the context otherwise requires. Upon
the written request of the Borrower, the Issuing Bank shall deliver to the
Borrower a copy of each issued Letter of Credit within a reasonable time after
the date of issuance thereof. To the extent any term of a Letter of Credit
Document is inconsistent with a term of any Loan Document, the term of such Loan
Document shall control.

(d) Reimbursement Obligations. Upon receipt by the Issuing Bank from the
beneficiary of a Letter of Credit of any demand for payment under such Letter of
Credit, the Issuing Bank shall promptly notify the Borrower and the
Administrative Agent of the amount to be paid by the Issuing Bank as a result of
such demand and the date on which payment is to be made by the Issuing Bank to
such beneficiary in respect of such demand; provided, however, that the Issuing
Bank’s failure to give, or delay in giving, such notice shall not discharge the
Borrower in any respect from the applicable Reimbursement Obligation. The
Borrower hereby absolutely, unconditionally and irrevocably agrees to pay and
reimburse the Issuing Bank for the amount of each demand for payment under such
Letter of Credit on or prior to the date on which payment is to be made by the
Issuing Bank to the beneficiary thereunder, without presentment, demand, protest
or other formalities of any kind (other than notice as provided in this
subsection). Upon receipt by the Issuing Bank of any payment in respect of any
Reimbursement Obligation, the Issuing Bank shall promptly pay to each Lender
that has acquired a participation therein under the second sentence of the
immediately following subsection (i) such Lender’s Commitment Percentage of such
payment.

(e) Manner of Reimbursement. Upon its receipt of a notice referred to in the
immediately preceding subsection (d), the Borrower shall advise the
Administrative Agent and the Issuing Bank whether or not the Borrower intends to
borrow hereunder to finance its obligation to reimburse the Issuing Bank for the
amount of the related demand for payment and, if it does, the Borrower shall
submit a timely request for such borrowing as provided in the applicable
provisions of this Agreement. If the Borrower fails to so advise the
Administrative Agent and the Issuing Bank, or if the Borrower fails to reimburse
the Issuing Bank for a demand for payment under a Letter of Credit by the date
of such payment, the failure of which the Issuing Bank shall promptly notify the
Administrative Agent, then (i) if the applicable conditions contained in
Article VI. would permit the making of Revolving Loans, the Borrower shall be
deemed to have requested a borrowing of Revolving Loans (which shall be Base
Rate Loans) in an amount equal to the unpaid Reimbursement Obligation and the
Administrative Agent shall give each Lender prompt notice of the amount of the
Revolving Loan to be made available to the Administrative Agent not later than
10:00 a.m. Pacific time and (ii) if such conditions would not permit the making
of Revolving Loans, the provisions of subsection (j) of this Section shall
apply. The limitations set forth in the second sentence of Section 2.1.(a) shall
not apply to any borrowing of Base Rate Loans under this subsection.

 

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(f) Effect of Letters of Credit on Commitments. Upon the issuance by the Issuing
Bank of any Letter of Credit and until such Letter of Credit shall have expired
or been cancelled, the Commitment of each Lender shall be deemed to be utilized
for all purposes of this Agreement in an amount equal to the product of (i) such
Lender’s Commitment Percentage and (ii) the sum of (A) the Stated Amount of such
Letter of Credit plus (B) any related Reimbursement Obligations then
outstanding.

(g) Issuing Bank’s Duties Regarding Letters of Credit; Unconditional Nature of
Reimbursement Obligations. In examining documents presented in connection with
drawings under Letters of Credit and making payments under such Letters of
Credit against such documents, the Issuing Bank shall only be required to use
the same standard of care as it uses in connection with examining documents
presented in connection with drawings under letters of credit in which it has
not sold participations and making payments under such letters of credit. The
Borrower assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, none of the Issuing Bank,
Administrative Agent or any of the Lenders shall be responsible for, and the
Borrower’s obligations in respect of Letters of Credit shall not be affected in
any manner by, (i) the form, validity, sufficiency, accuracy, genuineness or
legal effects of any document submitted by any party in connection with the
application for and issuance of or any drawing honored under any Letter of
Credit even if such document should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit, or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (iii) failure of the beneficiary of any Letter of
Credit to comply fully with conditions required in order to draw upon such
Letter of Credit; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, facsimile, electronic
mail, telecopy or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any Letter
of Credit, or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any Letter of Credit, or of the proceeds of any drawing under any
Letter of Credit; or (viii) any consequences arising from causes beyond the
control of the Issuing Bank, Administrative Agent or the Lenders. None of the
above shall affect, impair or prevent the vesting of any of the Issuing Bank’s
or Administrative Agent’s rights or powers hereunder. Any action taken or
omitted to be taken by the Issuing Bank under or in connection with any Letter
of Credit, if taken or omitted in the absence of gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final,
non-appealable judgment), shall not create against the Issuing Bank any
liability to the Borrower, the Administrative Agent or any Lender. In this
connection, the obligation of the Borrower to reimburse the Issuing Bank for any
drawing made under any Letter of Credit, and to repay any Revolving Loan made
pursuant to the second sentence of the immediately preceding subsection (e),
shall be absolute, unconditional and irrevocable and shall be paid strictly in
accordance with the terms of this Agreement and any other applicable Letter of
Credit Document under all circumstances whatsoever, including without
limitation, the following circumstances: (A) any lack of validity or
enforceability of any Letter of Credit Document or any term or provisions
therein; (B) any amendment or waiver of or any consent to departure from all or
any of the Letter of Credit Documents; (C) the existence of any claim, setoff,
defense or other right which the Borrower may have at any time against the
Issuing Bank, the Administrative Agent or any Lender, any beneficiary of a
Letter of Credit or any other Person, whether in connection with this Agreement,
the transactions contemplated hereby or in the Letter of Credit Documents or any
unrelated transaction; (D) any breach of contract or dispute between the
Borrower, the Issuing Bank, the Administrative Agent, any Lender or any other
Person; (E) any demand, statement or any other document presented under a Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein or made in connection therewith being untrue or
inaccurate in any respect whatsoever; (F) any non-application or misapplication
by the beneficiary of a Letter of Credit or of the proceeds of any drawing under
such Letter of Credit; (G) payment by the Issuing Bank under any Letter of

 

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Credit against presentation of a draft or certificate which does not strictly
comply with the terms of such Letter of Credit; and (H) any other act, omission
to act, delay or circumstance whatsoever that might, but for the provisions of
this Section, constitute a legal or equitable defense to or discharge of the
Borrower’s Reimbursement Obligations. Notwithstanding anything to the contrary
contained in this Section or Section 13.10., but not in limitation of the
Borrower’s unconditional obligation to reimburse the Issuing Bank for any
drawing made under a Letter of Credit as provided in this Section and to repay
any Revolving Loan made pursuant to the second sentence of the immediately
preceding subsection (e), the Borrower shall have no obligation to indemnify the
Administrative Agent, the Issuing Bank or any Lender in respect of any liability
incurred by the Administrative Agent, the Issuing Bank or such Lender arising
solely out of the gross negligence or willful misconduct of the Administrative
Agent, the Issuing Bank or such Lender in respect of a Letter of Credit as
determined by a court of competent jurisdiction in a final, non-appealable
judgment. Notwithstanding the above, nothing in this Section shall affect any
rights the Borrower may have with respect to the gross negligence or willful
misconduct of the Administrative Agent, the Issuing Bank or any Lender with
respect to any Letter of Credit.

(h) Amendments, Etc. The issuance by the Issuing Bank of any amendment,
supplement or other modification to any Letter of Credit shall be subject to the
same conditions applicable under this Agreement to the issuance of new Letters
of Credit (including, without limitation, that the request therefor be made
through the Issuing Bank), and no such amendment, supplement or other
modification shall be issued unless either (i) the respective Letter of Credit
affected thereby would have complied with such conditions had it originally been
issued hereunder in such amended, supplemented or modified form or (ii) the
Administrative Agent and appropriate Lenders required by Section 13.7. shall
have consented thereto. In connection with any such amendment, supplement or
other modification, the Borrower shall pay the fees, if any, payable under the
last sentence of Section 3.5.(c).

(i) Lenders’ Participation in Letters of Credit. Immediately upon the issuance
by the Issuing Bank of any Letter of Credit each Lender shall be deemed to have
absolutely, irrevocably and unconditionally purchased and received from the
Issuing Bank, without recourse or warranty, an undivided interest and
participation to the extent of such Lender’s Commitment Percentage of the
liability of the Issuing Bank with respect to such Letter of Credit and each
Lender thereby shall absolutely, unconditionally and irrevocably assume, as
primary obligor and not as surety, and shall be unconditionally obligated to the
Issuing Bank to pay and discharge when due, such Lender’s Commitment Percentage
of the Issuing Bank’s liability under such Letter of Credit. In addition, upon
the making of each payment by a Lender to the Administrative Agent for the
account of the Issuing Bank in respect of any Letter of Credit pursuant to the
immediately following subsection (j), such Lender shall, automatically and
without any further action on the part of the Issuing Bank, Administrative Agent
or such Lender, acquire (i) a participation in an amount equal to such payment
in the Reimbursement Obligation owing to the Issuing Bank by the Borrower in
respect of such Letter of Credit and (ii) a participation in a percentage equal
to such Lender’s Commitment Percentage in any interest or other amounts payable
by the Borrower in respect of such Reimbursement Obligation (other than the Fees
payable to the Issuing Bank pursuant to the second and the last sentences of
Section 3.5.(c)).

(j) Payment Obligation of Lenders. Each Lender severally agrees to pay to the
Administrative Agent, for the account of the Issuing Bank, on demand in
immediately available funds in Dollars the amount of such Lender’s Commitment
Percentage of each drawing paid by the Issuing Bank under each Letter of Credit
to the extent such amount is not reimbursed by the Borrower pursuant to the
immediately preceding subsection (d); provided, however, that in respect of any
drawing under any Letter of Credit, the maximum amount that any Lender shall be
required to fund, whether as a Revolving Loan or as a participation, shall not
exceed such Lender’s Commitment Percentage of such drawing except as otherwise
provided in Section 3.9.(d). If the notice referenced in the second sentence of
the immediately preceding subsection (e) is received by a Lender not later than
9:00 a.m. Pacific time, then such

 

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Lender shall make such payment available to the Administrative Agent not later
than 12:00 p.m. Pacific time on the date of demand therefor; otherwise, such
payment shall be made available to the Administrative Agent not later than 11:00
a.m. Pacific time on the next succeeding Business Day. Each Lender’s obligation
to make such payments to the Administrative Agent under this subsection, and the
Administrative Agent’s right to receive the same for the account of the Issuing
Bank, shall be absolute, irrevocable and unconditional and shall not be affected
in any way by any circumstance whatsoever, including without limitation, (i) the
failure of any other Lender to make its payment under this subsection, (ii) the
financial condition of the Borrower or any other Loan Party, (iii) the existence
of any Default or Event of Default, including any Event of Default described in
Section 11.1.(f) or (g), (iv) the termination of the Commitments or (v) the
delivery of Cash Collateral in respect of any Extended Letter of Credit. Each
such payment to the Administrative Agent for the account of the Issuing Bank
shall be made without any offset, abatement, withholding or deduction
whatsoever.

(k) Information to Lenders. Periodically, the Issuing Bank shall deliver to the
Administrative Agent, who shall promptly deliver the same to each Lender and the
Borrower, a notice describing the aggregate amount of all Letters of Credit
outstanding at such time. Upon the request of any Lender from time to time, the
Issuing Bank shall deliver any other information reasonably requested by such
Lender with respect to each Letter of Credit then outstanding. Other than as set
forth in this subsection, the Issuing Bank shall have no duty to notify the
Lenders regarding the issuance or other matters regarding Letters of Credit
issued hereunder. The failure of the Issuing Bank to perform its requirements
under this subsection shall not relieve any Lender from its obligations under
the immediately preceding subsection (j).

(l) Extended Letters of Credit. Each Lender confirms that its obligations under
the immediately preceding subsections (i) and (j) shall be reinstated in full
and apply if the delivery of any Cash Collateral in respect of an Extended
Letter of Credit is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise.

Section 2.3. Swingline Loans.

(a) Swingline Loans. Subject to the terms and conditions hereof, including
without limitation Section 2.14, the Swingline Lender agrees to make Swingline
Loans to the Borrower, during the period from the Effective Date to but
excluding the Swingline Maturity Date, in an aggregate principal amount at any
one time outstanding up to, but not exceeding, $40,000,000, as such amount may
be reduced from time to time in accordance with the terms hereof. If at any time
the aggregate principal amount of the Swingline Loans outstanding at such time
exceeds the Swingline Commitment in effect at such time, the Borrower shall
immediately pay the Administrative Agent for the account of the Swingline Lender
the amount of such excess. Subject to the terms and conditions of this
Agreement, the Borrower may borrow, repay and reborrow Swingline Loans
hereunder. The borrowing of a Swingline Loan shall not constitute usage of any
Lender’s Commitment for purposes of calculation of the fee payable under
Section 3.5.(b).

(b) Procedure for Borrowing Swingline Loans. The Borrower shall give the
Administrative Agent and the Swingline Lender notice pursuant to a Notice of
Swingline Borrowing or telephonic notice of each borrowing of a Swingline Loan.
Each Notice of Swingline Borrowing shall be delivered to the Swingline Lender no
later than 9:00 a.m. Pacific time on the proposed date of such borrowing. Any
telephonic notice shall include all information to be specified in a written
Notice of Swingline Borrowing and shall be promptly confirmed in writing by the
Borrower pursuant to a Notice of Swingline Borrowing sent to the Swingline
Lender on the same day of the giving of such telephonic notice. Not later than
12:00 noon Pacific time on the date of the requested Swingline Loan and subject
to satisfaction of the applicable conditions set forth in Section 6.2. for such
borrowing, the Swingline Lender will make the proceeds of such Swingline Loan
available to the Borrower in Dollars, in immediately available funds, in the
account specified by the Borrower in the Transfer Authorizer Designation Form.

 

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(c) Interest. Swingline Loans shall bear interest at a per annum rate equal to
the Base Rate as in effect from time to time plus the Applicable Margin.
Interest on Swingline Loans is solely for the account of the Swingline Lender
(except to the extent a Lender acquires a participating interest in a Swingline
Loan pursuant to the immediately following subsection (e)). All accrued and
unpaid interest on Swingline Loans shall be payable on the dates and in the
manner provided in Section 2.4. with respect to interest on Base Rate Loans
(except as the Swingline Lender and the Borrower may otherwise agree in writing
in connection with any particular Swingline Loan).

(d) Swingline Loan Amounts, Etc. Each Swingline Loan shall be in the minimum
amount of $500,000 and integral multiples of $100,000 in excess thereof, or such
other minimum amounts agreed to by the Swingline Lender and the Borrower. Any
voluntary prepayment of a Swingline Loan must be in integral multiples of
$100,000 or the aggregate principal amount of all outstanding Swingline Loans
(or such other minimum amounts upon which the Swingline Lender and the Borrower
may agree) and in connection with any such prepayment, the Borrower must give
the Swingline Lender and the Administrative Agent prior written notice thereof
no later than 9:00 a.m. Pacific time on the day prior to the date of such
prepayment. The Swingline Loans shall, in addition to this Agreement, be
evidenced by the Swingline Note.

(e) Repayment and Participations of Swingline Loans. The Borrower agrees to
repay each Swingline Loan within 3 Business Day of demand therefor by the
Swingline Lender and, in any event, within 5 Business Days after the date such
Swingline Loan was made; provided, that the proceeds of a Swingline Loan may not
be used to pay a Swingline Loan. Notwithstanding the foregoing, the Borrower
shall repay the entire outstanding principal amount of, and all accrued but
unpaid interest on, the Swingline Loans on the Swingline Maturity Date (or such
earlier date as the Swingline Lender and the Borrower may agree in writing). In
lieu of demanding repayment of any outstanding Swingline Loan from the Borrower,
the Swingline Lender may, on behalf of the Borrower (which hereby irrevocably
directs the Swingline Lender to act on its behalf), request a borrowing of
Revolving Loans that are Base Rate Loans from the Lenders in an amount equal to
the principal balance of such Swingline Loan. The amount limitations contained
in the second sentence of Section 2.1.(a) shall not apply to any borrowing of
such Revolving Loans made pursuant to this subsection. The Swingline Lender
shall give notice to the Administrative Agent of any such borrowing of Revolving
Loans not later than 9:00 a.m. Pacific time at least one Business Day prior to
the proposed date of such borrowing. Promptly after receipt of such notice of
borrowing of Revolving Loans from the Swingline Lender under the immediately
preceding sentence, the Administrative Agent shall notify each Lender of the
proposed borrowing. Not later than 9:00 a.m. Pacific time on the proposed date
of such borrowing, each Lender will make available to the Administrative Agent
at the Principal Office for the account of the Swingline Lender, in immediately
available funds, the proceeds of the Revolving Loan to be made by such Lender.
The Administrative Agent shall pay the proceeds of such Revolving Loans to the
Swingline Lender, which shall apply such proceeds to repay such Swingline Loan.
If the Lenders are prohibited from making Revolving Loans required to be made
under this subsection for any reason whatsoever, including without limitation,
the existence of any of the Defaults or Events of Default described in
Sections 11.1.(f) or (g), each Lender shall purchase from the Swingline Lender,
without recourse or warranty, an undivided interest and participation to the
extent of such Lender’s Commitment Percentage of such Swingline Loan, by
directly purchasing a participation in such Swingline Loan in such amount and
paying the proceeds thereof to the Administrative Agent for the account of the
Swingline Lender in Dollars and in immediately available funds. A Lender’s
obligation to purchase such a participation in a Swingline Loan shall be
absolute and

 

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unconditional and shall not be affected by any circumstance whatsoever,
including without limitation, (i) any claim of setoff, counterclaim, recoupment,
defense or other right which such Lender or any other Person may have or claim
against the Administrative Agent, the Swingline Lender or any other Person
whatsoever, (ii) the existence of a Default or Event of Default (including
without limitation, any of the Defaults or Events of Default described in
Sections 11.1. (f) or (g)), or the termination of any Lender’s Commitment,
(iii) the existence (or alleged existence) of an event or condition which has
had or could have a Material Adverse Effect, (iv) any breach of any Loan
Document by the Administrative Agent, any Lender, the Parent, the Borrower or
any other Loan Party, or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. If such amount is
not in fact made available to the Swingline Lender by any Lender, the Swingline
Lender shall be entitled to recover such amount on demand from such Lender,
together with accrued interest thereon for each day from the date of demand
thereof, at the Federal Funds Rate. If such Lender does not pay such amount
forthwith upon the Swingline Lender’s demand therefor, and until such time as
such Lender makes the required payment, the Swingline Lender shall be deemed to
continue to have outstanding Swingline Loans in the amount of such unpaid
participation obligation for all purposes of the Loan Documents (other than
those provisions requiring the other Lenders to purchase a participation
therein). Further, such Lender shall be deemed to have assigned any and all
payments made of principal and interest on its Revolving Loans, and any other
amounts due it hereunder, to the Swingline Lender to fund Swingline Loans in the
amount of the participation in Swingline Loans that such Lender failed to
purchase pursuant to this Section until such amount has been purchased (as a
result of such assignment or otherwise)

Section 2.4. Rates and Payment of Interest on Loans.

(a) Rates. The Borrower promises to pay to the Administrative Agent for the
account of each Lender interest on the unpaid principal amount of each Revolving
Loan made by such Lender for the period from and including the date of the
making of such Loan to but excluding the date such Loan shall be paid in full,
at the following per annum rates:

(i) during such periods as such Loan is a Base Rate Loan, at the Base Rate (as
in effect from time to time), plus the Applicable Margin; and

(ii) during such periods as such Loan is a LIBOR Loan, at LIBOR for such Loan
for the Interest Period therefor, plus the Applicable Margin.

Notwithstanding the foregoing, while an Event of Default exists under
Section 11.1.(a), 11.1.(b), 11.1.(f), or 11.1.(g), or at the direction of the
Required Lenders upon the existence of any other Event of Default, the Borrower
shall pay to the Administrative Agent for the account of each Lender and the
Issuing Bank, as the case may be, interest at the Post-Default Rate on the
outstanding principal amount of any Loan made by such Lender, on all
Reimbursement Obligations and on any other amount payable by the Borrower
hereunder or under the Notes held by such Lender to or for the account of such
Lender (including without limitation, accrued but unpaid interest to the extent
permitted under Applicable Law).

(b) Payment of Interest. All accrued and unpaid interest on the outstanding
principal amount of each Loan shall be payable (i) monthly in arrears on the
first day of each month, commencing with the first full calendar month occurring
after the Effective Date and (ii) on any date on which the principal balance of
such Loan is due and payable in full (whether at maturity, due to acceleration
or otherwise). Interest payable at the Post-Default Rate shall be payable from
time to time on demand. All determinations by the Administrative Agent of an
interest rate hereunder shall be conclusive and binding on the Lenders and the
Borrower for all purposes, absent manifest error.

 

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(c) Borrower Information Used to Determine Applicable Interest Rates. The
parties understand that the applicable interest rate for the Obligations and
certain fees set forth herein may be determined and/or adjusted from time to
time based upon certain financial ratios and/or other information to be provided
or certified to the Lenders by the Parent or the Borrower (the “Borrower
Information”). If it is subsequently determined that any such Borrower
Information was incorrect (for whatever reason, including without limitation
because of a subsequent restatement of earnings by the Parent or the Borrower)
at the time it was delivered to the Administrative Agent, and if the applicable
interest rate or fees calculated for any period were lower than they should have
been had the correct information been timely provided, then, such interest rate
and such fees for such period shall be automatically recalculated using correct
Borrower Information. The Administrative Agent shall promptly notify the
Borrower in writing of any additional interest and fees due because of such
recalculation, and the Borrower shall pay such additional interest or fees due
to the Administrative Agent, for the account of each Lender, within 5 Business
Days of receipt of such written notice. Any recalculation of interest or fees
required by this provision shall survive the termination of this Agreement, and
this provision shall not in any way limit any of the Administrative Agent’s, the
Issuing Bank’s, or any Lender’s other rights under this Agreement.

Section 2.5. Number of Interest Periods.

There may be no more than 5 different Interest Periods for LIBOR Loans
outstanding at the same time.

Section 2.6. Repayment of Revolving Loans.

The Borrower shall repay the entire outstanding principal amount of, and all
accrued but unpaid interest on, the Revolving Loans on the Termination Date.

Section 2.7. Prepayments.

(a) Optional. Subject to Section 5.4., the Borrower may prepay any Loan at any
time without premium or penalty. The Borrower shall give the Administrative
Agent at least 2 Business Days prior written notice of the prepayment of any
Loan. Each voluntary partial prepayment of Revolving Loans shall be in an
aggregate minimum amount of $100,000 and integral multiples of $100,000 in
excess thereof.

(b) Mandatory.

(i) Commitment Overadvance. If at any time the aggregate principal amount of all
outstanding Loans, together with the aggregate amount of all Letter of Credit
Liabilities, exceeds the aggregate amount of the Commitments, the Borrower shall
immediately upon demand pay to the Administrative Agent for the account of the
Lenders then holding Commitments (or if the Commitments have been terminated,
then holding outstanding Loans and/or Letter of Credit Liabilities), the amount
of such excess.

(ii) Maximum Loan Availability Overadvance. If at any time the aggregate
outstanding principal amount of Indebtedness (excluding Nonrecourse Indebtedness
and Indebtedness to the extent owing among the Parent and/or any of its
Subsidiaries but including Secured Recourse Indebtedness and the aggregate
principal amount of all outstanding Loans, and the aggregate amount of all
Letter of Credit Liabilities) of the Parent and the Ownership share of all such
Indebtedness of its Subsidiaries exceeds the Maximum Loan Availability, the
Borrower shall within 5 Business Days of a Responsible Officer of the Parent or
the Borrower obtaining knowledge of the occurrence of any such excess either
(x) pay to the Administrative Agent for the account of the Lenders then holding
Commitments (or if the Commitments have been terminated, then holding
outstanding Loans and/or Letter of Credit Liabilities), the amount of such
excess or (y) deliver to the Administrative Agent for prompt distribution to
each Lender notice of the Borrower’s intent to eliminate such excess by adding
one or more Properties as Unencumbered Borrowing Base Properties in accordance
with the final paragraph of Section 4.1.(b) within 10 Business Days of such
Responsible Officer obtaining knowledge of such excess. If such excess is not
eliminated in accordance with this subsection (b)(ii), then the entire
outstanding principal balance of all Loans, together with all accrued interest
thereon, and an amount equal to all Letter of Credit Liabilities for deposit
into the Letter of Credit Collateral Account, shall be immediately due and
payable in full.

 

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(iii) Application of Mandatory Prepayments. Amounts paid under the preceding
subsections (b)(i) and (b)(ii) shall be applied to pay all amounts of principal
outstanding on the Loans and any Reimbursement Obligations pro rata in
accordance with Section 3.2. and if any Letters of Credit are outstanding at
such time, the remainder, if any, shall be deposited into the Letter of Credit
Collateral Account for application to any Reimbursement Obligations. If the
Borrower is required to pay any outstanding LIBOR Loans by reason of this
Section prior to the end of the applicable Interest Period therefor, the
Borrower shall pay all amounts due under Section 5.4.

Section 2.8. Continuation.

So long as no Default or Event of Default exists, the Borrower may on any
Business Day, with respect to any LIBOR Loan, elect to maintain such LIBOR Loan
or any portion thereof as a LIBOR Loan by selecting a new Interest Period for
such LIBOR Loan. Each Continuation of a LIBOR Loan shall be in an aggregate
minimum amount of $1,000,000 and integral multiples of $100,000 in excess of
that amount, and each new Interest Period selected under this Section shall
commence on the last day of the immediately preceding Interest Period. Each
selection of a new Interest Period shall be made by the Borrower giving to the
Administrative Agent a Notice of Continuation not later than 9:00 a.m. Pacific
time on the third Business Day prior to the date of any such Continuation. Such
notice by the Borrower of a Continuation shall be by telecopy, electronic mail
or other similar form of communication in the form of a Notice of Continuation,
specifying (a) the proposed date of such Continuation, (b) the LIBOR Loans and
portions thereof subject to such Continuation and (c) the duration of the
selected Interest Period, all of which shall be specified in such manner as is
necessary to comply with all limitations on Loans outstanding hereunder. Each
Notice of Continuation shall be irrevocable by and binding on the Borrower once
given. Promptly after receipt of a Notice of Continuation, the Administrative
Agent shall notify each Lender of the proposed Continuation. If the Borrower
shall fail to select in a timely manner a new Interest Period for any LIBOR Loan
in accordance with this Section, such Loan will automatically, on the last day
of the current Interest Period therefor, continue as a LIBOR Loan with an
Interest Period of one month; provided, however that if a Default or Event of
Default exists, such Loan will automatically, on the last day of the current
Interest Period therefor, Convert into a Base Rate Loan notwithstanding the
first sentence of Section 2.9. or the Borrower’s failure to comply with any of
the terms of such Section.

Section 2.9. Conversion.

The Borrower may on any Business Day, upon the Borrower’s giving of a Notice of
Conversion to the Administrative Agent by telecopy, electronic mail or other
similar form of communication, Convert all or a portion of a Loan of one Type
into a Loan of another Type; provided, however, a Base Rate Loan may not be
Converted into a LIBOR Loan if a Default or Event of Default exists. Each
Conversion of Base Rate Loans into LIBOR Loans shall be in an aggregate minimum
amount of $1,000,000 and integral multiples of $100,000 in excess of that
amount. Each such Notice of Conversion shall be given not later than 9:00 a.m.
Pacific time 3 Business Days prior to the date of any proposed Conversion.
Promptly after receipt of a Notice of Conversion, the Administrative Agent shall
notify each Lender of the proposed Conversion. Subject to the restrictions
specified above, each Notice of Conversion shall be by telecopy, electronic mail
or other similar form of communication in the form of a Notice of Conversion
specifying (a) the requested date of such Conversion, (b) the Type of Loan to be
Converted, (c) the portion of such Type of Loan to be Converted, (d) the Type of
Loan such Loan is to be Converted into and (e) if such Conversion is into a
LIBOR Loan, the requested duration of the Interest Period of such Loan. Each
Notice of Conversion shall be irrevocable by and binding on the Borrower once
given.

 

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Section 2.10. Notes.

(a) Notes. Except in the case of a Lender that has notified the Administrative
Agent in writing that it elects not to receive a Revolving Note the Revolving
Loans made by each Lender shall, in addition to this Agreement, also be
evidenced by a Revolving Note, payable to the order of such Lender in a
principal amount equal to the amount of its Commitment as originally in effect
and otherwise duly completed. The Swingline Loans made by the Swingline Lender
to the Borrower shall, in addition to this Agreement, also be evidenced by a
Swingline Note payable to the order of the Swingline Lender.

(b) Records. The date, amount, interest rate, Type and duration of Interest
Periods (if applicable) of each Loan made by each Lender to the Borrower, and
each payment made on account of the principal thereof, shall be recorded by such
Lender on its books and such entries shall be binding on the Borrower absent
manifest error; provided, however, that (i) the failure of a Lender to make any
such record shall not affect the obligations of the Borrower under any of the
Loan Documents and (ii) if there is a discrepancy between such records of a
Lender and the statements of accounts maintained by the Administrative Agent
pursuant to Section 3.8., in the absence of manifest error, the statements of
account maintained by the Administrative Agent pursuant to Section 3.8. shall be
controlling.

(c) Lost, Stolen, Destroyed or Mutilated Notes. Upon receipt by the Borrower of
(i) written notice from a Lender that a Note of such Lender has been lost,
stolen, destroyed or mutilated, and (ii)(A) in the case of loss, theft or
destruction, an unsecured agreement of indemnity from such Lender in form
reasonably satisfactory to the Borrower, or (B) in the case of mutilation, upon
surrender and cancellation of such Note, the Borrower shall at its own expense
execute and deliver to such Lender a new Note dated the date of such lost,
stolen, destroyed or mutilated Note.

Section 2.11. Voluntary Reductions of the Commitment.

The Borrower shall have the right to terminate or reduce the aggregate unused
amount of the Commitments (for which purpose use of the Commitments shall be
deemed to include the aggregate amount of all Letter of Credit Liabilities and
the aggregate principal amount of all outstanding Swingline Loans) at any time
and from time to time without penalty or premium upon not less than 5 Business
Days prior written notice to the Administrative Agent of each such termination
or reduction, which notice shall specify the effective date thereof and the
amount of any such reduction (which in the case of any partial reduction of the
Commitments shall not be less that $10,000,000 and integral multiples of
$5,000,000 in excess of that amount in the aggregate) and shall be irrevocable
once given and effective only upon receipt by the Administrative Agent
(“Commitment Reduction Notice”); provided, however, the Borrower may not reduce
the aggregate amount of the Commitments below $100,000,000 unless the Borrower
is terminating the Commitments in full. Promptly after receipt of a Commitment
Reduction Notice the Administrative Agent shall notify each Lender of the
proposed termination or Commitment reduction. The Commitments, once reduced or
terminated pursuant to this Section, may not be increased or reinstated. The
Borrower shall pay all interest and fees on the Revolving Loans accrued to the
date of such reduction or termination of the Commitments to the Administrative
Agent for the account of the Lenders, including but not limited to any
applicable compensation due to each Lender in accordance with Section 5.4. of
this Agreement.

 

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Section 2.12. Extension of Termination Date.

(a) Generally. The Borrower shall have the right, exercisable one time, to
extend the Termination Date by one year. The Borrower may exercise such right
only by executing and delivering to the Administrative Agent at least 30 days
but not more than 120 days prior to the current Termination Date, a written
request for such extension (an “Extension Request”). The Administrative Agent
shall notify the Lenders if it receives an Extension Request promptly upon
receipt thereof. Not later than the date that is 10 days after the
Administrative Agent’s receipt of the Extension Request, the Administrative
Agent shall notify the Borrower if the Requisite Lenders have determined to
condition the extension of the Termination Date on an increase in either or both
of the applicable Capitalization Rates, and if so, what either or both new
Capitalization Rates to become effective on the current Termination Date would
be, it being understood, however, that in no event may the Capitalization Rates
increase in connection with such Extension Request by more than 0.50%. Any such
new Capitalization Rate shall be the rate determined by the Requisite Lenders on
the basis of then current market conditions and data, subject to the foregoing
cap. If the Requisite Lenders determine to condition the extension of the
Termination Date on an increase in either Capitalization Rate, then not later
than the date that is 10 days prior to the current Termination Date (the
“Extension Notification Date”), the Borrower shall notify the Administrative
Agent in writing of its decision to extend or not to extend the Termination Date
by one year. If the Borrower fails to provide such written notification on or
prior to the Extension Notification Date, the Borrower shall be deemed to have
elected to extend the Termination Date by one year. If the Borrower elects, or
is deemed to have elected, to extend the Termination Date, then subject to
satisfaction of the following conditions, the Termination Date shall be extended
for one year effective upon receipt by the Administrative Agent of the Extension
Request and payment of the fee referred to in the following clause (y):
(x) immediately prior to such extension and immediately after giving effect
thereto, (i) no Default or Event of Default shall exist and (ii) the
representations and warranties made or deemed made by the Borrower and each
other Loan Party in the Loan Documents to which any of them is a party, shall be
true and correct in all material respects on and as of the date of such
extension with the same force and effect as if made on and as of such date
except to the extent that such representations and warranties expressly relate
solely to an earlier date (in which case such representations and warranties
shall have been true and correct in all material respects on and as of such
earlier date) and except for changes in factual circumstances not prohibited
under the Loan Documents and (y) the Borrower shall have paid the Fees payable
under Section 3.5.(d). At any time prior to the effectiveness of any such
extension, upon the Administrative Agent’s request, the Borrower shall deliver
to the Administrative Agent a certificate executed by a Responsible Officer of
the Parent or the Borrower certifying the matters referred to in the immediately
preceding clauses (x)(i) and (x)(ii).

Section 2.13. Expiration Date of Letters of Credit Past Commitment Termination.

If on the date the Commitments are terminated or reduced to zero (whether
voluntarily, by reason of the occurrence of an Event of Default or otherwise)
there are any Letters of Credit outstanding hereunder and the aggregate Stated
Amount of such Letters of Credit exceeds the balance of available funds on
deposit in the Letter of Credit Collateral Account, then the Borrower shall, on
such date, pay to the Administrative Agent, for its benefit and the benefit of
the Lenders and the Issuing Bank, for deposit into the Letter of Credit
Collateral Account, an amount of money equal to the amount of such excess.

 

 

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Section 2.14. Amount Limitations.

Notwithstanding any other term of this Agreement or any other Loan Document, no
Lender shall be required to make a Loan, the Issuing Bank shall not be required
to issue a Letter of Credit and no reduction of the Commitments pursuant to
Section 2.11. shall take effect, if immediately after the making of such Loan,
the issuance of such Letter of Credit or such reduction in the Commitments:

(a) the aggregate principal amount of all outstanding Loans, together with the
aggregate amount of all Letter of Credit Liabilities, would exceed the aggregate
amount of the Commitments at such time; or

(b) the outstanding principal amount of Indebtedness (excluding Nonrecourse
Indebtedness and Indebtedness to the extent owing among the Parent and/or any of
its Subsidiaries but including Secured Recourse Indebtedness and the aggregate
principal amount of all outstanding Loans and the aggregate amount of all Letter
of Credit Liabilities) of the Parent and the Ownership Share of all such
Indebtedness of its Subsidiaries would exceed the Maximum Loan Availability at
such time.

Section 2.15. Increase in Commitments.

The Borrower shall have the right to request increases in the aggregate amount
of the Commitments by providing written notice to the Administrative Agent,
which notice shall be irrevocable once given; provided, however, that after
giving effect to any such increases the aggregate amount of the Commitments
shall not exceed $400,000,000. Each such increase in the Commitments must be an
aggregate minimum amount of $50,000,000 and integral multiples of $5,000,000 in
excess thereof. The Administrative Agent, in consultation with and with the
consent of the Borrower, shall manage all aspects of the syndication of such
increase in the Commitments, including decisions as to the selection of the
existing Lenders and/or other banks, financial institutions and other
institutional lenders to be approached with respect to such increase and the
allocations of the increase in the Commitments among such existing Lenders
and/or other banks, financial institutions and other institutional lenders. No
Lender shall be obligated in any way whatsoever to increase its Commitment or
provide a new Commitment, and any new Lender becoming a party to this Agreement
in connection with any such requested increase must be an Eligible Assignee. If
a new Lender becomes a party to this Agreement, or if any existing Lender is
increasing its Commitment, such Lender shall on the date it becomes a Lender
hereunder (or in the case of an existing Lender, increases its Commitment) (and
as a condition thereto) purchase from the other Lenders its Commitment
Percentage (determined with respect to the Lenders’ relative Commitments and
after giving effect to the increase of Commitments) of any outstanding Revolving
Loans, by making available to the Administrative Agent for the account of such
other Lenders, in immediately available funds, an amount equal to the sum of
(A) the portion of the outstanding principal amount of such Revolving Loans to
be purchased by such Lender, plus (B) the aggregate amount of payments
previously made by the other Lenders under Section 2.2.(j) that have not been
repaid, plus (C) interest accrued and unpaid to and as of such date on such
portion of the outstanding principal amount of such Revolving Loans. The
Borrower shall pay to the Lenders amounts payable, if any, to such Lenders under
Section 5.4. as a result of the prepayment of any such Revolving Loans.
Effecting the increase of the Commitments under this Section is subject to the
following conditions precedent: (x) no Default or Event of Default shall be in
existence on the effective date of such increase, (y) the representations and
warranties made or deemed made by the Borrower or any other Loan Party in any
Loan Document to which such Loan Party is a party shall be true and accurate in
all material respects on the effective date of such increase except to the
extent that such representations and warranties expressly relate solely to an
earlier date (in which case such representations and warranties shall have been
true and accurate on and as of such earlier date) and except for changes in
factual circumstances not prohibited hereunder, and (z) the Administrative Agent
shall have received each of the following, in form and substance satisfactory to
the Administrative Agent: (i) if not previously delivered to the Administrative
Agent, copies certified by the Secretary or Assistant Secretary of (A) all
corporate, partnership or other necessary action taken by the Parent and the
Borrower to authorize such increase and (B) all corporate, partnership, member
or other necessary action taken by each Guarantor authorizing the guaranty of
such increase; (ii) an opinion of counsel to the Parent, the Borrower and the
Guarantors, and addressed to the Administrative Agent and the Lenders covering
such matters as reasonably requested by the Administrative Agent, and (iii) new
Revolving Notes executed by the Borrower, payable to any new Lenders and
replacement Revolving Notes executed by the Borrower, payable to any existing
Lenders increasing their Commitments, in the amount of such Lender’s Commitment
at the time of the effectiveness of the applicable increase in the aggregate
amount of the Commitments. In connection with any increase in the aggregate
amount of the Commitments pursuant to this Section 2.15. any Lender becoming a
party hereto shall execute such documents and agreements as the Administrative
Agent may reasonably request.

 

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Section 2.16. Funds Transfer Disbursements.

(a) Generally. The Borrower hereby authorizes the Administrative Agent to
disburse the proceeds of any Loan made by the Lenders or any of their Affiliates
pursuant to the Loan Documents as requested by an authorized representative of
the Borrower to any of the accounts designated in the Transfer Authorizer
Designation Form. The Borrower agrees to be bound by any transfer request:
(i) authorized or transmitted by the Borrower; or (ii) made in the Borrower’s
name and accepted by the Administrative Agent in good faith and in compliance
with these transfer instructions, even if not properly authorized by the
Borrower. The Borrower further agrees and acknowledges that the Administrative
Agent may rely solely on any bank routing number or identifying bank account
number or name provided by the Borrower to effect a wire or funds transfer even
if the information provided by the Borrower identifies a different bank or
account holder than named by the Borrower. The Administrative Agent is not
obligated or required in any way to take any actions to detect errors in
information provided by the Borrower. If the Administrative Agent takes any
actions in an attempt to detect errors in the transmission or content of
transfer or requests or takes any actions in an attempt to detect unauthorized
funds transfer requests, the Borrower agrees that no matter how many times the
Administrative Agent takes these actions the Administrative Agent will not in
any situation be liable for failing to take or correctly perform these actions
in the future and such actions shall not become any part of the transfer
disbursement procedures authorized under this provision, the Loan Documents, or
any agreement between the Administrative Agent and the Borrower. The Borrower
agrees to notify the Administrative Agent of any errors in the transfer of any
funds or of any unauthorized or improperly authorized transfer requests within
14 days after the Administrative Agent’s confirmation to the Borrower of such
transfer.

(b) Funds Transfer. The Administrative Agent will, in its sole discretion,
determine the funds transfer system and the means by which each transfer will be
made. The Administrative Agent may delay or refuse to accept a funds transfer
request if the transfer would: (i) violate the terms of this authorization,
(ii) require use of a bank unacceptable to the Administrative Agent or any
Lender or prohibited by any Governmental Authority, (iii) cause the
Administrative Agent or any Lender to violate any Federal Reserve or other
regulatory risk control program or guideline or (iv) otherwise cause the
Administrative Agent or any Lender to violate any Applicable Law or regulation.

(c) Limitation of Liability. None of the Administrative Agent, the Issuing Bank
or any Lender shall be liable to the Parent, the Borrower or any other party for
(i) errors, acts or failures to act of others, including other entities, banks,
communications carriers or clearinghouses, through which the Borrower’s
transfers may be made or information received or transmitted, and no such entity
shall be deemed an agent of the Administrative Agent, the Issuing Bank or any
Lender, (ii) any loss, liability or delay caused by fires, earthquakes, wars,
civil disturbances, power surges or failures, acts of government, labor
disputes, failures in communications networks, legal constraints or other events
beyond Administrative Agent’s, Issuing Bank’s or any Lender’s control, or
(iii) any special, consequential, indirect or punitive damages, whether or not
(x) any claim for these damages is based on tort or contract or (y) the
Administrative Agent, the Issuing Bank, any Lender or the Borrower knew or
should have known the likelihood of these damages in any situation. Neither the
Administrative Agent, the Issuing Bank nor any Lender makes any representations
or warranties other than those expressly made in this Agreement.

 

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ARTICLE III. PAYMENTS, FEES AND OTHER GENERAL PROVISIONS

Section 3.1. Payments.

(a) Payments by Borrower. Except to the extent otherwise provided herein, all
payments of principal, interest, Fees and other amounts to be made by the
Borrower under this Agreement, the Notes or any other Loan Document shall be
made in Dollars, in immediately available funds, without setoff, deduction or
counterclaim, to the Administrative Agent at the Principal Office, not later
than 11:00 a.m. Pacific time on the date on which such payment shall become due
(each such payment made after such time on such due date to be deemed to have
been made on the next succeeding Business Day). Subject to Section 11.5., the
Borrower shall, at the time of making each payment under this Agreement or any
other Loan Document, specify to the Administrative Agent the amounts payable by
the Borrower hereunder to which such payment is to be applied. Each payment
received by the Administrative Agent for the account of a Lender under this
Agreement or any Note shall be paid to such Lender by wire transfer of
immediately available funds in accordance with the wiring instructions provided
by such Lender to the Administrative Agent from time to time, for the account of
such Lender at the applicable Lending Office of such Lender. Each payment
received by the Administrative Agent for the account of the Issuing Bank under
this Agreement shall be paid to the Issuing Bank by wire transfer of immediately
available funds in accordance with the wiring instructions provided by the
Issuing Bank to the Administrative Agent from time to time, for the account of
the Issuing Bank. In the event the Administrative Agent fails to pay such
amounts to such Lender or the Issuing Bank, as the case may be, (i) by 5:00 p.m.
Pacific time on the Business Day such funds are received by the Administrative
Agent, if such amounts are received by 11:00 a.m. Pacific time on such date or
(ii) by 5:00 p.m. Pacific time on the Business Day following the date such funds
are received by the Administrative Agent, if such amounts are received after
11:00 a.m. Pacific time on any Business Day, the Administrative Agent shall pay
interest on such amount until paid at a rate per annum equal to the Federal
Funds Rate from time to time in effect. If the due date of any payment under
this Agreement or any other Loan Document would otherwise fall on a day which is
not a Business Day such date shall be extended to the next succeeding Business
Day and interest shall continue to accrue at the rate, if any, applicable to
such payment for the period of such extension.

(b) Presumptions Regarding Payments by Borrower. Unless the Administrative Agent
shall have received notice from the Borrower prior to the date on which any
payment is due to the Administrative Agent for the account of the Lenders or the
Issuing Bank hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may (but shall not be obligated to), in reliance
upon such assumption, distribute to the Lenders or the Issuing Bank, as the case
may be, the amount due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent on demand that amount so
distributed to such Lender or the Issuing Bank, with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation.

 

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Section 3.2. Pro Rata Treatment.

Except to the extent otherwise provided herein: (a) each borrowing from the
Lenders under Section 2.1.(a) and 2.2.(e) shall be made from the Lenders, each
payment of the Fees under Sections 3.5.(a), 3.5.(b), the first sentence of
3.5.(c) and 3.5.(d) shall be made for the account of the Lenders, and each
termination or reduction of the amount of the Commitments under Section 2.11.
shall be applied to the respective Commitments of the Lenders, pro rata
according to the amounts of their respective Commitments; (b) each payment or
prepayment of principal of Revolving Loans shall be made for the account of the
Lenders pro rata in accordance with the respective unpaid principal amounts of
the Revolving Loans held by them, provided that, subject to Section 3.9., if
immediately prior to giving effect to any such payment in respect of any
Revolving Loans the outstanding principal amount of the Revolving Loans shall
not be held by the Lenders pro rata in accordance with their respective
Commitments in effect at the time such Revolving Loans were made, then such
payment shall be applied to the Revolving Loans in such manner as shall result,
as nearly as is practicable, in the outstanding principal amount of the
Revolving Loans being held by the Lenders pro rata in accordance with their
respective Commitments; (c) each payment of interest on Revolving Loans shall be
made for the account of the Lenders, pro rata in accordance with the amounts of
interest on such Loans then due and payable to the respective Lenders; (d) the
making, Conversion and Continuation of Loans of a particular Type (other than
Conversions provided for by Section 5.5.) shall be made pro rata among the
Lenders, according to the amounts of their respective Revolving Loans and the
then current Interest Period for each Lender’s portion of each such Loan of such
Type shall be coterminous; (e) the Lenders’ participation in, and payment
obligations in respect of, Letters of Credit under Section 2.2., shall be in
accordance with their respective Commitment Percentages; and (f) the Lenders’
participation in, and payment obligations in respect of, Swingline Loans under
Section 2.3., shall be in accordance with their respective Commitment
Percentages. All payments of principal, interest, fees and other amounts in
respect of the Swingline Loans shall be for the account of the Swingline Lender
only (except to the extent any Lender shall have acquired a participating
interest in any such Swingline Loan pursuant to Section 2.3.(e), in which case
such payments shall be pro rata in accordance with such participating
interests).

Section 3.3. Sharing of Payments, Etc.

If a Lender shall obtain payment of any principal of, or interest on, any of its
Loans under this Agreement or shall obtain payment on any other Obligation owing
by the Borrower or any other Loan Party through the exercise of any right of
set-off, banker’s lien, counterclaim or similar right or otherwise or through
voluntary prepayments directly to a Lender or other payments made by the
Borrower or any other Loan Party to a Lender (other than a payment in respect of
Specified Derivatives Obligations) not in accordance with the terms of this
Agreement and such payment should be distributed to the Lenders in accordance
with Section 3.2. or Section 11.5., as applicable, such Lender shall promptly
purchase from the other Lenders participations in (or, if and to the extent
specified by such Lender, direct interests in) the Loans made by the other
Lenders or other Obligations owed to such other Lenders in such amounts, and
make such other adjustments from time to time as shall be equitable, to the end
that all the Lenders shall share the benefit of such payment (net of any
reasonable expenses which may actually be incurred by such Lender in obtaining
or preserving such benefit) in accordance with the requirements of Section 3.2.
or Section 11.5., as applicable. To such end, all the Lenders shall make
appropriate adjustments among themselves (by the resale of participations sold
or otherwise) if such payment is rescinded or must otherwise be restored. The
Borrower agrees that any Lender so purchasing a participation (or direct
interest) in the Loans or other Obligations owed to such other Lenders may
exercise all rights of set-off, banker’s lien, counterclaim or similar rights
with respect to such participation as fully as if such Lender were a direct
holder of Loans in the amount of such participation. Nothing contained herein
shall require any Lender to exercise any such right or shall affect the right of
any Lender to exercise and retain the benefits of exercising, any such right
with respect to any other indebtedness or obligation of the Borrower.

 

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Section 3.4. Several Obligations.

No Lender shall be responsible for the failure of any other Lender to make a
Loan or to perform any other obligation to be made or performed by such other
Lender hereunder, and the failure of any Lender to make a Loan or to perform any
other obligation to be made or performed by it hereunder shall not relieve the
obligation of any other Lender to make any Loan or to perform any other
obligation to be made or performed by such other Lender.

Section 3.5. Fees.

(a) Closing Fee. On the Effective Date, the Borrower agrees to pay to the
Administrative Agent and each Lender all loan fees as have been agreed to in
writing by the Borrower and the Administrative Agent.

(b) Unused Facility Fees. During the period from the Effective Date to but
excluding the Termination Date, the Borrower agrees to pay to the Administrative
Agent for the account of the Lenders an unused facility fee equal to the sum of
the daily amount by which the aggregate amount of the Commitments exceeds the
aggregate outstanding principal balance of Revolving Loans and Letter of Credit
Liabilities set forth in the table below multiplied by the corresponding per
annum rate set forth below:

 

Amount by Which Commitments Exceed
Revolving Loans and Letter of Credit Liabilities

   Unused Fee $0 to and including an amount equal to 50% of the aggregate amount
of Commitments    0.25% per annum Greater than an amount equal to 50% of the
aggregate amount of Commitments    0.35% per annum

Such fee shall be computed on a daily basis and payable quarterly in arrears on
the first day of each January, April, July and October during the term of this
Agreement and on the Termination Date or any earlier date of termination of the
Commitments or reduction of the Commitments to zero.

(c) Letter of Credit Fees. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a letter of credit fee at a rate per annum
equal to the Applicable Margin for LIBOR Loans times the daily average Stated
Amount of each Letter of Credit for the period from and including the date of
issuance of such Letter of Credit (x) to and including the date such Letter of
Credit expires or is cancelled or (y) to but excluding the date such Letter of
Credit is drawn in full. In addition to such fees, the Borrower shall pay to the
Issuing Bank solely for its own account, a fronting fee in respect of each
Letter of Credit equal to twelve and one-half one hundredths of one percent
(0.125%) of the Stated Amount of such Letter of Credit; provided, however, in no
event shall the aggregate amount of such fee in respect of any Letter of Credit
be less than $500. The fees provided for in this subsection shall be
nonrefundable and payable, in the case of the fee provided for in the first
sentence, in arrears (i) quarterly on the first day of January, April, July and
October, (ii) on the Termination Date, (iii) on the date the Commitments are
terminated or reduced to zero and (iv) thereafter from time to time on demand of
the Administrative Agent and in the case of the fee provided for in the second
sentence, at the time of issuance of such Letter of Credit. The Borrower shall
pay directly to the Issuing Bank from time to time on demand all commissions,
charges, costs and expenses in the amounts customarily charged or incurred by
the Issuing Bank from time to time in like circumstances with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or any other
transaction relating thereto.

 

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(d) Credit Extension Fee. If the Termination Date is being extended in
accordance with Section 2.12., the Borrower shall pay to the Administrative
Agent for the account of each Lender a fee equal to fifteen one-hundreths of one
percent (0.15%) of the amount of such Lender’s Commitment (whether or not
utilized). Such fee shall be due and payable in full on the effective date of
such extension.

(e) Administrative and Other Fees. The Borrower agrees to pay the administrative
and other fees of the Administrative Agent as provided in the Fee Letter and as
may be otherwise agreed to in writing from time to time by the Borrower and the
Administrative Agent.

Section 3.6. Computations.

Unless otherwise expressly set forth herein, any accrued interest on any Loan,
any Fees or any other Obligations due hereunder shall be computed on the basis
of a year of 360 days and the actual number of days elapsed.

Section 3.7. Usury.

In no event shall the amount of interest due or payable on the Loans or other
Obligations exceed the maximum rate of interest allowed by Applicable Law and,
if any such payment is paid by the Borrower or any other Loan Party or received
by any Lender, then such excess sum shall be credited as a payment of principal,
unless the Borrower shall notify the respective Lender in writing that the
Borrower elects to have such excess sum returned to it forthwith. It is the
express intent of the parties hereto that the Borrower not pay and the Lenders
not receive, directly or indirectly, in any manner whatsoever, interest in
excess of that which may be lawfully paid by the Borrower under Applicable Law.
The parties hereto hereby agree and stipulate that the only charge imposed upon
the Borrower for the use of money in connection with this Agreement is and shall
be the interest specifically described in Section 2.4.(a)(i) and (ii) and, with
respect to Swingline Loans, in Section 2.5.(c). Notwithstanding the foregoing,
the parties hereto further agree and stipulate that all agency fees, syndication
fees, unused facility fees, closing fees, letter of credit fees, underwriting
fees, default charges, late charges, funding or “breakage” charges, increased
cost charges, attorneys’ fees and reimbursement for costs and expenses paid by
the Administrative Agent or any Lender to third parties or for damages incurred
by the Administrative Agent or any Lender, in each case in connection with the
transactions contemplated by this Agreement and the other Loan Documents are
charges made to compensate the Administrative Agent or any such Lender for
underwriting or administrative services and costs or losses performed or
incurred, and to be performed or incurred, by the Administrative Agent and the
Lenders in connection with this Agreement and shall under no circumstances be
deemed to be charges for the use of money. All charges other than charges for
the use of money shall be fully earned and nonrefundable when due.

Section 3.8. Statements of Account.

The Administrative Agent will account to the Borrower quarterly with a statement
of Loans, accrued interest and Fees, charges and payments made pursuant to this
Agreement and the other Loan Documents, and such account rendered by the
Administrative Agent shall be deemed conclusive upon the Borrower absent
manifest error. The failure of the Administrative Agent to deliver such a
statement of accounts shall not relieve or discharge the Borrower from any of
its obligations hereunder.

 

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Section 3.9. Defaulting Lenders.

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:

(a) 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 Requisite Lenders.

(b) 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
Article XI. or otherwise) or received by the Administrative Agent from a
Defaulting Lender pursuant to Section 13.4. 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 Bank or the Swingline Lender hereunder;
third, to Cash Collateralize the Issuing Bank’s Fronting Exposure with respect
to such Defaulting Lender in accordance with subsection (e) below; fourth, as
the Borrower may request (so long as no Default or Event of Default exists), to
the funding of any Revolving 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 Revolving Loans under this Agreement and (y) Cash Collateralize
the Issuing Bank’s future Fronting Exposure with respect to such Defaulting
Lender with respect to future Letters of Credit issued under this Agreement, in
accordance with subsection (e) below; sixth, to the payment of any amounts owing
to the Lenders, the Issuing Bank or the Swingline Lender as a result of any
judgment of a court of competent jurisdiction obtained by any Lender, the
Issuing Bank 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 amounts owing by such Defaulting Lender
under Section 2.2.(j) in respect of Letters of Credit (such amounts
“L/C Disbursements”), 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
Article VI. were satisfied or waived, such payment shall be applied solely to
pay the Loans of, and L/C Disbursements owed to, all Non-Defaulting Lenders on a
pro rata basis prior to being applied to the payment of any Loans of, or L/C
Disbursements owed to, such Defaulting Lender until such time as all Loans and
funded and unfunded participations in Letter of Credit Liabilities and Swingline
Loans are held by the Lenders pro rata in accordance with their respective
Commitment Percentages (determined without giving effect to the immediately
following subsection (d)). 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 subsection shall
be deemed paid to and redirected by such Defaulting Lender, and each Lender
irrevocably consents hereto.

 

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(c) Certain Fees.

(i) No Defaulting Lender shall be entitled to receive any Fee payable under
Section 3.5.(b) 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.

(ii) Each Defaulting Lender shall be entitled to receive the Fee payable under
Section 3.5.(c) for any period during which that Lender is a Defaulting Lender
only to the extent allocable to its Commitment Percentage of the stated amount
of Letters of Credit for which it has provided Cash Collateral pursuant to the
immediately following subsection (e).

(iii) With respect to any Fee not required to be paid to any Defaulting Lender
pursuant to the immediately preceding clause (ii), 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
Letter of Credit Liabilities that has been reallocated to such Non-Defaulting
Lender pursuant to the immediately following subsection (d), (y) pay to each
Issuing Bank the amount of any such Fee otherwise payable to such Defaulting
Lender to the extent allocable to such Issuing Bank’s Fronting Exposure to such
Defaulting Lender, and (z) not be required to pay the remaining amount of any
such Fee.

(d) Reallocation of Participations to Reduce Fronting Exposure. All or any part
of such Defaulting Lender’s participation in Letter of Credit Liabilities shall
be reallocated among the Non-Defaulting Lenders in accordance with their
respective Commitment Percentages (determined without regard to such Defaulting
Lender’s Commitment) but only to the extent that (x) the conditions set forth in
Article VI. 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 Credit Exposure of any Non-Defaulting Lender to exceed
such Non-Defaulting Lender’s 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.

(e) Cash Collateral, Repayment of Swingline Loans.

(i) If the reallocation described in the immediately preceding subsection (d)
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, Cash
Collateralize the Issuing Bank’s Fronting Exposure in accordance with the
procedures set forth in this subsection.

(ii) At any time that there shall exist a Defaulting Lender, within 1 Business
Day following the written request of the Administrative Agent or the Issuing
Bank (with a copy to the Administrative Agent), the Borrower shall Cash
Collateralize the Issuing Bank’s Fronting Exposure with respect to such
Defaulting Lender (determined after giving effect to the immediately preceding
subsection (d) and any Cash Collateral provided by such Defaulting Lender) in an
amount not less than the aggregate Fronting Exposure of the Issuing Bank with
respect to Letters of Credit issued and outstanding at such time.

 

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(iii) The Borrower, and to the extent provided by any Defaulting Lender, such
Defaulting Lender, hereby grant to the Administrative Agent, for the benefit of
the Issuing Bank, and agree to maintain, a first priority security interest in
all such Cash Collateral as security for the Defaulting Lenders’ obligation to
fund participations in respect of Letter of Credit Liabilities, to be applied
pursuant to the immediately following clause (iv). 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 Bank as
herein provided, or that the total amount of such Cash Collateral is less than
the aggregate Fronting Exposure of the Issuing Bank with respect to Letters of
Credit issued and outstanding at such time, 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).

(iv) Notwithstanding anything to the contrary contained in this Agreement, Cash
Collateral provided under this Section in respect of Letters of Credit shall be
applied to the satisfaction of the Defaulting Lender’s obligation to fund
participations in respect of Letter of Credit Liabilities (including, as to Cash
Collateral provided by a Defaulting Lender, any interest accrued on such
obligation) for which the Cash Collateral was so provided, prior to any other
application of such property as may otherwise be provided for herein.

(v) Cash Collateral (or the appropriate portion thereof) provided to reduce the
Issuing Bank’s Fronting Exposure shall no longer be required to be held as Cash
Collateral pursuant to this subsection following (x) the elimination of the
applicable Fronting Exposure (including by the termination of Defaulting Lender
status of the applicable Lender), or (y) the determination by the Administrative
Agent and the Issuing Bank that there exists excess Cash Collateral; provided
that, subject to the immediately preceding subsection (b), the Person providing
Cash Collateral and the Issuing Bank may (but shall not be obligated to) agree
that Cash Collateral shall be held to support future anticipated Fronting
Exposure or other obligations and provided further that to the extent that such
Cash Collateral was provided by the Borrower, such Cash Collateral shall remain
subject to the security interest granted pursuant to the Loan Documents.

(f) Defaulting Lender Cure. If the Borrower, the Administrative Agent, the
Swingline Lender and the Issuing Bank 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 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 to be held pro
rata by the Lenders in accordance with their respective Commitment Percentages
(determined without giving effect to the immediately preceding subsection (d)),
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.

(g) 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 and (ii) the Issuing Bank 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.

 

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Section 3.10. Taxes; Foreign Lenders.

(a) Taxes Generally. All payments by the Borrower of principal of, and interest
on, the Loans and all other Obligations shall be made free and clear of and
without deduction for any present or future excise, stamp or other taxes, fees,
duties, levies, imposts, charges, deductions, withholdings or other charges of
any nature whatsoever imposed by any taxing authority, but excluding
(i) franchise taxes, (ii) any taxes (other than withholding taxes) that would
not be imposed but for a connection between the Administrative Agent, the
Issuing Bank or a Lender and the jurisdiction imposing such taxes (other than a
connection arising solely by virtue of the activities of the Administrative
Agent, the Issuing Bank or such Lender pursuant to or in respect of this
Agreement or any other Loan Document), (iii) any taxes imposed on or measured by
the Issuing Bank’s or any Lender’s assets, net income, receipts or branch
profits, (iv) any taxes arising after the Agreement Date solely as a result of
or attributable to a Lender changing its designated Lending Office after the
date such Lender becomes a party hereto, (v) any taxes that are United States
withholding taxes imposed on amounts payable to such Lender at the time such
Lender becomes a party to this Agreement, except to the extent that such
Lender’s assignor or Participant’s assignor (if any) was entitled, at the time
of assignment, to receive additional amounts from the Borrower with respect to
such taxes pursuant to this paragraph and (vi) any U.S. Federal withholding
taxes imposed under FATCA (such non-excluded items being collectively called
“Taxes”). If any withholding or deduction from any payment to be made by the
Borrower hereunder is required in respect of any Taxes pursuant to any
Applicable Law, then the Borrower will:

(i) pay directly to the relevant Governmental Authority the full amount required
to be so withheld or deducted;

(ii) promptly forward to the Administrative Agent an official receipt or other
documentation reasonably satisfactory to the Administrative Agent evidencing
such payment to such Governmental Authority; and

(iii) pay to the Administrative Agent for its account or the account of the
applicable Lender or the Issuing Bank, as the case may be, such additional
amount or amounts as is necessary to ensure that the net amount actually
received by the Administrative Agent, the Issuing Bank or such Lender will equal
the full amount that the Administrative Agent, the Issuing Bank or such Lender
would have received had no such withholding or deduction been required.

(b) Tax Indemnification. If the Borrower fails to pay any Taxes when due to the
appropriate Governmental Authority or fails to remit to the Administrative
Agent, for its account or the account of the Issuing Bank or respective Lender,
as the case may be, the required receipts or other required documentary
evidence, the Borrower shall indemnify the Administrative Agent, the Issuing
Bank and the Lenders for any incremental Taxes, interest or penalties that may
become payable by the Administrative Agent, the Issuing Bank or any Lender as a
result of any such failure. For purposes of this Section, a distribution
hereunder by the Administrative Agent or any Lender to or for the account of any
Lender shall be deemed a payment by the Borrower. If the Administrative Agent, a
Lender or the Issuing Bank determines, in its sole discretion, that it has
received a refund of any Taxes as to which it has been indemnified by the
Borrower pursuant to this Section (including additional amounts paid by the
Borrower pursuant to this Section), it shall pay to the Borrower an amount equal
to such refund (but only to the extent of indemnity payments made under this
Section with respect to the indemnified Taxes giving rise to such refund), net
of all out-of-pocket expenses (including Taxes) of the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund), provided that the Borrower, upon the request of the Administrative
Agent, such Lender or the Issuing Bank, as the case may be, agrees to repay the
amount paid over pursuant to this Section (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to the Administrative
Agent, such Lender or the Issuing Bank in the event the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this subsection (b), in no event will the Administrative Agent, the Issuing
Bank or any Lender be required to pay any amount to the Borrower pursuant to
this subsection (b) the payment of which would place the Administrative Agent,
Issuing Bank or any Lender in a less favorable net after-Tax position than the
Administrative Agent, Issuing Bank or such Lender 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 the
Administrative Agent, any Lender or the Issuing Bank to make available its tax
returns (or any other information relating to its Taxes that it deems
confidential) to the Borrower or any other Person.

 

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(c) Tax Forms. Prior to the date that any Lender or Participant becomes a party
hereto, such Person shall deliver to the Borrower and the Administrative Agent
such certificates, documents or other evidence, as required by the Internal
Revenue Code or Treasury Regulations issued pursuant thereto (including Internal
Revenue Service Forms W-8ECI and W-8BEN, as applicable, or appropriate successor
forms, and IRS Form W-9 for any Non-exempt U.S. Lender or Participant, as
applicable), properly completed, currently effective and duly executed by such
Lender or Participant establishing that payments to it hereunder and under the
Notes are (i) not subject to United States Federal backup withholding tax and
(ii) not subject to United States Federal withholding tax under the Internal
Revenue Code. Each such Lender or Participant shall, to the extent it may
lawfully do so, (x) deliver further copies of such forms or other appropriate
certifications on or before the date that any such forms expire or become
obsolete and after the occurrence of any event requiring a change in the most
recent form delivered to the Borrower or the Administrative Agent and (y) obtain
such extensions of the time for filing, and renew such forms and certifications
thereof, as may be reasonably requested by the Borrower or the Administrative
Agent. The Borrower shall not be required to pay any amount pursuant to the last
sentence of subsection (a) above to any Lender or Participant , if such Lender,
Participant or the Administrative Agent, as applicable, fails to comply with the
requirements of this subsection. If any such Lender or Participant, to the
extent it may lawfully do so, fails to deliver the above forms or other
documentation, then the Administrative Agent may withhold from such payment to
such Lender such amounts as are required by the Internal Revenue Code. If any
Governmental Authority asserts that the Administrative Agent did not properly
withhold or backup withhold, as the case may be, any tax or other amount from
payments made to or for the account of any Lender, such Lender shall indemnify
the Administrative Agent therefor, including all penalties and interest, any
taxes imposed by any jurisdiction on the amounts payable to the Administrative
Agent under this Section, and costs and expenses (including all reasonable fees
and disbursements of any law firm or other external counsel and the allocated
cost of internal legal services and all disbursements of internal counsel) of
the Administrative Agent. The obligation of the Lenders under this Section shall
survive the termination of the Commitments, repayment of all Obligations and the
resignation or replacement of the Administrative Agent.

(d) FATCA. 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 Internal Revenue Code, as
applicable), such Lender shall deliver to the Borrower and the Administrative
Agent at the time or times prescribed by Applicable 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 Internal Revenue 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 (c), “FATCA”
shall include any amendments made to FATCA after the date of this Agreement.

 

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(e) USA Patriot Act Notice; Compliance. In order for the Administrative Agent to
comply with the Patriot Act, prior to any Lender or Participant that is
organized under the laws of a jurisdiction outside of the United States of
America becoming a party hereto, the Administrative Agent may request, and such
Lender or Participant shall provide to the Administrative Agent, its name,
address, tax identification number and/or such other identification information
as shall be necessary for the Administrative Agent to comply with federal law.

ARTICLE IV. UNENCUMBERED BORROWING BASE PROPERTIES

Section 4.1. Eligibility of Properties.

(a) Initial Unencumbered Borrowing Base Properties. On the Effective Date the
Properties identified on Schedule 4.1. shall be Unencumbered Borrowing Base
Properties.

(b) Additional Unencumbered Borrowing Base Properties. If after the Effective
Date, the Borrower desires that any additional Property become an Unencumbered
Borrowing Base Property and therefore included in calculations of the
Unencumbered Borrowing Base Value, the Borrower shall so notify the
Administrative Agent in writing (as referred to in this subsection, a “Notice of
Additional Unencumbered Borrowing Base Property”). Except as otherwise provided
in the immediately following subsection (c), no Property will become an
Unencumbered Borrowing Base Property unless it is an Eligible Unencumbered
Borrowing Base Property, and unless and until the Borrower delivers to the
Administrative Agent the following, in form and substance satisfactory to the
Administrative Agent (unless waived by the Requisite Lenders):

(i) a description of such Property, such description to include the age,
location and size of such Property;

(ii) an operating statement with respect to such Property for each of the two
prior fiscal years and for the current fiscal year through the fiscal quarter
most recently ending and for the current fiscal quarter, which shall be audited
(to the extent available) or certified by a representative of the Borrower to
the best of such representative’s knowledge as being true and correct in all
material respects; provided, that with respect to any period such Property was
not owned by a Loan Party, such information shall only be required to be
delivered to the extent reasonably available to the Borrower;

(iii) a pro forma operating statement or an operating budget for such Property
with respect to the current and immediately following fiscal years;

(iv) a budget for capital expenditures for the immediately following 12-month
period showing funding sources acceptable to the Administrative Agent; and

(v) a Compliance Certificate showing (x) pro forma compliance with the covenants
set forth in Section 10.1. and (y) pro forma effect on the Pricing Ratio, in
each case, after giving effect to the addition of such Property in the
calculations of the Unencumbered Borrowing Base Values; and

 

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(vi) such other information the Administrative Agent may reasonably request in
order to evaluate the Property including, without limitation, the following:

(1) a copy of the ALTA Owner’s Policy of Title Insurance (“Owner’s Policy”) of
the Borrower or a Subsidiary, as applicable, covering such Property showing the
identity of the fee titleholder thereto and all matters of record as of the date
of such policy;

(2) solely with respect to a property located in an earthquake zone, an
engineering report or structural inspection report for such Property that is
(w) prepared by an engineering firm reasonably acceptable to the Administrative
Agent, (x) if requested by the Administrative Agent, addressed to the
Administrative Agent, (y) not more than 12 months old and (z) otherwise in form
and substance acceptable to the Administrative Agent;

(3) (x) a “Phase I” environmental assessment of such Property, which report has
been (A) prepared by an environmental engineering firm reasonably acceptable to
the Administrative Agent, (B) if requested by the Administrative Agent,
addressed to the Administrative Agent and (C) is otherwise in form and substance
acceptable to the Administrative Agent and (y) any other environmental
assessments or other reports relating to such Property, including any “Phase II”
environmental assessment prepared or recommended by such environmental
engineering firm to be prepared for such Property;

(4) copies of all Property Management Agreements relating to such Property;

(5) if such Property is a New Property an Appraisal of such Property that is
(x) not more than 12 months old and (y) either addressed to the Administrative
Agent or the Administrative Agent and the Lenders are expressly permitted to
rely pursuant to a reliance letter addressed to the Administrative Agent and the
Lenders; and

(6) evidence that the insurance required by Section 8.5. is in effect and, to
the extent applicable, covers such Property.

A Notice of Additional Unencumbered Borrowing Base Property executed and
delivered by the Borrower to the Administrative Agent shall constitute a
certification by the Borrower to the Administrative Agent and the Lenders that
such Property satisfies all of the requirements contained in the definition of
“Eligible Unencumbered Borrowing Base Property” unless such notice states
otherwise (in which case the provisions of the immediately following
subsection (c) shall apply). Within 5 Business Days of the Administrative
Agent’s receipt of a Notice of Additional Unencumbered Borrowing Base Property
and the other reports and documents set forth in the immediately preceding
subsections (b)(i) through (vi), the Administrative Agent will send such notice,
reports and documents to each of the Lenders. Within 10 Business Days of the
Administrative Agent’s receipt of a Notice of Additional Unencumbered Borrowing
Base Property and other reports and documents set forth in subsections (b)(i)
through (vi), the Administrative Agent shall notify the Borrower and the Lenders
if the Administrative Agent has confirmed that such Property satisfies all of
the requirements contained in the definition of “Eligible Unencumbered Borrowing
Base Property”.

Notwithstanding the foregoing, if a Notice of Additional Unencumbered Borrowing
Base Property is delivered in connection with the submission of a Property as a
result of Section 2.7.(b)(ii) and within 10 Business Days of the providing of
such notice the Borrower has delivered all reports and documents required under
the immediately preceding subsections (b)(i), (ii), (iii), (iv), (v) and (vi)(1)
through (4), the Administrative Agent shall notify the Borrower and the Lenders
if the Administrative Agent has confirmed that such Property satisfies all of
the requirements contained in the definition of “Eligible Unencumbered Borrowing
Base Property”.

 

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(c) Nonconforming Properties. If a Property which the Borrower wants to have
included in calculation of the Unencumbered Borrowing Base Value does not
satisfy the requirements of an Eligible Unencumbered Borrowing Base Property,
then the Administrative Agent, upon written request of the Borrower shall
request that the Requisite Lenders determine whether such Property shall be
included as an Unencumbered Borrowing Base Property. In connection therewith,
the Borrower shall deliver the information required by the immediately preceding
subsection (b) to each of the Lenders. If such a request is made by the
Administrative Agent to the Lenders, within 15 Business Days after the date on
which a Lender has received such request and all of the items referred to in the
immediately preceding subsection (b), each such Lender shall notify the
Administrative Agent in writing whether or not such Lender accepts such Property
as an Unencumbered Borrowing Base Property. If a Lender fails to give such
notice within such time period, such Lender shall be deemed to have approved
such Property as an Unencumbered Borrowing Base Property. A Property shall
become an Unencumbered Borrowing Base Property under this subsection (c) only
upon the approval and/or deemed approval of the Requisite Lenders.

(d) Documents with Respect to Subsidiary. If a Property owned by a Subsidiary
that is not a Guarantor is to become an Unencumbered Borrowing Base Property,
the Borrower shall deliver to the Administrative Agent an Accession Agreement
executed by such Subsidiary together with the items that would have been
delivered with respect to such Subsidiary under Sections 6.1.(a)(iv) through
(viii) and (xiv) as if such Subsidiary had been a Guarantor on the Effective
Date. If the improvements on such a Property or the furniture, fixtures and
equipment utilized in the operation of such Property are owned or leased by a
Subsidiary (the “Accommodation Subsidiary”) other than the Subsidiary that owns
or leases such Property, then the Borrower shall also deliver to the
Administrative Agent an Accession Agreement executed by such Accommodation
Subsidiary. Until such time as the Administrative Agent shall have received the
items referred to in the immediately preceding two sentences with respect to
such Subsidiary and any applicable Accommodation Subsidiary, the applicable
Property shall not be considered to be an Unencumbered Borrowing Base Property.

Section 4.2. Reclassification of Properties.

From time to time the Borrower may request, upon not less than 10 Business Days
prior written notice to the Administrative Agent, that an Unencumbered Borrowing
Base Property be no longer classified as an Unencumbered Borrowing Base Property
and therefore not included in the calculations of the Unencumbered Borrowing
Base Value, which reclassification (a “Reclassification”) shall be effected by
the Administrative Agent if all the following conditions are satisfied as of the
date of such Reclassification:

(a) no Default or Event of Default exists or will exist immediately after giving
effect to such Reclassification and any prepayments of the Loans to be made in
connection therewith, and the reduction in the Unencumbered Borrowing Base Value
by reason of the release of such Property as of the date of such
Reclassification (any such request from the Borrower shall include a
representation regarding no Default or Event of Default to the effect set forth
in the preceding sentence); and

(b) the Borrower shall have delivered a Compliance Certificate showing (x) pro
forma compliance with the covenants set forth in Section 10.1. and (y) pro forma
effect on the Pricing Ratio, in each case, after giving effect to such
Reclassification.

 

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Upon the Borrower’s request and at the Borrower’s sole cost and expense, the
Administrative Agent agrees to execute and deliver such instruments, documents,
certificates and other agreements as the Borrower may reasonably request to
confirm such Reclassification.

ARTICLE V. YIELD PROTECTION, ETC.

Section 5.1. Additional Costs; Capital Adequacy.

(a) Capital Adequacy. If any Lender or any Participant in the Loan determines
that compliance with any law or regulation or with any guideline or request from
any central bank or other Governmental Authority (whether or not having the
force of law) affects or would affect the amount of capital required or expected
to be maintained by such Lender or such Participant, or any corporation
controlling such Lender or such Participant, as a consequence of, or with
reference to, such Lender’s Commitments or its making or maintaining Loans, or
participations in Letters of Credit or Swingline Loans, below the rate which
such Lender or such Participant or such corporation controlling such Lender or
such Participant could have achieved but for such compliance (taking into
account the policies of such Lender or such Participant or such corporation with
regard to capital), then the Borrower shall, from time to time, within thirty
(30) days after written demand by such Lender or such Participant, pay to such
Lender or such Participant additional amounts sufficient to compensate such
Lender or such Participant or such corporation controlling such Lender or such
Participant to the extent that such Lender or such Participant determines such
increase in capital is allocable to such Lender’s or such Participant’s
obligations hereunder.

(b) Additional Costs. In addition to, and not in limitation of the immediately
preceding subsection (a), the Borrower shall promptly pay to the Administrative
Agent for the account of a Lender from time to time such amounts as such Lender
may determine to be necessary to compensate such Lender for any costs incurred
by such Lender that it reasonably determines are attributable to its making or
maintaining of any LIBOR Loans or its obligation to make any LIBOR Loans
hereunder, any reduction in any amount receivable by such Lender under this
Agreement or any of the other Loan Documents in respect of any of such LIBOR
Loans or such obligation or the maintenance by such Lender of capital in respect
of its LIBOR Loans or its Commitment (such increases in costs and reductions in
amounts receivable being herein called “Additional Costs”), resulting from any
Regulatory Change that: (i) changes the basis of taxation of any amounts payable
to such Lender under this Agreement or any of the other Loan Documents in
respect of any of such LIBOR Loans or its Commitment (other than taxes, fees,
duties, levies, imposts, charges, deductions, withholdings, or other charges
which are excluded from the definition of Taxes pursuant to the first sentence
of Section 3.10.(a)) imposed on or measured by the overall net income of such
Lender or of its Lending Office for any of such LIBOR Loans by the jurisdiction
in which such Lender has its principal office or such Lending Office or taxes
covered by Section 3.10.(b), or (ii) imposes or modifies any reserve, special
deposit or similar requirements (other than Regulation D of the Board of
Governors of the Federal Reserve System or other similar reserve requirement
applicable to any other category of liabilities or category of extensions of
credit or other assets by reference to which the interest rate on LIBOR Loans is
determined to the extent utilized when determining LIBOR for such Loans)
relating to any extensions of credit or other assets of, or any deposits with or
other liabilities of, or other credit extended by, or any other acquisition of
funds by such Lender (or its parent corporation), or any commitment of such
Lender (including, without limitation, the Commitment of such Lender hereunder)
or (iii) has or would have the effect of reducing the rate of return on capital
of such Lender to a level below that which such Lender could have achieved but
for such Regulatory Change (taking into consideration such Lender’s policies
with respect to capital adequacy).

 

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(c) Lender’s Suspension of LIBOR Loans. Without limiting the effect of the
provisions of the immediately preceding subsection (a) and (b), if by reason of
any Regulatory Change, any Lender either (i) incurs Additional Costs based on or
measured by the excess above a specified level of the amount of a category of
deposits or other liabilities of such Lender that includes deposits by reference
to which the interest rate on LIBOR Loans is determined as provided in this
Agreement or a category of extensions of credit or other assets of such Lender
that includes LIBOR Loans or (ii) becomes subject to restrictions on the amount
of such a category of liabilities or assets that it may hold, then, if such
Lender so elects by notice to the Borrower (with a copy to the Administrative
Agent), the obligation of such Lender to make or Continue, or to Convert Base
Rate Loans into, LIBOR Loans shall be suspended until such Regulatory Change
ceases to be in effect (in which case the provisions of Section 5.5. shall
apply).

(d) Additional Costs in Respect of Letters of Credit. Without limiting the
obligations of the Borrower under the preceding subsections of this Section (but
without duplication), if as a result of any Regulatory Change or any risk-based
capital guideline or other requirement heretofore or hereafter issued by any
Governmental Authority there shall be imposed, modified or deemed applicable any
tax (other than taxes covered by Section 3.10.), reserve, special deposit,
capital adequacy or similar requirement against or with respect to or measured
by reference to Letters of Credit and the result shall be to increase the cost
to the Issuing Bank of issuing (or any Lender of purchasing participations in)
or maintaining its obligation hereunder to issue (or purchase participations in)
any Letter of Credit or reduce any amount receivable by the Issuing Bank or any
Lender hereunder in respect of any Letter of Credit, then, upon demand by the
Issuing Bank or such Lender, the Borrower shall pay promptly, and in any event
within 3 Business Days of demand, to the Issuing Bank or, in the case of such
Lender, to the Administrative Agent for the account of such Lender, from time to
time as specified by the Issuing Bank or such Lender, such additional amounts as
shall be sufficient to compensate the Issuing Bank or such Lender for such
increased costs or reductions in amount.

(e) Notification and Determination of Additional Costs. Each of the
Administrative Agent, Issuing Bank, each Lender, and each Participant, as the
case may be, agrees to notify the Borrower of any event occurring after the
Agreement Date entitling the Administrative Agent, the Issuing Bank, such Lender
or such Participant to compensation under any of the preceding subsections of
this Section as promptly as practicable; provided, however, that the failure of
the Administrative Agent, the Issuing Bank, any Lender or any Participant to
give such notice shall not release the Borrower from any of its obligations
hereunder (and in the case of a Lender, to the Administrative Agent); provided
further that no Lender shall be entitled to claim any additional cost, reduction
in amounts, loss, tax or other additional amount under this Article V if such
Lender fails to provide such notice to the Borrower within 180 days of the date
such Lender becomes aware of the occurrence of the event giving rise to the
additional cost, reduction in amounts, loss, tax or other additional amount. The
Administrative Agent, the Issuing Bank, each Lender and each Participant, as the
case may be, agrees to furnish to the Borrower (and in the case of the Issuing
Bank, a Lender or a Participant to the Administrative Agent as well) a
certificate setting forth in reasonable detail the basis and amount of each
request for compensation under this Section. Determinations by the
Administrative Agent, the Issuing Bank, such Lender, or such Participant, as the
case may be, of the effect of any Regulatory Change shall be conclusive and
binding for all purposes, provided that such determination is made on a
reasonable basis and in good faith.

Section 5.2. Suspension of LIBOR Loans.

Anything herein to the contrary notwithstanding, if, on or prior to the
determination of LIBOR for any Interest Period:

(a) the Administrative Agent reasonably determines (which determination shall be
conclusive) that quotations of interest rates for the relevant deposits referred
to in the definition of LIBOR are not being provided in the relevant amounts or
for the relevant maturities for purposes of determining rates of interest for
LIBOR Loans as provided herein or is otherwise unable to determine LIBOR; or

 

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(b) the Administrative Agent reasonably determines (which determination shall be
conclusive) that the relevant rates of interest referred to in the definition of
LIBOR upon the basis of which the rate of interest for LIBOR Loans for such
Interest Period is to be determined are not likely to adequately cover the cost
to any Lender of making or maintaining LIBOR Loans for such Interest Period;

then the Administrative Agent shall give the Borrower and each Lender prompt
notice thereof and, so long as such condition remains in effect, the Lenders
shall be under no obligation to, and shall not, make additional LIBOR Loans
(without limiting the obligation to make Base Rate Loans), Continue LIBOR Loans
or Convert Loans into LIBOR Loans and the Borrower shall, on the last day of
each current Interest Period for each outstanding LIBOR Loan, either prepay such
Loan or Convert such Loan into a Base Rate Loan.

Section 5.3. Illegality.

Notwithstanding any other provision of this Agreement, if any Lender shall
reasonably determine (which determination shall be conclusive and binding) that
it has become unlawful for such Lender to honor its obligation to make or
maintain LIBOR Loans hereunder, then such Lender shall promptly notify the
Borrower thereof (with a copy of such notice to the Administrative Agent) and
such Lender’s obligation to make or Continue, or to Convert Loans of any other
Type into, LIBOR Loans shall be suspended, in each case, until such time as such
Lender may again make and maintain LIBOR Loans (in which case the provisions of
Section 5.5. shall be applicable (without limiting the obligation to make Base
Rate Loans)).

Section 5.4. Compensation.

The Borrower shall pay to the Administrative Agent for the account of each
Lender, upon the request of the Administrative Agent, such amount or amounts as
the Administrative Agent shall determine in its reasonable discretion shall be
sufficient to compensate such Lender for any loss, cost or expense (excluding
lost profits) attributable to:

(a) any payment or prepayment (whether mandatory or optional) of a LIBOR Loan,
or Conversion of a LIBOR Loan, made by such Lender for any reason (including,
without limitation, acceleration) on a date other than the last day of the
Interest Period for such Loan; or

(b) any failure by the Borrower for any reason (including, without limitation,
the failure of any of the applicable conditions precedent specified in Article
VI. to be satisfied) to borrow a LIBOR Loan from such Lender on the date for
such borrowing, or to Convert a Base Rate Loan into a LIBOR Loan or Continue a
LIBOR Loan on the requested date of such Conversion or Continuation.

Not in limitation of the foregoing, such compensation shall include, without
limitation, in the case of a LIBOR Loan, an amount equal to the then present
value of (A) the amount of interest that would have accrued on such LIBOR Loan
for the remainder of the Interest Period at the rate applicable to such LIBOR
Loan, less (B) the amount of interest that would accrue on the same LIBOR Loan
for the same period if LIBOR were set on the date on which such LIBOR Loan was
repaid, prepaid or Converted or the date on which the Borrower failed to borrow,
Convert or Continue such LIBOR Loan calculating present value by using as a
discount rate LIBOR quoted on such date. Upon the Borrower’s request, the
Administrative Agent shall provide the Borrower with a statement setting forth
in reasonable detail the basis for requesting such compensation and the method
for determining the amount thereof. Any such statement shall be conclusive
provided that such determination is made on a reasonable basis and in good
faith.

 

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Section 5.5. Treatment of Affected Loans.

If the obligation of any Lender to make LIBOR Loans or to Continue, or to
Convert Base Rate Loans into, LIBOR Loans shall be suspended pursuant to
Section 5.1.(c), Section 5.2. or Section 5.3. then such Lender’s LIBOR Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for LIBOR Loans (or, in the case of a Conversion
required by Section 5.1.(c), Section 5.2., or Section 5.3. on such earlier date
as such Lender may specify to the Borrower with a copy to the Administrative
Agent) and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 5.1., Section 5.2. or Section 5.3. that gave
rise to such Conversion no longer exist:

(i) to the extent that such Lender’s LIBOR Loans have been so Converted, all
payments and prepayments of principal that would otherwise be applied to such
Lender’s LIBOR Loans shall be applied instead to its Base Rate Loans; and

(ii) all Loans that would otherwise be made or Continued by such Lender as LIBOR
Loans shall be made or Continued instead as Base Rate Loans, and all Base Rate
Loans of such Lender that would otherwise be Converted into LIBOR Loans shall
remain as Base Rate Loans.

If such Lender gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in Section 5.1.(c) or 5.3. that gave
rise to the Conversion of such Lender’s LIBOR Loans pursuant to this Section no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when LIBOR Loans made by other Lenders are
outstanding, then such Lender’s Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding LIBOR Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding LIBOR Loans and by such
Lender are held pro rata (as to principal amounts, Types and Interest Periods)
in accordance with their respective Commitments.

Section 5.6. Change of Lending Office.

Each Lender agrees that it will use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate an alternate
Lending Office with respect to any of its Loans affected by the matters or
circumstances described in Sections 3.10., 5.1. or 5.3. to reduce the liability
of the Borrower or avoid the results provided thereunder, so long as such
designation is not disadvantageous to such Lender as determined by such Lender
in its sole discretion, except that such Lender shall have no obligation to
designate a Lending Office located in the United States of America.

Section 5.7. Assumptions Concerning Funding of LIBOR Loans.

Calculation of all amounts payable to a Lender under this Article shall be made
as though such Lender had actually funded LIBOR Loans through the purchase of
deposits in the relevant market bearing interest at the rate applicable to such
LIBOR Loans in an amount equal to the amount of the LIBOR Loans and having a
maturity comparable to the relevant Interest Period; provided, however, that
each Lender may fund each of its LIBOR Loans in any manner it sees fit and the
foregoing assumption shall be used only for calculation of amounts payable under
this Article.

 

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Section 5.8. Affected Lenders.

If (a) a Lender requests compensation pursuant to Section 3.10. or 5.1., and the
Requisite Lenders are not also doing the same, or (b) the obligation of any
Lender to make LIBOR Loans or to Continue, or to Convert Base Rate Loans into,
LIBOR Loans shall be suspended pursuant to Section 5.1.(b) or 5.3. but the
obligation of the Requisite Lenders shall not have been suspended under such
Sections, or (c) a Lender does not vote in favor of any amendment, modification
or waiver to this Agreement which, pursuant to Section 13.7.(b), requires the
vote of such Lender, and the Requisite Lenders shall have voted in favor of such
amendment, modification or waiver, or (d) a Lender is a Defaulting Lender, then,
so long as there does not then exist any Default or Event of Default, the
Borrower may demand that such Lender (the “Affected Lender”), and upon such
demand the Affected Lender shall promptly, assign its Commitment to an Eligible
Assignee subject to and in accordance with the provisions of Section 13.6.(d)
for a purchase price equal to the aggregate principal balance of all Loans then
owing to the Affected Lender plus any accrued but unpaid interest thereon and
accrued but unpaid fees owing to the Affected Lender, or any other amount as may
be mutually agreed upon by such Affected Lender and Eligible Assignee. Each of
the Administrative Agent and the Affected Lender shall reasonably cooperate in
effectuating the replacement of such Affected Lender under this Section, but at
no time shall the Administrative Agent, such Affected Lender, any other Lender
nor any Titled Agent be obligated in any way whatsoever to initiate any such
replacement or to assist in finding an Eligible Assignee. The exercise by the
Borrower of its rights under this Section shall be at the Borrower’s sole cost
and expense and at no cost or expense to the Administrative Agent, the Affected
Lender or any of the other Lenders. The terms of this Section shall not in any
way limit the Borrower’s obligation to pay to any Affected Lender compensation
owing to such Affected Lender pursuant to this Agreement (including, without
limitation, pursuant to Sections 3.10., 5.1. or 5.4.) with respect to the
periods up to the date of replacement.

ARTICLE VI. CONDITIONS PRECEDENT

Section 6.1. Initial Conditions Precedent.

The obligation of the Lenders to effect or permit the occurrence of the first
Credit Event hereunder, whether as the making of a Loan or the issuance of a
Letter of Credit, is subject to the satisfaction of the following conditions
precedent:

(a) The Administrative Agent shall have received each of the following, in form
and substance satisfactory to the Administrative Agent:

(i) counterparts of this Agreement executed by each of the parties hereto;

(ii) Revolving Notes executed by the Borrower, payable to each Lender (other
than any Lender that has requested that it not receive a Revolving Note) and
complying with the terms of Section 2.10.(a) and the Swingline Note executed by
the Borrower;

(iii) the Guaranty executed by each of the Parent and each Material Subsidiary
(other than an Excluded Subsidiary or a Foreign Subsidiary) existing as of the
Effective Date;

(iv) the certificate or articles of incorporation or formation, articles of
organization, certificate of limited partnership, declaration of trust or other
comparable organizational instrument (if any) of each Loan Party certified
(x) as of a recent date by the Secretary of State of the state of formation of
such Loan Party and (y) by the Secretary or Assistant Secretary (or other
individual performing similar functions) of such Loan Party as being a true,
correct and complete copy thereof as of the Agreement Date;

 

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(v) a certificate of good standing (or certificate of similar meaning) with
respect to each Loan Party issued as of a recent date by the Secretary of State
of the state of formation of each such Loan Party and certificates of
qualification to transact business or other comparable certificates issued as of
a recent date by each Secretary of State (and any state department of taxation,
as applicable) of each state in which such Loan Party is required to be so
qualified and where failure to be so qualified could reasonably be expected to
have a Material Adverse Effect;

(vi) a certificate of incumbency signed by the Secretary or Assistant Secretary
(or other individual performing similar functions) of each Loan Party with
respect to each of the officers of such Loan Party authorized to execute and
deliver the Loan Documents to which such Loan Party is a party, and in the case
of the Borrower, authorized to execute and deliver on behalf of the Borrower
Notices of Borrowing, Notices of Conversion, Notices of Continuation, Notices of
Swingline Borrowing, and to request issuance of Letters of Credit;

(vii) copies certified by the Secretary or Assistant Secretary (or other
individual performing similar functions) of each Loan Party of (A) the by-laws
of such Loan Party, if a corporation, the operating agreement, if a limited
liability company, the partnership agreement, if a limited or general
partnership, or other comparable document in the case of any other form of legal
entity and (B) all corporate, partnership, member or other necessary action
taken by such Loan Party to authorize the execution, delivery and performance of
the Loan Documents to which it is a party;

(viii) an opinion of counsel to the Loan Parties (other than any Accommodation
Subsidiary that is not a Material Subsidiary), addressed to the Administrative
Agent and the Lenders and covering the matters set forth in Exhibit J;

(ix) evidence that the Fees then due and payable under Section 3.5., together
with all other fees, expenses and reimbursement amounts due and payable to the
Administrative Agent and any of the Lenders, including without limitation, the
fees and expenses of counsel to the Administrative Agent, have been paid;

(x) a Compliance Certificate calculated as of the Effective Date (giving pro
forma effect to the financing evidenced by this Agreement and the use of the
proceeds of the Loans to be funded on the Agreement Date);

(xi) with respect to each Property identified on Schedule 4.1., each of the
items referred to in Section 4.1.(b)(i), (ii), (iv) and (vi) required to be
delivered in connection with any Unencumbered Borrowing Base Property and a pro
forma operating budget for such Property with respect to the current fiscal
year;

(xii) a Transfer Authorizer Designation Form effective as of the Agreement Date;

(xiii) insurance certificates, or other evidence, providing that the insurance
coverage required under Section 8.5. (including, without limitation, both
property and liability insurance) is in full force and effect; and

(xiv) such other documents, agreements and instruments as the Administrative
Agent, or any Lender through the Administrative Agent, may reasonably request;
and

 

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(b) In the good faith and reasonable judgment of the Administrative Agent:

(i) there shall not have occurred or become known to the Administrative Agent or
any of the Lenders any event, condition, situation or status since the date of
the information contained in the financial and business projections, budgets,
pro forma data and forecasts concerning the Parent, the Borrower and its
Subsidiaries delivered to the Administrative Agent and the Lenders prior to the
Agreement Date that has had or could reasonably be expected to result in a
Material Adverse Effect;

(ii) no litigation, action, suit, investigation or other arbitral,
administrative or judicial proceeding shall be pending or threatened in writing
which could reasonably be expected to (A) result in a Material Adverse Effect or
(B) restrain or enjoin, impose materially burdensome conditions on, or otherwise
materially and adversely affect, the ability of the Borrower or any other Loan
Party to fulfill its obligations under the Loan Documents to which it is a
party;

(iii) the Parent, the Borrower and its Subsidiaries shall have received all
approvals, consents and waivers, and shall have made or given all necessary
filings and notices as shall be required to consummate the transactions
contemplated hereby without the occurrence of any default under, conflict with
or violation of (A) any Applicable Law or (B) any agreement, document or
instrument to which any Loan Party is a party or by which any of them or their
respective properties is bound, except for such approvals, consents, waivers,
filings and notices the receipt, making or giving of which would not reasonably
be likely to (A) have a Material Adverse Effect, or (B) restrain or enjoin
impose materially burdensome conditions on, or otherwise materially and
adversely affect the ability of the Borrower or any other Loan Party to fulfill
its obligations under the Loan Documents to which it is a party; and

(iv) the Borrower and each other Loan Party shall have provided all information
requested by the Administrative Agent and each Lender in order to comply with
applicable “know your customer” and anti-money laundering rules and regulations,
including without limitation, the Patriot Act.

The provisions of clauses (iv) through (viii) of the immediately preceding
subsection (a) shall not apply to Accommodation Subsidiaries that are not also
Material Subsidiaries.

Section 6.2. Conditions Precedent to All Loans and Letters of Credit.

The obligations of (i) Lenders to make any Loans and (ii) the Issuing Bank to
issue Letters of Credit are each subject to the further conditions precedent
that: (a) no Default or Event of Default shall exist as of the date of the
making of such Loan or date of issuance of such Letter of Credit or would exist
immediately after giving effect thereto, and no violation of the limits
described in Section 2.14. would occur after giving effect thereto; (b) the
representations and warranties made or deemed made by the Parent, the Borrower
and each other Loan Party in the Loan Documents to which any of them is a party,
shall be true and correct in all material respects on and as of the date of the
making of such Loan or date of issuance of such Letter of Credit with the same
force and effect as if made on and as of such date except to the extent that
such representations and warranties expressly relate solely to an earlier date
(in which case such representations and warranties shall have been true and
correct in all material respects on and as of such earlier date) and except for
changes in factual circumstances not prohibited under the Loan Documents; and
(c) in the case of the borrowing of Revolving Loans, the Administrative Agent
shall have received a timely Notice of Borrowing, and in the case of a Swingline
Loan, the Swingline Lender shall have received a timely Notice of Swingline
Borrowing. Each Credit Event shall constitute a certification by the Borrower to
the effect set forth clauses (a) and (b) in the preceding sentence (both as of
the date of the giving of notice relating to such Credit Event and, unless the
Borrower otherwise notifies the Administrative Agent prior to the date of such
Credit Event, as of the date of the occurrence of such Credit Event). In
addition, the Borrower shall be deemed to have represented to the Administrative
Agent and the Lenders at the time any Loan is made or any Letter of Credit is
issued that all conditions to the making of such Loan or issuing of such Letter
of Credit contained in this Section (other than the condition set forth in
clauses (d) above) have been satisfied.

 

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ARTICLE VII. REPRESENTATIONS AND WARRANTIES

Section 7.1. Representations and Warranties.

In order to induce the Administrative Agent and each Lender to enter into this
Agreement and to make Loans and, in the case of the Issuing Bank, to issue
Letters of Credit, the Parent and the Borrower represent and warrant to the
Administrative Agent, the Issuing Bank and each Lender as follows:

(a) Organization; Power; Qualification. Each of the Parent, the Borrower, the
other Loan Parties and the other Subsidiaries is a corporation, partnership or
other legal entity, duly organized or formed, validly existing and in good
standing under the jurisdiction of its incorporation or formation, has the power
and authority to own or lease its respective properties and to carry on its
respective business as now being and hereafter proposed to be conducted and is
duly qualified and is in good standing as a foreign corporation, partnership or
other legal entity, and authorized to do business, in each jurisdiction in which
the character of its properties or the nature of its business requires such
qualification or authorization and where the failure to be so qualified or
authorized could reasonably be expected to have, in each instance, a Material
Adverse Effect.

(b) Ownership Structure. As of the Agreement Date, Part I of Schedule 7.1.(b) is
a complete and correct list of all Subsidiaries of the Parent setting forth for
each such Subsidiary, (i) the jurisdiction of organization of such Subsidiary,
(ii) each Person holding any Equity Interests in such Subsidiary, (iii) the
nature of the Equity Interests held by each such Person, (iv) the percentage of
ownership of such Subsidiary represented by such Equity Interests and
(v) whether such Subsidiary is a Material Subsidiary, a Significant Subsidiary,
an Excluded Subsidiary, an Accommodation Subsidiary or none of the foregoing.
Except as disclosed in such Schedule, as of the Agreement Date (A) each of the
Parent and its Subsidiaries owns, free and clear of all Liens (other than
Permitted Liens), and has the unencumbered right to vote, all outstanding Equity
Interests in each Person shown to be held by it on such Schedule 7.1.(b),
(B) all of the issued and outstanding capital stock of each such Person
organized as a corporation is validly issued, fully paid and nonassessable and
(C) there are no outstanding subscriptions, options, warrants, commitments,
preemptive rights or agreements of any kind (including, without limitation, any
stockholders’ or voting trust agreements) for the issuance, sale, registration
or voting of, or outstanding securities convertible into, any additional shares
of capital stock of any class, or partnership or other ownership interests of
any type in, any such Person. As of the Agreement Date, Part II of
Schedule 7.1.(b) correctly sets forth all Unconsolidated Affiliates of the
Parent, including the correct legal name of such Person, the type of legal
entity which each such Person is, and all Equity Interests in such Person held
directly or indirectly by the Parent.

(c) Authorization of Loan Documents and Borrowings. The Borrower has the right
and power, and has taken all necessary action to authorize it, to borrow and
obtain other extensions of credit hereunder. The Borrower and each other Loan
Party has the right and power, and has taken all necessary action to authorize
it, to execute, deliver and perform each of the Loan Documents and the Fee
Letter to which it is a party in accordance with their respective terms and to
consummate the transactions contemplated hereby and thereby. The Loan Documents
and the Fee Letter to which any Loan Party is a party have been duly executed
and delivered by the duly authorized officers, agents and/or signatories of such
Person and each is a legal, valid and binding obligation of such Person
enforceable against such Person in accordance with its respective terms, except
as the same may be limited by bankruptcy, insolvency, and other similar laws
affecting the rights of creditors generally and the availability of equitable
remedies for the enforcement of certain obligations (other than the payment of
principal) contained herein or therein and as may be limited by equitable
principles generally.

 

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(d) Compliance of Loan Documents with Laws, Etc. The execution, delivery and
performance of this Agreement, the Notes, the other Loan Documents to which any
Loan Party is a party and of the Fee Letter in accordance with their respective
terms and the borrowings and other extensions of credit hereunder do not and
will not, by the passage of time, the giving of notice, or both: (i) require any
Governmental Approval or violate any Applicable Law (including all Environmental
Laws) relating to the Borrower or any other Loan Party; (ii) conflict with,
result in a breach of or constitute a default under the organizational documents
of any Loan Party, or any indenture, agreement or other instrument to which the
Borrower or any other Loan Party is a party or by which it or any of its
respective properties may be bound; or (iii) result in or require the creation
or imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by any Loan Party.

(e) Compliance with Law; Governmental Approvals. Each of the Borrower, the other
Loan Parties and the other Subsidiaries is in compliance with each Governmental
Approval applicable to it and in compliance with all other Applicable Laws
(including, without limitation, Environmental Laws) relating to it except for
noncompliances which, and Governmental Approvals the failure to possess which,
could not, in the aggregate, reasonably be expected to cause a Default or Event
of Default or have a Material Adverse Effect.

(f) Title to Properties; Liens. As of the Agreement Date, Part I of Schedule
7.1.(f) is a complete and correct listing of all real estate assets of the
Parent, the Borrower, each other Loan Party and each other Subsidiary, setting
forth, for each such Property, the average occupancy status of such Property for
the period of twelve consecutive calendar fiscal months ending closest to
September 7, 2012. Each of the Parent, the Borrower, each other Loan Party and
each other Subsidiary has good, marketable and legal title to, or a valid
leasehold interest in, its respective assets (other than Permitted Liens and
Liens on assets of an Excluded Subsidiary securing the Indebtedness which causes
such Subsidiary to be an Excluded Subsidiary). As of the Agreement Date, there
are no Liens against any assets of the Parent, the Borrower or any other
Subsidiary except for Permitted Liens and Liens on assets of an Excluded
Subsidiary securing the Indebtedness which causes such Subsidiary to be an
Excluded Subsidiary.

(g) Existing Indebtedness; Total Indebtedness. Schedule 7.1.(g) is, as of the
Agreement Date, a complete and correct listing of all Indebtedness (including
all Guarantees) of each of the Parent, the Borrower, the other Loan Parties and
the other Subsidiaries, and if such Indebtedness is secured by any Lien, a
description of all of the property subject to such Lien.

(h) Material Contracts. Excluding Material Contracts evidencing Indebtedness
listed on Schedule 7.1.(g), if any, Schedule 7.1.(h) is, as of the Agreement
Date, a true, correct and complete listing of all Material Contracts. No event
or condition which with the giving of notice, the lapse of time, or both, would
permit any party to any such Material Contract to terminate such Material
Contract exists.

(i) Litigation. Except as set forth on Schedule 7.1.(i), there are no actions,
suits, investigations or proceedings pending (nor, to the knowledge of any
Responsible Officer of the Parent or the Borrower, are there any actions, suits
or proceedings threatened) against or in any other way relating adversely to or
affecting the Parent, the Borrower, any other Loan Party, any other Subsidiary
or any of their respective property in any court or before any arbitrator of any
kind or before or by any other Governmental Authority which, (i) could
reasonably be expected to have a Material Adverse Effect or (ii) in any manner
draws into question the validity or enforceability of any Loan Documents or the
Fee Letter.

 

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(j) Taxes. Subject to applicable extensions, all federal, state and other
material tax returns of the Parent, the Borrower, each other Loan Party and each
other Subsidiary required by Applicable Law to be filed have been duly filed,
and all federal, state and other material taxes, assessments and other
governmental charges or levies upon, the Parent, the Borrower, each other Loan
Party, each other Subsidiary and their respective properties, income, profits
and assets which are due and payable have been paid, except any such nonpayment
which is at the time permitted under Section 8.6. As of the Agreement Date, none
of the United States income tax returns of the Parent, the Borrower any other
Loan Party or any other Subsidiary is under audit. All charges, accruals and
reserves on the books of the Parent, the Borrower, the other Loan Parties and
the other Subsidiaries in respect of any taxes or other governmental charges are
in accordance with GAAP.

(k) Financial Statements. The (i) audited consolidated balance sheet of the
Parent and its consolidated Subsidiaries for the fiscal year ended December 31,
2011, and the related audited consolidated statements of operations, cash flows
and shareholders’ equity for the fiscal year ended on such date, with the
opinion thereon of KPMG LLP, and (ii) unaudited consolidated balance sheet of
the Parent and its consolidated Subsidiaries for the fiscal quarter ended
September 7, 2012, and the related unaudited consolidated statements of
operations, cash flow, shareholders’ equity of the Parent and its consolidated
Subsidiaries for the one fiscal quarter period ended on such date, are complete
and correct in all material respects and present fairly, in all material
respects and in accordance with GAAP consistently applied throughout the periods
involved, the consolidated financial position of the Parent and its consolidated
Subsidiaries as at their respective dates and the results of operations and the
cash flow for such periods (subject, as to interim statements, to the absence of
footnotes and changes resulting from normal year-end audit adjustments). Neither
the Parent nor any of its Subsidiaries has on the Agreement Date any material
contingent liabilities, liabilities, liabilities for taxes, unusual or long-term
commitments or unrealized or forward anticipated losses from any unfavorable
commitments that would be required to be set forth in its financial statements
or notes thereto, except as referred to or reflected or provided for in said
financial statements.

(l) No Material Adverse Change. Since December 31, 2011, there has been no
material adverse change in the business, assets, liabilities, financial
condition or results of operations of the Parent and its Subsidiaries or the
Borrower and its Subsidiaries, in each case, taken as a whole. Each of the
Borrower and the Parent are Solvent, and the other Loan Parties taken as a whole
are Solvent.

(m) ERISA.

(i) Each Benefit Arrangement and Plan is in compliance with the applicable
provisions of ERISA, the Internal Revenue Code and other Applicable Laws in all
material respects. Except with respect to Multiemployer Plans, each Qualified
Plan (A) has received a favorable determination from the Internal Revenue
Service applicable to the Qualified Plan’s current remedial amendment cycle (as
defined in Revenue Procedure 2007-44 or “2007-44” for short), (B) has timely
filed for a favorable determination letter from the Internal Revenue Service
during its staggered remedial amendment cycle (as defined in 2007-44) and such
application is currently being processed by the Internal Revenue Service,
(C) had filed for a determination letter prior to its “GUST remedial amendment
period” (as defined in 2007-44) and received such determination letter and the
staggered remedial amendment cycle first following the GUST remedial amendment
period for such Qualified Plan has not yet expired, or (D) is maintained under a
prototype or volume submitter plan and is entitled to rely upon a favorable
opinion or advisory letter issued by the Internal Revenue Service with respect
to such prototype or volume submitter plan. To the best knowledge of the Parent
and the Borrower, nothing has occurred which could reasonably be expected to
result in the loss of their reliance on the Qualified Plan’s or Plan’s favorable
determination letter, opinion or advisory letter.

 

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(ii) With respect to any Benefit Arrangement that is a retiree welfare benefit
arrangement, all amounts have been accrued on the applicable ERISA Group’s
financial statements in accordance with FASB ASC 715. The “benefit obligation”
of all Plans does not exceed the “fair market value of plan assets” for such
Plans by more than $10,000,000 all as determined by and with such terms defined
in accordance with FASB ASC 715.

(iii) Except as could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect: (i) no ERISA Event has occurred or
is expected to occur; (ii) there are no pending, or to the best knowledge of the
Parent and the Borrower, threatened, claims, actions or lawsuits or other action
by any Governmental Authority, plan participant or beneficiary with respect to a
Benefit Arrangement; (iii) there are no violations of the fiduciary
responsibility rules with respect to any Benefit Arrangement or Plan; and
(iv) no member of the ERISA Group has engaged in a non-exempt “prohibited
transaction,” as defined in Section 406 of ERISA and Section 4975 of the
Internal Revenue Code, in connection with any Benefit Arrangement or Plan, that
would subject the Parent or Borrower to a tax on prohibited transactions imposed
by Section 502(i) of ERISA or Section 4975 of the Internal Revenue Code.

(n) Not Plan Assets; No Prohibited Transactions. None of the assets of the
Parent, the Borrower, any other Loan Party or any other Subsidiary constitutes
“plan assets” within the meaning of ERISA, the Internal Revenue Code and the
respective regulations promulgated thereunder. Assuming that no Lender funds any
amount payable by it hereunder with “plan assets,” as that term is defined in 29
C.F.R. 2510.3-101, the execution, delivery and performance of this Agreement and
the other Loan Documents, and the borrowing and repayment of amounts hereunder,
do not and will not constitute “prohibited transactions” under ERISA or the
Internal Revenue Code.

(o) Absence of Defaults. None of the Loan Parties or any of the other
Subsidiaries is in default under its certificate or articles of incorporation or
formation, bylaws, partnership agreement or other similar organizational
documents, and no event has occurred, which has not been remedied, cured or
waived, which, in any such case: (i) constitutes a Default or an Event of
Default; or (ii) constitutes, or which with the passage of time, the giving of
notice, or both, would constitute, a default or event of default by the Parent,
the Borrower, any other Loan Party or any other Subsidiary under any agreement
(other than this Agreement) or judgment, decree or order to which any such
Person is a party or by which any such Person or any of its respective
properties may be bound where such default or event of default could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

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(p) Environmental Laws. In the ordinary course of business each of the Parent,
the Borrower, each other Loan Party and each other Subsidiary reviews the
compliance with Environmental Laws of its respective business, operations and
properties. Each of the Parent, the Borrower, each other Loan Party and the
other Subsidiary: (i) is in compliance with all Environmental Laws applicable to
its business, operations and the Properties, (ii) has obtained all Governmental
Approvals which are required under Environmental Laws, and each such
Governmental Approval is in full force and effect, and (iii) is in compliance
with all terms and conditions of such Governmental Approvals, where with respect
to each of the immediately preceding clauses (i) through (iii) the failure to
obtain or to comply with could reasonably be expected to have a Material Adverse
Effect. Except for any of the following matters that could not reasonably be
expected to have a Material Adverse Effect, no Loan Party has any knowledge of,
or has received notice of, any past, present, or pending releases, events,
conditions, circumstances, activities, practices, incidents, facts, occurrences,
actions, or plans that, with respect to any Loan Party or any other Subsidiary,
their respective businesses, operations or with respect to the Properties, may:
(i) cause or contribute to an actual or alleged violation of or noncompliance
with Environmental Laws, (ii) cause or contribute to any other potential
common-law or legal claim or other liability, or (iii) cause any of the
Properties to become subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law or require the filing or recording
of any notice, approval or disclosure document under any Environmental Law and,
with respect to the immediately preceding clauses (i) through (iii) is based on
or related to the on-site or off-site manufacture, generation, processing,
distribution, use, treatment, storage, disposal, transport, removal, clean up or
handling, or the emission, discharge, release or threatened release of any
wastes or Hazardous Material, or any other requirement under Environmental Law.
There is no civil, criminal, or administrative action, suit, demand, claim,
hearing, notice, or demand letter, mandate, order, lien, request, investigation,
or proceeding pending or, to the Parent’s or Borrower’s knowledge after due
inquiry, threatened, against the Parent, the Borrower, any other Loan Party or
any other Subsidiary relating in any way to Environmental Laws which, reasonably
could be expected to have a Material Adverse Effect. None of the Properties of
the Parent, the Borrower, any other Loan Party or any other Subsidiary is listed
on or proposed for listing on the National Priority List promulgated pursuant to
the Comprehensive Environmental Response, Compensation and Liability Act of 1980
and its implementing regulations, or any state or local priority list
promulgated pursuant to any analogous state or local law. To Parent’s or
Borrower’s knowledge, no Hazardous Materials generated at or transported from
any such Properties is or has been transported to, or disposed of at, any
location that is listed or proposed for listing on the National Priority List or
any analogous state or local priority list, or any other location that is or has
been the subject of a clean-up, removal or remedial action pursuant to any
Environmental Law, except to the extent that such transportation or disposal
could not reasonably be expected to result in a Material Adverse Effect.

(q) Investment Company. None of the Parent, the Borrower, any other Loan Party
or any other Subsidiary is (i) an “investment company” or a company “controlled”
by an “investment company” within the meaning of the Investment Company Act of
1940, as amended, or (ii) subject to any other Applicable Law which purports to
regulate or restrict its ability to borrow money or obtain other extensions of
credit or to consummate the transactions contemplated by this Agreement or to
perform its obligations under any Loan Document to which it is a party.

(r) Margin Stock. None of the Parent, the Borrower, any other Loan Party or any
other Subsidiary is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose, whether immediate,
incidental or ultimate, of buying or carrying “margin stock” within the meaning
of Regulation U of the Board of Governors of the Federal Reserve System.

(s) Affiliate Transactions. Except as permitted by Section 10.11., none of the
Parent, the Borrower, any other Loan Party or any other Subsidiary is a party to
or bound by any agreement or arrangement with any Affiliate.

(t) Intellectual Property. Each of the Loan Parties and each other Subsidiary
owns or has the right to use, under valid license agreements or otherwise, all
material patents, licenses, franchises, trademarks, trademark rights, service
marks, service mark rights, trade names, trade name rights, trade secrets and
copyrights (collectively, “Intellectual Property”) necessary to the conduct of
its businesses as now conducted and as contemplated by the Loan Documents,
without known conflict with any patent, license, franchise, trademark, trademark
right, service mark, service mark right, trade secret, trade name, copyright, or
other proprietary right of any other Person. The Parent, the Borrower and each
other Subsidiary have taken all such steps as they deem reasonably necessary to
protect their respective rights under and with respect to such Intellectual
Property.

 

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(u) Business. As of the Agreement Date, the Parent, the Borrower, the other Loan
Parties and the other Subsidiaries are engaged in the business of developing,
construction, acquiring, owning and operating hotel properties, together with
other business activities incidental thereto.

(v) Broker’s Fees. No broker’s or finder’s fee, commission or similar
compensation will be payable with respect to the transactions contemplated
hereby. No other similar fees or commissions will be payable by any Loan Party
for any other services rendered to the Parent, the Borrower, any other Loan
Party or any other Subsidiary ancillary to the transactions contemplated hereby.

(w) Accuracy and Completeness of Information. All written information, reports
and data (other than financial projections and other forward looking statements)
furnished to the Administrative Agent or any Lender by, on behalf of, or at the
direction of, the Parent, the Borrower, any other Loan Party or any other
Subsidiary were, at the time the same were so furnished, and when taken as a
whole, complete and correct in all material respects, to the extent necessary to
give the recipient a true and accurate knowledge of the subject matter, or, in
the case of financial statements, present fairly, in accordance with GAAP
consistently applied throughout the periods involved in each case, the financial
position of the Persons involved as at the date thereof and the results of
operations for such periods (subject, as to interim statements, to changes
resulting from normal year end audit adjustments and absence of full footnote
disclosure). All financial projections and other forward looking statements
prepared by or on behalf of the Parent, the Borrower, any other Loan Party or
any other Subsidiary that have been or may hereafter be made available to the
Administrative Agent or any Lender were or will be prepared in good faith based
on assumptions believed by the Borrower to be reasonable at the time such
projections or statements are made or delivered but with it being understood
that such projections and statement are not a guarantee of future performance.
As of the Effective Date, no fact is known to any Loan Party which has had, or
may reasonably be expected in the future to have (so far as any Loan Party can
reasonably foresee), a Material Adverse Effect which has not been set forth in
the financial statements referred to in Section 7.1.(k) or in such information,
reports or data or otherwise disclosed in writing to the Administrative Agent
and the Lenders.

(x) REIT Status. For all dates after January 1, 2005, the Parent is organized
and operated in a manner such that upon its election of REIT status, it shall be
treated as a REIT for purposes of the Internal Revenue Code (beginning with the
effective date of such election) and each of its Subsidiaries that are
corporations (if any) are organized and operated in a manner such that upon such
election they will qualify as Qualified REIT Subsidiaries or Taxable REIT
Subsidiaries (beginning with the effective date of such election), except where
a Subsidiary’s failure to so qualify could not reasonably be expected to have an
adverse effect on the Parent’s qualification as a REIT. The Parent has elected
to be treated as a REIT under the Internal Revenue Code and for all dates
thereafter, the Parent is qualified as a REIT and each of its Subsidiaries that
is a corporation is a Qualified REIT Subsidiary or Taxable REIT Subsidiary
(beginning with the effective date of such election), except where a
Subsidiary’s failure to so qualify could not reasonably be expected to have an
adverse effect on the Parent’s qualification as a REIT.

(y) Unencumbered Borrowing Base Properties. Each of the Properties included in
calculations of the Unencumbered Borrowing Base Value satisfies all of the
requirements contained in the definition of “Eligible Unencumbered Borrowing
Base Property” (except to the extent such requirements were waived by the
Requisite Lenders pursuant to Section 4.1.(c) at the time such Property was
approved as an Unencumbered Borrowing Base Property).

 

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(z) OFAC. None of the Parent, the Borrower, any of the other Loan Parties, any
of the other Subsidiaries, or any other Affiliate of the Borrower: (i) is a
person named on the list of Specially Designated Nationals or Blocked Persons
maintained by the U.S. Department of the Treasury’s Office of Foreign Assets
Control (“OFAC”) available at
http://www.treas.gov/offices/enforcement/ofac/index.shtml or as otherwise
published from time to time; (ii) is (A) an agency of the government of a
country, (B) an organization controlled by a country, or (C) a person resident
in a country that is subject to a sanctions program identified on the list
maintained by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/index.shtml, or as otherwise
published from time to time, as such program may be applicable to such agency,
organization or person; or (iii) derives any of its assets or operating income
from investments in or transactions with any such country, agency, organization
or person; and none of the proceeds from the Loan will be used to finance any
operations, investments or activities in, or make any payments to, any such
country, agency, organization, or person.

Section 7.2. Survival of Representations and Warranties, Etc.

All statements contained in any certificate, financial statement or other
instrument delivered by or on behalf of any Loan Party or any other Subsidiary
to the Administrative Agent or any Lender pursuant to or in connection with this
Agreement or any of the other Loan Documents (including, but not limited to, any
such statement made in or in connection with any amendment thereto or any
statement contained in any certificate, financial statement or other instrument
delivered by or on behalf of any Loan Party prior to the Agreement Date and
delivered to the Administrative Agent or any Lender in connection with the
underwriting or closing the transactions contemplated hereby) shall constitute
representations and warranties made by the Parent and the Borrower to the
Administrative Agent and the Lenders under this Agreement. All representations
and warranties made under this Agreement and the other Loan Documents shall be
deemed to be made at and as of the Agreement Date, the Effective Date, the date
on which any extension of the Termination Date is effectuated pursuant to
Section 2.12. and at and as of the date of the occurrence of each Credit Event,
except to the extent that such representations and warranties expressly relate
solely to an earlier date (in which case such representations and warranties
shall have been true and correct in all material respects on and as of such
earlier date) and except for changes in factual circumstances not prohibited
under the Loan Documents. All such representations and warranties shall survive
the effectiveness of this Agreement, the execution and delivery of the Loan
Documents and the making of the Loans and the issuance of the Letters of Credit.

ARTICLE VIII. AFFIRMATIVE COVENANTS

For so long as this Agreement is in effect, unless the appropriate Lenders shall
otherwise consent in the manner provided for in Section 13.7., the Parent and
the Borrower shall comply with the following covenants:

Section 8.1. Preservation of Existence and Similar Matters.

Except as otherwise permitted under Section 10.7., the Parent and the Borrower
shall, and shall cause each other Loan Party and each other Subsidiary to,
preserve and maintain its respective existence, rights, franchises, licenses and
privileges in the jurisdiction of its incorporation or formation and qualify and
remain qualified and authorized to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification and authorization and where the failure to be so authorized and
qualified could reasonably be expected to have a Material Adverse Effect;
provided, however, that nothing in this Section 8.1. will prohibit the Parent or
any other Loan Party or any of their Subsidiaries from engaging in any
transactions permitted under this Agreement, including Section 10.7., and
neither the Parent nor any other Loan Party or any of their Subsidiaries shall
be required to preserve any such right, franchise or existence if the board of
directors of the Parent or the Borrower shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Parent, the
Borrower and their Subsidiaries taken as a whole and that the loss thereof is
not adverse in any material respect to the Lenders.

 

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Section 8.2. Compliance with Applicable Law and Material Contracts.

The Parent and the Borrower shall, and shall cause each other Loan Party and
each other Subsidiary to, comply with (a) all Applicable Laws, including the
obtaining of all Governmental Approvals, the failure with which to comply could
reasonably be expected to have a Material Adverse Effect, and (b) all terms and
conditions of all Material Contracts to which it is a party, the failure with
which to comply could give any other party thereto the right to terminate such
Material Contract.

Section 8.3. Maintenance of Property.

In addition to the requirements of any of the other Loan Documents, the Parent
and the Borrower shall, and shall cause each other Loan Party and each other
Subsidiary to, (a) protect and preserve all of its respective material
properties, including, but not limited to, all Intellectual Property (to the
extent reasonably necessary in connection with operations), and maintain in good
repair, working order and condition all tangible properties, ordinary wear and
tear and insured casualty losses excepted, and (b) make or cause to be made all
repairs, renewals, replacements and additions to such properties necessary or
appropriate in the Borrower’s good faith and reasonable judgment, so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times.

Section 8.4. Conduct of Business.

The Parent and the Borrower shall, and shall cause each other Loan Party and
each other Subsidiary taken as a whole to, carry on the business as described in
Section 7.1.(u) and not enter into any line of business not otherwise engaged in
by such Person as of the Agreement Date.

Section 8.5. Insurance.

In addition to the requirements of any of the other Loan Documents, the Parent
and the Borrower shall, and shall cause each other Loan Party and each other
Subsidiary to, maintain insurance (on a replacement cost basis) with financially
sound and reputable insurance companies (with an A.M. Best policyholders rating
of at least A-IX (with respect to liability) or A-X (with respect to property
damage)) against such risks (including, without limitation, acts of terrorism)
and in such amounts as is customarily maintained by prudent Persons engaged in
similar businesses and in similar locations or as may be required by Applicable
Law. At the time financial statements are furnished pursuant to Section 9.2. and
from time to time upon the request of the Administrative Agent, the Borrower
shall deliver to the Administrative Agent a detailed list, together with copies
of all policies of the insurance then in effect, stating the names of the
insurance companies, the amounts and rates of the insurance, the dates of the
expiration thereof and the properties and risks covered thereby.

Section 8.6. Payment of Taxes and Claims.

The Parent and the Borrower shall, and shall cause each other Loan Party and
each other Subsidiary to, pay and discharge before delinquent (a) all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or upon any properties belonging to it, and (b) all lawful
claims of materialmen, mechanics, carriers, warehousemen and landlords for
labor, materials, supplies and rentals which, if unpaid, might become a Lien on
any properties of such Person; provided, however, that this Section shall not
require the payment or discharge of any such tax, assessment, charge, levy or
claim (i) which is being contested in good faith by appropriate proceedings
which operate to suspend the collection thereof and for which adequate reserves
have been established on the books of such Person in accordance with GAAP or
(ii) to the extent covered by title insurance.

 

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Section 8.7. Inspections.

The Parent and the Borrower shall, and shall cause each other Loan Party and
each other Subsidiary to, permit the representatives or agents of any Lender or
the Administrative Agent, from time to time after reasonable prior notice and in
a manner that does not unreasonably disrupt the normal business operations of
the Parent, the Borrower or such Subsidiary, in each case so long as no Event of
Default shall be in existence, as often as may be reasonably requested, but only
during normal business hours, as the case may be, to: (a) visit and inspect all
properties of the Parent, the Borrower or such Subsidiary to the extent any such
right to visit or inspect is within the control of such Person; provided that
such visit and inspection shall not include the extraction of soil or other
sample testing related to Environmental Law or Hazardous Materials, unless a
Default or Event of Default exists; (b) inspect and make extracts from their
respective books and records, including but not limited to management letters
prepared by independent accountants; and (c) discuss with its officers and
employees, and its independent accountants, its business, properties, condition
(financial or otherwise), results of operations and performance. If requested by
the Administrative Agent, the Parent and the Borrower shall execute an
authorization letter addressed to their accountants authorizing the
Administrative Agent or any Lender to discuss the financial affairs of the
Parent, the Borrower, any other Loan Party or any other Subsidiary with their
accountants. The Parent may designate a representative to accompany any Lender
or Administrative Agent in connection with such visits, inspections and
discussion unless a Default or Event of Default exists. The Borrower shall be
obligated to reimburse the Administrative Agent and the Lenders for their
reasonable costs and expenses incurred in connection with the exercise of their
rights under this Section only if such exercise occurs while an Event of Default
exists.

Section 8.8. Use of Proceeds; Letters of Credit.

The Borrower will use the proceeds of the Loans only (a) to finance acquisitions
otherwise not prohibited under this Agreement; (b) to finance capital
expenditures and the repayment of Indebtedness of the Borrower and its
Subsidiaries; and (c) to provide for the general working capital and other
general corporate purposes of the Borrower and its Subsidiaries, including
without limitation, short-term bridge advances and the payment of fees and
expenses related to this Agreement. The Borrower shall only use Letters of
Credit for the same purposes for which it may use the proceeds of Loans. The
Borrower shall not, and shall not permit any other Loan Party or any other
Subsidiary to, use any part of such proceeds to purchase or carry, or to reduce
or retire or refinance any credit incurred to purchase or carry, any margin
stock (within the meaning of Regulation U or Regulation X of the Board of
Governors of the Federal Reserve System) or to extend credit to others for the
purpose of purchasing or carrying any such margin stock

Section 8.9. Environmental Matters.

The Parent and the Borrower shall, and shall cause each other Loan Party and
each other Subsidiary to, comply with all Environmental Laws the failure with
which to comply could reasonably be expected to have a Material Adverse Effect.
If the Parent, the Borrower, or any other Subsidiary shall (a) receive notice
that any violation of any Environmental Law may have been committed or is about
to be committed by such Person, (b) receive notice that any administrative or
judicial complaint or order has been filed or is about to be filed against the
Parent, the Borrower or any other Subsidiary alleging violations of any
Environmental Law or requiring any such Person to take any action in connection
with the release of Hazardous Materials or (c) receive any notice from a
Governmental Authority or private party alleging that any such Person may be
liable or responsible for costs associated with a response to or cleanup of a
release of Hazardous Materials or any damages caused thereby, and the matters
referred to in such notices, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, the Borrower shall provide the
Administrative Agent with a copy of such notice promptly, and in any event
within 10 Business Days, after the receipt thereof. The Parent and the Borrower
shall, and shall cause each other Loan Party and each other Subsidiary to,
promptly take all actions necessary to prevent the imposition of any material
Liens on any of their respective properties arising out of or related to any
Environmental Laws (other than a Lien (i) which is being contested in good faith
by appropriate proceedings which operate to suspend the enforcement thereof and
for which adequate reserves have been established on the books of the Parent,
the Borrower or such Subsidiary, as applicable, in accordance with GAAP,
(ii) which has been bonded-off in a manner reasonably acceptable to the
Administrative Agent, (iii) consisting of restrictions on the use of real
property, which restrictions do not materially detract from the value of such
property or impair the intended use thereof in the business of the Parent, the
Borrower and its other Subsidiaries or (iv) which could not reasonably be
expected to have a Material Adverse Effect). Nothing in this Section shall
impose any obligation or liability whatsoever on the Administrative Agent or any
Lender.

 

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Section 8.10. Books and Records.

The Parent and the Borrower shall, and shall cause each Subsidiary to, maintain
books and records pertaining to its respective business operations in such
detail, form and scope as is consistent with good business practice and in
accordance with GAAP.

Section 8.11. Further Assurances.

The Parent and the Borrower shall, at their cost and expense and upon request of
the Administrative Agent, execute and deliver or cause to be executed and
delivered, to the Administrative Agent such further instruments, documents and
certificates consistent with the existing terms and conditions of the Loan
Documents, and do and cause to be done such further acts that may be reasonably
necessary or advisable in the reasonable opinion of the Administrative Agent to
carry out more effectively the provisions and purposes of this Agreement and the
other Loan Documents.

Section 8.12. REIT Status.

The Parent shall at all times maintain its status as a REIT and election to be
treated as a REIT under the Internal Revenue Code.

Section 8.13. Exchange Listing.

The Parent shall maintain at least one class of common Equity Interest of the
Parent having trading privileges on the New York Stock Exchange or the American
Stock Exchange or which is subject to price quotations on the over-the-counter
market as reported by the National Association of Securities Dealers Automated
Quotation System.

Section 8.14. Additional Guarantors.

(a) Within 30 days of any Person (other than an Excluded Subsidiary or a Foreign
Subsidiary) becoming a Material Subsidiary after the Effective Date, the
Borrower shall deliver to the Agent each of the following items, each in form
and substance satisfactory to the Agent: (i) an Accession Agreement executed by
such Material Subsidiary and (ii) the items with respect to such Material
Subsidiary that would have been delivered under Sections 6.1.(a)(iv) through
(viii) if such Material Subsidiary had been one on the Effective Date; provided,
however, promptly (and in any event within 30 days) upon any Excluded Subsidiary
that is a Material Subsidiary ceasing to be subject to the restriction which
prevented it from delivering an Accession Agreement pursuant to this Section,
such Subsidiary shall comply with the provisions of this Section.

 

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(b) The Borrower may, at its option, cause any Subsidiary that is not already a
Guarantor to become a Guarantor by executing and delivering to the Agent the
items required to be delivered under Section 4.1.(d) with respect to a
Subsidiary that owns or leases an Unencumbered Borrowing Base Property.

Section 8.15. Release of Guarantors.

The Borrower may request in writing that the Administrative Agent release, and
upon receipt of such request the Administrative Agent shall release (subject to
the terms of the Guaranty), a Guarantor from the Guaranty so long as: (i) such
Guarantor meets, or will meet simultaneously with its release from the Guaranty,
all of the provisions of the definition of the term “Excluded Subsidiary” or has
ceased to be, or simultaneously with its release from the Guaranty will cease to
be, a Material Subsidiary or a Subsidiary, or in the case of a Material
Subsidiary that does not own or lease an Unencumbered Borrowing Base Property,
such release will not result in a violation of Section 10.1.(f) or (g);
(ii) such Guarantor is not otherwise required to be a party to the Guaranty
under Section 8.14.(a); (iii) no Default or Event of Default shall then be in
existence or would occur as a result of such release, including without
limitation, a Default or Event of Default resulting from a violation of any of
the covenants contained in Section 10.1.; (iv) the representations and
warranties made or deemed made by the Borrower and each other Loan Party in the
Loan Documents to which any of them is a party, shall be true and correct on and
as of the date of such release with the same force and effect as if made on and
as of such date except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and accurate on and as of such earlier date)
and except for changes in factual circumstances not prohibited under the Loan
Documents; and (v) the Administrative Agent shall have received such written
request at least 10 Business Days (or such shorter period as may be acceptable
to the Administrative Agent) prior to the requested date of release. Delivery by
the Borrower to the Administrative Agent of any such request shall constitute a
representation by the Borrower that the matters set forth in the preceding
sentence (both as of the date of the giving of such request and as of the date
of the effectiveness of such request) are true and correct with respect to such
request. If such Guarantor owns an Unencumbered Borrowing Base Property, then
the release of such Guarantor shall also be subject to and in accordance with
Section 4.2. The Administrative Agent agrees to furnish to the Borrower, at the
Borrower’s request and at the Borrower’s sole cost and expense, any release,
termination, or other agreement or document evidencing the foregoing release as
may be reasonably requested by the Borrower.

ARTICLE IX. INFORMATION

For so long as this Agreement is in effect, unless the appropriate Lenders shall
otherwise consent in the manner set forth in Section 13.7., the Borrower shall
furnish to the Administrative Agent for distribution to each of the Lenders:

Section 9.1. Quarterly Financial Statements.

As soon as available and in any event within 5 days after the same is required
to be filed with the Securities and Exchange Commission (but in no event later
than 45 days after the end of each of the first, second and third fiscal
quarters of the Parent), the unaudited consolidated balance sheet of the Parent
and its Subsidiaries as at the end of such period and the related unaudited
consolidated statements of income and cash flows of the Parent and its
Subsidiaries for such period, setting forth in each case in comparative form the
figures as of the end of and for the corresponding periods of the previous
fiscal year, all of which shall be certified by the chief financial officer or
chief accounting officer of the Parent, in his or her opinion, to present
fairly, in accordance with GAAP and in all material respects, the consolidated
financial position of the Parent and its Subsidiaries as at the date thereof and
the results of operations for such period (subject to normal year-end audit
adjustments); provided, however, the Parent shall not be required to deliver an
item required under this Section if such item is contained in a Form 10-Q filed
by the Parent with the Securities and Exchange Commission (or any Governmental
Authority substituted therefore) and is publicly available to the Administrative
Agent and the Lenders.

 

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Section 9.2. Year-End Statements.

As soon as available and in any event within 5 days after the same is required
to be filed with the Securities and Exchange Commission (but in no event later
than 120 days after the end of each fiscal year of the Parent), the audited
consolidated balance sheet of the Parent and its Subsidiaries as at the end of
such fiscal year and the related audited consolidated statements of income,
shareholders’ equity and cash flows of the Parent and its Subsidiaries for such
fiscal year, setting forth in comparative form the figures as at the end of and
for the previous fiscal year, all of which shall be (a) certified by the chief
financial officer or chief accounting officer of the Parent, in his or her
opinion, to present fairly, in accordance with GAAP and in all material
respects, the consolidated financial position of the Parent, the Borrower and
its other Subsidiaries as at the date thereof and the results of operations for
such period and (b) accompanied by the report thereon of an Approved Accounting
Firm, whose certificate shall be unqualified and in scope and substance
reasonably satisfactory to the Administrative Agent and who shall have
authorized the Borrower to deliver such financial statements and certification
thereof to the Administrative Agent and the Lenders pursuant to this Agreement;
provided, however, the Parent shall not be required to deliver an item required
under this Section if such item is contained in a Form 10-K filed by the Parent
with the Securities and Exchange Commission (or any Governmental Authority
substituted therefore) and is publicly available to the Administrative Agent and
the Lenders.

Section 9.3. Compliance Certificate.

At the time financial statements are furnished pursuant to Sections 9.1. and
9.2., and if the Requisite Lenders reasonably believe that an Event of Default
specified in any of Sections 11.1.(a), 11.1.(b), 11.1.(c)(1) resulting from
noncompliance with Section 10.1., and 11.1.(f) or a Default specified in
Section 11.1.(g) may occur, then within 10 days of the Administrative Agent’s
request with respect to any other fiscal period, a certificate substantially in
the form of Exhibit K (a “Compliance Certificate”) executed by the chief
financial officer or chief accounting officer of the Parent, among other things,
(a) setting forth in reasonable detail as of the end of such quarterly
accounting period, fiscal year, or other fiscal period, as the case may be, the
calculations required to establish (x) whether the Borrower was in compliance
with the covenants contained in Sections 10.1., 10.2. and 10.4. and (y) the
Pricing Ratio; and (b) stating that, to the best of his or her knowledge,
information and belief after due inquiry, no Default, Event of Default or breach
of any covenant under this Credit Agreement exists, or, if such is not the case,
specifying such Default or Event of Default and its nature, when it occurred,
whether it is continuing and the steps being taken by the Borrower with respect
to such event, condition or failure. Together with the delivery of each
Compliance Certificate, the Borrower shall deliver (A) a list of all Persons
that have become a Material Subsidiary or a Significant Subsidiary since the
date of the Compliance Certificate most recently delivered by the Borrower
hereunder and (B) a report of newly acquired Properties, including their Net
Operating Income for the period of four consecutive fiscal quarters most
recently ending, purchase price, and principal amount of the mortgage debt as of
the date of such Compliance Certificate, if any, since the date of the
Compliance Certificate most recently delivered by the Borrower hereunder.

 

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Section 9.4. Other Information.

(a) Management Reports. Promptly upon receipt thereof, copies of all reports, if
any, submitted to the Parent or its Board of Directors by its independent public
accountants, including without limitation, any management report;

(b) Securities Filings. Within 5 Business Days of the filing thereof, copies of
all registration statements (excluding the exhibits thereto (unless reasonably
requested by the Administrative Agent) and any registration statements on Form
S-8 or its equivalent), reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) and all other periodic reports which the Parent, the Borrower, any
other Loan Party or any other Subsidiary shall file with the Securities and
Exchange Commission (or any Governmental Authority substituted therefor) or any
national securities exchange. The materials described in this subsection shall
be deemed to have been delivered to each Lender if same are contained in a
filing by the Parent with the Securities and Exchange Commission (or any
Governmental Authority substituted therefor) and is publicly available to the
Administrative Agent and the Lenders, or if same are otherwise available on
Parent’s website;

(c) Shareholder Information. Promptly upon the mailing thereof to the
shareholders of the Parent generally, copies of all financial statements,
reports and proxy statements so mailed and promptly upon the issuance thereof
copies of all press releases issued by the Parent, the Borrower, other Loan
Party or any other Subsidiary;

(d) Partnership Information. To the extent not delivered in connection with
clause (c) above, promptly upon the mailing thereof to the partners of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;

(e) Development Property Updates. At the time financial statements are furnished
pursuant to Sections 9.1. and 9.2., a schedule of all Development Properties of
the Parent, the Borrower and each other Subsidiary (which schedule shall
include, to the extent applicable work has commenced, the Lexington New York
City located in New York City, New York, and the Chicago Marriott located in
Chicago, Illinois, during any period the applicable Property has been excluded
as a Development Property pursuant to the second sentence of the definition of
the term “Development Property”) which are under development as of the fiscal
quarter most recently ended, setting forth for each such Property its percentage
of completion, the estimated completion date, the total amount of development
funded and the status of such development against the development budget;

(f) Litigation. To the extent the Parent, the Borrower, any other Loan Party or
any other Subsidiary is aware of the same, prompt notice of the commencement of
any proceeding or investigation by or before any Governmental Authority and any
action or proceeding in any court or other tribunal or before any arbitrator
against or in any other way relating adversely to, or adversely affecting, such
Person or any of its respective properties, assets or businesses which could
reasonably be expected to have a Material Adverse Effect, and prompt notice of
the receipt of notice that any United States income tax returns of the Parent,
the Borrower, any other Loan Party or any other Subsidiary are being audited;

(g) Change of Management or Financial Condition. Prompt notice of any change in
the senior management of the Parent or the Borrower and any change in the
business, assets, liabilities, financial condition or results of operations of
the Parent, the Borrower, any other Loan Party or any other Subsidiary which has
had, or could reasonably be expected to have, a Material Adverse Effect;

(h) Default. Notice of the occurrence of any of the following promptly upon a
Responsible Officer of the Parent obtaining knowledge thereof: (i) any Default
or Event of Default or (ii) any event which with the passage of time, the giving
of notice, or otherwise, would permit any party to a Material Contract to
terminate such Material Contract;

 

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(i) Judgments. Prompt notice of any order, judgment or decree in excess of
$7,500,000 having been entered against the Parent, the Borrower, any other Loan
Party or any other Subsidiary or any of their respective properties or assets;

(j) Notice of Violation of Law. Prompt notice if the Parent, the Borrower or any
other Subsidiary shall receive any notification from any Governmental Authority
alleging a violation of any Applicable Law or any inquiry which, in either case,
could reasonably be expected to have a Material Adverse Effect;

(k) Material Contracts. Promptly upon entering into any Material Contract after
the Agreement Date (other than a Material Contract evidencing Indebtedness), a
copy to the Administrative Agent of such Material Contract unless such Material
Contract is otherwise publicly available to the Administrative Agent in a Form
10-K, 10-Q and/or 8-K (or their equivalents) or any other periodic report which
the Parent, the Borrower, or any other Subsidiary files with the Securities and
Exchange Commission; provided, that the Borrower shall not be required to
deliver to the Administrative Agent a copy of any Material Contract that
contains a confidentiality provision prohibiting such disclosure; provided
further that the Borrower shall use its commercially reasonable efforts to
obtain the other party’s consent to disclose such Material Contract to the
Administrative Agent and the Lenders;

(l) ERISA. If any ERISA Event shall occur that individually, or together with
any other ERISA Event that has occurred, could reasonably be expected to result
in liability to any member of the ERISA Group aggregating in excess of
$10,000,000, a certificate of the chief executive officer or chief financial
officer of the Parent setting forth details as to such occurrence and the
action, if any, which the Parent or applicable member of the ERISA Group is
required or proposes to take;

(m) Material/Significant Subsidiary. Prompt notice of any Person becoming a
Material Subsidiary or a Significant Subsidiary;

(n) Material Asset Sales. Prompt notice of the sale, transfer or other
disposition of any assets having an undepreciated book value of at least
$30,000,000 of the Parent, the Borrower, any Subsidiary or any other Loan Party
to any Person other than the Parent, the Borrower, any Subsidiary or any other
Loan Party;

(o) Ownership Share of Subsidiaries and Unconsolidated Affiliates. Promptly upon
the request of the Administrative Agent, evidence of the Parent’s calculation of
the Ownership Share with respect to a Subsidiary or an Unconsolidated Affiliate,
such evidence to be in form and detail satisfactory to the Administrative Agent;

(p) Projections and Budgets. Within ninety (90) days after the end of each
calendar year ending prior to the Termination Date, (x) projected sources and
uses of cash statements, balance sheets, income statements, and EBITDA, of the
Parent, the Borrower and the other Subsidiaries on a consolidated and annual
basis for the next succeeding fiscal year and, to the extent available, for the
next three succeeding fiscal years, all itemized in reasonable detail;
(y) operating statements for the prior year, a property budget for the then
current year and planned capital expenditure budget on both an individual and
consolidated basis for each Property of the Parent, the Borrower and each of the
other Subsidiaries and (z) the most current Smith Travel Research STAR Report
available, which will compare the individual Unencumbered Borrowing Base
Properties to the primary competitive set. The foregoing shall be accompanied by
pro forma calculations, together with detailed assumptions, required to
establish whether or not the Borrower, and when appropriate its consolidated
Subsidiaries, will be in compliance with the covenants contained in
Section 10.1. at the end of each fiscal quarter of the next succeeding fiscal
year;

 

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(q) Other Information. From time to time and promptly upon each request, such
data, certificates, reports, statements, opinions of counsel, documents or
further information regarding any Property or the business, assets, liabilities,
financial condition, results of operations or business prospects of the Parent,
the Borrower, any other Loan Party or any other Subsidiary as the Administrative
Agent or any Lender may reasonably request (subject to limitations imposed under
confidentiality requirements and agreements to which the Parent, Borrower or a
Subsidiary is subject).

Section 9.5. Electronic Delivery of Certain Information.

(a) Documents required to be delivered pursuant to the Loan Documents shall be
delivered by electronic communication and delivery, including, the Internet,
e-mail or intranet websites to which the Administrative Agent and each Lender
have access (including a commercial, third-party website or a website sponsored
or hosted by the Administrative Agent or the Borrower) provided that the
foregoing shall not apply to (i) notices to any Lender (or the Issuing Bank)
pursuant to Article II. and (ii) any Lender that has notified the Administrative
Agent and the Borrower that it cannot or does not want to receive electronic
communications. The Administrative Agent or the Borrower may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic
delivery pursuant to procedures approved by it for all or particular notices or
communications. Documents or notices delivered electronically shall be deemed to
have been delivered twenty-four (24) hours after the date and time on which the
Administrative Agent or the Borrower posts such documents or the documents
become available on a commercial website and the Administrative Agent or
Borrower notifies each Lender of said posting and provides a link thereto
provided if such notice or other communication is not sent or posted during the
normal business hours of the recipient, said posting date and time shall be
deemed to have commenced as of 9:00 a.m. Pacific time on the opening of business
on the next business day for the recipient. Notwithstanding anything contained
herein, in every instance the Borrower shall be required to provide paper copies
of the certificate required by Section 9.3. to the Administrative Agent and
shall deliver paper copies of any documents to the Administrative Agent or to
any Lender that requests such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender.
Except for the certificates required by Section 9.3., the Administrative Agent
shall have no obligation to request the delivery of or to maintain paper copies
of the documents delivered electronically, and in any event shall have no
responsibility to monitor compliance by the Borrower with any such request for
delivery. Each Lender shall be solely responsible for requesting delivery to it
of paper copies and maintaining its paper or electronic documents.

(b) Documents required to be delivered pursuant to Article II. may be delivered
electronically to a website provided for such purpose by the Administrative
Agent pursuant to the procedures provided to the Borrower by the Administrative
Agent.

Section 9.6. Public/Private Information.

The Borrower shall cooperate with the Administrative Agent in connection with
the publication of certain materials and/or information provided by or on behalf
of the Borrower. Documents required to be delivered pursuant to the Loan
Documents shall be delivered by or on behalf of the Borrower to the
Administrative Agent and the Lenders (collectively, “Information Materials”)
pursuant to this Article and the Borrower shall designate Information Materials
(a) that are either available to the public or not material with respect to the
Borrower and its Subsidiaries or any of their respective securities for purposes
of United States federal and state securities laws, as “Public Information” and
(b) that are not Public Information as “Private Information”.

 

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Section 9.7. USA Patriot Act Notice; Compliance.

The Patriot Act and federal regulations issued with respect thereto require all
financial institutions to obtain, verify and record certain information that
identifies individuals or business entities which open an “account” with such
financial institution. Consequently, a Lender (for itself and/or as agent for
all Lenders hereunder) may from time-to-time request, and the Borrower shall,
and shall cause the other Loan Parties, to provide to such Lender, such Loan
Party’s name, address, tax identification number and/or such other
identification information as shall be necessary for such Lender to comply with
federal law. An “account” for this purpose may include, without limitation, a
deposit account, cash management service, a transaction or asset account, a
credit account, a loan or other extension of credit, and/or other financial
services product.

ARTICLE X. NEGATIVE COVENANTS

For so long as this Agreement is in effect, unless the appropriate Lenders shall
otherwise consent in the manner set forth in Section 13.7., the Parent and the
Borrower shall comply with the following covenants in accordance with their
respective terms:

Section 10.1. Financial Covenants.

(a) Maximum Leverage Ratio. The Parent and the Borrower shall not permit the
ratio of (i) Total Indebtedness to (ii) Total Asset Value to exceed 0.60 to 1.00
at any time.

(b) Minimum Fixed Charge Coverage Ratio. The Parent and the Borrower shall not
at any time permit the ratio of (i) Adjusted EBITDA of the Parent and its
Subsidiaries for the period of twelve consecutive fiscal months most recently
ending to (ii) Fixed Charges for such period, to be less than 1.50 to 1.00.

(c) Reserved.

(d) Minimum Tangible Net Worth. The Parent and the Borrower shall not permit
Tangible Net Worth at any time to be less than (i) $1,857,000,000 plus (ii) 75%
of the Net Tangible Proceeds of all Equity Issuances effected by the Parent and
its Subsidiaries after September 7, 2012 (other than Equity Issuances to the
Parent, the Borrower or any Subsidiary).

(e) Secured Indebtedness. The Parent and the Borrower shall not permit the
aggregate amount of Secured Indebtedness of the Parent and its Subsidiaries
determined on a consolidated basis to exceed (i) 50.0% of Total Asset Value at
any time from the Effective Date through and including December 31, 2013 and
(ii) 45% of Total Asset Value at any time thereafter.

(f) Minimum Number and Value of Unencumbered Borrowing Base Properties. The
number of Unencumbered Borrowing Base Properties shall not be less than 5 at any
time and the aggregate Unencumbered Borrowing Base Value of the Unencumbered
Borrowing Base Properties shall not be less than $250,000,000 at any time.

(g) Adjusted Total Asset Value. The Parent and the Borrower shall not permit the
amount of Adjusted Total Asset Value attributable to assets directly owned by
the Borrower and the Guarantors to be less than 90.0% of Adjusted Total Asset
Value at any time.

 

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Notwithstanding the foregoing or Section 11.1.(c)(i), (x) the Parent and the
Borrower shall not be required to comply with the financial covenants contained
in this Section during any fiscal quarter in which no Loans and no Letters of
Credit Liabilities are outstanding; provided, that the Borrower must be in
compliance with such financial covenants as a condition to the making of a Loan
or the issuance of a Letter of Credit as provided in Section 6.2.

Section 10.2. Restricted Payments.

Subject to the following sentence, if an Event of Default exists, the Parent
shall not, and shall not permit any of its Subsidiaries to, declare or make any
Restricted Payments except that, subject to the following sentence, the Borrower
may declare and make cash distributions to the Parent and other holders of
partnership interests in the Borrower, and the Parent may declare and make cash
distributions to its shareholders, each, in an aggregate amount not to exceed
the minimum amount necessary for the Parent to remain in compliance with
Section 8.12. If an Event of Default specified in Section 11.1.(a),
Section 11.1.(b), Section 11.1.(f) or Section 11.1.(g) shall exist, or if as a
result of the occurrence of any other Event of Default any of the Obligations
have been accelerated pursuant to Section 11.2.(a), the Parent and the Borrower
shall not, and shall not permit any Subsidiary to, make any Restricted Payments
to any Person except that Subsidiaries may pay Restricted Payments to the
Parent, the Borrower or any other Subsidiary.

Section 10.3. Indebtedness.

The Parent and the Borrower shall not, and shall not permit any Subsidiary to,
incur, assume, or otherwise become obligated in respect of any Indebtedness
after the Agreement Date if immediately prior to the assumption, incurring or
becoming obligated in respect thereof, or immediately thereafter and after
giving effect thereto, a Default or Event of Default is or would be in
existence, including without limitation, a Default or Event of Default resulting
from a violation of any of the covenants contained in Section 10.1.

Section 10.4. Certain Permitted Investments.

The Parent and the Borrower shall not, and shall not permit any Loan Party or
other Subsidiary to, make any Investment in or otherwise own the following items
which would cause the aggregate value of such holdings of the Parent, the
Borrower and such other Subsidiaries to exceed the applicable limits set forth
below:

(a) Investments in Unconsolidated Affiliates and other Persons that are not
Subsidiaries, such that the aggregate value of such Investments (determined in a
manner consistent with the definition of Total Asset Value or, if not
contemplated under the definition of Total Asset Value, as determined in
accordance with GAAP) exceeds 10.0% of Total Asset Value at any time;

(b) Development Properties, such that the aggregate current book value of all
such Development Properties exceeds 15.0% of Total Asset Value at any time;

(c) Unimproved Land such that the aggregate book value of all such Unimproved
Land exceeds 5.0% of Total Asset Value at any time; and

(d) Mortgage Receivables, such that the aggregate book value of such Mortgage
Receivables exceeds 15.0% of Total Asset Value.

 

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In addition to the foregoing limitations, the aggregate value of all of the
items subject to the limitations in the preceding clauses (a) through (d) shall
not exceed 30.0% of Total Asset Value at any time.

Section 10.5. Investments Generally.

The Parent and the Borrower shall not, and shall not permit any other Loan Party
or any other Subsidiary to, directly or indirectly, acquire, make or purchase
any Investment, or permit any Investment of such Person to be outstanding on and
after the Agreement Date, other than the following:

(a) Investments in Subsidiaries in existence on the Agreement Date and disclosed
on Part I of Schedule 7.1.(b);

(b) Investments to acquire Equity Interests of a Subsidiary or any other Person
who after giving effect to such acquisition would be a Subsidiary, so long as in
each case immediately prior to such Investment, and after giving effect thereto,
no Default or Event of Default is or would be in existence;

(c) Investments permitted under Section 10.4.;

(d) Investments in Cash Equivalents;

(e) intercompany Indebtedness among (i) the Parent and the Borrower and (ii) the
Borrower and its Wholly Owned Subsidiaries provided that such Indebtedness is
permitted by the terms of Section 10.3. and Section 10.1.(f);

(f) Guarantees incurred by the Borrower or any Guarantor in respect of Unsecured
Indebtedness of the Borrower, the Parent or any other Guarantor that is
otherwise permitted by Section 10.1.(f);

(g) loans and advances to employees for moving, entertainment, travel and other
similar expenses in the ordinary course of business consistent with past
practices; and

(h) any other Investment as long as immediately prior to making such Investment,
and immediately thereafter and after giving effect thereto, no Default or Event
of Default is or would be in existence.

Section 10.6. Negative Pledge.

(a) The Parent and the Borrower shall not, and shall not permit any other Loan
Party or any other Subsidiary to, create, assume, or incur any Lien (other than
Permitted Liens and Liens on assets of an Excluded Subsidiary securing the
Indebtedness which causes such Subsidiary to be an Excluded Subsidiary) upon any
of its properties, assets, income or profits of any character whether now owned
or hereafter acquired if immediately prior to the creation, assumption or
incurring of such Lien, or immediately thereafter, a Default or Event of Default
is or would be in existence.

(b) The Parent and the Borrower shall not, and shall not permit any other Loan
Party or any other Subsidiary to, enter into, assume or otherwise be bound by
any Negative Pledge except for a Negative Pledge contained in any agreement
(i)(x) evidencing Indebtedness which the Parent, the Borrower, such other Loan
Party or such Subsidiary may create, incur, assume, or permit or suffer to exist
under Section 10.3., (y) which Indebtedness is secured by a Lien permitted to
exist, and (z) which prohibits the creation of any other Lien on only the
property securing such Indebtedness as of the date such agreement was entered
into; (ii) consisting of customary provisions in leases and other contracts
restricting the assignment thereof; or (iii) relating to the sale of a
Subsidiary or assets pending such sale, provided that in any such case the
Negative Pledge applies only to the Subsidiary or the assets that are the
subject of such sale.

 

 

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(c) The Parent and the Borrower shall not, and shall not permit any other Loan
Party or any other Subsidiary (other than an Excluded Subsidiary) to, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary (other
than an Excluded Subsidiary) to: (i) pay dividends or make any other
distribution on any of such Subsidiary’s capital stock or other equity interests
owned by the Borrower or any Subsidiary; (ii) pay any Indebtedness owed to the
Parent, the Borrower or any other Subsidiary; (iii) make loans or advances to
the Parent, the Borrower or any other Subsidiary; or (iv) transfer any of its
property or assets to the Parent, the Borrower or any other Subsidiary, except
for any such encumbrances or restrictions, (A) contained in agreements relating
to the sale of a Subsidiary or assets pending such sale, or relating to
Indebtedness secured by a Lien on assets that the Borrower or such Subsidiary
may create, incur, assume, or permit or suffer to exist under Sections 10.3. and
10.6.(a), provided that in any such case the encumbrances and restrictions apply
only to the Subsidiary or the assets that are the subject of such sale or Lien,
as the case may be, (B) set forth in the organizational documents or other
agreements binding on or applicable to any Excluded Subsidiary or any Subsidiary
that is not a Wholly Owned Subsidiary (but only to the extent such encumbrance
or restriction covers any Equity Interest in such Subsidiary or the property or
assets of such Subsidiary) or (C) contained in an agreement that governs an
Investment in an Unconsolidated Affiliate (but only to the extent such
encumbrance or restriction covers any Equity Interest in such Unconsolidated
Affiliate).

Section 10.7. Merger, Consolidation, Sales of Assets and Other Arrangements.

The Parent and the Borrower shall not, and shall not permit any other Loan Party
or any other Subsidiary to: (i) enter into any transaction of merger or
consolidation; (ii) liquidate, windup or dissolve itself (or suffer any
liquidation or dissolution); or (iii) convey, sell, lease, sublease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or any
substantial part of its business or assets, or the capital stock of or other
Equity Interests in any of its Subsidiaries, whether now owned or hereafter
acquired; provided, however, that:

(a) any of the actions described in the immediately preceding clauses (i)
through (iii) may be taken with respect to any Subsidiary so long as
(x) immediately prior to the taking of such action, and immediately thereafter
and after giving effect thereto, no Default or Event of Default is or would be
in existence, (y) if such action includes the sale of all Equity Interests in a
Subsidiary that is a Guarantor owned directly or indirectly by the Parent, such
Subsidiary can and will be released from the Guaranty in accordance with
Section 8.15 and (z) if such action includes the disposition of an Unencumbered
Borrowing Base Property (regardless of whether such disposition takes the form
of a direct sale of such Unencumbered Borrowing Base Property, the sale of the
Equity Interests of the Subsidiary that owns such Unencumbered Borrowing Base
Property or a merger of such Subsidiary), such Unencumbered Borrowing Base
Property can and will be released in accordance with Section 4.2.;

(b) the Parent, the Borrower, the other Loan Parties and the other Subsidiaries
may lease and sublease their respective assets, as lessor or sublessor (as the
case may be), in the ordinary course of their business;

(c) a Person may merge with a Loan Party so long as (i) the survivor of such
merger is such Loan Party or becomes a Loan Party at the time of such merger,
(ii) immediately prior to such merger, and immediately thereafter and after
giving effect thereto, (x) no Default or Event of

 

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Default is or would be in existence, including, without limitation, a Default or
Event of Default resulting from a breach of Section 10.1. and (y) the
representations and warranties made or deemed made by the Borrower and each
other Loan Party in the Loan Documents to which any of them is a party are and
shall be true and correct in all material respects, except to the extent that
such representations and warranties expressly relate solely to an earlier date
(in which case such representations and warranties shall have been true and
correct in all material respects on and as of such earlier date) and except for
changes in factual circumstances not prohibited under the Loan Documents,
(iii) the Borrower shall have given the Agent at least 30-days’ prior written
notice of such merger, such notice to include a certification as to the matters
described in the immediately preceding clause (ii) (except that such prior
notice shall not be required in the case of the merger of a Subsidiary that does
not own an Unencumbered Borrowing Base Property with and into a Loan Party but
the Borrower shall give the Agent notice of any such merger promptly following
the effectiveness of such merger) and (4) at the time the Borrower gives notice
pursuant to clause (1) of this subsection, the Borrower shall have delivered to
the Administrative Agent for distribution to each of the Lenders a Compliance
Certificate, calculated on a pro forma basis, evidencing the continued
compliance by the Loan Parties, as applicable, with the terms and conditions of
this Agreement and the other Loan Documents, including without limitation, the
financial covenants contained in Section 10.1., after giving effect to such
consolidation, merger, acquisition, Investment, sale, lease or other transfer
and any prepayment of Loans to be made in connection therewith; and

(d) the Parent, the Borrower and each other Subsidiary may sell, transfer or
dispose of assets among themselves.

Further, no Loan Party nor any Subsidiary, shall enter into any sale-leaseback
transactions or other transaction by which such Person shall remain liable as
lessee (or the economic equivalent thereof) of any real or personal property
that it has sold or leased to another Person.

Section 10.8. Fiscal Year.

The Parent shall not change its fiscal year from that in effect as of the
Agreement Date.

Section 10.9. Modifications of Material Contracts.

The Parent and the Borrower shall not enter into, and shall not permit any
Subsidiary or other Loan Party to enter into, any amendment or modification to
any Material Contract which could reasonably be expected to have a Material
Adverse Effect.

Section 10.10. Modifications of Organizational Documents.

The Parent and the Borrower shall not, and shall not permit any other Loan Party
or any other Subsidiary to, amend, supplement, restate or otherwise modify its
certificate or articles of incorporation or formation, by-laws, operating
agreement, declaration of trust, partnership agreement or other applicable
organizational document if such amendment, supplement, restatement or other
modification (a) is materially adverse to the interest of the Administrative
Agent, the Issuing Bank or the Lenders or (b) could reasonably be expected to
have a Material Adverse Effect.

 

 

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Section 10.11. Transactions with Affiliates.

The Parent and the Borrower shall not permit to exist or enter into, and shall
not permit any other Loan Party or any other Subsidiary to permit to exist or
enter into, any transaction (including the purchase, sale, lease or exchange of
any property or the rendering of any service) with any Affiliate (other than the
Parent, the Borrower, any other Loan Party or any Wholly Owned Subsidiary),
except transactions pursuant to the reasonable requirements of the business of
the Parent, the Borrower, such other Loan Party or such other Subsidiary and
upon fair and reasonable terms which are no less favorable to the Parent, the
Borrower, such other Loan Party or such other Subsidiary, as applicable, than
would be obtained in a comparable arm’s length transaction with a Person that is
not an Affiliate.

Section 10.12. ERISA Exemptions.

The Parent and the Borrower shall not, and shall not permit any other Loan Party
or any other Subsidiary to, permit any of its respective assets to become or be
deemed to be “plan assets” within the meaning of ERISA, the Internal Revenue
Code and the respective regulations promulgated thereunder. The Parent and the
Borrower shall not cause or permit to occur, and shall not permit any other
member of the ERISA Group to cause or permit to occur, any ERISA Event if such
ERISA Event could reasonably be expected to have a Material Adverse Effect.

Section 10.13. Environmental Matters.

The Parent and the Borrower shall not, and shall not permit any other Loan
Party, any other Subsidiary or any other Person to, use, generate, discharge,
emit, manufacture, handle, process, store, release, transport, remove, dispose
of or clean up any Hazardous Materials on, under or from the Properties in
material violation of any Environmental Law or in a manner that could reasonably
be expected to lead to any material environmental claim or pose a material risk
to human health, safety or the environment. Nothing in this Section shall impose
any obligation or liability whatsoever on the Administrative Agent or any
Lender.

Section 10.14. Derivatives Contracts.

The Parent and the Borrower shall not, and shall not permit any other Loan Party
or any other Subsidiary to, enter into or become obligated in respect of,
Derivatives Contracts, other than Derivatives Contracts entered into by the
Parent, the Borrower, any such Loan Party or any such Subsidiary in the ordinary
course of business and which establish an effective hedge in respect of
liabilities, commitments or assets held or reasonably anticipated by the Parent,
the Borrower, such other Loan Party or such other Subsidiary.

ARTICLE XI. DEFAULT

Section 11.1. Events of Default.

Each of the following shall constitute an Event of Default, whatever the reason
for such event and whether it shall be voluntary or involuntary or be effected
by operation of Applicable Law or pursuant to any judgment or order of any
Governmental Authority:

(a) Default in Payment of Principal. The Borrower shall fail to pay when due
(whether upon demand, at maturity, by reason of acceleration or otherwise) the
principal of any of the Loans, or any Reimbursement Obligation.

(b) Default in Payment of Interest and Other Obligations. The Borrower shall
fail to pay when due any interest on any of the Loans or any of the other
payment Obligations owing by the Borrower under this Agreement, any other Loan
Document or the Fee Letter or any other Loan Party shall fail to pay when due
any payment Obligation owing by such other Loan Party under any Loan Document to
which it is a party, and such failure shall continue for a period of 3 Business
Days.

 

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(c) Default in Performance.

(i) Any Loan Party shall fail to perform or observe any term, covenant,
condition or agreement on its part to be performed or observed and contained in
Section 9.4.(h), or Article X.; or

(ii) Any Loan Party shall fail to perform or observe any term, covenant,
condition or agreement contained in this Agreement or any other Loan Document to
which it is a party and not otherwise mentioned in this Section, and in the case
of this clause (ii) only, such failure shall continue for a period of 30 days
after the earlier of (x) the date upon which a Responsible Officer of the Parent
or the Borrower obtains knowledge of such failure or (y) the date upon which the
Parent or any other Loan Party has received written notice of such failure from
the Administrative Agent.

(d) Misrepresentations. Any written statement, representation or warranty made
or deemed made by or on behalf of any Loan Party under this Agreement or under
any other Loan Document, or any amendment hereto or thereto, or in any other
writing or statement at any time furnished or made or deemed made by, or on
behalf of, any Loan Party to the Administrative Agent, the Issuing Bank or any
Lender, shall at any time prove to have been incorrect or misleading, in light
of the circumstances in which made or deemed made, in any material respect when
furnished or made or deemed made.

(e) Indebtedness Cross-Default; Derivatives Contracts.

(i) The Borrower, any other Loan Party or any other Subsidiary shall fail to pay
when due and payable, within any applicable grace or cure period, the principal
of, or interest on, any Indebtedness (other than the Loans and Reimbursement
Obligations) having an aggregate outstanding principal amount (or, in the case
of any Derivatives Contract, having, without regard to the effect of any
close-out netting provision, a Derivatives Termination Value) of $30,000,000 or
more (or $37,500,000 or more in the case of Nonrecourse Indebtedness) (all such
Indebtedness being “Material Indebtedness”); or

(ii) (x) The maturity of any Material Indebtedness shall have been accelerated
in accordance with the provisions of any indenture, contract or instrument
evidencing, providing for the creation of or otherwise concerning such Material
Indebtedness or (y) any Material Indebtedness shall have been required to be
prepaid or repurchased prior to the stated maturity thereof; or

(iii) Any other event shall have occurred and be continuing which would permit
any holder or holders of any Material Indebtedness, any trustee or agent acting
on behalf of such holder or holders or any other Person, to accelerate the
maturity of any such Material Indebtedness or require any such Material
Indebtedness to be prepaid or repurchased prior to its stated maturity; or

(iv) There occurs an “Event of Default” under and as defined in any Derivatives
Contract as to which the Borrower, any Loan Party or any of other Subsidiary is
a “Defaulting Party” (as defined therein), or there occurs an “Early Termination
Date” (as defined therein) in respect of any such Derivatives Contract as a
result of a “Termination Event” (as defined therein) as to which the Borrower or
any of its Subsidiaries is an “Affected Party” (as defined therein), in each
case, if the Derivatives Termination Value payable by the Borrower, any other
Loan Party or any other Subsidiary exceeds $15,000,000 in the aggregate.

 

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(f) Voluntary Bankruptcy Proceeding. The Borrower, any other Loan Party or any
Significant Subsidiary shall: (i) commence a voluntary case under the Bankruptcy
Code or other federal bankruptcy laws (as now or hereafter in effect); (ii) file
a petition seeking to take advantage of any other Applicable Laws, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts; (iii) consent to, or fail to contest in a
timely and appropriate manner, any petition filed against it in an involuntary
case under such bankruptcy laws or other Applicable Laws or consent to any
proceeding or action described in the immediately following subsection;
(iv) apply for or consent to, or fail to contest in a timely and appropriate
manner, the appointment of, or the taking of possession by, a receiver,
custodian, trustee, or liquidator of itself or of a substantial part of its
property, domestic or foreign; (v) admit in writing its inability to pay its
debts as they become due; (vi) make a general assignment for the benefit of
creditors; (vii) make a conveyance fraudulent as to creditors under any
Applicable Law; or (viii) take any corporate or partnership action for the
purpose of effecting any of the foregoing.

(g) Involuntary Bankruptcy Proceeding. A case or other proceeding shall be
commenced against any Loan Party or any other Significant Subsidiary in any
court of competent jurisdiction seeking: (i) relief under the Bankruptcy Code or
other federal bankruptcy laws (as now or hereafter in effect) or under any other
Applicable Laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts; or (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of such
Person, or of all or any substantial part of the assets, domestic or foreign, of
such Person, and such case or proceeding shall continue undismissed or unstayed
for a period of 60 consecutive days, or an order granting the remedy or other
relief requested in such case or proceeding against such Loan Party or such
Significant Subsidiary (including, but not limited to, an order for relief under
such Bankruptcy Code or such other federal bankruptcy laws) shall be entered.

(h) Revocation of Loan Documents. Any Loan Party shall (or shall attempt to)
disavow, revoke or terminate any Loan Document or the Fee Letter to which it is
a party or shall otherwise challenge or contest in any action, suit or
proceeding in any court or before any Governmental Authority the validity or
enforceability of any Loan Document or the Fee Letter, or any Loan Document or
the Fee Letter shall cease to be in full force and effect (except as a result of
the express terms thereof).

(i) Judgment. A judgment or order for the payment of money or for an injunction
shall be entered against the Borrower, any other Loan Party, or any other
Subsidiary by any court or other tribunal and (i) such judgment or order shall
continue for a period of 30 days without being paid, stayed or dismissed through
appropriate appellate proceedings and (ii) either (A) the amount of such
judgment or order for which insurance has not been acknowledged in writing by
the applicable insurance carrier (or the amount as to which the insurer has
denied liability) exceeds, individually or together with all other such
outstanding judgments or orders entered against any Loan Parties or any other
Subsidiary, $30,000,000 or (B) in the case of an injunction or other
non-monetary judgment, such injunction or judgment or order could reasonably be
expected to have a Material Adverse Effect.

(j) Attachment. A warrant, writ of attachment, execution or similar process
shall be issued against any property of any Loan Party or any other Subsidiary,
which exceeds, individually or together with all other such warrants, writs,
executions and processes, $30,000,000 in amount and such warrant, writ,
execution or process shall not be paid, discharged, vacated, stayed or bonded
for a period of 30 days; provided, however, that if a bond has been issued in
favor of the claimant or other Person obtaining such warrant, writ, execution or
process, the issuer of such bond shall execute a waiver or subordination
agreement in form and substance satisfactory to the Administrative Agent
pursuant to which the issuer of such bond subordinates its right of
reimbursement, contribution or subrogation to the Obligations and waives or
subordinates any Lien it may have on the assets of any Loan Party.

 

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(k) ERISA.

(i) Any ERISA Event shall have occurred that results or could reasonably be
expected to result in liability to any member of the ERISA Group aggregating in
excess of $30,000,000; or

(ii) The “benefit obligation” of all Plans exceeds the “fair market value of
plan assets” for such Plans by more than $30,000,000, all as determined, and
with such terms defined, in accordance with FASB ASC 715.

(l) Loan Documents. An Event of Default (as defined therein) shall occur under
any of the other Loan Documents.

(m) Change of Control/Change in Management.

(i) Any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), is or
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a Person will be deemed to have “beneficial ownership”
of all securities that such Person has the right to acquire, whether such right
is exercisable immediately or only after the passage of time), directly or
indirectly, of more than 35% of the total voting power of the then outstanding
voting stock of the Parent;

(ii) During any period of 12 consecutive months ending after the Agreement Date,
individuals who at the beginning of any such 12-month period constituted the
Board of Directors of the Parent (together with any new directors whose election
by such Board or whose nomination for election by the shareholders of the Parent
was approved by a vote of a majority of the directors then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of the Parent then in office; or

(iii) The Parent or a Wholly Owned Subsidiary of the Parent shall cease to be
the sole general partner of the Borrower or shall cease to have the sole and
exclusive power to exercise all management and control over the Borrower.

Section 11.2. Remedies Upon Event of Default.

Upon the occurrence of an Event of Default the following provisions shall apply:

(a) Acceleration; Termination of Facilities.

(i) Automatic. Upon the occurrence of an Event of Default specified in
Sections 11.1.(f) or 11.1.(g), (A)(1) the principal of, and all accrued interest
on, the Loans and the Notes at the time outstanding, (2) an amount equal to the
Stated Amount of all Letters of Credit outstanding as of the date of the
occurrence of such Event of Default for deposit into the Letter of Credit
Collateral Account pursuant to Section 11.5. and (3) all of the other
Obligations, including, but not limited to, the other amounts owed to the
Lenders and the Administrative Agent under this Agreement, the Notes or any of
the other Loan Documents shall become immediately and automatically due and
payable without presentment, demand, protest, or other notice of any kind, all
of which are expressly waived by the Borrower on behalf of itself and the other
Loan Parties, and (B) the Commitments, the Swingline Commitment, and the
obligation of the Issuing Bank to issue Letters of Credit hereunder, shall all
immediately and automatically terminate.

 

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(ii) Optional. If any other Event of Default shall exist, the Administrative
Agent may, and at the direction of the Requisite Lenders shall: (A) declare
(1) the principal of, and accrued interest on, the Loans and the Notes at the
time outstanding, (2) an amount equal to the Stated Amount of all Letters of
Credit outstanding as of the date of the occurrence of such Event of Default for
deposit into the Letter of Credit Collateral Account pursuant to Section 11.5.
and (3) all of the other Obligations, including, but not limited to, the other
amounts owed to the Lenders and the Administrative Agent under this Agreement,
the Notes or any of the other Loan Documents to be forthwith due and payable,
whereupon the same shall immediately become due and payable without presentment,
demand, protest or other notice of any kind, all of which are expressly waived
by the Borrower on behalf of itself and the other Loan Parties, and
(B) terminate the Commitments and the Swingline Commitment and the obligation of
the Issuing Bank to issue Letters of Credit hereunder.

(b) Loan Documents. The Requisite Lenders may direct the Administrative Agent
to, and the Administrative Agent if so directed shall, exercise any and all of
its rights under any and all of the other Loan Documents.

(c) Applicable Law. The Requisite Lenders may direct the Administrative Agent
to, and the Administrative Agent if so directed shall, exercise all other rights
and remedies it may have under any Applicable Law.

(d) Appointment of Receiver. To the extent permitted by Applicable Law, the
Administrative Agent and the Lenders shall be entitled to the appointment of a
receiver for the assets and properties of the Borrower and its Subsidiaries
(other than Excluded Subsidiaries), without notice of any kind whatsoever and
without regard to the adequacy of any security for the Obligations or the
solvency of any party bound for its payment, to take possession of all or any
portion of the property or the business operations of the Borrower and its
Subsidiaries (other than Excluded Subsidiaries) and to exercise such power as
the court shall confer upon such receiver.

(e) Specified Derivatives Contract Remedies. Notwithstanding any other provision
of this Agreement or other Loan Document, each Specified Derivatives Provider
shall have the right, with prompt notice to the Administrative Agent, but
without the approval or consent of or other action by the Administrative Agent
or the Lenders, and without limitation of other remedies available to such
Specified Derivatives Provider under contract or Applicable Law, to undertake
any of the following: (a) to declare an event of default, termination event or
other similar event under any Specified Derivatives Contract and to create an
“Early Termination Date” (as defined therein) in respect thereof, (b) to
determine net termination amounts in respect of any and all Specified
Derivatives Contracts in accordance with the terms thereof, and to set off
amounts among such contracts, (c) to set off or proceed against deposit account
balances, securities account balances and other property and amounts held by
such Specified Derivatives Provider pursuant to any Derivatives Support
Document, including any “Posted Collateral” (as defined in any credit support
annex included in any such Derivatives Support Document to which such Specified
Derivatives Provider may be a party), and (d) to prosecute any legal action
against the Parent, the Borrower, any other Loan Party or any other Subsidiary
to enforce or collect net amounts owing to such Specified Derivatives Provider
pursuant to any Specified Derivatives Contract.

 

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Section 11.3. Remedies Upon Default.

Upon the occurrence of a Default specified in Section 11.1.(g), the Commitments,
the Swingline Commitment, and the obligation of the Issuing Bank to issue
Letters of Credit shall immediately and automatically terminate.

Section 11.4. Marshaling; Payments Set Aside.

None of the Administrative Agent, the Issuing Bank or any Lender shall be under
any obligation to marshal any assets in favor of any Loan Party or any other
party or against or in payment of any or all of the Obligations or the Specified
Derivatives Obligations. To the extent that any Loan Party makes a payment or
payments to the Administrative Agent, the Issuing Bank, or any Lender, or the
Administrative Agent, the Issuing Bank or any Lender enforce their security
interests or exercise their rights of setoff, and such payment or payments or
the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then to the
extent of such recovery, the Obligations, or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor, shall be revived and
continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.

Section 11.5. Allocation of Proceeds.

If an Event of Default exists, all payments received by the Administrative Agent
(or any Lender as a result of its exercise of remedies permitted under
Section 13.4. under any of the Loan Documents, in respect of any principal of or
interest on the Obligations or any other amounts payable by the Borrower
hereunder or thereunder, shall be applied in the following order and priority:

(a) amounts due to the Administrative Agent, the Issuing Bank and the Lenders in
respect of expenses due under Section 13.2. until paid in full, and then Fees;

(b) payments of interest on Swingline Loans;

(c) payments of interest on all other Loans and Reimbursement Obligations to be
paid to the Lenders and the Issuing Bank equally and ratably in accordance with
the respective amounts thereof then due and owing;

(d) payments of principal of Swingline Loans;

(e) payments of principal of all Loans, Reimbursement Obligations and other
Letter of Credit Liabilities, to be applied for the ratable benefit of the
Lenders; provided, however, to the extent that any amounts available for
distribution pursuant to this subsection are attributable to the issued but
undrawn amount of an outstanding Letter of Credit, such amounts shall be paid to
the Administrative Agent for deposit into the Letter of Credit Collateral
Account;

(f) amounts due to the Administrative Agent and the Lenders pursuant to
Sections 12.7. and 13.10.;

(g) payments of all other Obligations and other amounts due and owing by the
Borrower and the other Loan Parties under any of the Loan Documents, if any, to
be applied for the ratable benefit of the Lenders; and

 

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(h) any amount remaining after application as provided above, shall be paid to
the Borrower or whomever else may be legally entitled thereto.

Section 11.6. Letter of Credit Collateral Account.

(a) As collateral security for the prompt payment in full when due of all Letter
of Credit Liabilities and the other Obligations, the Borrower hereby pledges and
grants to the Administrative Agent, for the ratable benefit of the
Administrative Agent, the Issuing Bank and the Lenders as provided herein, a
security interest in all of its right, title and interest in and to the Letter
of Credit Collateral Account and the balances from time to time in the Letter of
Credit Collateral Account (including the investments and reinvestments therein
provided for below). The balances from time to time in the Letter of Credit
Collateral Account shall not constitute payment of any Letter of Credit
Liabilities until applied by the Issuing Bank as provided herein. Anything in
this Agreement to the contrary notwithstanding, funds held in the Letter of
Credit Collateral Account shall be subject to withdrawal only as provided in
this Section.

(b) Amounts on deposit in the Letter of Credit Collateral Account shall be
invested and reinvested by the Administrative Agent in such Cash Equivalents as
the Administrative Agent shall determine in its sole discretion. All such
investments and reinvestments shall be held in the name of and be under the sole
dominion and control of the Administrative Agent for the ratable benefit of the
Administrative Agent, the Issuing Bank and the Lenders; provided, that all
earnings on such investments will be credited to and retained in the Letter of
Credit Collateral Account. The Administrative Agent shall exercise reasonable
care in the custody and preservation of any funds held in the Letter of Credit
Collateral Account and shall be deemed to have exercised such care if such funds
are accorded treatment substantially equivalent to that which the Administrative
Agent accords other funds deposited with the Administrative Agent, it being
understood that the Administrative Agent shall not have any responsibility for
taking any necessary steps to preserve rights against any parties with respect
to any funds held in the Letter of Credit Collateral Account.

(c) If a drawing pursuant to any Letter of Credit occurs on or prior to the
expiration date of such Letter of Credit, the Borrower and the Lenders authorize
the Administrative Agent to use the monies deposited in the Letter of Credit
Collateral Account to reimburse the Issuing Bank for the payment made by the
Issuing Bank to the beneficiary with respect to such drawing or the payee with
respect to such presentment.

(d) If an Event of Default exists, the Administrative Agent may (and, if
instructed by the Requisite Lenders, shall) in its (or their) discretion at any
time and from time to time elect to liquidate any such investments and
reinvestments and apply the proceeds thereof to the Obligations in accordance
with Section 11.5. Notwithstanding the foregoing, the Administrative Agent shall
not be required to liquidate and release any such amounts if such liquidation or
release would result in the amount available in the Letter of Credit Collateral
Account to be less than the Stated Amount of all Extended Letters of Credit that
remain outstanding.

(e) So long as no Default or Event of Default exists, and to the extent amounts
on deposit in or credited to the Letter of Credit Collateral Account exceed the
aggregate amount of the Letter of Credit Liabilities then due and owing, the
Administrative Agent shall, from time to time, at the request of the Borrower,
deliver to the Borrower within 10 Business Days after the Administrative Agent’s
receipt of such request from the Borrower, against receipt but without any
recourse, warranty or representation whatsoever, such amount of the credit
balances in the Letter of Credit Collateral Account as exceeds the aggregate
amount of Letter of Credit Liabilities at such time. Upon the expiration,
termination or cancellation of an Extended Letter of Credit for which the
Lenders

 

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reimbursed (or funded participations in) a drawing deemed to have occurred under
the fourth sentence of Section 2.2.(b) for deposit into the Letter of Credit
Collateral Account but in respect of which the Lenders have not otherwise
received payment for the amount so reimbursed or funded, the Administrative
Agent shall promptly remit to the Lenders the amount so reimbursed or funded for
such Extended Letter of Credit that remains in the Letter of Credit Collateral
Account, pro rata in accordance with the respective unpaid reimbursements or
funded participations of the Lenders in respect of such Extended Letter of
Credit, against receipt but without any recourse, warranty or representation
whatsoever. When all of the Obligations shall have been indefeasibly paid in
full and no Letters of Credit remain outstanding, the Administrative Agent shall
deliver to the Borrower, against receipt but without any recourse, warranty or
representation whatsoever, the balances remaining in the Letter of Credit
Collateral Account.

(f) The Borrower shall pay to the Administrative Agent from time to time such
fees as the Administrative Agent normally charges for similar services in
connection with the Administrative Agent’s administration of the Letter of
Credit Collateral Account and investments and reinvestments of funds therein.

Section 11.7. Performance by Administrative Agent.

If the Borrower or any other Loan Party shall fail to perform any covenant, duty
or agreement contained in any of the Loan Documents, the Administrative Agent
may, after notice to the Borrower, perform or attempt to perform such covenant,
duty or agreement on behalf of the Borrower or such other Loan Party after the
expiration of any cure or grace periods set forth herein. In such event, the
Borrower shall, at the request of the Administrative Agent, promptly pay any
amount reasonably expended by the Administrative Agent in such performance or
attempted performance to the Administrative Agent, together with interest
thereon at the applicable Post-Default Rate from the date of such expenditure
until paid. Notwithstanding the foregoing, neither the Administrative Agent nor
any Lender shall have any liability or responsibility whatsoever for the
performance of any obligation of the Borrower under this Agreement or any other
Loan Document.

Section 11.8. Rights Cumulative.

(a) The rights and remedies of the Administrative Agent, the Issuing Bank, and
the Lenders under this Agreement, each of the other Loan Documents and the Fee
Letter shall be cumulative and not exclusive of any rights or remedies which any
of them may otherwise have under Applicable Law. In exercising their respective
rights and remedies the Administrative Agent, the Issuing Bank and the Lenders
may be selective and no failure or delay by the Administrative Agent, the
Issuing Bank or any of the Lenders in exercising any right shall operate as a
waiver of it, nor shall any single or partial exercise of any power or right
preclude its other or further exercise or the exercise of any other power or
right.

(b) Enforcement by Administrative Agent. Notwithstanding anything to the
contrary contained herein or in any other Loan Document, the authority to
enforce rights and remedies hereunder and under the other Loan Documents against
the Loan Parties or any of them shall be vested exclusively in, and all actions
and proceedings at law in connection with such enforcement shall be instituted
and maintained exclusively by, the Administrative Agent in accordance with
Article XI. for the benefit of all the Lenders and the Issuing Bank; provided
that the foregoing shall not prohibit (i) the Administrative Agent from
exercising on its own behalf the rights and remedies that inure to its benefit
(solely in its capacity as Administrative Agent) hereunder and under the other
Loan Documents, (ii) the Issuing Bank, the Swingline Lender or any Specified
Derivatives Provider from exercising the rights and remedies that inure to its
benefit (solely in its capacity as the Issuing Bank, Swingline Lender or
Specified Derivatives Provider, as the case may be) hereunder, under the other
Loan Documents or under any Specified Derivatives Contract, as applicable,
(iii) any

 

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Lender from exercising setoff rights in accordance with Section 13.4. (subject
to the terms of Section 3.3.), or (iv) any Lender from filing proofs of claim or
appearing and filing pleadings on its own behalf during the pendency of a
proceeding relative to any Loan Party under any Debtor Relief Law; and provided,
further, that if at any time there is no Person acting as Administrative Agent
hereunder and under the other Loan Documents, then (x) the Requisite Lenders
shall have the rights otherwise ascribed to the Administrative Agent pursuant to
Article XI. and (y) in addition to the matters set forth in clauses (ii),
(iii) and (iv) of the preceding proviso and subject to Section 3.3., any Lender
may, with the consent of the Requisite Lenders, enforce any rights and remedies
available to it and as authorized by the Requisite Lenders.

ARTICLE XII. THE ADMINISTRATIVE AGENT

Section 12.1. Appointment and Authorization.

Each Lender hereby irrevocably appoints and authorizes the Administrative Agent
to take such action as contractual representative on such Lender’s behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
specifically delegated to the Administrative Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto. Not in
limitation of the foregoing, each Lender authorizes and directs the
Administrative Agent to enter into the Loan Documents for the benefit of the
Lenders. Each Lender hereby agrees that, except as otherwise set forth herein,
any action taken by the Requisite Lenders in accordance with the provisions of
this Agreement or the Loan Documents, and the exercise by the Requisite Lenders
of the powers set forth herein or therein, together with such other powers as
are reasonably incidental thereto, shall be authorized and binding upon all of
the Lenders. Nothing herein shall be construed to deem the Administrative Agent
a trustee or fiduciary for any Lender or to impose on the Administrative Agent
duties or obligations other than those expressly provided for herein. Without
limiting the generality of the foregoing, the use of the terms “Agent”,
“Administrative Agent”, “agent” and similar terms in the Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
Applicable Law. Instead, use of such terms is merely a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties. The Administrative Agent shall deliver to each
Lender, promptly upon receipt thereof by the Administrative Agent, copies of
each of the financial statements, certificates, notices and other documents
delivered to the Administrative Agent pursuant to Article IX. that the Borrower
is not otherwise required to deliver directly to the Lenders. The Administrative
Agent will furnish to any Lender, upon the request of such Lender, a copy (or,
where appropriate, an original) of any document, instrument, agreement,
certificate or notice furnished to the Administrative Agent by the Borrower, any
other Loan Party or any other Affiliate of the Borrower, pursuant to this
Agreement or any other Loan Document not already delivered to such Lender
pursuant to the terms of this Agreement or any such other Loan Document. As to
any matters not expressly provided for by the Loan Documents (including, without
limitation, enforcement or collection of any of the Obligations), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Requisite Lenders (or all of the Lenders if explicitly required under any
other provision of this Agreement), and such instructions shall be binding upon
all Lenders and all holders of any of the Obligations; provided, however, that,
notwithstanding anything in this Agreement to the contrary, the Administrative
Agent shall not be required to take any action which exposes the Administrative
Agent to personal liability or which is contrary to this Agreement or any other
Loan Document or Applicable Law. Not in limitation of the foregoing, the
Administrative Agent may exercise any right or remedy it or the Lenders may have
under any Loan Document upon the occurrence of a Default or an Event of Default
unless the Requisite Lenders have directed the Administrative Agent otherwise.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against the Administrative Agent as a result of the Administrative
Agent acting or refraining from acting under this Agreement or any of the other
Loan Documents in accordance with the instructions of the Requisite Lenders, or
where applicable, all the Lenders.

 

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Section 12.2. Administrative Agent’s Reliance.

Notwithstanding any other provisions of this Agreement or any other Loan
Documents, neither the Administrative Agent nor any of its directors, officers,
agents, employees or counsel shall be liable for any action taken or not taken
by it under or in connection with this Agreement or any other Loan Document,
except for its or their own gross negligence or willful misconduct in connection
with its duties expressly set forth herein or therein as determined by a court
of competent jurisdiction in a final non-appealable judgment. Without limiting
the generality of the foregoing, the Administrative Agent may consult with legal
counsel (including its own counsel or counsel for the Parent, the Borrower or
any other Loan Party), independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel, accountants or
experts. Neither the Administrative Agent nor any of its directors, officers,
agents, employees or counsel: (a) makes any warranty or representation to any
Lender, the Issuing Bank or any other Person, and shall be responsible to any
Lender, the Issuing Bank or any other Person for any statement, warranty or
representation made or deemed made by the Borrower, any other Loan Party or any
other Person in or in connection with this Agreement or any other Loan Document;
(b) shall have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or any
other Loan Document or the satisfaction of any conditions precedent under this
Agreement or any Loan Document on the part of the Borrower or other Persons, or
to inspect the property, books or records of the Borrower or any other Person;
(c) shall be responsible to any Lender or the Issuing Bank for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any other Loan Document, any other instrument or document
furnished pursuant thereto or any collateral covered thereby or the perfection
or priority of any Lien in favor of the Administrative Agent on behalf of the
Lenders and the Issuing Bank in any such collateral; (d) shall have any
liability in respect of any recitals, statements, certifications,
representations or warranties contained in any of the Loan Documents or any
other document, instrument, agreement, certificate or statement delivered in
connection therewith; and (e) shall incur any liability under or in respect of
this Agreement or any other Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telephone, telecopy
or electronic mail) believed by it to be genuine and signed, sent or given by
the proper party or parties. The Administrative Agent may execute any of its
duties under the Loan Documents by or through agents, employees or
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects in the absence of gross
negligence or willful misconduct as determined by a court of competent
jurisdiction in a final non-appealable judgment. Unless set forth in writing to
the contrary, the making of its initial Loan by a Lender shall constitute a
certification by such Lender to the Administrative Agent and the other Lenders
that the conditions precedent for initial Loans set forth in Sections 6.1. and
6.2. that have not previously been waived by the Requisite Lenders have been
satisfied.

Section 12.3. Notice of Events of Default.

The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Administrative Agent has
received notice from a Lender or the Borrower referring to this Agreement,
describing with reasonable specificity such Default or Event of Default and
stating that such notice is a “notice of default.” If any Lender (excluding the
Lender which is also serving as the Administrative Agent) becomes aware of any
Default or Event of Default, it shall promptly send to the Administrative Agent
such a “notice of default”. Further, if the Administrative Agent receives such a
“notice of default,” the Administrative Agent shall give prompt notice thereof
to the Lenders.

 

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Section 12.4. Wells Fargo as Lender.

Wells Fargo, as a Lender, shall have the same rights and powers under this
Agreement and any other Loan Document, as the case may be, as any other Lender
and may exercise the same as though it were not the Administrative Agent; and
the term “Lender” or “Lenders” shall, unless otherwise expressly indicated,
include Wells Fargo in each case in its individual capacity. Wells Fargo and its
affiliates may each accept deposits from, maintain deposits or credit balances
for, invest in, lend money to, act as trustee under indentures of, serve as
financial advisor to, and generally engage in any kind of business with, the
Parent, the Borrower, any other Loan Party or any other affiliate thereof as if
it were any other bank and without any duty to account therefor to the Issuing
Bank or other Lenders. Further, the Administrative Agent and any affiliate may
accept fees and other consideration from the Loan Parties for services in
connection with this Agreement or otherwise without having to account for the
same to the Issuing Bank or the other Lenders. The Issuing Bank and the Lenders
acknowledge that, pursuant to such activities, Wells Fargo or its affiliates may
receive information regarding the Parent, the Borrower, other Loan Parties,
other Subsidiaries and other Affiliates (including information that may be
subject to confidentiality obligations in favor of such Person) and acknowledge
that the Administrative Agent shall be under no obligation to provide such
information to them.

Section 12.5. Approvals of Lenders.

All communications from the Administrative Agent to any Lender requesting such
Lender’s determination, consent, approval or disapproval (a) shall be given in
the form of a written notice to such Lender, (b) shall be accompanied by a
description of the matter or issue as to which such determination, approval,
consent or disapproval is requested, or shall advise such Lender where
information, if any, regarding such matter or issue may be inspected, or shall
otherwise describe the matter or issue to be resolved, (c) shall include, if
reasonably requested by such Lender and to the extent not previously provided to
such Lender, written materials and, as appropriate, a brief summary of all oral
information provided to the Administrative Agent by the Parent or the Borrower
in respect of the matter or issue to be resolved, and (d) shall include the
Administrative Agent’s recommended course of action or determination in respect
thereof. Unless a Lender shall give written notice to the Administrative Agent
that it specifically objects to the recommendation or determination of the
Administrative Agent (together with a reasonable written explanation of the
reasons behind such objection) within ten (10) Business Days (or such lesser or
greater period as may be specifically required under the express terms of the
Loan Documents) of receipt of such communication, such Lender shall be deemed to
have conclusively approved of or consented to such recommendation or
determination. With respect to decisions requiring the approval of the Requisite
Lenders, Administrative Agent shall timely submit any required written notices
to all Lenders and upon receiving the required approval or consent shall follow
the course of action or determination recommended by Administrative Agent or
such other course of action recommended by the Requisite Lenders, and each
non-responding Lender shall be deemed to have concurred with such recommended
course of action. Notwithstanding the foregoing, any matter requiring all
Lenders’ approval or consent shall not be deemed given by any Lender’s failure
to respond within any such Lender’s Reply Period.

 

 

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Section 12.6. Lender Credit Decision, Etc.

Each of the Lenders and the Issuing Bank expressly acknowledges and agrees that
neither the Administrative Agent nor any of its officers, directors, employees,
agents, counsel, attorneys-in-fact or other affiliates has made any
representations or warranties to the Issuing Bank or such Lender and that no act
by the Administrative Agent hereafter taken, including any review of the affairs
of the Parent, the Borrower, any other Loan Party or any other Subsidiary or
Affiliate, shall be deemed to constitute any such representation or warranty by
the Administrative Agent to the Issuing Bank or any Lender. Each of the Lenders
and the Issuing Bank acknowledges that it has made its own credit and legal
analysis and decision to enter into this Agreement and the transactions
contemplated hereby, independently and without reliance upon the Administrative
Agent, any other Lender or counsel to the Administrative Agent, or any of their
respective officers, directors, employees, agents or counsel, and based on the
financial statements of the Parent, the Borrower, the other Loan Parties, the
other Subsidiaries and other Affiliate thereof, and inquiries of such Persons,
its independent due diligence of the business and affairs of the Parent, the
Borrower, the other Loan Parties, the other Subsidiaries and other Persons, its
review of the Loan Documents, the legal opinions required to be delivered to it
hereunder, the advice of its own counsel and such other documents and
information as it has deemed appropriate. Each of the Lenders and the Issuing
Bank also acknowledges that it will, independently and without reliance upon the
Administrative Agent, any other Lender or counsel to the Administrative Agent or
any of their respective officers, directors, employees and agents, and based on
such review, advice, documents and information as it shall deem appropriate at
the time, continue to make its own decisions in taking or not taking action
under the Loan Documents. The Administrative Agent shall not be required to keep
itself informed as to the performance or observance by the Parent, the Borrower
or any other Loan Party of the Loan Documents or any other document referred to
or provided for therein or to inspect the properties or books of, or make any
other investigation of, the Parent, the Borrower, any other Loan Party or any
other Subsidiary. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders and the Issuing
Bank by the Administrative Agent under this Agreement or any of the other Loan
Documents, the Administrative Agent shall have no duty or responsibility to
provide any Lender or the Issuing Bank with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Parent, the Borrower, any other Loan Party or any other
Affiliate thereof which may come into possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or other
Affiliates. Each of the Lenders and the Issuing Bank acknowledges that the
Administrative Agent’s legal counsel in connection with the transactions
contemplated by this Agreement is only acting as counsel to the Administrative
Agent and is not acting as counsel to any Lender or the Issuing Bank.

Section 12.7. Indemnification of Administrative Agent.

Each Lender agrees to indemnify the Administrative Agent (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so) pro rata in accordance with such Lender’s respective Commitment
Percentage, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, reasonable out-of-pocket costs
and expenses of any kind or nature whatsoever which may at any time be imposed
on, incurred by, or asserted against the Administrative Agent (in its capacity
as Administrative Agent but not as a Lender) in any way relating to or arising
out of the Loan Documents, any transaction contemplated hereby or thereby or any
action taken or omitted by the Administrative Agent under the Loan Documents
(collectively, “Indemnifiable Amounts”); provided, however, that no Lender shall
be liable for any portion of such Indemnifiable Amounts to the extent resulting
from the Administrative Agent’s gross negligence or willful misconduct as
determined by a court of competent jurisdiction in a final, non-appealable
judgment; provided, however, that no action taken in accordance with the
directions of the Requisite Lenders (or all of the Lenders, if expressly
required hereunder) shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section. Without limiting the generality of the
foregoing, each Lender agrees to reimburse the Administrative Agent (to the
extent not reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so) promptly upon demand for its ratable share of any
out-of-pocket expenses (including the reasonable fees and expenses of the
counsel to the Administrative Agent) incurred by the Administrative Agent in
connection with the preparation, negotiation, execution, administration, or
enforcement (whether through negotiations, legal proceedings, or otherwise) of,
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rights or responsibilities of the parties under, the Loan Documents, any suit or
action brought by the Administrative Agent to enforce the terms of the Loan
Documents and/or collect any Obligations, any “lender liability” suit or claim
brought against the Administrative Agent and/or the Lenders, and any claim or
suit brought against the Administrative Agent and/or the Lenders arising under
any Environmental Laws. Such out-of-pocket expenses (including counsel fees)
shall be advanced by the Lenders on the request of the Administrative Agent
notwithstanding any claim or assertion that the Administrative Agent is not
entitled to indemnification hereunder upon receipt of an undertaking by the
Administrative Agent that the Administrative Agent will reimburse the Lenders if
it is actually and finally determined by a court of competent jurisdiction that
the Administrative Agent is not so entitled to indemnification. The agreements
in this Section shall survive the payment of the Loans and all other amounts
payable hereunder or under the other Loan Documents and the termination of this
Agreement. If the Borrower shall reimburse the Administrative Agent for any
Indemnifiable Amount following payment by any Lender to the Administrative Agent
in respect of such Indemnifiable Amount pursuant to this Section, the
Administrative Agent shall share such reimbursement on a ratable basis with each
Lender making any such payment.

Section 12.8. Successor Administrative Agent.

(a) The Administrative Agent may (i) resign at any time as Administrative Agent
under the Loan Documents by giving written notice thereof to the Lenders and the
Borrower or (ii) be removed as Administrative Agent under the Loan Documents for
gross negligence or willful misconduct, as determined by a court of competent
jurisdiction in a final, non-appealable judgment, upon 30 days’ prior written
notice by all Lenders (other than the Lender then acting as Administrative
Agent). Upon any such resignation or removal, the Requisite Lenders shall have
the right to appoint a successor Administrative Agent which appointment shall,
provided no Default or Event of Default exists, be subject to the Borrower’s
approval, which approval shall not be unreasonably withheld or delayed (except
that the Borrower shall, in all events, be deemed to have approved each Lender
and any of its Affiliates as a successor Administrative Agent). If no successor
Administrative Agent shall have been so appointed in accordance with the
immediately preceding sentence, and shall have accepted such appointment, within
30 days after the resigning Administrative Agent’s giving of notice of
resignation or the giving of notice of removal of the Administrative Agent, then
the current Administrative Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Administrative Agent, which shall be a Lender, if any
Lender shall be willing to serve, or otherwise shall be a financial institution
having total combined assets of at least $50,000,000,000 and an Eligible
Assignee or another Person acceptable to the Requisite Lenders.

(b) The Administrative Agent may be removed as Administrative Agent under the
Loan Documents, with or without cause, upon 15 days’ prior written notice from
the Borrower to the Administrative Agent and all the Lenders; provided that upon
such removal Bank of America, N.A. is appointed as successor Administrative
Agent (in such capacity, “Successor Agent”) and accepts such appointment
thereof. Wells Fargo, as the retiring Administrative Agent, shall, at the sole
cost and expense of the Borrower, take such actions and furnish such
information, documents, instruments and agreements as are customary in its
business practices and may be reasonably requested from time to time by
Successor Agent in order to facilitate and complete the transfer of the
administrative agency function to the Successor Agent.

 

 

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(c) If the Administrative Agent shall notify the Borrower and the Lenders that
no Lender has accepted such appointment, then such resignation shall nonetheless
become effective in accordance with such notice and (1) the Administrative Agent
shall be discharged from its duties and obligations hereunder and under the
other Loan Documents and (2) all payments, communications and determinations
provided to be made by, to or through the Administrative Agent shall instead be
made to each Lender and the Issuing Bank directly, until such time as a
successor Administrative Agent has been appointed as provided for above in this
Section; provided, further that such Lenders and the Issuing Bank so acting
directly shall be and be deemed to be protected by all indemnities and other
provisions herein for the benefit and protection of the Administrative Agent as
if each such Lender or Issuing Bank were itself the Administrative Agent. Upon
the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent pursuant to the terms of clause (a) or (b) above,
such successor Administrative Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the current Administrative
Agent, and the current Administrative Agent shall be discharged from its duties
and obligations under the Loan Documents. Such successor Administrative Agent
shall issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or shall make other arrangements
satisfactory to the current Administrative Agent, in either case, to assume
effectively the obligations of the current Administrative Agent with respect to
such Letters of Credit. After any Administrative Agent’s resignation or removal
hereunder as Administrative Agent pursuant to the terms of clause (a) or
(b) above, the provisions of this Article XII. shall continue to inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under the Loan Documents. Notwithstanding anything
contained herein to the contrary, the Administrative Agent may assign its rights
and duties under the Loan Documents to any of its Affiliates by giving the
Borrower and each Lender prior written notice.

Section 12.9. Titled Agents.

Each of the Lead Arrangers, the Syndication Agent and the Documentation Agent
(each a “Titled Agent”) in each such respective capacity, assumes no
responsibility or obligation hereunder, including, without limitation, for
servicing, enforcement or collection of any of the Loans, nor any duties as an
agent hereunder for the Lenders. The titles given to the Titled Agents are
solely honorific and imply no fiduciary responsibility on the part of the Titled
Agents to the Administrative Agent, the Issuing Bank, any Lender, the Parent,
the Borrower or any other Loan Party and the use of such titles does not impose
on the Titled Agents any duties or obligations greater than those of any other
Lender or entitle the Titled Agents to any rights other than those to which any
other Lender is entitled.

ARTICLE XIII. MISCELLANEOUS

Section 13.1. Notices.

Unless otherwise provided herein (including without limitation as provided in
Section 9.5.), communications provided for hereunder shall be in writing and
shall be mailed, telecopied, or delivered as follows:

If to the Borrower and/or the Parent:

DiamondRock Hospitality Limited Partnership

3 Bethesda Metro Center, Suite 1500

Bethesda, Maryland 20814

Attn: Chief Financial Officer and General Counsel

Telephone:   240-744-1190

Telecopy:     240-744-1199

 

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with a copy to:

Willkie Farr & Gallagher LLP

787 Seventh Ave.

New York, New York 10019

Attn: Steven D. Klein

Telephone:  212-728-8221

Telecopy:     212-728-9221

If to the Administrative Agent:

Wells Fargo Bank, National Association

1750 H Street, NW, #550

Washington, D.C. 20006

Attention: Mark F. Monahan

Telecopier: 202-429-2589

Telephone: 202-303-3017

with a copy to:

Wells Fargo Bank, National Association

120 Mountain View Blvd., Ste. 200

Basking Ridge, NJ 07920

Attention: Kimberely Y. Gross

Telecopier: 908-542-2092

Telephone: 908-542-2089

If to the Issuing Bank:

Wells Fargo Bank, National Association

1750 H Street, NW, #550

Washington, D.C. 20006

Attention: Mark F. Monahan

Telecopier: 202-429-2589

Telephone: 202-303-3017

with a copy to:

Wells Fargo Bank, National Association

120 Mountain View Blvd., Ste. 200

Basking Ridge, NJ 07920

Attention: Kimberely Y. Gross

Telecopier: 908-542-2092

Telephone: 908-542-2089

with a copy to:

Wells Fargo Bank, N.A.

U.S. Trade Services—Standby Letter of Credit

One Front Street, 21st Floor

San Francisco, CA 94111

Telephone: 800-798-2815, Option 1

Telecopier: 415-296-8905

 

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If to any other Lender:

To such Lender’s address or telecopy number as set forth in the applicable
Administrative Questionnaire.

or, as to each party at such other address as shall be designated by such party
in a written notice to the other parties delivered in compliance with this
Section; provided, a Lender or the Issuing Bank shall only be required to give
notice of any such other address to the Administrative Agent and the Borrower.
All such notices and other communications shall be effective (i) if mailed or
sent by overnight courier, upon the first to occur of receipt or the expiration
of 3 days after the deposit in the United States Postal Service mail, postage
prepaid and addressed to the address of the Parent or the Borrower or the
Administrative Agent, the Issuing Bank and Lenders at the addresses specified;
(ii) if telecopied, when transmitted; (iii) if hand delivered, when delivered;
or (iv) if delivered in accordance with Section 9.5. to the extent applicable;
provided, however, that, in the case of the immediately preceding clauses (i),
(ii) and (iii), non-receipt of any communication as of the result of any change
of address of which the sending party was not notified or as the result of a
refusal to accept delivery shall be deemed receipt of such communication.
Notwithstanding the immediately preceding sentence, all notices or
communications to the Administrative Agent, the Issuing Bank or any Lender under
Article II. shall be effective only when actually received. None of the
Administrative Agent, the Issuing Bank or any Lender shall incur any liability
to any Loan Party (nor shall the Administrative Agent incur any liability to the
Issuing Bank or the Lenders) for acting upon any telephonic notice referred to
in this Agreement which the Administrative Agent, the Issuing Bank or such
Lender, as the case may be, believes in good faith to have been given by a
Person authorized to deliver such notice or for otherwise acting in good faith
hereunder. Failure of a Person designated to get a copy of a notice to receive
such copy shall not affect the validity of notice properly given to another
Person.

Section 13.2. Expenses.

The Borrower agrees (a) to pay or reimburse the Administrative Agent for all of
its reasonable out-of-pocket costs and expenses incurred in connection with the
preparation, negotiation and execution of, and any amendment, supplement or
modification to, any of the Loan Documents (including due diligence expenses and
reasonable travel expenses related to closing), and the consummation of the
transactions contemplated hereby and thereby, including the reasonable fees and
disbursements of counsel to the Administrative Agent and all costs and expenses
of the Administrative Agent in connection with the use of IntraLinks, SyndTrak
or other similar information transmission systems in connection with the Loan
Documents and of the Administrative Agent in connection with the review of
Properties for inclusion as Unencumbered Borrowing Base Properties and the
Administrative Agent’s other activities under Article IV., including the
reasonable fees and disbursements of counsel to the Administrative Agent
relating to all such activities, (b) to pay or reimburse the Administrative
Agent, the Issuing Bank and the Lenders for all their reasonable costs and
expenses incurred in connection with the enforcement or preservation of any
rights under the Loan Documents and the Fee Letter, including the reasonable
fees and disbursements of their respective counsel (including the allocated fees
and expenses of in-house counsel) and any payments in indemnification or
otherwise payable by the Lenders to the Administrative Agent pursuant to the
Loan Documents, (c) to pay, and indemnify and hold harmless the Administrative
Agent, the Issuing Bank and the Lenders from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any failure
to pay or delay in paying, documentary, stamp, excise and other similar taxes,
if any, which may be payable or determined to be payable in connection with the
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delivery of any of the Loan Documents, or consummation of any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
any Loan Document and (d) to the extent not already covered by any of the
preceding subsections, to pay or reimburse the fees and disbursements of counsel
to the Administrative Agent, the Issuing Bank and any Lender incurred in
connection with the representation of the Administrative Agent, the Issuing Bank
or such Lender in any matter relating to or arising out of any bankruptcy or
other proceeding of the type described in Sections 11.1.(f) or 11.1.(g),
including, without limitation (i) any motion for relief from any stay or similar
order, (ii) the negotiation, preparation, execution and delivery of any document
relating to the Obligations and (iii) the negotiation and preparation of any
debtor-in-possession financing or any plan of reorganization of the Borrower or
any other Loan Party, whether proposed by the Borrower, such Loan Party, the
Lenders or any other Person, and whether such fees and expenses are incurred
prior to, during or after the commencement of such proceeding or the
confirmation or conclusion of any such proceeding. If the Borrower shall fail to
pay any amounts required to be paid by it pursuant to this Section, the
Administrative Agent and/or the Lenders may pay such amounts on behalf of the
Borrower and such amounts shall be deemed to be Obligations owing hereunder.

Section 13.3. Stamp, Intangible and Recording Taxes.

The Borrower will pay any and all stamp, excise, intangible, registration,
recordation and similar taxes, fees or charges and shall indemnify the
Administrative Agent and each Lender against any and all liabilities with
respect to or resulting from any delay in the payment or omission to pay any
such taxes, fees or charges, which may be payable or determined to be payable in
connection with the execution, delivery, recording, performance or enforcement
of this Agreement, the Notes and any of the other Loan Documents, the amendment,
supplement, modification or waiver of or consent under this Agreement, the Notes
or any of the other Loan Documents or the perfection of any rights or Liens
under this Agreement, the Notes or any of the other Loan Documents.

Section 13.4. Setoff.

Subject to Section 3.3. and in addition to any rights now or hereafter granted
under Applicable Law and not by way of limitation of any such rights, the
Borrower hereby authorizes the Administrative Agent, the Issuing Bank, each
Lender, each Affiliate of the Administrative Agent, the Issuing Bank or any
Lender, and each Participant (but not Affiliates of a Participant), at any time
or from time to time, to the fullest extent permitted by Applicable Law, while
an Event of Default exists, without notice to the Borrower or to any other
Person, any such notice being hereby expressly waived, but in the case of the
Issuing Bank, a Lender, an Affiliate of the Issuing Bank or a Lender, or a
Participant, subject to receipt of the prior written consent of the
Administrative Agent exercised in its sole discretion, to set off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other indebtedness at any time held or owing by
the Administrative Agent, the Issuing Bank, such Lender, any Affiliate of the
Administrative Agent, the Issuing Bank or such Lender, or such Participant, to
or for the credit or the account of the Borrower against and on account of any
of the Obligations, irrespective of whether or not any or all of the Loans and
all other Obligations have been declared to be, or have otherwise become, due
and payable as permitted by Section 11.2., and although such Obligations shall
be contingent or unmatured. Notwithstanding anything to the contrary in this
Section, if 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 3.9.
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 Bank 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 and the Issuing Bank agree to make
reasonable efforts to notify the Borrower promptly after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application.

 

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Section 13.5. Litigation; Jurisdiction; Other Matters; Waivers.

(a) EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN OR
AMONG THE PARENT, THE BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR
ANY OF THE LENDERS WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND
FACT AND WOULD RESULT IN DELAY AND EXPENSE TO THE PARTIES. ACCORDINGLY, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE LENDERS, THE ADMINISTRATIVE
AGENT, THE ISSUING BANK, THE PARENT AND THE BORROWER HEREBY WAIVES ITS RIGHT TO
A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT
OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO
ARISING OUT OF THIS AGREEMENT, THE NOTES, ANY OTHER LOAN DOCUMENT OR THE FEE
LETTER OR BY REASON OF ANY OTHER SUIT, CAUSE OF ACTION OR DISPUTE WHATSOEVER
BETWEEN OR AMONG THE PARENT, THE BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING
BANK OR ANY OF THE LENDERS OF ANY KIND OR NATURE RELATING TO ANY OF THE LOAN
DOCUMENTS.

(b) EACH OF THE PARENT, THE BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING BANK
AND EACH LENDER HEREBY AGREES THAT THE FEDERAL DISTRICT COURT OF THE SOUTHERN
DISTRICT OF NEW YORK AND ANY STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN OF
NEW YORK, NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES BETWEEN OR AMONG THE PARENT, THE BORROWER, THE ADMINISTRATIVE
AGENT, THE ISSUING BANK OR ANY OF THE LENDERS, ARISING OUT OF THIS AGREEMENT,
ANY OTHER LOAN DOCUMENT OR THE FEE LETTER OR IN CONNECTION WITH OR BY REASON OF
ANY OTHER SUIT, CAUSE OF ACTION OR DISPUTE WHATSOEVER BETWEEN OR AMONG THE
PARENT, THE BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY OF THE
LENDERS OF ANY KIND OR NATURE RELATING TO ANY OF THE LOAN DOCUMENTS. THE PARENT,
THE BORROWER, THE ISSUING BANK AND EACH OF THE LENDERS EXPRESSLY SUBMIT AND
CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN
SUCH COURTS. EACH PARTY FURTHER 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 FORUM AND EACH
AGREES NOT TO PLEAD OR CLAIM THE SAME. THE CHOICE OF FORUM SET FORTH IN THIS
SECTION SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE
ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER REGARDING THE ENFORCEMENT
BY THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER OF ANY JUDGMENT
OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.

(c) THE PROVISIONS OF THIS SECTION HAVE BEEN CONSIDERED BY EACH PARTY WITH THE
ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES
THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS
PAYABLE HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS, THE TERMINATION OR
EXPIRATION OF ALL LETTERS OF CREDIT AND THE TERMINATION OF THIS AGREEMENT.

 

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Section 13.6. Successors and Assigns.

(a) Successors and Assigns Generally. 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, except that neither the Parent or the
Borrower may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Administrative Agent and each
Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of the immediately following subsection (b), (ii) by way of
participation in accordance with the provisions of the immediately following
subsection (d) or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of the immediately following subsection (f) (and any
other attempted assignment or transfer by any party hereto shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
the immediately following subsection (d) and, to the extent expressly
contemplated hereby, the Related Parties of the Administrative Agent and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it); provided that any such assignment shall be subject to the
following conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of an assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum
amount need be assigned; and

(B) in any case not described in the immediately preceding subsection (A), the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loans of the assigning Lender subject
to each such assignment (in each case, determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date) shall not be less than $5,000,000 in the case
of any assignment of a Commitment, unless each of the Administrative Agent and,
so long as no Default or Event of Default shall exist, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed);
provided, however, that if, after giving effect to such assignment, the amount
of the Commitment held by such assigning Lender or the outstanding principal
balance of the Loans of such assigning Lender, as applicable, would be less than
$5,000,000, then such assigning Lender shall assign the entire amount of its
Commitment and the Loans at the time owing to it.

(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan or the Commitment
assigned.

 

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(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by clause (i)(B) of this subsection (b) and, in addition:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (x) a Default or Event of Default shall exist
at the time of such assignment or (y) such assignment is to a Lender, to an
Affiliate of a Lender or to an Approved Fund; provided that 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 10 Business Days
after having received notice thereof;

(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of a
Commitment if such assignment is to a Person that is not already a Lender with a
Commitment, an Affiliate of such Lender or an Approved Fund with respect to such
Lender; and

(C) the consent of the Issuing Bank and the Swingline Lender (such consent not
to be unreasonably withheld or delayed), as applicable, shall be required for
any assignment that increases the obligation of the assignee to participate in
exposure under one or more Letters of Credit or Swingline Loans (whether or not
then outstanding), as applicable; provided, however, that no such consent is
required if such assignment is to a Person that is already a Lender with a
Commitment, an Affiliate of such Lender or an Approved Fund with respect to such
Lender.

(iv) Assignment and Acceptance. The parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500 (or $7,500 in the case of an
assignment by a Defaulting Lender)(which fee the Administrative Agent may waive
in its sole discretion) for each assignment, and the assignee, if it is not a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

(v) No Assignment to Certain Person. No such assignment shall be made to (A) the
Borrower or any of the Borrower’s Affiliates or Subsidiaries or (B) to any
Defaulting Lender or any of its Subsidiaries, or to any Person who, upon
becoming a Lender hereunder, would constitute any of the foregoing Persons
described in this clause (B).

(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.

(vii) Certain Additional Payments. 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
Bank, 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 Letters of Credit and Swingline Loans in
accordance with its Commitment 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.

 

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Subject to acceptance and recording thereof by the Administrative Agent pursuant
to the immediately following subsection (c), from and after the effective date
specified in each Assignment and Assumption, the assignee thereunder shall be a
party to this Agreement 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 5.4., 13.2. and 13.10. and the other
provisions of this Agreement and the other Loan Documents as provided in
Section 13.11. with respect to facts and circumstances occurring prior to the
effective date of such assignment. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
paragraph 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 the
immediately following subsection (d).

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Principal Office 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 Commitments of, and principal
amounts of the Loans 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 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 and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Parent, the Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person, a Defaulting Lender
or the Borrower or any of their respective Affiliates or Subsidiaries) (each, a
“Participant”) in all or a portion of such Lender’s rights and/or obligations
under this Agreement (including all or a portion of its Commitment and/or the
Loans owing to it); provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Parent, the Borrower, the Administrative Agent and the 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 or
instrument 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 or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver of any provision of any Loan Document described in the
second sentence of Section 13.7. that adversely affects such Participant.
Subject to the immediately following subsection (e), the Borrower agrees that
each Participant shall be entitled to the benefits of Sections 3.10., 5.1., 5.4.
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
Applicable Law, each Participant also shall be entitled to the benefits of
Section 13.4. as though it were a Lender, provided such Participant agrees to be
subject to Section 3.3. 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

 

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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 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 commitment, loan, letter of credit 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. Upon request from the Administrative Agent, a Lender shall notify the
Administrative Agent and the Borrower of the sale of any participation
hereunder.

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Sections 3.10. and 5.1. than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 3.10. unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrower and the Administrative Agent, to comply with Section 3.10.(c) as though
it were a Lender.

(f) Certain Pledges. 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; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

(g) No Registration. Each Lender agrees that, without the prior written consent
of the Borrower and the Administrative Agent, it will not make any assignment
hereunder in any manner or under any circumstances that would require
registration or qualification of, or filings in respect of, any Loan or Note
under the Securities Act or any other securities laws of the United States of
America or of any other jurisdiction.

Section 13.7. Amendments and Waivers.

(a) Generally. Except as otherwise expressly provided in this Agreement, (i) any
consent or approval required or permitted by this Agreement or in any other Loan
Document to be given by the Lenders may be given, (ii) any term of this
Agreement or of any other Loan Document may be amended, (iii) the performance or
observance by the Parent, the Borrower, any other Loan Party or any other
Subsidiary of any terms of this Agreement or such other Loan Document may be
waived, and (iv) the continuance of any Default or Event of Default may be
waived (either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Requisite Lenders
(or the Administrative Agent at the written direction of the Requisite Lenders),
and, in the case of an amendment to any Loan Document, the written consent of
each Loan Party which is party thereto.

(b) Additional Lender Consents. In addition to the forgoing requirements, no
amendment, waiver or consent shall:

(i) increase (or reinstate) the Commitment of a Lender or subject a Lender to
any additional obligations without the written consent of such Lender;

 

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(ii) reduce the principal of, or interest that has accrued or the rates of
interest that will be charged on the outstanding principal amount of, any Loans
or other Obligations without the written consent of each Lender directly
affected thereby; provided, however, only the written consent of the Requisite
Lenders shall be required for the waiver of interest payable at the Post-Default
Rate, retraction of the imposition of interest at the Post-Default Rate and
amendment of the definition of “Post-Default Rate”;

(iii) reduce the amount of any Fees payable to a Lender hereunder or postpone
any date fixed for payment thereof without the written consent of such Lender;

(iv) modify the definition of “Termination Date” (except in accordance with
Section 2.12.) or otherwise postpone any date fixed for any payment of principal
of, or interest on, any Loans or for the payment of Fees or any other
Obligations (including the waiver of any Default or Event of Default as a result
of the nonpayment of any such Obligations as and when due), or extend the
expiration date of any Letter of Credit beyond the Termination Date, in each
case, without the written consent of each Lender;

(v) modify the definitions of “Commitment Percentage” or amend or otherwise
modify the provisions of Section 3.2., in each case, without the written consent
of each Lender;

(vi) amend this Section or amend the definitions of the terms used in this
Agreement or the other Loan Documents insofar as such definitions affect the
substance of this Section, in each case, without the written consent of each
Lender;

(vii) modify the definition of the term “Requisite Lenders” or modify in any
other manner the number or percentage of the Lenders required to make any
determinations or waive any rights hereunder or to modify any provision hereof,
in each case, without the written consent of each Lender;

(viii) modify any provision of a Loan Document the modification of which
expressly requires the consent of all Lenders or all Lenders directly affected
by such modification, in each case, without the written consent of all Lenders
or all such directly affected Lenders, as the case may be;

(ix) release any Guarantor from its obligations under the Guaranty except as
contemplated by Section 8.15., without the written consent of each Lender;

(x) waive a Default or Event of Default under Section 11.1.(a) or
Section 11.1.(b), in each case, without the written consent of each Lender
directly affected thereby; or

(xi) amend, or waive the Borrower’s compliance with, Section 2.14., in each
case, without the written consent of each Lender;

 

 

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(c) Amendment of Administrative Agent’s Duties, Etc. No amendment, waiver or
consent unless in writing and signed by the Administrative Agent, in addition to
the Lenders required hereinabove to take such action, shall affect the rights or
duties of the Administrative Agent under this Agreement or any of the other Loan
Documents. Any amendment, waiver or consent relating to Section 2.2. or the
obligations of the Issuing Bank under this Agreement or any other Loan Document
shall, in addition to the Lenders required hereinabove to take such action,
require the written consent of the Issuing Bank. Any amendment, waiver or
consent relating to Section 2.3. or the obligations of the Swingline Lender
under this Agreement or any other Loan Document shall, in addition to the
Lenders required hereinabove to take such action, require the written consent of
the Swingline Lender. No waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent thereon and any amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose set forth therein. Notwithstanding anything to the contrary
herein, no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder (and any amendment, waiver or consent
which by its terms requires the consent of all Lenders or each affected Lender
may be effected with the consent of the applicable Lenders other than Defaulting
Lenders), except that (x) the Commitments of any Defaulting Lender may not be
increased, reinstated or extended without the written consent of such Defaulting
Lender and (y) any waiver, amendment or modification requiring the consent of
all Lenders or each affected Lender that by its terms affects any Defaulting
Lender more adversely than other affected Lenders shall require the written
consent of such Defaulting Lender. Except as otherwise provided in
Section 12.5., no course of dealing or delay or omission on the part of the
Administrative Agent or any Lender in exercising any right shall operate as a
waiver thereof or otherwise be prejudicial thereto. Any Event of Default
occurring hereunder shall continue to exist until such time as such Event of
Default is waived in writing in accordance with the terms of this Section,
notwithstanding any attempted cure or other action by the Borrower, any other
Loan Party or any other Person subsequent to the occurrence of such Event of
Default. Except as otherwise explicitly provided for herein or in any other Loan
Document, no notice to or demand upon any Loan Party shall entitle such Loan
Party to other or further notice or demand in similar or other circumstances.

(d) Technical Amendments. Notwithstanding anything to the contrary in this
Section 13.7., if the Administrative Agent and the Borrower have jointly
identified an ambiguity, omission, mistake or defect in any provision of this
Agreement or an inconsistency between provisions of this Agreement, the
Administrative Agent and the Borrower shall be permitted to amend such provision
or provisions to cure such ambiguity, omission, mistake, defect or inconsistency
so long as to do so would not adversely affect the interests of the Lenders and
the Issuing Bank. Any such amendment shall become effective without any further
action or consent of any other party to this Agreement.

Section 13.8. Nonliability of Administrative Agent and Lenders.

The relationship between the Borrower, on the one hand, and the Lenders and the
Administrative Agent, on the other hand, shall be solely that of borrower and
lender. Neither the Administrative Agent nor any Lender shall have any fiduciary
responsibilities to the Borrower or the Parent and no provision in this
Agreement or in any of the other Loan Documents, and no course of dealing
between or among any of the parties hereto, shall be deemed to create any
fiduciary duty owing by the Administrative Agent or any Lender to any Lender,
the Borrower, any Subsidiary or any other Loan Party. Neither the Administrative
Agent nor any Lender undertakes any responsibility to the Borrower or the Parent
to review or inform the Borrower or the Parent of any matter in connection with
any phase of the business or operations of the Borrower or the Parent.

 

 

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Section 13.9. Confidentiality.

Except as otherwise provided by Applicable Law, the Administrative Agent, the
Issuing Bank and each Lender shall utilize all non-public information obtained
pursuant to the requirements of this Agreement which has been identified as
confidential or proprietary by the Parent, Borrower, the other Loan Parties and
other Subsidiaries in accordance with its customary procedure for handling
confidential information of this nature and in accordance with safe and sound
banking practices but in any event may make disclosure: (a) to any of their
respective Affiliates (provided any such Affiliate shall agree to keep such
information confidential in accordance with the terms of this Section); (b) as
reasonably requested by any bona fide potential Eligible Assignee, Participant
or other transferee in connection with the contemplated transfer of any
Commitment or participations therein as permitted hereunder (provided they shall
agree to keep such information confidential in accordance with the terms of this
Section or pursuant to terms at least as restrictive as this Section); (c) as
required or requested by any Governmental Authority or representative thereof or
pursuant to legal process or in connection with any legal proceedings; (d) to
the Administrative Agent’s, Issuing Bank’s or such Lender’s independent auditors
and other professional advisors (provided they shall be notified of the
confidential nature of the information); (e) if an Event of Default exists, to
any other Person, in connection with the exercise by the Administrative Agent,
the Issuing Bank or the Lenders of rights hereunder or under any of the other
Loan Documents; (f) upon Borrower’s prior consent (which consent shall not be
unreasonably withheld), to any contractual counter-parties to any swap or
similar hedging agreement or to any rating agency; and (g) to the extent such
information (x) becomes publicly available other than as a result of a breach of
this Section or (y) becomes available to the Administrative Agent, the Issuing
Bank or any Lender on a nonconfidential basis from a source other than the
Borrower or any Affiliate.

Section 13.10. Indemnification.

(a) The Borrower shall and hereby agrees to indemnify, defend and hold harmless
the Administrative Agent, the Issuing Bank, the Lenders, all of the Affiliates
of each of the Administrative Agent, the Issuing Bank or any of the Lenders, and
their respective Related Parties (each referred to herein as an “Indemnified
Party”) from and against any and all of the following (collectively, the
“Indemnified Costs”): losses, costs, claims, penalties, damages, liabilities,
deficiencies, judgments or reasonable expenses of every kind and nature
(including, without limitation, amounts paid in settlement, court costs and the
reasonable fees and disbursements of counsel incurred in connection with any
litigation, investigation, claim or proceeding or any advice rendered in
connection therewith, but excluding Indemnified Costs indemnification in respect
of which is specifically covered by Section 3.10. or 5.1. or expressly excluded
from the coverage of such Sections) incurred by an Indemnified Party in
connection with, arising out of, or by reason of, any suit, cause of action,
claim, arbitration, investigation or settlement, consent decree or other
proceeding (the foregoing referred to herein as an “Indemnity Proceeding”) which
is in any way related directly or indirectly to: (i) this Agreement or any other
Loan Document or the transactions contemplated thereby; (ii) the making of any
Loans or issuance of Letters of Credit hereunder; (iii) any actual or proposed
use by the Borrower of the proceeds of the Loans or Letters of Credit; (iv) the
Administrative Agent’s, the Issuing Bank’s or any Lender’s entering into this
Agreement; (v) the fact that the Administrative Agent, the Issuing Bank and the
Lenders have established the credit facility evidenced hereby in favor of the
Borrower; (vi) the fact that the Administrative Agent, the Issuing Bank and the
Lenders are creditors of the Parent, the Borrower and have or are alleged to
have information regarding the financial condition, strategic plans or business
operations of the Parent, the Borrower and the Subsidiaries; (vii) the fact that
the Administrative Agent, the Issuing Bank and the Lenders are material
creditors of the Parent, the Borrower and are alleged to influence directly or
indirectly the business decisions or affairs of the Parent, the Borrower and the
Subsidiaries or their financial condition; (viii) the exercise of any right or
remedy the Administrative Agent, the Issuing Bank or the Lenders may have under
this Agreement or the other Loan Documents; (ix) any civil penalty or fine
assessed by the OFAC against, and all reasonable costs and expenses (including
counsel fees and disbursements) incurred in connection with defense thereof by,
the Administrative Agent, the Issuing Bank or any Lender as a result of conduct
of the Borrower, any other Loan Party or any other Subsidiary that violates a
sanction administered or enforced by the OFAC; or (x) any violation or
non-compliance by the Parent, Borrower, any other Loan Party or any other
Subsidiary of any Applicable Law (including any Environmental Law) including,
but not limited to, any Indemnity Proceeding commenced by (A) the Internal
Revenue Service or state taxing authority or (B) any Governmental Authority or
other Person under any Environmental Law, including any Indemnity Proceeding
commenced by a Governmental Authority or other Person seeking remedial or other
action to cause the Borrower or its Subsidiaries (or its respective properties)
(or the Administrative Agent and/or the Lenders and/or the Issuing Bank as
successors to the Borrower) to be in compliance with such Environmental Laws;
provided, however, that the Borrower shall not be obligated to indemnify any
Indemnified Party for any acts or omissions of such Indemnified Party in
connection with matters described in this subsection to the extent arising from
the gross negligence or willful misconduct of such Indemnified Party, as
determined by a court of competent jurisdiction in a final, non-appealable
judgment.

 

 

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(b) The Borrower’s indemnification obligations under this Section shall apply to
all Indemnity Proceedings arising out of, or related to, the foregoing whether
or not an Indemnified Party is a named party in such Indemnity Proceeding. In
this connection, this indemnification shall cover all Indemnified Costs of any
Indemnified Party in connection with any deposition of any Indemnified Party or
compliance with any subpoena (including any subpoena requesting the production
of documents). This indemnification shall, among other things, apply to any
Indemnity Proceeding commenced by other creditors of the Borrower or any
Subsidiary, any shareholder of the Borrower or any Subsidiary (whether such
shareholder(s) are prosecuting such Indemnity Proceeding in their individual
capacity or derivatively on behalf of the Borrower), any account debtor of the
Borrower or any Subsidiary or by any Governmental Authority. If indemnification
is to be sought hereunder by an Indemnified Party, then such Indemnified Party
shall notify the Borrower of the commencement of any Indemnity Proceeding;
provided, however, that the failure to so notify the Borrower shall not relieve
the Borrower from any liability that it may have to such Indemnified Party
pursuant to this Section except to the extent such failure to notify materially
and adversely affects the Borrower.

(c) This indemnification shall apply to any Indemnity Proceeding arising during
the pendency of any bankruptcy proceeding filed by or against the Borrower
and/or any Subsidiary.

(d) All out-of-pocket fees and expenses of, and all amounts paid to
third-persons by, an Indemnified Party shall be advanced by the Borrower at the
request of such Indemnified Party notwithstanding any claim or assertion by the
Borrower that such Indemnified Party is not entitled to indemnification
hereunder upon receipt of an undertaking by such Indemnified Party that such
Indemnified Party will reimburse the Borrower if it is actually and finally
determined by a court of competent jurisdiction that such Indemnified Party is
not so entitled to indemnification hereunder.

(e) An Indemnified Party may conduct its own investigation and defense of, and
may formulate its own strategy with respect to, any Indemnity Proceeding covered
by this Section and, as provided above, all Indemnified Costs incurred by such
Indemnified Party shall be reimbursed by the Borrower. No action taken by legal
counsel chosen by an Indemnified Party in investigating or defending against any
such Indemnity Proceeding shall vitiate or in any way impair the obligations and
duties of the Borrower hereunder to indemnify and hold harmless each such
Indemnified Party; provided, however, that if (i) the Borrower is required to
indemnify an Indemnified Party pursuant hereto and (ii) the Borrower has
provided evidence reasonably satisfactory to such Indemnified Party that the
Borrower has the financial wherewithal to reimburse such Indemnified Party for
any amount paid by such Indemnified Party with respect to such Indemnity
Proceeding, such Indemnified Party shall not settle or compromise any such
Indemnity Proceeding without the prior written consent of the Borrower (which
consent shall not be unreasonably withheld or delayed). Notwithstanding the
foregoing, an Indemnified Party may settle or compromise any such Indemnity
Proceeding without the prior written consent of the Borrower where (x) no
monetary relief is sought against such Indemnified Party in such Indemnity
Proceeding or (y) there is an allegation of a violation of law by such
Indemnified Party.

(f) If and to the extent that the obligations of the Borrower hereunder are
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under Applicable Law.

 

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(g) The Borrower’s obligations under this Section shall survive any termination
of this Agreement and the other Loan Documents and the payment in full in cash
of the Obligations, and are in addition to, and not in substitution of, any of
the other obligations set forth in this Agreement or any other Loan Document to
which it is a party.

Section 13.11. Termination; Survival.

At such time as (a) all of the Commitments have been terminated, (b) all Letters
of Credit have terminated or expired (other than Letters of Credit the
expiration dates of which extend beyond the Termination Date as permitted under
Section 2.2.(b) and in respect of which the Borrower has satisfied the
requirements of such Section), (c) none of the Lenders is obligated any longer
under this Agreement to make any Loans and the Issuing Bank is no longer
obligated under this Agreement to issue Letters of Credit and (d) all
Obligations (other than obligations which survive as provided in the following
sentence) have been paid and satisfied in full, this Agreement shall terminate.
The indemnities to which the Administrative Agent, the Issuing Bank and the
Lenders are entitled under the provisions of Sections 3.10., 5.1., 5.4., 12.7.,
13.2. and 13.10. and any other provision of this Agreement and the other Loan
Documents, and the provisions of Section 13.5., shall continue in full force and
effect and shall protect the Administrative Agent, the Issuing Bank and the
Lenders (i) notwithstanding any termination of this Agreement, or of the other
Loan Documents, against events arising after such termination as well as before
and (ii) at all times after any such party ceases to be a party to this
Agreement with respect to all matters and events existing on or prior to the
date such party ceased to be a party to this Agreement. The Administrative Agent
agrees to furnish to the Borrower, upon the Borrower’s request and at the
Borrower’s sole cost and expense, any release, termination, or other agreement
or document evidencing the foregoing termination. The provisions of Section 13.9
shall survive termination of this Agreement for a period of one year.

Section 13.12. Severability of Provisions.

If any provision under this Agreement or the other Loan Documents shall be
determined by a court of competent jurisdiction to be invalid or unenforceable,
that provision shall be deemed severed from the Loan Documents, and the
validity, legality and enforceability of the remaining provisions shall remain
in full force as though the invalid, illegal, or unenforceable provision had
never been part of the Loan Documents.

Section 13.13. GOVERNING LAW.

THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.

Section 13.14. Counterparts.

To facilitate execution, this Agreement and any amendments, waivers, consents or
supplements may be executed in any number of counterparts as may be convenient
or required. It shall not be necessary that the signature of, or on behalf of,
each party, or that the signature of all persons required to bind any party,
appear on each counterpart. All counterparts shall collectively constitute a
single document. It shall not be necessary in making proof of this document to
produce or account for more than a single counterpart containing the respective
signatures of, or on behalf of, each of the parties hereto.

 

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Section 13.15. Obligations with Respect to Loan Parties.

The obligations of the Parent or the Borrower to direct or prohibit the taking
of certain actions by the other Loan Parties as specified herein shall be
absolute and not subject to any defense the Parent or the Borrower may have that
the Parent or the Borrower does not control such Loan Parties.

Section 13.16. Independence of Covenants.

All covenants hereunder shall be given in any jurisdiction independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists.

Section 13.17. Limitation of Liability.

None of the Administrative Agent, the Issuing Bank or any Lender, or any Related
Party shall have any liability with respect to, and each of the Parent and the
Borrower hereby waives, releases, and agrees not to sue any of them upon, any
claim for any special, indirect, incidental, or consequential damages suffered
or incurred by the Borrower in connection with, arising out of, or in any way
related to, this Agreement, any of the other Loan Documents or the Fee Letter,
or any of the transactions contemplated by this Agreement or any of the other
Loan Documents. Each of the Parent and the Borrower hereby waives, releases, and
agrees not to sue the Administrative Agent, the Issuing Bank or any Lender or
any of the Administrative Agent’s, the Issuing Bank’s or any Lender’s
affiliates, officers, directors, employees, attorneys, or agents for punitive
damages in respect of any claim in connection with, arising out of, or in any
way related to, this Agreement, any of the other Loan Documents, the Fee Letter,
or any of the transactions contemplated by this Agreement or financed hereby.

Section 13.18. Entire Agreement.

This Agreement, the Notes, the other Loan Documents and the Fee Letter embody
the final, entire agreement among the parties hereto and supersede any and all
prior commitments, agreements, representations, and understandings, whether
written or oral, relating to the subject matter hereof and thereof and may not
be contradicted or varied by evidence of prior, contemporaneous, or subsequent
oral agreements or discussions of the parties hereto. There are no oral
agreements among the parties hereto.

Section 13.19. Construction.

The Administrative Agent, the Issuing Bank, the Parent, the Borrower and each
Lender acknowledge that each of them has had the benefit of legal counsel of its
own choice and has been afforded an opportunity to review this Agreement and the
other Loan Documents with its legal counsel and that this Agreement and the
other Loan Documents shall be construed as if jointly drafted by the
Administrative Agent, the Issuing Bank, the Parent, the Borrower and each
Lender.

Section 13.20. Headings.

The paragraph and section headings in this Agreement are provided for
convenience of reference only and shall not affect its construction or
interpretation.

 

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Section 13.21. No Novation.

THE PARTIES HERETO HAVE ENTERED INTO THIS AGREEMENT SOLELY TO AMEND AND RESTATE
THE TERMS OF THE EXISTING CREDIT AGREEMENT. THE PARTIES DO NOT INTEND THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION OF
ANY OF THE OBLIGATIONS OWING BY THE BORROWER UNDER OR IN CONNECTION WITH THE
EXISTING CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS (AS DEFINED IN THE
EXISTING CREDIT AGREEMENT).

Section 13.22. New York Mortgages.

(a) Generally. The parties hereto acknowledge and agree that as an accommodation
to the Parent and the Borrower, the Administrative Agent, the Issuing Bank and
the Lenders may, from time to time, in their sole discretion, accept the
benefits of Mortgages encumbering real property located in the State of New York
assigned from time to time pursuant to the terms of this Section to the
Administrative Agent, for its benefit and the benefit of the Issuing Bank and
the Lenders (any such Mortgage a “New York Mortgage”).

(b) Assignment of New York Mortgages. In connection with the acceptance of the
benefits of a New York Mortgage by the Administrative Agent, the Issuing Bank
and the Lenders, the Borrower shall cause to be delivered to the Administrative
Agent each of the following, in form and substance satisfactory to the
Administrative Agent:

(i) the originals (or if not available, copies) of each outstanding promissory
note evidencing the Indebtedness secured by such New York Mortgage, duly
endorsed (by allonge or otherwise) to the order of the Administrative Agent
(collectively, “Existing New York Notes”);

(ii) an amended and restated promissory note (each a “Restated New York Note”)
which amends, restates and, if applicable, consolidates the applicable Existing
New York Notes, which (x) shall be payable to the order of the Administrative
Agent for the benefit of itself, the Issuing Bank and the Lenders, (y) shall be
in an initial aggregate principal amount equal to the principal amount of Loans
advanced hereunder in connection with the transfer of such Existing New York
Notes to the Administrative Agent for the benefit of itself, the Issuing Banks
and the Lenders and (z) shall incorporate by reference all of the applicable
terms and conditions of this Agreement and the other Loan Documents;

(iii) a copy of such New York Mortgage, including all amendments thereto,
showing all recording information thereon certified to the knowledge of an
authorized officer of the Borrower as being true, correct and complete;

(iv) an assignment of such New York Mortgage, in recordable form, executed by
each holder of the Indebtedness secured by such New York Mortgage (or an
authorized agent acting on behalf of each such holder);

(v) a modification to such New York Mortgage executed by the applicable Loan
Parties, such modification, among other things, to modify such New York Mortgage
(x) to provide that it secures the applicable Restated New York Note, (y) to
provide that the maximum principal sum of Obligations secured by such New York
Mortgage at execution or in the future shall not exceed the initial principal
amount of the applicable Restated New York Note and (z) to include language
reasonably satisfactory to the Administrative Agent to the effect that payments
in respect of the Obligations shall not be deemed to reduce the amount of the
Obligations secured by such New York Mortgage until such time as the outstanding
principal amount of the Obligations shall have been reduced to the initial
principal amount of the applicable Restated New York Note;

 

109

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(vi) terminations of, or assignments and modifications to, any assignment of
leases and rents, financing statements and any other document, instrument or
agreement securing the Indebtedness secured by such New York Mortgage, as the
Administrative Agent may reasonably request;

(vii) a copy of any environmental assessment report on the Property subject to
such New York Mortgage available to the Borrower, and if reasonably requested by
the Administrative Agent, reliance letters from the environmental engineering
firms performing such assessments addressed to the Administrative Agent, the
Issuing Bank and the Lenders; provided, however, if such a reliance letter is
not provided, the Administrative Agent, the Issuing Bank and the Lenders shall
have no obligation to accept an assignment of such New York Mortgage;

(viii) and environmental indemnity agreement executed by the Borrower, the
Parent and any other Loan Party that owns or leases the Property encumbered by
such New York Mortgage in favor of the Administrative Agent for its benefit and
the benefit of the Issuing Bank and the Lenders and in a form reasonably
acceptable to the Administrative Agent; and

(ix) such other documents, agreements and instruments as the Administrative
Agent on behalf of the Issuing Bank and the Lenders may reasonably request.

(c) Release of New York Mortgages. Notwithstanding any other provision of this
Agreement or any other Loan Document to the contrary, including without
limitation, Section 13.7., (i) upon the Borrower’s written request and at the
Borrower’s sole cost and expense, the Administrative Agent shall release any or
all of the New York Mortgages or assign any or all of the New York Mortgages to
any Person requested by the Borrower (any such assignment to be without recourse
or warranty whatsoever) and (ii) the Administrative Agent may in its discretion,
and shall at the direction of the Requisite Lenders, release any or all of the
New York Mortgages if the Administrative Agent has, or the Requisite Lenders
have, reasonably determined that holding any of such New York Mortgages could be
detrimental to the Administrative Agent or the Lenders, and so long as the
Administrative Agent shall have given the Borrower written notice at least 5
days prior to any such release; provided, however, the Administrative Agent
shall not be required to give any such prior notice to the Borrower if the
Administrative Agent, in its sole discretion, has determined that delay of such
release would be detrimental to the Administrative Agent or the Lenders.

(d) Indemnity. Not in limitation of any of the Borrower’s obligations under
Section 13.2. or 13.10., the Borrower shall and hereby agrees to indemnify,
defend and hold harmless the Administrative Agent, the Issuing Bank, each Lender
and each other Indemnified Party from and against any and all losses, costs,
claims, damages, liabilities, deficiencies, judgments or expenses of every kind
and nature (including, without limitation, amounts paid in settlement, court
costs and the fees and disbursements of counsel incurred in connection with any
litigation, investigation, claim or proceeding or any advice rendered in
connection therewith) incurred by an Indemnified Party in connection with,
arising out of, or by reason of, any Indemnity Proceeding which is in any way
related directly or indirectly to (i) the failure of any Person to pay any
recording tax payable pursuant to N.Y. Tax Law, Ch. 60, Art. 11, Sec. 253 et
seq. or other Applicable Laws of the State of New York or any political
subdivision of such State or (ii) any New York Mortgage.

 

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(e) The Borrower represents and warrants that no Property encumbered by a New
York Mortgage is located in an area determined by the Federal Emergency
Management Agency to have special flood hazards.

[Signatures on Following Pages]

 

111

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IN WITNESS WHEREOF, the parties hereto have caused this Third Amended and
Restated Credit Agreement to be executed by their authorized officers all as of
the day and year first above written.

 

Borrower:

DiamondRock Hospitality Limited Partnership By:   DiamondRock Hospitality
Company, its sole General Partner   By:  

/s/ Sean M. Mahoney

    Name:   Sean M. Mahoney     Title:   Executive Vice President, Chief
Financial Officer and Treasurer PARENT: DIAMONDROCK HOSPITALITY COMPANY By:  

/s/ Sean M. Mahoney

  Name:   Sean M. Mahoney   Title:   Executive Vice President, Chief Financial
Officer and Treasurer

[Signatures Continued on Next Page]

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[Signature Page to Third Amended and Restated Credit Agreement

with DiamondRock Hospitality Limited Partnership]

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as

    Administrative Agent and as a Lender

By:  

/s/ Mark F. Monahan

  Name: Mark F. Monahan   Title: Senior Vice President

[Signatures Continued on Next Page]

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[Signature Page to Third Amended and Restated Credit Agreement

with DiamondRock Hospitality Limited Partnership]

 

BANK OF AMERICA, N.A., as a Lender By:  

/s/ Steven P. Renwick

  Name:   Steven P. Renwick   Title:   Senior Vice President

[Signatures Continued on Next Page]

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[Signature Page to Third Amended and Restated Credit Agreement

with DiamondRock Hospitality Limited Partnership]

 

CITIBANK, N.A., as a Lender

By:

 

/s/ John C. Rowland

  Name:   John C. Rowland   Title:   Vice President

[Signatures Continued on Next Page]

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[Signature Page to Third Amended and Restated Credit Agreement

with DiamondRock Hospitality Limited Partnership]

 

DEUTSCHE BANK TRUST COMPANY AMERICAS, as a Lender

By:

 

/s/ James Rolison

  Name:   JAMES ROLISON   Title:   MANAGING DIRECTOR

By:

 

/s/ George R. Reynolds

  Name:   GEORGE R. REYNOLDS   Title:   DIRECTOR

[Signatures Continued on Next Page]

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[Signature Page to Third Amended and Restated Credit Agreement

with DiamondRock Hospitality Limited Partnership]

 

REGIONS BANK, as a Lender

By:

 

/s/ Lee Surtees

  Name:   Lee Surtees   Title:   Vice President

[Signatures Continued on Next Page]

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[Signature Page to Third Amended and Restated Credit Agreement

with DiamondRock Hospitality Limited Partnership]

 

PNC BANK, NATIONAL ASSOCIATION, as a Lender

By:

 

/s/ Benjamin Adams

  Name:   Benjamin Adams   Title:   Vice President

[Signatures Continued on Next Page]

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[Signature Page to Third Amended and Restated Credit Agreement

with DiamondRock Hospitality Limited Partnership]

 

KEYBANK NATIONAL ASSOCIATION, as a   Lender

By:

 

/s/ Jim Komperda

  Name:   Jim Komperda   Title:   Vice President

[Signatures Continued on Next Page]

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[Signature Page to Third Amended and Restated Credit Agreement

with DiamondRock Hospitality Limited Partnership]

 

GOLDMAN SACHS BANK USA, as a Lender

By:

 

/s/ Mark Walton

  Name:   Mark Walton   Title:   Authorized Signatory

[Signatures Continued on Next Page]

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[Signature Page to Third Amended and Restated Credit Agreement

with DiamondRock Hospitality Limited Partnership]

 

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

By:

 

/s/ Michael King

  Name:   Michael King   Title:   Vice President

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SCHEDULE I

Commitments

 

Lender

   Commitment Amount  

Wells Fargo Bank, National Association

   $ 40,000,000.00   

Bank of America, N.A.

   $ 40,000,000.00   

Citibank, N.A.

   $ 28,000,000.00   

Deutsche Bank Trust Company Americas

   $ 18,000,000.00   

Regions Bank

   $ 18,000,000.00   

PNC Bank, National Association

   $ 18,000,000.00   

KeyBank National Association

   $ 18,000,000.00   

Goldman Sachs Bank USA

   $ 10,000,000.00   

Morgan Stanley Senior Funding, Inc.

   $ 10,000,000.00      

 

 

 

TOTAL

   $ 200,000,000.00      

 

 

 

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SCHEDULE 1.1

List of Loan Parties

 

Bloodstone TRS, Inc.

   Guarantor

DiamondRock Alpharetta Owner, LLC

   Guarantor

DiamondRock Alpharetta Tenant, LLC

   Guarantor

DiamondRock Boston Owner, LLC

   Guarantor

DiamondRock Boston Tenant, LLC

   Guarantor

DiamondRock Boston Broad Street Owner, LLC

   Guarantor

DiamondRock Boston Broad Street Tenant, LLC

   Guarantor

DiamondRock Burlington Owner, LLC

   Guarantor

DiamondRock Burlington Tenant, LLC

   Guarantor

DiamondRock Chelsea Owner, LLC

   Guarantor

DiamondRock Chelsea Tenant, LLC

   Guarantor

DiamondRock Chicago Conrad Owner, LLC

   Guarantor

DiamondRock Chicago Conrad Tenant, LLC

   Guarantor

DiamondRock DC M Street Owner, LLC

   Guarantor

DiamondRock DC M Street Tenant, LLC

   Guarantor

DiamondRock Denver Downtown Owner, LLC

   Guarantor

DiamondRock Denver Downtown Tenant, LLC

   Guarantor

DiamondRock San Diego Owner, LLC

   Guarantor

DiamondRock San Diego Tenant, LLC

   Guarantor

DiamondRock Sonoma Owner, LLC

   Guarantor

DiamondRock Sonoma Tenant, LLC

   Guarantor

DiamondRock Torrance Owner, LLC

   Guarantor

DiamondRock Torrance Tenant, LLC

   Guarantor

Accommodation Subsidiaries are noted in italics.

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SCHEDULE 4.1

Initial Unencumbered Borrowing Base Properties

 

Property

   Borrowing Base Value  

Atlanta Marriott Alpharetta

   $ 46,183,937   

Conrad Chicago

   $ 80,749,802   

Courtyard Denver Downtown

   $ 45,196,975   

Hilton Burlington

   $ 52,000,000   

Hilton Garden Inn New York/Chelsea

   $ 65,512,264   

The Lodge at Sonoma Renaissance Resort & Spa

   $ 36,037,676   

Torrance Marriott South Bay

   $ 54,013,578      

 

 

 

Total Unencumbered Borrowing Base:

   $ 379,694,232   

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1SCHEDULE 7.1(b)

Ownership Structure

PART I

 

Company

   Jurisdiction of
Organization    Equity Interest Holders    % of
Ownership   Material/
Significant/
and/or  Excluded
Subsidiary    State
Qualification

Bloodstone TRS, Inc.

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Material    MA

DiamondRock Acquisition, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   N/A    DE

DiamondRock Allerton Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Significant    IL

DiamondRock Alpharetta Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Material    GA

DiamondRock Alpharetta Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   Accommodation
Subsidiary    GA

DiamondRock Bethesda General, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   N/A    MD

DiamondRock Bethesda Limited, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   N/A    MD

DiamondRock Bethesda Owner Limited Partnership (f/k/a Rock Spring Hotel Owner
Limited Partnership)

   Maryland    DiamondRock Bethesda
General, LLC

 

DiamondRock Bethesda
Limited, LLC

   1%

(GP Interest)

 

99%

(LP Interest)

  Significant    N/A

DiamondRock Bethesda Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   N/A    MD

DiamondRock Boston Owner, LLC

   Delaware    Palomar Holding Inc.    100%   Material    MA

DiamondRock Boston Expansion Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   N/A    MA

DiamondRock Boston Retail Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Significant    MA

 

1 

Accommodation Subsidiaries are noted in italics.

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

Company

   Jurisdiction of
Organization    Equity Interest Holders    % of
Ownership   Material/
Significant/
and/or  Excluded
Subsidiary    State
Qualification

DiamondRock Boston Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   Accommodation
Subsidiary    MA

DiamondRock Boston Broad Street Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Material    MA

DiamondRock Boston Broad Street Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   Accommodation
Subsidiary    MA

DiamondRock Burlington Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Material    VT

DiamondRock Burlington Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   Accommodation
Subsidiary    VT

DiamondRock Cayman Islands, Inc.

   Cayman
Islands    DiamondRock Frenchman’s
Holdings, LLC    100%   N/A    N/A

DiamondRock Charleston Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Significant    SC

DiamondRock Charleston Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   N/A    SC

DiamondRock Chelsea Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Material    NY

DiamondRock Chelsea Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   Accommodation
Subsidiary    NY

DiamondRock Cherry Creek Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Excluded    CO

DiamondRock Cherry Creek Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   Excluded    CO

DiamondRock Chicago Conrad Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Material    IL

DiamondRock Chicago Conrad Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   Accommodation
Subsidiary    IL

DiamondRock Chicago Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Excluded    IL

DiamondRock Chicago Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   Excluded    IL

DiamondRock DC M Street Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Material    DC

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

Company

   Jurisdiction of
Organization    Equity Interest Holders    % of
Ownership   Material/
Significant/
and/or  Excluded
Subsidiary    State
Qualification

DiamondRock DC M Street Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   Accommodation
Subsidiary    DC

DiamondRock Denver Downtown Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Material    CO

DiamondRock Denver Downtown Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   Accommodation
Subsidiary    CO

DiamondRock East 40th Street NYC Owner Holdings, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   N/A    NY

DiamondRock East 40th Street NYC Owner, LLC

   Delaware    DiamondRock East 40th
Street NYC Owner
Holdings, LLC    100%   Excluded    NY

DiamondRock East 40th Street NYC Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   Excluded    NY

DiamondRock Frenchman’s Holdings, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Excluded    N/A

DiamondRock Frenchman’s Owner, Inc.

   U.S.
Virgin
Islands    DiamondRock Cayman
Islands, Inc.    100%   Excluded    N/A

DiamondRock Hospitality Limited Partnership

   Delaware    DiamondRock
Hospitality Company

 

DiamondRock
Hospitality, LLC

   1%

(GP interest)

 

99%

(LP interest)

  Material    MA

DiamondRock Hospitality, LLC

   Delaware    DiamondRock
Hospitality Company    100%   N/A    DE

DiamondRock LAX Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Excluded    CA

DiamondRock LAX Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   Excluded    CA

DiamondRock Manhattan/Midtown East Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Excluded    NY

DiamondRock Manhattan/Midtown East Tenant, LLC

   Delaware    DiamondRock
Manhattan/Midtown East
Tenant Holdings, LLC    100%   Excluded    NY DiamondRock Minneapolis Owner, LLC
   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Excluded    MN

DiamondRock Minneapolis Tenant, LLC

   Delaware    Bloodstone TRS, Inc    100%   Excluded    MN

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

Company

   Jurisdiction of
Organization    Equity Interest Holders    % of
Ownership   Material/
Significant/
and/or  Excluded
Subsidiary    State
Qualification

DiamondRock NY Lex Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Excluded    NY

DiamondRock NY Lex Tenant, LLC

   Delaware    Bloodstone TRS, Inc    100%   Excluded    NY

DiamondRock Oak Brook Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   N/A    IL

DiamondRock Oak Brook Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   N/A    IL

DiamondRock Orlando Airport Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Excluded    FL

DiamondRock Orlando Airport Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   Excluded    FL

DiamondRock Salt Lake Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Excluded    UT

DiamondRock Salt Lake Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   Excluded    UT

DiamondRock San Diego Owner, LLC

   Delaware    DiamondRock
Hospitality Limited
Partnership    100%   Material    CA

DiamondRock San Diego Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   Accommodation
Subsidiary    CA

DiamondRock SF Sutter Street Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Significant    CA

DiamondRock SF Sutter Street Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   N/A    CA

DiamondRock Sonoma Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Material    CA

DiamondRock Sonoma Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   Accommodation
Subsidiary    CA

DiamondRock Times Square Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Significant    CA

DiamondRock Times Square Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%   N/A    CA

DiamondRock Torrance Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%   Material    CA

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

Company

   Jurisdiction of
Organization    Equity Interest Holders    % of
Ownership    Material/
Significant/
and/or  Excluded
Subsidiary    State
Qualification

DiamondRock Torrance Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%    Accommodation
Subsidiary    CA

DiamondRock Vail Owner, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%    Significant    CO

DiamondRock Vail Tenant, LLC

   Delaware    Bloodstone TRS, Inc.    100%    N/A    CO

DRH Worthington Owner General, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%    N/A    TX

DRH Worthington Owner Limited, LLC

   Delaware    DiamondRock Hospitality
Limited Partnership    100%    N/A    N/A

DRH Worthington Owner Limited Partnership

   Delaware    DRH Worthington Owner
General, LLC

 

DRH Worthington Owner
Limited, LLC

   1%

(GP interest)

 

99%

(LP interest)

   Excluded    TX

DRH Worthington Tenant General, LLC

   Delaware    Bloodstone TRS, Inc.    100%    N/A    TX

DRH Worthington Tenant Limited, LLC

   Delaware    Bloodstone TRS, Inc.    100%    N/A    N/A

DRH Worthington Tenant Limited Partnership

   Delaware    DRH Worthington Tenant
General, LLC

 

DRH Worthington Tenant
Limited, LLC

   1%

(GP interest)

 

99%

(LP interest)

   Excluded    TX

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

SCHEDULE 7.1(f)

Title to Properties; Occupancy Rates

Part I

 

Property

   Occupancy Rate2  

Atlanta Marriott Alpharetta

     67.2 % 

Bethesda Marriott Suites

     64.9 % 

Chicago Marriott Downtown Magnificent Mile

     74.0 % 

Conrad Chicago

     80.3 % 

Courtyard Denver Downtown

     84.9 % 

Courtyard New York Manhattan/Fifth Avenue

     89.4 % 

Courtyard New York Manhattan/Midtown East

     85.2 % 

Frenchman’s Reef & Morning Star Marriott Beach Resort

     82.2 % 

Hilton Boston

     78.2 % 

Hilton Burlington

     74.1 % 

Hilton Garden Inn Chelsea

     94.5 % 

Hilton Minneapolis

     72.2 % 

J.W. Marriott Cherry Creek

     75.1 % 

Lexington Hotel, New York

     95.0 % 

Los Angeles Airport Marriott

     85.8 % 

Mortgage interest relating to The Allerton Hotel

     n/a   

Oak Brook Hills Marriott Resort

     57.0 % 

Orlando Airport Marriott

     72.8 % 

Renaissance Charleston Hotel

     84.7 % 

Renaissance Worthington Hotel Fort Worth

     70.9 % 

Salt Lake City Marriott Downtown

     63.5 % 

The Lodge at Sonoma Renaissance Resort & Spa

     70.3 % 

Torrance Marriott South Bay

     83.5 % 

Vail Marriott Mountain Resort & Spa

     62.4 % 

Westin Boston Waterfront

     72.7 % 

Westin San Diego

     78.0 % 

Westin Washington D.C. M Street

     74.7 % 

Part II

Liens in Existence on the Agreement Date

See Schedule 7.1(g): Indebtedness and Guaranties

 

 

2 

Trailing 12-month occupancy as of September 7, 2012

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

SCHEDULE 7.1(g)

Indebtedness and Guaranties

 

Property

   Amount of Debt as of
November 19, 2012      Secured
or  Unsecured  

Mortgage Loan Indebtedness

     

Chicago Marriott Downtown Magnificent Mile

   $ 211,738,686         Secured   

Courtyard New York Manhattan/Fifth Avenue

   $ 50,223,053         Secured   

Courtyard New York Manhattan/Midtown East

   $ 41,997,368         Secured   

Frenchman’s Reef & Morning Star Marriott

   $ 58,775,865         Secured   

Beach Resort

     

Los Angeles Airport Marriott

   $ 82,600,000         Secured   

Orlando Airport Marriott

   $ 57,652,002         Secured   

J.W. Marriott Cherry Creek

   $ 40,933,160         Secured   

Lexington Hotel New York

   $ 170,368,000         Secured   

Renaissance Worthington Hotel Fort Worth

   $ 54,775,779         Secured   

Salt Lake City Marriott Downtown

   $ 28,776,078         Secured    Guaranty Indebtedness      

Frenchman’s Reef – guaranty of obligations under original Guaranty Agreement
dated July 29, 2005 as modified by that certain Loan Modification Agreement
dated March 25, 2010

     N/A         N/A    Other Indebtedness      

Times Square Development – obligations pursuant to that certain Purchase and
Sale Agreement dated January 18, 2011

   $ 126,000,000         Unsecured   

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

SCHEDULE 7.1(h)

Material Contracts

None.

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

SCHEDULE 7.1(i)

Litigation

None.

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

EXHIBIT A

FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

This Assignment and Assumption Agreement (the “Assignment and Assumption”) is
dated as of the Effective Date set forth below and is entered into by and
between [the][each]1 Assignor identified in item 1 below ([the][each, an]
“Assignor”) and [the][each]2 Assignee identified in item 2 below ([the][each,
an] “Assignee”). [It is understood and agreed that the rights and obligations of
[the Assignors][the Assignees]3 hereunder are several and not joint.]4
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (as amended, the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by [the][each]
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][each] Assignor hereby irrevocably sells and
assigns to [the Assignee][the respective Assignees], and [the][each] Assignee
hereby irrevocably purchases and assumes from [the Assignor][the respective
Assignors], 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][the
respective Assignors’] rights and obligations in [its capacity as a
Lender][their respective capacities as Lenders] 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][the respective Assignors]
under the respective facilities identified below (including without limitation
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][any]
Assignor (in its capacity as a Lender)][the respective Assignors (in their
respective capacities as Lenders)] 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, but not
limited to, 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 by [the][any] Assignor to [the][any] Assignee pursuant to clauses
(i) and (ii) above being referred to herein collectively as [the][an] “Assigned
Interest”). Each such sale and assignment is without recourse to [the][any]
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by [the][any] Assignor.

 

 

1 

For bracketed language here and elsewhere in this form relating to the
Assignor(s), if the assignment is from a single Assignor, choose the first
bracketed language. If the assignment is from multiple Assignors, choose the
second bracketed language.

2 

For bracketed language here and elsewhere in this form relating to the
Assignee(s), if the assignment is to a single Assignee, choose the first
bracketed language. If the assignment is to multiple Assignees, choose the
second bracketed language.

3 

Select as appropriate.

4 

Include bracketed language if there are either multiple Assignors or multiple
Assignees.

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

1.      Assignor[s]:

             

[Assignor [is][is not] a Defaulting Lender]

2.      Assignee[s]:

                [for each Assignee, indicate [Affiliate][Approved Fund] of
[identify Lender]

3.      Borrower(s):

  DiamondRock Hospitality Limited Partnership

4.      Administrative Agent: Wells Fargo Bank, National Association, as the
administrative agent under the Credit Agreement

    

5.      Credit Agreement:    

  The $200,000,000.00 Third Amended and Restated Credit Agreement dated as of
November [    ], 2012, among DiamondRock Hospitality Limited Partnership,
Diamondrock Hospitality Company, the Lenders parties thereto, and Wells Fargo
Bank, National Association, as Administrative Agent.

6.      Assigned Interest[s]:

    

 

Assignor[s]5

  

Assignee[s]6

   Facility
Assigned7    Aggregate
Amount of
Commitment/
Loans for all
Lenders8      Amount of
Commitment/
Loans
Assigned      Percentage
Assigned of
Commitment/
Loans9     CUSIP Number          $            $                %             $
           $                %   

 

[7.

Trade Date:                     ]10

[Page break]

 

 

5 

List each Assignor, as appropriate.

6 

List each Assignee, as appropriate.

7 

Fill in the appropriate terminology for the types of facilities under the Credit
Agreement that are being assigned under this Assignment (e.g. “Revolving Credit
Commitment,” etc.)

8 

Amount to be adjusted by the counterparties to take into account any payments or
prepayments made between the Trade Date and the Effective Date.

9 

Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

10 

To be completed if the Assignor(s) and the Assignee(s) intend that the minimum
assignment amount is to be determined as of the Trade Date.

 

A-2

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

Effective Date:                     , 20     [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR[S]11 [NAME OF ASSIGNOR] By:           Name:       Title:     [NAME OF
ASSIGNOR] By:           Name:       Title:     ASSIGNEE[S]12 [NAME OF ASSIGNEE]
By:           Name:       Title:     [NAME OF ASSIGNEE] By:            Name:   
    Title:    

[Page Break]

 

 

11 

Add additional signature blocks as needed.

12 

Add additional signature blocks as needed.

 

A-3

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

[Consented to and]13 Accepted:

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent

By:            Name:        Title:     [Consented to:]14 DIAMONDROCK HOSPITALITY
LIMITED PARTNERSHIP By:   DiamondRock Hospitality Company,   its sole General
Partner By:           Name:       Title:     [RELEVANT PARTY]15 By:          
Name:       Title:    

 

 

13 

To be added only if the consent of the Administrative Agent is required by the
terms of the Credit Agreement.

14 

Include signature of the Borrower only if required under Section 13.6.(b) of the
Credit Agreement.

15 

To be added only if the consent of the other parties (e.g. Swingline Lender,
Issuing Bank) is required by the terms of the Credit Agreement.

 

A-4

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

ANNEX 1

[                     ]16

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor[s]. [The][Each] Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of [the][the relevant] Assigned Interest,
(ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or
other adverse claim, (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and (iv) it is [not] a
Defaulting Lender; 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 the
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the
Borrower, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.

1.2. Assignee[s]. [The][Each] 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
meets all the requirements to be an Eligible Assignee as defined in the Credit
Agreement (subject to such consents, if any, as may be required under such
definition), (iii) from and after the Effective Date specified for this
Assignment and Assumption, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of [the][the relevant]
Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is
sophisticated with respect to decisions to acquire assets of the type
represented by the Assigned Interest and either it, or the person exercising
discretion in making its decision to acquire the Assigned Interest, is
experienced in acquiring assets of such type, (v) it has received a copy of the
Credit Agreement, and has received or has been accorded the opportunity to
receive copies of the most recent financial statements delivered pursuant to
Section 9.1 or 9.2., as applicable, and such other documents and information as
it deems appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase [the][such] Assigned Interest,
(vi) it has, independently and without reliance upon the Administrative Agent,
the Assignor, or any other Lender and based on such documents and information as
it has deemed appropriate, made its own credit analysis and decision to enter
into this Assignment and Assumption and to purchase [the][such] Assigned
Interest, and (vii) if it is a Foreign Lender, attached to the Assignment and
Assumption is any documentation required to be delivered by it pursuant to the
terms of the Credit Agreement, duly completed and executed by [the][such]
Assignee; and (b) agrees that (i) it will, independently and without reliance on
the Administrative Agent, [the][any] 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.

 

 

16 

Describe Credit Agreement at option of Administrative Agent.

 

A-5

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

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of [the][each] Assigned Interest (including
payments of principal, interest, fees and other amounts) to [the][the relevant]
Assignee whether such amounts have accrued prior to, on or after the Effective
Date specified for this Assignment and Assumption. The Assignor[s] and the
Assignee[s] shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to such Effective Date or with respect to
the making of this assignment directly between themselves.

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.

 

A-6

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

EXHIBIT B

FORM OF AMENDED AND RESTATED GUARANTY

THIS AMENDED AND RESTATED GUARANTY (this “Guaranty”) dated as of November
[    ], 2012, is executed and delivered by each of the undersigned and the other
Persons from time to time party hereto pursuant to the execution and delivery of
an Accession Agreement in the form of Annex I hereto (all of the undersigned,
together with such other Persons each a “Guarantor” and collectively, the
“Guarantors”) in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, in its
capacity as Administrative Agent (the “Administrative Agent”) for the Lenders
under that certain Third Amended and Restated Credit Agreement dated as of
November [    ], 2012 (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”), by and among DiamondRock Hospitality
Limited Partnership (the “Borrower”), DiamondRock Hospitality Company (the
“Parent”), the financial institutions party thereto and their assignees under
Section 13.6. thereof (the “Lenders”), the Administrative Agent and the other
parties thereto.

WHEREAS, pursuant to the Credit Agreement, the Administrative Agent, the
Lenders, the Swingline Lender and the Issuing Bank have agreed to make available
to the Borrower certain financial accommodations on the terms and conditions set
forth in the Credit Agreement;

WHEREAS, certain Guarantors previously executed and delivered to the
Administrative Agent that Guaranty dated as of February 28, 2007, as amended by
that certain Amended and Restated Guaranty Agreement dated as of August 6, 2010
(as further amended and in effect immediately prior to the date hereof, the
“Existing Guaranty”);

WHEREAS, the Borrower and each of the Guarantors, though separate legal
entities, are mutually dependent on each other in the conduct of their
respective businesses as an integrated operation and have determined it to be in
their mutual best interests to obtain financing from the Administrative Agent,
the Lenders, the Swingline Lender and the Issuing Bank through their collective
efforts;

WHEREAS, each Guarantor acknowledges that it will receive direct and indirect
benefits from the Administrative Agent, the Lenders, the Swingline Lender and
the Issuing Bank making such financial accommodations available to the Borrower
under the Credit Agreement and, accordingly, each Guarantor is willing to
guarantee the Borrower’s obligations to the Administrative Agent, the Lenders
and the Issuing Bank on the terms and conditions contained herein; and

WHEREAS, the amendment and restatement of the Existing Guaranty effected by each
Guarantor’s execution and delivery of this Guaranty is a condition to the
Administrative Agent, the Lenders, Swingline Lender, and the Issuing Bank
making, and continuing to make, such financial accommodations to the Borrower.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by each Guarantor, each Guarantor agrees that
the Existing Guaranty is amended and restated in its entirety as follows:

 

B-1

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

Section 1. Guaranty. Each Guarantor hereby absolutely, irrevocably and
unconditionally guaranties the due and punctual payment and performance when
due, whether at stated maturity, by acceleration or otherwise, of all of the
following (collectively referred to as the “Guarantied Obligations”): (a) all
indebtedness and obligations owing by the Borrower or any other Loan Party to
any Lender, the Issuing Bank or the Administrative Agent under or in connection
with the Credit Agreement and any other Loan Document to which the Borrower or
such other Loan Party is a party, including without limitation, the repayment of
all principal of the Revolving Loans and the Swingline Loans and the
Reimbursement Obligations, and the payment of all interest, Fees, charges,
attorneys’ fees and other amounts payable to any Lender or the Administrative
Agent thereunder or in connection therewith; (b) any and all extensions,
renewals, modifications, amendments or substitutions of the foregoing; (c) all
reasonable expenses, including, without limitation, reasonable attorneys’ fees
and disbursements, that are incurred by the Administrative Agent, the Lenders,
the Swingline Lender, or the Issuing Bank in the enforcement of any of the
foregoing or any obligation of such Guarantor hereunder; and (d) all other
Obligations.

Section 2. Guaranty of Payment and Not of Collection. This Guaranty is a
guaranty of payment, and not of collection, and a debt of each Guarantor for its
own account. Accordingly, none of the Lenders, the Swingline Lender, the Issuing
Bank or the Administrative Agent shall be obligated or required before enforcing
this Guaranty against any Guarantor: (a) to pursue any right or remedy any of
them may have against the Borrower, any other Loan Party or any other Person or
commence any suit or other proceeding against the Borrower, any other Loan Party
or any other Person in any court or other tribunal; (b) to make any claim in a
liquidation or bankruptcy of the Borrower, any other Loan Party or any other
Person; or (c) to make demand of the Borrower, any other Loan Party or any other
Person or to enforce or seek to enforce or realize upon any collateral security
held by the Lenders, the Swingline Lender, the Issuing Bank or the
Administrative Agent which may secure any of the Guarantied Obligations.

Section 3. Guaranty Absolute. Each Guarantor guarantees that the Guarantied
Obligations will be paid strictly in accordance with the terms of the documents
evidencing the same, regardless of any Applicable Law now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of the
Administrative Agent, the Lenders, the Swingline Lender, or the Issuing Bank
with respect thereto. The liability of each Guarantor under this Guaranty shall
be absolute, irrevocable and unconditional in accordance with its terms and
shall remain in full force and effect without regard to, and shall not be
released, suspended, discharged, terminated or otherwise affected by, any
circumstance or occurrence whatsoever, including without limitation, the
following (whether or not such Guarantor consents thereto or has notice
thereof):

(a) (i) any change in the amount, interest rate or due date or other term of any
of the Guarantied Obligations, (ii) any change in the time, place or manner of
payment of all or any portion of the Guarantied Obligations, (iii) any amendment
or waiver of, or consent to the departure from or other indulgence with respect
to, the Credit Agreement, any other Loan Document, or any other document or
instrument evidencing or relating to any Guarantied Obligations, or (iv) any
waiver, renewal, extension, addition, or supplement to, or deletion from, or any
other action or inaction under or in respect of, the Credit Agreement, any of
the other Loan Documents, or any other documents, instruments or agreements
relating to the Guarantied Obligations or any other instrument or agreement
referred to therein or evidencing any Guarantied Obligations or any assignment
or transfer of any of the foregoing;

(b) any lack of validity or enforceability of the Credit Agreement, any of the
other Loan Documents, or any other document, instrument or agreement referred to
therein or evidencing any Guarantied Obligations or any assignment or transfer
of any of the foregoing;

 

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(c) any furnishing to the Administrative Agent, the Lenders, the Swingline
Lender, or the Issuing Bank of any security for the Guarantied Obligations, or
any sale, exchange, release or surrender of, or realization on, any collateral
securing any of the Obligations;

(d) any settlement or compromise of any of the Guarantied Obligations, any
security therefor, or any liability of any other party with respect to the
Guarantied Obligations, or any subordination of the payment of the Guarantied
Obligations to the payment of any other liability of the Borrower or any other
Loan Party;

(e) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to such Guarantor,
the Borrower, any other Loan Party or any other Person, or any action taken with
respect to this Guaranty by any trustee or receiver, or by any court, in any
such proceeding;

(f) any act or failure to act by the Borrower, any other Loan Party or any other
Person which may adversely affect such Guarantor’s subrogation rights, if any,
against the Borrower to recover payments made under this Guaranty;

(g) any nonperfection or impairment of any security interest or other Lien on
any collateral, if any, securing in any way any of the Obligations;

(h) any application of sums paid by the Borrower, any Guarantor or any other
Person with respect to the liabilities of the Borrower to the Administrative
Agent, the Lenders, the Swingline Lender, or the Issuing Bank, regardless of
what liabilities of the Borrower remain unpaid;

(i) any defect, limitation or insufficiency in the borrowing powers of the
Borrower or in the exercise thereof;

(j) any defense, set-off, claim or counterclaim (other than indefeasible payment
and performance in full) which may at any time be available to or be asserted by
the Borrower, any other Loan Party, or any other Person against the
Administrative Agent or any Lender;

(k) any statement, representation or warranty made or deemed to be made by or on
behalf of the Borrower, any Guarantor or any other Loan Party under the Credit
Agreement, any other Loan Document, or any amendment hereto or thereto, proves
to have been incorrect or misleading in any respect;

(l) any change in the corporate existence, structure, or ownership of the
Borrower or any other Loan Party; or

(m) any other circumstance which might otherwise constitute a defense available
to, or a discharge of, a Guarantor hereunder (other than indefeasible payment
and performance in full).

 

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Section 4. Action with Respect to Guarantied Obligations. The Lenders, the
Issuing Bank, the Swingline Lender, and the Administrative Agent may, at any
time and from time to time, without the consent of, or notice to, any Guarantor,
and without discharging any Guarantor from its obligations hereunder, take any
and all actions described in Section 3 and may otherwise: (a) amend, modify,
alter or supplement the terms of any of the Guarantied Obligations, including,
but not limited to, extending or shortening the time of payment of any of the
Guarantied Obligations or changing the interest rate that may accrue on any of
the Guarantied Obligations; (b) amend, modify, alter or supplement the Credit
Agreement or any other Loan Document; (c) sell, exchange, release or otherwise
deal with all, or any part, of any collateral securing any of the Obligations;
(d) release any other Loan Party or other Person liable in any manner for the
payment or collection of the Guarantied Obligations; (e) exercise, or refrain
from exercising, any rights against the Borrower, any other Loan Party or any
other Person; and (f) apply any sum, by whomsoever paid or however realized, to
the Guarantied Obligations in such order as the Lenders shall elect.

Section 5. Representations and Warranties. Each Guarantor hereby makes to the
Administrative Agent, the Lenders, the Swingline Lender and the Issuing Bank all
of the representations and warranties made by the Borrower with respect to or in
any way relating to such Guarantor in the Credit Agreement and the other Loan
Documents, as if the same were set forth herein in full.

Section 6. Covenants. Each Guarantor will comply with all covenants that the
Borrower is to cause such Guarantor to comply with under the terms of the Credit
Agreement or any of the other Loan Documents.

Section 7. Waiver. Each Guarantor, to the fullest extent permitted by Applicable
Law, hereby waives notice of acceptance hereof or any presentment, demand,
protest or notice of any kind, and any other act or thing, or omission or delay
to do any other act or thing, which in any manner or to any extent might vary
the risk of such Guarantor or which otherwise might operate to discharge such
Guarantor from its obligations hereunder.

Section 8. Inability to Accelerate Loan. If the Administrative Agent, the
Issuing Bank, the Swingline Lender, and/or the Lenders are prevented under
Applicable Law or otherwise from demanding or accelerating payment of any of the
Guarantied Obligations by reason of any automatic stay or otherwise, the
Administrative Agent, the Issuing Bank, Swingline Lender, and/or the Lenders
shall be entitled to receive from each Guarantor, upon demand therefor, the sums
which otherwise would have been due had such demand or acceleration occurred.

Section 9. Reinstatement of Guarantied Obligations. If claim is ever made on the
Administrative Agent, any Lender, the Swingline Lender or the Issuing Bank for
repayment or recovery of any amount or amounts received in payment or on account
of any of the Guarantied Obligations, and the Administrative Agent, such Lender,
the Swingline Lender or the Issuing Bank repays all or part of said amount by
reason of (a) any judgment, decree or order of any court or administrative body
of competent jurisdiction, or (b) any settlement or compromise of any such claim
effected by the Administrative Agent, such Lender, the Swingline Lender or the
Issuing Bank with any such claimant (including the Borrower or a trustee in
bankruptcy for the Borrower), then and in such event each Guarantor agrees that
any such judgment, decree, order, settlement or compromise shall be binding on
it, notwithstanding any revocation hereof or the cancellation of the Credit
Agreement, any of the other Loan Documents, or any other instrument evidencing
any liability of the Borrower, and such Guarantor shall be and remain liable to
the Administrative Agent, such Lender, the Swingline Lender or the Issuing Bank
for the amounts so repaid or recovered to the same extent as if such amount had
never originally been paid to the Administrative Agent, such Lender, the
Swingline Lender or the Issuing Bank.

 

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Section 10. Subrogation. Upon the making by any Guarantor of any payment
hereunder for the account of the Borrower, such Guarantor shall be subrogated to
the rights of the payee against the Borrower; provided, however, that such
Guarantor shall not enforce any right or receive any payment by way of
subrogation or otherwise take any action in respect of any other claim or cause
of action such Guarantor may have against the Borrower arising by reason of any
payment or performance by such Guarantor pursuant to this Guaranty, unless and
until all of the Guarantied Obligations have been indefeasibly paid and
performed in full. Once the Guarantied Obligations have been indefeasibly paid
and performed in full, the Administrative Agent agrees to furnish to such
Guarantor, at such Guarantor’s request and at such Guarantor’s sole cost and
expense, any agreement evidencing the foregoing subrogation as may be reasonably
requested by such Guarantor and reasonably satisfactory to the Administrative
Agent. If any amount shall be paid to such Guarantor on account of or in respect
of such subrogation rights or other claims or causes of action, such Guarantor
shall hold such amount in trust for the benefit of the Administrative Agent, the
Lenders, the Swingline Lender, and the Issuing Bank and shall forthwith pay such
amount to the Administrative Agent to be credited and applied against the
Guarantied Obligations, whether matured or unmatured, in accordance with the
terms of the Credit Agreement or to be held by the Administrative Agent as
collateral security for any Guarantied Obligations existing.

Section 11. Right of Contribution. The Guarantors hereby agree as among
themselves that, if any Guarantor shall make an Excess Payment (as defined
below), such Guarantor shall have a right of contribution from each other
Guarantor in an amount equal to such other Guarantor’s Contribution Share (as
defined below) of such Excess Payment. The payment obligations of any Guarantor
under this Section shall be subordinate and subject in right of payment to the
Obligations until such time as the Obligations have been paid in full and the
Commitments have expired or terminated, and none of the Guarantors shall
exercise any right or remedy under this Section against any other Guarantor
until such Obligations have been paid in full and the Commitments have expired
or terminated. This Section shall not be deemed to affect any right of
subrogation, indemnity, reimbursement or contribution that any Guarantor may
have under Applicable Law against the Borrower in respect of any payment of
Guarantied Obligations. Notwithstanding the foregoing, all rights of
contribution against any Guarantor shall terminate from and after such time, if
ever, that such Guarantor shall cease to be a Guarantor in accordance with the
applicable provisions of the Loan Documents. For purposes of this Section, the
following terms have the indicated meanings:

(a) “Excess Payment” means the amount paid by any Guarantor in excess of its
Ratable Share of any Guarantied Obligations.

(b) “Ratable Share” means, for any Guarantor in respect of any payment of
Obligations, the ratio (expressed as a percentage) as of the date of such
payment of Guarantied Obligations of (i) the amount by which the aggregate
present fair salable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of all
of the Loan Parties exceeds the amount of all of the debts and liabilities
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of the Loan Parties hereunder) of the Loan
Parties; provided, however, that, for purposes of calculating the Ratable Shares
of the Guarantors in respect of any payment of Obligations, any Guarantor that
became a Guarantor subsequent to the date of any such payment shall be deemed to
have been a Guarantor on the date of such payment and the financial information
for such Guarantor as of the date such Guarantor became a Guarantor shall be
utilized for such Guarantor in connection with such payment.

 

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(c) “Contribution Share” means, for any Guarantor in respect of any Excess
Payment made by any other Guarantor, the ratio (expressed as a percentage) as of
the date of such Excess Payment of (i) the amount by which the aggregate present
fair salable value of all of its assets and properties exceeds the amount of all
debts and liabilities of such Guarantor (including contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of such
Guarantor hereunder) to (ii) the amount by which the aggregate present fair
salable value of all assets and other properties of the Loan Parties other than
the maker of such Excess Payment exceeds the amount of all of the debts and
liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Loan Parties) of the Loan
Parties other than the maker of such Excess Payment; provided, however, that,
for purposes of calculating the Contribution Shares of the Guarantors in respect
of any Excess Payment, any Guarantor that became a Guarantor subsequent to the
date of any such Excess Payment shall be deemed to have been a Guarantor on the
date of such Excess Payment and the financial information for such Guarantor as
of the date such Guarantor became a Guarantor shall be utilized for such
Guarantor in connection with such Excess Payment.

Section 12. Payments Free and Clear. All sums payable by each Guarantor
hereunder, whether of principal, interest, Fees, expenses, premiums or
otherwise, shall be paid in full, without set-off or counterclaim or any
deduction or withholding whatsoever (including any Taxes), and if any Guarantor
is required by Applicable Law or by any Governmental Authority to make any such
deduction or withholding, such Guarantor shall pay to the Administrative Agent,
the Lenders, the Swingline Lender, and the Issuing Bank such additional amount
as will result in the receipt by the Administrative Agent, the Lenders, the
Swingline Lender, and the Issuing Bank of the full amount payable hereunder had
such deduction or withholding not occurred or been required.

Section 13. Set-off. In addition to any rights now or hereafter granted under
any of the other Loan Documents or Applicable Law and not by way of limitation
of any such rights, each Guarantor hereby authorizes the Administrative Agent,
each Lender, the Swingline Lender, and the Issuing Bank, each Affiliate of the
Administrative Agent, a Lender, the Swingline Lender, and the Issuing Bank, and
each Participant (but not Affiliates of such Participant) at any time during the
continuance of an Event of Default, without any prior notice to such Guarantor
or to any other Person, any such notice being hereby expressly waived, but in
the case of a Lender, the Swingline Lender, or the Issuing Bank, an Affiliate of
a Lender, the Swingline Lender, or the Issuing Bank, or a Participant (but not
Affiliates of a Participant) subject to receipt of the prior written consent of
the Administrative Agent exercised in its sole discretion to the fullest extent
permitted by law, to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness at any time held or owing by the Administrative Agent, such
Lender, the Swingline Lender, or the Issuing Bank, or any Affiliate of the
Administrative Agent or such Lender, the Swingline Lender, or the Issuing Bank,
or such Participant (but not Affiliates of such Participant) to or for the
credit or the account of such Guarantor against and on account of any of the
Guarantied Obligations, although such obligations shall be contingent or
unmatured. Each Guarantor agrees, to the fullest extent permitted by Applicable
Law, that any Participant may exercise rights of setoff or counterclaim and
other rights with respect to its participation as fully as if such Participant
were a direct creditor of such Guarantor in the amount of such participation.
Each Lender agrees to notify the Borrower and such Guarantor after any such set
off made by such Lender; provided, that the failure to give such notice shall
not affect the validity of such set off.

 

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Section 14. Subordination. Each Guarantor hereby expressly covenants and agrees
for the benefit of the Administrative Agent, the Lenders, the Swingline Lender
and the Issuing Bank that all obligations and liabilities of the Borrower to
such Guarantor of whatever description, including without limitation, all
intercompany receivables of such Guarantor from the Borrower (collectively, the
“Junior Claims”) shall be subordinate and junior in right of payment to all
Guarantied Obligations. If an Event of Default shall exist, then no Guarantor
shall accept any direct or indirect payment (in cash, property or securities, by
setoff or otherwise) from the Borrower on account of or in any manner in respect
of any Junior Claim until all of the Guarantied Obligations have been
indefeasibly paid in full.

Section 15. Avoidance Provisions. It is the intent of each Guarantor, the
Administrative Agent, the Lenders, the Swingline Lender, and the Issuing Bank
that in any Proceeding, such Guarantor’s maximum obligation hereunder shall
equal, but not exceed, the maximum amount which would not otherwise cause the
obligations of such Guarantor hereunder (or any other obligations of such
Guarantor to the Administrative Agent, the Lenders, the Swingline Lender and the
Issuing Bank) to be avoidable or unenforceable against such Guarantor in such
Proceeding as a result of Applicable Law, including without limitation,
(a) Section 548 of the Bankruptcy Code of 1978, as amended (the “Bankruptcy
Code”) and (b) any state fraudulent transfer or fraudulent conveyance act or
statute applied in such Proceeding, whether by virtue of Section 544 of the
Bankruptcy Code or otherwise. The Applicable Laws under which the possible
avoidance or unenforceability of the obligations of such Guarantor hereunder (or
any other obligations of such Guarantor to the Administrative Agent, the
Lenders, the Swingline Lenders, and the Issuing Bank) shall be determined in any
such Proceeding are referred to as the “Avoidance Provisions”. Accordingly, to
the extent that the obligations of any Guarantor hereunder would otherwise be
subject to avoidance under the Avoidance Provisions, the maximum Guarantied
Obligations for which such Guarantor shall be liable hereunder shall be reduced
to that amount which, as of the time any of the Guarantied Obligations are
deemed to have been incurred under the Avoidance Provisions, would not cause the
obligations of such Guarantor hereunder (or any other obligations of such
Guarantor to the Administrative Agent, the Lenders, the Swingline Lender, and
the Issuing Bank), to be subject to avoidance under the Avoidance Provisions.
This Section is intended solely to preserve the rights of the Administrative
Agent, the Lenders, the Swingline Lender and the Issuing Bank hereunder to the
maximum extent that would not cause the obligations of any Guarantor hereunder
to be subject to avoidance under the Avoidance Provisions, and no Guarantor or
any other Person shall have any right or claim under this Section as against the
Administrative Agent, the Lenders, the Swingline Lender and the Issuing Bank
that would not otherwise be available to such Person under the Avoidance
Provisions.

Section 16. Information. Each Guarantor assumes all responsibility for being and
keeping itself informed of the financial condition of the Borrower and the other
Guarantors, and of all other circumstances bearing upon the risk of nonpayment
of any of the Guarantied Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder, and agrees that none of
the Administrative Agent, the Lenders, the Swingline Lender, or the Issuing Bank
shall have any duty whatsoever to advise any Guarantor of information regarding
such circumstances or risks.

Section 17. Governing Law. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

 

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SECTION 18. WAIVER OF JURY TRIAL.

(a) EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN OR
AMONG ANY GUARANTOR, THE ADMINISTRATIVE AGENT, THE ISSUING BANK, THE SWINGLINE
LENDER OR ANY OF THE LENDERS WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF
LAW AND FACT AND WOULD RESULT IN DELAY AND EXPENSE TO THE PARTIES. ACCORDINGLY,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE LENDERS, THE SWINGLINE
LENDER, ISSUING BANK, THE ADMINISTRATIVE AGENT AND EACH GUARANTOR HEREBY WAIVES
ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE
IN ANY COURT OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY
PARTY HERETO ARISING OUT OF THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR BY
REASON OF ANY OTHER SUIT, CAUSE OF ACTION OR DISPUTE WHATSOEVER BETWEEN OR AMONG
ANY GUARANTOR, THE AGENT OR ANY OF THE LENDERS OF ANY KIND OR NATURE RELATING TO
ANY OF THE LOAN DOCUMENTS.

(b) EACH OF THE GUARANTORS, THE ADMINISTRATIVE AGENT, THE SWINGLINE LENDER, THE
ISSUING BANK, AND EACH LENDER HEREBY AGREES THAT THE FEDERAL DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK OR ANY STATE COURT LOCATED IN THE BOROUGH OF
MANHATTAN OF NEW YORK, SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS
OR DISPUTES BETWEEN OR AMONG ANY GUARANTOR, THE ADMINISTRATIVE AGENT, THE
ISSUING BANK, THE SWINGLINE LENDER, OR ANY OF THE LENDERS, PERTAINING DIRECTLY
OR INDIRECTLY TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR TO ANY MATTER
ARISING HEREFROM OR THEREFROM. EACH GUARANTOR AND EACH OF THE LENDERS EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMMENCED IN SUCH COURTS WITH RESPECT TO SUCH CLAIMS OR DISPUTES. EACH GUARANTOR
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR
PAPERS ISSUED THEREIN, AND AGREES THAT SERVICE OF SUCH SUMMONS AND COMPLAINT, OR
OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO
SUCH GUARANTOR AT ITS ADDRESS FOR NOTICES PROVIDED FOR HEREIN. SHOULD A
GUARANTOR FAIL TO APPEAR OR ANSWER ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO
SERVED WITHIN THIRTY DAYS AFTER THE MAILING THEREOF, SUCH GUARANTOR SHALL BE
DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BE ENTERED AGAINST IT AS
DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS. EACH PARTY
FURTHER 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 FORUM AND EACH AGREES NOT TO PLEAD OR
CLAIM THE SAME. THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE
DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE ADMINISTRATIVE AGENT, THE
SWINGLINE LENDER, THE ISSUING BANK, OR ANY LENDER OR THE ENFORCEMENT BY THE
ADMINISTRATIVE AGENT, THE SWINGLINE LENDER, THE ISSUING BANK, OR ANY LENDER OF
ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.

 

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(c) THE PROVISIONS OF THIS SECTION HAVE BEEN CONSIDERED BY EACH PARTY WITH THE
ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES
THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS
PAYABLE HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS, THE TERMINATION OR
EXPIRATION OF ALL LETTERS OF CREDIT AND THE TERMINATION OF THIS GUARANTY.

Section 19. Loan Accounts. The Administrative Agent, each Lender, the Swingline
Lender, and the Issuing Bank may maintain books and accounts setting forth the
amounts of principal, interest and other sums paid and payable with respect to
the Guarantied Obligations, and in the case of any dispute relating to any of
the outstanding amount, payment or receipt of any of the Guarantied Obligations
or otherwise, the entries in such books and accounts shall be deemed conclusive
evidence of the amounts and other matters set forth herein, absent manifest
error. The failure of the Administrative Agent, any Lender or the Issuing Bank
to maintain such books and accounts shall not in any way relieve or discharge
any Guarantor of any of its obligations hereunder.

Section 20. Waiver of Remedies. No delay or failure on the part of the
Administrative Agent, any Lender, the Swingline Lender, or the Issuing Bank in
the exercise of any right or remedy it may have against any Guarantor hereunder
or otherwise shall operate as a waiver thereof, and no single or partial
exercise by the Administrative Agent, any Lender or the Issuing Bank of any such
right or remedy shall preclude any other or further exercise thereof or the
exercise of any other such right or remedy.

Section 21. Termination. This Guaranty shall remain in full force and effect
with respect to each Guarantor until indefeasible payment in full of the
Guarantied Obligations and the other Obligations and the termination or
cancellation of the Credit Agreement in accordance with its terms.

Section 22. Successors and Assigns. Each reference herein to the Administrative
Agent, the Lenders, the Swingline Lender, or the Issuing Bank shall be deemed to
include such Person’s respective successors and assigns (including, but not
limited to, any holder of the Guarantied Obligations) in whose favor the
provisions of this Guaranty also shall inure, and each reference herein to each
Guarantor shall be deemed to include such Guarantor’s successors and assigns,
upon whom this Guaranty also shall be binding. The Lenders, the Swingline
Lender, and the Issuing Bank may, in accordance with the applicable provisions
of the Credit Agreement, assign, transfer or sell any Guarantied Obligation, or
grant or sell participations in any Guarantied Obligations, to any Person
without the consent of, or notice to, any Guarantor and without releasing,
discharging or modifying any Guarantor’s obligations hereunder. Subject to
Section 13.9 of the Credit Agreement, each Guarantor hereby consents to the
delivery by the Administrative Agent or any Lender to any Assignee or
Participant (or any prospective Assignee or Participant) of any financial or
other information regarding the Borrower or any Guarantor. No Guarantor may
assign or transfer its obligations hereunder to any Person without the prior
written consent of all Lenders and any such assignment or other transfer to
which all of the Lenders have not so consented shall be null and void.

Section 23. JOINT AND SEVERAL OBLIGATIONS. THE OBLIGATIONS OF THE GUARANTORS
HEREUNDER SHALL BE JOINT AND SEVERAL, AND ACCORDINGLY, EACH GUARANTOR CONFIRMS
THAT IT IS LIABLE FOR THE FULL AMOUNT OF THE “GUARANTIED OBLIGATIONS” AND ALL OF
THE OBLIGATIONS AND LIABILITIES OF EACH OF THE OTHER GUARANTORS HEREUNDER.

 

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Section 24. Amendments. This Guaranty may not be amended except in writing
signed by the Requisite Lenders (or all of the Lenders if required under the
terms of the Credit Agreement), the Administrative Agent and each Guarantor.

Section 25. Payments. All payments to be made by any Guarantor pursuant to this
Guaranty shall be made in Dollars, in immediately available funds to the
Administrative Agent at the Principal Office, not later than 2:00 p.m. on the
date of demand therefor.

Section 26. Notices. All notices, requests and other communications hereunder
shall be in writing (including facsimile transmission or similar writing) and
shall be given (a) to each Guarantor at its address set forth below its
signature hereto, (b) to the Administrative Agent, any Lender, the Swingline
Lender, or the Issuing Bank at its respective address for notices provided for
in the Credit Agreement, or (c) as to each such party at such other address as
such party shall designate in a written notice to the other parties. Each such
notice, request or other communication shall be effective (i) if mailed, when
received; (ii) if telecopied, when transmitted; or (iii) if hand delivered, when
delivered; provided, however, that any notice of a change of address for notices
shall not be effective until received.

Section 27. Severability. In case any provision of this Guaranty shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

Section 28. Headings. Section headings used in this Guaranty are for convenience
only and shall not affect the construction of this Guaranty.

Section 29. Limitation of Liability. Neither the Administrative Agent nor any
Lender, nor any Affiliate, officer, director, employee, attorney, or agent of
the Administrative Agent, any Lender, the Swingline Lender, or the Issuing Bank
shall have any liability with respect to, and each Guarantor hereby waives,
releases, and agrees not to sue any of them upon, any claim for any special,
indirect, incidental, or consequential damages suffered or incurred by a
Guarantor in connection with, arising out of, or in any way related to, this
Guaranty, any of the other Loan Documents, or any of the transactions
contemplated by this Guaranty, the Credit Agreement, any of the other Loan
Documents, or any of the other documents, instruments or agreements evidencing
the Guarantied Obligations. Each Guarantor hereby waives, releases, and agrees
not to sue the Administrative Agent, any Lender, the Swingline Lender, or the
Issuing Bank or any of the Administrative Agent’s, any Lender’s, the Swingline
Lender’s, or the Issuing Bank’s Affiliates, officers, directors, employees,
attorneys, or agents for punitive damages in respect of any claim in connection
with, arising out of, or in any way related to, this Guaranty, the Credit
Agreement, any of the other Loan Documents, or any of the other documents,
instruments or agreements evidencing the Guarantied Obligations, or any of the
transactions contemplated thereby.

Section 30. Electronic Delivery of Certain Information. Each Guarantor
acknowledges and agrees that information regarding the Guarantor may be
delivered electronically pursuant to Section 9.5 of the Credit Agreement.

Section 31. Release of Guarantor. If expressly permitted by the Credit
Agreement, a Guarantor may be released from this Guaranty in accordance with the
terms of the Credit Agreement.

 

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Section 32. NO NOVATION. THE PARTIES HERETO HAVE ENTERED INTO THIS AMENDED AND
RESTATED GUARANTY SOLEY TO AMEND AND RESTATE THE TERMS OF, AND THE OBLIGATIONS
OWING UNDER AND IN CONNECTON WITH, THE EXISTING GUARANTY. THE PARTIES DO NOT
INTEND THIS AMENDED AND RESTATED GUARANTY NOR THE TRANSACTIONS CONTEMPLATED
HEREBY TO BE, AND THIS AMENDED AND RESTATED GUARANTY AND THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION OF ANY OF THE
OBLIGATIONS OWING BY THE GUARANTORS UNDER OR IN CONNECTION WITH THE EXISTING
GUARANTY.

Section 33. Definitions. (a) For the purposes of this Guaranty:

“Proceeding” means any of the following: (i) a voluntary or involuntary case
concerning any Guarantor shall be commenced under the Bankruptcy Code of 1978,
as amended; (ii) a custodian (as defined in such Bankruptcy Code or any other
applicable bankruptcy laws) is appointed for, or takes charge of, all or any
substantial part of the property of any Guarantor; (iii) any other proceeding
under any Applicable Law, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding-up or composition for adjustment of debts,
whether now or hereafter in effect, is commenced relating to any Guarantor;
(iv) any Guarantor is adjudicated insolvent or bankrupt; (v) any order of relief
or other order approving any such case or proceeding is entered by a court of
competent jurisdiction; (vi) any Guarantor makes a general assignment for the
benefit of creditors; (vii) any Guarantor shall fail to pay, or shall state that
it is unable to pay, or shall be unable to pay, its debts generally as they
become due; (viii) any Guarantor shall call a meeting of its creditors with a
view to arranging a composition or adjustment of its debts; (ix) any Guarantor
shall by any act or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing; or (x) any corporate action shall be taken
by any Guarantor for the purpose of effecting any of the foregoing.

(b) Terms not otherwise defined herein are used herein with the respective
meanings given them in the Credit Agreement.

IN WITNESS WHEREOF, each Guarantor has duly executed and delivered this Guaranty
as of the date and year first written above.

 

[GUARANTOR] By:            Name:        Title:     Address for Notices for all
Guarantors: c/o DiamondRock Hospitality Limited Partnership 3 Bethesda Metro
Center, Suite 1500 Bethesda, Maryland 20814 Attention: Chief Financial Officer
and General Counsel Telephone: 240-744-1190 Telecopy: 240-744-1199

 

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ANNEX I

FORM OF ACCESSION AGREEMENT

THIS ACCESSION AGREEMENT dated as of                     ,             ,
executed and delivered by                                 ,
a                     (the “New Guarantor”) in favor of WELLS FARGO BANK,
NATIONAL ASSOCIATION, in its capacity as Administrative Agent (the
“Administrative Agent”) for the Lenders under that certain Third Amended and
Restated Credit Agreement dated as of November [    ], 2012 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), by and among DiamondRock Hospitality Limited Partnership (the
“Borrower”), DiamondRock Hospitality Company (the “Parent”), the financial
institutions party thereto and their assignees under Section 13.6. thereof (the
“Lenders”), the Administrative Agent, and the other parties thereto, for its
benefit and the benefit of Swingline Lender, the Issuing Bank, and the Lenders.

WHEREAS, pursuant to the Credit Agreement, the Administrative Agent, the Issuing
Bank and the Lenders have agreed to make available to the Borrower certain
financial accommodations on the terms and conditions set forth in the Credit
Agreement;

WHEREAS, the Borrower, the New Guarantor and the existing Guarantors, though
separate legal entities, are mutually dependent on each other in the conduct of
their respective businesses as an integrated operation and have determined it to
be in their mutual best interests to obtain financing from the Administrative
Agent, the Lenders, the Swingline Lender, and the Issuing Bank through their
collective efforts;

WHEREAS, the New Guarantor acknowledges that it will receive direct and indirect
benefits from the Administrative Agent, the Lenders, the Swingline Lender, and
the Issuing Bank making such financial accommodations available to the Borrower
under the Credit Agreement and, accordingly, the New Guarantor is willing to
guarantee the Borrower’s obligations to the Administrative Agent, the Lenders,
the Swingline Lender and the Issuing Bank on the terms and conditions contained
herein; and

WHEREAS, the New Guarantor’s execution and delivery of this Agreement is a
condition to the Administrative Agent, the Lenders, the Swingline Lender, and
the Issuing Bank continuing to make such financial accommodations to the
Borrower.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the New Guarantor, the New Guarantor agrees
as follows:

Section 1. Accession to Guaranty. The New Guarantor hereby agrees that it is a
“Guarantor” under that certain Amended and Restated Guaranty dated as of
November [    ], 2012 (as amended, supplemented, restated or otherwise modified
from time to time, the “Guaranty”), made by the Guarantors party thereto in
favor of the Administrative Agent, for its benefit and the benefit of the
Lenders, the Swingline Lender, and the Issuing Bank and assumes all obligations
of a “Guarantor” thereunder and agrees to be bound thereby, all as if the New
Guarantor had been an original signatory to the Guaranty. Without limiting the
generality of the foregoing, the New Guarantor hereby:

 

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(a) irrevocably and unconditionally guarantees the due and punctual payment and
performance when due, whether at stated maturity, by acceleration or otherwise,
of all Guarantied Obligations (as defined in the Guaranty);

(b) makes to the Administrative Agent, the Lenders, the Swingline Lender, and
the Issuing Bank as of the date hereof each of the representations and
warranties contained in Section 5 of the Guaranty and agrees to be bound by each
of the covenants contained in Section 6 of the Guaranty; and

(c) consents and agrees to each provision set forth in the Guaranty.

SECTION 2. GOVERNING LAW. THIS ACCESSION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

Section 3. Definitions. Capitalized terms used herein and not otherwise defined
herein shall have their respective defined meanings given them in the Credit
Agreement.

IN WITNESS WHEREOF, the New Guarantor has caused this Accession Agreement to be
duly executed and delivered under seal by its duly authorized officers as of the
date first written above.

 

[NEW GUARANTOR]

By:

          Name:            Title:       

 

Address for Notices:

c/o DiamondRock Hospitality Limited Partnership

   

Attention:

     

Telecopier:

    ()       

Telephone:

    ()       

 

Accepted:

WELLS FARGO BANK, NATIONAL

    ASSOCIATION, as Administrative Agent

By:

          Name:            Title:       

 

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EXHIBIT C

FORM OF [AMENDED AND RESTATED] REVOLVING NOTE

 

$                                       , 20    

FOR VALUE RECEIVED, the undersigned, DIAMONDROCK HOSPITALITY LIMITED
PARTNERSHIP, a limited partnership formed under the laws of the State of
Delaware (the “Borrower”) hereby unconditionally promises to pay to the order of
                                 (the “Lender”), in care of Wells Fargo Bank,
National Association, as Administrative Agent (the “Administrative Agent”), to
Wells Fargo Bank, National Association, NorthStar East Building, MAC:N9303-110,
608 Second Avenue S., Minneapolis, Minnesota 55402, or at such other address as
may be specified in writing by the Administrative Agent to the Borrower, the
principal sum of                                  AND             /100 DOLLARS
($            ) (or such lesser amount as shall equal the aggregate unpaid
principal amount of Loans made by the Lender to the Borrower under the Credit
Agreement (as herein defined)), on the dates and in the principal amounts
provided in the Credit Agreement, and to pay interest on the unpaid principal
amount owing hereunder, at the rates and on the dates provided in the Credit
Agreement.

The date, amount of each Loan made by the Lender to the Borrower, and each
payment made on account of the principal thereof, shall be recorded by the
Lender on its books and, prior to any transfer of this Note, endorsed by the
Lender on the schedule attached hereto or any continuation thereof, provided
that the failure of the Lender to make any such recordation or endorsement shall
not affect the obligations of the Borrower to make a payment when due of any
amount owing under the Credit Agreement or hereunder in respect of the Loans
made by the Lender.

This Amended and Restated Note (this “Note”) is one of the “Notes” referred to
in the Third Amended and Restated Credit Agreement dated as of November [    ],
2012 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), by and among the Borrower, DiamondRock
Hospitality Company (the “Parent”), the financial institutions party thereto and
their assignees under Section 13.6. thereof, the Administrative Agent, and the
other parties thereto, and is subject to, and entitled to, all provisions and
benefits thereof. Capitalized terms used herein and not defined herein shall
have the respective meanings given to such terms in the Credit Agreement.

The Credit Agreement, among other things, (a) provides for the making of
Revolving Loans evidenced by this Note by the Lender to the Borrower from time
to time in an aggregate amount not to exceed at any time outstanding the Dollar
amount first above mentioned, (b) permits the prepayment of the Revolving Loans
evidenced by this Note by the Borrower subject to certain terms and conditions
and (c) provides for the acceleration of the maturity of the Revolving Loans
evidenced by this Note upon the occurrence of certain specified events.

Except as permitted by Section 13.6. of the Credit Agreement, this Note may not
be assigned by the Lender to any other Person.

[This Note is being issued in replacement of that certain Amended and Restated
Revolving Note dated as of August 6, 2010, executed and delivered by Borrower
party thereto and payable to the order of the Lender, as amended and in effect
immediately prior to the date hereof. THIS NOTE IS NOT INTENDED TO BE, AND SHALL
NOT BE CONSTRUED TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING UNDER OR IN
CONNECTION WITH SUCH OTHER REVOLVING NOTE.]

 

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THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.

The Borrower hereby waives presentment for payment, demand, notice of demand,
notice of non-payment, protest, notice of protest and all other similar notices.

Time is of the essence for this Note.

IN WITNESS WHEREOF, the undersigned has executed and delivered this Note under
seal as of the date first written above.

 

DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP

By:

  DiamondRock Hospitality Company,   its sole General Partner

By:

      Name:       Title:    

 

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SCHEDULE OF LOANS

This Note evidences Revolving Loans made under the within-described Credit
Agreement to the Borrower, on the dates, in the principal amounts, bearing
interest at the rates and maturing on the dates set forth below, subject to the
payments and prepayments of principal set forth below:

 

Date of Revolving Loan

   Principal Amount
of Revolving Loan    Amount Paid or
Prepaid    Unpaid
Principal Amount    Notation
Made By

 

 

 

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EXHIBIT D

FORM OF NOTICE OF BORROWING

            , 20            

Wells Fargo Bank, National Association

1750 H Street, NW, #550

Washington, D.C. 20006

Attention: Mark F. Monahan

Telecopier: 202-429-2589

Telephone: 202-303-3017

Wells Fargo Bank, National Association

120 Mountain View Blvd., Ste. 200

Basking Ridge, NJ 07920

Attention: Kimberely Y. Gross

Telecopier: 908-542-2092

Telephone: 908-542-2089

Ladies and Gentlemen:

Reference is made to that certain Third Amended and Restated Credit Agreement
dated as of November [    ], 2012 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
DiamondRock Hospitality Limited Partnership (the “Borrower”), DiamondRock
Hospitality Company (the “Parent”), the financial institutions party thereto and
their assignees under Section 13.6. thereof (the “Lenders”), Wells Fargo Bank,
National Association, as Administrative Agent (the “Administrative Agent”), and
the other parties thereto. Capitalized terms used herein, and not otherwise
defined herein, have their respective meanings given them in the Credit
Agreement.

 

  1. Pursuant to Section 2.1.(b) of the Credit Agreement, the Borrower hereby
requests that the Lenders make Revolving Loans to the Borrower in an aggregate
principal amount equal to $            .

 

  2. The Borrower requests that such Revolving Loans be made available to the
Borrower on                     , 20    .

 

  3. The Borrower hereby requests that the requested Revolving Loans all be of
the following Type:

[Check one box only]

 

  ¨ Base Rate Loans

 

  ¨ LIBOR Loans, each with an initial Interest Period for a duration of:

[Check one box only]   ¨ 1 month

                                        ¨ 3 months

                                        ¨ 6 months

 

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4.

   The proceeds of this borrowing of Revolving Loans will be used for the
following purpose:                                          .

5.        

   The Borrower requests that the proceeds of this borrowing of Revolving Loans
be made available to the Borrower by wire transfer in immediately available
funds to:

 

[insert wire instructions for Borrower’s account].

The Borrower hereby certifies to the Administrative Agent and the Lenders that
as of the date hereof and as of the date of the making of the requested
Revolving Loans and after giving effect thereto, (a) no Default or Event of
Default exists or shall exist, and (b) the representations and warranties made
or deemed made by the Borrower and each other Loan Party in the Loan Documents
to which any of them is a party are and shall be true and correct in all
material respects, except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and correct on and as of such earlier date)
and except for changes in factual circumstances not prohibited under the Loan
Documents. In addition, the Borrower certifies to the Administrative Agent and
the Lenders that all conditions to the making of the requested Revolving Loans
contained in Article VI. of the Credit Agreement will have been satisfied (or
waived in accordance with the applicable provisions of the Loan Documents) at
the time such Revolving Loans are made.

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice
of Borrowing as of the date first written above.

 

DIAMONDROCK HOSPITALITY LIMITED
PARTNERSHIP

By:

 

DiamondRock Hospitality Company,

 

its sole General Partner

By:

 

 

  Name:  

 

  Title:  

 

 

D-2

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EXHIBIT E

FORM OF NOTICE OF CONTINUATION

                    , 20        

Wells Fargo Bank, National Association

1750 H Street, NW, #550

Washington, D.C. 20006

Attention: Mark F. Monahan

Telecopier: 202-429-2589

Telephone: 202-303-3017

Wells Fargo Bank, National Association

120 Mountain View Blvd., Ste. 200

Basking Ridge, NJ 07920

Attention: Kimberely Y. Gross

Telecopier: 908-542-2092

Telephone: 908-542-2089

Ladies and Gentlemen:

Reference is made to that certain Third Amended and Restated Credit Agreement
dated as of November [    ], 2012 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
DiamondRock Hospitality Limited Partnership (the “Borrower”), DiamondRock
Hospitality Company (the “Parent”), the financial institutions party thereto and
their assignees under Section 13.6. thereof (the “Lenders”), Wells Fargo Bank,
National Association, as Administrative Agent (the “Administrative Agent”), and
the other parties thereto. Capitalized terms used herein, and not otherwise
defined herein, have their respective meanings given them in the Credit
Agreement.

Pursuant to Section 2.8. of the Credit Agreement, the Borrower hereby requests a
Continuation of a borrowing of Revolving Loans under the Credit Agreement, and
in that connection sets forth below the information relating to such
Continuation as required by such Section of the Credit Agreement:

 

  1. The proposed date of such Continuation is                     , 20    .

 

  2. The aggregate principal amount of Revolving Loans subject to the requested
Continuation is $             and was originally borrowed by the Borrower on
                    , 20    .

 

  3. The portion of such principal amount subject to such Continuation is
$            .

 

  4. The current Interest Period for each of the Revolving Loans subject to such
Continuation ends on                     , 20    .

 

E-1

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  5. The duration of the new Interest Period for each of such Loans or portion
thereof subject to such Continuation is:

[Check one box only]   ¨ 1 month

                                        ¨ 3 months

                                        ¨ 6 months

The Borrower hereby certifies to the Administrative Agent and the Lenders that
as of the date hereof and as of the proposed date of the requested Continuation
and after giving effect thereto, no Default or Event of Default exists or will
exist.

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice
of Continuation as of the date first written above.

 

DIAMONDROCK HOSPITALITY LIMITED
PARTNERSHIP

By:

 

DiamondRock Hospitality Company,

 

its sole General Partner

By:

 

 

  Name:  

 

  Title:  

 

 

E-2

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EXHIBIT F

FORM OF NOTICE OF CONVERSION

                    , 200    

Wells Fargo Bank, National Association

1750 H Street, NW, #550

Washington, D.C. 20006

Attention: Mark F. Monahan

Telecopier: 202-429-2589

Telephone: 202-303-3017

Wells Fargo Bank, National Association

120 Mountain View Blvd., Ste. 200

Basking Ridge, NJ 07920

Attention: Kimberely Y. Gross

Telecopier: 908-542-2092

Telephone: 908-542-2089

Ladies and Gentlemen:

Reference is made to that certain Third Amended and Restated Credit Agreement
dated as of November [    ], 2012 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
DiamondRock Hospitality Limited Partnership (the “Borrower”), DiamondRock
Hospitality Company (the “Parent”), the financial institutions party thereto and
their assignees under Section 13.6. thereof (the “Lenders”), Wells Fargo Bank,
National Association, as Administrative Agent (the “Administrative Agent”), and
the other parties thereto. Capitalized terms used herein, and not otherwise
defined herein, have their respective meanings given them in the Credit
Agreement.

Pursuant to Section 2.9. of the Credit Agreement, the Borrower hereby requests a
Conversion of a borrowing of Revolving Loans of one Type into Revolving Loans of
another Type under the Credit Agreement, and in that connection sets forth below
the information relating to such Conversion as required by such Section of the
Credit Agreement:

 

  1. The proposed date of such Conversion is             , 20    .

 

  2. The Revolving Loans to be Converted pursuant hereto are currently:

[Check one box only]  ¨ Base Rate Loans

                            ¨ LIBOR Loans

 

  3. The aggregate principal amount of Revolving Loans subject to the requested
Conversion is $             and was originally borrowed by the Borrower on
            , 20    .

 

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4.        

  The portion of such principal amount subject to such Conversion is
$            .

5.

  The amount of such Revolving Loans to be so Converted is to be converted into
Revolving Loans of the following Type:   [Check one box only]        ¨         
Base Rate Loans          ¨          LIBOR Loans, each with an initial Interest
Period for a duration of:         ¨        1 month  

[Check one box only]    

  

   ¨        3 months         ¨        6 months

The Borrower hereby certifies to the Administrative Agent and the Lenders that
as of the date hereof and as of the date of the requested Conversion and after
giving effect thereto, (a) no Default or Event of Default exists or will exist
(provided the certification under this clause (a) shall not be made in
connection with the Conversion of a Loan into a Base Rate Loan), and (b) the
representations and warranties made or deemed made by the Borrower and each
other Loan Party in the Loan Documents to which any of them is a party are and
shall be true and correct in all material respects, except to the extent that
such representations and warranties expressly relate solely to an earlier date
(in which case such representations and warranties shall have been true and
correct on and as of such earlier date) and except for changes in factual
circumstances not prohibited under the Loan Documents.

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice
of Conversion as of the date first written above.

 

DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP By:   DiamondRock Hospitality
Company,   its sole General Partner By:           Name:       Title:    

 

F-2

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EXHIBIT G

FORM OF NOTICE OF SWINGLINE BORROWING

                    , 20    

Wells Fargo Bank, National Association

1750 H Street, NW, #550

Washington, D.C. 20006

Attention: Mark F. Monahan

Telecopier: 202-429-2589

Telephone: 202-303-3017

Wells Fargo Bank, National Association

120 Mountain View Blvd., Ste. 200

Basking Ridge, NJ 07920

Attention: Kimberely Y. Gross

Telecopier: 908-542-2092

Telephone: 908-542-2089

Ladies and Gentlemen:

Reference is made to that certain Third Amended and Restated Credit Agreement
dated as of November [    ], 2012 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
DiamondRock Hospitality Limited Partnership (the “Borrower”), DiamondRock
Hospitality Company (the “Parent”), the financial institutions party thereto and
their assignees under Section 13.6. thereof (the “Lenders”), Wells Fargo Bank,
National Association, as Administrative Agent (the “Administrative Agent”), and
the other parties thereto. Capitalized terms used herein, and not otherwise
defined herein, have their respective meanings given them in the Credit
Agreement.

 

  1. Pursuant to Section 2.3.(b) of the Credit Agreement, the Borrower hereby
requests that the Swingline Lender make a Swingline Loan to the Borrower in an
amount equal to $            .

 

  2. The Borrower requests that such Swingline Loan be made available to the
Borrower on                     , 20    .

 

  3. The Borrower requests that the proceeds of such Swingline Loan be made
available to the Borrower by                    , 20    .

 

G-1

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The Borrower hereby certifies to the Administrative Agent and the Lenders that
as of the date hereof and as of the date of the making of the requested
Swingline Loans and after giving effect thereto, (a) no Default or Event of
Default exists or shall exist, and (b) the representations and warranties made
or deemed made by the Borrower and each other Loan Party in the Loan Documents
to which any of them is a party are and shall be true and correct in all
material respects, except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and correct on and as of such earlier date)
and except for changes in factual circumstances not prohibited under the Loan
Documents. In addition, the Borrower certifies to the Administrative Agent and
the Lenders that all conditions to the making of the requested Swingline Loans
contained in Article VI. of the Credit Agreement will have been satisfied (or
waived in accordance with the applicable provisions of the Loan Documents) at
the time such Swingline Loans are made.

If notice of the requested borrowing of this Swingline Loan was previously given
by telephone, this notice is to be considered the written confirmation of such
telephone notice required by Section 2.3.(b) of the Credit Agreement.

[Signature on Next Page]

 

G-2

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IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice
of Swingline Borrowing as of the date first written above.

 

DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP By:   DiamondRock Hospitality
Company,   its sole General Partner By:           Name:       Title:    

 

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EXHIBIT H

FORM OF SWINGLINE NOTE

 

$40,000,000                             , 20    

FOR VALUE RECEIVED, the undersigned, DIAMONDROCK HOSPITALITY LIMITED
PARTNERSHIP, a limited partnership formed under the laws of the State of
Delaware (the “Borrower”), hereby promises to pay to the order of WELLS FARGO
BANK, NATIONAL ASSOCIATION (the “Swingline Lender”) in care of Wells Fargo Bank,
National Association, as Administrative Agent (the “Administrative Agent”), to
Wells Fargo Bank, National Association, NorthStar East Building, MAC:N9303-110,
608 Second Avenue S., Minneapolis, Minnesota 55402, or at such other address as
may be specified by the Swingline Lender to the Borrower, the principal sum of
FORTY MILLION AND NO/100 DOLLARS ($40,000,000.00) (or such lesser amount as
shall equal the aggregate unpaid principal amount of Swingline Loans made by the
Swingline Lender to the Borrower under the Credit Agreement), on the dates and
in the principal amounts provided in the Credit Agreement, and to pay interest
on the unpaid principal amount owing hereunder, at the rates and on the dates
provided in the Credit Agreement.

The date, amount of each Swingline Loan, and each payment made on account of the
principal thereof, shall be recorded by the Swingline Lender on its books and,
prior to any transfer of this Swingline Note (this “Note”), endorsed by the
Swingline Lender on the schedule attached hereto or any continuation thereof,
provided that the failure of the Swingline Lender to made any such recordation
or endorsement shall not affect the obligations of the Borrower to make a
payment when due of any amount owing under the Credit Agreement or hereunder in
respect of the Swingline Loans.

This Note is the “Swingline Note” referred to in the Third Amended and Restated
Credit Agreement dated as of November [    ], 2012 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
by and among the Borrower, DiamondRock Hospitality Company (the “Parent”), the
financial institutions party thereto and their assignees under Section 13.6.
thereof, the Administrative Agent, and the other parties thereto, and is subject
to, and entitled to, all provisions and benefits thereof. Capitalized terms used
herein and not defined herein shall have the respective meanings given to such
terms in the Credit Agreement.

The Credit Agreement provides for the acceleration of the maturity of this Note
upon the occurrence of certain events and for prepayments of Swingline Loans
upon the terms and conditions specified therein.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.

The Borrower hereby waives presentment for payment, demand, notice of demand,
notice of non-payment, protest, notice of protest and all other similar notices.

Time is of the essence for this Note.

 

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IN WITNESS WHEREOF, the undersigned has executed and delivered this Swingline
Note under seal as of the date first written above.

 

DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP By:   DiamondRock Hospitality
Company,   its sole General Partner By:       Name:       Title:    

 

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EXHIBIT I

FORM OF TRANSFER AUTHORIZER DESIGNATION

(For Disbursement of Loan Proceeds)

þ NEW     ¨ REPLACE PREVIOUS DESIGNATION     ¨ ADD     ¨ CHANGE     ¨ DELETE
LINE NUMBER
¨ INITIAL LOAN DISBURSEMENT

The following representatives (“Authorized Representatives”) of DIAMONDROCK
HOSPITALITY LIMITED PARTNERSHIP (“Borrower”) are authorized to request the
disbursement of loan proceeds and initiate funds transfers for Loan Number
104239 (“Loan”) assigned to the unsecured revolving credit facility in the
initial principal amount of $200,000,000 (“Initial Loan Amount”), which Initial
Loan Amount may be increased pursuant to the term of the Credit Agreement (as
defined below) to a principal amount that after giving effect to any such
increases shall not exceed $400,000,000 (“Increased Loan Amount”) evidenced by
that certain Third Amended and Restated Credit Agreement dated November [    ],
2012 (“Credit Agreement”), by and among the Borrower, DiamondRock Hospitality
Company (the “Parent”), the financial institutions party thereto and their
assignees under Section 13.6. thereof, Wells Fargo Bank, National Association
(the “Administrative Agent”), and the other parties thereto The Administrative
Agent is authorized to rely on this Transfer Authorizer Designation form until
it has received a new Transfer Authorizer Designation form signed by Borrower,
even in the event that any or all of the foregoing information may have changed.
The maximum amount of the initial disbursement of any Loan proceeds (“Initial
Loan Disbursement”) and the maximum amount of each subsequent disbursement of
any Loan proceeds (each a “Subsequent Loan Disbursement”) that each Authorized
Representative is authorized to request are set forth below:

 

Name

   Title    Maximum Initial
Loan  Disbursement
Amount1    Maximum Subsequent
Loan Disbursement
Amount1

1.

        

 

I-1

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INITIAL LOAN DISBURSEMENT AUTHORIZATION

 

¨ Applicable for Wire Transfer in Connection with Request from Authorized
Representative. The Administrative Agent is hereby authorized to disburse the
proceeds of the Initial Loan Disbursement requested from an Authorized
Representative in accordance with the terms of the Credit Agreement by wire
transfer as specified in the wire transfer instructions set forth below under
Item 1. of “Beneficiary Bank and Account Holder Information” of this Transfer
Authorizer Designation.

 

¨ Applicable for Wire Transfer Instructions from Person other than Authorized
Representative. The Administrative Agent is hereby authorized to accept wire
transfer instructions for the Initial Loan Disbursement from
                     (i.e. specify title/escrow company), which instructions are
to be delivered, via fax, email, or letter, to the Administrative Agent. Said
instructions shall include the Borrower’s Name; Title/Escrow
#                     and/or Loan #            ; the person/entity to receive
the Initial Loan Disbursement (“Receiving Party”); the Receiving Party’s full
account name; Receiving Party’s account number at the receiving bank (“Receiving
Bank”); Receiving Bank’s (ABA) routing number; city and state of the Receiving
Bank; and the amount of the Initial Loan Disbursement (not to exceed the Maximum
Initial Loan Disbursement Amount set forth above).

 

¨ Applicable for Deposit into Deposit Account. The Administrative Agent is
hereby authorized to disburse the proceeds of the Initial Loan Disbursement
requested from an Authorized Representative in accordance with the terms of the
Credit Agreement by deposit into the deposit account specified in the deposit
instructions set forth below under Item 2. of “Beneficiary Bank and Account
Holder Information” of this Transfer Authorizer Designation.

SUBSEQUENT LOAN DISBURSEMENT AUTHORIZATION

 

¨ Not Applicable

 

¨ Applicable for Wire Transfer in Connection with Request from Authorized
Representative. The Administrative Agent is hereby authorized to disburse the
proceeds of any Subsequent Loan Disbursement requested from an Authorized
Representative in accordance with the terms of the Credit Agreement by wire
transfer as specified in the wire transfer instructions set forth below under
Item 3. of Beneficiary Bank and Account Holder Information of this Transfer
Authorizer Designation.

 

¨ Applicable for Wire Transfer from Person other than Authorized Representative.
The Administrative Agent is hereby authorized to accept wire transfer
instructions for the Subsequent Loan Disbursement from                     
(i.e. specify title/escrow company), which instructions are to be delivered, via
fax, email, or letter, to Lender. Said instructions shall include the Borrower’s
Name; Title/Escrow #                     and/or Loan #            ; the
person/entity to receive the Subsequent Loan Disbursement (“Receiving Party”);
the Receiving Party’s full account name; Receiving Party’s account number at the
receiving bank (“Receiving Bank”); Receiving Bank’s (ABA) routing number; city
and state of the Receiving Bank; and the amount of the Subsequent Loan
Disbursement (not to exceed the Maximum Subsequent Loan Disbursement Amount set
forth above).

 

I-2

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¨ Applicable for Deposit into Deposit Account. The Administrative Agent is
hereby authorized to disburse the proceeds of any Subsequent Loan Disbursement
requested from an Authorized Representative in accordance with the terms of the
Credit Agreement by deposit into the deposit account specified in the deposit
instructions set forth below under Item 4. of “Beneficiary Bank and Account
Holder Information” of this Transfer Authorizer Designation.

Borrower acknowledges and agrees that the acceptance of and disbursement of
funds by the Administrative Agent in accordance with the title/escrow company or
Authorized Representative instructions shall be governed by this Transfer
Authorizer Designation form and any other Loan Documents (as defined in the Loan
Agreement). The Administrative Agent shall not be further required to confirm
said disbursement instructions received from title/escrow company or Authorized
Representative with Borrower. This Transfer Authorizer Designation form is in
effect until [EXPIRATION DATE OF AUTHORIZATION] after which time a new
authorization request shall be required. Borrower shall instruct title/escrow
company via a separate letter, to deliver said disbursement instructions in
writing, directly to the Administrative Agent at its address set forth in that
certain Section of the Loan Agreement entitled Notices. Borrower also hereby
authorizes the Administrative Agent to attach a copy of the written disbursement
instructions to this Transfer Authorizer Designation form upon receipt of said
instructions.

 

I-3

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Beneficiary Bank and Account Holder Information

1. INITIAL LOAN DISBURSEMENT AUTHORIZATION—FOR WIRE TRANSFER

Borrower Name:

Title/Escrow Number:

 

  A. Loan Number:

 

  B. Transfer/Deposit Funds to (Receiving Party Account Name):

 

  C. Receiving Party Deposit Account Number:

 

  D. Receiving Bank Name, City and State:

 

  E. Receiving Bank Routing (ABA) Number:

 

  F. Disbursement Amount (Not to exceed the Maximum Initial Loan Disbursement
Amount):

 

  G. Further Credit Information/Instructions:

2. INITIAL LOAN DISBURSEMENT AUTHORIZATION—FOR DEPOSIT INTO DEPOSIT ACCOUNT

Borrower Name:

Title/Escrow Number:

 

  A. Loan Number:

 

  B. Transfer/Deposit Funds to (Receiving Party Account Name):

 

  C. Receiving Party Deposit Account Number:

 

  D. Receiving Bank Name, City and State:

 

  E. Receiving Bank Routing (ABA) Number:

 

  F. Disbursement Amount (Not to exceed the Maximum Initial Loan Disbursement
Amount):

 

  G. Further Credit Information/Instructions:

 

I-4

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3. SUBSEQUENT LOAN DISBURSEMENT AUTHORIZATION—FOR WIRE TRANSFER

Borrower Name:

Title/Escrow Number:

 

  A. Loan Number:

 

  B. Transfer/Deposit Funds to (Receiving Party Account Name):

 

  C. Receiving Party Deposit Account Number:

 

  D. Receiving Bank Name, City and State:

 

  E. Receiving Bank Routing (ABA) Number:

 

  F. Disbursement Amount (Not to exceed the Maximum Subsequent Loan Disbursement
Amount nor an amount, in the aggregate with the outstanding loans, would exceed
the [Initial] Loan Amount [or the Increased Loan Amount, as applicable)]:

 

  G. Further Credit Information/Instructions:

 

I-5

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4. SUBSEQUENT LOAN DISBURSEMENT AUTHORIZATION—FOR DEPOSIT INTO DEPOSIT ACCOUNT

Borrower Name:

Title/Escrow Number:

 

  A. Loan Number:

 

  B. Transfer/Deposit Funds to (Receiving Party Account Name):

 

  C. Receiving Party Deposit Account Number:

 

  D. Receiving Bank Name, City and State:

 

  E. Receiving Bank Routing (ABA) Number:

 

  F. Disbursement Amount (Not to exceed the Maximum Subsequent Loan Disbursement
Amount nor an amount, in the aggregate with the outstanding loans, would exceed
the [Initial]Loan Amount [or the Increased Loan Amount, as applicable )]:

 

  G. Further Credit Information/Instructions:

 

1 

Neither the Initial Disbursement Amount, nor the Initial Disbursement Amount
together with any Subsequent Disbursement Amounts, shall ever exceed the Initial
Loan Amount or the Increased Loan Amount, as applicable.

 

I-6

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

Date:                         

 

“BORROWER” DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP By:   DiamondRock
Hospitality Company,   its sole General Partner By:       Name:       Title:    

 

I-7

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EXHIBIT J

FORM OF OPINION OF COUNSEL

(Please see attached)

 

J-1

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EXHIBIT K

FORM OF COMPLIANCE CERTIFICATE

                    , 20    

Wells Fargo Bank, National Association

1750 H Street, NW, #550

Washington, D.C. 20006

Attention: Mark F. Monahan

Telecopier: 202-429-2589

Telephone: 202-303-3017

Wells Fargo Bank, National Association

120 Mountain View Blvd., Ste. 200

Basking Ridge, NJ 07920

Attention: Kimberely Y. Gross

Telecopier: 908-542-2092

Telephone: 908-542-2089

Ladies and Gentlemen:

Reference is made to that certain Third Amended and Restated Credit Agreement
dated as of November [    ], 2012 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
DiamondRock Hospitality Limited Partnership (the “Borrower”), DiamondRock
Hospitality Company (the “Parent”), the financial institutions party thereto and
their assignees under Section 13.6. thereof (the “Lenders”), Wells Fargo Bank,
National Association, as Administrative Agent (the “Administrative Agent”), and
the other parties thereto. Capitalized terms used herein, and not otherwise
defined herein, have their respective meanings given them in the Credit
Agreement.

Pursuant to Section 9.3 of the Credit Agreement, the undersigned hereby
certifies, in such person’s corporate and not individual capacity, to the
Administrative Agent and the Lenders that:

1. The undersigned is the [                    ] of the Parent.

2. The undersigned has examined the books and records of the Parent and the
Borrower and has conducted such other examinations and investigations as are
reasonably necessary to provide this Compliance Certificate.

3. As of the date of this Compliance Certificate, to the best of my knowledge,
information and belief after due inquiry, no Default or Event of Default exists
and the Borrower and its Subsidiaries are in compliance with all covenants under
the Credit Agreement. [if such is not the case, specify such Default, Event of
Default or covenant non-compliance and its nature, when it occurred and whether
it is continuing and the steps being taken by the Borrower with respect to such
event, condition or failure].

 

K-1

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

4. Attached hereto as Schedule 1 are reasonably detailed calculations
(a) establishing whether or not the Borrower and its Subsidiaries were in
compliance with the covenants contained in Sections 10.1., 10.2. and 10.4. of
the Credit Agreement and (b) demonstrating the Pricing Ratio.

5. [Attached hereto as Schedule 2 is a list of all Persons that are a Material
Subsidiary or a Significant Subsidiary as of the date hereof] 1 [Attached hereto
as Schedule 2 is a list of all Persons that have become a Material Subsidiary or
a Significant Subsidiary since the date of the Compliance Certificate most
recently delivered by the Borrower or the Parent prior to the date hereof.]

6. [Attached hereto as Schedule 3 is a report of the Properties of the Parent,
the Borrower and each of the other Subsidiaries, including their Net Operating
Income for the trailing four (4) fiscal quarters most recently ending and
mortgage debt as of the date hereof, if any, in each case, as of the date
hereof.]2 [Attached hereto as Schedule 3 is a report of newly acquired
Properties of the Parent, the Borrower and each of the other Subsidiaries,
including their Net Operating Income for the trailing four (4) fiscal quarters
ending                    , purchase price, and principal amount of the mortgage
debt as of the date hereof, if any, since the date of the Compliance Certificate
most recently delivered by the Borrower or the Parent prior to the date hereof.]

7. As of the date hereof [the aggregate outstanding principal amount of all
outstanding Loans is less than or equal to the Maximum Loan Availability at such
time.] [there are no Loans outstanding.]

8. Schedule 4 attached hereto accurately and completely sets forth, in
reasonable detail, the information to determine the Unencumbered Borrowing Base
Value of all Unencumbered Borrowing Base Properties and Maximum Loan
Availability as of                     , 20    , including, without limitation,
the aggregate principal amount of all Secured Recourse Indebtedness. 3

9. [Each Property listed on Schedule 5 attached hereto constitutes an Eligible
Borrowing Base Property and the Administrative Agent has received such
information and reports regarding such Property as required under
Section 4.1.(b) of the Credit Agreement.]4

 

 

1 

Substitute this statement and the corresponding Schedule, upon the delivery of
this Certificate on the Closing Date.

2 

Substitute this statement and the corresponding Schedule, upon the delivery of
this Certificate on the Closing Date.

3 

If this Certificate is delivered in connection with the submission of an
Eligible Unencumbered Borrowing Base Property as an Unencumbered Borrowing Base
Property pursuant to Section 4.1.(b), then each of the calculations set forth on
Schedules 3 should include such Property as if it is already an Unencumbered
Borrowing Base Property.

4 

Include this statement and the corresponding Schedule, if this Certificate is
delivered in connection with the submission of an Eligible Unencumbered
Borrowing Base Property as an Unencumbered Borrowing Base Property pursuant to
Section 4.1.(b).

 

K-2

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10. [Schedule 6 attached hereto accurately and completely sets forth, in
reasonable detail, the information required to determine the Unencumbered
Borrowing Base Value of each Eligible Unencumbered Borrowing Base Property as of
                    , 20    .]5

IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date
first above written.

 

   [INSERT NAME], as [Chief Financial Officer][Chief Executive Officer] of
DiamondRock Hospitality Company

 

 

5 

Include this statement and the corresponding Schedule, if this Certificate is
delivered in connection with the submission of an Eligible Unencumbered
Borrowing Base Property as an Unencumbered Borrowing Base Property pursuant to
Section 4.1.(b).

 

K-3

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Schedule 1

Financial Covenant Compliance

[Calculations to be Attached]

 

K-1

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

Schedule 2

Material Subsidiary or a Significant Subsidiary since                     ,
20    

 

K-2

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Schedule 3

New Properties

[Report to be Attached]

 

K-3

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Schedule 4

Maximum Loan Availability

[Report to be Attached]

 

K-4

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

Schedule 5

Eligible Borrowing Base Properties

[Report to be Attached]

 

K-5

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Schedule 6

Unencumbered Borrowing Base Value of each Eligible Unencumbered Borrowing Base
Property

[Report to be Attached]

 

K-6