Exhibit 10.1

EXECUTION COPY

SENIOR SECURED CREDIT AGREEMENT

dated as of July 25, 2012

among

CHOICE HOTELS INTERNATIONAL, INC.,

as Borrower,

THE LENDERS NAMED HEREIN,

and

DEUTSCHE BANK AG NEW YORK BRANCH,

as Administrative Agent,

with

DEUTSCHE BANK SECURITIES INC.

and

WELLS FARGO SECURITIES, LLC

as Joint Lead Arrangers,

and

DEUTSCHE BANK SECURITIES INC.

and

WELLS FARGO SECURITIES, LLC

as Joint Book-Running Managers,

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Syndication Agent,

and

BANK OF AMERICA, N.A., JPMORGAN CHASE BANK, N.A., SUNTRUST BANK

AND PNC BANK, NATIONAL ASSOCIATION,

as Co-Documentation Agents

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TABLE OF CONTENTS

 

     Page   ARTICLE I    DEFINITIONS    SECTION 1.01.  

Defined Terms

     1    SECTION 1.02.  

Terms Generally

     22    SECTION 1.03.  

Effectiveness of Euro Provisions

     23    SECTION 1.04.  

Other Definitions and Provisions

     23    SECTION 1.05.  

Alternative Currencies

     23    SECTION 1.06.  

Letter of Credit Amounts

     23    ARTICLE II    THE CREDITS    SECTION 2.01.   Revolving Loans; Term
Loan; Competitive Bid Loans      24    SECTION 2.02.   Swingline Loans      24
   SECTION 2.03.   Procedure for Advances of Revolving Loans, Term Loans and
Swingline Loans      26    SECTION 2.04.   Procedure for Advance of Competitive
Bid Loans      27    SECTION 2.05.   Repayment of Loans      29    SECTION 2.06.
  Permanent Reduction of the Revolving Commitment and the Alternative Currency
Commitment      32    SECTION 2.07.   Fees      32    SECTION 2.08.   Evidence
of Indebtedness      33    SECTION 2.09.   Interest on Loans      34    SECTION
2.10.   Notice and Manner of Conversion or Continuation of Loans      36   
SECTION 2.11.   Manner of Payment      36    SECTION 2.12.   Crediting of
Payments and Proceeds      37    SECTION 2.13.   Adjustments      38    SECTION
2.14.   Nature of Obligations of Lenders Regarding Extensions of Credit;
Assumption by the Administrative Agent      38    SECTION 2.15.   Redenomination
of Eurocurrency Loans      39    SECTION 2.16.   Extension of Initial Maturity
Date      39    SECTION 2.17.   Changed Circumstances      40    SECTION 2.18.  
Indemnity      41    SECTION 2.19.   Capital Requirements      42    SECTION
2.20.   Taxes      42    SECTION 2.21.   Mitigation by Lenders      44   
SECTION 2.22.   Rounding and Other Consequential Changes      45    SECTION
2.23.   Letters of Credit      45    SECTION 2.24.   Increase in Commitments   
  49    SECTION 2.25.   Special Provisions Regarding Revolving Loans      50   
SECTION 2.26.   Replacement of Certain Lenders      50    SECTION 2.27.  
Defaulting Lenders      51    SECTION 2.28.   Certain Permitted Amendments     
53   

 

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ARTICLE III    REPRESENTATIONS AND WARRANTIES    SECTION 3.01.  

Organization; Powers

     54    SECTION 3.02.  

Authorization

     55    SECTION 3.03.  

Enforceability

     55    SECTION 3.04.  

Governmental Approvals

     55    SECTION 3.05.  

Financial Statements

     55    SECTION 3.06.  

No Material Adverse Change

     55    SECTION 3.07.  

Title to Properties; Possession Under Leases

     56    SECTION 3.08.  

Subsidiaries

     56    SECTION 3.09.  

Litigation; Compliance with Laws

     56    SECTION 3.10.  

Agreements

     56    SECTION 3.11.  

Federal Reserve Regulations

     57    SECTION 3.12.  

Investment Company Act

     57    SECTION 3.13.  

Use of Proceeds

     57    SECTION 3.14.  

Tax Returns

     57    SECTION 3.15.  

No Material Misstatements

     57    SECTION 3.16.  

Employee Benefit Plans

     57    SECTION 3.17.  

Environmental Matters

     58    SECTION 3.18.  

Solvency

     58    SECTION 3.19.  

OFAC

     58    ARTICLE IV    CONDITIONS OF LENDING    SECTION 4.01.  

All Credit Events

     58    SECTION 4.02.  

First Credit Event.

     59    ARTICLE V    AFFIRMATIVE COVENANTS    SECTION 5.01.  

Existence; Businesses and Properties

     61    SECTION 5.02.  

Insurance

     62    SECTION 5.03.  

Taxes

     62    SECTION 5.04.  

Financial Statements, Reports, etc

     62    SECTION 5.05.  

Litigation and Other Notices

     64    SECTION 5.06.  

ERISA

     64    SECTION 5.07.  

Maintaining Records; Access to Properties and Inspections

     64    SECTION 5.08.  

Use of Proceeds

     65    SECTION 5.09.  

Subsidiaries; Principal Properties

     65    ARTICLE VI    NEGATIVE COVENANTS    SECTION 6.01.  

Indebtedness

     67    SECTION 6.02.  

Liens

     67    SECTION 6.03.  

Sale and Lease-Back Transactions

     69    SECTION 6.04.  

Investments, Loans and Advances

     69    SECTION 6.05.  

Mergers and Consolidations

     70    SECTION 6.06.  

Asset Sales

     70    SECTION 6.07.  

Transactions with Affiliates

     70    SECTION 6.08.  

Certain Accounting Changes; Organizational Documents

     70    SECTION 6.09.  

Negative Pledges

     70    SECTION 6.10.  

Restricted Payments

     71    SECTION 6.11.  

Consolidated Leverage Ratio

     71    SECTION 6.12.  

Consolidated Secured Leverage Ratio

     71    SECTION 6.13.  

Consolidated Fixed Charge Coverage Ratio

     71   

 

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ARTICLE VII   

EVENTS OF DEFAULT

   ARTICLE VIII    THE AGENT   

SECTION 8.01.

  Appointment; Supplemental Collateral Agents      74   

SECTION 8.02.

  Delegation of Duties      75   

SECTION 8.03.

  Exculpatory Provisions      75   

SECTION 8.04.

  Reliance by the Administrative Agent      76   

SECTION 8.05.

  Notice of Default      76   

SECTION 8.06.

  Non-Reliance on the Administrative Agent and Other Lenders      76   

SECTION 8.07.

  Indemnification      77   

SECTION 8.08.

  The Administrative Agent in Its Individual Capacity      77   

SECTION 8.09.

  Resignation of the Administrative Agent; Successor Administrative Agent     
77   

SECTION 8.10.

  Other Agents, Arrangers and Managers      78   

SECTION 8.11.

  Mandatory Cost Information      78    ARTICLE IX    MISCELLANEOUS   

SECTION 9.01.

  Notices      78   

SECTION 9.02.

  Survival of Agreement      79   

SECTION 9.03.

  Binding Effect      79   

SECTION 9.04.

  Successors and Assigns      80   

SECTION 9.05.

  Expenses; Indemnity      83   

SECTION 9.06.

  Right of Setoff      84   

SECTION 9.07.

  Applicable Law      85   

SECTION 9.08.

  Waivers; Amendment      85   

SECTION 9.09.

  Entire Agreement      86   

SECTION 9.10.

  Waiver of Jury Trial; Consequential and Punitive Damages      86   

SECTION 9.11.

  Severability      86   

SECTION 9.12.

  Counterparts      86   

SECTION 9.13.

  Headings      86   

SECTION 9.14.

  Jurisdiction; Consent to Service of Process; Judgment Currency      87   

SECTION 9.15.

  Confidentiality      88   

SECTION 9.16.

  Rights and Remedies Cumulative; Non-Waiver; etc      88   

SECTION 9.17.

  USA Patriot Act      88   

SECTION 9.18.

  No Fiduciary Duties      89   

SECTION 9.19.

  Release of Collateral      89   

SECTION 9.20.

  No Bankruptcy Proceedings      89   

 

Exhibits

   

Exhibit A-1

  Form of Notice of Borrowing

Exhibit A-2

  Form of Notice of Account Designation

Exhibit A-3

  Form of Notice of Prepayment

Exhibit A-4

  Form of Notice of Conversion/Continuation

Exhibit A-5

  Form of Competitive Bid Request

Exhibit A-6

  Form of Invitation to Bid

 

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Exhibit A-7

  Form of Competitive Bid

Exhibit A-8

  Form of Competitive Bid Accept/Reject Letter

Exhibit B

  Form of Administrative Questionnaire

Exhibit C

  Form of Assignment and Acceptance

Exhibit D

  Form of Guarantee Agreement for Restricted Subsidiaries

Exhibit E

  Form of Security Agreement

Exhibit F-1

  Form of Term Note

Exhibit F-2

  Form of Revolving Note

Exhibit G

  Form of Designated Bank Note

Exhibit H

  Form of Designation Agreement  

Schedules

   

Schedule 1.01(a)

  Mandatory Cost

Schedule 2.01

  Commitments

Schedule 3.08

  Subsidiaries

Schedule 6.02

  Existing Liens

 

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SENIOR SECURED CREDIT AGREEMENT

This SENIOR SECURED CREDIT AGREEMENT, dated as of July 25, 2012, is made by and
among CHOICE HOTELS INTERNATIONAL, INC., a Delaware corporation (the
“Borrower”), the Lenders referred to herein, DEUTSCHE BANK AG NEW YORK BRANCH,
as administrative agent for the Lenders (in such capacity, together with any
successor administrative agent appointed in accordance with Section 8.09, the
“Administrative Agent”), DEUTSCHE BANK SECURITIES INC. and WELLS FARGO
SECURITIES, LLC, as joint lead arrangers (the “Arrangers”), DEUTSCHE BANK
SECURITIES INC. and WELLS FARGO SECURITIES, LLC, as joint book-running managers
(the “Book-Running Managers”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as
syndication agent (the “Syndication Agent”), and BANK OF AMERICA, N.A., JPMORGAN
CHASE BANK, N.A., SUNTRUST BANK and PNC BANK, NATIONAL ASSOCIATION, as
co-documentation agents.

Capitalized terms used in this Agreement shall have the meanings assigned to
such terms in Section 1.01.

The Borrower has requested the Lenders to extend certain credit facilities on
the terms and subject to the conditions herein set forth. Accordingly, for good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties hereto, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
shall have the meanings specified below:

“ABR Loan” shall mean any Loan denominated in dollars bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.

“Accepting Lenders” shall have the meaning assigned to such term in
Section 2.28(a).

“Adjusted LIBO Rate” shall mean, with respect to any Eurodollar Loan for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.

“Administrative Questionnaire” shall mean an Administrative Questionnaire in the
form of Exhibit B.

“Administrative Agent” shall have the meaning specified in the recital of
parties to this Agreement.

“Administrative Agent’s Correspondent” shall mean Deutsche Bank AG, London
Branch, or any other financial institution designated by the Administrative
Agent to act as its correspondent hereunder with respect to the distribution and
payment of Eurocurrency Loans.

“Affiliate” shall mean, when used 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.

“Agreement” shall mean this Senior Secured Credit Agreement.

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“Agreement Collateral” shall have the meaning assigned to such term in the
Security Agreement.

“Agreement Collateral Release Date” shall mean the date on which the
Consolidated Leverage Ratio is first required to be no greater than 4.00:1.00
pursuant to Section 6.11, provided that no Default or Event of Default then
exists.

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds
Effective Rate in effect on such day plus  1/2%, or (c) the LIBO Rate for a one
(1) month Interest Period (determined on a daily basis) plus 1%. For purposes
hereof, “Prime Rate” shall mean the rate of interest per annum publicly
announced from time to time by the Deutsche Bank AG New York Branch, as its
prime rate in effect at its principal office in New York City; each change in
the Prime Rate shall be effective on the date such change is publicly announced
as effective. The parties hereto acknowledge that the rate announced publicly by
Deutsche Bank AG New York Branch, as its Prime Rate is an index or base rate and
shall not necessarily be its lowest or best rate charged to its customers.
“Federal Funds Effective Rate” shall mean the rate per annum (rounded upwards,
if necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any reason,
such rate is not available, then “Federal Funds Effective Rate” shall mean a
daily rate which is determined, in the opinion of the Administrative Agent, to
be the rate at which federal funds are being offered for sale in the national
federal funds market at 9:00 a.m. Rates for weekends or holidays shall be the
same as the rate for the most immediately preceding Business Day. Any change in
the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds
Effective Rate or the LIBO Rate shall be effective on the effective date of such
change in the Prime Rate, the Federal Funds Effective Rate or the LIBO Rate,
respectively.

“Alternate Foreign Holding Subsidiary” shall have the meaning specified in
Section 5.09(e).

“Alternative Currency” shall mean each lawful and freely available currency
(other than dollars) that is freely transferable and freely convertible into
dollars and in which dealings in deposits are carried on in the London interbank
market, which shall be requested by the Borrower and approved by all of the
Lenders.

“Alternative Currency Amount” shall mean with respect to each Revolving Loan
made or continued (or to be made or continued) in an Alternative Currency, the
amount of such Alternative Currency which is equivalent to the principal amount
in dollars of such Revolving Loan at the most favorable Spot Exchange Rate
determined by the Administrative Agent to be available to it at approximately
11:00 a.m. two (2) Business Days before such Revolving Loan is made or continued
(or to be made or continued). When used with respect to any other sum expressed
in dollars, “Alternative Currency Amount” shall mean the amount of such
Alternative Currency which is equivalent to the amount so expressed in dollars
at the most favorable Spot Exchange Rate determined by the Administrative Agent
to be available to it at the relevant time.

“Alternative Currency Commitment” shall mean the lesser of (a) $35,000,000 and
(b) the Revolving Commitment, as such amount may be reduced or modified at any
time or from time to time pursuant to the terms hereof.

“Alternative Currency Letter of Credit” shall mean a Letter of Credit
denominated in an Alternative Currency.

 

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“Anti-Terrorism Laws” means any Applicable Law relating to terrorism, trade
sanctions programs and embargoes, import/export licensing, money laundering, or
bribery, including the PATRIOT Act.

“Applicable Law” shall mean all applicable provisions of constitutions, laws,
statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts of governmental authorities and
all orders and decrees of all courts and arbitrators.

“Applicable Percentage” shall mean, with respect to any Eurocurrency Loan,
Eurodollar Loan, ABR Loan or Swingline Loan (if applicable), as the case may be,
the applicable percentage per annum set forth in the table below under the
caption “Applicable Percentage for Eurocurrency and Eurodollar Loans” or
“Applicable Percentage for ABR Loans”, as the case may be, based upon the
Consolidated Leverage Ratio as set forth below, provided that the Applicable
Percentage for Eurocurrency Loans shall be increased by an amount equal to the
applicable Mandatory Cost, as determined pursuant to the relevant formula set
forth on Schedule 1.01(a) hereto:

 

Pricing Level

   Consolidated Leverage Ratio    Applicable Percentage for
Eurocurrency (excluding
Mandatory Costs) and
Eurodollar Loans     Applicable Percentage
for ABR Loans  

I

   < 3.50:1.00      2.000 %      1.000 % 

II

   ³ 3.50:1:00 but < 4.00:1.00      2.375 %      1.375 % 

III

   ³ 4.00:1.00 but < 4.50:1.00      2.750 %      1.750 % 

IV

   ³ 4.50:1.00 but < 5.00:1.00      3.250 %      2.250 % 

V

   ³ 5.00:1.00 but < 5.50:1.00      3.750 %      2.750 % 

VI

   ³ 5.50:1.00      4.250 %      3.250 % 

The Applicable Percentage for each ABR Loan shall be determined by reference to
the Consolidated Leverage Ratio in effect from time to time and the Applicable
Percentage for any Interest Period for any Eurocurrency Loan, Eurodollar Loan or
Swingline Loan (if applicable) comprising part of the same borrowing by the
Borrower shall be determined by reference to the Consolidated Leverage Ratio in
effect on the first day of such Interest Period; provided, however, that (a) the
Applicable Percentage for the period from the Closing Date until the date on
which the Administrative Agent receives the financial statements required to be
delivered pursuant to Section 5.04(b) for the quarter ending September 30, 2012
shall be at Pricing Level II, (b) no change in the Applicable Percentage
resulting from the Consolidated Leverage Ratio shall be effective until three
Business Days after the date on which the Administrative Agent receives (i) the
financial statements required to be delivered pursuant to Section 5.04(a) or
(b), as the case may be, and (ii) a certificate of the Financial Officer of the
Borrower demonstrating the Consolidated Leverage Ratio, and (c) the Applicable
Percentage shall be at Pricing Level VI for so long as the Borrower has not
submitted to the Administrative Agent as and when required under Section 5.04(a)
or (b), as applicable, the information described in clause (b) of this proviso.

“Application” shall mean an application, in the form specified by the Issuing
Bank from time to time, requesting the Issuing Bank to issue a Letter of Credit.

“Approved Fund” shall mean any Person (other than a natural person), including,
without limitation, any special purpose entity, 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, provided
that such Approved Fund must be administered by (a) a Lender, (b) a Lender
Affiliate or (c) an entity or an Affiliate of an entity that administers or
manages a Lender.

 

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“Arrangers” shall have the meaning specified in the recital of parties to this
Agreement.

“Asset Sale” shall mean, with respect to the Borrower or any Subsidiary, any
sale, transfer or other disposition of any assets or other properties (including
individual business assets, patents, trademarks and other intangibles) of the
Borrower or such Subsidiary, including the sale, transfer or disposition of any
capital stock of or any merger or consolidation involving any Subsidiary and any
issuance or sale by any Subsidiary of shares of its capital stock, other than
(i) sales of inventory and used equipment in the ordinary course of business of
the Person (whether the Borrower or a Subsidiary) owning and selling such
inventory or used equipment; (ii) sales, transfers and other dispositions of any
tangible assets by the Borrower or any Subsidiary that have become obsolete or
have been determined by the management of the Borrower or such Subsidiary to no
longer be necessary for the conduct of its business; (iii) sales, transfers and
other dispositions of any assets to the Borrower or any Restricted Subsidiary;
(iv) Sale and Lease-Back Transactions; (v) sales by the Borrower or Subsidiaries
of assets acquired from Persons other than the Borrower or other Subsidiaries,
which sales occur not more than 12 months after the respective dates on which
such assets were acquired; and (vi) the disposition of Hedging Agreements.

“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an Eligible Assignee, and accepted by the Administrative Agent
and each Issuing Bank, in the form of Exhibit C.

“Bainum Affiliates” shall have the meaning assigned to such term in the
definition of “Permitted Holders”.

“Beneficial Ownership” shall have the meaning provided in Rule 13d-3 of the
Securities and Exchange Commission under the Exchange Act.

“Board” shall mean the Board of Governors of the Federal Reserve System of the
United States.

“Book-Running Managers” shall have the meaning specified in the recital of
parties to this Agreement.

“Borrower” shall have the meaning specified in the recital of parties to this
Agreement.

“Borrower Materials” shall have the meaning given such term in Section 5.04.

“Business Day” shall mean any day (other than a day which is a Saturday, Sunday
or legal holiday) on which banks are open for business in New York, New York and
Charlotte, North Carolina; provided, however, that (i) when used in connection
with a Eurodollar Loan, the term “Business Day” shall also exclude any day on
which banks are not open for dealings in dollar deposits in the London interbank
market and (ii) when used in connection with a Eurocurrency Loan, “Business Day”
shall also mean any TARGET Day, and shall exclude any day on which commercial
banks are not open for foreign exchange business in London or, if such reference
relates to the date on which any amount is to be paid or made available in an
Alternative Currency, in the principal financial center in the country of such
Alternative Currency.

“Capital Lease Obligations” of any Person shall mean the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP applied on a consistent
basis and, for the purposes of this Agreement, the amount of such obligations at
any time shall be the liability therefor at such time determined in accordance
with GAAP applied on a consistent basis.

 

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“Capital Stock” shall mean (i) in the case of a corporation, capital stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability company,
membership interests and (v) any other interest or participation that confers on
a Person the right to receive a share of the profits and losses of, or
distribution of assets of, the issuing Person (excluding hypothetical shares of
stock of the Borrower issued to employees as part of a “phantom stock” or
similar compensation plan).

“Cash Management Agreement” shall mean any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card,
purchasing cards, electronic funds transfer and other cash management
arrangements.

“Cash Management Obligations” shall mean all existing or future payment and
other obligations owing by the Borrower or any Restricted Subsidiary under any
Cash Management Agreement (which such Cash Management Agreement is permitted
hereunder) with any person that (i) is a Lender or a Lender Affiliate or
(ii) was a Lender or a Lender Affiliate at the time such Cash Management
Agreement is entered into.

“Change in Control” shall be deemed to have occurred if (i) any Person or two or
more Persons acting in concert (other than, in either case, a Permitted Holder)
shall have acquired Beneficial Ownership, directly or indirectly, of, or shall
have acquired by contract or otherwise, Capital Stock of the Borrower (or other
securities convertible into such Capital Stock) representing 35% or more of the
aggregate ordinary voting power represented by the issued and outstanding
Capital Stock of the Borrower, (ii) the direct or indirect sale, assignment,
transfer, lease, conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or
substantially all of the Borrower’s and its Subsidiaries’ properties or assets,
taken as a whole, to any “person” (individually and as that term is used in
Section 13(d)(3) and Section 14(d)(2) of the Exchange Act), other than the
Borrower or one of its Subsidiaries, or (iii) Continuing Directors shall cease
for any reason to constitute a majority of the members of the board of directors
of the Borrower then in office.

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

“Closing Date” shall mean the date hereof.

“Code” shall mean the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as may be amended or modified from time to time.

“Collateral” shall mean all “Collateral” referred to in the Collateral Documents
and all other property that is or is intended to be, by the express terms of the
Loan Documents, subject to any Lien in favor of the Administrative Agent for the
benefit of the Secured Parties, including the Pledged Equity and, during any
period prior to the Agreement Collateral Release Date, Agreement Collateral but
excluding any Excluded Collateral (as such term is defined in the Security
Agreement).

 

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“Collateral Documents” shall mean the Security Agreement, each Security
Agreement Supplement and any other agreement, each as amended from time to time,
that creates or purports to create a Lien in favor of the Administrative Agent
for the benefit of the Secured Parties.

“Commitment” shall mean, with respect to any Lender, such Lender’s Term Loan
Commitment and Revolving Commitment, and “Commitments” shall mean all Term Loan
Commitments and Revolving Commitments.

“Competitive Bid” shall mean an offer by a Lender to make a Competitive Bid Loan
pursuant to Section 2.04.

“Competitive Bid Accept/Reject Letter” shall mean a notification made by the
Borrower pursuant to Section 2.04(c) in the form of Exhibit A-8.

“Competitive Bid Interest Period” shall have the meaning assigned thereto in
Section 2.09(b)(ii).

“Competitive Bid Loan” shall mean any Loan bearing interest at the Competitive
Bid Rate determined in accordance with Section 2.04.

“Competitive Bid Rate” shall mean, as to any Competitive Bid made by a Lender
pursuant to Section 2.04 in the case of (a) a Eurodollar Competitive Bid Loan,
the Adjusted LIBO Rate adjusted by the Competitive Margin and (b) a Fixed Rate
Loan, the fixed rate of interest offered by the Lender making such Competitive
Bid.

“Competitive Bid Reduction” shall have the meaning given such term in
Section 2.01(a).

“Competitive Bid Request” shall mean a request made pursuant to Section 2.04(a)
in the form of Exhibit A-5.

“Competitive Margin” shall mean, as to any Eurodollar Competitive Bid Loan, the
margin (expressed as a percentage rate per annum in the form of a decimal to no
more than four decimal places) to be added to or subtracted from the Adjusted
LIBO Rate in order to determine the interest rate applicable to such Loan, as
specified in the Competitive Bid relating to such Loan.

“Consolidated” refers to the consolidation of accounts in accordance with GAAP.

“Consolidated EBITDA” shall mean, for any period, the Consolidated Net Income
for such period taken as a single accounting period, plus (a) the sum of the
following amounts of the Borrower and its Subsidiaries for such period
determined on a consolidated basis in conformity with GAAP to the extent
deducted in the determination of such Consolidated Net Income: (i) depreciation
expense, (ii) amortization expense, (iii) interest expense, (iv) income and
franchise tax expense, and (v) other non-cash charges (other than any increase
in the allowance for doubtful accounts), minus (b) the portion of such
Consolidated EBITDA attributable to any Domestic Subsidiary that is not a
Restricted Subsidiary.

“Consolidated Fixed Charge Coverage Ratio” shall mean, as of any date of
determination, the ratio of (i) Consolidated EBITDA for the fiscal four quarter
period most recently ended for which financial statements of the Borrower are
required to be delivered to the Administrative Agent pursuant to Section 5.04(a)
or (b), as the case may be, to (ii) Consolidated Fixed Charges for such fiscal
four quarter period.

 

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“Consolidated Fixed Charges” shall mean, for any period, the sum of
(a) Consolidated Interest Expense plus (b) scheduled amortization due and
payable in respect of the Term Loan for such period, plus (c) aggregate
distributions on Preferred Interests payable by the Borrower for such period and
distributions made by the Borrower in such period for the purpose of paying
dividends on Preferred Interests issued by the Borrower, provided that all such
obligations of a Domestic Subsidiary that is not a Restricted Subsidiary shall
be excluded from the determination of Consolidated Fixed Charges. For clarity,
scheduled amortization due and payable in respect of the Term Loan for any
period shall not include amortization payments that did not become due by virtue
of a voluntary prepayment that discharged such obligation.

“Consolidated Indebtedness” shall mean, as of any date of determination without
duplication, all obligations accounted for as Indebtedness on a consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries on such date, in
accordance with GAAP consistently applied, whether such obligations are
classified as long-term or short-term, and including in any event, without
duplication, all (x) Guarantees of Indebtedness of others and (y) all
obligations as an account party in respect of letters of credit and bankers’
acceptances, but excluding Indebtedness of the type described in clause (i) of
the definition of Indebtedness, provided that all such obligations of a Domestic
Subsidiary that is not a Restricted Subsidiary shall be excluded from the
determination of Consolidated Indebtedness.

“Consolidated Interest Expense” shall mean, for any period, the aggregate cash
interest expense of the Borrower and its Consolidated Subsidiaries for such
period, including capitalized interest and the portion of any payments made in
respect of Capital Lease Obligations deemed to represent interest, all as
determined on a Consolidated basis in accordance with GAAP consistently applied,
but excluding (a) deferred financing costs, and (b) other non-cash interest
expenses.

“Consolidated Leverage Ratio” shall mean, as of any date of determination, the
ratio of (i) Consolidated Indebtedness to (ii) Consolidated EBITDA for the
fiscal four quarter period most recently ended for which financial statements of
the Borrower are required to be delivered to the Administrative Agent pursuant
to Section 5.04(a) or (b), as the case may be. In the event the Borrower shall
complete, directly or through a Subsidiary (other than a Domestic Subsidiary
that is not a Restricted Subsidiary), an acquisition or divestiture of any
Person or business unit during any period, the Consolidated Leverage Ratio as of
the end of and for such period shall thereafter be determined on a pro forma
basis as if such acquisition or divestiture had been completed on the first day
of such period.

“Consolidated Net Assets” shall mean the Consolidated total assets of the
Borrower and its Subsidiaries, after deducting therefrom all current liabilities
of the Borrower and its Subsidiaries (other than the current portion of
long-term Indebtedness of the Borrower and its Subsidiaries and Capitalized
Lease Obligations of the Borrower and its Subsidiaries), all as set forth on the
latest Consolidated balance sheet of the Borrower prepared in accordance with
GAAP.

“Consolidated Net Income” shall mean, for any period, the net income (or loss)
of the Borrower and its Subsidiaries for such period, as determined on a
Consolidated basis in accordance with GAAP consistently applied; provided,
however, that with respect to interest income only cash interest income shall be
included in the determination of Consolidated Net Income.

“Consolidated Secured Indebtedness” shall mean, at any time, all Consolidated
Indebtedness minus any portion of Consolidated Indebtedness that is Unsecured
Indebtedness of the Borrower.

“Consolidated Secured Leverage Ratio” shall mean, as of any date of
determination, the ratio of (i) Consolidated Secured Indebtedness to
(ii) Consolidated EBITDA for the fiscal four quarter period most recently ended
for which financial statements of the Borrower are required to be delivered to
the Administrative Agent pursuant to Section 5.04(a) or (b), as the case may be.
In the event the Borrower shall complete, directly or through a Subsidiary
(other than a Domestic Subsidiary that is not a Restricted Subsidiary), an
acquisition or divestiture of any Person or business unit during any period, the
Consolidated Secured Leverage Ratio as of the end of and for such period shall
thereafter be determined on a pro forma basis as if such acquisition or
divestiture had been completed on the first day of such period.

 

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“Consolidated Total Assets” shall mean, as at any date of determination, the
total assets of the Borrower and its Consolidated Subsidiaries at such time, as
determined on a Consolidated basis in accordance with GAAP consistently applied,
and including in any event and without limitation, the value of all investments
by the Borrower or any Consolidated Subsidiary in any joint venture or other
Person that is not Consolidated with the Borrower in accordance with GAAP, minus
the portion of such Consolidated Total Assets attributable to any Domestic
Subsidiary that is not a Restricted Subsidiary.

“Continuing Directors” shall mean, during any period of up to 24 consecutive
months after the date hereof, individuals who at the beginning of such 24 month
period were directors of the Borrower (together with any new director whose
election by the Borrower’s board of directors or whose nomination for election
by the Borrower’s stockholders was approved by a vote of (i) at least a majority
of the directors then still in office who either were directors at the beginning
of such period or whose election or nomination for election was previously so
approved or (ii) Permitted Holders representing not less than 50% of the
aggregate ordinary voting power represented by the issued and outstanding
Capital Stock of the Borrower).

“Control” shall mean 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 ownership of voting securities, by contract or otherwise, and
“Controlling” and “Controlled” shall have correlative meanings; provided,
however, that the existence of a management contract by the Borrower or one of
its Affiliates to manage another entity shall not be deemed to be Control.

“Credit Event” shall have the meaning assigned to such term in Section 4.01.

“DBAG” shall mean Deutsche Bank AG New York Branch.

“Default” shall mean any event or condition which upon notice, lapse of time or
both would constitute an Event of Default.

“Defaulting Lender” shall mean any Lender that (a) has failed to fund any
portion of any Loan, any participation in any L/C Obligations or any
participation in any Swingline Loan required to be funded by it hereunder within
two Business Days of the date required to be funded by it hereunder, (b) has
otherwise failed to pay over to the Administrative Agent or any other Lender any
other amount required to be paid by it hereunder within one Business Day of the
date when due, unless such amount is the subject of a good faith dispute,
(c) has notified the Borrower, the Administrative Agent or any other Lender in
writing that it does not intend to comply with any of its funding obligations
under this Agreement or has made a public statement to the effect that it does
not intend to comply or has failed to comply with its funding obligations under
this Agreement, or (d) has become or is, or whose direct or indirect parent
company has become or is, insolvent or has become the subject of a bankruptcy or
insolvency proceeding, or has had a receiver, conservator, trustee or custodian
appointed for it, or has taken any action in furtherance of, or indicating its
consent to, approval of or acquiescence in any such proceeding or appointment,
provided that a Lender shall not be a Defaulting Lender solely by virtue of the
ownership or acquisition of any Capital Stock in that Lender or any direct or
indirect parent company thereof by a Governmental Authority.

“Delivery Date” shall have the meaning assigned to such term in Section 5.09(f).

“Departing Lender” shall have the meaning assigned to such term in Section 2.26.

“Designated Bank” shall mean a special purpose entity that (i) shall have become
a party to this Agreement pursuant to Section 9.04(i), and (ii) is not otherwise
a Lender.

 

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“Designated Bank Notes” shall mean promissory notes of the Borrower,
substantially in the form of Exhibit G hereto, evidencing the obligation of the
Borrower to repay Competitive Bid Loans made by Designated Banks, as the same
may be amended, supplemented, modified or restated from time to time, and
“Designated Bank Note” shall mean any one of such promissory notes issued under
Section 9.04(i).

“Designating Lender” shall have the meaning set forth in Section 9.04(i).

“Designation Agreement” shall mean a designation agreement in substantially the
form of Exhibit H attached hereto, entered into by a Lender and a Designated
Bank and accepted by the Administrative Agent.

“dollars” or “$” shall mean lawful money of the United States of America.

“Domestic Subsidiary” shall mean any Subsidiary that is organized under the laws
of any political subdivision of the United States of America (other than a
Subsidiary described in clause (ii) of the definition of Foreign Subsidiary).

“Effective Date” shall mean the date on and as of which each of the conditions
set forth in Section 4.02 shall have been satisfied.

“Eligible Assignee” shall mean (a) a Lender, (b) a Lender Affiliate, (c) an
Approved Fund, and (d) any other person (other than a natural person) approved
by (i) the Administrative Agent, (ii) in the case of any assignment of a
Revolving Commitment, the Swingline Lender and the Issuing Bank, and
(iii) unless an Event of Default has occurred and is continuing, the Borrower
(each such approval not to be unreasonably withheld or delayed), provided that
notwithstanding the foregoing, “Eligible Assignee” shall not include the
Borrower or any of the Borrower’s Affiliates or Subsidiaries.

“EMU” shall mean economic and monetary union as contemplated in the Treaty on
European Union.

“EMU Legislation” shall mean legislative measures of the Council of European
Union for the introduction of, change over to or operation of the euro.

“Equivalent Dollar Amount” shall mean, (a) with respect to any Loan denominated
in any Alternative Currency, the amount of dollars that would be required to
purchase the amount of the Alternate Currency of such Loan on the date two
(2) Business Days prior to the date of such Loan (or in the case of any
determination made under Section 2.05 or redenomination under Section 2.15, on
the date of determination or redenomination therein referred to), based upon the
Spot Exchange Rate and (b) with respect to any amount of dollars on any date,
such amount of dollars.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, and the
rules and regulations thereunder, each as amended or modified from time to time.

“ERISA Affiliate” shall mean any person (whether or not incorporated) that is a
member of a group of which the Borrower is a member and which is treated as a
single employer under Section 414 of the Code or Section 4001(b) of ERISA.

“euro” shall mean the single currency to which the Participating Member States
of the European Union have converted.

“Eurocurrency” when used in reference to any Loan shall refer to whether such
Loan, or Loans, denominated in an Alternative Currency are bearing interest at a
rate determined by reference to the LIBO Rate in accordance with the provisions
of Article II.

 

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“Eurodollar” when used in reference to any Loan shall refer to whether such
Loan, or Loans, denominated in dollars are bearing interest at a rate determined
by reference to the Adjusted LIBO Rate in accordance with the provisions of
Article II.

“Event of Default” shall have the meaning assigned to such term in Article VII.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Excluded FATCA Tax” shall mean any tax, assessment or other governmental charge
imposed under FATCA that would not have been imposed but for a failure by a
Lender (or any financial institution through which any payment is made to such
Lender) to comply with the requirements of FATCA.

“Excluded Taxes” shall have the meaning given such term in Section 2.20(a).

“Existing Credit Agreement” shall mean the Senior Unsecured Revolving Credit
Agreement dated as of February 24, 2011, among Choice Hotels International,
Inc., Wells Fargo Bank, National Association, as administrative agent, the
lenders party thereto and the other parties identified therein, as amended,
modified or supplemented to date.

“Existing Stockholder” shall mean any stockholder of the Borrower which,
together with such stockholder’s affiliates, owns more than 5% of the common
stock of the Borrower as of the Closing Date so long as the Bainum Affiliates
continue to own more common stock of the Borrower than such Existing
Stockholder.

“Extension Date” shall have the meaning given such term in Section 2.16.

“Extensions of Credit” shall mean, as to any Lender at any time, (a) an amount
equal to the sum of (i) such Lender’s Pro Rata Percentage of the Term Loan then
outstanding, (ii) the aggregate principal amount of all Revolving Loans made by
such Lender then outstanding, (iii) such Lender’s Pro Rata Percentage of the L/C
Obligations then outstanding and (iv) such Lender’s Pro Rata Percentage of the
Swingline Loans then outstanding, or (b) the making of any Loan or participation
in any Letter of Credit by such Lender, as the context requires.

“Facilities” shall mean the Revolving Credit Facility and the Term Loan
Facility.

“Facility Exposure” shall mean (a) with respect to each Facility, at any date of
determination, the sum of the aggregate principal amount of all outstanding
Loans relating to such Facility, plus, in the case of the Revolving Credit
Facility, without duplication, all L/C Obligations and outstanding Swingline
Loans and (b) with respect to the Facilities as a whole, at any date of
determination, the sum of the aggregate principal amount of all outstanding
Loans plus, without duplication, all L/C Obligations and outstanding Swingline
Loans.

“FATCA” shall mean Sections 1471 through 1474 of the Code (as of the date
hereof) and any regulations or official interpretations thereof (including any
Revenue Ruling, Revenue Procedure, Notice or similar guidance issued by the
United States Internal Revenue Service thereunder as a precondition to relief or
exemption from Taxes under such provisions); provided, however, that FATCA shall
also include any amendments to Sections 1471 through 1474 of the Code and any
regulations or official interpretations thereof if, as amended or interpreted or
pursuant to such regulations, FATCA provides a commercially reasonable mechanism
to avoid the tax imposed thereunder by satisfying the information reporting and
other requirements of FATCA.

“Federal Funds Effective Rate” shall have the meaning assigned to such term in
the definition of “Alternate Base Rate”.

 

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“Fee Letter” shall mean any fee letter agreement executed and delivered by the
Borrower and to which any Arranger and/or the Administrative Agent is a party,
as the same may be amended from time to time.

“Financial Officer” of any corporation shall mean the chief financial officer,
principal accounting officer, treasurer or controller of such corporation.

“Fixed Rate Loan” shall mean any Competitive Bid Loan bearing interest at a
fixed percentage rate per annum (expressed in the form of a decimal to no more
than four decimal places) specified by the Lender making such Fixed Rate Loan in
its Competitive Bid.

“Foreign Lender” shall mean 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, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

“Foreign Subsidiary” shall mean (i) any Subsidiary that is not a Domestic
Subsidiary, including any Subsidiary which is a “controlled foreign corporation”
(within the meaning of Section 957 of the Code) or (ii) any Subsidiary organized
under any political subdivision of the United States of America substantially
all of the assets of which constitute the Capital Stock of one or more
controlled foreign corporations.

“Franchise Agreement” shall mean a contract (whether called a franchise
agreement, license agreement or otherwise) pursuant to which the Borrower grants
a third party the right to operate a hotel under one or more hotel brands, as
each such contract may be amended from time to time.

“Fronting Exposure” shall mean, at any time there is a Defaulting Lender,
(a) with respect to the Issuing Bank, such Defaulting Lender’s Pro Rata
Percentage of the outstanding L/C Obligations other than L/C Obligations as to
which such Defaulting Lender’s participation obligation has been reallocated to
other Lenders or cash collateral or other credit support acceptable to the
Issuing Bank shall have been provided in accordance with the terms hereof and
(b) with respect to the Swingline Lender, such Defaulting Lender’s Pro Rata
Percentage of Swingline Loans other than Swingline Loans as to which such
Defaulting Lender’s participation obligation has been reallocated to other
Lenders, repaid by the Borrower or for which cash collateral or other credit
support acceptable to the Swingline Lender shall have been provided in
accordance with the terms hereof.

“GAAP” shall mean generally accepted accounting principles in effect from time
to time in the United States of America as recognized by the American Institute
of Certified Public Accountants and the Financial Accounting Standards Board and
any other applicable authoritative bodies, provided that in the event of a
conflict in the principles recognized by the American Institute of Certified
Public Accountants and the Financial Accounting Standards Board and another
applicable authoritative body, the principles in effect at such time and
recognized by the American Institute of Certified Public Accountants and the
Financial Accounting Standards Board shall control.

“Governmental Authority” shall mean the government of the United States of
America or any other nation, or of any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).

“Guarantee” of or by any Person shall mean any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the “primary obligor”) in any
manner, whether directly or indirectly, and including (a) any obligation of such
Person, direct or indirect, to assume, purchase or pay (or advance or supply
funds for the

 

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purchase or payment of) such Indebtedness or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) any obligation of such Person to provide other credit support
or to purchase property, securities or services in each case for the purpose of
assuring the owner of such Indebtedness of the payment of such Indebtedness, and
(c) any obligation of such Person to maintain working capital, equity capital or
other financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness; provided, however, that the
term Guarantee shall not include (i) endorsements for collection or deposit, in
either case in the ordinary course of business or (ii) performance guarantees,
construction guarantees or customary Non-Recourse guarantees of Non-Recourse
Indebtedness, unless and until a claim for payment has been made under any
performance guarantee, construction guarantee or customary Non-Recourse
guarantee, at which time any such performance guarantee, construction guarantee
or customary Non-Recourse guarantee shall be deemed to be a Guarantee in an
amount equal to such claim.

“Guarantee Agreement” shall mean the Guarantee Agreement, substantially in the
form of Exhibit D, among the Guarantors and the Administrative Agent, and shall
include any Guarantee Joinder Agreement.

“Guarantee Joinder Agreement” shall mean any joinder agreement pursuant to which
a Restricted Subsidiary joins the Guarantee Agreement and becomes a Guarantor,
either substantially in the form attached as an exhibit to the Guarantee
Agreement or in such other form as may be requested by the Borrower and
reasonably approved by the Administrative Agent for such purpose.

“Guarantor” shall mean each Restricted Subsidiary.

“Hedging Agreement” shall mean any agreement with respect to any Interest Rate
Contract, forward rate agreement, commodity swap, forward foreign exchange
agreement, currency swap agreement, cross-currency rate swap agreement, currency
option agreement or other agreement or arrangement designed to alter the risks
of any person arising from fluctuations in interest rates, currency values or
commodity prices, all as amended, restated, supplemented or otherwise modified
from time to time.

“Hedging Obligations” shall mean all existing or future payment and other
obligations owing by the Borrower or any Restricted Subsidiary under any Hedging
Agreement (which such Hedging Agreement is permitted hereunder) with any person
that (i) is a Lender or a Lender Affiliate or (ii) was a Lender or a Lender
Affiliate at the time such Hedging Agreement is executed.

“Hotel Properties” shall mean any hotel properties owned on the Closing Date or
acquired or constructed after the Closing Date, including fixtures and
personalty associated therewith.

“Indebtedness” of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property or assets purchased by such Person, (e) all obligations of such Person
issued or assumed as the deferred purchase price of property or services,
(f) all indebtedness of others 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 owned or acquired by such person, whether or not the
obligations secured thereby have been assumed (valued at the lesser of (1) the
amount of such indebtedness or (2) if such indebtedness is Non-Recourse to such
Person, the fair market value of such property), (g) all Guarantees by such
Person of Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations of such Person in respect of Hedging Agreements,
(j) all obligations of such Person as an account party in respect of letters of
credit (other than (x) documentary letters of credit (including commercial and
trade letters of credit) issued to secure payment obligations in respect of
goods and services in the ordinary course of business and (y) letters of credit
and surety bonds with respect to underlying obligations of such Person

 

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that are already accounted for as liabilities elsewhere in this definition) and
bankers’ acceptances, (k) to the extent not otherwise included, all obligations
of such Person under so-called forward equity purchase contracts where such
Person is obligated to purchase or redeem any shares of equity securities issued
by such Person, and (l) all obligations of such person in respect of any
so-called “synthetic lease” (i.e., a lease of property which is treated as an
operating lease under GAAP and as a loan or financing for U.S. income tax
purposes). Notwithstanding the foregoing, Indebtedness shall (x) not include
“deferred revenues”, “current accounts payable” or “accrued and other expenses”
(as such items are set forth in the financial statements of the Borrower and its
Subsidiaries to be delivered to the Administrative Agent and each Lender
pursuant to Section 5.04) incurred in the ordinary course of business, and
(y) include the Indebtedness of any partnership in which such Person is a
general partner, except to the extent that such Indebtedness is expressly stated
to be non-recourse to such partner.

“Indenture” shall mean that certain Indenture, dated as of August 25, 2010,
between the Borrower and Wells Fargo Bank, National Association, as trustee, as
supplemented by a Supplemental Indenture dated as of August 25, 2010 and a
Second Supplemental Indenture dated as of June 27, 2012, as the same may be
further amended.

“Initial Maturity Date” shall mean July 25, 2016.

“Insignificant Subsidiary” shall mean, at any time, any Subsidiary of the
Borrower that (x) has (i) assets of not greater than 10% of the Consolidated
total assets of the Borrower and its Subsidiaries (determined as of the last day
of the most recent fiscal quarter of the Borrower) and (ii) revenue of less than
10% of the Consolidated revenues of the Borrower and its Subsidiaries for the
most recently ended four-quarter period of the Borrower and its Subsidiaries
(computed pro forma for any acquisitions or dispositions made during such
four-quarter period) and (y) if aggregated with all other Subsidiaries of the
Borrower with respect to which an event described under clause (g) or (h) of
Article VII has occurred and is continuing, would have (i) assets of not greater
than 10% of the Consolidated total assets of the Borrower and its Subsidiaries
(determined as of the last day of the most recent fiscal quarter of the
Borrower) and (ii) revenue of less than 10% of the Consolidated revenues of the
Borrower and its Subsidiaries for the most recently ended four-quarter period of
the Borrower and its Subsidiaries (computed pro forma for any acquisitions or
dispositions made during such four-quarter period).

“Interest Payment Date” shall mean, with respect to any Loan, the last day of
the Interest Period applicable thereto and, in the case of a Eurocurrency Loan
or Eurodollar Loan with an Interest Period of more than three (3) months’
duration or a Fixed Rate Loan with an Interest Period of more than three
(3) months’ duration, each day that would have been an Interest Payment Date for
such Loan had successive Interest Periods of three months’ duration been
applicable to such Loan and, in addition, the date of any refinancing or
conversion of such Loan.

“Interest Period” shall mean (a) as to any Eurocurrency Loan or Eurodollar Loan,
the period commencing on the date of such borrowing and ending on the
numerically corresponding day (or, if there is no numerically corresponding day,
on the last day) in the calendar month that is 1, 2, 3 or 6 months thereafter,
as the Borrower may elect, (b) as to any ABR Loan, the period commencing on the
date of such ABR Loan and ending on the earliest of (i) the last Business Day of
the calendar quarter in which such ABR Loan was made, (ii) the Maturity Date, or
(iii) the date of prepayment of such Loan and (c) as to any Fixed Rate Loan, the
period commencing on the date of such Fixed Rate Loan and ending on the date
specified in the Competitive Bids in which the offer to make the Fixed Rate
Loans were extended, which shall not be earlier than seven (7) days after the
date of such Fixed Rate Loan or later than ninety (90) days after the date of
such Fixed Rate Loan; provided, however, that if any Interest Period would end
on a day other than a Business Day, such Interest Period shall be extended to
the next Business Day unless, in the case of Eurocurrency Loans and Eurodollar
Loans only, such next Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the preceding Business Day.
Interest shall accrue from and including the first day of an Interest Period to
but excluding the last day of such Interest Period.

 

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“Interest Rate Contract” shall mean any interest rate swap agreement, interest
rate cap agreement, interest rate floor agreement, interest rate collar
agreement, interest rate option or any other agreement regarding the hedging of
interest rate risk exposure executed in connection with hedging the interest
rate exposure of any person and any confirming letter executed pursuant to such
agreement, all as amended, restated, supplemented or otherwise modified from
time to time.

“Interest Rate Determination Date” shall mean, in relation to any period for
which an interest rate is to be determined with respect to a Eurodollar Loan or
Eurocurrency Loan: (a) (if the currency is euro) two TARGET Days before the
first day of that period; or (b) (for any other currency) two Business Days
before the first day of that period, unless, in either case, market practice
differs in the relevant interbank market for a currency, in which case the
Interest Rate Determination Date for that currency will be determined by the
Administrative Agent in accordance with market practice in the relevant
interbank market (and if quotations would normally be given by leading banks in
the relevant interbank market on more than one day, the Interest Rate
Determination Date will be the last of those days).

“Issuing Bank” shall mean, as the context may require, (a) DBAG, with respect to
Letters of Credit issued on and after the Closing Date or (b) any other Lender
that may become an Issuing Bank pursuant to Section 8.09(b), with respect to
Letters of Credit issued by such Lender.

“L/C Commitment” shall mean the lesser of (a) $25,000,000 and (b) the Revolving
Commitment.

“L/C Disbursement” shall mean a payment or disbursement made by an Issuing Bank
pursuant to a Letter of Credit.

“L/C Obligations” shall mean at any time the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time, plus (b) the aggregate
principal amount of all L/C Disbursements relating to Letters of Credit that
have not yet been reimbursed at such time.

“L/C Participants” shall mean the collective reference to all the Revolving
Credit Lenders other than the Issuing Bank.

“Lender” shall mean (a) a Person listed on Schedule 2.01 and any other Person
that shall become a party hereto pursuant to an Assignment and Acceptance or an
accession agreement executed and delivered in accordance with Section 2.24 or
2.28(a), as the case may be, other than such Person that ceases to be a party
hereto pursuant to an Assignment and Acceptance or (b) a Designated Bank;
provided, however, that the term “Lender” shall exclude each Designated Bank
when used in reference to a Revolving Loan, the Revolving Commitments or terms
relating to the Revolving Loans and the Revolving Commitments and shall further
exclude each Designated Bank for all other purposes hereunder, except that any
Designated Bank which funds a Competitive Bid Loan shall, subject to
Section 9.04(i), have the rights (including, without limitation, the rights
given to a Lender contained in Article IX) and obligations of a Lender
associated with holding such Competitive Bid Loan.

“Lender Affiliate” shall mean, (a) with respect to any Lender, (i) an Affiliate
of such Lender or (ii) any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an Affiliate of such
lender and (b) with respect to any Lender that is a fund which invests in bank
loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.

“Lending Office” shall mean, with respect to any Lender, the office of such
Lender maintaining such Lender’s Pro Rata Percentage of the Extensions of
Credit.

 

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“Letter of Credit” shall mean any letter of credit issued pursuant to Section
2.23.

“LIBO Rate” shall mean, with respect to any Eurodollar Loan or Eurocurrency Loan
(other than Eurocurrency Loans denominated in Sterling) for any Interest Period,
the rate appearing on the Reuters Screen LIBOR01 (or on any successor or
substitute page of such service, or any successor to or substitute for such
service, providing rate quotations comparable to those currently provided on
such page of such service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
deposits in the applicable currency in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for deposits in the applicable
currency with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason or in the event of an
Eurocurrency Loan denominated in Sterling, then the “LIBO Rate” with respect to
such Eurodollar Loan or Eurocurrency Loan for such Interest Period shall be the
rate at which deposits in the applicable currency of $5,000,000 (or its
Equivalent Dollar Amount) and for a maturity comparable to such Interest Period
are offered by the Administrative Agent’s Correspondent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
on the Interest Rate Determination Date. Each calculation by the Administrative
Agent of the LIBO Rate shall be conclusive and binding for all purposes, absent
manifest error.

“Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, encumbrance, hypothecation, charge or security interest in or on
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a
third party (excluding rights of first refusal) with respect to such securities.

“Loans” shall mean the loans made by the Lenders to the Borrower pursuant to
this Agreement, including the Term Loan, each Revolving Loan, each Swingline
Loan and each Competitive Bid Loan.

“Loan Documents” shall mean (a) this Agreement, (b) the Letters of Credit,
(c) the Guarantee Agreement, (d) any Loan Modification Agreement, if requested
by a Lender pursuant to Section 2.08(a), (e) each Note, (f) the Fee Letters,
(g) the Collateral Documents, (h) if applicable, any Designation Agreements and
Designated Bank Notes, and (i) 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 Hedging Agreements and Cash Management
Agreements.

“Loan Modification Agreement” shall mean a Loan Modification Agreement in form
and substance reasonably satisfactory to the Administrative Agent, the Borrower
and the applicable Accepting Lenders, among the Borrower, the other Loan
Parties, such Accepting Lenders and the Administrative Agent.

“Loan Modification Offer” shall have the meaning assigned to such term in
Section 2.28(a).

“Loan Parties” shall mean the Borrower and the Restricted Subsidiaries.

“Mandatory Cost” shall mean the percentage rate per annum calculated by the
Administrative Agent in accordance with Schedule 1.01(a) hereto.

“Margin Stock” shall mean “margin stock” or “margin securities” as such terms
are defined in Regulation T, Regulation U and Regulation X.

“Material Adverse Effect” shall mean a materially adverse effect on the
business, operations, assets, property or condition, financial or otherwise, of
the Borrower, its Domestic Subsidiaries that are Restricted Subsidiaries, and
its Foreign Subsidiaries, taken as a whole.

 

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“Maturity Date” shall mean (a) with respect to the Revolving Facility, the
earliest to occur of (i) the Initial Maturity Date, as such date may be extended
in accordance with Section 2.16, (ii) the date of termination of the Revolving
Commitments by the Borrower pursuant to Section 2.06, (iii) the date of
termination of the Revolving Commitments by the Administrative Agent on behalf
of the Lenders pursuant to Article VII or (iv) the automatic termination of the
Revolving Commitments pursuant to clause (g) or (h) of Article VII, and (b) with
respect to the Term Loan, the earliest to occur of (i) the Initial Maturity
Date, as such date may be extended in accordance with Section 2.16, (ii) the
date of termination of the Term Loan Commitments by the Administrative Agent on
behalf of the Lenders pursuant to Article VII or (iii) the automatic termination
of the Term Loan Commitments pursuant to clause (g) or (h) of Article VII.

“Moody’s” shall mean Moody’s Investors Service, Inc. and any successor thereto.

“Multiemployer Plan” shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate (other
than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code) is making or accruing an obligation to make
contributions, or has within any of the preceding six (6) plan years made or
accrued an obligation to make contributions.

“Non-Consenting Lender” shall mean any Lender that has not consented to any
proposed amendment, modification, waiver or termination of any Loan Document
which, pursuant to Section 9.08(b), requires the consent of all Lenders or all
affected Lenders and with respect to which the Required Lenders shall have
granted their consent.

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

“Non-Recourse” shall mean, with reference to any obligation or liability of any
person, any obligation or liability for which such person is not liable or
obligated other than, if at all, as to its interest in a specifically identified
asset only, subject to such limited exceptions to the non-recourse nature of
such obligation or liability, such as fraud, misappropriation, misapplication
and environmental indemnities, as are usual and customary in like transactions
involving institutional lenders at the time of the incurrence of such obligation
or liability.

“Note” shall mean a Revolving Note or a Term Note.

“Notice of Account Designation” shall have the meaning assigned thereto in
Section 2.03(b).

“Notice of Borrowing” shall have the meaning assigned thereto in
Section 2.03(a).

“Notice of Conversion/Continuation” shall have the meaning assigned thereto in
Section 2.10.

“Notice of Prepayment” shall have the meaning assigned thereto in
Section 2.05(d).

“Obligations” shall mean (a) the Borrower’s obligations in respect of the due
and punctual payment of principal of and interest on the Loans and reimbursement
of the L/C Disbursements, in each case when and as due whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (b) all
fees, expenses, indemnities, reimbursements and other obligations, monetary or
otherwise, of the Borrower under this Agreement or any other Loan Document,
(c) all obligations, monetary or otherwise, of each Loan Party under each Loan
Document to which it is a party and (d) unless otherwise agreed upon in writing
by the applicable Lender party thereto, all Hedging Obligations and Cash
Management Obligations.

 

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“Original Principal Amount” shall mean the original principal amount of the Term
Loan (i.e., $150,000,000).

“Participating Member State” shall mean each state so described in any EMU
Legislation.

“PATRIOT Act” shall mean the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)).

“Payment in Full” shall mean, with respect to any Obligations, (a) the payment
in full in cash of all such Obligations (other than (i) contingent
indemnification obligations to the extent no claim giving rise thereto has been
asserted and (ii) Hedging Obligations and Cash Management Obligations that, at
the time of determination, are allowed by the Person to whom such Obligations
are owing to remain outstanding or are not required to be repaid or cash
collateralized pursuant to the provisions of any document governing the
applicable Hedging Obligations or Cash Management Obligations), (b) the
termination or expiration of all of the Commitments and (c) in connection with
the termination or expiration of the Revolving Commitment, either (i) the
cancellation and return to each Issuing Bank of all Letters of Credit issued by
such Issuing Bank or (ii) the cash collateralization (or the delivery of a
back-to-back letter of credit reasonably acceptable to such Issuing Bank in form
and content and from an issuer reasonably acceptable to such Issuing Bank) of
all Letters of Credit issued by any Issuing Bank (in an amount equal to 105% of
the undrawn amount of such Letters of Credit) in a manner reasonably acceptable
to such Issuing Bank.

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.

“Permitted Amendments” shall have the meaning assigned to such term in
Section 2.28(c).

“Permitted Corporate Transaction” shall mean that transaction disclosed to the
Lenders prior to the Closing Date.

“Permitted Currency” shall mean dollars or, subject to Section 1.05, any
Alternative Currency, or each such currency, as the context requires.

“Permitted Holder” shall mean (a) (i) all lineal descendents of Stewart W.
Bainum, and all spouses and adopted children of such descendents, (ii) all
trusts for the benefit of any person described in clause (i) and trustees of
such trusts, (iii) all legal representatives of any person or trust described in
clauses (i) and (ii), and (iv) all partnerships, corporations, limited liability
companies or other entities controlled by a Person described in clauses (i),
(ii) or (iii) (such persons referred to in this clause (a) collectively, “Bainum
Affiliates”); or (b) any other Existing Stockholder.

“Permitted Liquid Investments” shall mean (a) direct obligations of, or
obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America (or by any agency thereof to the
extent such obligations are backed by the full faith and credit of the United
States of America), (b) investments in commercial paper having credit ratings of
at least A-2 from S&P and P-2 from Moody’s, (c) investments in certificates of
deposit, bankers acceptances and time deposits issued or guaranteed by or placed
with, and money market deposit accounts issued or offered by, any domestic
office of any commercial bank organized under the laws of the United States of
America or any State thereof which has a combined capital and surplus and
undivided profits of not less than $200,000,000, (d) investments in the ordinary
course of business in customary repurchase agreements with respect to freely
marketable, short-term securities of the type customarily subject to repurchase
agreements, (e) other readily marketable debt and equity securities traded on
national securities exchanges or on other nationally recognized markets,
including over-the-counter markets, (f) investments, classified in accordance
with GAAP as current assets of the Borrower or any of its Subsidiaries, in money
market investment funds or mutual funds, which are administered by reputable
financial institutions, and the portfolios of which are limited to investments
of the

 

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character, quality and maturity described in clauses (a) through (e) above, and
(g) investments that fail to meet the requirements of clause (f) above solely
because such investments do not constitute “current assets” due to their being
maintained in irrevocable trusts in connection with the Borrower’s sponsorship
of non-qualified retirement savings and investment plans for certain employees
and senior executives of the Borrower.

“Person” shall mean any natural person, corporation, trust, joint venture,
association, company, limited liability company, partnership or government, or
any agency or political subdivision thereof.

“Plan” shall mean any pension plan (other than a Multiemployer Plan) subject to
the provisions of Title IV of ERISA or Section 412 of the Code which is
maintained for employees of the Borrower or any ERISA Affiliate.

“Platform” shall have the meaning given such term in Section 5.04.

“Pledged Equity” shall have the meaning assigned to such term in the Security
Agreement.

“Preferred Interests” shall mean, with respect to any Person, Capital Stock
issued by such Person that are entitled to a preference or priority over any
other Capital Stock issued by such Person upon any distribution of such Person’s
property and assets, whether by dividend or upon liquidation.

“Principal Property” shall have the meaning set forth in the Indenture.

“Principal Property Subsidiary” shall mean a “Restricted Subsidiary”, as such
term is defined in the Indenture.

“Pro Rata Percentage” of any amount shall mean, with respect to any Lender at
any time, (a) in the case of the Revolving Credit Facility, the product of such
amount times a fraction the numerator of which is the amount of such Lender’s
Revolving Commitment at such time (or, if the Revolving Commitments shall have
expired or been terminated, such Lender’s Facility Exposure at such time with
respect to the Revolving Credit Facility) and the denominator of which is the
aggregate amount of the Lenders’ Revolving Commitments at such time (or, if the
Revolving Commitments shall have expired or been terminated, the aggregate
Facility Exposure at such time with respect to the Revolving Credit Facility)
and (b) in the case of the Term Loan Facility, the product of such amount times
a fraction the numerator of which is the amount of such Lender’s Term Loan
Commitment at such time (or, if the Term Loan Commitments shall have expired,
been fully funded or been terminated, such Lender’s Facility Exposure at such
time with respect to the Term Loan Facility) and the denominator of which is the
aggregate amount of the Lenders’ Term Loan Commitments at such time (or, if the
Term Loan Commitments shall have expired, been fully funded or been terminated,
the aggregate Facility Exposure at such time with respect to the Term Loan
Facility).

“Proprietary Information” shall have the meaning given such term in
Section 9.15.

“Public Lender” shall have the meaning given such term in Section 5.04.

“Recourse” shall mean, with reference to any obligation or liability of any
person, any liability or obligation that is not Non-Recourse to such person.

“Reference Bank” shall mean the Administrative Agent.

“Register” shall have the meaning given such term in Section 9.04(d).

 

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“Regulation D” shall mean Regulation D of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Regulation T” shall mean Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Regulation U” shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Regulation X” shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Reimbursement Obligation” shall mean the obligation of the Borrower to
reimburse the Issuing Bank pursuant to Section 2.23(d) for amounts drawn under
Letters of Credit.

“Reportable Event” shall mean any reportable event as defined in Section 4043(c)
of ERISA or the regulations issued thereunder with respect to a Plan (other than
a Plan maintained by an ERISA Affiliate which is considered an ERISA Affiliate
only pursuant to subsection (m) or (o) of Section 414 of the Code).

“Required Lenders” shall mean, at any time, Lenders having Commitments
representing at least a majority of the aggregate Commitments or, if the
Commitments have been terminated, Lenders holding Loans and L/C Obligations
representing at least a majority of the sum of the aggregate amount of L/C
Obligations and aggregate principal amount of the Loans then outstanding,
provided that the Commitment of, and the portion of the Extensions of Credit, as
applicable, held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.

“Responsible Officer” of any corporation shall mean any executive officer or
Financial Officer of such corporation and any other officer or similar official
thereof responsible for the administration of the obligations of such
corporation in respect of this Agreement.

“Restricted Subsidiary” shall mean all Subsidiaries of the Borrower that are not
Unrestricted Subsidiaries.

“Revolving Credit Facility” shall mean, at any time, the aggregate amount of the
Revolving Commitments at such time. The Subfacilities shall constitute a part of
the Revolving Credit Facility.

“Revolving Credit Lender” shall mean, at any time, a Lender that holds a
Revolving Commitment.

“Revolving Commitment” shall mean (a) as to any Lender, the obligation of such
Lender to make Revolving Loans to the account of the Borrower hereunder in an
aggregate principal amount at any time outstanding not to exceed the amount set
forth opposite such Lender’s name in the Register, as such amount may be
increased or reduced at any time or from time to time pursuant to the terms
hereof, and (b) as to all Lenders, the aggregate commitment of all Lenders to
make Revolving Loans, as such amount may be increased or reduced at any time or
from time to time pursuant to the terms hereof. The Revolving Commitment of all
Lenders on the Closing Date shall be $200,000,000.

“Revolving Loan” shall mean any revolving loan made to the Borrower pursuant to
Section 2.01(a), and all such revolving loans as the context requires.

 

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“Revolving Note” shall mean a promissory note of the Borrower payable to the
order of any Revolving Credit Lender, in substantially the form of Exhibit F-2
hereto, evidencing the indebtedness of the Borrower to such Lender under the
Revolving Credit Facility.

“Sale and Lease-Back Transaction” shall mean any arrangement, directly or
indirectly, with any person whereby such person shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
which it intends to use for substantially the same purpose or purposes as the
property being sold or transferred.

“S&P” shall mean Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc. and any successor thereto.

“Secured Parties” shall mean the Administrative Agent, the Issuing Bank, the
Swingline Lender, the Lenders, the holder of any Cash Management Obligations and
the holder of any Hedging Obligations.

“Security Agreement” shall mean a security agreement, dated as of the Closing
Date, in favor of the Administrative Agent from the Loan Parties party thereto
in the form of Exhibit E attached hereto.

“Security Agreement Supplement” has the meaning specified in the Security
Agreement.

“Sharing Event” shall mean (a) the occurrence of an Event of Default with
respect to the Borrower or a Restricted Subsidiary pursuant to clause (g) or
(h) of Article VII, (b) the termination of the Commitments pursuant to Article
VII or (c) the acceleration of the Loans pursuant to Article VII.

“Spot Exchange Rate” shall mean on the day two (2) Business Days prior to any
calculation date with respect to any Alternative Currency (a) the rate appearing
on Reuters Screen LIBOR01 or the applicable Reuters Screen Page (or such other
relevant display page as determined by the Administrative Agent) for the sale or
purchase, as applicable, of such Alternative Currency for dollars in the London
foreign exchange market at approximately 11:00 a.m. London time for purchase or
delivery two (2) days later, or, if not available, (b) the spot selling rate or
purchasing rate, as applicable, at which the Administrative Agent’s
Correspondent offers to sell or purchase such Alternative Currency for dollars
in the London foreign exchange market at approximately 11:00 a.m. London time
for delivery two (2) Business Days later; provided, however, that if, at the
time of any such determination, no such spot rate can reasonably be quoted, the
Administrative Agent may use any method (including obtaining quotes from two
(2) or more market makers for the applicable Alternative Currency) as it deems
applicable to determine such rate, and such determination shall be conclusive
absent manifest error.

“Statutory Reserve Rate” shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

 

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“Sterling” shall mean, at any date of determination, the lawful currency of the
United Kingdom.

“Subfacility” shall mean each of the Swingline Commitment and the L/C
Commitment.

“subsidiary” shall mean with respect to any Person, any corporation,
association, joint venture, partnership or other business entity (whether now
existing or hereafter organized) of which at least a majority of the voting
Capital Stock or other Capital Stock having ordinary voting power for the
election of directors (or the equivalent) is, at the time as of which any
determination is being made, 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.

“Subsidiary” shall mean any subsidiary of the Borrower.

“Supplemental Collateral Agent” shall have the meaning set forth in
Section 8.01(b).

“Swingline Commitment” shall mean the lesser of (a) $10,000,000 and (b) the
Revolving Commitment.

“Swingline Lender” shall mean DBAG in its capacity as swingline lender
hereunder.

“Swingline Loan” shall mean any swingline loan made by the Swingline Lender to
the Borrower pursuant to Section 2.02, and all such swingline loans collectively
as the context requires.

“Swingline Termination Date” shall mean the first to occur of (a) the
resignation of DBAG as Administrative Agent in accordance with Section 8.09 and
(b) the Maturity Date.

“Syndication Agent” shall have the meaning specified in the recital of parties
to this Agreement.

“TARGET” shall mean Trans-European Automated Real-time Gross Settlement Express
Transfer payment system (or, if such system ceases to be operative, such other
payment system (if any) determined by the Administrative Agent to be a suitable
replacement).

“TARGET Day” shall mean any day on which TARGET is open for the settlement of
payments in euro.

“Taxes” shall have the meaning assigned to such term in Section 2.20(a).

“Term Loan” shall mean a term loan to the Borrower from the Term Loan Lenders in
the Original Principal Amount, as such amount may be increased from time to time
in accordance with Section 2.24.

“Term Loan Commitment” shall mean (a) as to any Lender, the obligation of such
Lender to fund its Pro Rata Percentage of the Term Loan hereunder in an
aggregate principal amount at any time outstanding not to exceed the amount set
forth opposite such Lender’s name in the Register, as such amount may be
increased from time to time in accordance with Section 2.24 and (b) as to all
Lenders, the aggregate commitment of all Lenders to fund the Term Loan
hereunder, as such amount may be increased at any time or from time to time in
accordance with Section 2.24. The Term Loan Commitment of all Lenders on the
Closing Date shall be $150,000,000.

“Term Loan Facility” shall mean, at any time, the aggregate amount of the Term
Loan Commitments at such time.

 

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“Term Loan Lender” shall mean, at any time, a Lender that holds a Term Loan
Commitment.

“Term Note” shall mean a promissory note of the Borrower payable to the order of
any Term Loan Lender, in substantially the form of Exhibit F-1 hereto,
evidencing the indebtedness of the Borrower to such Lender under the Term Loan
Facility.

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

“Transactions” shall have the meaning assigned to such term in Section 3.02.

“Treaty on European Union” shall mean the Treaty of Rome of March 25, 1957, as
amended by the Single European Act of 1986, the Maastricht Treaty of 1992, and
the Amsterdam Treaty of 1998, each as amended from time to time.

“Unrestricted Subsidiaries” shall mean all Foreign Subsidiaries of the Borrower
and such other Subsidiaries as may be designated or redesignated as unrestricted
by the Borrower in accordance with Section 5.09(a) or (b). As of the Closing
Date, Schedule 3.08 lists all Subsidiaries and categorizes them as Restricted or
Unrestricted.

“Unsecured Indebtedness” shall mean any Indebtedness that is not secured by any
Lien on any property.

“Unused Fee” shall have the meaning assigned thereto in Section 2.07(a).

“Unused Revolving Credit Commitment” shall mean, with respect to any Revolving
Credit Lender at any date of determination, (a) such Revolving Credit Lender’s
Revolving Credit Commitment at such time minus (b) the sum of (i) the aggregate
principal amount of all Revolving Loans (excluding all Swingline Loans) made by
such Revolving Credit Lender (in its capacity as a Revolving Credit Lender) and
outstanding at such time plus (ii) such Revolving Credit Lender’s Pro Rata
Percentage of all L/C Obligations plus (iii) such Revolving Credit Lender’s Pro
Rata Percentage of the aggregate principal amount of all Competitive Bid Loans
outstanding at such time.

“Wholly Owned Subsidiary” shall mean a Subsidiary all the Capital Stock or other
ownership interest of which is owned by the Borrower or a Wholly Owned
Subsidiary of the Borrower (including any Subsidiary that would be wholly owned
but for directors’ qualifying shares or similar matters).

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

SECTION 1.02. Terms Generally. The definitions herein shall apply equally to
both the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words “include”, “includes” and “including” shall be deemed to
be followed by the phrase “without limitation”. All references herein to
Articles,

 

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Sections, Exhibits and Schedules shall be deemed references to Articles and
Sections of, and Exhibits and Schedules to, this Agreement unless the context
shall otherwise require. The words “hereof,” “herein” and “hereunder” and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP consistently applied, as in effect from
time to time; provided, however, that, for purposes of determining compliance
with any covenant set forth in Article VI, such terms shall be construed in
accordance with GAAP as in effect on the date of this Agreement applied on a
basis consistent with the application used in preparing the Borrower’s audited
financial statements referred to in Section 3.05.

SECTION 1.03. Effectiveness of Euro Provisions. With respect to any state (or
the currency of such state) that is not a Participating Member State on the date
of this Agreement, the provisions of Sections 2.09(f), 2.15(b), 2.15(c) and 2.22
shall become effective in relation to such state (and the currency of such
state) at and from the date on which such state becomes a Participating Member
State.

SECTION 1.04. Other Definitions and Provisions.

(a) Use of Capitalized Terms. Unless otherwise defined therein, all capitalized
terms defined in this Agreement shall have the defined meanings when used in
this Agreement and the other Loan Documents or any certificate, report or other
document made or delivered pursuant to this Agreement.

(b) Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Eastern time (daylight or standard, as applicable).

(c) References to Agreement and Laws. Unless otherwise expressly provided
herein, (i) references to formation documents, governing documents, agreements
(including the Loan Documents) and other contractual instruments shall be deemed
to include all subsequent amendments, restatements, extensions, supplements and
other modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document; and (ii) references to any Applicable Law shall include
all statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting such Applicable Law.

SECTION 1.05. Alternative Currencies. The Borrower may from time to time request
that Revolving Loans and Letters of Credit be made in an alternative currency.
Any such request shall be made to the Administrative Agent (which shall promptly
notify each Lender thereof) not later than 12:00 P.M. (noon) 30 days prior to
the date of the desired Revolving Loan or Letter of Credit, as applicable. Each
Lender shall notify the Administrative Agent, not later than 12:00 P.M. (noon)
15 Business Days after receipt of such request whether it consents, in its sole
discretion, to making Revolving Loans and the issuance of Letters of Credit in
such requested currency. Any failure by a Lender to respond to such request
within the time period specified in the preceding sentence shall be deemed to be
a refusal by such Lender to make Revolving Loans or consent to the issuance of
Letters of Credit, in such requested currency. If all of the Lenders consent to
making the Revolving Loans and the issuance of Letters of Credit in such
requested currency, the Administrative Agent shall so notify the Borrower and
such currency shall be deemed for all purposes to be an Alternative Currency
hereunder. Upon any Lender’s refusal to make Revolving Loans or to consent to
the issuance of Letters of Credit in the requested currency, the Borrower may
replace such Lender in accordance with Section 2.26.

SECTION 1.06. Letter of Credit Amounts. Unless otherwise specified, all
references herein to the amount of a Letter of Credit at any time shall be
deemed to mean the maximum face amount of such Letter of Credit after giving
effect to all increases thereof contemplated by such Letter of Credit or the
Application therefor (at the time specified therefor in such applicable Letter
of Credit or Application and as such amount may be reduced by (a) any permanent
reduction of such Letter of Credit or (b) any amount which is drawn, reimbursed
and no longer available under such Letter of Credit).

 

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ARTICLE II

THE CREDITS

SECTION 2.01. Revolving Loans; Term Loan; Competitive Bid Loans.

(a) Revolving Loans. Subject to the terms and conditions of this Agreement, and
in reliance upon the representations and warranties set forth herein, each
Revolving Credit Lender severally agrees to make Revolving Loans in a Permitted
Currency to the Borrower from time to time from the Closing Date through, but
not including, the Maturity Date as requested by the Borrower in accordance with
the terms of Section 2.03, provided that based upon the Equivalent Dollar Amount
of all outstanding Revolving Loans, Competitive Bid Loans and L/C Obligations,
(i) the aggregate amount of the Revolving Commitments shall be deemed used from
time to time to the extent of the aggregate amount of the Competitive Bid Loans
then outstanding and such deemed use of the aggregate amount of the Revolving
Commitments shall be allocated among the Revolving Credit Lenders ratably
according to their respective Revolving Commitments (such deemed use of the
aggregate amount of the Revolving Commitments being a “Competitive Bid
Reduction”), (ii) the aggregate principal amount of all outstanding Revolving
Loans (after giving effect to any amount requested and the use of the proceeds
thereof) shall not exceed the Revolving Commitment (as reduced by any
Competitive Bid Reduction) minus the sum of all outstanding Swingline Loans and
L/C Obligations, (iii) the aggregate principal amount of all outstanding
Revolving Loans made in an Alternative Currency (after giving effect to any
amount requested and the use of the proceeds thereof) plus the L/C Obligations
with respect to all Alternative Currency Letters of Credit shall not exceed the
Alternative Currency Commitment and (iv) the aggregate principal amount of all
outstanding Revolving Loans (after giving effect to any amount requested and the
use of the proceeds thereof) from any Revolving Credit Lender to the Borrower
shall not at any time exceed such Revolving Credit Lender’s Revolving Commitment
(as reduced by such Revolving Credit Lender’s Pro Rata Percentage of any
Competitive Bid Reduction) minus such Revolving Credit Lender’s Pro Rata
Percentage of (A) outstanding Swingline Loans and (B) outstanding L/C
Obligations. Each Revolving Loan by a Revolving Credit Lender shall be in a
principal amount equal to such Revolving Credit Lender’s Pro Rata Percentage of
the aggregate principal amount of Revolving Loans requested on such occasion.
Subject to the terms and conditions hereof, the Borrower may borrow, repay and
reborrow Revolving Loans hereunder until the Maturity Date.

(b) Term Loan. Subject to the terms and conditions of this Agreement, and in
reliance upon the representations and warranties set forth herein, each Term
Loan Lender severally agrees to fund to the Borrower an amount equal to its Pro
Rata Percentage of the Term Loan on the Closing Date. Subject to the terms and
conditions of this Agreement, the Term Loan shall be funded to the Borrower on
the Closing Date as a single advance. Borrower shall not have the right to
reborrow any portion of the Term Loan that is repaid or prepaid.

(c) Competitive Bid Loans. Subject to the terms and conditions of this
Agreement, the Borrower may, prior to the Maturity Date and pursuant to the
procedures set forth in Section 2.04, request the Revolving Credit Lenders to
make offers to make Competitive Bid Loans, provided that, based upon the
Equivalent Dollar Amount of all outstanding Revolving Loans and L/C Obligations,
the aggregate principal amount of all outstanding Competitive Bid Loans (after
giving effect to any amount requested and the use of proceeds thereof) shall not
exceed the Revolving Commitment minus the sum of all outstanding Revolving
Loans, Swingline Loans and L/C Obligations. The Revolving Credit Lenders may,
but shall have no obligation to, make such offers and the Borrower may, but
shall have no obligation to, accept any such offers in the manner set forth in
Section 2.04.

SECTION 2.02. Swingline Loans.

 

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(a) Availability. Subject to the terms and conditions of this Agreement, the
Swingline Lender agrees to make Swingline Loans in dollars to the Borrower from
time to time from the Closing Date through, but not including, the Swingline
Termination Date, provided that (i) all Swingline Loans shall be denominated in
dollars and (ii) based upon the Equivalent Dollar Amount of all outstanding
Revolving Loans and L/C Obligations, the aggregate principal amount of all
outstanding Swingline Loans (after giving effect to any amount requested and the
use of proceeds thereof), shall not exceed the lesser of (A) the Revolving
Commitment minus the sum of all outstanding Revolving Loans, Competitive Bid
Loans and the L/C Obligations and (B) the Swingline Commitment.

(b) Refunding.

(i) Upon written demand by the Swingline Lender, with a copy of such demand to
the Administrative Agent, each Revolving Credit Lender shall purchase from the
Swingline Lender, and the Swingline Lender shall sell and assign to each such
Revolving Credit Lender, such Revolving Credit Lender’s Pro Rata Percentage of
each outstanding Swingline Loan as of the date of such demand, by making
available for the account of its Lending Office, by deposit to the Swingline
Lender’s account, in same day funds, an amount equal to the portion of the
outstanding principal amount of such Swingline Loans to be purchased by such
Revolving Credit Lender. The Borrower hereby agrees to each such sale and
assignment. Each Revolving Credit Lender agrees to purchase its Pro Rata
Percentage of an outstanding Swingline Loans on (i) the Business Day on which
demand therefor is made by the Swingline Lender, provided that notice of such
demand is given not later than 12:00 Noon on such Business Day or (ii) by 2.00
p.m. on the first Business Day next succeeding such demand if notice of such
demand is given after such time. Upon any such assignment by the Swingline
Lender to any Revolving Credit Lender of a portion of a Swingline Loan, the
Swingline Lender represents and warrants to such Revolving Credit Lender that
the Swingline Lender is the legal and beneficial owner of such interest being
assigned by it, but makes no other representation or warranty and assumes no
responsibility with respect to such Swingline Loan, the Loan Documents or any
Loan Party. If and to the extent that any Revolving Credit Lender shall not have
so made the amount of such Swingline Loan available to the Swingline Lender,
such Revolving Credit Lender agrees to pay to the Swingline Lender forthwith on
demand such amount together with interest thereon, for each day after the date
such amount was due until the date such amount is paid to the Swingline Lender,
at the Federal Funds Effective Rate for the first day such payment is not made
and thereafter at the interest rate applicable to Swingline Loans pursuant to
Section 2.09(a) or (c), as the case may be. If such Revolving Credit Lender
shall pay to the Swingline Lender such amount on any Business Day, such amount
so paid in respect of principal shall constitute a Swingline Loan made by such
Revolving Credit Lender on such Business Day for purposes of this Agreement, and
the outstanding principal amount of the Swingline Loan made by the Swingline
Lender shall be reduced by such amount on such Business Day. No Revolving Credit
Lender’s obligation to fund its respective Pro Rata Percentage of a Swingline
Loan shall be affected by any other Revolving Credit Lender’s failure to fund
its Pro Rata Percentage of a Swingline Loan, nor shall any Revolving Credit
Lender’s Pro Rata Percentage be increased as a result of any such failure of any
other Revolving Credit Lender to fund its Pro Rata Percentage of a Swingline
Loan.

(ii) The Borrower shall pay to the Swingline Lender upon demand, but in no event
later than 1:00 p.m. on the next Business Day after such demand is made, the
amount of such Swingline Loans to the extent amounts received from the Revolving
Credit Lenders are not sufficient to repay in full the outstanding Swingline
Loans requested or required to be purchased. In addition, the Borrower hereby
authorizes the Administrative Agent to charge any account maintained by the
Borrower with the Swingline Lender (up to the amount available therein) in order
to immediately pay the Swingline Lender the amount of such Swingline Loans to
the extent amounts received from the Revolving Credit Lenders are not sufficient
to repay in full the outstanding Swingline Loans requested or required to be
purchased. If any portion of any such amount paid to the Swingline Lender shall
be recovered by or on behalf of the Borrower from the Swingline Lender in
bankruptcy

 

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or otherwise, the loss of the amount so recovered shall be ratably shared among
all the Revolving Credit Lenders in accordance with their respective Pro Rata
Percentages (unless the amounts so recovered by or on behalf of the Borrower
pertain to a Swingline Loan extended after the occurrence and during the
continuance of an Event of Default of which the Administrative Agent has
received notice in the manner required pursuant to Section 8.05 and which such
Event of Default has not been waived by the Required Lenders or the Lenders, as
applicable).

(iii) Each Revolving Credit Lender acknowledges and agrees that its obligation
to purchase interests in Swingline Loans in accordance with the terms of this
Section 2.02(b) is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including, without limitation, non-satisfaction of the
conditions set forth in Article IV. Whenever, at any time after the Swingline
Lender has received from any Lender such Lender’s participating interest in a
Swingline Loan, the Swingline Lender receives any payment on account thereof,
the Swingline Lender will distribute to such Lender its participating interest
in such amount (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender’s participating interest was
outstanding and funded).

(iv) The Borrower shall repay to the Administrative Agent for the account of
(i) the Swingline Lender and (ii) each other Revolving Credit Lender that has
made a Swingline Loan by purchase from the Swingline Lender pursuant to this
Section 2.02(b), the outstanding principal amount of each Swingline Loan made by
each of them on or before the earlier of (A) the fifth Business Day after the
date such Swingline Loan was funded by the Swingline Lender and (B) the Maturity
Date.

(c) Defaulting Lenders. Notwithstanding anything to the contrary contained in
this Section 2.02, the Swingline Lender shall not be obligated to make any
Swingline Loan at a time when any other Lender is a Defaulting Lender, unless
the Swingline Lender has entered into arrangements with the Borrower or such
Defaulting Lender that are reasonably satisfactory to the Swingline Lender to
eliminate the Swingline Lender’s Fronting Exposure (after giving effect to
Section 2.27(c)) with respect to any such Defaulting Lender, including the
delivery of cash collateral.

SECTION 2.03. Procedure for Advances of Revolving Loans, Term Loans and
Swingline Loans.

(a) Requests for Borrowing. The Borrower shall give the Administrative Agent
irrevocable prior written notice of its intention to borrow substantially in the
form attached hereto as Exhibit A-1 (a “Notice of Borrowing”) not later than
(i) 12:00 p.m. on the same Business Day as each ABR Loan, (ii) 2:00 p.m. on the
same Business Day as each Swingline Loan, (iii) 12:00 p.m. at least three
(3) Business Days before each Eurodollar Loan and (iv) subject to Section 1.05,
12:00 p.m. at least four (4) Business Days before each Eurocurrency Loan, is to
be made, specifying (A) the date of such borrowing, which shall be a Business
Day, (B) whether the Loan shall be denominated in dollars or an Alternative
Currency, (C) if such Loan is denominated in dollars, whether such Loan shall be
a Eurodollar Loan or an ABR Loan, (D) the amount of such borrowing, which shall
be in an amount equal to the amount of the Revolving Commitment or the
Alternative Currency Commitment, as applicable, then available to the Borrower,
or if less, (1) with respect to ABR Loans and Swingline Loans, in an aggregate
principal amount of $100,000 or a whole multiple of $100,000 in excess thereof,
and (2) with respect to Eurodollar Loans and Eurocurrency Loans, in an aggregate
principal amount of $3,000,000 or a whole multiple of $1,000,000 (or the
Alternative Currency Amount thereof, as applicable) in excess thereof,
(E) whether such Loan is to be a Revolving Loan, a Term Loan or a Swingline Loan
and (F) in the case of a Eurodollar Loan or a Eurocurrency Loan, the duration of
the Interest Period applicable thereto. A Notice of Borrowing received after the
applicable deadline set forth above shall be deemed received on the next
Business Day. The Administrative Agent shall promptly notify the Lenders of each
Notice of Borrowing.

 

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(b) Disbursement of Revolving Loans Denominated in Dollars and Swingline Loans.
Not later than 2:00 p.m. on the proposed borrowing date for any Revolving Loan
denominated in dollars and any Swingline Loan, (i) each Revolving Credit Lender
will make available to the Administrative Agent, for the account of the
Borrower, at the office of the Administrative Agent in dollars in funds
immediately available to the Administrative Agent, such Revolving Credit
Lender’s Pro Rata Percentage of the Revolving Loan to be made on such borrowing
date and (ii) the Swingline Lender will make available to the Administrative
Agent, for the account of the Borrower, at the office of the Administrative
Agent in dollars in funds immediately available to the Administrative Agent, the
Swingline Loan to be made on such borrowing date. The Borrower hereby
irrevocably authorizes the Administrative Agent to disburse the proceeds of each
borrowing requested pursuant to this Section 2.03(b) in immediately available
funds by crediting or wiring such proceeds to the deposit account of the
Borrower identified in the most recent notice substantially in the form of
Exhibit A-2 hereto (a “Notice of Account Designation”) delivered by the Borrower
to the Administrative Agent or as may be otherwise agreed upon by the Borrower
and the Administrative Agent from time to time. Subject to Section 2.14 hereof,
the Administrative Agent shall not be obligated to disburse the portion of the
proceeds of any Revolving Loan requested pursuant to Section 2.03(a) to the
extent that any Revolving Credit Lender has not made available to the
Administrative Agent its Pro Rata Percentage of such Revolving Loan. Revolving
Loans to be made for the purpose of purchasing interests in Swingline Loans
shall be made by the Revolving Credit Lenders as provided in Section 2.02(b).

(c) Disbursement of Revolving Loans denominated in an Alternative Currency. Not
later than 11:00 a.m. (in the city in which the Administrative Agent’s
Correspondent is located) on or before the proposed borrowing date for any
Revolving Loan denominated in an Alternative Currency, each Lender will make
available to the Administrative Agent, for the account of the Borrower, at the
office of the Administrative Agent’s Correspondent in the requested Alternative
Currency in funds immediately available to the Administrative Agent, such
Lender’s Pro Rata Percentage of the Revolving Loan to be made on such borrowing
date. The Borrower hereby irrevocably authorizes the Administrative Agent to
disburse the proceeds of each borrowing requested pursuant to this Section 2.03
in immediately available funds by crediting or wiring such proceeds to the
deposit account of the Borrower identified in the most recent Notice of Account
Designation delivered by the Borrower to the Administrative Agent or as may be
otherwise agreed upon by the Borrower and the Administrative Agent from time to
time. Subject to Section 2.14, the Administrative Agent shall not be obligated
to disburse the portion of the proceeds of any Loan requested pursuant to this
Section 2.03 to the extent that any Lender has not made available to the
Administrative Agent its Pro Rata Percentage of such Loan.

SECTION 2.04. Procedure for Advance of Competitive Bid Loans.

(a) Competitive Bid Request. In order to request Competitive Bids, the Borrower
shall deliver to the Administrative Agent a duly completed Competitive Bid
Request in the form of Exhibit A-5 hereto (a “Competitive Bid Request”) to be
received by the Administrative Agent not later than 12:00 p.m. (i) five
(5) Business Days before each proposed Eurodollar Competitive Bid Loan and
(ii) two (2) Business Days before each proposed Fixed Rate Loan, provided that
the Borrower may not submit more than two (2) Competitive Bid Requests during
any period of five (5) consecutive Business Days. Notwithstanding the foregoing,
the Borrower may not submit more than six (6) Competitive Bid Requests during
any calendar month. No Eurocurrency Loan or ABR Loan shall be requested in, or
made pursuant to, a Competitive Bid Request. A Competitive Bid Request that does
not conform substantially to the form of Exhibit A-5 may be rejected in the
Administrative Agent’s sole discretion, and the Administrative Agent shall
promptly notify the Borrower of such rejection by telephone promptly confirmed
by telecopy. Such request shall in each case refer to this Agreement and specify
(i) whether the borrowing then being requested is to be a Eurodollar Competitive
Bid Loan or a Fixed Rate Loan, (ii) the date of such borrowing (which shall be a
Business Day), (iii) the aggregate principal amount of such borrowing which
shall be in a minimum principal amount of $1,000,000 or a whole multiple of
$1,000,000 in excess thereof, and (iv) the Competitive Bid Interest Periods with
respect to each Eurodollar Competitive Bid Loan and each Fixed Rate Loan which
Competitive Bid Interest Periods may not expire on a date later than the first
Business Day prior to the Maturity Date,

 

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provided that the Borrower may not request bids for more than three
(3) different durations of Competitive Bid Interest Periods in the same
Competitive Bid Request. Promptly after its receipt of a Competitive Bid Request
that is not rejected as aforesaid, the Administrative Agent shall invite by
facsimile (in the form set forth in Exhibit A-6 hereto) the Revolving Credit
Lenders to bid, on the terms and conditions of this Agreement, to make
Competitive Bid Loans pursuant to the Competitive Bid Request.

(b) Competitive Bids.

(i) Each Revolving Credit Lender may, in its sole discretion, make up to three
(3) Competitive Bids to the Borrower in response to a Competitive Bid Request.
Each Competitive Bid by a Revolving Credit Lender must be received by the
Administrative Agent via facsimile, in the form of Exhibit A-7 hereto, (A) not
later than 10:30 a.m. three (3) Business Days before any proposed Eurodollar
Competitive Bid Loan and (B) not later than 10:30 a.m. on the same Business Day
as a proposed Fixed Rate Loan, and any Competitive Bid received by the
Administrative Agent after such time can be rejected by the Administrative
Agent. Competitive Bids that do not conform substantially to the form of Exhibit
A-7 or otherwise include additional conditions to funding shall be rejected by
the Administrative Agent and the Administrative Agent shall notify the Revolving
Credit Lender making such nonconforming bid of such rejection as soon as
practicable. Each Competitive Bid shall refer to this Agreement and specify
(A) the principal amount of the Competitive Bid Loan or Loans that the Revolving
Credit Lender is willing to make to the Borrower which shall be in a minimum
principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess
thereof and may equal the entire principal amount of the Competitive Bid Loan
requested by the Borrower, (B) the Competitive Bid Rate or Rates at which the
Revolving Credit Lender is prepared to make the Competitive Bid Loan or Loans
and (C) the Competitive Bid Interest Period with respect thereto. A Competitive
Bid submitted by a Revolving Credit Lender pursuant to this Section 2.04(b)(i)
shall be irrevocable.

(ii) If the Administrative Agent shall elect to submit a Competitive Bid in its
capacity as a Revolving Credit Lender, it shall submit such bid directly to the
Borrower at least one quarter (1/4) of an hour earlier than the latest time at
which the other Revolving Credit Lenders are required to submit their bids to
the Administrative Agent pursuant to Section 2.04(b)(i).

(iii) The Administrative Agent shall notify the Borrower by facsimile, (A) not
later than 11:00 a.m. three (3) Business Days before a proposed Eurodollar
Competitive Bid Loan and (B) not later than 11:00 a.m. on the same Business Day
of each proposed Fixed Rate Loan, of all the Competitive Bids made, the
Competitive Bid Rate or Rates, the principal amount of each Competitive Bid Loan
in respect of which a Competitive Bid was made, the Competitive Bid Interest
Period applicable to each such Eurodollar Competitive Bid Loan and the identity
of the Revolving Credit Lender that made each bid. The Administrative Agent
shall send a copy of all Competitive Bids to the Borrower for its records as
soon as practicable after completion of the bidding process set forth in this
Section 2.04.

(iv) All notices required by this Section 2.04 shall be given in accordance with
Section 9.01.

(c) Acceptance/Rejection.

(i) The Borrower may, in its sole and absolute discretion, subject only to the
provisions of this paragraph (c), accept or reject any Competitive Bid referred
to in paragraph (b) above. The Borrower shall notify the Administrative Agent by
telephone, confirmed by facsimile in the form of Exhibit A-8 hereto (a
“Competitive Bid Accept/Reject Letter”), whether and to what extent it has
decided to accept or reject any or all of the bids referred to in
Section 2.04(b), (A) not later than 12:00 p.m. three (3) Business Days before a
proposed Eurodollar Competitive Bid Loan

 

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and (B) not later than 12:00 p.m. on the day of each proposed Fixed Rate Loan,
provided that (A) the failure by the Borrower to give such notice shall be
deemed to be a rejection of all the bids referred to in Section 2.04(b), (B) the
acceptance of bids by the Borrower shall be made on the basis of ascending order
(from lowest to highest) of bids for Eurodollar Competitive Bid Loans or Fixed
Rate Loans within each Competitive Bid Interest Period and the Borrower shall
not accept a bid made at a particular Competitive Bid Rate for a particular
Competitive Bid Interest Period if the Borrower has rejected a bid made at a
lower Competitive Bid Rate for the same Competitive Bid Interest Period, (C) if
Competitive Bids are made by two (2) or more Revolving Credit Lenders for the
same Competitive Bid Rate and the same Competitive Bid Interest Period, the
principal amount accepted shall be allocated among such Revolving Credit Lenders
by the Borrower (after consultation with the Administrative Agent) on a pro rata
basis rounded to the nearest $1,000,000, (D) the aggregate amount of the
Competitive Bids accepted by the Borrower shall not exceed the principal amount
specified in the Competitive Bid Request, and (E) no bid shall be accepted for a
Competitive Bid Loan unless such Competitive Bid Loan is in a minimum principal
amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof. A
notice given by the Borrower pursuant to this Section 2.04(c)(i) shall be
irrevocable.

(ii) The Administrative Agent shall promptly notify each bidding Revolving
Credit Lender whether or not its Competitive Bid has been accepted (and if so,
in what amount and at what Competitive Bid Rate) by facsimile, and each
successful bidder will thereupon become bound, subject to the other applicable
conditions hereof, to make the Competitive Bid Loan in respect of which its bid
has been accepted.

(d) Disbursement of Competitive Bid Loans. Not later than 2:00 p.m. on the
proposed borrowing date, each Revolving Credit Lender whose Competitive Bid was
accepted will make available to the Administrative Agent, for the account of the
Borrower, at the Administrative Agent’s Office in funds immediately available to
the Administrative Agent, such Revolving Credit Lender’s Competitive Bid Loan to
be made on such borrowing date. After receipt thereof from the applicable
Revolving Credit Lenders, the Administrative Agent shall disburse not later than
3:30 p.m. the proceeds of each borrowing accepted pursuant to Section 2.04(c) in
immediately available funds by crediting such proceeds to the deposit account or
accounts specified in the most recent Notice of Account Designation delivered by
the Borrower or as may be agreed upon by the Borrower and the Administrative
Agent from time to time. The Administrative Agent shall not be obligated to
disburse the proceeds of any Competitive Bid Loan accepted pursuant to
Section 2.04(c) until the applicable Revolving Credit Lender shall have made
available to the Administrative Agent its Competitive Bid Loan.

SECTION 2.05. Repayment of Loans.

(a) Repayment on the Maturity Date. The Borrower hereby agrees to repay the
outstanding principal amount of (i) all Revolving Loans in full in the
applicable Permitted Currency in which each Revolving Loan was initially funded
on the Maturity Date, (ii) each Competitive Bid Loan on the expiration of the
applicable Competitive Bid Interest Period and (iii) all Swingline Loans in
accordance with Section 2.02(b), together, in each case, with all accrued but
unpaid interest thereon. Each Lender agrees, promptly after a request from the
Borrower following the Maturity Date, to return to the Borrower any Note issued
to such Lender pursuant to this Agreement (including any Designated Bank Notes).

(b) Mandatory Repayment of Revolving Loans.

(i) Revolving Commitment. If at any time (as determined by the Administrative
Agent under Section 2.05(b)(v)), based upon the Equivalent Dollar Amount of all
outstanding Revolving Loans and L/C Obligations, (A) solely because of currency
fluctuation, the outstanding principal amount of all Revolving Loans exceeds one
hundred and five percent (105%) of the Revolving Commitment minus the sum of all
outstanding Competitive Bid Loans, Swingline Loans

 

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and L/C Obligations or (B) for any other reason, the outstanding principal
amount of all Revolving Loans exceeds the Revolving Commitment minus the sum of
all outstanding Competitive Bid Loans, Swingline Loans and L/C Obligations,
then, in each such case, the Borrower shall (I) first, if (and to the extent)
necessary to eliminate such excess, immediately repay outstanding Swingline
Loans (and/or reduce any pending request for a borrowing of such Loans on such
day by the Equivalent Dollar Amount of such excess), (II) second, if (and to the
extent) necessary to eliminate such excess, immediately repay outstanding
Revolving Loans which are ABR Loans by the Equivalent Dollar Amount of such
excess (and/or reduce any pending request for a borrowing of such Loans on such
day by the Equivalent Dollar Amount of such excess), (III) third, if (and to the
extent) necessary to eliminate such excess, immediately repay Revolving Loans
which are Eurodollar Loans and Eurocurrency Loans (and/or reduce any pending
requests for a borrowing or continuation or conversion of such Loans submitted
in respect of such Loans on such day by the Equivalent Dollar Amount of such
excess), (IV) fourth, if (and to the extent) necessary to eliminate such excess,
with respect to any Letters of Credit then outstanding, make a payment of cash
collateral into a cash collateral account opened by the Administrative Agent for
the benefit of the Lenders in an amount equal to the aggregate then undrawn and
unexpired amount of such Letters of Credit (such cash collateral to be applied
in accordance with Section 2.23(g)), and (V) fifth, if (and to the extent)
necessary to eliminate such excess, to immediately repay Competitive Bid Loans,
in the inverse order of maturity of any such Competitive Bid Loans.

(ii) Alternative Currency Commitment. If at any time (as determined by the
Administrative Agent under Section 2.05(b)(v)), based upon the Equivalent Dollar
Amount of all outstanding Revolving Loans and L/C Obligations, (A) solely
because of currency fluctuation, the outstanding principal amount of all
Revolving Loans denominated in an Alternative Currency plus the L/C Obligations
with respect to all Alternative Currency Letters of Credit exceeds the lesser of
(1) one hundred and five percent (105%) of the Revolving Commitment minus the
sum of all outstanding Revolving Loans denominated in dollars, Competitive Bid
Loans, Swingline Loans and L/C Obligations with respect to Letters of Credit
denominated in dollars and (2) one hundred and five percent (105%) of the
Alternative Currency Commitment or (B) for any other reason, the outstanding
principal amount of all Alternative Currency Loans exceeds the lesser of (1) the
Revolving Commitment minus the sum of all outstanding Revolving Loans
denominated in dollars, Competitive Bid Loans, Swingline Loans and L/C
Obligations and (2) the Alternative Currency Commitment, then, in each such
case, such excess shall (x) with respect to Eurocurrency Loans, be immediately
repaid in the currency in which such Revolving Loan(s) were initially funded by
the Borrower to the Administrative Agent for the account of the Lenders and
(y) with respect to any Alternative Currency Letters of Credit then outstanding,
deposited in cash as collateral into a cash collateral account opened by the
Administrative Agent for the benefit of the Lenders.

(iii) Swingline Commitment. If at any time (as determined by the Administrative
Agent under Section 2.05(b)(v)), based upon the Equivalent Dollar Amount of all
outstanding Revolving Loans and L/C Obligations, and for any reason the
outstanding principal amount of all Swingline Loans exceeds the lesser of
(A) the Revolving Commitment minus the sum of all outstanding Revolving Loans,
Competitive Bid Loans and L/C Obligations and (B) the Swingline Commitment,
then, in each such case, such excess shall be immediately repaid by the Borrower
to the Administrative Agent for the account of the Lenders.

(iv) Excess L/C Obligations. If at any time (as determined by the Administrative
Agent under Section 2.05(b)(v)) and for any reason, based upon the Equivalent
Dollar Amount of all outstanding Revolving Loans and L/C Obligations, the
outstanding amount of all L/C Obligations exceeds the lesser of (A) the
Revolving Commitment minus the sum of the amount of all outstanding Revolving
Loans, Competitive Bid Loans and Swingline Loans and (B) the L/C Commitment,
then, in each such case, the Borrower shall make a payment of cash collateral
into a cash collateral account opened by the Administrative Agent for the
benefit of the Lenders in an amount equal to the aggregate then undrawn and
unexpired amount of such Letters of Credit (such cash collateral to be applied
in accordance with Section 2.23(g)).

 

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(v) Compliance and Payments. The Borrower’s compliance with this Section 2.05(b)
shall be tested from time to time by the Administrative Agent at its sole
discretion, but in any event shall be tested on the date on which the Borrower
requests the Lenders to make a Revolving Loan or the Issuing Bank to issue a
Letter of Credit under Section 4.01. All determinations of the outstanding
principal amount of Loans and L/C Obligations shall be based on their Equivalent
Dollar Amounts. To determine this, on such testing dates, the Administrative
Agent shall determine the Spot Exchange Rate with respect to each Eurocurrency
Loan and each undrawn Alternative Currency Letter of Credit. Each such repayment
pursuant to this Section 2.05(b) shall be accompanied by any amount required to
be paid pursuant to Section 2.18 hereof.

(c) Scheduled Amortization of Term Loan. The Borrower shall repay a principal
amount of the Term Loan in an amount equal to (i) 1.25% of the Original
Principal Amount, payable on the last Business Day of each calendar quarter
commencing September 30, 2012 and ending June 30, 2014, (ii) 1.875% of the
Original Principal Amount, payable on the last Business Day of each calendar
quarter commencing September 30, 2014 and ending June 30, 2016, and (iii) if the
Initial Maturity Date has been extended pursuant to Section 2.16, 2.5% of the
Original Principal Amount, payable on the last Business Day of each calendar
quarter commencing September 30, 2016 and ending June 30, 2017. Each such
repayment shall be accompanied by any amount required to be paid pursuant to
Section 2.05(e). Any repayment or prepayment of the Term Loan made by the
Borrower pursuant to Section 2.05(d) or otherwise shall be applied to reduce the
then remaining quarterly payments required pursuant to this Section 2.05(c) in
the direct order of maturity.

(d) Optional Repayments. The Borrower may at any time and from time to time
repay the Loans, in whole or in part, upon at least four (4) Business Days’
irrevocable notice to the Administrative Agent with respect to Eurocurrency
Loans, upon at least three (3) Business Days’ irrevocable notice to the
Administrative Agent with respect to Eurodollar Loans and Competitive Bid Loans
and upon notice received no later than 2:00 p.m. (Eastern time) on the proposed
date of repayment with respect to ABR Loans and Swingline Loans, substantially
in the form attached hereto as Exhibit A-3 (a “Notice of Prepayment”),
specifying (i) the date of repayment, (ii) the amount of repayment,
(iii) whether the repayment is of the Term Loan, Revolving Loans, Competitive
Bid Loans, Swingline Loans, or a combination thereof, and, if of a combination
thereof, the amount allocable to each and (iv) whether the repayment is of
Eurocurrency Loans, Eurodollar Loans, ABR Loans, or a combination thereof, and,
if of a combination thereof, the amount allocable to each. Upon receipt of such
notice, the Administrative Agent shall promptly notify each Lender. If any such
notice is given, the amount specified in such notice shall be due and payable on
the date set forth in such notice. Partial repayments shall be in an aggregate
amount of (i) $100,000 or a whole multiple of $100,000 in excess thereof with
respect to ABR Loans and Swingline Loans, (ii) $3,000,000 or a whole multiple of
$1,000,000 in excess thereof with respect to Eurodollar Loans and Eurocurrency
Loans (based upon the Alternative Currency Amount thereof) and (iii) $1,000,000
or a whole multiple of $1,000,000 in excess thereof with respect to Competitive
Bid Loans. Each such repayment shall be accompanied by any amount required to be
paid pursuant to Section 2.05(e).

(e) Limitation on Repayment of Certain Loans. The Borrower may not repay any
Eurodollar Loan, any Eurocurrency Loan or any Competitive Bid Loan on any day
other than on the last day of the Interest Period or Competitive Bid Interest
Period applicable thereto unless such repayment is accompanied by any amount
required to be paid pursuant to Section 2.18 hereof.

(f) Hedging Agreements and other Borrowings. No repayment or prepayment pursuant
to this Section 2.05 shall affect any of the Borrower’s obligations under any
Hedging Agreement or any of the Borrower’s right to obtain other Loans or
Letters of Credit.

 

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(g) Payment of Interest and Other Expenses. Each repayment or prepayment
pursuant to this Section 2.05 shall be accompanied by accrued interest on the
amount repaid.

SECTION 2.06. Permanent Reduction of the Revolving Commitment and the
Alternative Currency Commitment.

(a) Voluntary Reduction. The Borrower shall have the right at any time and from
time to time, upon at least five (5) Business Days prior written notice to the
Administrative Agent, to permanently reduce, without premium or penalty, (i) the
entire Revolving Commitment at any time or (ii) portions of the Revolving
Commitment, from time to time, in an aggregate principal amount not less than
$5,000,000 or any whole multiple of $1,000,000 in excess thereof. Any such
reduction shall (A) permanently reduce the Lenders’ Revolving Commitments pro
rata in accordance with their respective Pro Rata Percentages and
(B) permanently reduce the Alternative Currency Commitment pro rata in
accordance with the relative amount of the Alternative Currency Commitment and
the Revolving Commitment.

(b) Corresponding Payments. Each permanent reduction permitted pursuant to this
Section 2.06 shall be accompanied by a payment of principal sufficient to reduce
(i) the aggregate Equivalent Dollar Amount of all outstanding Revolving Loans,
Swingline Loans and L/C Obligations, as applicable, after such reduction to the
Revolving Commitment as so reduced and (ii) to the extent that the Alternative
Currency Commitment is reduced, the aggregate Equivalent Dollar Amount of all
outstanding Eurocurrency Loans and Alternative Currency Letters of Credit to the
Alternate Currency Commitment as so reduced. If the Revolving Commitment as so
reduced is less than the aggregate amount of all outstanding Letters of Credit,
the Borrower shall be required to deposit cash collateral in a cash collateral
account opened by the Administrative Agent in an amount equal to the aggregate
then undrawn and unexpired amount of such Letters of Credit. Such cash
collateral shall be applied in accordance with Section 2.23(g). Any reduction of
the Revolving Commitment to zero shall be accompanied by payment of all
outstanding Revolving Loans, Competitive Bid Loans and Swingline Loans (and
furnishing of cash collateral satisfactory to the Administrative Agent for all
L/C Obligations) and shall result in the termination of the Revolving
Commitment. If the reduction of the Revolving Commitment or the Alternative
Currency Commitment, as applicable, requires the repayment of any Eurodollar
Loan, any Eurocurrency Loan or any Competitive Bid Loans bearing interest at the
Adjusted LIBO Rate, such repayment shall be accompanied by any amount required
to be paid pursuant to Section 2.18 hereof.

SECTION 2.07. Fees.

(a) Unused Fee. The Borrower shall pay to the Administrative Agent for the
account of the Revolving Credit Lenders an unused commitment fee (the “Unused
Fee”), from the Closing Date in the case of each initial Revolving Credit Lender
and from the effective date specified in the Assignment and Acceptance or
accession agreement executed and delivered in accordance with Section 2.24 or
2.28(a), as applicable, pursuant to which it became a Revolving Credit Lender in
the case of each other Revolving Credit Lender until the Maturity Date, payable
in arrears quarterly on the last Business Day of each calendar quarter and on
the Maturity Date. The Unused Fee payable for the account of each Revolving
Credit Lender shall be calculated for each period for which the Unused Fee is
payable on the average daily Unused Revolving Credit Commitment of such Lender
during such period at the rate of 0.30% per annum.

(b) Administrative Agent’s and Other Fees. The Borrower agrees to pay the fees
set forth in the Fee Letter in accordance with the terms thereof.

(c) Letter of Credit Commissions and Charges.

 

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(i) Letter of Credit Commissions. Subject to Section 2.27(f), the Borrower shall
pay to the Administrative Agent, for the account of the Issuing Bank and the L/C
Participants, a letter of credit commission with respect to each Letter of
Credit in an amount equal to the face amount (or Equivalent Dollar Amount
thereof, if applicable) of such Letter of Credit multiplied by the Applicable
Percentage with respect to Revolving Loans that are Eurodollar Loans (determined
on a per annum basis). Such commission shall be payable quarterly in arrears on
the last Business Day of each calendar quarter, on the Maturity Date and
thereafter on demand of the Administrative Agent. The Administrative Agent
shall, promptly following its receipt thereof, distribute to the Issuing Bank
and the L/C Participants all commissions received pursuant to this Section in
accordance with their respective Pro Rata Percentages.

(ii) Issuance Fee. In addition to the foregoing commission, the Borrower shall
pay to the Administrative Agent, for the account of the Issuing Bank, an
issuance fee with respect to each Letter of Credit in an amount equal to the
greater of (A) $1,500.00 and (B) the face amount of such Letter of Credit
multiplied by 0.125% per annum. Such issuance fee shall be payable quarterly in
arrears on the last Business Day of each calendar quarter, on the Maturity Date
and thereafter on demand of the Administrative Agent.

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

(d) Extension Fee. The Borrower shall pay to the Administrative Agent on the
Extension Date, for the account of each Lender, a Facilities extension fee, in
an amount equal to (i) 0.25% of each Lender’s Revolving Commitment then
outstanding (whether funded or unfunded), provided that the applicable Revolving
Commitment has not been terminated on or prior to the Extension Date and
(ii) 0.25% of each Lender’s Pro Rata Percentage of the then outstanding Term
Loan.

(e) Competitive Bid Processing Fee. For each Competitive Bid Request received by
the Administrative Agent hereunder, the Borrower shall pay to the Administrative
Agent a competitive bid processing fee of $1,500.00.

SECTION 2.08. Evidence of Indebtedness.

(a) Extensions of Credit. The Loans and Letters of Credit made by each Lender
shall be evidenced by one or more accounts or records maintained by such Lender
and by the Administrative Agent in the ordinary course of business. The accounts
or records maintained by the Administrative Agent and each Lender shall be
conclusive absent manifest error of the amount of the Loans and Letters of
Credit made by the Lenders to the Borrower and the interest and payments
thereon. Any failure to so record or any error in doing so shall not, however,
limit or otherwise affect the obligation of the Borrower hereunder to pay any
amount owing with respect to the Obligations. In the event of any conflict
between the accounts and records maintained by any Lender and the accounts and
records of the Administrative Agent in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of manifest
error. Any Lender, through the Administrative Agent, may request that Loans made
by it be evidenced by a Note. In such event, the Borrower shall prepare, execute
and deliver to such Lender a Note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns).

(b) Participations. In addition to the accounts and records referred to in
subsection (a), each Lender and the Administrative Agent shall maintain in
accordance with its usual practice accounts or records evidencing the purchases
and sales by such Lender of participations in Letters of Credit and Swingline
Loans. In the event of any conflict between the accounts and records maintained
by the Administrative Agent and the accounts and records of any Lender in
respect of such matters, the accounts and records of the Administrative Agent
shall control in the absence of manifest error.

 

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SECTION 2.09. Interest on Loans.

(a) Interest Rate Options. Subject to the provisions of this Section 2.09, at
the election of the Borrower, (i) Revolving Loans denominated in dollars shall
bear interest at (A) the Alternate Base Rate plus the Applicable Percentage or
(B) the Adjusted LIBO Rate plus the Applicable Percentage, (ii) Revolving Loans
denominated in an Alternative Currency shall bear interest at the LIBO Rate plus
the Applicable Percentage (plus any applicable Mandatory Cost) and
(iii) Swingline Loans shall bear interest at the Alternate Base Rate plus the
Applicable Percentage, provided that neither the Adjusted LIBO Rate nor the LIBO
Rate shall be available until three (3) Business Days after the Closing Date
(unless otherwise agreed by the Administrative Agent). The Borrower shall select
the rate of interest and Interest Period, if any, applicable to any Loan at the
time a Notice of Borrowing is given pursuant to Section 2.03 or 2.23 or at the
time a Notice of Conversion/Continuation is given pursuant to Section 2.10. Any
Loan or any portion thereof as to which the Borrower has not duly specified an
interest rate (excluding Alternative Currency Loans) as provided herein shall be
deemed an ABR Loan denominated in dollars. Requests for Alternative Currency
Loans as to which the Borrower has not duly specified an interest rate and
interest period shall be deemed a LIBO Rate Loan for a one (1) month interest
period.

(b) Interest Periods.

(i) In connection with each Eurodollar Loan or Eurocurrency Loan, the Borrower,
by giving notice at the times described in Section 2.09(a), shall elect an
Interest Period to be applicable to such Loan, which Interest Period shall be a
period of one (1), two (2), three (3), or six (6) months with respect to each
such Loan, provided that:

(A) the Interest Period shall commence on the date of advance of or conversion
to any Eurodollar or Eurocurrency Loan and, in the case of immediately
successive Interest Periods, each successive Interest Period shall commence on
the date on which the immediately preceding Interest Period expires;

(B) if any Interest Period would otherwise expire on a day that is not a
Business Day, such Interest Period shall expire on the next Business Day,
provided that if any Interest Period with respect to a Eurodollar or
Eurocurrency Loan would otherwise expire on a day that is not a Business Day but
is a day of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the immediately preceding Business Day;

(C) any Interest Period with respect to a Eurodollar or Eurocurrency Loan that
begins on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the relevant calendar
month at the end of such Interest Period; and

(D) no Interest Period shall extend beyond the Maturity Date.

(ii) In connection with each Competitive Bid Loan, the Borrower, by giving
notice at the times described in Section 2.04, shall elect an interest period
(each, a “Competitive Bid Interest Period”) applicable to such Competitive Bid
Loan, which Competitive Bid Interest Period shall be a period of such duration
as accepted by the Borrower pursuant to Section 2.04(c), provided that:

(A) the Competitive Bid Interest Period for a Fixed Rate Loan shall not be less
than seven (7) days nor more than ninety (90) days;

(B) the Competitive Bid Interest Period for any Eurodollar Competitive Bid Loan
shall be a period of one (1), two (2), or three (3) months;

 

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(C) the Competitive Bid Interest Period shall commence on the date of advance of
any Competitive Bid Loan;

(D) if any Competitive Bid Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the next Business
Day; and

(E) no Competitive Bid Interest Period shall expire on a date later than the
first Business Day prior to the Maturity Date.

(iii) There shall be no more than eight (8) Interest Periods in effect at any
time.

(c) Default Rate. Upon the occurrence and during the continuance of any payment
Event of Default, and at the option of the Required Lenders upon the occurrence
and during the continuance of any other Event of Default, (i) the Borrower shall
no longer have the option to request Eurocurrency Loans and Eurodollar Loans,
Competitive Bid Loans or Swingline Loans, (ii) all outstanding Eurocurrency
Loans and Eurodollar Loans shall bear interest at a rate per annum of two
percent (2%) in excess of the rate then applicable to such Loans until the end
of the applicable Interest Period and thereafter at a rate equal to two percent
(2%) in excess of the rate then applicable to ABR Loans, (iii) all outstanding
Competitive Bid Loans shall bear interest at a rate per annum equal to two
percent (2%) in excess of the rate then applicable to such Competitive Bid Loan
until the end of the applicable Competitive Bid Interest Period and thereafter
of a rate equal to two percent (2%) in excess of the rate then applicable to ABR
Loans and (iv) all outstanding ABR Loans and other Obligations arising hereunder
or under any other Loan Document shall bear interest at a rate per annum equal
to two percent (2%) in excess of the rate then applicable to ABR Loans or such
other Obligations arising hereunder or under any other Loan Document. Interest
shall continue to accrue on the Loans after the filing by or against the
Borrower of any petition seeking any relief in bankruptcy or under any act or
law pertaining to insolvency or debtor relief, whether state, federal or
foreign.

(d) Interest Payment and Computation. Interest on each ABR Loan shall be payable
in arrears on the last Business Day of each calendar quarter commencing
September 30, 2012; and interest on each Eurodollar Loan, Eurocurrency Loan and
Competitive Bid Loan shall be payable on the last day of each Interest Period or
Competitive Bid Interest Period, respectively, applicable thereto, and if such
Interest Period extends over three (3) months, at the end of each three
(3) month interval during such Interest Period. All computations of interest for
Eurocurrency Loans denominated in Sterling and for ABR Loans when the Alternate
Base Rate is determined by the Prime Rate shall be made on the basis of a year
of 365 or 366 days, as the case may be, and actual days elapsed. All other
computations of fees and interest provided hereunder shall be made on the basis
of a 360-day year and actual days elapsed (which results in more fees or
interest, as applicable, being paid than if computed on the basis of a
365/366-day year).

(e) Maximum Rate. In no contingency or event whatsoever shall the aggregate of
all amounts deemed interest under this Agreement charged or collected pursuant
to the terms of this Agreement exceed the highest rate permissible under any
Applicable Law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto. In the event that such a court determines
that the Lenders have charged or received interest hereunder in excess of the
highest applicable rate, the rate in effect hereunder shall automatically be
reduced to the maximum rate permitted by Applicable Law and the Lenders shall at
the Administrative Agent’s option (i) promptly refund to the Borrower any
interest received by the Lenders in excess of the maximum lawful rate or
(ii) apply such excess to the principal balance of the Obligations on a pro rata
basis. It is the intent hereof that the Borrower not pay or contract to pay, and
that neither the Administrative Agent nor any Lender receive or contract to
receive, directly or indirectly in any manner whatsoever, interest in excess of
that which may be paid by the Borrower under Applicable Law.

 

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(f) Basis of Accrual. Subject to Section 1.03, with respect to the currency of
any state that becomes a Participating Member State, the accrual of interest or
fees expressed in this Agreement with respect to such currency shall be based
upon the applicable convention or practice in the London Interbank Market for
the basis of accrual of interest or fees in respect of the euro, which such
convention or practice shall replace such expressed basis effective as of and
from the date on which such state becomes a Participating Member State, provided
that if any Loan in the currency of such state is outstanding immediately prior
to such date, such replacement shall take effect, with respect to such Loan, at
the end of the then current Interest Period.

SECTION 2.10. Notice and Manner of Conversion or Continuation of Loans. Provided
that no Default or Event of Default has occurred and is then continuing, the
Borrower shall have the option to (a) convert at any time following the third
Business Day after the Closing Date all or any portion of any outstanding ABR
Loans (other than Swingline Loans) in a principal amount equal to $3,000,000 or
any whole multiple of $1,000,000 in excess thereof into one or more Eurodollar
Loans, (b) upon the expiration of any Interest Period, convert all or any part
of its outstanding Eurodollar Loans in a principal amount equal to $3,000,000 or
a whole multiple of $1,000,000 in excess thereof into ABR Loans (other than
Swingline Loans) or (c) upon the expiration of any Interest Period, continue any
Eurodollar Loan or Eurocurrency Loan denominated in any Permitted Currency in a
principal amount of $3,000,000 or any whole multiple of $1,000,000 in excess
thereof (or with respect to Eurocurrency Loans, the Alternative Currency Amount
in each case thereof) as a Eurodollar or Eurocurrency (as applicable) Loan in
the same Permitted Currency. Whenever the Borrower desires to convert or
continue Loans as provided above, the Borrower shall give the Administrative
Agent irrevocable prior written notice in the form attached as Exhibit A-3 (a
“Notice of Conversion/Continuation”) not later than 11:00 a.m. four (4) Business
Days (with respect to any Eurocurrency Loan) and three (3) Business Days (with
respect to any Loan denominated in dollars) before the day on which a proposed
conversion or continuation of such Loan is to be effective specifying (A) the
Loans to be converted or continued, and, in the case of any Eurodollar Loan or
Eurocurrency Loan to be converted or continued, the last day of the Interest
Period therefor, (B) the Permitted Currency in which such Loan is denominated,
(C) the effective date of such conversion or continuation (which shall be a
Business Day), (D) the principal amount of such Loans to be converted or
continued, and (E) the Interest Period to be applicable to such converted or
continued Eurodollar Loan or Eurocurrency Loan. The Administrative Agent shall
promptly notify the Lenders of such Notice of Conversion/Continuation.

SECTION 2.11. Manner of Payment.

(a) Loans and Letters of Credit Denominated in Dollars. Each payment by the
Borrower on account of the principal of or interest on any Loan or Letter of
Credit denominated in dollars or of any fee, commission or other amounts
(including the Reimbursement Obligation with respect to any Letter of Credit
denominated in dollars) payable to the Lenders under this Agreement or any Loan
(except as set forth in Section 2.11(b)) shall be made in dollars not later than
1:00 p.m. on the date specified for payment under this Agreement to the
Administrative Agent for the account of the applicable Lenders (except as set
forth below) pro rata in accordance with their respective Pro Rata Percentages
(except as specified below) in immediately available funds and shall be made
without any set-off, counterclaim or deduction whatsoever. Any payment received
after such time but before 2:00 p.m. on such day shall be deemed a payment on
such date for the purposes of Article VII, but for all other purposes shall be
deemed to have been made on the next succeeding Business Day. Any payment
received after 2:00 p.m. shall be deemed to have been made on the next
succeeding Business Day for all purposes. With respect to each Letter of Credit
denominated in dollars, each payment to the Administrative Agent of the Issuing
Bank’s fees or L/C Participants’ commissions shall be made in like manner, but
for the account of the Issuing Bank or the L/C Participants, as the case may be.

 

(b) Loans and Letters of Credit Denominated in Alternative Currencies. Each
payment by the Borrower on account of the principal of or interest on the
Revolving Loans denominated in any Alternative Currency or any Alternative
Currency Letter of Credit (including the Reimbursement Obligation with respect
to any Alternative Currency Letter of Credit) shall be made in such Alternative
Currency not later than 11:00 a.m. (in the city in which the Administrative
Agent’s Correspondent is located) on the date specified for payment under this
Agreement to the Administrative Agent’s account with the Administrative Agent’s
Correspondent for the account of the applicable Lenders (except as set forth
below) pro rata in

 

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accordance with their respective Pro Rata Percentages (except as set forth
below) in immediately available funds, and shall be made without any set-off,
counterclaim or deduction whatsoever. Any payment received after such time but
before 12:00 noon (in the city in which the Administrative Agent’s Correspondent
is located) on such day shall be deemed a payment on such date for the purposes
of Article VII, but for all other purposes shall be deemed to have been made on
the next succeeding Business Day. Any payment received after 12:00 noon (in the
city in which the Administrative Agent’s Correspondent is located) shall be
deemed to have been made on the next succeeding Business Day for all purposes.
With respect to each Alternative Currency Letter of Credit, each payment to the
Administrative Agent of the Issuing Bank’s fees or L/C Participants’ commissions
shall be made in like manner, but for the account of the Issuing Bank or the L/C
Participants, as the case may be.

(c) Pro Rata Treatment. Upon receipt by the Administrative Agent of each such
payment, the Administrative Agent shall distribute to each applicable Lender at
its address for notices set forth herein its pro rata share of such payment in
accordance with such Lender’s Pro Rata Percentage (except as specified below)
and shall wire advice of the amount of such credit to each such Lender. Each
payment to the Administrative Agent of the Issuing Bank’s fees or L/C
Participants’ commissions shall be made in like manner, but for the account of
the Issuing Bank or the L/C Participants, as the case may be. Each payment to
the Administrative Agent of Administrative Agent’s fees or expenses shall be
made for the account of the Administrative Agent. Each payment to the
Administrative Agent with respect to a Swingline Loan (including, without
limitation, the Swingline Lender’s fees or expenses) shall be made for the
account of the Swingline Lender. Any amount payable to any Lender under Sections
2.17, 2.18, 2.19, 2.20 or 9.05 shall be paid to the Administrative Agent for the
account of the applicable Lender. Subject to Section 2.09(b)(i), if any payment
under this Agreement or any Loan shall be specified to be made upon a day which
is not a Business Day, it shall be made on the next day which is a Business Day
and such extension of time shall in such case be included in computing any
interest if payable along with such payment.

(d) Defaulting Lenders. Notwithstanding anything to the contrary contained in
this Section 2.11, if any Lender becomes a Defaulting Lender, then, until such
time as such Lender is no longer a Defaulting Lender, each payment by the
Borrower hereunder shall be applied in accordance with Section 2.27(b).

SECTION 2.12. Crediting of Payments and Proceeds. In the event that the Borrower
shall fail to pay any of the Obligations when due and the Obligations have been
accelerated pursuant to Article VII, all payments received by the Lenders upon
the Loans and the other Obligations and all net proceeds from the enforcement of
the Obligations shall be applied: (a) first to all expenses then due and payable
by the Borrower hereunder and under the other Loan Documents, (b) then to all
indemnity obligations then due and payable by the Borrower hereunder and under
the other Loan Documents, (c) then to all Administrative Agent’s and Issuing
Bank’s fees then due and payable, (d) then to all facility and other fees and
commissions then due and payable, (e) then to accrued and unpaid interest on the
Swingline Loan to the Swingline Lender, (f) then to the principal amount
outstanding under the Swingline Loans to the Swingline Lender, (g) then pro rata
to (i) accrued and unpaid interest on the Loans (pro rata in accordance with all
such amounts due) and (ii) accrued and unpaid interest on the Reimbursement
Obligation (pro rata in accordance with all such amounts due), (h) then pro rata
to (i) the principal amount of the Loans (pro rata in accordance with all such
amounts due), (ii) Reimbursement Obligation (pro rata in accordance with all
such amounts due), (iii) any Hedging Obligations (including any termination
payments and any accrued and unpaid interest thereon) (pro rata in accordance
with all such amounts due) and (iv) any Cash Management Obligations (including
any principal amounts and any accrued and unpaid interest thereon) (pro rata in
accordance with all such amounts due), and (i) then to the cash collateral
account described in Section 2.23(g) hereof to the extent of any L/C Obligations
then outstanding, in that order.

 

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SECTION 2.13. Adjustments. If any Lender (a “Benefited Lender”) shall at any
time receive any payment of all or part of the Obligations owing to it, or
interest thereon, or if any Lender shall at any time receive any collateral in
respect to the Obligations owing to it (whether voluntarily or involuntarily, by
set-off or otherwise) in a greater proportion (taking into account any
Competitive Bid Loans of such Lender) than any such payment to and collateral
received by any other Lender, if any, in respect of the similar Obligations
owing to such other Lender, or interest thereon, such Benefited Lender shall
purchase for cash from the other Lenders in the applicable Facility such portion
of each such other Lender’s Extensions of Credit, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such Benefited Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders,
provided that

(a) if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefited Lender, such purchase shall be rescinded, and the
purchase price and benefits returned to the extent of such recovery, but without
interest; and

(b) provisions of this paragraph shall not be construed to apply to (A) any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement, (B) the application of cash collateral provided for in
Section 2.27 or (C) any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in Swingline Loans and Letters of Credit to any assignee or participant, other
than to the Borrower or any Subsidiary thereof (as to which the provisions of
this paragraph shall apply).

The Borrower agrees that each Lender so purchasing a portion of another Lender’s
Extensions of Credit may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.

SECTION 2.14. Nature of Obligations of Lenders Regarding Extensions of Credit;
Assumption by the Administrative Agent. The obligations of the Lenders under
this Agreement to make the Loans and issue or participate in Letters of Credit
are several and are not joint or joint and several. Unless the Administrative
Agent shall have received notice from a Lender prior to a proposed borrowing
date that such Lender will not make available to the Administrative Agent such
Lender’s ratable portion of the amount to be borrowed on such date (which notice
shall not release such Lender of its obligations hereunder), the Administrative
Agent may assume that such Lender has made such portion available to the
Administrative Agent on the proposed borrowing date in accordance with the terms
hereof, and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If such amount is
made available to the Administrative Agent on a date after such borrowing date,
such Lender shall pay to the Administrative Agent on demand interest, until
paid, (a) with respect to any Loan denominated in dollars for each day after the
date such amount was due until the date such amount is paid to the
Administrative Agent, at the Federal Funds Effective Rate for the first day such
payment is not made, and thereafter at the interest rate applicable to such Loan
pursuant to Section 2.09(a) or (c), as the case may be, and (b) with respect to
any Loan denominated in an Alternative Currency, for each day after the date
such amount was due until the date such amount is paid to the Administrative
Agent, at a rate per annum equal to the Administrative Agent’s aggregate
marginal cost (including the cost of maintaining any required reserves or
deposit insurance and of any fees, penalties, overdraft charges or other costs
or expenses incurred by the Administrative Agent as a result of the failure to
deliver funds hereunder) of carrying such amount for the first day such payment
is not made, and thereafter at the interest rate applicable to such Loan
pursuant to Section 2.09(a) or (c), as the case may be. A certificate of the
Administrative Agent with respect to any amounts owing under this Section 2.14
shall be conclusive, absent manifest error. If such Lender’s Pro Rata Percentage
of such borrowing is not made available to the Administrative Agent by such
Lender within three (3) Business Days after such borrowing date, the
Administrative Agent shall be entitled to recover such amount made available by
the Administrative Agent with interest thereon at the rate per annum applicable
to ABR Loans hereunder, on demand, from the Borrower. The failure of any Lender
to make available its Pro Rata Percentage of any Loan requested by a Borrower
shall not relieve it or any other Lender of its obligation, if any, hereunder to
make its Pro Rata Percentage of such Loan available on the borrowing date, but
no Lender shall be responsible for the failure of any other Lender to make its
Pro Rata Percentage of such Loan available on the borrowing date.
Notwithstanding anything set forth herein to the contrary, any Lender that fails
to make available its Pro Rata Percentage of any Loan shall not (a) have any
voting or consent rights under or with respect to any Loan Document or
(b) constitute a “Lender” (or be included in the calculation of Required Lenders
hereunder) for any voting or consent rights under or with respect to any Loan
Document, in each case, as described further in Section 2.27.

 

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SECTION 2.15. Redenomination of Eurocurrency Loans.

(a) Conversion to the Base Rate. If any Eurocurrency Loan is required to bear
interest based at the Alternate Base Rate rather than the LIBO Rate pursuant to
Section 2.09(c), Section 2.17 or any other applicable provision hereof, such
Loan shall be funded in dollars in an amount equal to the Equivalent Dollar
Amount of such Eurocurrency Loan, all subject to the provisions of
Section 2.05(b). The Borrower shall reimburse the Lenders upon any such
conversion for any amounts required to be paid under Section 2.18.

(b) Redenomination of Loans. Subject to Section 1.03, any Loan to be denominated
in the currency of the applicable Participating Member State shall be made in
euro.

(c) Redenomination of Obligations. Subject to Section 1.03, any obligation of
any party under this Agreement or any other Loan Document which has been
denominated in the currency of a Participating Member State shall be
redenominated into euro.

(d) Further Assurances. The terms and provisions of this Agreement will be
subject to such changes of construction as reasonably determined by the
Administrative Agent in consultation with the Borrower to reflect the
implementation of the EMU in any Participating Member State or any market
conventions relating to the fixing and/or calculation of interest being changed
or replaced and to reflect market practice at that time, and subject thereto, to
put the Administrative Agent, the Lenders and the Borrower in the same position,
so far as possible, that they would have been if such implementation had not
occurred. In connection therewith, the Borrower agrees, at the request of the
Administrative Agent, at the time of or at any time following the implementation
of the EMU in any Participating Member State or any market conventions relating
to the fixing and/or calculation of interest being changed or replaced, to enter
into an agreement amending this Agreement in such manner as the Administrative
Agent shall reasonably request in consultation with the Borrower.

SECTION 2.16. Extension of Initial Maturity Date.

At least 90 days prior to the Initial Maturity Date, the Borrower, by written
notice to the Administrative Agent, may request, with respect to the Revolving
Commitments then outstanding and the Term Loan then outstanding, a single
one-year extension of the Initial Maturity Date. The Administrative Agent shall
promptly notify each Lender of such request and the Initial Maturity Date shall,
effective as at the Initial Maturity Date (the “Extension Date”), be extended
for an additional one year period, provided that the Borrower shall have paid
the extension fee as described in Section 2.07(d) and on the Extension Date the
following statements shall be true and the Administrative Agent shall have
received for the account of each Lender a certificate signed by a Responsible
Officer of the Borrower, dated the Extension Date, stating that: (a) the
representations and warranties contained in the Loan Documents are true and
correct in all material respects on and as of the Extension Date with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date, (b) no
Default or Event of Default has occurred and is continuing or would result from
such extension, and (c) the Loan Parties are in compliance with the covenants
contained in Sections 6.11, 6.12 and 6.13 immediately before and, on a pro forma
basis, immediately after the extension, together with supporting information
demonstrating such compliance. In the event that an extension is effected
pursuant to this Section 2.16 (but subject to the provisions of Sections 2.05
and 2.06 and Article VII), the aggregate principal amount of all Loans shall be
repaid in full ratably to the Lenders on the Initial Maturity Date as so
extended. As of the Extension Date, any and all references in this Agreement or
any of the other Loan Documents to the “Initial Maturity Date” shall refer to
the Initial Maturity Date as so extended.

 

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SECTION 2.17. Changed Circumstances.

(a) Circumstances Affecting LIBO Rate and Alternative Currency Availability. If
with respect to any Interest Period for any Eurodollar Loan or Eurocurrency Loan
the Administrative Agent or Required Lenders (after consultation with the
Administrative Agent) shall determine that (i) by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
eurodollars or an Alternative Currency in the applicable amounts are not being
quoted via the Reuters Screen LIBOR01 or the applicable Reuters Screen Page or
offered to the Administrative Agent or such Lender for such Interest Period,
(ii) a fundamental change has occurred in the foreign exchange or interbank
markets with respect to any Alternative Currency (including, without limitation,
changes in national or international financial, political or economic conditions
or currency exchange rates or exchange controls) or (iii) it has become
otherwise materially impractical for the Administrative Agent or the Lenders to
make such Loan in an Alternative Currency, then the Administrative Agent shall
forthwith give notice thereof to the Borrower. Thereafter, until the
Administrative Agent notifies the Borrower that such circumstances no longer
exist, the obligation of the Lenders to make Eurodollar Loans or Eurocurrency
Loans, as applicable, and the right of the Borrower to convert any Loan to or
continue any Loan as a Eurodollar Loan or a Eurocurrency Loan, as applicable,
shall be suspended, and the Borrower shall repay in full (or cause to be repaid
in full) the then outstanding principal amount of each such Eurodollar Loan or
Eurocurrency Loan, as applicable, together with accrued interest thereon, on the
last day of the then current Interest Period applicable to such Eurodollar Loan
or Eurocurrency Loan, as applicable, or convert the then outstanding principal
amount of each such Eurodollar Loan or Eurocurrency Loan, as applicable, to an
ABR Loan in dollars as of the last day of such Interest Period.

(b) Laws Affecting LIBO Rate and Alternative Currency Availability. If, after
the date hereof, the introduction of, or any change in, any Applicable Law or
any change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any of the Lenders (or any of their
respective Lending Offices) with any request or directive (whether or not having
the force of law) of any such Governmental Authority, central bank or comparable
agency, shall make it unlawful or impossible for any of the Lenders (or any of
their respective Lending Offices) to honor its obligations hereunder to make or
maintain any Eurodollar Loan or any Eurocurrency Loan, such Lender shall
promptly give notice thereof to the Administrative Agent and the Administrative
Agent shall promptly give notice to the Borrower and the other Lenders.
Thereafter, until the Administrative Agent notifies the Borrower that such
circumstances no longer exist, (i) the obligations of such Lender to make
Eurodollar Loans or Eurocurrency Loans, as applicable, and the right of the
Borrower to convert or continue any Loan made by such Lender as a Eurodollar
Loan or a Eurocurrency Loan, as applicable, shall be suspended, and (ii) if such
Lender may not lawfully continue to maintain a Eurodollar Loan or a Eurocurrency
Loan, as applicable, to the end of the then current Interest Period applicable
thereto as a Eurodollar Loan or Eurocurrency Loan, as applicable, the applicable
Eurodollar Loan or an Eurocurrency Loan, as applicable, shall immediately be
converted to an ABR Loan in dollars for the remainder of such Interest Period.

(c) Increased Costs. If any Change in Law shall:

(i) except as provided in Section 2.20(e), subject any of the Lenders (or any of
their respective Lending Offices) to any tax, duty or other charge with respect
to any Loan, Letter of Credit or Application or shall change the basis of
taxation of payments to any of the Lenders (or any of their respective Lending
Offices) of the principal of or interest on any Loan, Letter of Credit or
Application or any other amounts due under this Agreement in respect thereof
(except for changes in the rate of franchise tax or tax on the overall net
income of any of the Lenders or any of their respective Lending Offices imposed
by the jurisdiction in which such Lender is organized or is or should be
qualified to do business or such Lending Office is located);

 

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(ii) impose, modify or deem applicable any reserve (including, without
limitation, any reserve imposed by the Board), special deposit, insurance or
capital or similar requirement against assets of, deposits with or for the
account of, or credit extended by any of the Lenders (or any of their respective
Lending Offices); or

(iii) impose on any Lender (or any of their respective Lending Offices) or any
Issuing Bank or the London interbank market any other condition, cost or expense
(other than Taxes) affecting this Agreement or Loans made by such Lender or any
Letter of Credit or participation therein,

and the result of any of the foregoing events described in clause (i), (ii) or
(iii) above is to increase the costs to any of the Lenders of maintaining any
Eurodollar Loan, Competitive Bid Loan or Eurocurrency Loan, as applicable, or
issuing or participating in Letters of Credit or to reduce the yield or amount
of any sum received or receivable by any of the Lenders under this Agreement or
under the Loans in respect of a Eurodollar Loan, Competitive Bid Loan or a
Eurocurrency Loan, as applicable, or Letter of Credit or Application, then, upon
the request of such Lender, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or Lenders for such
increased cost or reduction. The amount of such compensation shall be
determined, in the applicable Lender’s sole discretion, based upon the
assumption that such Lender funded its Pro Rata Percentage of the Eurodollar
Loans, Competitive Bid Loans or Eurocurrency Loans, as applicable, in the London
interbank market and using any attribution or averaging methods which such
Lender reasonably deems appropriate and practical. A certificate of such Lender
setting forth in reasonable detail the basis for determining such amount or
amounts necessary to compensate such Lender shall be forwarded to the Borrower
through the Administrative Agent and shall be conclusively presumed to be
correct save for manifest error.

(d) Exchange Indemnification and Increased Costs. The Borrower shall, upon
demand from the Administrative Agent, pay to the Administrative Agent or any
applicable Lender, the amount of (i) any loss or cost or increased cost incurred
by the Administrative Agent or any applicable Lender, (ii) any reduction in any
amount payable to or in the effective return on the capital to the
Administrative Agent or any applicable Lender, (iii) any interest or any other
return, including principal, foregone by the Administrative Agent or any
applicable Lender as a result of the introduction of, change over to or
operation of the euro, or (iv) any currency exchange loss, that Administrative
Agent or any Lender sustains as a result of any payment being made by a Borrower
in a currency other than that originally extended to the Borrower or as a result
of any other currency exchange loss incurred by the Administrative Agent or any
applicable Lender under this Agreement. A certificate of the Administrative
Agent setting forth the basis for determining such additional amount or amounts
necessary to compensate the Administrative Agent or the applicable Lender shall
be conclusively presumed to be correct save for manifest error.

SECTION 2.18. Indemnity. The Borrower hereby indemnifies each of the Lenders
against any loss or expense (including, without limitation, any foreign exchange
costs, but excluding loss of anticipated profits) which may arise or be
attributable to each Lender’s obtaining, liquidating or employing deposits or
other funds acquired to effect, fund or maintain any Loan (a) as a consequence
of any failure by the Borrower to make any payment when due of any amount due
hereunder in connection with a Eurodollar Loan, Competitive Bid Loan or a
Eurocurrency Loan, (b) due to any failure of the Borrower to borrow, continue or
convert on a date specified therefor in a Notice of Borrowing, Competitive Bid
Request or Notice of Conversion/Continuation or (c) due to any payment,
prepayment or conversion of any Eurodollar Loan, Competitive Bid Loan or
Eurocurrency Loan on a date other than the last day of the Interest Period
therefor. The amount of such loss or expense shall be determined based upon the
assumption that such Lender funded its Pro Rata Percentage, as applicable, of
the Eurodollar Loan, Competitive Bid Loan or Eurocurrency Loan in the London
interbank market and using any reasonable attribution or averaging methods which
such Lender deems appropriate and practical. A certificate of such Lender
setting forth the basis for determining such amount or amounts necessary to
compensate such Lender shall be forwarded to the Borrower through the
Administrative Agent and shall be conclusively presumed to be correct save for
manifest error.

 

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SECTION 2.19. Capital Requirements. If any Lender or the Issuing Bank determines
that any Change in Law affecting such Lender or the Issuing Bank or any lending
office of such Lender or such Lender’s or the Issuing Bank’s holding company, if
any, regarding capital or liquidity requirements has or would have the effect of
reducing the rate of return on the capital of, or has affected or would affect
the amount of capital or liquidity required to be maintained by, any Lender or
any corporation controlling such Lender as a consequence of, or with reference
to the Revolving Commitments and other commitments of this type, below the rate
which such Lender or such other corporation could have achieved but for such
Change in Law, then within five (5) Business Days after written demand by any
such Lender, the Borrower shall pay to such Lender from time to time as
specified by such Lender additional amounts sufficient to compensate such Lender
or other corporation for such reduction. A certificate submitted to the Borrower
and the Administrative Agent by such Lender setting forth in reasonable detail
such amounts, shall, in the absence of manifest error, be presumed to be correct
and binding for all purposes.

SECTION 2.20. Taxes.

(a) Payments Free and Clear. Except as otherwise provided in Section 2.20(e),
any and all payments by the Borrower hereunder or under the Loans and Letters of
Credit shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholding,
and all liabilities with respect thereto excluding, (i) in the case of each
Lender and the Administrative Agent, income and franchise taxes imposed by the
jurisdiction under the laws of which such Lender or the Administrative Agent (as
the case may be) is organized or is or should be qualified to do business or any
political subdivision thereof, (ii) in the case of each Lender, (A) income and
franchise taxes imposed by the jurisdiction of such Lender’s Lending Office or
any political subdivision thereof and (B) any Excluded FATCA Tax and (iii) in
the case of a Foreign Lender (other than an assignee pursuant to a request by
the Borrower under Section 2.26) any withholding tax that is imposed under any
law in effect at the time such Foreign Lender becomes a party hereto (or
designates a new lending office) or is attributable to such Foreign Lender’s
failure or inability (other than as a result of the occurrence, after the date
of this Agreement, of any Change in Law) to comply with Section 2.20(e), except
to the extent that such Foreign Lender (or its assignor, if any) was entitled,
at the time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to this Section 2.20(a) (all such taxes, levies, imposts, deductions,
charges, withholdings and liabilities not excluded by items (i), (ii) or
(iii) being hereinafter referred to as “Taxes,” and all such excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities described in
items (i), (ii) or (iii) being hereinafter referred to as “Excluded Taxes”). If
the Borrower shall be required by law to deduct or withhold any Taxes from or in
respect of any sum payable hereunder or under any Loan or in respect of any
Letter of Credit to any Lender or the Administrative Agent, (A) except as
otherwise provided in Section 2.20(e), the sum payable shall be increased as may
be necessary so that after making all required deductions or withholdings
(including deductions or withholdings applicable to additional sums payable
under this Section 2.20) such Lender or the Administrative Agent (as the case
may be) receives an amount equal to the amount such party would have received
had no such deductions or withholdings been made, (B) the Borrower shall make
such deductions or withholdings, (C) the Borrower shall pay the full amount
deducted to the relevant taxing authority or other authority in accordance with
Applicable Law, and (D) the Borrower shall deliver to the Administrative Agent
and such Lender evidence of such payment to the relevant taxing authority or
other Governmental Authority in the manner provided in Section 2.20(d).

(b) Stamp and Other Taxes. In addition, the Borrower shall pay any present or
future stamp, registration, recordation or documentary taxes or any other
similar fees or charges or excise or property taxes, levies of the United States
or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Collateral, the Loans, the Letters of Credit, or the other Loan Documents, or
the perfection of any rights or security interest in respect thereof
(hereinafter referred to as “Other Taxes”).

 

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(c) Indemnity. Except as otherwise provided in Section 2.20(e), the Borrower
shall indemnify each Lender and the Administrative Agent for the full amount of
Taxes and Other Taxes (including, without limitation, any Taxes and Other Taxes
imposed by any jurisdiction on amounts payable under this Section 2.20) paid by
such Lender or the Administrative Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. Such indemnification shall be made within 30 days from the date such
Lender or the Administrative Agent (as the case may be) makes written demand
therefor. A certificate of the Administrative Agent or such Lender setting forth
in reasonable detail the basis for determining such indemnification shall be
forwarded to the Borrower through the Administrative Agent and shall be
conclusively presumed to be correct save for manifest error. Nothing contained
in this Section 2.20(c) shall prevent the Borrower from pursuing, at the sole
cost and expense of the Borrower, the refund of any such Taxes or Other Taxes
from the Foreign Lender which paid, or upon whose behalf the Borrower paid, such
Taxes or Other Taxes if the Borrower in good faith believes such taxes were
incorrectly or illegally asserted.

(d) Evidence of Payment. Within 30 days after the date of any payment of Taxes
or Other Taxes, the Borrower shall furnish to the Administrative Agent and the
applicable Lender, at its address referred to in Section 9.01, the original or a
certified copy of a receipt evidencing payment thereof or other evidence of
payment satisfactory to the Administrative Agent.

(e) Delivery of Tax Forms. To the extent required by Applicable Law to reduce or
eliminate withholding or payment of taxes, each Lender and the Administrative
Agent shall deliver to the Borrower, with a copy to the Administrative Agent, on
the Closing Date or concurrently with the delivery of the relevant Assignment
and Acceptance or any accession agreement executed and delivered in accordance
with Section 2.24 or 2.28(a), as applicable, (i) two United States Internal
Revenue Service Forms W-9, Forms W-8ECI or Forms W-8BEN, as applicable (or
successor forms) properly completed and certifying in each case that such Lender
is entitled to a complete exemption from withholding or deduction for or on
account of any United States federal income taxes, and (ii) an Internal Revenue
Service Form W-8BEN or W-8ECI or successor applicable form, as the case may be,
to establish an exemption from United States backup withholding taxes. Each such
Lender further agrees to deliver to the Borrower, with a copy to the
Administrative Agent, as applicable, two Form W-9, Form W-8BEN or W-8ECI, or
successor applicable forms or manner of certification, as the case may be, on or
before the date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to the Borrower, certifying in the case of a Form W-9, Form
W-8BEN or W-8ECI (or successor forms) that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes (unless in any such case an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders such
forms inapplicable or the exemption to which such forms relate unavailable and
such Lender notifies the Borrower and the Administrative Agent that it is not
entitled to receive payments without deduction or withholding of United States
federal income taxes) and, in the case of a Form W-9, Form W-8BEN or W-8ECI,
establishing an exemption from United States backup withholding tax. Each
Foreign Lender further agrees to provide, promptly upon the reasonable demand of
the Borrower or the Administrative Agent, any information, form or document,
accurately completed, that may be required in order to demonstrate that such
Foreign Lender is in compliance with the requirements of FATCA, including
§1471(b) of the Code, if such Foreign Lender is a foreign financial institution
(as such term is defined in §1471(d)(4) of the Code) or §1472(b), if such
Foreign Lender is a non-financial foreign entity (as such term is defined in
§1472(d) of the Code). Notwithstanding anything in any Loan Document to the
contrary, the Borrower shall not be required to pay additional amounts to any
Lender or the Administrative Agent under Section 2.20 or Section 2.17(c), (i) if
such Lender or the Administrative Agent fails to comply with the requirements of
this Section 2.20(e), other than to the extent that such failure is due to a
Change in Law occurring after the date on which such Lender or the
Administrative Agent became a party to this Agreement or (ii) that are the
result of such Lender’s or the Administrative Agent’s gross negligence or
willful misconduct, as applicable.

 

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(f) Survival. Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower and Lenders
contained in this Section 2.20 shall survive the payment in full of the
Obligations and the termination of the Revolving Commitments.

(g) Treatment of Certain Refunds. If the Administrative Agent, a Lender or the
Issuing Bank determines, in its sole but reasonable discretion, that it has
received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts 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,
or additional amounts paid, by the Borrower under this Section with respect to
the Taxes or Other Taxes giving rise to such refund), net of all reasonable and
documented out-of-pocket expenses 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, agrees to repay the amount paid over to
the Borrower (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 is required to repay such refund to such Governmental Authority. This
paragraph (g) 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 which it deems confidential) to the Borrower
or any other Person.

(h) Indemnification by Lenders. Each Lender shall indemnify the Administrative
Agent within 10 days after demand therefor, for the full amount of any Excluded
Taxes attributable to such Lender that are payable or paid by the Administrative
Agent, and reasonable expenses arising therefrom or with respect thereto,
whether or not such Excluded Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to any Lender by the Administrative Agent shall
be conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document against any amount due to the
Administrative Agent under this paragraph (h). The agreements in this paragraph
(h) shall survive the resignation and/or replacement of the Administrative
Agent.

SECTION 2.21. Mitigation by Lenders. If any Lender requests compensation
pursuant to Section 2.17 or Section 2.19, or if the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.20, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, solely in the judgment of
such Lender, such designation or assignment (a) would eliminate or reduce
amounts payable pursuant to Section 2.17, Section 2.19 or Section 2.20, as the
case may be, in the future and (b) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be practically
disadvantageous to such Lender. Failure or delay on the part of any Lender or
any Issuing Bank to demand compensation pursuant to Section 2.17 or Section 2.19
shall not constitute a waiver of such Lender’s or such Issuing Bank’s right to
demand such compensation, provided that the Borrower shall not be required to
compensate a Lender or an Issuing Bank pursuant to such Sections for any
increased costs or reductions incurred more than 180 days prior to the date that
such Lender or such Issuing Bank, as the case may be, notifies the Borrower of
the event giving rise to such increased costs or reductions and of such Lender’s
or such Issuing Bank’s intention to claim compensation therefor (except that if
the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 180 day period referred to above shall be extended to
include the period of retroactive effect thereof).

 

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SECTION 2.22. Rounding and Other Consequential Changes. Subject to Section 1.03,
without prejudice and in addition to any method of conversion or rounding
prescribed by any EMU Legislation and without prejudice to the respective
obligations of the Borrower to the Administrative Agent and the Lenders and the
Administrative Agent and the Lenders to the Borrower under or pursuant to this
Agreement, except as expressly provided in this Agreement, each provision of
this Agreement, including, without limitation, the right to combine currencies
to effect a set-off, shall be subject to such reasonable changes of
interpretation as the Administrative Agent may from time to time specify to be
necessary or appropriate to reflect the introduction of or change over to the
euro in Participating Member States.

SECTION 2.23. Letters of Credit.

(a) L/C Commitment. Subject to the terms and conditions hereof, the Issuing
Bank, in reliance on the agreements of the Revolving Credit Lenders set forth in
Section 2.23(c), agrees to issue standby letters of credit (“Letters of Credit”)
denominated in a Permitted Currency for the account of the Borrower on any
Business Day from the Closing Date through but not including the date which is
five (5) Business Days prior to the Maturity Date in such form as may be
approved from time to time by the Issuing Bank and the Administrative Agent,
provided that the Issuing Bank shall have no obligation to issue any Letter of
Credit if, after giving effect to such issuance, based upon the Equivalent
Dollar Amount of all outstanding Revolving Loans and L/C Obligations, (a) the
L/C Obligations would exceed the lesser of (i) the L/C Commitment or (ii) the
Revolving Commitment minus the amount of all outstanding Revolving Loans,
Swingline Loans and Competitive Bid Loans or (b) the unused portion of the
Revolving Commitment of any Revolving Credit Lender would be less than zero.
Each Letter of Credit shall (i) be denominated in a Permitted Currency in a
minimum amount of $100,000, or such lesser amounts as may be agreed to by the
Issuing Bank, (or the Alternative Currency Amount thereof with respect to any
Alternative Currency Letter of Credit), (ii) be a standby letter of credit
issued to support obligations of the Borrower or any of its Restricted
Subsidiaries, contingent or otherwise, incurred in the ordinary course of
business, and (iii) expire on a date satisfactory to the Issuing Bank and the
Administrative Agent, which date shall be no later than five (5) Business Days
prior to the Maturity Date. The Issuing Bank shall not at any time be obligated
to issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Bank or any L/C Participant 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 Letters of Credit, unless the context otherwise requires.

(b) Procedure for Issuance of Letters of Credit. The Borrower may from time to
time request that the Issuing Bank issue a Letter of Credit by delivering to the
Issuing Bank at the Administrative Agent’s office an Application therefor,
completed to the satisfaction of the Issuing Bank, and such other certificates,
documents and other papers and information (“L/C Supporting Documentation”) as
the Issuing Bank and the Administrative Agent may request (which information
shall include the Permitted Currency in which the Letter of Credit shall be
denominated). The Borrower will contemporaneously deliver to the Administrative
Agent, at the Administrative Agent’s office, a copy of such Application and L/C
Supporting Documentation. Upon receipt of any Application, the Issuing Bank
shall process such Application and L/C Supporting Documentation delivered to it
in connection therewith in accordance with its customary procedures and shall,
after approving the same and receiving confirmation from the Administrative
Agent that sufficient availability exists under the Revolving Commitment for
issuance of such Letter of Credit, subject to Section 2.20(a) and Article IV
hereof, promptly issue the Letter of Credit requested thereby (but in no event
shall the Issuing Bank be required to issue any Letter of Credit earlier than
four (4) Business Days after its receipt of the Application therefor and all L/C
Supporting Documentation relating thereto) by issuing the original of such
Letter of Credit to the beneficiary thereof or as otherwise may be agreed by the
Issuing Bank and the Borrower. The Issuing Bank shall promptly furnish to the
Borrower and the Administrative Agent a copy of such Letter of Credit and the
Administrative Agent shall promptly notify each Revolving Credit Lender of the
issuance and upon request by any Revolving Credit Lender, furnish to such
Revolving Credit Lender a copy of such Letter of Credit and the amount of such
Revolving Credit Lender’s participation therein.

 

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(c) L/C Participations.

(i) The Issuing Bank irrevocably agrees to grant and hereby grants to each L/C
Participant, and, to induce the Issuing Bank to issue Letters of Credit
hereunder, each L/C Participant irrevocably agrees to accept and purchase and
hereby accepts and purchases from the Issuing Bank, on the terms and conditions
hereinafter stated, for such L/C Participant’s own account and risk an undivided
interest equal to such L/C Participant’s Pro Rata Percentage in the Issuing
Bank’s obligations and rights under and in respect of each Letter of Credit
issued hereunder and the amount of each draft paid by the Issuing Bank
thereunder. Each L/C Participant unconditionally and irrevocably agrees with the
Issuing Bank that, if a draft is paid under any Letter of Credit for which the
Issuing Bank is not reimbursed in full by the Borrower through a Revolving Loan
or otherwise in accordance with the terms of this Agreement, such L/C
Participant shall pay to the Issuing Bank in the applicable Permitted Currency
upon demand at the Issuing Bank’s address for notices specified herein an amount
equal to such L/C Participant’s Pro Rata Percentage of the amount of such draft,
or any part thereof, which is not so reimbursed.

(ii) Upon becoming aware of any amount required to be paid by any L/C
Participant to the Issuing Bank pursuant to Section 2.23(c) in respect of any
unreimbursed portion of any payment made by the Issuing Bank under any Letter of
Credit, the Issuing Bank shall notify the Administrative Agent and the
Administrative Agent shall notify each L/C Participant of the amount and due
date of such required payment and such L/C Participant shall pay to the Issuing
Bank in the applicable Permitted Currency the amount specified on the applicable
due date. If any such amount is paid to the Issuing Bank after the date such
payment is due, such L/C Participant shall pay to the Issuing Bank in the
applicable Permitted Currency on demand, in addition to such amount, interest at
the Federal Funds Effective Rate for the first day such payment is not made, and
thereafter at the interest rate applicable to Revolving Loans pursuant to
Section 2.09(a) or (c), as the case may be. A certificate of the Issuing Bank
with respect to any amounts owing under this Section 2.23(c)(ii) shall be
conclusive in the absence of manifest error. With respect to payment to the
Issuing Bank of the unreimbursed amounts described in this Section 2.23(c), if
the L/C Participants receive notice that any such payment is due (A) prior to
1:00 p.m. on any Business Day, such payment shall be due that Business Day, and
(B) after 1:00 p.m. on any Business Day, such payment shall be due on the
following Business Day.

(iii) Whenever, at any time after the Issuing Bank has made payment under any
Letter of Credit and has received from any L/C Participant its Pro Rata
Percentage of such payment in accordance with this Section 2.23, the Issuing
Bank receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise), or any payment of interest on account thereof,
the Issuing Bank will distribute to such L/C Participant its pro rata share
thereof, provided that in the event that any such payment received by the
Issuing Bank shall be required to be returned by the Issuing Bank, such L/C
Participant shall return to the Issuing Bank the portion thereof previously
distributed by the Issuing Bank to it.

(d) Reimbursement Obligation of the Borrower.

(i) Reimbursement Obligation of the Borrower. In the event of any drawing under
any Letter of Credit, the Borrower agrees to reimburse (either with the proceeds
of a Revolving Loan as provided for in this Section 2.23(d) or with funds from
other sources), in same day funds in the applicable Permitted Currency in which
such Letter of Credit was denominated, the Issuing Bank on each date on which
the Issuing Bank notifies the Borrower of the date and amount of a draft paid
under any Letter of Credit for the amount of (i) such draft so paid and (ii) any
amounts referred to in Section 2.07(c) incurred by the Issuing Bank in
connection with such payment (other than those payable pursuant to
Section 2.23(d)(iii) below).

 

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(ii) Reimbursement By the Revolving Credit Lenders. The Issuing Bank shall
promptly deliver written notice of any drawing under a Letter of Credit to the
Administrative Agent and the Borrower. Unless the Borrower shall promptly (but
in any event no later than the date of receipt of such notice of drawing from
the Issuing Bank) notify the Issuing Bank that the Borrower intends to reimburse
the Issuing Bank for such drawing from other sources or funds, the Borrower
shall be deemed to have timely given a Notice of Borrowing to the Administrative
Agent requesting that the Revolving Credit Lenders make a Revolving Loan in the
applicable Permitted Currency bearing interest at the Alternate Base Rate (or
the LIBO Rate with a one (1) month Interest Period with respect to the repayment
of any Alternative Currency Letters of Credit) on such date in the amount of
(a) such draft so paid and (b) any amounts referred to in Section 2.07(c)
incurred by the Issuing Bank in connection with such payment (including, without
limitation, any and all costs, fees and other expenses incurred by the Issuing
Bank in effecting the payment of any Alternative Currency Letter of Credit), and
the Revolving Credit Lenders shall make a Revolving Loan in the applicable
Permitted Currency bearing interest at the Alternate Base Rate (or the LIBO Rate
with a one (1) month Interest Period with respect to the repayment of any
Alternative Currency Letters of Credit) in such amount, the proceeds of which
shall be applied to reimburse the Issuing Bank for the amount of the related
drawing and costs and expenses. Each Revolving Credit Lender acknowledges and
agrees that its obligation to fund a Revolving Loan in accordance with this
Section 2.23(d) to reimburse the Issuing Bank for any draft paid under a Letter
of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including, without limitation, non-satisfaction of the
conditions set forth in Section 2.03(a) or Article IV. If the Borrower has
elected to pay the amount of such drawing with funds from other sources and
shall fail to reimburse the Issuing Bank as provided above, the unreimbursed
amount of such drawing shall bear interest at the rate which would be payable on
any outstanding ABR Loans which were then overdue from the date such amounts
become payable (whether at stated maturity, by acceleration or otherwise) until
payment in full.

(iii) Exchange Indemnification and Increased Costs. The Borrower shall, upon
demand from any Issuing Bank or L/C Participant, pay to such Issuing Bank or L/C
Participant, the amount of (i) any loss or cost or increased cost incurred by
such Issuing Bank or L/C Participant, (ii) any reduction in any amount payable
to or in the effective return on the capital to such Issuing Bank or L/C
Participant, (iii) any currency exchange loss, in each case that such Issuing
Bank or L/C Participant sustains as a result of the Borrower’s repayment in
dollars of any Letter of Credit denominated in an Alternative Currency. A
certificate of such Issuing Bank setting forth in reasonable detail the basis
for determining such additional amount or amounts necessary to compensate such
Issuing Bank shall be conclusively presumed to be correct save for manifest
error.

(e) Obligations Absolute. The Borrower’s obligations under this Section 2.23
(including, without limitation, the Reimbursement Obligation) shall be absolute
and unconditional under any and all circumstances and irrespective of any
set-off, counterclaim or defense to payment which the Borrower may have or have
had against the Issuing Bank or any beneficiary of a Letter of Credit or any
other Person. The Borrower also agrees that the Issuing Bank, the Administrative
Agent and the L/C Participants shall not be responsible for, and the Borrower’s
Reimbursement Obligation under Section 2.23(d) shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. Without limiting
the foregoing, it is expressly agreed that the Reimbursement Obligations of the
Borrower will not be excused by ordinary negligence, gross negligence, wrongful
conduct or willful misconduct of the Issuing Bank or the Administrative Agent.
However, the foregoing shall not excuse the Issuing Bank or the Administrative
Agent from liability to the Borrower in any independent action or proceeding
brought by the Borrower against the Issuing Bank or the Administrative Agent
following such reimbursement or payment by the Borrower to the extent of any
unavoidable direct

 

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damages suffered by the Borrower that are caused directly by the Issuing Bank’s
or the Administrative Agent’s gross negligence or willful misconduct, provided
that the Issuing Bank or the Administrative Agent, as applicable (i) shall have
acted with due diligence and reasonable care if it acts in accordance with
standard letter of credit practice of commercial banks located in the place that
the Letter of Credit is issued and (ii) the Borrower’s aggregate remedies
against the Issuing Bank or the Administrative Agent for wrongfully honoring a
presentation or wrongfully retaining honored documents shall in no event exceed
the aggregate amount paid by the Borrower to the Issuing Bank or the
Administrative Agent with respect to the honored presentation, plus interest.
The Issuing Bank shall not be liable for any error, omission, interruption or
delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions caused by the Issuing Bank’s gross negligence or willful misconduct.
The Borrower agrees that any action taken or omitted by the Issuing Bank or the
Administrative Agent under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence of gross negligence or
willful misconduct, shall be binding on the Borrower and shall not result in any
liability of the Issuing Bank, the Administrative Agent or any L/C Participant
to the Borrower. The responsibility of the Issuing Bank to the Borrower in
connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are in conformity with such Letter of Credit. Without limiting any other
provision of this Agreement, the Issuing Bank, and, as applicable, its
correspondents, may honor any presentation or drawing under a Letter of Credit
that appears on its face substantially to comply with the terms and conditions
of the Letter of Credit.

(f) Effect of Application. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section, the provisions of this Section shall apply.

(g) Cash Collateralization. If any Event of Default (other than an Event of
Default described in clause (g) or (h) of Article VII) shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Credit Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit) demanding the deposit of
cash collateral pursuant to this paragraph and of the amount to be deposited,
or, if an Event of Default described in clause (g) or (h) of Article VII shall
occur, on the Business Day of such occurrence, deposit in an account with the
Administrative Agent, for the benefit of the Revolving Credit Lenders, an amount
in cash in dollars equal to the Equivalent Dollar Amount of 105% of the
aggregate amount of all L/C Obligations at that date plus all applicable fees,
interest, premium (if any) and costs that have accrued or will accrue through
the remaining term of such Letter of Credit. The Administrative Agent may, at
any time and from time to time after the initial deposit, request that
additional cash collateral be provided in order to protect against the results
of exchange fluctuations. Such deposits shall be held by the Administrative
Agent as collateral for the payment and performance of the obligations of the
Borrower under this Agreement. The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account. Other than any interest earned on the investment of such deposits in
Permitted Liquid Investments, which investments shall be made at the option and
sole discretion of the Administrative Agent, such deposits shall not bear
interest. Interest or profits, if any, on such investments shall accumulate in
such account. Moneys in such account shall (i) automatically be applied by the
Administrative Agent to reimburse the Issuing Bank for L/C Disbursements for
which they have not been reimbursed, (ii) be held for the satisfaction of the
reimbursement obligations of the Borrower for the L/C Obligations at such time
and (iii) if the maturity of the Loans has been accelerated (but subject to the
consent of Revolving Credit Lenders holding participations in outstanding
Letters of Credit representing greater than 50% of the aggregate undrawn amount
of all outstanding Letters of Credit), be applied to satisfy other obligations
of the Borrower under this Agreement. If the Borrower is required to provide an
amount of cash collateral hereunder as a result of the occurrence of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be returned
to the Borrower within three Business Days after all Events of Default have been
cured or waived.

 

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(h) Defaulting Lenders. Notwithstanding anything to the contrary contained in
this Section 2.23, the Issuing Bank shall not be obligated to issue, amend or
increase any Letter of Credit at a time when any Revolving Credit Lender is a
Defaulting Lender, unless the Issuing Bank has entered into arrangements with
the Borrower or such Defaulting Lender which are reasonably satisfactory to the
Issuing Bank to eliminate the Issuing Bank’s Fronting Exposure (after giving
effect to Section 2.27(c)) with respect to any such Defaulting Lender, including
the delivery of cash collateral.

SECTION 2.24. Increase in Commitments.

(a) After the Closing Date but prior to the Maturity Date, the Borrower shall
have the right to request from time to time additional Commitments (the
“Additional Commitments”) in an aggregate amount not to exceed $100,000,000,
each which request shall be made by the Borrower giving written notice (the
“Additional Commitment Notice”) to the Administrative Agent setting forth
whether the Additional Commitments are Term Loan Commitments, Revolving
Commitments or both, and if both, the allocation of the Additional Commitments
between Term Loan Commitments and Revolving Commitments, and such other details
with respect thereto as are reasonably requested by the Administrative Agent.
Each request for Additional Commitments shall request Additional Commitments in
an amount not less than $25,000,000 (or such lesser amount approved by the
Administrative Agent). Upon receipt of such request, the Administrative Agent
shall notify the existing Lenders of the requested Additional Commitments and
offer each such Lender an opportunity to participate at its sole discretion in
the Additional Commitments. Any existing Lender that does not agree (in its sole
discretion) to provide a portion of the proposed Additional Commitments within
10 days after receipt from the Administrative Agent of such notice shall be
deemed to have declined participation in any amount of such proposed Additional
Commitments. Notwithstanding any existing Lender’s rejection of any portion of
the proposed Additional Commitments, each existing Lender shall remain a Lender
hereunder, subject to the terms and conditions hereof. In addition, the Borrower
and the Administrative Agent may offer to additional proposed Lenders that
qualify as Eligible Assignees (including any required consent of the
Administrative Agent, the Swingline Lender and/or the Issuing Bank, such consent
not to be unreasonably withheld) the opportunity to accept all or a portion of
the amount of the proposed Additional Commitments. The allocation of the
Additional Commitments among the Lenders and Eligible Assignees who agree to
accept any portion thereof shall be made by the Borrower, in consultation with
the Administrative Agent. Upon the effectiveness of the Additional Commitments,
(i) each Eligible Assignee (that is not an existing Lender) which has been
allocated any portion of the Additional Commitments shall execute an accession
agreement to this Agreement, (ii) the Commitments of the existing Lenders which
have been allocated any portion of the Additional Commitments shall be increased
by such amount, (iii) the Pro Rata Percentages of the Lenders (including the
Eligible Assignees as the new Lenders) shall be adjusted to reflect such
allocations, (iv) if applicable, and subject to the payment of applicable
amounts pursuant to Section 2.18 in connection therewith, the Borrower shall be
deemed to have made such borrowings and repayments of the Revolving Loans, and
the Lenders shall make such adjustments of outstanding Revolving Loans between
and among them, as shall be necessary to effect the reallocation of the
Revolving Commitments such that, after giving effect thereto, the Revolving
Loans shall be held by the Lenders (including the Eligible Assignees as the new
Lenders) ratably in accordance with their Revolving Commitments, (v) each Lender
and Eligible Assignee participating in any Additional Commitment that is
allocated in whole or in part to the Term Loan Commitments severally agrees to
fund to the Borrower as a single advance the portion of such Additional
Commitment that the Borrower has allocated to it pursuant to the immediately
preceding sentence and (vi) other changes shall be made to the Loan Documents as
may be necessary to reflect the aggregate amount, if any, by which Lenders
(including the Eligible Assignees as the new Lenders) have agreed to increase
their respective Revolving Commitments or make new Revolving Commitments in
response to the Borrower’s request for an increase in the aggregate Commitments
pursuant to this Section 2.24 and which other changes do not adversely affect
the rights of those Lenders who do not elect to increase their respective
Commitments, in each case without the consent of the Lenders other than those
Lenders increasing their Commitments.

 

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(b) Notwithstanding the foregoing, an increase in the aggregate amount of the
Commitments pursuant to Section 2.24(a) shall be effective only if (i) no
Default or Event of Default shall have occurred and be continuing on the date
such increase is to become effective; (ii) each of the representations and
warranties made by the Borrower in this Agreement and the other Loan Documents
shall be true and correct on and as of the date of the Additional Commitment
Notice and the date such increase is to become effective with the same force and
effect as if made on and as of such date (or, if any such representation or
warrant is expressly stated to have been made as of a specific date, as of such
specific date); and (iii) the Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel may
reasonably request relating to the authorization of such increase.

SECTION 2.25. Special Provisions Regarding Revolving Loans.

(a) Upon the occurrence of a Sharing Event, automatically (and without the
taking of any action) (x) all then outstanding Eurocurrency Loans shall be
automatically converted into Eurodollar Loans denominated in dollars (in an
amount equal to the Equivalent Dollar Amount of the aggregate principal amount
of the Eurocurrency Loans on the date such Sharing Event first occurred, which
Eurodollar Loans denominated in dollars (i) shall thereafter be deemed to be ABR
Loans and (ii) unless the Sharing Event resulted solely from a termination of
the Revolving Commitments pursuant to clause (i) in the last paragraph of
Article VII, shall be immediately due and payable on the date such Sharing Event
has occurred) and (y) unless the Sharing Event resulted solely from a
termination of the Revolving Commitments, all accrued and unpaid interest and
other amounts owing with respect to such Eurocurrency Loans shall be immediately
due and payable in dollars, taking the Equivalent Dollar Amount of such accrued
and unpaid interest and other amounts.

(b) Upon the occurrence of a Sharing Event (i) no further Revolving Loans shall
be made, (ii) all amounts from time to time accruing with respect to, and all
amounts from time to time payable on account of, any outstanding Eurocurrency
Loans (including, without limitation, any interest and other amounts which were
accrued but unpaid on the date of such purchase) shall be payable in dollars as
if such Eurocurrency Loans had originally been made in dollars and shall be
distributed by the relevant Revolving Credit Lenders (or their affiliates) to
the Administrative Agent for the account of the Revolving Credit Lenders which
made such Revolving Loans or are participating therein and (iii) the Revolving
Commitments of the Lenders shall be automatically terminated.

SECTION 2.26. Replacement of Certain Lenders. In the event any Lender (a) shall
have requested additional compensation from the Borrower under Section 2.17(c),
Section 2.19 or Section 2.20, (b) shall have given notice under Section 2.17 of
its inability to make or maintain as such any Eurocurrency Loan or Eurodollar
Loan, (c) is a Defaulting Lender hereunder, (d) shall have refused to make
Revolving Loans or consent to the issuance of Letters of Credit in requested
alternative currencies under Section 1.05, or (e) is a Non-Consenting Lender,
the Borrower may, at its sole expense and effort, require such Lender (each, a
“Departing Lender”) to transfer and assign, without recourse (in accordance with
and subject to the restrictions contained in, and the consents required by,
Section 9.04) all its interests, rights and obligations under this Agreement and
the related Loan Documents to an assignee that shall assume such assigned
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided, however, that (i) such assignment shall not conflict with
any Applicable Law, (ii) the Borrower shall have received a written consent of
the Administrative Agent in the case of an assignee that is not a Lender, which
consent shall not unreasonably be withheld, and (iii) the Borrower or such
assignee shall have paid to the Departing Lender in immediately available funds
the principal of and interest accrued to the date of such payment on the Loans
made by it hereunder and all other amounts owed to it hereunder. If such
Departing Lender does not execute and deliver to the Administrative Agent a duly
completed Assignment and Acceptance and/or any other documentation necessary to
reflect such replacement within a period of time

 

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deemed reasonable by the Administrative Agent after the later of (x) the date on
which the replacement Lender executes and delivers such Assignment and
Acceptance and/or such other documentation and (y) the date on which the
Departing Lender receives all payments described in clause (iii), then such
Departing Lender shall be deemed to have executed and delivered such Assignment
and Acceptance and/or such other documentation as of such date and the Borrower
shall be entitled (but not obligated) to execute and deliver such Assignment and
Acceptance and/or such other documentation on behalf of such Departing Lender.

SECTION 2.27. 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 Section 9.08(b) and the definition of “Required
Lenders”.

(b) Reallocation of Payments. 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, or otherwise, and including
any amounts made available to the Administrative Agent for the account of such
Defaulting Lender pursuant to Section 9.06), 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 and/or the Swingline Lender
hereunder; third, if so determined by the Administrative Agent or requested by
the Issuing Bank and/or the Swingline Lender, to be held as cash collateral for
future funding obligations of such Defaulting Lender of any participation in any
Swingline Loan or Letter of Credit; fourth, as the Borrower may request (so long
as no Default or Event of Default exists), to the funding of any Loan in respect
of which such Defaulting Lender has failed to fund its portion thereof as
required by this Agreement, as determined by the Administrative Agent; fifth, if
so determined by the Administrative Agent and the Borrower, to be held in a
non-interest bearing deposit account and released pro rata in order to
(x) satisfy obligations of such Defaulting Lender to fund Loans under this
Agreement and (y) be held as cash collateral for future funding obligations of
such Defaulting Lender of any participation in any Swingline Loan or Letter of
Credit; sixth, to the payment of any amounts owing to the Administrative Agent,
the Lenders, the Issuing Bank or Swingline Lender as a result of any judgment of
a court of competent jurisdiction obtained by the Administrative Agent, any
Lender, the Issuing Bank or 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 (i) such payment is a
payment of the principal amount of any Revolving Loans or funded participations
in Swingline Loans or Letters of Credit in respect of which such Defaulting
Lender has not fully funded its appropriate share and (ii) such Revolving Loans
or funded participations in Swingline Loans or Letters of Credit were made at a
time when the conditions set forth in Section 4.01 were satisfied or waived,
such payment shall be applied solely to pay the Revolving Loans of, and funded
participations in Swingline Loans or Letters of Credit owed to, all
Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment
of any Revolving Loans of, or funded participations in Swingline Loans or
Letters of Credit owed to, such Defaulting Lender. Any payments, prepayments or
other amounts paid or payable to a Defaulting Lender that are applied (or held)
to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant
to this Section 2.27(b) shall be deemed paid to and redirected by such
Defaulting Lender, and each Lender irrevocably consents hereto.

 

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(c) Reallocation of Pro Rata Percentages to Reduce Fronting Exposure. During any
period in which there is a Defaulting Lender, all or any part of such Defaulting
Lender’s obligation to acquire, refinance or fund participations in Swingline
Loans or Letters of Credit pursuant to Section 2.02(b) and Section 2.23(c) shall
be reallocated among the Non-Defaulting Lenders in accordance with their
respective Pro Rata Percentages (computed without giving effect to the Revolving
Commitment of such Defaulting Lender), provided that (i) each such reallocation
shall be given effect only if, at the date the applicable Lender becomes a
Defaulting Lender, no Default or Event of Default exists, (ii) the
representations and warranties set forth in Article III hereof shall be true and
correct in all material respects on and as of the date of such reallocation with
the same effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date, and
(iii) the aggregate obligation of each Non-Defaulting Lender to acquire,
refinance or fund participations in Letters of Credit and Swingline Loans shall
not exceed the positive difference, if any, of (A) the Revolving Commitment of
that Non-Defaulting Lender as decreased in connection with any outstanding
Competitive Bid Loan in accordance with Section 2.01(a) minus (B) the sum of
(1) the aggregate outstanding principal amount of the Revolving Loans of that
Lender plus (2) such Lender’s Pro Rata Percentage of (x) outstanding Swingline
Loans and (y) outstanding L/C Obligations. 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.

(d) Cash Collateral for Letters of Credit. Promptly on demand by the Issuing
Bank or the Administrative Agent from time to time, the Borrower shall deliver
to the Administrative Agent cash collateral in an amount sufficient to cover all
Fronting Exposure with respect to the Issuing Bank (after giving effect to
Section 2.27(c)) on terms reasonably satisfactory to the Administrative Agent
and the Issuing Bank (and such cash collateral shall be in Dollars). Any such
cash collateral shall be deposited in a separate account with the Administrative
Agent, subject to the exclusive dominion and control of the Administrative
Agent, as collateral (solely for the benefit of the Issuing Bank) for the
payment and performance of each Defaulting Lender’s Pro Rata Percentage of
outstanding L/C Obligations. Moneys in such account shall be applied by the
Administrative Agent to reimburse the Issuing Bank immediately for each
Defaulting Lender’s Pro Rata Percentage of any drawing under any Letter of
Credit which has not otherwise been reimbursed by the Borrower or such
Defaulting Lender.

(e) Prepayment of Swingline Loans. Promptly on demand by the Swingline Lender or
the Administrative Agent from time to time, the Borrower shall prepay Swingline
Loans in an amount of all Fronting Exposure with respect to the Swingline Lender
(after giving effect to Section 2.27(c)).

(f) Certain Fees.

(i) No Defaulting Lender shall be entitled to receive any Unused Fee pursuant to
Section 2.07(a) for any period during which that Lender is a Defaulting Lender.

(ii) Each Defaulting Lender shall be entitled to receive letter of credit
commissions pursuant to Section 2.07(c) for any period during which that Lender
is a Defaulting Lender only to the extent allocable to its Pro Rata Percentage
of the stated amount of Letters of Credit for which such Defaulting Lender has
provided cash collateral or other credit support arrangements satisfactory to
the Issuing Bank.

(iii) With respect to any fees or letter of credit commissions not required to
be paid to any Defaulting Lender pursuant to clause (i) or (ii) above, the
Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such
fees or commissions otherwise payable to such Defaulting Lender with respect to
such Defaulting Lender’s participation in L/C Obligations or Swingline Loans
that has been reallocated to such Non-Defaulting Lender pursuant to
Section 2.27(c), (y) pay to the Issuing Bank and Swingline Lender, as
applicable, the amount of any such fees or commissions otherwise payable to such
Defaulting Lender to the extent allocable to such Issuing Bank’s or Swingline
Lender’s Fronting Exposure to such Defaulting Lender, and (z) not be required to
pay any remaining amount of any such fees or commissions.

 

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(g) Defaulting Lender Cure. If the Borrower, the Administrative Agent, the
Swingline Lender and the Issuing Bank agree in writing in their sole discretion
that a Defaulting Lender should no longer be deemed to be a Defaulting Lender,
the Administrative Agent will so notify the parties hereto, whereupon as of the
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 that portion of outstanding
Revolving Loans of the other Lenders or take such other actions as the
Administrative Agent may determine to be necessary to cause the Revolving Loans
and funded and unfunded participations in Letters of Credit and Swingline Loans
to be held on a pro rata basis by the Lenders in accordance with their Pro Rata
Percentages (without giving effect to Section 2.27(c)), 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 such 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 such Lender’s having
been a Defaulting Lender.

SECTION 2.28. Certain Permitted Amendments.

(a) The Borrower may, by written notice to the Administrative Agent from time to
time beginning on the date that is 18 months after the Closing Date, but not
more than three times during the term of this Agreement (and with no more than
one such offer outstanding at any one time), make one or more offers (each, a
“Loan Modification Offer”) to all the Lenders to make one or more Permitted
Amendments pursuant to procedures reasonably specified by the Administrative
Agent and reasonably acceptable to the Borrower. Such notice shall set forth
(i) the terms and conditions of the requested Permitted Amendment and (ii) the
date on which such Permitted Amendment is requested to become effective (which
shall not be less than 10 Business Days or more than 30 Business Days after the
date of such notice, unless otherwise agreed to by the Administrative Agent).
Notwithstanding anything to the contrary in Section 9.08, each Permitted
Amendment shall only require the consent of the Borrower, the Administrative
Agent and those Lenders that accept the applicable Loan Modification Offer (such
Lenders, the “Accepting Lenders”), and each Permitted Amendment shall become
effective only with respect to the Loans and Commitments of the Accepting
Lenders. In connection with any Loan Modification Offer, the Borrower may, at
its sole option, terminate the aggregate Commitments of one or more of the
Lenders that are not Accepting Lenders, and in connection therewith shall repay
in full all outstanding Loans, and accrued but unpaid interest and fees (along
with any amount owing pursuant to Section 2.18), at such time owing to such
terminated Lender, with such termination taking effect, and any related
repayment being made, upon the effectiveness of the Permitted Amendment.
Additionally, to the extent the Borrower has terminated the Commitments of such
Lenders, it may request any other Eligible Assignee (including any required
consent of the Administrative Agent, the Issuing Bank and/or the Swingline
Lender, such consent not to be unreasonably withheld) to provide a commitment to
make loans on the terms set forth in such Loan Modification Offer in an amount
not to exceed the amount of the Commitments terminated pursuant to the preceding
sentence, provided that each Eligible Assignee (that is not an existing Lender)
shall execute an accession agreement to this Agreement. Upon the effectiveness
of any Permitted Amendment and any termination of any Lender’s Commitments (and
any related repayment of Loans and unpaid interest and fees) pursuant to this
section and any related commitment of an Eligible Assignee with respect to such
terminated Commitments, subject to the payment of applicable amounts pursuant to
Section 2.18 in connection therewith, the Borrower shall be deemed to have made
such borrowings and repayments of the Loans, and the Lenders shall make such
adjustments of outstanding Loans between and among them, as shall be necessary
to effect the reallocation of the Commitments such that, after giving effect
thereto, the Loans shall be held by the Lenders (including the Eligible
Assignees as the new Lenders) ratably in accordance with their Commitments.

 

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(b) The Borrower and each Accepting Lender shall execute and deliver to the
Administrative Agent a Loan Modification Agreement and such other documentation
as the Administrative Agent shall reasonably specify to evidence the acceptance
of the Permitted Amendments and the terms and conditions thereof. The
Administrative Agent shall promptly notify each Lender as to the effectiveness
of each Loan Modification Agreement. Each of the parties hereto hereby agrees
that, upon the effectiveness of any Loan Modification Agreement, this Agreement
shall be deemed amended to the extent (but only to the extent) necessary to
reflect the existence and terms of the Permitted Amendment evidenced thereby and
only with respect to the Loans and Commitments of the Accepting Lenders,
including any amendments necessary to treat the applicable Loans and/or
Commitments of the Accepting Lenders as a new “Class” of loans and/or
commitments hereunder. Notwithstanding the foregoing, no Permitted Amendment
shall become effective unless the Administrative Agent, to the extent reasonably
requested by the Administrative Agent, shall have received legal opinions, board
resolutions, officer’s and secretary’s certificates and other documentation
consistent with those delivered on the Closing Date under this Agreement.

(c) “Permitted Amendments” means any or all of the following: (i) an extension
of the Maturity Date or, in the case of the Term Loan, an extension of any
scheduled interest payment, applicable solely to the Loans and/or Commitments of
the Accepting Lenders, (ii) an increase in the interest rate with respect to the
Loans and/or Commitments of the Accepting Lenders, (iii) the inclusion of
additional fees to be payable to the Accepting Lenders in connection with the
Permitted Amendment (including any upfront fees), (iv) such amendments to this
Agreement and the other Loan Documents as shall be appropriate, in the
reasonable judgment of the Administrative Agent, to provide the rights and
benefits of this Agreement and other Loan Documents to each new “Class” of loans
and/or commitments resulting therefrom, provided that (A) the allocation of the
participation exposure with respect to any then-existing or subsequently issued
or made Letter of Credit or Swingline Loan as between the revolving commitments
of such new “Class” and the Revolving Commitments of the then-existing Lenders
shall be made on a pro rata basis as between the revolving commitments of such
new “Class” and the Revolving Commitments of the then-existing Revolving Credit
Lenders, (B) the L/C Commitment and Swingline Commitment may not be extended
without the prior written consent of the Issuing Bank or the Swingline Lender,
as applicable, and only to the extent the L/C Commitment or Swingline Commitment
so extended does not exceed the aggregate Revolving Commitments extended
pursuant to clause (i) above, (C) payments of principal and interest on Loans
(including loans of Accepting Lenders) shall continue to be shared pro rata in
accordance with Section 2.11(c), except that notwithstanding Section 2.11(c) the
Loans and Commitments of the Lenders that are not Accepting Lenders may be
repaid and terminated on their applicable Maturity Date, without any pro rata
reduction of the revolving commitments and repayment of loans of Accepting
Lenders with a different Maturity Date, and (v) such other amendments to this
Agreement and the other Loan Documents as shall be appropriate, in the
reasonable judgment of the Administrative Agent, to give effect to the foregoing
Permitted Amendments.

(d) This Section 2.28 shall supersede any provision in Section 9.08 to the
contrary. Notwithstanding any reallocation into extending and non-extending
“Classes” in connection with a Permitted Amendment, all Loans to the Borrower
under this Agreement shall rank pari passu in right of payment.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to each of the Lenders that:

SECTION 3.01. Organization; Powers. Each of the Borrower and the Restricted
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, except for inactive Restricted
Subsidiaries that do not engage in any business and whose failure to be validly
existing or in good standing would not reasonably be expected to have a Material
Adverse Effect, (b) has all requisite power and authority to own its property
and assets and to carry on its business as now conducted and as proposed to be
conducted, (c) is qualified to do business in every jurisdiction where such
qualification is required, except where the failure so to qualify would not
result in a Material Adverse Effect, and (d) in the case of each Loan Party, has
the power and authority to execute, deliver and perform its obligations under
each Loan Document to which it is party and each other agreement or instrument
contemplated thereby and in the case of the Borrower, to borrow and incur other
obligations hereunder.

 

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SECTION 3.02. Authorization. The execution, delivery and performance by each
Loan Party of the Loan Documents to which it is to be a party and in the case of
the Borrower the borrowings of the Loans, the use of proceeds thereof and the
Letters of Credit hereunder (collectively, the “Transactions”) (a) have been
duly authorized by all requisite action, including approval of such Loan Party’s
Board of Directors (if applicable) and if required, stockholder action on the
part of such Loan Party, or, in the case of the use of proceeds thereof, will be
so authorized in the ordinary course after the Closing Date, and (b) will not
(i) violate (A) any provision of law, statute, rule or regulation applicable to
the Borrower or any Subsidiary if such matter could reasonably be expected to
have a Material Adverse Effect, or of the certificate or articles of
incorporation or other constitutive documents or by-laws of the Borrower or any
Subsidiary, (B) any order of any Governmental Authority if such matter could
reasonably be expected to have a Material Adverse Effect or (C) any provision of
any indenture, agreement or other instrument to which the Borrower or any
Subsidiary is a party or by which any of them or any of their property is or may
be bound if such matter could reasonably be expected to have a Material Adverse
Effect, (ii) be in conflict with, result in a breach of or constitute (alone or
with notice or lapse of time or both) a default under any such indenture,
agreement or other instrument if such matter could reasonably be expected to
have a Material Adverse Effect or (iii) result in the creation or imposition of
any Lien (other than pursuant to the Loan Documents or the Indenture) upon or
with respect to any property or assets now owned or hereafter acquired by the
Borrower or any Restricted Subsidiary.

SECTION 3.03. Enforceability. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document when
executed and delivered by the Loan Parties party thereto will constitute, a
legal, valid and binding obligation of the Borrower and the other Loan Parties
enforceable against the Borrower and the other Loan Parties in accordance with
its terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of
creditors’ rights generally and by general principles of equity.

SECTION 3.04. Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the Transactions, except such as have
been made or obtained and are in full force and effect or will be made or
obtained in accordance with applicable laws, except when failure to obtain any
such consents or approvals could not reasonably be expected to cause a Material
Adverse Effect or jeopardize enforceability of any of the Loan Documents.

SECTION 3.05. Financial Statements. The Borrower has heretofore furnished to
Administrative Agent (i) the Consolidated balance sheets and statements of
income and cash flow of the Borrower and its Consolidated Subsidiaries as of and
for the fiscal year ended December 31, 2011, audited and accompanied by the
opinion of PricewaterhouseCoopers, LLP, independent public accountants and
(ii) the unaudited Consolidated balance sheets and statements of income and cash
flow of the Borrower and its Consolidated Subsidiaries as of and for the fiscal
quarter ended March 31, 2012 certified by the Financial Officer of the Borrower.
Such financial statements present fairly the financial condition and results of
operations of the Borrower and its Consolidated Subsidiaries as of such dates
and for such periods. Such balance sheets and the notes thereto disclose all
material liabilities, direct or contingent, of the Borrower and its Consolidated
Subsidiaries as of the dates thereof. Such financial statements were prepared in
accordance with GAAP applied on a consistent basis.

SECTION 3.06. No Material Adverse Change. As of the date hereof, there has been
no material adverse change in the business, assets, operations, property,
condition, financial or otherwise, material contingent liabilities or material
agreements of the Borrower and the Restricted Subsidiaries, taken as a whole,
since December 31, 2011, not previously disclosed in writing to the
Administrative Agent or Lenders or disclosed in public filings of the Borrower
made with the Securities and Exchange Commission prior to the Closing Date and
publicly available electronically at www.sec.gov or www.choicehotels.com (it
being understood that changes in general economic conditions shall not be deemed
to constitute such a material adverse change).

 

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SECTION 3.07. Title to Properties; Possession Under Leases.

(a) Each of the Borrower and the Restricted Subsidiaries has good and marketable
title to, or valid leasehold interests in, all its properties and assets, except
(i) for minor defects in title that do not interfere with its ability to conduct
its business as currently conducted or to utilize such properties and assets for
their intended purposes or (ii) where such failure would not otherwise,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. All such material properties and assets are free and clear of
Liens, other than Liens permitted by Section 6.02(a).

(b) Each of the Borrower and the Restricted Subsidiaries has complied with all
obligations under all leases to which it is a party and all such leases are in
full force and effect, except to the extent any failure to do so would not
reasonably be expected to have a Material Adverse Effect. Each of the Borrower
and the Subsidiaries enjoys peaceful and undisturbed possession under all such
material leases, except to the extent any failure to do so would not reasonably
be expected to have a Material Adverse Effect.

SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the date hereof a
list of all Subsidiaries of the Borrower, their respective jurisdictions of
formation and the percentage ownership interest of the Borrower therein.

SECTION 3.09. Litigation; Compliance with Laws.

(a) There are not any actions, suits or proceedings at law or in equity or by or
before any Governmental Authority now pending or, to the knowledge of any
Responsible Officer of the Borrower, threatened against or affecting the
Borrower or any Restricted Subsidiary or any business, property or rights of any
such Person and to the knowledge of any Responsible Officer of the Borrower
there are not any investigations now pending or threatened against the Borrower
or any Restricted Subsidiary, in each case, (i) which involve any Loan Document
or the Transactions (excluding any such actions, suits or proceedings threatened
by the Lenders or the Administrative Agent) or (ii) as to which there is a
reasonable probability of an adverse determination and which, if such probable
adverse determination occurred, could, individually or in the aggregate,
reasonably be anticipated to result in a Material Adverse Effect.

(b) To the best knowledge of any Responsible Officer of the Borrower, neither
the Borrower nor any of the Subsidiaries is in violation of any law, rule or
regulation, or in default with respect to any judgment, writ, injunction or
decree of any Governmental Authority, where such violation or default could
reasonably be anticipated to result in a Material Adverse Effect.

SECTION 3.10. Agreements.

(a) Neither the Borrower nor any of the Subsidiaries is a party to any agreement
or instrument or subject to any corporate or other restriction that has resulted
or could reasonably be anticipated to result in a Material Adverse Effect.

(b) Neither the Borrower nor any of its Subsidiaries is in default in any manner
under any provision of any indenture or other agreement or instrument evidencing
Indebtedness, or any other material agreement or instrument to which it is a
party or by which it or any of its properties or assets are or may be bound,
where such default could reasonably be anticipated to result in a Material
Adverse Effect.

 

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SECTION 3.11. Federal Reserve Regulations.

(a) Neither the Borrower nor any of the Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying Margin Stock.

(b) Following application of the proceeds of each Loan, not more than
twenty-five percent (25%) of the value of the assets of the Borrower will be
Margin Stock. No part of the proceeds of any Loan has been used for any purpose
that violates the provisions of Regulations T, U or X.

SECTION 3.12. Investment Company Act. Neither the Borrower nor any Subsidiary is
an “investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940.

SECTION 3.13. Use of Proceeds. The Borrower will use the proceeds of the Loans
and Letters of Credit in accordance with Section 5.08.

SECTION 3.14. Tax Returns. Each of the Borrower and the Restricted Subsidiaries
has filed or caused to be filed all Federal, state, local and foreign tax
returns required to have been filed by it and has paid or caused to be paid all
taxes shown to be due and payable on such returns or on any assessments received
by it, except, in each case, (a) taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary shall have
set aside on its books reserves as shall be required in conformity with GAAP or
(b) to the extent that the failure to do so would not reasonably be expected to
have a Material Adverse Effect.

SECTION 3.15. No Material Misstatements. No information, report, financial
statement, exhibit or schedule furnished by or on behalf of the Borrower to the
Administrative Agent or any Lender in connection with the negotiation of any
Loan Document or included therein or delivered pursuant thereto (other than
information of a general economic or industry nature) contained or contains any
untrue statement of material fact or omitted or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were or are made, not materially misleading, provided that
notwithstanding the foregoing with respect to financial projections, financial
projections shall, to the actual knowledge of the chief financial officer,
represent good faith estimates of the financial condition and operations of the
Borrower and its Subsidiaries (using assumptions that the chief financial
officer believes in good faith to be reasonable at the time prepared and made
available, it being recognized by the Administrative Agent and the Lenders that
such projections are not to be viewed as facts or guaranties of future
performance, that actual results during the period or periods covered by such
projections may differ from the projected results and that such differences may
be material and that the Borrower makes no representation that such projections
will in fact be realized).

SECTION 3.16. Employee Benefit Plans. With respect to each of the Plans, each of
the Borrower and its ERISA Affiliates is in compliance in all material respects
with the applicable provisions of ERISA and the regulations and published
interpretations thereunder. No Reportable Event has occurred as to which the
Borrower or any ERISA Affiliate was required to file a report with the PBGC
except as would not reasonably be expected to have a Material Adverse Effect.
The present value of all benefit liabilities under each Plan (based on those
assumptions used to fund such Plan) did not, as of the last annual valuation
date applicable thereto, exceed by more than $5,000,000 the value of the assets
of such Plan. Neither the Borrower nor any ERISA Affiliate has incurred any
Withdrawal Liability or any other liability under Title IV of ERISA (other than
premiums not yet due) that remains unpaid and that could result in a Material
Adverse Effect. Neither the Borrower nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization or has been
terminated within the meaning of Title IV of ERISA, and to the best knowledge of
any Responsible Officer of the Borrower no Multiemployer Plan is reasonably
expected to be in reorganization or to be terminated, where such reorganization
or termination has resulted or could reasonably be expected to result, through
increases in the contributions required to be made to such Plan or otherwise, in
a Material Adverse Effect. Neither the Borrower nor any ERISA Affiliate has
received any notice from the PBGC regarding the funded status of any plan.

 

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SECTION 3.17. Environmental Matters. Except with respect to matters that
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect, the Borrower and each Restricted Subsidiary has
complied with all Federal, state, local and other statutes, ordinances, orders,
judgments, rulings and regulations relating to environmental pollution or to
environmental regulation or control or to employee health or safety. Except with
respect to matters that individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect, neither the Borrower nor any
Restricted Subsidiary has received notice of any failure so to comply. Except
with respect to matters that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect, the Borrower’s and the
Subsidiaries facilities do not manage any hazardous wastes, hazardous
substances, hazardous materials, toxic substances, toxic pollutants or
substances similarly denominated, as those terms or similar terms are used in
the Resource Conservation and Recovery Act, the Comprehensive Environmental
Response Compensation and Liability Act, the Hazardous Materials Transportation
Act, the Toxic Substance Control Act, the Clean Air Act, the Clean Water Act or
any other applicable law, in violation of any such law or any regulations
promulgated pursuant thereto.

SECTION 3.18. Solvency. As of the Effective Date, with respect to the Borrower
and the Restricted Subsidiaries, collectively, (a) the fair valuation of and the
present fair saleable value of their assets exceed the amount that will be
required to be paid on or in respect of their existing debts and other probable
liabilities at a fair valuation (including contingencies) as such debts and
liabilities mature, as such value and such liabilities are determined in
accordance with Sections 101 of the Bankruptcy Code or Sections 1 and 2 of the
Uniform Fraudulent Transfer Act, (b) their assets do not constitute unreasonably
small capital for the Borrower and the Restricted Subsidiaries to carry out
their businesses as now conducted and as proposed to be conducted and (c) they
do not intend to incur debts or liabilities beyond their ability to pay such
debts and liabilities as they mature.

SECTION 3.19. OFAC. No Loan Party (i) is a Person whose property or interest in
property is blocked or subject to blocking pursuant to Section 1 of Executive
Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg.
49079 (2001)), (ii) engages in any dealings or transactions prohibited by
Section 2 of such executive order, or otherwise violates Section 2 of such
executive order, or (iii) is a Person on the list of Specially Designated
Nationals and Blocked Persons or subject to the limitations or prohibitions
under any other U.S. Department of Treasury’s Office of Foreign Assets Control
regulation or executive order.

ARTICLE IV

CONDITIONS OF LENDING

The effectiveness of this Agreement and the obligations of the Lenders to make
Loans and of the Issuing Bank to issue, extend or renew Letters of Credit
hereunder are subject to the satisfaction of the following conditions:

SECTION 4.01. All Credit Events. On the date of each Extension of Credit (each
such event being called a “Credit Event”):

(a) The Administrative Agent shall have received a notice of such Credit Event
as required by Section 2.03, Section 2.04, Section 2.10, or Section 2.23, as the
case may be.

(b) The representations and warranties set forth in Article III hereof shall be
true and correct in all material respects on and as of the date of such Credit
Event with the same effect as though made on and as of such date, except to the
extent such representations and warranties expressly relate to an earlier date.

 

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(c) No Default or Event of Default shall have occurred and be continuing. Each
Credit Event shall be deemed to constitute a representation and warranty by the
Borrower on the date of such Credit Event as to the matters specified in
paragraphs (b) and (c) of this Section 4.01.

SECTION 4.02. First Credit Event. On the Effective Date:

(a) The Administrative Agent shall have received (i) a copy of the certificate
or articles of incorporation (or analogous documents) and all amendments thereto
of each Loan Party certified as of a recent date by the Secretary of State (or
other appropriate Governmental Authority) of the state (or country) of its
organization or such other evidence as is reasonably satisfactory to the
Administrative Agent; (ii) a certificate as to the good standing (or other
analogous certification to the extent available) of each Loan Party as of a
recent date, from the appropriate Secretary of State (or other appropriate
Governmental Authority) or such other evidence as is reasonably satisfactory to
the Administrative Agent; (iii) a certificate of the Secretary or Assistant
Secretary of each Loan Party dated the Effective Date and certifying (A) that
attached thereto is a true and complete copy of the by-laws (or such other
analogous documents to the extent available) of such Loan Party as in effect on
the Effective Date and at all times since a date prior to the date of the
resolutions described in clause (B) below, (B) that attached thereto is a true
and complete copy of resolutions duly adopted by the Board of Directors of such
Loan Party authorizing the execution, delivery and performance of the Loan
Documents to which it is party, and in the case of the Borrower, the borrowings
hereunder, and that such resolutions have not been modified, rescinded or
amended and are in full force and effect, (C) that the certificate or articles
of incorporation (or analogous documents) of such Loan Party have not been
amended since the date of the last amendment thereto shown on the certificate of
good standing (or other analogous certification or such other evidence
reasonably satisfactory to the Administrative Agent) furnished pursuant to
clause (i) or (ii) above, and (D) as to the incumbency and specimen signature of
each officer executing any Loan Document or any other document delivered in
connection herewith on behalf of such Loan Party; (iv) a certificate of another
officer as to the incumbency and specimen signature of the Secretary or
Assistant Secretary executing the certificate pursuant to (iii) above; and
(v) such other documents as the Administrative Agent, the Lenders or the Issuing
Bank may reasonably request.

(b) The Administrative Agent shall have received a certificate of the Borrower,
dated the Effective Date and signed by a Financial Officer of the Borrower
confirming compliance with the conditions precedent set forth in paragraphs
(b) and (c) of Section 4.01.

(c) The Administrative Agent shall have received all fees and other amounts due
and payable on or prior to the Effective Date.

(d) The Administrative Agent shall have received a favorable written opinion of
(i) Hogan Lovells US LLP, special counsel to the Borrower and the Guarantors,
(ii) VanEps, Kunneman VanDoorne, Curaçao counsel to the Lenders and
(iii) Alston & Bird, LLP, Georgia counsel to the Borrower and Guarantors, each
dated the Effective Date and addressed to the Administrative Agent, the Lenders
and the Issuing Bank, in form and substance satisfactory to the Administrative
Agent and the Lenders, and the Borrower hereby instructs such counsel to deliver
such opinions to the Administrative Agent.

(e) Neither the Borrower nor any of its Restricted Subsidiaries shall have
outstanding any Indebtedness, other than (i) Indebtedness incurred under the
Loan Documents and (ii) other Indebtedness permitted under Section 6.01 and
outstanding on the Effective Date.

(f) The Existing Credit Agreement and all commitments thereunder to lend shall
have been terminated, all letters of credit issued thereunder shall have been
terminated, all amounts outstanding thereunder shall have been paid in full and
all Liens, if any, securing any obligations thereunder or under any related
agreement shall have been permanently released and the Administrative Agent
shall have received evidence satisfactory in form and substance to it
demonstrating such termination, payment and release.

 

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(g) The Administrative Agent shall have received counterparts of all Loan
Documents signed on behalf of each applicable Loan Party.

(h) The Administrative Agent shall have received an original Note duly executed
by the Borrower and payable to the order of each Lender that has requested the
same.

(i) The Administrative Agent shall have (A) duly filed financing statements on
or before the day of the First Credit Event under the Uniform Commercial Code of
all jurisdictions that the Administrative Agent may deem necessary or desirable
in order to perfect and protect the first priority Liens and security interests
created under the Collateral Documents, covering the Collateral described
therein, (B) received completed requests for information dated a recent date,
including UCC, judgment, tax, litigation and bankruptcy searches with respect to
each applicable Loan Party, and, in the case of UCC searches, listing all
effective financing statements filed in the jurisdictions referred to in clause
(A) above and in such other jurisdictions specified by the Administrative Agent
that name any Loan Party as debtor, together with copies of such financing
statements, (C) received evidence of the completion of all other recordings and
filings of or with respect to the Collateral Documents that the Administrative
Agent may deem necessary or desirable in order to perfect and protect the Liens
created thereby, (D) (i) received certificates evidencing all of the Initial
Pledged Equity (as defined in the Security Agreement) that is represented by
certificates and stock powers and membership interest powers (as the case may
be) with respect thereto executed in blank, all in form and substance reasonably
acceptable to the Administrative Agent and (ii) with respect to such Initial
Pledged Equity that constitutes an uncertificated security, either (1) received
evidence satisfactory to the Administrative Agent in its reasonable discretion
that each issuer thereof has registered the Administrative Agent as the
registered owner of such security or (2)(x) received evidence that an
Authorization Statement (as defined in the Security Agreement) has been
delivered to each issuer thereof and (y) received from each issuer thereof
(I) an Acknowledgment and Consent (as defined in the Security Agreement) and
(II) a Transaction Statement (as defined in the Security Agreement), confirming
that each such issuer will comply with instructions with respect to such
security originated by the Administrative Agent without further consent or
approval, and (E) received evidence that all other action that the
Administrative Agent may reasonably deem necessary or desirable in order to
perfect and protect the first priority Liens and security interests created
under the Collateral Documents has been taken.

(j) The Loan Parties shall have received all material governmental, shareholder
and third party consents and approvals necessary (or any other material consents
as determined in the reasonable discretion of the Administrative Agent) in
connection with the transactions contemplated by this Agreement and the other
Loan Documents and the other transactions contemplated hereby and all applicable
waiting periods shall have expired without any action being taken by any Person
that could reasonably be expected to restrain, prevent or impose any material
adverse conditions on any of the Loan Parties or such other transactions or that
could seek or threaten any of the foregoing, and no law or regulation shall be
applicable which in the reasonable judgment of the Administrative Agent could
reasonably be expected to have such effect.

(k) No action, proceeding, investigation, regulation or legislation shall have
been instituted, threatened or proposed before any Governmental Authority to
enjoin, restrain, or prohibit, or to obtain substantial damages in respect of,
or which is related to or arises out of this Agreement or the other Loan
Documents or the consummation of the transactions contemplated hereby or
thereby, or which, in the Administrative Agent’s sole discretion, would make it
inadvisable to consummate the transactions contemplated by this Agreement or the
other Loan Documents or the consummation of the transactions contemplated hereby
or thereby.

(l) No material adverse change in the business, assets, operations, property,
liabilities (actual or contingent) or condition (financial or otherwise) of the
Loan Parties and their Subsidiaries, taken as a whole, shall have occurred since
December 31, 2011 except as disclosed in public filings of the Borrower made
with the Securities and Exchange Commission prior to the Closing Date and
publicly available electronically at www.sec.gov or www.choicehotels.com.

 

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(m) The Borrower and each Guarantor shall have provided to the Administrative
Agent and the Lenders the documentation and other information requested by the
Administrative Agent in order to comply with requirements of the PATRIOT Act.

(n) The Administrative Agent shall have received a breakage indemnity letter
agreement in form and substance satisfactory to it, dated not later than the
earliest applicable deadline set forth in Section 2.03(a), signed on behalf of
the Borrower.

(o) To the extent applicable, the Administrative Agent and the Borrower shall
enter into a post-closing letter agreement in form and substance satisfactory to
the Administrative Agent, dated as of the date hereof.

(p) The Administrative Agent shall have received a Notice of Account Designation
in the form attached hereto as Exhibit A-2.

The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notices shall be conclusive and binding.

ARTICLE V

AFFIRMATIVE COVENANTS

The Borrower covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect or the principal of or interest on any Loan,
any fees or any other expenses or amounts payable under any Loan Document shall
be unpaid (other than contingent indemnification obligations to the extent no
claim giving rise thereto has been asserted), and until all Letters of Credit
have been canceled, have expired or have otherwise been cash collateralized and
all amounts drawn thereunder have been reimbursed in full, unless the Required
Lenders shall otherwise consent in writing, the Borrower shall, and shall cause
each of the Restricted Subsidiaries to:

SECTION 5.01. Existence; Businesses and Properties.

(a) Do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its legal existence, except as otherwise permitted under
Section 6.05, and except for inactive Restricted Subsidiaries that do not engage
in any business and except for Restricted Subsidiaries whose failure to maintain
legal existence would not reasonably be expected to have a Material Adverse
Effect.

(b) Do or cause to be done all things necessary to obtain, preserve, renew,
extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names used
in the conduct of its business, except to the extent any failure to do so would
not reasonably be expected to have a Material Adverse Effect; comply with all
applicable laws, rules, regulations and orders of any Governmental Authority,
whether now in effect or hereafter enacted, except to the extent any failure to
do so would not reasonably be expected to have a Material Adverse Effect.

(c) (i) maintain and operate its business in primarily the manner in which it is
presently conducted and operated; and (ii) at all times maintain and preserve
all property used in the conduct of such business and keep such property in good
repair, working order and condition and from time to time make, or cause to be
made, all needful and proper repairs, renewals, additions, improvements and
replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times, provided that the
foregoing clauses (i) and (ii) shall not prohibit the Borrower or any Restricted
Subsidiary from discontinuing or changing the operation and maintenance of any
Restricted Subsidiary, property or business if such discontinuance or change
would not reasonably be expected to have a Material Adverse Effect.

 

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SECTION 5.02. Insurance. Keep its insurable properties adequately insured at all
times by financially sound and reputable insurers; maintain such other
insurance, to such extent and against such risks, including fire and other risks
insured against by extended coverage, as is customary with companies in the same
or similar businesses, including public liability insurance against claims for
personal injury or death or property damage occurring upon, in, about or in
connection with the use of any properties owned, occupied or controlled by it;
and maintain such other insurance as may be required by law.

SECTION 5.03. Taxes. Pay and discharge promptly when due all taxes, assessments
and governmental charges or levies imposed upon it or upon its income or profits
or in respect of its property, before the same shall become delinquent or in
default, as well as all lawful and valid claims for labor, materials and
supplies or otherwise which, if unpaid, would reasonably be expected to have a
Material Adverse Effect; provided, however, that such payment and discharge
shall not be required with respect to any such tax, assessment, charge, levy or
claim so long as the validity or amount thereof shall be contested in good faith
by appropriate proceedings and the Borrower or such Restricted Subsidiary shall
have set aside on its books reserves with respect thereto as shall be required
in conformity with GAAP.

SECTION 5.04. Financial Statements, Reports, etc. In the case of the Borrower,
furnish to the Administrative Agent (for further delivery by the Administrative
Agent to the Issuing Bank and the Lenders in accordance with its customary
practice):

(a) within 90 days after the end of each fiscal year, its audited Consolidated
balance sheets and related statements of income and cash flow, showing the
financial condition of the Borrower and its Consolidated Subsidiaries as of the
close of such fiscal year and the results of its operations and the operations
of such Subsidiaries during such year, all audited by independent public
accountants of recognized national standing reasonably acceptable to the
Administrative Agent and accompanied by an opinion of such accountants (which
shall not be qualified in any material respect) to the effect that such
Consolidated financial statements fairly present the financial condition and
results of operations of the Borrower on a Consolidated basis in accordance with
GAAP consistently applied;

(b) within 50 days after the end of each of the first three fiscal quarters of
each fiscal year, beginning with the fiscal quarter ending June 30, 2012, its
unaudited Consolidated balance sheets and related statements of income and cash
flow, showing the financial condition of the Borrower and its Consolidated
Subsidiaries as of the close of such fiscal quarter and the results of its
operations and the operations of such Subsidiaries during such fiscal quarter
and the then elapsed portion of the fiscal year, all certified by the Financial
Officer of the Borrower as fairly presenting in all material respects the
financial condition and results of operations of the Borrower on a Consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;

(c) concurrently with any delivery of financial statements under clause (a) or
(b) above, a certificate of the accounting firm or the Financial Officer of the
Borrower opining on or certifying such statements (which certificate, when
furnished by an accounting firm, may be limited to accounting matters and
disclaim responsibility for legal interpretations) and in any event will be
based on the actual knowledge after due inquiry of the Person giving the
certificate, and:

(i) certifying that no Event of Default or Default has occurred or, if such an
Event of Default or Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with respect
thereto;

 

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(ii) setting forth computations in reasonable detail satisfactory to the
Administrative Agent demonstrating compliance with the covenants contained in
Sections 6.11, 6.12 and 6.13 (except that the requirements set forth in this
clause (ii) shall not apply to the quarterly financial statements related to the
fiscal quarter ending on June 30, 2012); and

(iii) with respect to the computations delivered pursuant to
Section 5.04(c)(ii), the Financial Officer shall break out and separately
provide the financial information relating solely to Domestic Subsidiaries that
are Unrestricted Subsidiaries and certify the accuracy of such information;

(d) promptly after the same become publicly available, copies (which such
deliveries may be made by email or facsimile) of all periodic and other reports,
proxy statements and other materials filed by it with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any of or all
the functions of said Commission, or with any national securities exchange, or
distributed to its shareholders, as the case may be; and

(e) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Borrower or any
Restricted Subsidiary, or compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request.

Any of the deliveries required by this Section 5.04 may be made by email or
facsimile to the Administrative Agent in accordance with Section 9.01, provided
that the financial statements required to be delivered pursuant to paragraphs
(a) and (b) above and the information required to be delivered pursuant to
paragraph (d) above shall be deemed to have been delivered on the date on which
the Borrower has posted, and has provided notice to the Administrative Agent of
such posting of, such information on the Borrower’s and/or the Securities and
Exchange Commission’s website on the internet at the website address provided in
such notice, or at another website accessible by the Lenders without charge.
Notwithstanding the foregoing, (i) the Borrower shall deliver paper copies of
the reports and financial statements referred to in paragraphs (a) and (b) of
this Section 5.04 to the Administrative Agent or any Lender who requests the
Borrower to deliver such paper copies until written notice to cease delivering
paper copies is given by the Administrative Agent or such Lender and (ii) upon
request of the Administrative Agent, the Borrower shall deliver a paper copy of
the certificate required by paragraph (c) of this Section 5.04.

The Borrower hereby acknowledges that (a) the Administrative Agent will make
available to the Lenders and the Issuing Bank materials and/or information
provided by or on behalf of the Borrower hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on SyndTrak Online or another
similar electronic system (the “Platform”) and (b) certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Borrower or its securities) (each, a
“Public Lender”). The Borrower hereby agrees that, if requested by the
Administrative Agent, it will use commercially reasonable efforts to identify
that portion of the Borrower Materials that may be distributed to the Public
Lenders and that (i) all such Borrower Materials shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first page thereof; (ii) by marking
Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the
Administrative Agent, the Issuing Lender and the Lenders to treat such Borrower
Materials as not containing any material non-public information (although it may
be sensitive and proprietary) with respect to the Borrower or its securities for
purposes of United States Federal and state securities laws (provided, however,
that to the extent such Borrower Materials constitute Proprietary Information,
they shall be treated as set forth in Section 9.15); (iii) all Borrower
Materials marked “PUBLIC” are permitted to be made available through a portion
of the Platform designated “Public Investor;” and (iv) the Administrative Agent
shall be entitled to treat any Borrower Materials that are not marked “PUBLIC”
as being suitable only for posting on a portion of the Platform not designated
“Public Investor.” Notwithstanding the foregoing, (x) the Borrower shall be
under no Obligation to mark any Borrower Materials “PUBLIC” and (y) each Public
Lender shall designate to the Administrative Agent one or more persons who are
entitled to receive and view Borrower Materials containing material non-public
information to the same extent as Lenders that are not Public Lenders.

 

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SECTION 5.05. Litigation and Other Notices. Furnish to the Administrative Agent
written notice of the following promptly after learning of it (for further
delivery by the Administrative Agent to the Issuing Bank and the Lenders in
accordance with its customary practice):

(a) any Event of Default or Default, specifying the nature and extent thereof
and the corrective action (if any) proposed to be taken with respect thereto;

(b) the filing or commencement of, or any written threat or notice of intention
of any Person to file or commence, any action, suit or proceeding, whether at
law or in equity or by or before any Governmental Authority, against the
Borrower or any Affiliate thereof as to which there is a reasonable probability
of an adverse determination and which, if such probable adverse determination
occurred, could reasonably be anticipated to result in a Material Adverse
Effect; and

(c) any development that has resulted in a Material Adverse Effect.

SECTION 5.06. ERISA. (a) Comply in all material respects with the applicable
provisions of ERISA and (b) furnish to the Administrative Agent and each Lender
(i) as soon as possible, and in any event within 30 days after any Responsible
Officer of the Borrower or any ERISA Affiliate either knows or has reason to
know that any Reportable Event has occurred that alone or together with any
other Reportable Event could reasonably be expected to result in liability of
the Borrower or any ERISA Affiliate in an aggregate amount exceeding
$10,000,000, a statement of a Financial Officer of the Borrower setting forth
details as to such Reportable Event and the action proposed to be taken with
respect thereto, together with a copy of the notice, if any, of such Reportable
Event given to the PBGC, (ii) promptly after receipt thereof, a copy of any
notice the Borrower or any ERISA Affiliate may receive from the PBGC relating to
the funded status of any Plan or to the intention of the PBGC to terminate any
Plan or Plans (other than a Plan maintained by an ERISA Affiliate which is
considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code) or to appoint a trustee to administer any Plan or
Plans, (iii) within 10 days after the due date for filing with the PBGC pursuant
to Section 412(n) of the Code of a notice of failure to make a required
installment or other payment with respect to a Plan, a statement of a Financial
Officer of the Borrower setting forth details as to such failure and the action
proposed to be taken with respect thereto, together with a copy of such notice
given to the PBGC and (iv) promptly and in any event within 30 days after
receipt thereof by the Borrower or any ERISA Affiliate from the sponsor of a
Multiemployer Plan, a copy of each notice received by the Borrower or any ERISA
Affiliate concerning (A) the imposition of Withdrawal Liability in excess of
$5,000,000 or (B) a determination that a Multiemployer Plan is, or is expected
to be, terminated or in reorganization, in each case within the meaning of Title
IV of ERISA.

SECTION 5.07. Maintaining Records; Access to Properties and Inspections.
Maintain all financial records in accordance with GAAP and upon reasonable
notice by any Lender permit any representatives designated by such Lender,
subject to Section 9.15, to visit and inspect the financial records and the
properties of the Borrower or any Restricted Subsidiary at reasonable times
during normal business hours and as often as requested and to make extracts from
and copies of such financial records, and permit any representatives designated
by any Lender to discuss the affairs, finances and condition of the Borrower or
any Restricted Subsidiary with the officers thereof and independent accountants
therefor. So long as no Event of Default exists, the Borrower shall not be
required to reimburse for expenses incurred in connection with more than one
inspection or examination per fiscal year, which such one inspection or
examination shall be arranged by the Administrative Agent.

 

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SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans and request the
issuance of Letters of Credit only (a) to pay off the Existing Credit Agreement
and certain other existing Indebtedness of the Borrower and its Subsidiaries on
the Closing Date, (b) to pay fees and expenses in connection with the entering
into of this Agreement and the Facilities, and the related transactions, and
(c) for general corporate purposes of the Borrower and its Restricted
Subsidiaries, including, without limitation, working capital, investments,
acquisitions, payments of dividends (including the special dividend to be paid
by the Borrower in connection with the closing of the Facilities), repurchasing
outstanding capital stock and capital expenditures (provided that such
activities are permitted by any other provisions of this Agreement and the other
Loan Documents). In no event shall (a) any part of the proceeds of the Loans be
used by any Loan Party (i) to purchase or carry margin stock or to extend credit
to others for the purpose of purchasing or carrying Margin Stock or (ii) fund
any operations in, finance any investments or activities in, or make any
payments to, a Person in violation of any Anti-Terrorism Law, (b) the funds used
to repay the Facilities be derived from any unlawful activity in violation of
any Anti-Terrorism Law or (c) more than twenty-five percent (25%) of the value
of the assets of the Borrower and its Subsidiaries be Margin Stock.

SECTION 5.09. Subsidiaries; Principal Properties.

(a) Additional Domestic Subsidiary. If at any time after the Closing Date the
Borrower or any Subsidiary creates or acquires any Domestic Subsidiary with
assets in excess of $5,000,000 (other than in connection with a Permitted
Corporate Transaction), then:

(i) not later than the required date of delivery of the certificate required by
Section 5.04(c) for the fiscal period in which such Domestic Subsidiary was
formed or acquired (or such date that is no more than 60 days later as may be
agreed by the Administrative Agent, in its discretion), designate such Domestic
Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary in
accordance with Section 5.09(b);

(ii) in the case of a Restricted Subsidiary, the Borrower shall, not later than
the required date of delivery of the certificate required by Section 5.04(c) for
the fiscal period in which such Domestic Subsidiary was formed or acquired (or
such date that is no more than 60 days later as may be agreed by the
Administrative Agent, in its discretion) (A) cause such Restricted Subsidiary to
deliver to the Administrative Agent a duly executed Guarantee Joinder Agreement
and if such Restricted Subsidiary owns a Wholly Owned Subsidiary that is a
Restricted Subsdiary, a duly executed Security Agreement Supplement and deliver,
or cause the constituent owners of such Restricted Subsidiary to deliver, each
item required to be delivered pursuant to Section 4 of the Security Agreement,
(B) if such Restricted Subsidiary is a Wholly-Owned Subsidiary that is a
Domestic Subsidiary and any constituent owner of such Domestic Subsidiary is not
a “Grantor” under the Security Agreement, cause such constituent owner to
deliver to the Administrative Agent a duly executed Security Agreement
Supplement from such constituent owner and (C) such other documents and
certificates as may be reasonably requested by the Administrative Agent with
respect to such Domestic Subsidiary and its Guarantee Joinder Agreement, all in
form, content and scope reasonably satisfactory to the Administrative Agent,
provided that in the event any such Domestic Subsidiary is a Wholly Owned
Subsidiary but is intended to be disposed of, in whole or in part (so that it
will cease to be a Wholly Owned Subsidiary) by the Borrower or Subsidiary of the
Borrower that owns the equity interests in such Domestic Subsidiary not later
than the end of the fiscal quarter immediately following the fiscal quarter in
which such Domestic Subsidiary was created or acquired, and such intent is
provided to the Administrative Agent in a written notice not later than the
required date of delivery of the certificate required by Section 5.04(c) for the
fiscal period in which such Domestic Subsidiary was formed or acquired, the
foregoing requirements of this Section 5.09(a)(ii) shall not be required unless
such Domestic Subsidiary remains a Wholly Owned Subsidiary as of the last day of
such next succeeding fiscal quarter, in which case such requirements shall be
required to be satisfied in accordance with this Section 5.09(a)(ii) as if such
Domestic Subsidiary had been created or acquired during such next succeeding
fiscal quarter.

 

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(b) Designation and Redesignation of Subsidiaries. So long as no Default or
Event of Default exists or would result from such designation or redesignation,
the Borrower may, at any time upon written notice to the Administrative Agent,
redesignate any Restricted Subsidiary as an Unrestricted Subsidiary, redesignate
any Unrestricted Subsidiary as a Restricted Subsidiary or designate any newly
created or acquired Domestic Subsidiary as an Unrestricted Subsidiary. No such
designation of a new Subsidiary as an Unrestricted Subsidiary or redesignation
of a Restricted Subsidiary as an Unrestricted Subsidiary under this subsection
(b) shall be permitted unless, at the time in question, the Borrower would have
the right, without causing a Default or Event of Default, to (i) distribute to
its shareholders as an in-kind dividend the equity interest owned by the
Borrower (directly or indirectly) in such Restricted Subsidiary or newly created
or acquired Domestic Subsidiary, (ii) to distribute to its shareholders as a
cash dividend an amount of money equal to the fair market value of the assets
owned by such Restricted Subsidiary or newly created or acquired Domestic
Subsidiary or (iii) invest an amount of money equal to the value of such
Unrestricted Subsidiary’s assets directly or indirectly in the equity of such
Unrestricted Subsidiary within the applicable dollar limits prescribed by
Section 6.04.

(c) Certain Releases. Other than during the continuance of a Default or Event of
Default, at the request of the Borrower, the Administrative Agent shall release
any Guarantor from the Guarantee Agreement and Security Agreement in connection
with (i) the sale, transfer or other disposition of such Guarantor, permitted by
this Agreement (including, without limitation, in connection with any
transaction that results in such Guarantor ceasing to be a Wholly Owned Domestic
Subsidiary), of all or substantially all of the assets owned by such Guarantor
in an Asset Sale permitted by this Agreement, or (ii) a redesignation of such
Guarantor as an Unrestricted Subsidiary pursuant to Section 5.09(b), provided
that prior to any such release pursuant to clause (i) of this subsection (c),
the Borrower shall deliver a certificate of the Financial Officer of the
Borrower setting forth in reasonable detail computations evidencing compliance
with Sections 6.11, 6.12 and 6.13 on a pro forma basis after giving effect to
such release and certifying that no Default or Event of Default has occurred and
is continuing, or would occur after giving effect to such release.

(d) Principal Properties. Cause the Borrower’s direct or indirect interest in
each Principal Property to be acquired directly by the Borrower or through a
Wholly Owned Subsidiary that holds no other material assets other than such
Principal Property and assets relating thereto.

(e) Certain Foreign Subsidiaries. Cause the Capital Stock of all active
Subsidiaries of Choice Hotels Netherlands Antilles N.V. as of the Closing Date
that continue in the future to be owned, directly or indirectly, by the
Borrower, to continue to be owned, directly or indirectly, by Choice Hotels
Netherlands Antilles N.V. or another holding company Subsidiary that is not a
Domestic Subsidiary (such holding company Subsidiary, an “Alternate Foreign
Holding Subsidiary”) where at least (but not greater than) 65% of all of the
Capital Stock of such Alternate Foreign Holding Subsidiary has been pledged to
the Administrative Agent pursuant to the Security Agreement or a duly executed
Security Agreement Supplement and the Administrative Agent shall have received
such Security Agreement Supplement and the documents and items described in
Section 5.09(a)(ii) with respect to such holding company Subsidiary and the
related pledgor.

(f) Certain Domestic Subsidiaries. Notwithstanding the provisions of
Section 4.02(i)(D), the Borrower shall not be required to deliver the
certificates evidencing the Capital Stock of Choice Capital Corp., Suburban
Franchise Holding Co., Inc. and Suburban Franchise Systems, Inc., and the
related stock powers, until the date falling six (6) months after the Closing
Date (the “Delivery Date”), which date may be extended for an additional three
months with the consent of the Administrative Agent, not to be unreasonably
withheld. On the Delivery Date, the Borrower shall deliver such items to the
Administrative Agent unless the Borrower or its Subsidiaries shall have sold,
transferred or otherwise disposed of the Capital Stock of such entities pursuant
to an Asset Sale that is permitted under Section 6.06 or such entities shall
have ceased to exist pursuant to a transaction that is permitted under
Section 6.05.

 

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ARTICLE VI

NEGATIVE COVENANTS

The Borrower covenants and agrees with each Lender, the Issuing Bank and the
Administrative Agent that, so long as this Agreement shall remain in effect or
the principal of or interest on any Loan, any fees or any other expenses or
amounts payable under any Loan Document shall be unpaid (other than contingent
indemnification obligations to the extent no claim giving rise thereto has been
asserted), and until all Letters of Credit have been canceled, expired or have
otherwise been cash collateralized and all amounts drawn thereunder have been
reimbursed in full, unless the Required Lenders shall otherwise consent in
writing, the Borrower shall not, and shall not cause or permit any of the
Restricted Subsidiaries to:

SECTION 6.01. Indebtedness. Incur, create or assume any Indebtedness if (a) a
Default or an Event of Default would exist after giving effect to the
incurrence, creation or assumption of such Indebtedness or (b) in the case of
Indebtedness incurred by an Unrestricted Subsidiary that is not a Guarantor,
such Indebtedness is Recourse to the Borrower or any Loan Party.

SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien on any
property or assets (including stock or other securities of any Person, including
any Restricted Subsidiary) now owned or hereafter acquired by it or on any
income or revenues or rights (excluding rights of first refusal) in respect of
any thereof, except Liens satisfying any of the following tests:

(a) Liens on property or assets of the Borrower and its Restricted Subsidiaries
existing on the date hereof and set forth in Schedule 6.02; provided, however,
that such Liens shall secure only those obligations which they secure on the
date hereof except as otherwise permitted hereunder;

(b) any Lien existing on any property or asset prior to the acquisition thereof
by the Borrower or any Restricted Subsidiary; provided, however, that (i) such
Lien is not created in contemplation of or in connection with such acquisition
and (ii) such Lien does not apply to any other property or assets of the
Borrower or any Restricted Subsidiary;

(c) Liens for taxes, assessments or governmental or quasi-governmental charges
or levies not yet due or which are being contested in compliance with
Section 5.03;

(d) carriers’, warehousemen’s, mechanics, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business and securing obligations
that are not due or which are being contested in compliance with Section 5.03;

(e) statutory liens of landlords in respect of property leased by the Borrower
or any Restricted Subsidiary;

(f) pledges and deposits made in the ordinary course of business in compliance
with workmen’s compensation, unemployment insurance and other social security
laws or regulations;

(g) deposits and other Liens in scope consistent with industry practice to
secure the performance of bids, trade contracts (other than for Indebtedness),
leases (other than Capital Lease Obligations), statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;

(h) zoning restrictions, easements, rights-of-way, restrictions on use of real
property and other similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial in amount and do not
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the business of the Borrower and its Restricted
Subsidiaries taken as a whole;

 

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(i) Liens created under the Loan Documents to secure the Obligations (and
refinancings thereof);

(j) other Liens to secure purchase-money Indebtedness (including Capital Lease
Obligations) of the Borrower or any Restricted Subsidiary; and refinancings,
renewals and replacements thereof, provided that (i) such Liens do not apply to
any property or assets of the Borrower or any Restricted Subsidiary consisting
of franchise brands (whether now owned or hereafter acquired) and related
Franchise Agreements and (ii) each such Lien is limited to the property and
assets acquired in connection with such purchase-money Indebtedness;

(k) other Liens to secure Non-Recourse Indebtedness of the Borrower or any
Restricted Subsidiary and refinancings, renewals and replacements thereof,
provided that such Liens do not apply to any (i) Collateral or (ii) property or
assets of the Borrower or any Restricted Subsidiary consisting of franchise
brands (whether now owned or hereafter acquired) and related Franchise
Agreements;

(l) Liens to secure Recourse Indebtedness of the Borrower or any Restricted
Subsidiary and permitted refinancings thereof, provided that (i) such Lien does
not apply to any (A) Collateral or (B) property or assets of the Borrower or
such Restricted Subsidiary consisting of franchise brands (whether now owned or
hereafter acquired) and related Franchise Agreements and (ii) the aggregate
outstanding principal amount of Recourse Indebtedness secured by Liens shall not
at any time exceed the greater of (A) $25,000,000 and (B) 15% of Consolidated
Net Assets;

(m) Liens on the property of the Borrower or any of its Restricted Subsidiaries
in favor of landlords securing licenses, subleases or leases entered into in the
ordinary course of business and not materially interfering with the conduct of
the business of the Borrower and its Restricted Subsidiaries taken as a whole;

(n) Liens arising from precautionary UCC financing statement filings (or
equivalent filings, registrations or agreements in foreign jurisdictions)
regarding operating leases entered into by the Borrower or any of its Restricted
Subsidiaries in the ordinary course of business;

(o) Liens securing judgments which do not constitute an Event of Default or
Liens created by or existing from any litigation or legal proceeding that are
currently being contested in good faith by appropriate proceedings and with
respect to which adequate reserves are being maintained in accordance with GAAP;

(p) customary Liens in favor of a banks or other depository or financial
institutions arising as a matter of law and encumbering deposits or other funds
maintained with such financial institution (including rights of setoff);

(q) Liens on insurance policies and the proceeds thereof securing the financing
of the premiums with respect thereto;

(r) Liens of a collecting bank arising under Section 4-210 of the Uniform
Commercial Code on items in the course of collection;

(s) Liens in the nature of good faith deposits required in connection with, or
escrow arrangements securing indemnification obligations associated with, any
investment transaction permitted under Section 6.04;

 

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(t) Liens resulting from the refinancing, renewal or extension of obligations
secured by any Lien permitted by clause (a) or (b) of this Section 6.02, so long
as (x) the principal amount of the obligations secured thereby is not increased
as a result thereof (except to the extent Liens securing any such incremental
obligations are independently permitted under (and applied as a utilization of
the basket described in) Section 6.02(l) above) and (y) such renewals,
replacements and extensions do not result in Liens applying to any property or
assets which are not already subject to the Liens securing the respective
obligations being renewed, replaced or extended; and

(u) Liens on any Principal Property or the Capital Stock of any Principal
Property Subsidiary granted in favor of the trustee under the Indenture that are
pari passu with the Liens granted in favor of the Administrative Agent under the
Loan Documents.

SECTION 6.03. Sale and Lease-Back Transactions. Enter into any Sale and
Lease-Back Transaction unless immediately thereafter the value (determined as of
the time of sale in accordance with GAAP) of all property the subject of Sale
and Lease-Back Transactions, when added to the aggregate principal amount of
Indebtedness of the Borrower or any Restricted Subsidiary secured at such time
by Liens permitted only under Sections 6.02(j) and (k), does not exceed 15% of
Consolidated Total Assets at such time.

SECTION 6.04. Investments, Loans and Advances. Purchase, hold or acquire any
Capital Stock, comparable ownership interests, evidences of indebtedness or
other securities of, make or permit to exist any loans or advances to, or make
any investment or any other interest in, any other Person, except:

(a) loans, advances, capital contributions, guarantees and other investments
existing on the date hereof and loans, advances, capital contributions,
guarantees and other investments by the Borrower or any Restricted Subsidiary in
the capital stock or comparable ownership interests of any Subsidiary, including
by means of contributions by any Subsidiary of Hotel Properties, provided that
all such investments made in Unrestricted Subsidiaries following the Effective
Date shall not exceed an aggregate amount of $50,000,000 at any time
outstanding;

(b) loans, advances, capital contributions, guarantees and other investments by
the Borrower to Restricted Subsidiaries or by Subsidiaries to the Borrower or
any Restricted Subsidiary, in each case to the extent no Default or Event of
Default would result after giving effect thereto;

(c) Permitted Liquid Investments;

(d) so long as no Default or Event of Default has occurred and is continuing,
loans and advances by the Borrower and its Restricted Subsidiaries to their
employees, officers, and directors in the ordinary course of business in an
aggregate amount outstanding at any time not in excess of $2,000,000;

(e) other investments, capital contributions, guarantees, loans and advances
made in connection with hospitality-related business activities and ancillary
business activities reasonably related thereto other than investments in
Unrestricted Subsidiaries (which shall be governed by subsection (a) above),
provided that (i) no Default or Event of Default has occurred and is continuing,
or would exist after giving effect thereto and (ii) the Borrower is in
compliance with Sections 6.11, 6.12 and 6.13 (both immediately before and
immediately after giving effect thereto);

(f) so long as no Default or Event of Default has occurred and is continuing,
repurchases of the outstanding stock of the Borrower in accordance with
Section 6.10; and

(g) other investments, capital contributions, guarantees, loans and advances not
otherwise permitted pursuant to this Section 6.04 in an aggregate amount
outstanding at any time not in excess of $5,000,000.

 

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For purposes of Section 5.09(a) and clauses (a) and (g) of this Section 6.04,
calculations shall be on the basis of amounts actually invested, net of any
return on investment or return of capital with respect to such investments, and
without regard to any write-up or write-down of the value of such investments.

SECTION 6.05. Mergers and Consolidations. Merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it,
or sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all or substantially all its assets whether now owned or
hereafter acquired, except that:

(a) (i) the Borrower may merge or consolidate with a Subsidiary or (ii) a
Subsidiary may merge or consolidate with the Borrower, in each case so long as
the Borrower is the surviving entity;

(b) any Subsidiary may merge or consolidate with any Restricted Subsidiary so
long as the Restricted Subsidiary is the surviving entity or so long as the
surviving entity becomes a Restricted Subsidiary and promptly complies with
Section 5.09(a) (unless such Subsidiary is then designated as an Unrestricted
Subsidiary in accordance with Section 5.09);

(c) any Restricted Subsidiary may merge or consolidate with another Restricted
Subsidiary; and

(d) the Borrower or any Subsidiary may merge or consolidate with another Person;
provided, however, that (i) the Borrower or such Subsidiary is the surviving
entity, or in the case of a Subsidiary, such merger or consolidation of such
Subsidiary into another Person is an Asset Sale permitted hereunder and (ii) no
Default or Event of Default has occurred and is continuing, or would exist after
giving effect to such merger or consolidation.

SECTION 6.06. Asset Sales. Consummate any Asset Sale if (a) a Default or Event
of Default has occurred and is continuing, or would occur after giving effect
thereto or (b) such Asset Sale consists of any franchise brand (whether now
owned or hereafter acquired) and the Borrower would not be in pro forma
compliance with the covenants set forth in Sections 6.11, 6.12 and 6.13 after
giving effect to such Asset Sale and any substantially simultaneous repayment of
Indebtedness with the proceeds thereof.

SECTION 6.07. Transactions with Affiliates. Sell or transfer any property or
assets to, or purchase or acquire any property or assets from, or otherwise
enter into any other transactions with, any of its Affiliates unless (i) such
transaction is conducted in the ordinary course of business at prices and on
terms and conditions not less favorable to the Borrower or such Restricted
Subsidiary than could be obtained on an arms-length basis from unrelated third
parties, (ii) such transaction is between or among the Borrower and the
Restricted Subsidiaries or (iii) permitted by Sections 6.04, 6.05 or 6.10,
provided that the Borrower or any Restricted Subsidiary may not enter into any
of the foregoing transactions with an Affiliate that is an Unrestricted
Subsidiary if a Default or an Event of Default has occurred and is continuing.

SECTION 6.08. Certain Accounting Changes; Organizational Documents. (a) Change
its fiscal year end from December 31, or make any change in its accounting
treatment and reporting practices except as required or permitted by GAAP or
(b) amend, modify or change its articles of incorporation (or corporate charter
or other similar organizational documents) or amend, modify or change its bylaws
(or other similar documents) in any manner that is adverse in any material
respect to the rights or interests of the Lenders.

SECTION 6.09. Negative Pledges. Except with respect to prohibitions against
other encumbrances on specific property encumbered to secure payment of
particular Indebtedness (which Indebtedness relates solely to such specific
property, and improvements and accretions thereto and proceeds thereof, and is
otherwise permitted hereby), enter into any agreement prohibiting the creation
or assumption of any Lien upon the properties or assets of the Borrower or any
Loan Party to secure the Obligations, whether now owned or hereafter acquired,
provided that the foregoing shall not apply to (w) any prohibitions

 

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or requirements set forth either (i) in any Loan Document or (ii) in any
document with respect to any other Indebtedness so long as such prohibition
permits a Lien securing the Obligations either without securing such other
Indebtedness or by requiring such other Indebtedness also to be secured by a
Lien on such assets, either pari passu with or on a subordinated basis to the
Obligations, (x) restrictions or conditions imposed by law, (y) customary
restrictions and conditions contained in agreements relating to the sale of any
asset or property pending such sale, provided such restrictions and conditions
apply only to the asset or property that is sold and such sale is permitted
hereunder or (z) customary provisions in leases, licenses and other agreements
restricting the assignment thereof.

SECTION 6.10. Restricted Payments. Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its Capital Stock
now or hereafter outstanding, return any capital to its stockholders, partners
or members (or the equivalent Persons thereof) as such, make any distribution of
assets, Capital Stock, obligations or securities to its stockholders, partners
or members (or the equivalent Persons thereof) as such; provided, however, that
the Borrower may take such actions only so long as no Event of Default shall
have occurred and be continuing or would result therefrom and (a) any such
dividends or other payments declared or paid by the Borrower (excluding,
however, the special dividend to be paid by the Borrower in connection with the
closing of the Facilities) shall not exceed $50,000,000 in the aggregate for any
calendar year if the Consolidated Leverage Ratio exceeds 4.50:1.00 both
immediately before and immediately after giving effect to the payment of such
contemplated dividend or payment or (b) such actions are taken in connection
with a Permitted Corporate Transaction.

SECTION 6.11. Consolidated Leverage Ratio. In the case of the Borrower, permit
the Consolidated Leverage Ratio as of the last day of each fiscal quarter
occurring during any of the periods indicated below to exceed the correlative
ratio indicated:

 

Period

   Consolidated Leverage
Ratio

The Closing Date through June 30, 2013

   5.75:1.00

July 1, 2013 through June 30, 2014

   5.00:1.00

July 1, 2014 through June 30, 2015

   4.50:1.00

July 1, 2015 and thereafter

   4.00:1.00

SECTION 6.12. Consolidated Secured Leverage Ratio. In the case of the Borrower,
permit the Consolidated Secured Leverage Ratio as of the last day of each fiscal
quarter occurring during any of the periods indicated below to exceed the
correlative ratio indicated:

 

Period

   Consolidated Secured
Leverage Ratio

The Closing Date through June 30, 2013

   2.50:1.00

July 1, 2013 through June 30, 2014

   2.25:1.00

July 1, 2014 through June 30, 2015

   2.00:1.00

July 1, 2015 and thereafter

   1.75:1.00

SECTION 6.13. Consolidated Fixed Charge Coverage Ratio. In the case of the
Borrower, permit the Consolidated Fixed Charge Coverage Ratio as of the last day
of each fiscal quarter occurring during any of the periods indicated below to be
less than the correlative ratio indicated:

 

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Period

   Consolidated Fixed
Charge Coverage Ratio

The Closing Date through June 30, 2014

   2.00:1.00

July 1, 2014 through June 30, 2015

   2.25:1.00

July 1, 2015 and thereafter

   2.50:1.00

ARTICLE VII

EVENTS OF DEFAULT

In case of the happening of any of the following events (“Events of Default”):

(a) any representation or warranty made or deemed made (such representation or
warranty being deemed made as provided in Section 4.01) in or in connection with
any Loan Document or Loan or issuances of Letters of Credit hereunder, or any
representation, warranty, statement or information contained in any report,
certificate, financial statement or other instrument furnished in connection
with or pursuant to any Loan Document, shall prove to have been false or
misleading in any material respect when so made, deemed made or furnished;

(b) default shall be made in the payment of any principal of any Loan or the
reimbursement with respect to any L/C Disbursement when and as the same shall
become due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise;

(c) default shall be made in the payment of any interest on any Loan or any fee
or L/C Disbursement or any other amount (other than an amount referred to in
clause (b) above) due under any Loan Document, when and as the same shall become
due and payable, and such default shall continue unremedied for a period of five
Business Days;

(d) default shall be made in the due observance or performance by the Borrower
of any covenant, condition or agreement contained in Section 5.01(a) or in
Article VI;

(e) default shall be made in the due observance or performance by the Borrower
of any covenant, condition or agreement contained in any Loan Document (other
than those specified in clauses (b), (c) and (d) above) and such default shall
continue unremedied (i) for a period of 10 Business Days after notice thereof
from the Administrative Agent to the Borrower in the case of Sections 5.04(a),
5.04(b), 5.04(c), 5.05(a), and 5.09 or (ii) for a period of 30 days after notice
from the Administrative Agent to the Borrower in all other cases;

(f) the Borrower or any other Loan Party shall (i) fail to pay any principal or
interest due in respect of any Indebtedness (other than the Loans or any
Reimbursement Obligations) in an aggregate principal amount (or, with respect to
any Hedging Agreement, the Termination Value) in excess of $25,000,000, when and
as the same shall become due and payable by the Borrower or such Loan Party,
after taking into account all applicable notice, grace or cure periods or
(ii) fail to observe or perform any other term, covenant, condition or agreement
contained in any agreement or instrument evidencing or governing any
Indebtedness (other than the Loans or any Reimbursement Obligations) in an
aggregate principal amount (or, with respect to any Hedging Agreement, the
Termination Value) in excess of $25,000,000, or permit any other event to occur,
if the effect of any failure or event referred to in this clause (ii) is to
cause, or to permit the holder or holders of such Indebtedness or a trustee on
its or their behalf to cause, after taking into account all applicable notice,
grace or cure periods, such Indebtedness to become due prior to its stated
maturity or, with respect to a Hedging Agreement, such Hedging Agreement to be
terminated;

 

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(g) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief in
respect of the Borrower or any other Loan Party (other than an Insignificant
Subsidiary), or of a substantial part of the property or assets of the Borrower
or any other Loan Party (other than an Insignificant Subsidiary), under Title 11
of the United States Code, as now constituted or hereafter amended, or any other
Federal, state or foreign bankruptcy, insolvency, receivership or similar law,
(ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any other Loan Party (other
than an Insignificant Subsidiary), or for a substantial part of the property or
assets of the Borrower or any other Loan Party (other than an Insignificant
Subsidiary), or (iii) the winding-up or liquidation of the Borrower or any other
Loan Party (other than an Insignificant Subsidiary); and such proceeding or
petition shall continue undismissed for 90 days or an order or decree approving
or ordering any of the foregoing shall be entered;

(h) the Borrower or any other Loan Party (other than an Insignificant
Subsidiary), shall (i) voluntarily commence any proceeding or file any petition
seeking relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) consent to the institution of, or
fail to contest in a timely and appropriate manner, any proceeding or the filing
of any petition described in clause (g) above, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any other Loan Party (other than an
Insignificant Subsidiary) or for a substantial part of the property or assets of
the Borrower or any other Loan Party (other than an Insignificant Subsidiary),
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors, (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (vii) take any action for the
purpose of effecting any of the foregoing;

(i) one or more judgments for the payment of money in an aggregate amount (net
of any amounts paid or fully covered by independent third party insurance as to
which the relevant insurance company does not dispute coverage) in excess of
$25,000,000 shall be rendered against the Borrower, any other Loan Party or any
combination thereof and the same shall remain undischarged for a period of 90
consecutive days during which execution shall not be effectively stayed, or any
judgment creditor shall levy upon assets or properties of the Borrower or any
other Loan Party to enforce any such judgment and such levy has not been
effectively stayed within 10 days;

(j) a Reportable Event or Reportable Events, or a failure to make a required
installment or other payment (within the meaning of Section 430 of the Code),
shall have occurred with respect to any Plan or Plans that reasonably could be
expected to result in liability of the Borrower to the PBGC or to a Plan in an
aggregate amount exceeding $10,000,000 and, within 30 days after the reporting
of any such Reportable Event to the Administrative Agent or after the receipt by
the Administrative Agent of the statement required pursuant to Section 5.06, the
Administrative Agent shall have notified the Borrower in writing that (i) the
Required Lenders have made a determination that, on the basis of such Reportable
Event or Reportable Events or the failure to make a required payment, there are
reasonable grounds (A) for the termination of such Plan or Plans by the PBGC,
(B) for the appointment by the appropriate United States District Court of a
trustee to administer such Plan or Plans or (C) for the imposition of a lien in
favor of a Plan or the PBGC and (ii) as a result thereof an Event of Default
exists hereunder; or a trustee shall be appointed by a United States District
Court to administer any such Plan or Plans; or the PBGC shall institute
proceedings to terminate any Plan or Plans;

(k) (i) the Borrower or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to
such Multiemployer Plan, (ii) the Borrower or such ERISA Affiliate does not have
reasonable grounds for contesting such Withdrawal Liability or is not in fact
contesting such Withdrawal Liability in a timely and appropriate manner and
(iii) the amount of the Withdrawal Liability specified in such notice, when
aggregated with all other amounts required to be paid to Multiemployer Plans in
connection with Withdrawal Liabilities (determined as of the date or dates of
such notification), exceeds $10,000,000 or requires payments exceeding
$2,000,000 in any year;

 

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(l) the Borrower or any ERISA Affiliate shall have been notified by the sponsor
of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is
being terminated, within the meaning of Title IV of ERISA, if solely as a result
of such reorganization or termination the aggregate annual contributions of the
Borrower and its ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or have been or are being terminated have been or will be
increased over the amounts required to be contributed to such Multiemployer
Plans for their most recently completed plan years by an amount exceeding
$2,500,000; or

(m) there shall have occurred a Change in Control;

then, and in every such event (other than an event with respect to the Borrower
described in clause (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent, at the request of the
Required Lenders, shall, by notice to the Borrower, take any or all of the
following actions, at the same or different times: (i) terminate forthwith the
Commitments, (ii) declare the Loans then outstanding to be forthwith due and
payable in whole or in part, whereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and any unpaid
accrued fees and all other liabilities of the Borrower accrued hereunder and
under any other Loan Document, shall become forthwith due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein or in any
other Loan Document to the contrary notwithstanding and (iii) require cash
collateral as contemplated by Section 2.23(g); and in any event with respect to
the Borrower described in clause (g) or (h) above, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued fees and all other
liabilities of the Borrower accrued hereunder and under any other Loan Document,
shall automatically become due and payable, and the Borrower shall automatically
be required to provide cash collateral in respect of outstanding Letters of
Credit, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by the Borrower, anything contained
herein or in any other Loan Document to the contrary notwithstanding.

ARTICLE VIII

THE AGENT

SECTION 8.01. Appointment; Supplemental Collateral Agents. (a) Each of the
Lenders hereby irrevocably designates and appoints the Administrative Agent
named herein to act on its behalf as the Administrative Agent of such Lender
under this Agreement and the other Loan Documents for the term hereof and each
such Lender irrevocably authorizes the Administrative Agent named herein, as
Administrative Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and such other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement or
such other Loan Documents, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Loan Documents or otherwise exist against the
Administrative Agent. Any reference to the Administrative Agent in this Article
VIII shall be deemed to refer to the Administrative Agent solely in its capacity
as Administrative Agent and not in its capacity as a Lender.

 

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(b) Anything contained herein or in the Collateral Documents to the contrary
notwithstanding, the Administrative Agent may from time to time, when the
Administrative Agent deems it to be necessary, appoint one or more trustees,
co-trustees, collateral co-agents or collateral subagents (each, a “Supplemental
Collateral Agent”) with respect to all or any part of the Collateral. In the
event that the Administrative Agent so appoints any Supplemental Collateral
Agent with respect to any Collateral, (i) such Supplemental Collateral Agent
shall automatically be vested, in addition to the Administrative Agent, with all
rights, powers, privileges, interests and remedies of the Administrative Agent
under the Collateral Documents with respect to such Collateral; (ii) the
provisions of Section 16 of the Security Agreement, this Article VIII and
Section 9.05 hereof that refer to the Administrative Agent shall inure to the
benefit of such Supplemental Collateral Agent, and all references therein and in
the other Loan Documents to the Collateral Agent shall be deemed to be
references to the Administrative Agent and/or such Supplemental Collateral
Agent, as the context may require; and (iii) the term “Administrative Agent,”
when used herein or in any applicable Collateral Document in relation to the
Liens on or security interests in such Collateral granted in favor of the
Administrative Agent, and any rights, powers, privileges, interests and remedies
of the Administrative Agent with respect to such Collateral, shall be deemed to
include such Supplemental Collateral Agent; provided, however, that no such
Supplemental Collateral Agent shall be authorized to take any action with
respect to any such Collateral unless and except to the extent expressly
authorized in writing by the Administrative Agent. Should any instrument in
writing from the Borrower or any other Loan Party be required by any
Supplemental Collateral Agent so appointed by the Administrative Agent to more
fully or certainly vest in and confirming to such Supplemental Collateral Agent
such rights, powers, privileges and duties, the Borrower shall, or shall cause
such Loan Party to, execute, acknowledge and deliver any and all such
instruments promptly upon request by the Administrative Agent. If any
Supplemental Collateral Agent, or successor thereto, shall die, become incapable
of acting, resign or be removed, all the rights, powers, privileges and duties
of such Supplemental Collateral Agent, to the extent permitted by law, shall
automatically vest in and be exercised by the Administrative Agent until the
appointment of a new Supplemental Collateral Agent.

SECTION 8.02. Delegation of Duties. The Administrative Agent may execute any of
its respective duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact (including any Supplemental Collateral Agent) selected by the
Administrative Agent with reasonable care, provided that this Section 8.02 shall
not be construed to relieve such agents or attorneys-in-fact (including any
Supplemental Collateral Agent) from liability.

SECTION 8.03. Exculpatory Provisions. Neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact, subsidiaries
or Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or the
other Loan Documents (except for actions occasioned directly by its or such
Person’s own gross negligence or willful misconduct), or (b) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by the Borrower or any of the Loan Parties or any officer
thereof contained in this Agreement or the other Loan Documents or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or the other Loan Documents or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or the other Loan
Documents or for any failure of the Borrower or any of the Loan Parties to
perform its obligations hereunder or thereunder. The Administrative Agent shall
not be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of the
Borrower or any of the Loan Parties.

 

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SECTION 8.04. Reliance by the Administrative Agent.

(a) The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, email, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other
experts selected by the Administrative Agent. The Administrative Agent shall be
fully justified in failing or refusing to take any action under this Agreement
and the other Loan Documents unless it shall first receive such advice or
concurrence of the Required Lenders (or, when expressly required hereby or by
the relevant other Loan Documents, all the Lenders) as it deems appropriate or
it shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action except for its own gross negligence or
willful misconduct. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Required Lenders (or, when expressly required
hereby, all the Lenders), and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Lenders.

(b) For purposes of determining compliance with the conditions specified in
Section 4.02, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

SECTION 8.05. Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
unless it has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a “notice of default”. In the event that the Administrative Agent
receives such a notice, it shall promptly give notice thereof to the Lenders
(and if the notice comes from a Lender, to the Borrower). The Administrative
Agent shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders (or, when expressly
required hereby, all the Lenders), provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders, except to the extent that
other provisions of this Agreement expressly require that any such action be
taken or not be taken only with the consent and authorization or the request of
the Lenders or Required Lenders, as applicable.

SECTION 8.06. Non-Reliance on the Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its respective officers, directors, employees, agents, attorneys-in-fact,
subsidiaries or Affiliates has made any representations or warranties to it and
that no act by the Administrative Agent hereafter taken, including any review of
the affairs of the Borrower or any Loan Party, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and its
Subsidiaries and made its own decision to make its Loans and issue or
participate in Letters of Credit hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower or any Loan
Party. Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent hereunder or by the other
Loan Documents, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Borrower or any of the Loan Parties which may come into
the possession of the Administrative Agent or any of its respective officers,
directors, employees, agents, attorneys-in-fact, subsidiaries or Affiliates.

 

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SECTION 8.07. Indemnification. The Lenders agree to indemnify the Administrative
Agent in its capacity as such and (to the extent not reimbursed by the Borrower
and without limiting the obligation of the Borrower to do so), ratably according
to the respective amounts of their Pro Rata Percentages from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Loans or any Reimbursement Obligation) be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of this
Agreement or the other Loan Documents, or any documents, reports or other
information provided to the Administrative Agent or any Lender or contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Administrative Agent’s bad faith, gross negligence or
willful misconduct. The agreements in this Section 8.07 shall survive the
payment of the Obligations and the termination of this Agreement.

SECTION 8.08. The Administrative Agent in Its Individual Capacity. The
Administrative Agent and its respective subsidiaries and Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Borrower as though the Administrative Agent were not the Administrative
Agent hereunder. With respect to any Loans made or renewed by it and with
respect to any Letter of Credit issued by it or participated in by it, the
Administrative Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any Lender and may exercise the same as though
it were not the Administrative Agent, and the terms “Lender” and “Lenders” shall
include the Administrative Agent in its individual capacity.

SECTION 8.09. Resignation of the Administrative Agent; Successor Administrative
Agent.

(a) Subject to the appointment and acceptance of a successor as provided below,
the Administrative Agent may resign as the Administrative Agent at any time by
giving notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall appoint from among the Lenders a
successor Administrative Agent for the Lenders, which successor Administrative
Agent shall be consented to by the Borrower at all times other than during the
existence of an Event of Default (which consent of the Borrower shall not be
unreasonably withheld or delayed). If no successor Administrative Agent shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the Administrative Agent’s giving of notice of
resignation, then the Administrative Agent may, on behalf of the Lenders,
appoint a successor Administrative Agent, which successor shall be a bank with
an office in the United States, or an Affiliate of any such bank with an office
in the United States, provided that if the Administrative Agent shall notify the
Borrower and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (i) the Administrative Agent shall be discharged
from its duties and obligations hereunder and under the other Loan Documents,
(ii) all payments, and communications provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the Issuing
Bank directly and (iii) all determinations provided to be made by the
Administrative Agent shall instead be made by the Required Lenders, until such
time as the Required Lenders appoint a successor Administrative Agent as
provided for above. Upon the acceptance of any appointment as an Administrative
Agent hereunder by a successor Administrative Agent and upon the execution and
filing or recording of such financing statements, or amendments thereto, and
such other instruments or notices, as may be necessary or desirable, or as the
Required Lenders may request, in order to continue the perfection of the Liens
granted or purported to be

 

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granted by the Collateral Documents, such successor Administrative Agent shall
thereupon succeed to and become vested with all rights, powers, privileges and
duties of the retiring Administrative Agent and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder without any
other or further act or deed on the part of such retiring Administrative Agent
or any other Lender. After any retiring Administrative Agent’s resignation
hereunder as Administrative Agent, the provisions of this Article VIII and
Section 9.05 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Administrative Agent under this Agreement. If no
successor Administrative Agent has accepted appointment as Administrative Agent
by the date which is 30 days following a retiring Administrative Agent’s notice
of resignation, the retiring Administrative Agent’s resignation shall
nevertheless thereupon become effective and the Required Lenders shall perform
all of the duties of the Administrative Agent hereunder until such time, if any,
as the Required Lenders appoint a successor Administrative Agent as provided for
above.

(b) In the event an Administrative Agent resigns as Administrative Agent
pursuant to Section 8.09(a), such retiring Administrative Agent shall also have
the opportunity to resign as Swingline Lender and/or Issuing Bank concurrently
with such resignation as Administrative Agent. In the event of any such
resignation as Issuing Bank or Swingline Lender, the Borrower shall be entitled
to appoint from among the Lenders a successor Issuing Bank or Swingline Lender
hereunder, provided that (x) the resignation of an Issuing Bank or Swingline
Lender, as the case may be, shall not take effect until the appointment and
acceptance of a successor Issuing Bank or Swingline Lender and (y) any successor
Issuing Bank or Swingline Lender shall be willing to act in such capacity and
shall accept such appointment. If an Issuing Bank resigns, it shall retain all
the rights and obligations of the Issuing Bank hereunder with respect to all
Letters of Credit outstanding as of the effective date of its resignation as
Issuing Bank and all L/C Obligations with respect thereto, including the right
to require the Revolving Credit Lenders to make Revolving Loans or fund risk
participations for unreimbursed amounts of Letters of Credit pursuant to
Section 2.23. No Letter of Credit issued by an Issuing Bank shall be required to
be canceled, replaced with a Letter of Credit issued by any successor Issuing
Bank or otherwise cash collateralized solely on account of an Issuing Bank’s
resignation as Issuing Bank, and for all purposes hereunder, such Letter of
Credit shall remain a Letter of Credit issued hereunder. If a Swingline Lender
resigns as Swingline Lender, it shall retain all the rights of the Swingline
Lender provided for hereunder with respect to Swingline Loans made by it and
outstanding as of the effective date of such resignation, including the right to
require the Lenders to make Revolving Loans or fund risk participations in
outstanding Swingline Loans pursuant to Section 2.02(b).

SECTION 8.10. Other Agents, Arrangers and Managers. None of the Persons
identified on the facing page, in the preamble of this Agreement or on the
signature pages of this Agreement as a “syndication agent,” “documentation
agent,” “book-running manager” or “joint lead arranger” shall have any right,
power, obligation, liability, responsibility or duty under this Agreement in
such capacity. Without limiting the foregoing, none of the Persons so identified
shall in such capacity have or be deemed to have any fiduciary relationship with
any Lender. Each Lender acknowledges that it has not relied, and will not rely,
on any of the Persons so identified in deciding to enter into this Agreement or
in taking or not taking action hereunder.

SECTION 8.11. Mandatory Cost Information. Each Lender shall supply the
Administrative Agent with any information required by the Administrative Agent
in order to calculate the Mandatory Cost in accordance with Schedule 1.01(a).

ARTICLE IX

MISCELLANEOUS

SECTION 9.01. Notices. Except as otherwise provided in this Agreement, all
notices and communications hereunder shall be in writing (for purposes hereof,
the term “writing” shall include information in electronic format such as
electronic mail, telecopy and internet web pages), or by telephone

 

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subsequently confirmed in writing. Any notice shall be effective if delivered by
hand delivery or sent via electronic mail, posting on an internet web page,
telecopy, recognized overnight courier service or certified mail, return receipt
requested, and shall be presumed to be received by a party hereto (i) on the
date of delivery if delivered by hand or sent by electronic mail, posting on an
internet web page, telecopy, (ii) on the next Business Day if sent by recognized
overnight courier service and (iii) on the third Business Day following the date
sent by certified mail, return receipt requested. A telephonic notice to the
Administrative Agent as understood by the Administrative Agent will be deemed to
be the controlling and proper notice in the event of a discrepancy with or
failure to receive a confirming written notice. Notices to any party shall be
sent to it at the following addresses, or any other address as to which all the
other parties are notified in writing:

(a) if to the Borrower or any Guarantor, at 10750 Columbia Pike, Silver Spring,
Maryland 20901, Attention of General Counsel, with a copy to the Chief Financial
Officer of the Borrower (Facsimile No. (301) 592-6314);

(b) if to the Administrative Agent, the Swingline Lender or the Issuing Bank, to
Deutsche Bank AG New York Branch, 200 Crescent Court, Suite 500, Dallas, Texas
75201, Attention: Linda Davis, Telephone No.: (214) 740-7904, Facsimile No.:
(214) 740-7910 with a copy to Deutsche Bank AG New York Branch, 60 Wall Street,
New York, NY 10005, Attention: Amy Sinensky, Telephone 212-250-4063, Fax
212-797-4885, and a copy to agency.transaction@db.com; and

(c) if to a Lender, to it at its address (or facsimile number) set forth in
Schedule 2.01 or in the Assignment and Acceptance or accession agreement
executed and delivered in accordance with Section 2.24 or 2.28(a), as the case
may be, pursuant to which such Lender became a party hereto.

Except as otherwise provided in Section 9.14(c), all notices and other
communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the date of receipt, in
each case delivered, sent or mailed (properly addressed) to such party as
provided in this Section 9.01 or in accordance with the latest unrevoked
direction from such party given in accordance with this Section 9.01.

SECTION 9.02. Survival of Agreement. All covenants, agreements, representations
and warranties made by the Borrower herein and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this
Agreement or any other Loan Document shall be considered to have been relied
upon by the Administrative Agent, the Lenders and the Issuing Bank and shall
survive the making by the Lenders of the Loans and the issuance of Letters of
Credit by the Issuing Bank, regardless of any investigation made by the
Administrative Agent, the Lenders or the Issuing Bank or on their behalf, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement or any other Loan Document is outstanding (other than contingent
indemnification obligations to the extent no claim giving rise thereto has been
asserted) and unpaid or any Letter of Credit is outstanding and so long as the
Revolving Commitments have not been terminated.

SECTION 9.03. Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrower and the Administrative Agent and when
the Administrative Agent shall have received copies hereof which, when taken
together, bear the signatures of each Lender, and thereafter shall be binding
upon and inure to the benefit of the Borrower, the Administrative Agent and each
Lender and their respective successors and assigns, except that the Borrower may
not assign or delegate its rights or obligations hereunder or any interest
herein without the prior consent of all the Lenders.

 

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SECTION 9.04. Successors and Assigns.

(a) Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of the Borrower, the
Administrative Agent, the Issuing Bank or the Lenders that are contained in this
Agreement shall bind and inure to the benefit of their respective successors and
assigns.

(b) Each Lender may assign to one or more Eligible Assignees all or a portion of
its interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided,
however, that (i) except in the case of an assignment to a Lender or a Lender
Affiliate, the Borrower (unless an Event of Default has occurred and is
continuing, in which case the Borrower’s consent to such assignment shall not be
required) and the Administrative Agent and each Issuing Bank must give their
prior written consent to such assignment (which consent shall not be
unreasonably withheld), (ii) except in the case of an assignment to a Lender or
a Lender Affiliate or an assignment of all of a Lender’s Commitment, the amount
of the Commitment of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 and the amount of the Commitment of such Lender remaining after such
assignment shall not be less than $5,000,000 or shall be zero, (iii) the parties
to each such assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and recordation fee of
$3,500 for the account of the Administrative Agent (provided, however, that
(A) no such fee shall be payable in the case of an assignment to a Lender
Affiliate and (B) the Administrative Agent shall have the right to waive such
fee in its sole discretion) and (iv) the assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire. Upon
acceptance and recording pursuant to Section 9.04(e), from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement and (B) the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lenders rights and obligations under this Agreement, such Lender shall cease to
be a party hereto (but shall continue to be entitled to the benefits of Sections
2.17, 2.18, 2.19, 2.20 and 9.05, as well as to any fees accrued for its account
hereunder and not yet paid)). If the consent of the Borrower is required
pursuant to this Section 9.04, and the Borrower does not respond to the
Administrative Agent’s request for consent within five (5) Business Days of the
receipt of such request, the consent shall be deemed given. Notwithstanding the
foregoing, no such assignment will be made by any Lender to any Defaulting
Lender or any of their respective Subsidiaries, or any Person who, upon becoming
a Lender hereunder, would constitute any of the foregoing Persons described in
this sentence.

(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the assignee thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim and that its
Commitment, and the outstanding balances of its Loans, in each case without
giving effect to assignments thereof which have not become effective, are as set
forth in such Assignment and Acceptance, (ii) except as set forth in clause
(i) above, such assigning Lender makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto or the financial condition of the Borrower or any Subsidiary or the
performance or observance by the Borrower or any Subsidiary of any of its
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.04 and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter

 

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into such Assignment and Acceptance; (v) such assignee will independently and
without reliance upon the Administrative Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (vi) such assignee appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by the terms of
this Agreement are required to be performed by it as a Lender.

(d) The Administrative Agent shall maintain at one of its offices a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitment of, and principal
amount 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 in the
absence of manifest error and the Borrower, the Administrative Agent, the
Issuing Bank 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. The Register shall be available for inspection by the Borrower,
the Issuing Bank and any Lender (with respect to such Lender’s information), at
any reasonable time and from time to time upon reasonable prior notice.

(e) Upon its receipt of a duly completed Assignment and Acceptance executed by
an assigning Lender and an assignee together with (i) an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), (ii) if applicable, the processing and
recordation fee referred to in Section 9.04(b) and (iii) if required, the
written consent of the Borrower, the Issuing Bank and the Administrative Agent
to such assignment, the Administrative Agent shall (A) accept such Assignment
and Acceptance, (B) record the information contained therein in the Register and
(C) give prompt notice thereof to the Lenders and the Issuing Bank.

(f) Each Lender may without the consent of or notice to the Borrower, the
Issuing Bank, the Administrative Agent or any other Lender sell participations
to one or more banks or other entities (excluding any natural person, the
Borrower or any Affiliate or Subsidiary of the Borrower) in all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans owing to it) in a minimum gross amount of
$5,000,000 per participating bank or entity; provided, however, 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, (iii) the participating banks or other entities
shall be entitled to the benefit of the cost protection provisions contained in
Sections 2.17, 2.18, 2.19 and 2.20 to the same extent as if they were Lenders
but not in excess of those cost protections to which the Lender from which it
purchased its participation would be entitled to under Sections 2.17, 2.18, 2.19
and 2.20 and (iv) the Borrower, the Administrative Agent, the Issuing Bank and
the other Lenders shall continue to deal solely and directly with such Lender
(and shall not be required to deal with any participating bank or other entity,
notwithstanding any other provision contained herein) in connection with such
Lender’s rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower relating to the
Loans or L/C Disbursements and to approve any amendment, modification or waiver
of any provision of this Agreement (other than amendments, modifications or
waivers decreasing any fees payable hereunder to such Lender, increasing the
Commitment of such Lender or decreasing the amount of principal of or the rate
at which interest is payable on the Loans of such Lender, extending any
scheduled principal payment date or date fixed for the payment of interest on
the Loans of such Lender or releasing any Loan Party from its Guarantee under
the Guarantee Agreement (except as provided in Section 5.09(c) or the Guarantee
Agreement) or limiting any Loan Party’s liability in respect of its Guarantee
Agreement).

 

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(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender by
or on behalf of the Borrower; provided, however, that, prior to any such
disclosure of information designated by the Borrower as confidential, each such
assignee or participant or proposed assignee or participant shall execute an
agreement whereby such assignee or participant shall agree to preserve the
confidentiality of such confidential information. It is understood that
confidential information relating to the Borrower would not ordinarily be
provided in connection with assignments or participations of Competitive Bid
Loans.

(h) Notwithstanding any other provision set forth in this Agreement, any Lender
may at any time create a security interest in all or any portion of its rights
under this Agreement, including in favor of the Federal Reserve Bank; provided,
however, that no such assignment shall release a Lender from any of its
obligations hereunder.

(i) Any Lender (each, a “Designating Lender”) may at any time designate one
Designated Bank to fund Competitive Bid Loans on behalf of such Designating
Lender subject to the terms of this Section 9.04(i), and the provisions in
9.04(b) and (f) shall not apply to such designation. No Lender may designate
more than one (1) Designated Bank. The parties to each such designation shall
execute and deliver to the Administrative Agent for its acceptance a Designation
Agreement. Upon such receipt of an appropriately completed Designation Agreement
executed by a Designating Lender and a designee representing that it is a
Designated Bank, the Administrative Agent will accept such Designation Agreement
and will give prompt notice thereof to the Borrower, whereupon, (i) if requested
by the Designated Bank, the Borrower shall execute and deliver to the
Designating Bank a Designated Bank Note payable to the order of the Designated
Bank, (ii) from and after the effective date specified in the Designation
Agreement, the Designated Bank shall become a party to this Agreement with a
right to make Competitive Bid Loans on behalf of its Designating Lender pursuant
to Section 2.04 after the Borrower has accepted a Competitive Bid Loan (or
portion thereof) of such Designating Lender, and (iii) the Designated Bank shall
not be required to make payments with respect to any obligations in this
Agreement except to the extent of excess cash flow of such Designated Bank which
is not otherwise required to repay obligations of such Designated Bank which are
then due and payable; provided, however, that regardless of such designation and
assumption by the Designated Bank, the Designating Lender shall be and remain
obligated to the Borrower, the Administrative Agent and the other Lenders for
each and every of the obligations of the Designating Lender and its related
Designated Bank with respect to this Agreement, including, without limitation,
any indemnification obligations hereunder and any sums otherwise payable to the
Borrower by the Designated Bank. Each Designating Lender shall serve as the
Administrative Agent of the Designated Bank and shall on behalf of, and to the
exclusion of, the Designated Bank: (i) receive any and all payments made for the
benefit of the Designated Bank and (ii) give and receive all communications and
notices and take all actions hereunder, including, without limitation, votes,
approvals, waivers, consents and amendments under or relating to this Agreement
and the other Loan Documents. Any such notice, communication, vote, approval,
waiver, consent or amendment shall be signed by the Designating Lender as
Administrative Agent for the Designated Bank and shall not be signed by the
Designated Bank on its own behalf but shall be binding on the Designated Bank to
the same extent as if actually signed by the Designated Bank. The Borrower, the
Administrative Agent and Lenders may rely thereon without any requirement that
the Designated Bank sign or acknowledge the same. No Designated Bank may assign
or transfer all or any portion of its interest hereunder or under any other Loan
Document, other than assignments to the Designating Lender which originally
designated such Designated Bank.

(j) In connection with any assignment of rights and obligations of any
Defaulting Lender hereunder, no such assignment will be effective unless and
until, in addition to the other conditions thereto set forth herein, the parties
to the assignment 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

 

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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 Pro Rata
Percentage. Notwithstanding the foregoing, in the event that any assignment of
rights and obligations of any Defaulting Lender hereunder becomes effective
under applicable law without compliance with the provisions of this paragraph,
then the assignee of such interest will be deemed to be a Defaulting Lender for
all purposes of this Agreement until such compliance occurs.

(k) Upon notice to the Borrower from the Administrative Agent or any Lender of
the loss, theft, destruction or mutilation of any Lender’s promissory note, the
Borrower will execute and deliver, in lieu of such original promissory note, a
replacement promissory note, identical in form and substance to, and dated as of
the same date as, the promissory note so lost, stolen or mutilated, subject to
delivery by such Lender to the Borrower of an affidavit of lost note and
indemnity in customary form. Upon the execution and delivery of the replacement
promissory note, all references herein or in any of the other Loan Documents to
the lost, stolen or mutilated promissory note shall be deemed references to the
replacement promissory note.

SECTION 9.05. Expenses; Indemnity.

(a) The Borrower agrees to pay all reasonable and documented out-of-pocket
expenses (i) incurred by each of the Administrative Agent, the Issuing Bank, the
Arrangers and their Affiliates in connection with the preparation of this
Agreement and the other Loan Documents delivered on the Closing Date and the
syndication of the facilities provided for herein (whether or not the
transactions hereby contemplated shall be consummated), (ii) incurred by the
Administrative Agent in connection with any amendments, modifications or waivers
of the provisions hereof or thereof (whether or not the transactions thereby
contemplated shall be consummated), including without limitation, all costs
related to electronic or internet distribution of information hereunder or
(iii) incurred by the Administrative Agent or any Lender in connection with the
enforcement or protection of their rights (as such rights may relate to the
Borrower or any Restricted Subsidiary) in connection with this Agreement and the
other Loan Documents or in connection with the Loans made or Letters of Credit
issued hereunder, in each case including the reasonable and documented
out-of-pocket fees and disbursements of the Administrative Agent, and, in
connection with any “work-out” or any enforcement or protection of the rights of
the Lenders or the Administrative Agent hereunder, any other counsel for the
Administrative Agent and counsel for any Lender; provided, however, that in
connection with any one such action or any separate but substantially similar or
related actions in the same jurisdiction, the Borrower shall not be liable for
the fees and expenses of more than one counsel to the Administrative Agent
(along with one local counsel in each applicable jurisdiction) and one separate
counsel to the Lenders and the Issuing Bank (along with one local counsel in
each applicable jurisdiction), unless there shall exist an actual conflict of
interest among such Persons, and in such case, not more than one additional
counsel to the affected parties (along with one additional local counsel in each
applicable jurisdiction).

(b) The Borrower agrees to indemnify the Administrative Agent, each Lender, each
Arranger, each Book-Running Manager, the Syndication Agent, the Issuing Bank and
their respective directors, officers, employees, agents and Affiliates (each
such Person, an “Indemnitee”) against, and to hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities, obligations, actions or
causes of action brought by a third party, settlement payments and related
expenses, including reasonable and documented out-of-pocket counsel fees and
expenses, incurred, suffered, sustained or required to be paid by or asserted
against any Indemnitee by reason of or resulting from or in connection with any
claim, litigation, investigation or proceeding (regardless of whether any
Indemnitee is a party thereto) in any way related to (i) the execution or
delivery of this Agreement or any other Loan Document or any agreement or
instrument contemplated thereby, the performance by the parties thereto of their
respective obligations thereunder or the consummation of the Transactions or
(ii) the use of the proceeds of the Loans or issuance of Letters of Credit;
provided, however, that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined by a court of competent

 

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jurisdiction by final and nonappealable judgment to have resulted from (1) the
gross negligence or willful misconduct of such Indemnitee or (2) the breach in
bad faith by such Indemnitee of such Indemnitee’s obligations under any Loan
Document, or (y) constitute amounts in respect of Excluded Taxes. Promptly after
receipt by an Indemnitee of notice of any complaint or the commencement of any
action or proceeding with respect to which indemnification is being sought
hereunder, such Person shall notify the Borrower of such complaint or of the
commencement of such action or proceeding, but failure so to notify the Borrower
will relieve the Borrower from any liability which the Borrower may have
hereunder only if and to the extent that such failure results in the forfeiture
by the Borrower of substantial rights and defenses, and shall not in any event
relieve the Borrower from any other obligation or liability that the Borrower
may have to any Indemnitee otherwise than under this Agreement. If the Borrower
so elects or is requested by such Indemnitee, the Borrower shall assume the
defense of such action or proceeding, including the employment of counsel
reasonably satisfactory to the Indemnitee and the payment of the reasonable fees
and disbursements of such counsel. In the event, however, such Indemnitee
reasonably determines in its judgment that having common counsel would present
such counsel with a conflict of interest or if the defendant in, or targets of,
any such action or proceeding include both the Indemnitee and the Borrower, and
such Indemnitee reasonably concludes that there may be legal defenses available
to it or other Indemnitees that are different from or in addition to those
available to the Borrower or if the Borrower fails to assume the defense of the
action or proceeding or to employ counsel reasonably satisfactory to such
Indemnitee, in either case in a timely manner, then the Indemnitee may employ
separate counsel to represent or defend it in any such action or proceeding and
the Borrower shall pay the reasonable fees and disbursements of such counsel. In
any action or proceeding the defense of which the Borrower assumes, the
Indemnitee shall have the right to participate in such litigation and to retain
its own counsel at the Indemnitee’s own expense. The Borrower further agrees
that it shall not, without the prior written consent of the Indemnitee, settle
or compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding in respect of which indemnification
may be sought hereunder (whether or not an Indemnitee is an actual or potential
party to such claim, action, suit or proceeding) unless such settlement,
compromise or consent includes (i) an unconditional release of each Indemnitee
hereunder from all liability arising out of such claim, action, suit or
proceeding or (ii) a covenant not to sue each Indemnitee, or another similar
alternative which is consented to by each Indemnitee party to such claim,
action, suit or proceeding, which covenant not to sue or other approved
alternative has the effect of an unconditional release of each Indemnitee
hereunder from all liability arising out of such claim, action, suit or
proceeding.

(c) The provisions of this Section 9.05 shall remain operative and in full force
and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of any Letter of Credit, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Administrative Agent,
any Arranger, any Lender or any Issuing Bank. All amounts due under this
Section 9.05 shall be payable upon written demand therefor.

SECTION 9.06. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, but
excluding trust accounts) at any time held and other indebtedness at any time
owing by such Lender to or for the credit or the account of the Borrower against
any of and all the Obligations held by such Lender which are then due and owing,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, but the failure to give such notice
shall not affect the validity of such setoff and application. The rights of each
Lender under this Section 9.06 are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have (it being assumed
for purposes of this Section 9.06 that such Lender shall convert any amount so
setoff into the relevant currency on the date of such setoff). Notwithstanding
the foregoing, if any Defaulting Lender exercises any such right of setoff,
(x) all amounts so set off will be paid over immediately to the Administrative
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Section 2.27(b) and, pending such payment, will be segregated by such Defaulting
Lender from its other funds and deemed held in trust for the benefit of the
Administrative Agent, the Issuing Banks, the Swingline Lender and the Lenders
and (y) the Defaulting Lender will 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.

SECTION 9.07. Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OR
RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES ARE
DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (2007
REVISION), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 600 (THE “UNIFORM
CUSTOMS”) AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF
THE STATE OF NEW YORK.

SECTION 9.08. Waivers; Amendment.

(a) No failure or delay of the Administrative Agent or any Lender or any Issuing
Bank in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the Issuing
Bank and the Lenders hereunder and under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies which they would otherwise have.
No waiver of any provision of this Agreement or any other Loan Document or
consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by Section 9.08(b), and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. No notice or demand on the Borrower in any case shall
entitle the Borrower to any other or further notice or demand in similar or
other circumstances.

(b) Neither this Agreement nor any other Loan Document nor any provision hereof
or thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrower and the Required Lenders or, in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by the
Administrative Agent and the Loan Party or Loan Parties that are parties
thereto, in each case with the consent of the Required Lenders; provided,
however, that (subject to Section 2.28 in the case of Permitted Amendments) no
such agreement shall (i) decrease the principal amount of, or extend (other than
as contemplated in Section 2.16) the maturity of or any scheduled principal
payment date or date for the payment of any interest on, any Loan or any date
for reimbursement of an L/C Disbursement, or fees, or waive or excuse any such
payment or any part thereof, or decrease any fees or the rate of interest on any
Loan or L/C Disbursement (other than (A) interest or fees arising in connection
with the occurrence of an Event of Default, (B) the fee described in
Section 9.04(b) or (C) amendments to Section 6.11 or the defined terms related
to Section 6.11 which shall only require the consent of the Required Lenders),
without, in each case, the prior written consent of each Lender affected
thereby, (ii) increase any Commitment without the prior written consent of the
Lender holding such Commitment (including pursuant to Section 2.24, if
applicable), (iii) release all or substantially all of the Collateral in any
transaction or series of related transactions (except as permitted pursuant to
Section 9.19) without the written consent of each Lender, (iv) release the
Borrower from its obligations under the Loan Documents or release all or
substantially all of the value of the Guarantee Agreement (except as permitted
by Section 5.09(c) or as provided in the Guarantee Agreement), without, in each
case, the written consent of each Lender, or (v) amend or modify the provisions
of Section 2.11(c), the provisions of this Section 9.08(b), the definition of
the “Required Lenders” or the provisions of Section 9.03, without, in each case,
the prior written consent of each affected Lender; provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, any Issuing Bank or the Swingline Lender hereunder without
the prior written consent of the Administrative Agent or such Issuing Bank or
Swingline Lender. Notwithstanding anything to the contrary herein, no Defaulting
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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
Commitment of any Defaulting Lender may not be increased or extended without the
consent of such 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
consent of such Defaulting Lender.

(c) Notwithstanding the foregoing, no amendment, waiver or consent shall, unless
in writing and signed by the Designating Lender on behalf of its Designated Bank
affected thereby, (i) subject such Designated Bank to any additional
obligations, (ii) reduce the principal of, interest on, or other amounts due
with respect to, the Designated Bank Note made payable to such Designated Bank,
or (iii) postpone any date fixed for any payment of principal of, or interest
on, or other amounts due with respect to, the Designated Bank Note made payable
to the Designated Bank.

SECTION 9.09. Entire Agreement. This Agreement and the other Loan Documents
constitute the entire contract between the parties relative to the subject
matter hereof. Any previous agreement among the parties with respect to the
subject matter hereof is superseded by this Agreement and the other Loan
Documents. Nothing in this Agreement or in the other Loan Documents, expressed
or implied, is intended to confer upon any party other than the parties hereto
and thereto any rights, remedies, obligations or liabilities under or by reason
of this Agreement or the other Loan Documents.

SECTION 9.10. Waiver of Jury Trial; Consequential and Punitive Damages. Each
party hereto hereby waives, to the fullest extent permitted by applicable law,
(a) any right it may have to a trial by jury in respect of any litigation
directly or indirectly arising out of, under or in connection with this
Agreement or any of the other Loan Documents and (b) any claims for punitive
damages (to the extent such claims arise from the use of proceeds of the Loans
for the purpose of acquisitions). Each party hereto (i) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce the foregoing waiver and (ii) acknowledges that it and the other
parties hereto have been induced to enter into this Agreement and the other Loan
Documents, as applicable, by, among other things, the mutual waivers and
certifications in this Section 9.10. Further, each Loan Party hereby agrees not
to assert any claim against any Indemnitee on any theory of liability, for
special, indirect, consequential or punitive damages arising out of or otherwise
relating to the Facilities, the actual or proposed use of the proceeds of the
Loans or the Letters of Credit, the Loan Documents or any of the transactions
contemplated by the Loan Documents.

SECTION 9.11. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

SECTION 9.12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract, and shall become effective as
provided in Section 9.03. Delivery of an executed counterpart of a signature
page to this Agreement by facsimile or by e-mail (with the executed counterpart
of the signature page attached to the e-mail in PDF format or similar format)
shall be effective as delivery of an original executed counterpart of this
Agreement.

SECTION 9.13. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

 

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SECTION 9.14. Jurisdiction; Consent to Service of Process; Judgment Currency.

(a) Each of the Borrower, the Lenders, the Administrative Agent and the Issuing
Bank hereby irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction of any New York State court or Federal
court of the United States of America sitting in the County and City of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State
court or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent, any Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or the other Loan Documents against the Borrower or its properties in the courts
of any jurisdiction.

(b) Each of the Borrower, the Lenders, the Administrative Agent and the Issuing
Bank hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have
to the laying of venue of any suit, action or proceeding arising out of or
relating to this agreement or the other Loan Documents in any New York State or
Federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

(c) The Borrower and each other party hereto consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

(d) If for the purpose of obtaining judgment in any court it is necessary to
convert a sum due hereunder in one currency into another currency, the parties
hereto agree, to the fullest extent that they may effectively do so under
applicable law, that the rate of exchange used shall be the spot rate at which
in accordance with normal banking procedures the first currency could be
purchased in New York City with such other currency by the Person obtaining such
judgment on the Business Day preceding that on which final judgment is given.

(e) The parties agree, to the fullest extent that they may effectively do so
under applicable law, that the obligations of the Borrower to make payments in
any currency of the principal of and interest on the Loans of the Borrower and
any other amounts due from the Borrower hereunder to the Administrative Agent as
provided in Sections 2.05(a) and 2.23(d) (i) shall not be discharged or
satisfied by any tender, or any recovery pursuant to any judgment, in any
currency other than the relevant currency, except to the extent that such tender
or recovery shall result in the actual receipt by the Administrative Agent at
its relevant office on behalf of the Lenders of the full amount of the relevant
currency expressed to be payable in respect of the principal of and interest on
the Loans and all other amounts due hereunder (it being assumed for purposes of
this clause (i) that the Administrative Agent will convert any amount tendered
or recovered into the relevant currency on the date of such tender or recovery),
(ii) shall be enforceable as an alternative or additional cause of action for
the purpose of recovering in the relevant currency the amount, if any, by which
such actual receipt shall fall short of the full amount of the relevant currency
so expressed to be payable and (iii) shall not be affected by an unrelated
judgment being obtained for any other sum due under this Agreement.

 

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SECTION 9.15. Confidentiality. Unless otherwise agreed to in writing by the
Borrower, each of the Issuing Bank, the Administrative Agent and the Lenders
hereby agrees to keep all Proprietary Information (as defined below)
confidential and not to disclose or reveal any Proprietary Information to any
Person other than the Administrative Agent’s, such Lender’s and their respective
Affiliates’ directors, officers, employees, Affiliates, attorneys, accountants
and agents and to actual or potential assignees and participants (subject to
Section 9.04(g) in the case of disclosure to actual or potential assignees and
participants) and actual or potential counterparties (or Advisors) to any swap
or derivatives transaction, and then, in each case, only to such Persons who
need to know such Proprietary Information in connection with the transactions
contemplated hereby, if they are informed of the confidential nature of such
Proprietary Information and directed to observe the confidentiality obligations
of this paragraph as if they were parties hereto; provided, however, that the
Administrative Agent, the Issuing Bank or any Lender may disclose Proprietary
Information (a) as required by law, rule, regulation or judicial process (in
which case, such disclosing party shall, to the extent permitted by law, inform
the Borrower promptly in advance thereof), (b) as requested or required by any
state or Federal or foreign authority or examiner regulating banks or banking,
(c) subject to appropriate confidentiality protections for the benefit of the
Borrower, in any legal proceedings between the Administrative Agent, the Issuing
Bank or such Lender and the Borrower arising out of this Agreement or (d) in
connection with the exercise of any remedies hereunder or under any other Loan
Document or any action or proceeding relating to this Agreement or any other
Loan Document or the enforcement of rights hereunder or thereunder. For purposes
of this Agreement, the term “Proprietary Information” shall include all
information about the Borrower or any of their Affiliates which has been
furnished by or on behalf of the Borrower or any of its Affiliates, whether
furnished before or after the date hereof, and regardless of the manner in which
it is furnished; provided, however, that Proprietary Information does not
include information which (x) is or becomes generally available to the public
other than as a result of a disclosure by the Administrative Agent, the Issuing
Bank or any Lender not permitted by this Agreement, (y) was obtained or
otherwise became available to the Administrative Agent, the Issuing Bank or any
Lender on a nonconfidential basis prior to its disclosure to the Administrative
Agent, the Issuing Bank or such Lender by the Borrower or any of its Affiliates
or (z) becomes available to the Administrative Agent, the Issuing Bank or any
Lender on a nonconfidential basis from a Person other than the Borrower or its
Affiliates who, to the best knowledge of the Administrative Agent, the Issuing
Bank or such Lender, as the case may be, is not otherwise bound by a
confidentiality agreement with the Borrower or any of its Affiliates, or is not
otherwise prohibited from transmitting the information to the Administrative
Agent, the Issuing Bank or such Lender. Notwithstanding any other provision in
this Agreement or any other Loan Document to the contrary, (x) the parties
hereby agree that each party (and each employee, representative, or other agent
of each party) may each disclose to any and all persons, without limitation of
any kind, the United States tax treatment and United States tax structure of the
transaction and all materials of any kind (including opinions or other tax
analyses) that are provided to each party relating to such United States tax
treatment and United States tax structure and (y) the Administrative Agent may
disclose the identity of any Defaulting Lender to the other Lenders and the
Borrower if requested by any Lender or the Borrower.

SECTION 9.16. Rights and Remedies Cumulative; Non-Waiver; etc. The enumeration
of the rights and remedies of the Administrative Agent and the Lenders set forth
in this Agreement is not intended to be exhaustive and the exercise by the
Administrative Agent and the Lenders of any right or remedy shall not preclude
the exercise of any other rights or remedies, all of which shall be cumulative,
and shall be in addition to any other right or remedy given hereunder or under
the other Loan Documents or that may now or hereafter exist at law or in equity
or by suit or otherwise. No delay or failure to take action on the part of the
Administrative Agent or any Lender in exercising any right, power or privilege
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude any other or further exercise
thereof or the exercise of any other right, power or privilege or shall be
construed to be a waiver of any Event of Default. No course of dealing between
the Borrower, the Administrative Agent and the Lenders or their respective
agents or employees shall be effective to change, modify or discharge any
provision of this Agreement or any of the other Loan Documents or to constitute
a waiver of any Event of Default.

SECTION 9.17. USA Patriot Act. The Administrative Agent and each Lender hereby
notifies the Borrower that pursuant to the requirements of the PATRIOT Act, it
is required to obtain, verify and record information that identifies the
Borrower and each Guarantor, which information includes the name and address of
the Borrower and each Guarantor and other information that will allow the
Administrative Agent and each such Lender to identify the Borrower and each
Guarantor in accordance with the PATRIOT Act.

 

88

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

SECTION 9.18. No Fiduciary Duties. Each Loan Party agrees that nothing in the
Loan Documents or otherwise will be deemed to create an advisory, fiduciary or
agency relationship or fiduciary or other implied duty between the
Administrative Agent, any Lender or any Affiliate thereof, on the one hand, and
such Loan Party, its stockholders or its Affiliates, on the other. The Loan
Parties agree that the transactions contemplated by the Loan Documents
(including the exercise of rights and remedies hereunder and thereunder) are
arm’s-length commercial transactions. Each Loan Party agrees that it has
consulted its own legal and financial advisors to the extent it deemed
appropriate and that it is responsible for making its own independent judgment
with respect to such transactions and the process leading thereto. Each of the
Loan Parties acknowledges that the Administrative Agent, the Lenders and their
respective Affiliates may have interests in, or may be providing or may in the
future provide financial or other services to other parties with interests which
a Loan Party may regard as conflicting with its interests and may possess
information (whether or not material to the Loan Parties) other than as a result
of (x) the Administrative Agent acting as administrative agent hereunder or
(y) the Lenders acting as lenders hereunder, that the Administrative Agent or
any such Lender may not be entitled to share with any Loan Party. Without
prejudice to the foregoing, each of the Loan Parties agrees that the
Administrative Agent, the Lenders and their respective Affiliates may (a) deal
(whether for its own or its customers’ account) in, or advise on, securities of
any Person, and (b) accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from and generally engage
in any kind of business with other Persons in each case, as if the
Administrative Agent were not the Administrative Agent and as if the Lenders
were not Lenders, and without any duty to account therefor to the Loan Parties.
Each of the Loan Parties hereby irrevocably waives, in favor of the
Administrative Agent, the Lenders and the Arrangers, any conflict of interest
which may arise by virtue of the Administrative Agent, the Arrangers and/or the
Lenders acting in various capacities under the Loan Documents or for other
customers of the Administrative Agent, any Arranger or any Lender as described
in this Section 9.18.

SECTION 9.19. Release of Collateral. The Liens on the Collateral granted under
the Collateral Documents will be released (a) in whole, upon the Payment in Full
of the Obligations, (b) as to any property constituting Collateral that is sold,
leased, transferred or otherwise disposed of in accordance with the terms of the
Loan Documents, (c) with respect to the Pledged Equity of, and any Collateral
that is owned by, a Guarantor that is released from its Guarantee pursuant to
Section 5.09(c), (d) with respect to the Agreement Collateral, on the Agreement
Collateral Release Date, and (e) with the consent of the Lenders pursuant to
Section 9.08(b), and, in each case, all rights to the applicable Collateral
shall revert to the applicable grantor. Notwithstanding any provision to the
contrary herein, as and when requested by any Loan Party, the Administrative
Agent shall, at the Borrower’s cost, execute and deliver UCC financing statement
amendments or releases that remove the released Collateral from any previously
filed financing statements that included such released Collateral in the
description of the assets covered thereby. If requested in writing by a Loan
Party, the Administrative Agent shall, at the Borrower’s cost, execute and
deliver such other documents, instruments or statements and to take such other
action as a Loan Party may reasonably request to evidence or confirm that any
Collateral released in accordance with this Section 9.19 has been released from
the Liens of each of the Collateral Documents.

SECTION 9.20. No Bankruptcy Proceedings. Each of the Borrower, the
Administrative Agent, and each Lender hereby agrees that it will not institute
against any Designated Bank or join any other Person in instituting against any
Designated Bank any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding under any federal or state bankruptcy or similar law,
until the later to occur of (i) one year and one day after the payment in full
of the latest maturing commercial paper note issued by such Designated Bank and
(ii) the Maturity Date.

[Signature Pages Follow]

 

89

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

IN WITNESS WHEREOF, the Borrower, the Administrative Agent, the Issuing Bank and
the Lenders have caused this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.

 

BORROWER:

CHOICE HOTELS INTERNATIONAL, INC.

By:

  /s/ David L. White  

Name: David L. White

 

Title: Senior Vice President, Chief Financial

Officer and Treasurer

 

 

S-1   

Choice Hotels – Credit Agreement

July 2012

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

ADMINISTRATIVE AGENT, LENDER, SWINGLINE LENDER AND ISSUING BANK: DEUTSCHE BANK
AG NEW YORK BRANCH, as Administrative Agent, Lender, Swingline Lender and
Issuing Bank

By:

  /s/ George R. Reynolds  

Name: George R. Reynolds

Title: Director

By:

  /s/ Kevin Chichester  

Name: Kevin Chichester

Title: Director

 

S-2   

Choice Hotels – Credit Agreement

July 2012

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

LENDER: WELLS FARGO BANK, NATIONAL ASSOCIATION, as Lender

By:

  /s/ Barbara K. Angel  

Name: Barbara K. Angel

Title: Senior Vice President

 

S-3   

Choice Hotels – Credit Agreement

July 2012

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

LENDER: BANK OF AMERICA, N.A., as Lender

By:

  /s/ Steven P. Renwick  

Name: Steven P. Renwick

Title: Senior Vice President

 

S-4   

Choice Hotels – Credit Agreement

July 2012

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

LENDER: JPMORGAN CHASE BANK, N.A., as Lender

By:

  /s/ Alicia T. Schreibstein  

Name: Alicia T. Schreibstein

Title: Vice President

 

S-5   

Choice Hotels – Credit Agreement

July 2012

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

LENDER: SUNTRUST BANK, as Lender

By:

  /s/ Jeffrey M. Henry  

Name: Jeffrey M. Henry

Title: Senior Vice President

 

S-6   

Choice Hotels – Credit Agreement

July 2012

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

LENDER:

PNC BANK, NATIONAL ASSOCIATION,

as Lender

By:

  /s/ Bremmer Kneib  

Name: Bremmer Kneib

Title: Vice President

 

S-7   

Choice Hotels – Credit Agreement

July 2012

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

LENDER:

CITIZENS BANK OF PENNSYLVANIA,

as Lender

By:

  /s/ Leslie D. Broderick  

Name: Leslie D. Broderick

Title: Senior Vice President

 

S-8   

Choice Hotels – Credit Agreement

July 2012

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

LENDER: CAPITAL ONE, N.A., as Lender

By:

  /s/ Van Buren Knick II  

Name: Van Buren Knick II

Title: Senior Vice President

 

S-9   

Choice Hotels – Credit Agreement

July 2012

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

LENDER: GOLDMAN SACHS BANK USA, as Lender

By:

  /s/ Mark Walton  

Name: Mark Walton

Title: Authorized Signatory

 

S-10   

Choice Hotels – Credit Agreement

July 2012

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

Schedule 1.01(a)

To

Credit Agreement

Mandatory Cost Formulae

 

1. The Mandatory Cost is an addition to the interest rate to compensate Lenders
for the cost of compliance with (a) the requirements of the Bank of England
and/or the United Kingdom’s Financial Services Authority (the “Financial
Services Authority”) (or, in either case, any other authority which replaces all
or any of its functions) or (b) the requirements of the European Central Bank.

 

2. On the first day of each Interest Period (or as soon as possible thereafter),
the Administrative Agent shall calculate, as a percentage rate, a rate (the
“Additional Cost Rate”) for each Lender in accordance with the paragraphs set
out below. The Mandatory Cost will be calculated by the Administrative Agent as
a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion
to the percentage participation of each Lender in the relevant Loan) and will be
expressed as a percentage rate per annum.

 

3. The Additional Cost Rate for any Lender lending from a Lending Office in a
Participating Member State will be the percentage notified by that Lender to the
Administrative Agent. This percentage will be certified by that Lender in its
notice to the Administrative Agent to be its reasonable determination of the
cost (expressed as a percentage of that Lender’s participation in all Loans made
from that Lending Office) of complying with the minimum reserve requirements of
the European Central Bank in respect of loans made from that Lending Office.

 

4. The Additional Cost Rate for any Lender lending from a Lending Office in the
United Kingdom will be calculated by the Administrative Agent as follows:

 

  (a) in relation to a Loan denominated in Pounds Sterling:

 

LOGO [g385358g46f87.jpg]

 

  (b) in relation to a Loan denominated in any currency other than Pounds
Sterling:

 

LOGO [g385358g58c76.jpg]

Where:

 

  A is the percentage of Eligible Liabilities (assuming these to be in excess of
any stated minimum) which that Lender is from time to time required to maintain
as an interest free cash ratio deposit with the Bank of England to comply with
cash ratio requirements.

 

  B is the percentage rate of interest (excluding the Margin and Mandatory Cost
and, if the same would otherwise apply, the additional rate of interest
specified in Section 6.1(d) (Default Rate) payable for the relevant Interest
Period on the relevant Loan.

 

  C is the percentage (if any) of Eligible Liabilities which that Lender is
required from time to time to maintain as interest bearing Special Deposits with
the Bank of England.

 

 

Sch. 1.01(a) - 1

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

  D is the percentage rate per annum payable by the Bank of England to the
Administrative Agent on interest bearing Special Deposits.

 

  E is designed to compensate Lenders for amounts payable under the Fees Rules
and is calculated by the Administrative Agent as being the average of the most
recent rates of charge supplied by the Reference Banks to the Administrative
Agent pursuant to paragraph 7 below and expressed in pounds per £1,000,000.

 

5. For the purposes of this Schedule 1.01(a):

 

  (a) “Eligible Liabilities” has the meaning given to it from time to time under
or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the
Bank of England;

 

  (b) “Fees Rules” means the rules on periodic fees contained in the FSA
Supervision Manual or such other law or regulation as may be in force from time
to time in respect of the payment of fees for the acceptance of deposits;

 

  (c) “Fee Tariffs” means the fee tariffs specified in the Fees Rules under the
activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee
required pursuant to the Fees Rules but taking into account any applicable
discount rate);

 

  (d) “Reference Banks” means the principal London Office of Wells Fargo Bank,
National Association or such other bank as may be appointed by the
Administrative Agent after consultation with the Borrower;

 

  (e) “Special Deposits” has the meanings given to it from time to time under or
pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank
of England; and

 

  (f) “Tariff Base” has the meaning given to it in, and will be calculated in
accordance with, the Fees Rules.

 

6. In application of the above formulae, A, B, C and D will be included in the
formulae as percentages (i.e., 5 percent will be included in the formula as 5
and not as 0.05). A negative result obtained by subtracting D from B shall be
taken as zero. The resulting figures shall be rounded to four decimal places.

 

7. If requested by the Administrative Agent, each Reference Bank shall, as soon
as practicable after publication by the Financial Services Authority, supply to
the Administrative Agent the rate of charge payable by that Reference Bank to
the Financial Services Authority pursuant to the Fees Rules in respect of the
relevant financial year of the Financial Services Authority (calculated for this
purpose by that Reference Bank as being the average of the Fee Tariffs
applicable to that Reference Bank for that financial year) and expressed in
pounds per £1,000,000 of the Tariff Base of that Reference Bank.

 

8. Each Lender shall supply any information required by the Administrative Agent
for the purpose of calculating its Additional Cost Rate. In particular, but
without limitation, each Lender shall supply the following information on or
prior to the date on which it becomes a Lender:

 

  (a) the jurisdiction of its Lending Office; and

 

  (b) any other information that the Administrative Agent may reasonably require
for such purpose.

 

 

Sch. 1.01(a) - 2

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

Each Lender shall promptly notify the Administrative Agent of any change to the
information provided by it pursuant to this paragraph.

 

9. The percentages of each Lender for the purpose of A and C above and the rates
of charge of each Reference Bank for the purpose of E above shall be determined
by the Administrative Agent based upon the information supplied to it pursuant
to paragraphs 7 and 8 above and on the assumption that, unless a Lender notifies
the Administrative Agent to the contrary, each Lender’s obligations in relation
to cash ratio deposits and Special Deposits are the same as those of a typical
bank from its jurisdiction of incorporation with a Lending Office in the same
jurisdiction as its Lending Office.

 

10. The Administrative Agent shall have no liability to any Person if such
determination results in an Additional Cost Rate which over or under compensates
any Lender and shall be entitled to assume that the information provided by any
Lender or Reference Bank pursuant to paragraphs 3, 7 and 8 above is true and
correct in all respects.

 

11. The Administrative Agent shall distribute the additional amounts received as
a result of the Mandatory Cost to the Lenders on the basis of the Additional
Cost Rate for each Lender based on the information provided by each Lender and
each Reference Bank pursuant to paragraphs 3, 7 and 8 above.

 

12. Any determination by the Administrative Agent pursuant to this Schedule
1.01(a) in relation to a formula, the Mandatory Cost, an Additional Cost Rate or
any amount payable to a Lender shall, in the absence of manifest error, be
conclusive and binding on all parties.

 

13. The Administrative Agent may from time to time, after consultation with the
Borrower and the Lenders, determine and notify to all parties of any amendments
which are required to be made to this Schedule 1.01(a) in order to comply with
any change in law, regulation or any requirements from time to time imposed by
the Bank of England, the Financial Services Authority or the European Central
Bank (or, in any case, any other authority which replaces all or any of its
functions) and any such determination shall, in the absence of manifest error,
be conclusive and binding on all parties.

 

Sch. 1.01(a) - 3

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

Schedule 2.01

Commitments

 

Lender

   Revolving
Commitment      Revolving Pro Rata
Percentage     Term Loan
Commitment      Term Pro Rata
Percentage  

Deutsche Bank AG New York Branch

8022 Gate Parkway, Suite 200

Jacksonville, Florida 32256

Attn: Deal Administrator

   $ 50,000,000.00         25.0 %    $ 7,500,000.00         5.0 % 

Wells Fargo Bank, NA

1525 W. T. Harris Boulevard

Charlotte, North Carolina 28262

Attn: Jay Wright

   $ 45,000,000.00         22.5 %    $ 12,500,000.00         8.3 % 

Bank of America, N.A.

901 Main Street, 64th Floor

Dallas, Texas, 75202

Attn: Ravi Burnwal

   $ 30,000,000.00         15.0 %    $ 30,000,000.00         20.0 % 

JPMorgan Chase Bank, N.A.

10 South Dearborn

Chicago, Illinois 60603

Attn: Non-Agented Servicing Group

   $ 30,000,000.00         15.0 %    $ 15,000,000.00         10.0 % 

SunTrust Bank

211 Perimiter Center Parkway, Suite 500

Atlanta, Georgia 30346

Attn: Credit Services Specialist

   $ 15,000,000.00         7.5 %    $ 25,000,000.00         16.7 % 

PNC Bank, National Association

249 Fifth Avenue

One PNC Plaza

Pittsburgh, Pennsylvania 15222

   $ 10,000,000.00         5.0 %    $ 20,000,000.00         13.3 % 

 

Sch. 2.01 - 1

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

Lender

   Revolving
Commitment      Revolving Pro Rata
Percentage     Term Loan
Commitment      Term Pro Rata
Percentage  

Citizens Bank of Pennsylvania

20 Cabot Road

Medford, Massachusetts 02155

Attn: Dakota L. Hodgton

   $ 10,000,000.00         5.0 %    $ 20,000,000.00         13.3 % 

Capital One, N.A.

6200 Chevy Chase Drive

Laurel, Maryland 20707

Attn: Christy Wharton

   $ 10,000,000.00         5.0 %    $ 15,000,000.00         10.0 % 

Goldman Sachs Bank USA

200 West Street

New York, New York 10282

   $ 0.00         0.0 %    $ 5,000,000.00         3.3 % 

 

Sch. 2.01 - 2

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

Schedule 3.08

Subsidiaries

 

Entity

Name

  

Country (State) of

Incorporation

   Equity
Interest     Restricted/
Unrestricted  

Choi Choice Hotels International, Inc.

   U.S. (DE)      —        Borrower   

CHH VM 2010 LLC

   U.S. (DE)      100 %      Unrestricted   

Choice Capital Corp.

   U.S. (DE)      100 %      Restricted   

Capital Horizon Fund, LLC

   U.S. (DE)      100 %      Unrestricted   

Choice Hotels (Ireland) Limited

   Ireland      100 %      Unrestricted   

Choice Hotels Argentina, S.A.

   Argentina      100 %      Unrestricted   

Choice Hotels International Pty. Ltd.

   Australia      100 %      Unrestricted   

Choice Hotels International Services Corp.

   U.S. (DE)      100 %      Restricted   

Choice Hotels Funding, LLC

   U.S. (DE)      100 %      Unrestricted   

Brentwood Boulevard Hotel Development, LLC

   U.S. (DE)      100 %      Restricted   

Dry Pocket Road Hotel Development, LLC

   U.S. (DE)      100 %      Restricted   

Park Lane Drive Hotel Development, LLC

   U.S. (DE)      100 %      Restricted   

CSES, LLC

   U.S. (DE)      100 %      Restricted   

CS WO LLC

   U.S. (DE)      100 %      Unrestricted   

CS Rockland, LLC

   U.S. (DE)      100 %      Unrestricted   

ORL CS Member LLC

   U.S. (DE)      100 %      Unrestricted   

Ortel Partners, LLC

   U.S. (DE)      90 %      Unrestricted   

CS at Ninth LLC

   U.S. (DE)      100 %      Unrestricted   

MG CS Member LLC

   U.S. (DE)      100 %      Unrestricted   

CHH Plano LLC

   U.S. (DE)      100 %      Unrestricted   

CS White Plains, LLC

   U.S. (DE)      100 %      Unrestricted   

CS AT Phoenix, LLC

   U.S. (DE)      100 %      Unrestricted   

CS NYC Member, LLC

   U.S. (DE)      100 %      Unrestricted   

Choice Hotels Systems, Inc.

   Canada      100 %      Unrestricted   

Choice International Hospitality Services, Inc.

   U.S. (DE)      100 %      Unrestricted   

Choice Hotels Netherlands Antilles N.V.

   Curacao      100 %      Unrestricted   

Choice Hotels Licensing B.V.

   Netherlands      100 %      Unrestricted   

Choice Hotels France, S.A.S.

   France      100 %      Unrestricted   

Choice Hotels Franchise, GmbH

   Germany      100 %      Unrestricted   

Choice Hospitality (India) Private Limited

   India      100 %      Unrestricted   

Choice Hotels Australasia Pty. Ltd.

   Australia      100 %      Unrestricted   

 

Sch. 2.01 - 1

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

Choice Hotels International Asia Pacific Pty. Ltd.

   Australia     100 %    Unrestricted

Choice Hotels Australia Pty. Ltd.

   Australia     100 %    Unrestricted

Choice Hotels International Licensing, ULC

   Canada     100 %    Unrestricted

Choice Hotels de Mexico S. de R.L. de C.V.

   Mexico     99 %    Unrestricted

Quality Hotels Limited

   United Kingdom     100 %    Unrestricted

Clarion Hotel Pty. Ltd.

   Australia     100 %    Unrestricted

Comfort Hotels Pty. Ltd.

   Australia     100 %    Unrestricted

Comfort Inn Pty. Ltd.

   Australia     100 %    Unrestricted

Choice Hotels Pty. Ltd.

   Australia     100 %    Unrestricted

Quality Hotels (Ireland) Limited

   Ireland     100 %    Unrestricted

Quality Hotels Europe, Inc.

   U.S. (DE)     100 %    Unrestricted

Quality Hotels Pty. Ltd.

   Australia     100 %    Unrestricted

Quality Inn Pty. Ltd.

   Australia     100 %    Unrestricted

Quality Inns International, Inc.

   U.S. (DE)     100 %    Unrestricted

Sleep Inn Pty. Ltd.

   Australia     100 %    Unrestricted

Suburban Franchise Holding Company, Inc.

   U.S. (GA)     100 %    Restricted

Suburban Franchise Systems, Inc.

   U.S. (GA)     100 %    Restricted

 

Sch. 3.08 - 2

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

Schedule 6.02

Existing Liens

None.

 

Sch. 6.02 - 1

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

EXHIBIT A-1

to

Senior Secured Credit Agreement

dated as of July 25, 2012

by and among

Choice Hotels International, Inc.,

as Borrower,

the Lenders party thereto

and

Deutsche Bank AG New York Branch,

as Administrative Agent

FORM OF NOTICE OF BORROWING

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

NOTICE OF BORROWING

Dated as of:                            

Deutsche Bank AG New York Branch

  as Administrative Agent

60 Wall Street

New York, New York 10005

Attention: Amy Sinensky

Telephone: 212-250-4063

Fax: 212-797-4885

agency.transaction@db.com

Ladies and Gentlemen:

This irrevocable Notice of Borrowing is delivered to you pursuant to
Section 2.03(a) of the Senior Secured Credit Agreement dated as of July 25, 2012
(as amended, supplemented, restated or otherwise modified from time to time, the
“Credit Agreement”), by and among Choice Hotels International, Inc., a Delaware
corporation (the “Borrower”), the Lenders and Deutsche Bank AG New York Branch,
as Administrative Agent.

1. The Borrower hereby requests that the [Revolving Credit Lenders][Term Loan
Lenders][Swingline Lender] make a [Revolving Loan][Term Loan][Swingline Loan]
denominated in [dollars][Alternative Currency] to the Borrower in the aggregate
principal amount of $                    .1

2. The Borrower hereby requests that the Loan requested herein be made on the
following Business Day:                         .2

3. The Borrower hereby requests that the Loan bear interest at the following
interest rate, plus the Applicable Percentage, as set forth below:

 

Component of Loan

 

Interest Rate3

 

Interest Period4

 

Termination Date for

Interest Period

(if applicable)

                                   

4. The principal amount of all Loans and L/C Obligations outstanding as of the
date hereof (including the requested Loan) does not exceed the maximum amount
permitted to be outstanding pursuant to the terms of the Credit Agreement.

 

1 

Complete with a Permitted Currency and an amount in accordance with
Section 2.03(a). All Swingline Loans must be denominated in dollars.

2 

Complete with a Business Day in accordance with Section 2.03(a) of the Credit
Agreement for Revolving Loans or Swingline Loans

3 

Indicate Alternate Base Rate or Adjusted LIBO Rate for Loans denominated in
dollars, or LIBO Rate for Loans denominated in an Alternative Currency. All
Swingline Loans must bear interest at the Alternate Base Rate.

4 

Include for Adjusted LIBO Rate or LIBO Rate loans only. May be one, two, three
or six months.

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

5. All of the conditions applicable to the Loan requested herein as set forth in
the Credit Agreement have been satisfied as of the date hereof and will remain
satisfied to the date of such Loan.

6. Capitalized terms used herein and not defined herein shall have the meanings
assigned thereto in the Credit Agreement.

[Signature Page Follows]

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

IN WITNESS WHEREOF, the undersigned has executed this Notice of Borrowing as of
the              day of                     ,             .

 

CHOICE HOTELS INTERNATIONAL, INC. By:     Name:     Title:    

[Notice of Borrowing – Choice Hotels]

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

EXHIBIT A-2

to

Senior Secured Credit Agreement

dated as of July 25, 2012

by and among

Choice Hotels International, Inc.,

as Borrower,

the Lenders party thereto

and

Deutsche Bank AG New York Branch,

as Administrative Agent

FORM OF NOTICE OF ACCOUNT DESIGNATION

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

NOTICE OF ACCOUNT DESIGNATION

Dated as of:                     

Deutsche Bank AG New York Branch

  as Administrative Agent

60 Wall Street

New York, New York 10005

Attention: Amy Sinensky

Telephone: 212-250-4063

Fax: 212-797-4885

agency.transaction@db.com

Ladies and Gentlemen:

This Notice of Account Designation is delivered to you under Section 2.03(b) of
the Senior Secured Credit Agreement dated as of July 25, 2012 (as amended,
supplemented, restated or otherwise modified from time to time, the “Credit
Agreement”), by and among Choice Hotels International, Inc., a Delaware
corporation (the “Borrower”), the Lenders party thereto and Deutsche Bank AG New
York Branch, as Administrative Agent.

1. The Administrative Agent is hereby authorized to disburse all Loan proceeds
to the Borrower into the following account(s):

 

 

ABA Routing Number:                 

Account Number:                     

2. This authorization shall remain in effect until revoked or until a subsequent
Notice of Account Designation is provided to the Administrative Agent.

3. Capitalized terms used herein and not defined herein shall have the meanings
assigned thereto in the Credit Agreement.

[Signature Page Follows]

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

IN WITNESS WHEREOF, the undersigned has executed this Notice of Account
Designation as of the              day of                         ,
            .

 

CHOICE HOTELS INTERNATIONAL, INC. By:     Name:    

Title:

   

[Notice of Account Designation – Choice Hotels]

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

EXHIBIT A-3

to

Senior Secured Credit Agreement

dated as of July 25, 2012

by and among

Choice Hotels International, Inc.,

as Borrower,

the Lenders party thereto

and

Deutsche Bank AG New York Branch,

as Administrative Agent

FORM OF NOTICE OF PREPAYMENT

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

NOTICE OF PREPAYMENT

Dated as of:                             

Deutsche Bank AG New York Branch

  as Administrative Agent

60 Wall Street

New York, New York 10005

Attention: Amy Sinensky

Telephone: 212-250-4063

Fax: 212-797-4885

agency.transaction@db.com

Ladies and Gentlemen:

This irrevocable Notice of Prepayment is delivered to you under Section 2.05(d)
of the Senior Secured Credit Agreement dated as of July 25, 2012 (as amended,
supplemented, restated or otherwise modified from time to time, the “Credit
Agreement”), by and among Choice Hotels International, Inc., a Delaware
corporation (the “Borrower”), the Lenders party thereto, and Deutsche Bank AG
New York Branch, as Administrative Agent.

1. The Borrower hereby provides notice to the Administrative Agent that it shall
repay the following [ABR Loans, ][Eurocurrency Loans, ][Eurodollar
Loans,][Competitive Bid Loans] and/or [Swingline Loans]:
                        .1

2. The Loan to be prepaid is a:2

 

  ¨ Swingline Loan (            )

 

  ¨ Revolving Loan (            )

 

  ¨ Term Loan (            )

 

  ¨ Competitive Bid Loan (            )

3. The Borrower shall repay the above-referenced Loans on the following Business
Day:                     .3

4. Capitalized terms used herein and not defined herein shall have the meanings
assigned thereto in the Credit Agreement.

[Signature Page Follows]

 

1 

Complete with an amount in accordance with Section 2.05(d) of the Credit
Agreement.

2 

Check each applicable box and indicate the amount of the prepayment allocable to
each.

3 

Complete with a Business Day that provides at least four (4) Business Days’
irrevocable notice to the Administrative Agent with respect to Eurocurrency
Loans, at least three (3) Business Days’ irrevocable notice to the
Administrative Agent with respect to Eurodollar Loans and Competitive Bid Loans
and notice received no later than 2:00 P.M. Eastern Time on the proposed date of
repayment with respect to ABR Loans and Swingline Loans.

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

IN WITNESS WHEREOF, the undersigned has executed this Notice of Prepayment as of
the              day of                     ,             .

 

CHOICE HOTELS INTERNATIONAL, INC. By:     Name:     Title:    

[Notice of Prepayment - Choice Hotels]

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EXHIBIT A-4

to

Senior Secured Credit Agreement

dated as of July 25, 2012

by and among

Choice Hotels International, Inc.,

as Borrower,

the Lenders party thereto

and

Deutsche Bank AG New York Branch,

as Administrative Agent

FORM OF NOTICE OF CONVERSION/CONTINUATION

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

NOTICE OF CONVERSION/CONTINUATION

Dated as of:                     

Deutsche Bank AG New York Branch

  as Administrative Agent

60 Wall Street

New York, New York 10005

Attention: Amy Sinensky

Telephone: 212-250-4063

Fax: 212-797-4885

agency.transaction@db.com

Ladies and Gentlemen:

This irrevocable Notice of Conversion/Continuation (the “Notice”) is delivered
to you under Section 2.10 of the Senior Secured Credit Agreement dated as of
July 25, 2012 (as amended, supplemented, restated or otherwise modified from
time to time, the “Credit Agreement”), by and among Choice Hotels International,
Inc, a Delaware corporation (the “Borrower”), the Lenders party thereto, and
Deutsche Bank AG New York Branch, as Administrative Agent.

1. The Loan to which this Notice relates is a Revolving Loan.

2. This Notice is submitted for the purpose of: (Check one and complete
applicable information in accordance with the Credit Agreement.)

¨ Converting all or a portion of an ABR Loan into a Eurodollar Loan (denominated
in dollars),

 

  (a) The aggregate outstanding principal balance of such Loan is
$                    .

 

  (b) The principal amount of such Loan to be converted is
$                    .

 

  (c) The requested effective date of the conversion of such Loan is
                    .

 

  (d) The requested Interest Period applicable to the converted Loan
is                    .

¨ Converting all or a portion of a Eurodollar Loan (denominated in dollars) into
an ABR Loan

 

  (a) The aggregate outstanding principal balance of such Loan is
$                    .

 

  (b) The last day of the current Interest Period for such Loan is
                    .

 

  (c) The principal amount of such Loan to be converted is
$                    .

 

  (d) The requested effective date of the conversion of such Loan is
                    .

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

¨ Continuing all or a portion of a Eurodollar Loan as a Eurodollar Loan

 

  (a) The aggregate outstanding principal balance of such Loan is
$                    .

 

  (b) The last day of the current Interest Period for such Loan is
                    .

 

  (c) The principal amount of such Loan to be continued is
$                    .

 

  (d) The requested effective date of the continuation of such Loan is
                    .

 

  (e) The requested Interest Period applicable to the continued Loan is
                    .

¨ Continuing all or a portion of a Eurocurrency Loan as a Eurocurrency Loan (in
the same Alternative Currency)

 

  (a) Such Loan is denominated in                     .

 

  (b) The aggregate outstanding principal balance of such Loan is
                    .

 

  (c) The last day of the current Interest Period for such Loan is
                    .

 

  (d) The principal amount of such Loan to be continued is                     .

 

  (e) The requested effective date of the continuation of such Loan is
                    .

 

  (f) The requested Interest Period applicable to the continued Loan is
                    .

3. The principal amount of all Loans and L/C Obligations outstanding as of the
date hereof does not exceed the maximum amount permitted to be outstanding
pursuant to the terms of the Credit Agreement.

4. All of the conditions applicable to the conversion or continuation of the
Loan requested herein as set forth in the Credit Agreement have been satisfied
or waived as of the date hereof and will remain satisfied or waived to the date
of such Loan.

5. Capitalized terms used herein and not defined herein shall have the meanings
assigned thereto in the Credit Agreement.

[Signature Page Follows]

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IN WITNESS WHEREOF, the undersigned has executed this Notice of
Conversion/Continuation as of the          day of                     ,
        .

 

CHOICE HOTELS INTERNATIONAL, INC. By:                             
                                                                    
Name:                                                                       
                     Title:                            
                                                                 

Continuation – Choice Hotels

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

EXHIBIT A-5

to

Senior Secured Credit Agreement

dated as of July 25, 2012

by and among

Choice Hotels International, Inc.,

as Borrower,

the Lenders party thereto

and

Deutsche Bank AG New York Branch,

as Administrative Agent

FORM OF COMPETITIVE BID REQUEST

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

COMPETITIVE BID REQUEST

Dated as of: ______

Deutsche Bank AG New York Branch

    as Administrative Agent

60 Wall Street

New York, New York 10005

Attention: Amy Sinensky

Telephone: 212-250-4063

Fax: 212-797-4885

agency.transaction@db.com

Ladies and Gentlemen:

This Competitive Bid Request is delivered to you under Section 2.04(a) of the
Senior Secured Credit Agreement dated as of July 25, 2012 (as amended,
supplemented, restated or otherwise modified from time to time, the “Credit
Agreement”), by and among Choice Hotels International, Inc. (the “Borrower”),
the Lenders party thereto, and Deutsche Bank AG New York Branch, as
Administrative Agent.

1. The Borrower hereby requests a Competitive Bid Loan under the Credit
Agreement, and in connection therewith sets forth below the terms on which such
Competitive Bid Loan is requested to be made:

 

(a)    Date of Competitive Bid Loan      

(b)    Principal Amount of Competitive Bid Loan

    

(c)    Competitive Bid Rate(s)1

    

(d)    Competitive Bid Interest Period(s) and the last day thereof

    

2. The principal amount of all Loans and L/C Obligations outstanding as of the
date hereof (including the requested Competitive Bid Loan) does not exceed the
maximum amount permitted to be outstanding pursuant to the terms of the Credit
Agreement.

3. All of the conditions applicable to the Competitive Bid Loan requested herein
as set forth in the Credit Agreement have been satisfied or waived as of the
date hereof and will remain satisfied to the date of such Competitive Bid Loan.

4. Capitalized terms used herein and not defined herein have the meanings
assigned thereto in the Credit Agreement.

[Signature Page Follows]

 

1 

Specify whether the Competitive Bid Loan is to be a Eurodollar Competitive Bid
Loan or a Fixed Rate Loan.

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

IN WITNESS WHEREOF, the undersigned has executed this Competitive Bid Request as
of the          day of                     ,             .

 

CHOICE HOTELS INTERNATIONAL, INC. By:     Name:     Title:    

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

EXHIBIT A-6

to

Senior Secured Credit Agreement

dated as of July 25, 2012

by and among

Choice Hotels International, Inc.,

as Borrower,

the Lenders party thereto

and

Deutsche Bank AG New York Branch,

as Administrative Agent

FORM OF INVITATION TO BID

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

INVITATION TO BID

Dated as of: _________

[Complete address block]

[with contact details of ]

[each Lender, as appropriate]

Ladies and Gentlemen:

Reference is made to the Senior Secured Credit Agreement dated as of July 25,
2012 (as amended, supplemented, restated or otherwise modified from time to
time, the “Credit Agreement”), by and among Choice Hotels International, Inc.
(the “Borrower”), the Lenders party thereto, and Deutsche Bank AG New York
Branch, as Administrative Agent. Capitalized terms used herein and not defined
herein have the meanings assigned thereto in the Credit Agreement.

1. The Borrower made a Competitive Bid Request on                     ,
            , pursuant to Section 2.04(a) of the Credit Agreement, and in
connection therewith you are invited to submit a Competitive Bid by
[Date]/[Time]. Your Competitive Bid must comply with Section 2.04 of the Credit
Agreement and the terms set forth below on which such Competitive Bid Loan is
requested to be made.

 

(a)    Date of Competitive Bid Loan

    

(b)    Principal amount of Competitive Bid Loan

    

(c)    Competitive Bid Rate(s)

    

(d)    Competitive Bid Interest Period(s) and the last day thereof

    

[Signature Page Follows]

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

Very truly yours,

DEUTSCHE BANK TRUST COMPANY AMERICAS, as

Administrative Agent

By:     Name:     Title:     By:     Name:     Title:    

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

EXHIBIT A-7

to

Senior Secured Credit Agreement

dated as of July 25, 2012

by and among

Choice Hotels International, Inc.,

as Borrower,

the Lenders party thereto

and

Deutsche Bank AG New York Branch,

as Administrative Agent

FORM OF COMPETITIVE BID

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

COMPETITIVE BID

Dated as of:                        

Deutsche Bank AG New York Branch

    as Administrative Agent

60 Wall Street

New York, New York 10005

Attention: Amy Sinensky

Telephone: 212-250-4063

Fax: 212-797-4885

agency.transaction@db.com

Ladies and Gentlemen:

The undersigned, [Name of Lender] refers to the Senior Secured Credit Agreement
dated as of July 25, 2012 (as amended, supplemented, restated or otherwise
modified from time to time, the “Credit Agreement”), by and among Choice Hotels
International, Inc. (the “Borrower”), the Lenders party thereto, and Deutsche
Bank AG New York Branch, as Administrative Agent. Capitalized terms not defined
herein shall have the meanings assigned thereto in the Credit Agreement.

1. The undersigned hereby irrevocably makes a Competitive Bid pursuant to
Section 2.04(b) of the Credit Agreement, in response to the Competitive Bid
Request made by the Borrower on             ,             , and in connection
therewith sets forth below the terms on which such Competitive Bid is made:

 

(a)    Date of Competitive Bid Loan

       

(b)    Principal Amount of Competitive Bid Loan

       

(c)    Competitive Bid Rate(s)

       

(d)    Competitive Bid Interest Period(s) and the last day thereof     

       

2. The undersigned hereby confirms that it is prepared, subject to the
conditions set forth in the Credit Agreement, to extend credit to the Borrower
upon acceptance by the Borrower of this bid in accordance with Section 2.04(c)
of the Credit Agreement.

[Signature Page Follows]

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

Very truly yours, [NAME OF LENDER] By:      Name:     Title:    

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

EXHIBIT A-8

to

Senior Secured Credit Agreement

dated as of July 25, 2012

by and among

Choice Hotels International, Inc.,

as Borrower,

the Lenders party thereto

and

Deutsche Bank AG New York Branch,

as Administrative Agent

FORM OF COMPETITIVE BID ACCEPT/REJECT LETTER

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

COMPETITIVE BID ACCEPT/REJECT LETTER

Dated as of:                     

Deutsche Bank AG New York Branch

    as Administrative Agent

60 Wall Street

New York, New York 10005

Attention: Amy Sinensky

Telephone: 212-250-4063

Fax: 212-797-4885

agency.transaction@db.com

Ladies and Gentlemen:

This Competitive Bid Accept/Reject Letter is delivered to you under
Section 2.04(c) of the Senior Secured Credit Agreement dated as of July 25, 2012
(as amended, supplemented, restated or otherwise modified from time to time, the
“Credit Agreement”), by and among Choice Hotels International, Inc. (the
“Borrower”), the Lenders party thereto and Wells Fargo Bank, National
Association, as Administrative Agent.

1. The Borrower has received a summary of bids in connection with our
Competitive Bid Request dated                     ,             , and in
accordance with Section 2.04(c) of the Credit Agreement, the Borrower hereby
accepts the following:

 

(a)    Date of Competitive Bid Loan

  

 

(b)    Principal Amount of Competitive Bid Loan

  

 

(c)    Competitive Bid Rate(s)

  

 

(d)    Competitive Bid Interest Period(s)

  

 

(e)    Lender

  

 

2.      The Borrower hereby rejects the following bids:

  

(a)    Date of Competitive Bid Loan

  

 

(b)    Principal Amount of Competitive Bid Loan

  

 

(c)    Competitive Bid Rate(s)

  

 

(d)    Competitive Bid Interest Period(s)

  

 

(e)    Lender

  

 

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

IN WITNESS WHEREOF, the undersigned has executed this Competitive Bid
Accept/Reject Letter as of the          day of                     ,
            .

 

Very truly yours, CHOICE HOTELS INTERNATIONAL, INC. By:     Name:  

 

Title:  

 

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

EXHIBIT B

to

Senior Secured Credit Agreement

dated as of July 25, 2012

by and among

Choice Hotels International, Inc.,

as Borrower,

the Lenders party thereto

and

Deutsche Bank AG New York Branch,

as Administrative Agent

FORM OF ADMINISTRATIVE QUESTIONNAIRE

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

Please type or print clearly all requested information and fax or email to:
Anita Cheung at (212) 797-4940 or anita.cheung@db.com.

LOGO [g385358g32f02.jpg]

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

EXHIBIT C

to

Senior Secured Credit Agreement

dated as of July 25, 2012

by and among

Choice Hotels International, Inc.,

as Borrower,

the Lenders party thereto

and

Deutsche Bank AG New York Branch,

as Administrative Agent

FORM OF ASSIGNMENT AND ACCEPTANCE

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

ASSIGNMENT AND ACCEPTANCE

Reference is made to the Senior Secured Credit Agreement dated as of July 25,
2012, by and among Choice Hotels International, Inc., a Delaware corporation
(the “Borrower”), the Lenders party thereto and Deutsche Bank AG New York
Branch, as Administrative Agent (as amended, supplemented, restated or otherwise
modified from time to time, the “Credit Agreement”). Capitalized terms not
defined herein shall have the meaning assigned thereto in the Credit Agreement.

1. The Assignor hereby sells and assigns, without recourse, to the Assignee, and
the Assignee hereby purchases and assumes, without recourse, from the Assignor,
effective as of the Effective Date set forth on the reverse hereof, the
interests set forth on the reverse hereof (the “Assigned Interest”) in the
Assignor’s rights and obligations under the Credit Agreement, including, without
limitation, the interests set forth on the reverse hereof in the Commitment of
the Assignor on the Effective Date and the Competitive Bid Loans owing to the
Assignor and the Letter of Credit participations acquired by Assignor which are
outstanding on the Effective Date. Each of the Assignor and the Assignee hereby
makes and agrees to be bound by all the representations, warranties and
agreements set forth in Section 9.04(c) of the Credit Agreement, a copy of which
is has been received by each such party. From and after the Effective Date
(i) the Assignee shall be a party to and be bound by the provisions of the
Credit Agreement and, to the extent of the interests assigned by this Assignment
and Acceptance, have the rights and obligations of a Lender thereunder and under
the Loan Documents and (ii) the Assignor shall, to the extent of the interest
assigned by this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.

2. This Assignment and Acceptance is being delivered to the Administrative Agent
together with (i) if the Assignee is organized under the laws of a jurisdiction
outside the United States, the forms specified in Section 2.20(e) of the Credit
Agreement, duly completed and executed by such Assignee, (ii) if the Assignee is
not already a Lender under the Credit Agreement, an Administrative Questionnaire
in the form of Exhibit B to the Credit Agreement and (iii) a processing and
recordation fee of $3,500 (unless such fee has otherwise been waived by the
Administrative Agent).

3. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York without reference to its
conflicts of laws principles or provisions.

 

Date of Assignment:

   

 

Legal Name of Assignor:

   

 

Legal Name of Assignee:    

 

Assignee’s Address for Notices:

   

 

           

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

Effective Date of Assignment

        

(may not be fewer than 5 Business

        

Days after the Date of Assignment):

            

 

Facility

 

Principal

Amount

Assigned

 

Percentage Assigned of

Facility and Commitment

Thereunder (as set forth,

to at least 8 decimals, as

a percentage of the

Facility and the aggregate

Commitments of all Lenders

thereunder)

ABR Loans:

     

 

 

 

Eurodollar Loans:

     

 

 

 

Eurocurrency Loans:

     

 

 

 

Eurodollar Competitive Bid Loans

     

 

 

 

Fixed Rate Competitive Bid Loans

     

 

 

 

Letter of Credit Participations:

     

 

 

 

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

The terms set forth above

are hereby agreed to:

                                     , as Assignor By:     Name:     Title:    

 

                                     , as Assignee By:     Name:     Title:    

 

Accepted:

 

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Administrative Agent and an Issuing Bank

By:     Name:     Title:    

 

[[Include each other Issuing Bank, if any],

as an Issuing Bank

  By:         Name:         Title:       ]

 

[CHOICE HOTELS INTERNATIONAL, INC.   By:         Name:         Title:       ]1

 

 

1 

Include to the extent required under Section 9.04(b).

[Assignment and Acceptance — Choice Hotels]

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

EXHIBIT D

to

Senior Secured Credit Agreement

dated as of July 25, 2012

by and among

Choice Hotels International, Inc.,

as Borrower,

the Lenders party thereto

and

Deutsche Bank AG New York Branch,

as Administrative Agent

FORM OF GUARANTEE AGREEMENT FOR RESTRICTED SUBSIDIARIES

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

GUARANTEE AGREEMENT (as amended, restated, supplemented or otherwise modified
from time to time, this “Guaranty”), dated as of July 25, 2012, is made by
certain Restricted Subsidiaries of CHOICE HOTELS INTERNATIONAL, INC., a Delaware
corporation (such Restricted Subsidiaries, collectively, the “Guarantors”, each,
a “Guarantor”), in favor of DEUTSCHE BANK AG NEW YORK BRANCH, as administrative
agent (in such capacity, the “Administrative Agent”) for the ratable benefit of
itself and the other Secured Parties from time to time parties to the Senior
Secured Credit Agreement, dated of even date herewith (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
by and among the Borrower, the Lenders, and the Administrative Agent.

STATEMENT OF PURPOSE

Pursuant to the terms of the Credit Agreement, the Secured Parties have agreed
to make Loans and to issue Letters of Credit to the Borrower upon the terms and
subject to the conditions set forth therein.

The Borrower and the Guarantors, though separate legal entities, comprise one
integrated financial enterprise, and all Loans made and Letters of Credit issued
to the Borrower will inure, directly or indirectly, to the benefit of each of
the Guarantors.

It is a condition precedent to the obligation of the Secured Parties to make
their respective Loans and issue their respective Letters of Credit to the
Borrower under the Credit Agreement that the Guarantors shall have executed and
delivered this Guaranty to the Administrative Agent, for the ratable benefit of
itself and the other Secured Parties.

NOW, THEREFORE, in consideration of the premises, in order to induce the Secured
Parties to make Loans and issue Letters of Credit under the Credit Agreement
from time to time, and to induce the holders of the Hedging Obligations to enter
into Hedging Agreements from time to time, and to induce the holders of the Cash
Management Obligations to enter into Cash Management Agreements from time to
time, and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, each Guarantor hereby agrees with the
Administrative Agent for the ratable benefit of the Secured Parties as follows:

ARTICLE I

DEFINED TERMS

SECTION 1.1. Definitions. The following terms when used in this Guaranty shall
have the meanings assigned to them below:

“Additional Guarantor” means each Restricted Subsidiary of the Borrower which
hereafter becomes a Guarantor pursuant to Section 4.16 hereof and Section 5.09
of the Credit Agreement.

“Applicable Insolvency Laws” means all Applicable Laws governing bankruptcy,
reorganization, arrangement, adjustment of debts, relief of debtors,
dissolution, insolvency, fraudulent transfers or conveyances or other similar
laws (including, without limitation, 11 U.S.C. Sections 544, 547, 548 and 550
and other “avoidance” provisions of Title 11 of the United States Code, as
amended or supplemented).

“Guaranteed Obligations” has the meaning set forth in Section 2.1.

“Guaranty Agreement Supplement” means an instrument in the form of Exhibit A
hereto.

“Paid in Full” means, with respect to any Guaranteed Obligations, (a) the
payment in full in cash of all such Guaranteed Obligations (other than
(i) contingent indemnification obligations to the extent no claim giving rise
thereto has been asserted and (ii) Hedging Obligations and Cash Management
Obligations that, at the time of determination, are allowed by the Person to
whom such Guaranteed Obligations are owing to

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

remain outstanding or are not required to be repaid or cash collateralized
pursuant to the provisions of any document governing the applicable Hedging
Obligations or Cash Management Obligations), (b) the termination or expiration
of all of the Commitments and (c) in connection with the termination or
expiration of the Revolving Commitments, either (i) the cancellation and return
to each Issuing Bank of all Letters of Credit issued by such Issuing Bank or
(ii) the cash collateralization (or the delivery of a back-to-back letter of
credit reasonably acceptable to such Issuing Bank in form and content and from
an issuer reasonably acceptable to such Issuing Bank) of all Letters of Credit
issued by any Issuing Bank (in an amount equal to 105% of the undrawn amount of
such Letters of Credit) in a manner reasonably acceptable to such Issuing Bank.

SECTION 1.2. Other Definitional Provisions. Capitalized terms used and not
otherwise defined in this Guaranty including the preambles and recitals hereof
shall have the meanings ascribed to them in the Credit Agreement. In the event
of a conflict between capitalized terms defined herein and in the Credit
Agreement, the Credit Agreement shall control. The words “hereof,” “herein”,
“hereto” and “hereunder” and words of similar import when used in this Guaranty
shall refer to this Guaranty as a whole and not to any particular provision of
this Guaranty, and Section references are to this Guaranty unless otherwise
specified. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

ARTICLE II

GUARANTY

SECTION 2.1. Guaranty. Each Guarantor hereby, jointly and severally with the
other Guarantors, unconditionally guarantees to the Administrative Agent for the
ratable benefit of itself and the other Secured Parties, and their respective
permitted successors, endorsees, transferees and assigns, the prompt payment and
performance of all Obligations of the Borrower, whether primary or secondary
(whether by way of endorsement or otherwise), whether now existing or hereafter
arising, whether or not from time to time reduced or extinguished (except by
payment thereof) or hereafter increased or incurred, whether enforceable or
unenforceable as against the Borrower, whether or not discharged, stayed or
otherwise affected by any Applicable Insolvency Law or proceeding thereunder,
whether created directly with the Administrative Agent or any other Secured
Party or acquired by the Administrative Agent or any other Secured Party through
assignment or endorsement or otherwise, whether matured or unmatured, whether
joint or several, as and when the same become due and payable (whether at
maturity or earlier, by reason of acceleration, mandatory repayment or
otherwise), in accordance with the terms of any such instruments evidencing any
such obligations, including all renewals, extensions or modifications thereof
(all Obligations of the Borrower, including all of the foregoing, being
hereafter collectively referred to as the “Guaranteed Obligations”).

SECTION 2.2. Bankruptcy Limitations on Guarantors. Notwithstanding anything to
the contrary contained in Section 2.1, it is the intention of each Guarantor and
the Secured Parties that, in any proceeding involving the bankruptcy,
reorganization, arrangement, adjustment of debts, relief of debtors, dissolution
or insolvency or any similar proceeding with respect to any Guarantor or its
assets, the amount of such Guarantor’s obligations with respect to the
Guaranteed Obligations (or any other obligations of such Guarantor to the
Administrative Agent and the other Secured Parties) shall be equal to, but not
in excess of, the maximum amount thereof not subject to avoidance or recovery by
operation of Applicable Insolvency Laws after giving effect to Section 2.3. To
that end, but only in the event and to the extent that after giving effect to
Section 2.3 such Guarantor’s obligations with respect to the Guaranteed
Obligations (or any other obligations of such Guarantor to the Administrative
Agent and the other Secured Parties) or any payment made pursuant to such
Guaranteed Obligations (or any other obligations of such Guarantor to the
Administrative Agent and the other Secured Parties) would, but for the operation
of the first sentence of this Section 2.2, be subject to avoidance or recovery
in any such proceeding under Applicable Insolvency Laws after giving effect to
Section 2.3, the amount of such Guarantor’s obligations with respect to the
Guaranteed Obligations (or any other obligations of such Guarantor to the
Administrative Agent and the other Secured Parties) shall be limited to the
largest amount which, after giving effect thereto, would not, under Applicable
Insolvency Laws, render such

 

2

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

Guarantor’s obligations with respect to the Guaranteed Obligations (or any other
obligations of such Guarantor to the Administrative Agent and the other Secured
Parties) unenforceable or avoidable or otherwise subject to recovery under
Applicable Insolvency Laws. To the extent any payment actually made pursuant to
the Guaranteed Obligations exceeds the limitation of the first sentence of this
Section 2.2 and is otherwise subject to avoidance and recovery in any such
proceeding under Applicable Insolvency Laws, the amount subject to avoidance
shall in all events be limited to the amount by which such actual payment
exceeds such limitation and the Guaranteed Obligations as limited by the first
sentence of this Section 2.2 shall in all events remain in full force and effect
and be fully enforceable against such Guarantor. The first sentence of this
Section 2.2 is intended solely to preserve the rights of the Administrative
Agent hereunder against such Guarantor in such proceeding to the maximum extent
permitted by Applicable Insolvency Laws and neither such Guarantor, the
Borrower, any other Guarantor nor any other Person shall have any right or claim
under such sentence that would not otherwise be available under Applicable
Insolvency Laws in such proceeding.

SECTION 2.3. Agreements for Contribution

(a) To the extent any Guarantor is required, by reason of its obligations
hereunder, to pay to any Secured Party an amount greater than the amount of
value (as determined in accordance with Applicable Insolvency Laws) actually
made available to or for the benefit of such Guarantor on account of the Credit
Agreement, this Guaranty or any other Loan Document, such Guarantor shall have
an enforceable right of contribution against the remaining Guarantors, and the
remaining Guarantors shall be jointly and severally liable, for repayment of the
full amount of such excess payment. Subject only to the subordination provided
in Subsection 2.3(d), such Guarantor further shall be subrogated to any and all
rights of the Secured Parties against the Borrower and the remaining Guarantors
to the extent of such excess payment.

(b) To the extent that any Guarantor would, but for the operation of this
Section 2.3 and by reason of its obligations hereunder or its obligations to
other Guarantors under this Section 2.3, be rendered insolvent for any purpose
under Applicable Insolvency Laws, each of the Guarantors hereby agrees to
indemnify such Guarantor and commits to make a contribution to such Guarantor’s
capital in an amount at least equal to the amount necessary to prevent such
Guarantor from having been rendered insolvent by reason of the incurrence of any
such obligations.

(c) To the extent that any Guarantor would, but for the operation of this
Section 2.3 be rendered insolvent under any Applicable Insolvency Law by reason
of its incurring of obligations to any other Guarantor under the foregoing
Subsections 2.3(a) and (b), such Guarantor shall, in turn, have rights of
contribution and indemnity, to the full extent provided in the foregoing
Subsections 2.3(a) and (b), against the remaining Guarantors, such that all
obligations of all of the Guarantors hereunder and under this Section 2.3 shall
be allocated in a manner such that no Guarantor shall be rendered insolvent for
any purpose under Applicable Insolvency Law by reason of its incurrence of such
obligations.

(d) Notwithstanding any payment or payments by any of the Guarantors hereunder,
or any set-off or application of funds of any of the Guarantors by the
Administrative Agent or any other Secured Party, or the receipt of any amounts
by the Administrative Agent or any other Secured Party with respect to any of
the Guaranteed Obligations, none of the Guarantors shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any other Secured
Party against the Borrower or the other Guarantors or against any collateral
security held by the Administrative Agent or any other Secured Party for the
payment of the Guaranteed Obligations nor shall any of the Guarantors seek any
reimbursement from the Borrower or any of the other Guarantors in respect of
payments made by such Guarantor in connection with the Guaranteed Obligations,
until all amounts owing to the Administrative Agent and the other Secured
Parties on account of the Guaranteed Obligations are Paid in Full. If any amount
shall be paid to any Guarantor on account of such subrogation rights at any time
when all of the Guaranteed Obligations shall not have been Paid in Full, such
amount shall be held by such Guarantor in trust for the Administrative Agent,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such Guarantor, be turned over to the Administrative Agent in the exact form
received by such Guarantor (duly endorsed by such Guarantor to the
Administrative Agent, if required) to be applied against the Guaranteed
Obligations, whether matured or unmatured, in such order as set forth in the
Credit Agreement.

 

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SECTION 2.4. Nature of Guaranty.

(a) Each Guarantor agrees that this Guaranty is a continuing, unconditional
guaranty of payment and performance and not of collection, and that its
obligations under this Guaranty shall be primary, absolute and unconditional,
irrespective of, and unaffected by:

(i) the genuineness, validity, regularity, enforceability or any future
amendment of, or change in, the Credit Agreement, any other Loan Document, any
Hedging Agreement or any other agreement, document or instrument to which the
Borrower or any Subsidiary thereof is or may become a party;

(ii) the absence of any action to enforce this Guaranty, the Credit Agreement or
any other Loan Document, any Hedging Agreement or the waiver or consent by the
Administrative Agent or any other Secured Party with respect to any of the
provisions of this Guaranty, the Credit Agreement or any other Loan Document or
Hedging Agreement;

(iii) the existence, value or condition of, or failure to perfect its Lien
against, any security for or other guaranty of the Guaranteed Obligations or any
action, or the absence of any action, by the Administrative Agent or any other
Secured Party in respect of such security or guaranty (including, without
limitation, the release of any such security or guaranty);

(iv) any structural change in, restructuring of or other similar organizational
change of the Borrower or any Subsidiary thereof;

(v) any manner of application of Collateral or any other collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any Collateral or any other collateral for all or any of
the Guaranteed Obligations or any other Obligations of any Loan Party under the
Loan Documents or any other assets of any Loan Party or any of its Subsidiaries;

(vi) any failure of any Secured Party to disclose to any Loan Party any
information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party now or
hereafter known to such Secured Party;

(vii) the failure of any other Person (other than, with respect to this
Guaranty, the Administrative Agent) to execute or deliver this Guaranty, any
Guaranty Agreement Supplement (as hereinafter defined) or any other guaranty or
agreement or the release or reduction of liability of any Guarantor or other
guarantor or surety with respect to the Guaranteed Obligations (other than any
release or reduction described in Section 4.15); or

(viii) any other action or circumstances which might otherwise constitute a
legal or equitable discharge or defense of a surety or guarantor;

it being agreed by each Guarantor that, subject to the first sentence of
Section 2.2 and to Section 4.15, its obligations under this Guaranty shall not
be discharged until the final indefeasible payment and performance, in full, of
the Guaranteed Obligations (other than contingent indemnification obligations to
the extent no claim giving rise thereto has been asserted) and the termination
of the Commitments.

(b) Each Guarantor represents, warrants and agrees that the Guaranteed
Obligations and its obligations under this Guaranty are not and shall not be
subject to any counterclaims or offsets or defenses of any kind (other than the
defense of payment) against the Administrative Agent, the Secured Parties or the
Borrower whether now existing or which may arise in the future.

 

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(c) Each Guarantor hereby agrees and acknowledges that the Guaranteed
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon this Guaranty, and all dealings between the Borrower and any of the
Guarantors, on the one hand, and the Administrative Agent and the other Secured
Parties, on the other hand, likewise shall be conclusively presumed to have been
had or consummated in reliance upon this Guaranty.

SECTION 2.5. Waivers. To the extent permitted by Applicable Law, each Guarantor
expressly waives all of the following rights and defenses (and agrees not to
take advantage of or assert any such right or defense):

(a) any rights it may now or in the future have under any statute (including,
without limitation, any rights and defenses that are or may become available to
such Guarantor by reason of North Carolina General Statutes Section 26-7, et
seq., California Civil Code Sections 2787 through 2855, inclusive, 2899 and
3433, or any similar laws), or at law or in equity, or otherwise, to compel the
Administrative Agent or any other Secured Party to proceed in respect of the
Obligations against the Borrower or any other Person or against any security for
or other guaranty of the payment and performance of the Guaranteed Obligations
before proceeding against, or as a condition to proceeding against, such
Guarantor;

(b) any defense based upon the failure of the Administrative Agent or any other
Secured Party to commence an action in respect of the Guaranteed Obligations
against the Borrower, such Guarantor, any other guarantor or any other Person or
any security for the payment and performance of the Guaranteed Obligations;

(c) any right to insist upon, plead or in any manner whatever claim or take the
benefit or advantage of, any appraisal, valuation, stay, extension, marshalling
of assets or redemption laws, or exemption, whether now or at any time hereafter
in force, which may delay, prevent or otherwise affect the performance by such
Guarantor of its obligations under, or the enforcement by the Administrative
Agent or the other Secured Parties of this Guaranty;

(d) any right of diligence, presentment, demand, protest and notice (except as
specifically required herein or any other Loan Document) of whatever kind or
nature with respect to any of the Guaranteed Obligations and waives, to the
fullest extent permitted by Applicable Law, the benefit of all provisions of
Applicable Law which are or might be in conflict with the terms of this
Guaranty;

(e) any right to revoke this Guaranty;

(f) any defense arising by reason of any claim or defense based upon an election
of remedies by any Secured Party that in any manner impairs, reduces, releases
or otherwise adversely affects the subrogation, reimbursement, exoneration,
contribution or indemnification rights of such Guarantor or other rights of such
Guarantor to proceed against any of the other Loan Parties, any other guarantor
or any other Person or any Collateral;

(g) any defense based on any right of set-off or counterclaim against or in
respect of the Obligations of such Guarantor hereunder;

(h) any duty on the part of any Secured Party to disclose to such Guarantor any
information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party or any
of its Subsidiaries now or hereafter known by such Secured Party; and

 

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(i) any and all right to notice of the creation, renewal, extension or accrual
of any of the Obligations and notice of or proof of reliance by the
Administrative Agent or any other Secured Party upon, or acceptance of, this
Guaranty.

Each Guarantor agrees that any notice or directive given at any time to the
Administrative Agent or any other Secured Party which is inconsistent with any
of the foregoing waivers shall be null and void and may be ignored by the
Administrative Agent or such other Secured Party, and, in addition, may not be
pleaded or introduced as evidence in any litigation relating to this Guaranty
for the reason that such pleading or introduction would be at variance with the
written terms of this Guaranty, unless the Administrative Agent and the Required
Lenders have specifically agreed otherwise in writing. The foregoing waivers are
of the essence of the transaction contemplated by the Credit Agreement, the
other Loan Documents and the Hedging Agreements and, but for this Guaranty and
such waivers, the Administrative Agent and the other Secured Parties would
decline to enter into the Credit Agreement, the other Loan Documents and the
Hedging Agreements.

SECTION 2.6. Modification of Loan Documents, etc. Neither the Administrative
Agent nor any other Secured Party shall incur any liability to any Guarantor as
a result of any of the following, and none of the following shall impair or
release this Guaranty or any of the obligations of any Guarantor under this
Guaranty:

(a) any change or extension of the manner, place or terms of payment of, or
renewal or alteration of all or any portion of, the Guaranteed Obligations;

(b) any action under or in respect of the Credit Agreement, any other Loan
Document or any Hedging Agreement in the exercise of any remedy, power or
privilege contained therein or available to any of them at law, in equity or
otherwise, or waiver or refraining from exercising any such remedies, powers or
privileges;

(c) any amendment to or modification of, in any manner whatsoever, the Credit
Agreement, any other Loan Document or any Hedging Agreement;

(d) any extension or waiver of the time for performance by any Guarantor, any
other guarantor, the Borrower or any other Person of, or compliance with, any
term, covenant or agreement on its part to be performed or observed under the
Credit Agreement, any other Loan Document or any Hedging Agreement, or waiver of
such performance or compliance or consent to a failure of, or departure from,
such performance or compliance;

(e) any taking and holding of security or collateral for the payment of the
Guaranteed Obligations or the sale, exchange, release, disposal of, or other
dealing with, any property pledged, mortgaged or conveyed, or in which the
Administrative Agent or the other Secured Parties have been granted a Lien, to
secure any Indebtedness of any Guarantor, any other guarantor or the Borrower to
the Administrative Agent or the other Secured Parties;

(f) any release of anyone who may be liable in any manner for the payment of any
amounts owed by any Guarantor, any other guarantor or the Borrower to the
Administrative Agent or any other Secured Party;

(g) any modification or termination of the terms of any intercreditor or
subordination agreement pursuant to which claims of other creditors of any
Guarantor, any other guarantor or the Borrower are subordinated to the claims of
the Administrative Agent or any other Secured Party; or

 

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(h) any application of any sums by whomever paid or however realized to any
Guaranteed Obligations owing by any Guarantor, any other guarantor or the
Borrower to the Administrative Agent or any other Secured Party in such manner
as the Administrative Agent or any other Secured Party shall determine in its
reasonable discretion.

SECTION 2.7. Demand by the Administrative Agent. In addition to the terms set
forth in this Article II and in no manner imposing any limitation on such terms,
if all or any portion of the then outstanding Guaranteed Obligations are
declared to be immediately due and payable, then the Guarantors shall, upon
demand in writing therefor by the Administrative Agent to the Guarantors, pay
all or such portion of the outstanding Guaranteed Obligations due hereunder then
declared due and payable. Notwithstanding the foregoing, each Guarantor agrees
that, in the event of the dissolution or insolvency of the Borrower or any
Guarantor, or the inability or failure of the Borrower or any Guarantor to pay
debts as they become due, or an assignment by the Borrower or any Guarantor for
the benefit of creditors, or the commencement of any case or proceeding in
respect of the Borrower or any Guarantor under bankruptcy, insolvency or similar
laws, and if such event shall occur at a time when any of the Guaranteed
Obligations may not then be due and payable, each Guarantor will pay to the
Administrative Agent, for the ratable benefit of the Secured Parties and their
respective permitted successors, indorsees, transferees and assigns, forthwith
the full amount which would be payable hereunder by each Guarantor if all such
Guaranteed Obligations were then due and payable.

SECTION 2.8. Remedies. Upon the occurrence and during the continuance of any
Event of Default, with the consent of the Required Lenders, the Administrative
Agent may, or upon the request of the Required Lenders, the Administrative Agent
shall, enforce against the Guarantors their respective obligations and
liabilities hereunder and exercise such other rights and remedies as may be
available to the Administrative Agent hereunder, under the Credit Agreement, the
other Loan Documents, the Hedging Agreements or otherwise.

SECTION 2.9. Benefits of Guaranty. The provisions of this Guaranty are for the
benefit of the Administrative Agent and the other Secured Parties and their
respective permitted successors, transferees, endorsees and assigns, and nothing
herein contained shall impair, as between the Borrower, the Administrative Agent
and the other Secured Parties, the obligations of the Borrower under the Loan
Documents or the Hedging Agreements. In the event all or any part of the
Guaranteed Obligations are transferred, endorsed or assigned by the
Administrative Agent or any other Secured Party to any Person or Persons as
permitted under the Credit Agreement, any reference to an “Administrative
Agent”, or “Secured Party” herein shall be deemed to refer equally to such
Person or Persons.

SECTION 2.10. Termination; Reinstatement.

(a) Subject to subsection (c) below, this Guaranty shall remain in full force
and effect until all the Guaranteed Obligations shall have been Paid in Full.

(b) No payment made by the Borrower, any Guarantor, any other guarantor or any
other Person received or collected by the Administrative Agent or any other
Secured Party from the Borrower, any Guarantor, any other guarantor or any other
Person by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Guaranteed Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of any Guarantor hereunder which shall,
notwithstanding any such payment (other than any payment made by such Guarantor
in respect of the obligations of the Guarantors or any payment received or
collected from such Guarantor in respect of the obligations of the Guarantors),
remain liable for the obligations of the Guarantors up to the maximum liability
of such Guarantor hereunder until the Guaranteed Obligations shall have been
Paid in Full.

(c) Each Guarantor agrees that, if any payment made by the Borrower or any other
Person applied to the Guaranteed Obligations is at any time avoided, annulled,
set aside, rescinded, invalidated, declared to be fraudulent or preferential or
otherwise required to be refunded or repaid or is repaid in whole or

 

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in part pursuant to a good faith settlement of a pending or threatened avoidance
claim, or the proceeds of any collateral are required to be refunded by the
Administrative Agent or any other Secured Party to the Borrower, its estate,
trustee, receiver or any other Person, including, without limitation, any
Guarantor, under any Applicable Law or equitable cause, then, to the extent of
such payment or repayment, each Guarantor’s liability hereunder (and any Lien or
collateral securing such liability) shall be and remain in full force and
effect, as fully as if such payment had never been made, and, if prior thereto,
this Guaranty shall have been canceled or surrendered (and if any Lien or
collateral securing such Guarantor’s liability hereunder shall have been
released or terminated by virtue of such cancellation or surrender), this
Guaranty (and such Lien or collateral) shall be reinstated in full force and
effect, and such prior cancellation or surrender shall not diminish, release,
discharge, impair or otherwise affect the obligations of such Guarantor in
respect of the amount of such payment (or any Lien or collateral securing such
obligation).

SECTION 2.11. Payments. Payments by the Guarantors shall be made to the
Administrative Agent, to be credited and applied to the Guaranteed Obligations
in accordance with Section 2.12 of the Credit Agreement, in immediately
available dollars to an account designated by the Administrative Agent or at the
Administrative Agent’s address specified in Section 9.01 of the Credit Agreement
or at any other address that may be specified in writing from time to time by
the Administrative Agent.

ARTICLE III

REPRESENTATIONS, WARRANTIES AND COVENANTS

To induce the Administrative Agent and the other Secured Parties to make any
Loans and issue any Letters of Credit, each Guarantor hereby represents and
warrants, and covenants and agrees (as the context may require) that:

SECTION 3.1. Existence. Such Guarantor is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or
formation, has the requisite power and authority to own, lease and operate its
properties and to carry on its business as now being and hereafter proposed to
be conducted and is duly 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 other than in such
jurisdictions where failure to so qualify would not have a Material Adverse
Effect.

SECTION 3.2. Authorization of Guaranty; Enforceability. Such Guarantor has the
right, power and authority to execute, deliver and perform this Guaranty and has
taken all necessary corporate, limited liability company or other organizational
action to authorize its execution, delivery and performance of this Guaranty.
This Guaranty has been duly executed and delivered by the duly authorized
officers of such Guarantor and this Guaranty constitutes the legal, valid and
binding obligation of such Guarantor enforceable in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar state or federal debtor relief laws from
time to time in effect which affect the enforcement of creditors’ rights in
general and the availability of equitable remedies.

SECTION 3.3. No Conflict; Consents. The execution, delivery and performance by
such Guarantor of this Guaranty will not, by the passage of time, the giving of
notice or otherwise, (i) violate any provision of any Applicable Law or
contractual obligation of such Guarantor other than any violation that could not
reasonably be expected to have a Material Adverse Effect and (ii) will not
result in the creation or imposition of any Lien upon or with respect to any
property or revenues of such Guarantor other than Liens permitted under
Section 6.02 of the Credit Agreement. No consent or authorization of, filing
with, or other act by or in respect of, any arbitrator or Governmental Authority
and no consent of any other Person (including, without limitation, any
stockholder or creditor of such Guarantor), is required in connection with the
execution, delivery, performance, validity or enforceability of this Guaranty,
except such as have been made or obtained and are in full force and effect, and
except when failure to obtain any such consents or approvals, make any such
filing or do any other act could not reasonably be expected to have a Material
Adverse Effect.

 

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SECTION 3.4. Litigation. No actions, suits or proceedings before any arbitrator
or Governmental Authority are pending or, to the knowledge of any Responsible
Officer of such Guarantor, threatened by or against such Guarantor or against
any of its properties with respect to this Guaranty or any of the transactions
contemplated hereby (i) which involve any Loan Document or the Transactions
(excluding any such actions, suits or proceedings threatened by the Secured
Parties or the Administrative Agent) or (ii) as to which there is a reasonable
probability of an adverse determination and which, if such probable adverse
determination occurred, could, individually or in the aggregate, reasonably be
anticipated to result in a Material Adverse Effect.

SECTION 3.5. Title to Assets. Such Guarantor has title to the real property
owned by it and a valid leasehold interest in the real property leased by it,
and has good and marketable title to all of its personal property, except
(i) for minor defects in title that do not interfere with its ability to conduct
its business as currently conducted or to utilize such properties and assets for
their intended purposes or (ii) where such failure would not otherwise,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. All such material properties and assets are free of any and all
Liens of any type whatsoever, except those permitted by Section 6.02 of the
Credit Agreement.

ARTICLE IV

MISCELLANEOUS

SECTION 4.1. Amendments, Waivers and Consents. None of the terms, covenants,
agreements or conditions of this Guaranty may be amended, supplemented or
otherwise modified, nor may they be waived, nor may any consent be given, except
in accordance with Section 9.08 of the Credit Agreement.

SECTION 4.2. Notices. All notices and communications hereunder shall be given to
the addresses and otherwise made in accordance with Section 9.01 of the Credit
Agreement; provided that notices and communications to the Guarantors shall be
directed to the Guarantors, at the address of the Borrower set forth in
Section 9.01 of the Credit Agreement.

SECTION 4.3. Enforcement Expenses, Indemnification.

(a) Each Guarantor agrees to pay or reimburse each Secured Party and the
Administrative Agent for all its reasonable and documented out-of-pocket costs
and expenses incurred in connection with enforcing or preserving any rights
under this Guaranty and the other Loan Documents to which such Guarantor is a
party, including, without limitation, in connection with any workout,
restructuring, bankruptcy or other similar proceeding, in each case, to the
extent the Borrower would be required to do so pursuant to Section 9.05 of the
Credit Agreement. Such costs and expenses shall include, without limitation, the
reasonable fees and disbursements of counsel (including the allocated fees and
expenses of in-house counsel) to each Secured Party and of counsel to the
Administrative Agent, in each case, to the extent the Borrower would be required
to do so pursuant to Section 9.05 of the Credit Agreement.

(b) Each Guarantor agrees to pay, and to save the Administrative Agent and the
Secured Parties harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the collateral or in connection with any of the transactions contemplated by
this Guaranty.

(c) Each Guarantor agrees to pay, and to save the Administrative Agent and the
Secured Parties harmless from any and all liabilities, obligations, losses,
damages, penalties, costs and expenses in connection with actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Guaranty, in each case, to the extent the Borrower would be required to
do so pursuant to Section 9.05 of the Credit Agreement.

 

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(d) The agreements in this Section 4.3 shall survive termination of the
Commitments and repayment of the Obligations and all other amounts payable under
the Credit Agreement and the other Loan Documents.

SECTION 4.4. Governing Law. This Guaranty shall be construed in accordance with
and governed by the laws of the State of New York.

SECTION 4.5. Consent to Jurisdiction and Venue; Judgment Currency.

(a) Each Guarantor, the Borrower and the Administrative Agent hereby irrevocably
and unconditionally submits, for itself and its property, to the exclusive
jurisdiction of any New York State court or Federal court of the United States
of America sitting in the County and City of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Guaranty or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State court or, to the extent permitted by
Applicable Law, in such Federal court. Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Guaranty or any other Loan Document shall
affect any right that the Administrative Agent or any other Secured Party may
otherwise have to bring any action or proceeding relating to this Guaranty or
any other Loan Document against the Borrower, any Guarantor or their respective
properties in the courts of any jurisdiction.

(b) Each Guarantor, the Borrower and the Administrative Agent hereby irrevocably
and unconditionally waives, to the fullest extent permitted by Applicable Law,
any objection that it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Guaranty or any
other Loan Document in any New York State or Federal court referred to in
paragraph (a) of this Section 4.5. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by Applicable Law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

(c) Each Guarantor and each other party hereto hereby consents to service of
process in the manner provided for notices in Section 9.01 of the Credit
Agreement. Nothing in this Guaranty will affect the right of any party to this
Guaranty to serve process in any other manner permitted by Applicable Law.

(d) If for the purpose of obtaining judgment in any court it is necessary to
convert a sum due under the Credit Agreement in one currency into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so under Applicable Law, that the rate of exchange used shall be
the spot rate at which in accordance with normal banking procedures the first
currency could be purchased in New York City with such other currency by the
Person obtaining such judgment on the Business Day preceding that on which final
judgment is given. Each Guarantor shall indemnify the Secured Parties and hold
the Secured Parties harmless from and against all loss or damage resulting from
any change in exchange rates between the date any claim is reduced to judgment
and the date of payment thereof by any Guarantor.

SECTION 4.6. Waiver of Jury Trial; Waiver of Punitive Damages.

(a) Waiver of Jury Trial. Each party hereto hereby waives, to the fullest extent
permitted by Applicable Law any right it may have to a trial by jury in respect
of any litigation directly or indirectly arising out of, under or in connection
with this Guaranty or any of the other Loan Documents. Each party hereto
(i) certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver and (ii) acknowledges
that it and the other parties hereto have been induced to enter into this
Guaranty and the other Loan Documents, as applicable, by, among other things,
the mutual waivers and certifications in this Section 4.6.

 

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(b) No Punitive/Exemplary Damages. The Administrative Agent, the Borrower (on
behalf of itself and its Subsidiaries) and each Guarantor hereby agree that no
such Person shall have a remedy of punitive or exemplary damages against any
other party to this Guaranty or any other Loan Document and each such Person
hereby waives any right or claim to punitive or exemplary damages that they may
now have or may arise in the future.

SECTION 4.7. Rights and Remedies Cumulative; Non-Waiver; etc. The enumeration of
the rights and remedies of the Administrative Agent and the other Secured
Parties set forth in this Guaranty is not intended to be exhaustive and the
exercise by the Administrative Agent and the other Secured Parties of any right
or remedy shall not preclude the exercise of any other rights or remedies, all
of which shall be cumulative, and shall be in addition to any other right or
remedy given hereunder or under the other Loan Documents or that may now or
hereafter exist at law or in equity or by suit or otherwise. No delay or failure
to take action on the part of the Administrative Agent or any other Secured
Party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any such right, power or
privilege shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent or
any other Secured Party of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which the Administrative
Agent or such other Secured Party would otherwise have on any future occasion.
No course of dealing between the Borrower, the Administrative Agent and the
other Secured Parties or their respective agents or employees shall be effective
to change, modify or discharge any provision of this Guaranty or any of the
other Loan Documents or to constitute a waiver of any Event of Default.

SECTION 4.8. Successors and Assigns. This Guaranty shall be binding upon each
Guarantor and its respective the successors and assigns and shall inure to the
benefit of each Guarantor (and shall bind all Persons who become bound as a
Guarantor under this Guaranty), the Administrative Agent and the other Secured
Parties and their successors and permitted assigns; provided that no Guarantor
may assign, transfer or delegate any of its rights or obligations under this
Guaranty without the prior written consent of the Administrative Agent (given in
accordance with Section 4.1).

SECTION 4.9. Severability. In the event any one or more of the provisions
contained in this Guaranty or in any other Loan Document should be held invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

SECTION 4.10. Headings. Article and Section headings used herein are for
convenience of reference only, are not part of this Guaranty and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Guaranty.

SECTION 4.11. Counterparts. This Guaranty may be executed in any number of
counterparts, each of which shall be an original and all of which, when taken
together, shall constitute one agreement. This Guaranty may be delivered by
facsimile or other electronic transmission of the relevant signature pages
hereof.

SECTION 4.12. Set-Off. Each Guarantor hereby irrevocably authorizes the
Administrative Agent and each other Secured Party at any time and from time to
time upon the occurrence and during the continuation of an Event of Default and
in accordance with Section 9.06 of the Credit Agreement, without notice to such
Guarantor or any other Guarantor, any such notice being expressly waived by each
Guarantor, to set-off and appropriate and apply any and all deposits (general or
special, time or demand, provisional or final, but excluding trust accounts), in
any currency, and any other credits, indebtedness or claims, in any currency, in
each case, whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Administrative Agent or such other
Secured Party to or for the credit or the account of such Guarantor, or any part
thereof in such amounts as the Administrative Agent or such other Secured Party
may

 

11

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elect, against and on account of the obligations and liabilities of such
Guarantor to the Administrative Agent or such other Secured Party hereunder and
claims of every nature and description of the Administrative Agent or such other
Secured Party against such Guarantor, in any currency, whether arising
hereunder, under the Credit Agreement, any other Loan Document or otherwise, as
the Administrative Agent or such other Secured Party may elect, whether or not
the Administrative Agent or any other Secured Party has made any demand for
payment and although such obligations, liabilities and claims may be contingent
or unmatured. The Administrative Agent and each other Secured Party shall notify
such Guarantor promptly of any such set-off and the application made by the
Administrative Agent or such other Secured Party of the proceeds thereof;
provided that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of the Administrative Agent and each
other Secured Party under this Section 4.12 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Administrative Agent or such other Secured Party may have.

SECTION 4.13. Integration. This Guaranty and the other Loan Documents represent
the agreement of the Guarantors, the Administrative Agent and the other Secured
Parties with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any other Secured Party relative to subject matter hereof and thereof
not expressly set forth or referred to herein or in the other Loan Documents.

SECTION 4.14. Acknowledgements. Each Guarantor hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Guaranty and the other Loan Documents to which it is a party;

(b) it has received a copy of the Credit Agreement and has reviewed and
understands the same;

(c) neither the Administrative Agent nor any other Secured Party has any
fiduciary relationship with or duty to any Guarantor arising out of or in
connection with this Guaranty or any of the other Loan Documents, and the
relationship between the Guarantors, on the one hand, and the Administrative
Agent and the other Secured Parties, on the other hand, in connection herewith
or therewith is solely that of debtor and creditor; and

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

SECTION 4.15. Releases.

(a) At such time as the Guaranteed Obligations shall have been Paid in Full,
this Guaranty and all obligations (other than those expressly stated to survive
such termination or as may be reinstated after such termination) of the
Administrative Agent and each Guarantor hereunder shall terminate, all without
delivery of any instrument or performance of any act by any party.

(b) Notwithstanding anything contained herein to the contrary, a Guarantor will
be automatically and unconditionally released from its obligations under this
Guaranty upon (i) the sale or disposition of such Guarantor (by merger,
consolidation, the sale of its Capital Stock or the sale of all or substantially
all of its assets (other than by lease)) and whether or not the Guarantor is the
surviving corporation in such transaction, to a Person which is not the Borrower
or a Restricted Subsidiary, so long as such transaction is not prohibited by the
Credit Agreement and would not result in a Default or Event of Default
thereunder, or (ii) the redesignation of such Guarantor as an Unrestricted
Subsidiary pursuant to Section 5.09 of the Credit Agreement. Without the consent
or other agreement of any Lender, the Administrative Agent is authorized to
release a Guarantor, and shall release such Guarantor, upon the delivery of an
officer’s certificate certifying in writing to the Administrative Agent that the
conditions for such release described in this Section 4.15(b) have

 

12

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been satisfied. To the extent the Administrative Agent is required to execute
any release documents in accordance with the immediately preceding sentence, the
Administrative Agent shall, at Borrower’s cost, do so promptly upon requests of
the Borrower or the relevant Loan Party without the consent or further agreement
of any Lender.

SECTION 4.16. Additional Guarantors. Each Restricted Subsidiary of the Borrower
that is required to become a party to this Guaranty pursuant to Section 5.09 of
the Credit Agreement shall become a Guarantor for all purposes of this Guaranty
upon execution and delivery by such Restricted Subsidiary of a Guaranty
Agreement Supplement.

[Signature Pages to Follow]

 

13

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IN WITNESS WHEREOF, each of the Guarantors has executed and delivered this
Guaranty under seal by their duly authorized officers, all as of the day and
year first above written.

 

CHOICE HOTELS INTERNATIONAL SERVICES CORP., as Guarantor By:  

 

Name:  

 

Title:  

 

DRY POCKET ROAD HOTEL DEVELOPMENT, LLC, as Guarantor By: CHOICE HOTELS
INTERNATIONAL SERVICES CORP., its Sole Member By:  

 

Name:  

 

Title:  

 

PARK LANE DRIVE HOTEL DEVELOPMENT, LLC, as Guarantor By: CHOICE HOTELS
INTERNATIONAL SERVICES CORP., its Sole Member By:  

 

Name:  

 

Title:  

 

[Signature Pages Continue]

Choice Hotels – Guaranty

JULY 2012

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

BRENTWOOD BOULEVARD HOTEL DEVELOPMENT, LLC, as Guarantor By: CHOICE HOTELS
INTERNATIONAL SERVICES CORP., its Sole Member By:  

 

Name:  

 

Title:  

 

CHOICE CAPITAL CORP., as Guarantor By:  

 

Name:  

 

Title:  

 

SUBURBAN FRANCHISE HOLDING COMPANY, INC., as Guarantor By:  

 

Name:  

 

Title:  

 

SUBURBAN FRANCHISE SYSTEMS, as Guarantor By:  

 

Name:  

 

Title:  

 

[Signature Pages Continue]

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

CSES, LLC, as Guarantor By: CHOICE HOTELS INTERNATIONAL SERVICES CORP., its Sole
Member By:  

 

Name:  

 

Title:  

 

CHOICE HOTELS INTERNATIONAL, INC., as Borrower By:  

 

Name:  

 

Title:  

 

[Signature Pages Continue]

 

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

DEUTSCHE BANK AG NEW YORK BRANCH, as Administrative Agent By:  

 

Name:  

 

Title:  

 

By:  

 

Name:  

 

Title:  

 

 

Choice Hotels – Guaranty

JULY 2012

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

Exhibit A

 

Choice Hotels – Guaranty

JULY 2012

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

GUARANTEE AGREEMENT SUPPLEMENT

THIS GUARANTEE AGREEMENT SUPPLEMENT, dated as of                  , 20    ,
(this “Supplement”) is made by [                    ], a [                    ]
(the “New Subsidiary Guarantor”) in favor of DEUTSCHE BANK AG NEW YORK BRANCH,
as Administrative Agent for the Secured Parties party to the Credit Agreement
(as defined in the Guarantee Agreement referred to below).

1. Reference is hereby made to the Guarantee Agreement dated as of July 25,
2012, made by certain Restricted Subsidiaries of Choice Hotels International,
Inc. party thereto, as guarantors, in favor of the Administrative Agent (as
amended, restated, supplemented or otherwise modified from time to time, the
“Guaranty”). This Supplement supplements the Guarantee Agreement, forms a part
thereof and is subject to the terms thereof. Capitalized terms used and not
defined herein shall have the meanings given thereto or referenced in the Credit
Agreement or the Guaranty, as applicable.

2. The New Subsidiary Guarantor hereby agrees to unconditionally guarantee to
the Administrative Agent for the ratable benefit of itself and the other Secured
Parties and their respective permitted successors, endorsees, transferees and
assigns, the prompt payment (whether at stated maturity, by acceleration or
otherwise) and performance of all Obligations of the Borrower to the same extent
and upon the same terms and conditions as are contained in the Guarantee
Agreement.

3. The New Subsidiary Guarantor hereby agrees that by executing this Supplement
it is a Guarantor (as defined in the Guaranty) under the Guaranty as if a
signatory thereto on the Closing Date, and the New Subsidiary Guarantor shall
comply with, and be subject to, all of the terms, covenants, conditions and
agreements and hereby makes each representation and warranty, in each case set
forth therein. The New Subsidiary Guarantor agrees that the “Guarantee
Agreement”, “Guarantee” or “Guaranty” as used herein or in any other Loan
Documents shall mean the Guaranty as supplemented hereby.

4. The New Subsidiary Guarantor hereby acknowledges it has received a copy of
the Credit Agreement and the Guaranty and that it has read and understands the
terms thereof.

5. Attached hereto as Annex A is a schedule setting forth all information of the
type required to be provided pursuant to Section 3.08 to the Credit Agreement
therein with respect to the New Subsidiary Guarantor.

6. All notices and communications to the New Subsidiary Guarantor shall be given
to the addresses and otherwise made in accordance with Section 9.01 of the
Credit Agreement; provided that notices and communications to the New Subsidiary
Guarantor shall be directed to the New Subsidiary Guarantor at the address of
the Borrower set forth in Section 9.01 of the Credit Agreement.

7. The New Subsidiary Guarantor hereby waives acceptance by the Administrative
Agent and the other Secured Parties of the guaranty by the New Subsidiary
Guarantor under the Guaranty upon the execution of this Supplement by the New
Subsidiary Guarantor.

8. This Supplement may be executed in any number of counterparts, each of which
shall be an original and all of which, when taken together, shall constitute one
agreement. This Supplement may be delivered by facsimile or other electronic
transmission of the relevant signature pages hereof.

9. This Supplement shall be governed by and construed and interpreted in
accordance with the laws of the State of New York.

[Signature Page to Follow]

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

IN WITNESS WHEREOF, the undersigned hereby causes this Guarantee Agreement
Supplement to be executed and delivered under seal as of the date first above
written.

 

[                     ]

By:

 

 

Name:

 

 

Title:

 

 

[Guarantee Agreement Supplement – Choice Hotels]

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

ANNEX A

Supplemental Schedule 3.08 to Credit Agreement

 

Choice Hotels – Guaranty

JULY 2012

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

EXHIBIT E

to

Senior Secured Credit Agreement

dated as of July 25, 2012

by and among

Choice Hotels International, Inc.,

as Borrower,

the Lenders party thereto

and

Deutsche Bank AG New York Branch,

as Administrative Agent

FORM OF SECURITY AGREEMENT

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

SECURITY AGREEMENT

Dated July 25, 2012

from

THE GRANTORS REFERRED TO HEREIN

to

DEUTSCHE BANK AG NEW YORK BRANCH,

as Administrative Agent

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

T A B L E  O F  C O N T E N T S

 

Section    Page  

Section 1.

 

Grant of Security

     1   

Section 2.

 

Security for Obligations

     3   

Section 3.

 

Grantors Remain Liable

     3   

Section 4.

 

Delivery and Control of Security Collateral

     3   

Section 5.

 

Representations and Warranties

     4   

Section 6.

 

Further Assurances

     5   

Section 7.

 

Post-Closing Changes; Collections on Assigned Agreements

     6   

Section 8.

 

UCC Article 8

     7   

Section 9.

 

Voting Rights; Distributions; Etc.

     7   

Section 10.

 

As to the Assigned Agreements

     7   

Section 11.

 

Transfers and Other Liens; Additional Capital Stock

     8   

Section 12.

 

Administrative Agent Appointed Attorney-in-Fact

     8   

Section 13.

 

Administrative Agent May Perform

     8   

Section 14.

 

The Administrative Agent’s Duties

     8   

Section 15.

 

Remedies

     9   

Section 16.

 

Indemnity and Expenses

     10   

Section 17.

 

Amendments; Waivers; Additional Grantors, Etc.

     11   

Section 18.

 

Notices, Etc.

     11   

Section 19.

 

Continuing Security Interest; Assignments under the Credit Agreement

     11   

Section 20.

 

Release; Termination

     11   

Section 21.

 

Security Interest Absolute

     12   

Section 22.

 

Third Party Waivers

     13   

Section 23.

 

Execution in Counterparts

     16   

Section 24.

 

The Credit Agreement

     16   

Section 25.

 

Jurisdiction, Etc.

     16   

Section 26.

 

Governing Law

     16   

Section 27.

 

WAIVER OF JURY TRIAL

     16   

 

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

Schedules

 

Schedule I

   –      Location, Chief Executive Office, Type of Organization, Jurisdiction
of Organization and Organizational Identification Number

Schedule II

   –      Pledged Equity

Exhibits

       

Exhibit A

   –      Form of Security Agreement Supplement

Exhibit B

   –      Form of Authorization Statement

Exhibit C

   –      Form of Acknowledgement and Consent

Exhibit D

   –      Form of Transaction Statement

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

SECURITY AGREEMENT

SECURITY AGREEMENT dated July 25, 2012 (this “Agreement”) among CHOICE HOTELS
INTERNATIONAL, INC., a Delaware corporation (the “Borrower”), the entities
listed on the signature pages hereof as the subsidiary grantors, and the
ADDITIONAL GRANTORS (as defined in Section 16) (collectively, the “Grantors”),
and DEUTSCHE BANK AG NEW YORK BRANCH, as administrative agent (in such capacity,
together with any successor administrative agent appointed pursuant to Article
VIII of the Credit Agreement (as hereinafter defined), the “Administrative
Agent”) for the Secured Parties (as defined in the Credit Agreement).

PRELIMINARY STATEMENTS

(1) The Borrower has entered into a Senior Secured Credit Agreement dated as of
even date herewith (such Agreement, as it may hereafter be amended, amended and
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”) with the Lenders and the Administrative Agent.

(2) Pursuant to the Credit Agreement, the Grantors are entering into this
Agreement in order to grant to the Administrative Agent for the ratable benefit
of the Secured Parties a security interest in the Collateral (as hereinafter
defined).

(3) The Grantors identified on Schedule II hereto are the owners as of the date
hereof of the shares of stock or other Capital Stock of (i) the Wholly Owned
Subsidiaries that are Restricted Subsidiaries and (ii) Choice Netherlands
Antilles N.V. (collectively, the “Initial Pledged Equity”) set forth opposite
such Grantor’s name on and as otherwise described in Schedule II and issued by
the Persons named therein.

(4) It is a condition precedent to the making of Loans and the issuance of
Letters of Credit by the Secured Parties under the Credit Agreement from time to
time that the Grantors shall have executed and delivered this Agreement to the
Administrative Agent.

(5) Each Grantor will derive substantial direct and indirect benefit from the
transactions contemplated by the Loan Documents.

(6) Terms defined in the Credit Agreement and not otherwise defined in this
Agreement are used in this Agreement as defined in the Credit Agreement.
Further, unless otherwise defined in this Agreement or in the Credit Agreement,
terms defined in Article 8 or 9 of the UCC (as defined below) are used in this
Agreement as such terms are defined in such Article 8 or 9. “UCC” means the
Uniform Commercial Code as in effect, from time to time, in the State of New
York; provided, however, that, if perfection or the effect of perfection or
non-perfection or the priority of any security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, “UCC” means the Uniform Commercial Code as in effect
from time to time in such other jurisdiction for purposes of the provisions
hereof relating to such perfection, effect of perfection or non-perfection or
priority.

NOW, THEREFORE, in consideration of the premises, in order to induce the Secured
Parties to make Loans and issue Letters of Credit under the Credit Agreement
from time to time, and to induce the holders of the Hedging Obligations to enter
into Hedging Agreements from time to time, and to induce the holders of the Cash
Management Obligations to enter into Cash Management Agreements from time to
time, and for good and valuable other consideration, the receipt and sufficiency
of which is hereby conclusively acknowledged, each Grantor hereby agrees with
the Administrative Agent for the ratable benefit of the Secured Parties as
follows:

Section 1. Grant of Security. Each Grantor hereby grants to the Administrative
Agent, for the ratable benefit of the Secured Parties, a security interest in,
such Grantor’s right, title and interest in and to

 

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

the following, in each case, as to each type of property described below,
whether now owned or hereafter acquired by such Grantor, wherever located, and
whether now or hereafter existing or arising (collectively, the “Collateral”):

(a) the following (the “Security Collateral”):

(i) (A) the Initial Pledged Equity, (B) the shares of stock or other Capital
Stock of any other Wholly Owned Subsidiary that is a Restricted Subsidiary and
65% of the shares of stock or other Capital Stock of any Alternate Foreign
Holding Subsidiary, in each case, from time to time hereafter acquired or
created (collectively, the “Additional Pledged Equity”), (C) the certificates
(if any) representing the Initial Pledged Equity and the Additional Pledged
Equity, and (D) all dividends, distributions, return of capital, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Initial
Pledged Equity and the Additional Pledged Equity, and all subscription warrants,
rights or options issued thereon or with respect thereto; and

(ii) all additional shares of stock and other Capital Stock of or in any issuer
of the Initial Pledged Equity or Additional Pledged Equity, or any successor
entity from time to time acquired by such Grantor in any manner (such shares and
other Capital Stock, together with the Initial Pledged Equity and the Additional
Pledged Equity, being the “Pledged Equity”), and the certificates (if any)
representing such additional shares or other Capital Stock, and all dividends,
distributions, return of capital, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares or other Capital Stock and all
subscription warrants, rights or options issued thereon or with respect thereto;

(b) so long as the Agreement Collateral Release Date shall not have occurred,
each of the Franchise Agreements relating to a hotel situated in the United
States, in each case as such agreements may be amended, amended and restated,
supplemented or otherwise modified from time to time (collectively, the
“Assigned Agreements”), including, without limitation, (i) all rights of such
Grantor to receive moneys due and to become due under or pursuant to the
Assigned Agreements, (ii) all rights of such Grantor to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Assigned
Agreements, (iii) claims of such Grantor for damages arising out of or for
breach of or default under the Assigned Agreements and (iv) the right of such
Grantor to terminate the Assigned Agreements, to perform thereunder and to
compel performance and otherwise exercise all remedies thereunder (all such
Collateral being the “Agreement Collateral”); and

(c) all proceeds of, collateral for, income, royalties and other payments now or
hereafter due and payable with respect to, and supporting obligations relating
to, any and all of the Collateral (including, without limitation, proceeds,
collateral and supporting obligations that constitute property of the types
described in clauses (a) and (b) of this Section 1 and this clause (c));

provided, however, that notwithstanding any of the other provisions set forth in
this Section 1, this Security Agreement shall not constitute a grant of a
security interest in any of the following assets, now owned or hereafter
acquired or arising (the following assets being hereinafter collectively
referred to as the “Excluded Collateral”): (A) any Franchise Agreement or any
other agreement, permit, consent, order or franchise covering real or personal
property of any Grantor, and any of its rights or interest thereunder, including
the real or personal property covered thereby, if and to the extent that the
grant of a security interest or lien is prohibited by or in violation of (I) any
law, rule, regulation or order, or (II) a term, provision or condition of any
such Franchise Agreement (whether applicable to the Grantor or the applicable
franchisee) or such agreement, permit, consent, order or franchise (in each case
unless such law, rule, regulation, term, provision or condition would be
rendered ineffective with respect to the creation of the security interest
hereunder

 

2

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

pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor
provision or provisions) of any relevant jurisdiction or any other applicable
law (including Title 11, U.S. Code, or any other similar foreign, federal or
state law for the relief of debtors (any such law, “Bankruptcy Law”)) or
principles of equity) and such provision or condition has not been waived or the
consent of the other party to such agreement, permit, consent, order or
franchise has not been obtained; provided further that the Collateral shall
include (and such security interest shall attach) immediately at such time as
the contractual or legal prohibition shall no longer be applicable and to the
extent severable, shall attach immediately to any portion of such Franchise
Agreement or other agreement, permit, consent, order or franchise not subject to
the prohibitions specified in (I) or (II) above; (B) any Franchise Agreement
related to a hotel situated other than in the United States; (C) more than 65%
of the Capital Stock of any Wholly Owned Subsidiary that is a Foreign
Subsidiary; (D) any Principal Property or Principal Property Subsidiary unless
all obligations under the Indenture are secured by Liens on such Principal
Property or Principal Property Subsidiary on an equal and ratable basis with the
Secured Obligations, if and to the extent required by Section 4.7 of the
Indenture; and (E) the Capital Stock of any Subsidiary that is not a Wholly
Owned Subsidiary. Notwithstanding anything to the contrary herein, the Grantors
make no representations or warranties hereunder, and the covenants hereunder
shall not apply, in respect of the Excluded Collateral.

Section 2. Security for Obligations. This Agreement secures the payment of all
Obligations of such Grantor now or hereafter existing, whether direct or
indirect, absolute or contingent, and whether for principal, reimbursement
obligations, interest, fees, premiums, penalties, indemnifications, contract
causes of action, costs, expenses or otherwise (all such Obligations being the
“Secured Obligations”). Without limiting the generality of the foregoing, this
Agreement secures, as to each Grantor, the payment of all amounts that
constitute part of the Secured Obligations and would be owed by such Grantor to
any Secured Party under the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving a Loan Party.

Section 3. Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in such Grantor’s Collateral to the extent set forth therein
to perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Administrative
Agent of any of the rights hereunder shall not release any Grantor from any of
its duties or obligations under the contracts and agreements included in the
Collateral and (c) no Secured Party shall have any obligation or liability under
the contracts and agreements included in the Collateral solely by reason of this
Agreement or any other Loan Document, nor shall any Secured Party be obligated
to perform any of the obligations or duties of any Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.

Section 4. Delivery and Control of Security Collateral. (a) On the Closing Date,
except as provided for in Section 5.09(f) of the Credit Agreement, all
then-existing certificates or instruments representing or evidencing Security
Collateral shall be delivered to and held by or on behalf of the Administrative
Agent pursuant hereto and shall be in suitable form for transfer by delivery, or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance reasonably satisfactory to the Administrative
Agent. Thereafter, except as provided for in Section 5.09(f) of the Credit
Agreement, all other certificates or instruments representing or evidencing
Security Collateral shall, no later than the required date of delivery of the
certificate required by Section 5.04(c) of the Credit Agreement for the fiscal
period in which such certificates or instruments representing or evidencing
Security Collateral are acquired (or such date that is no more than 60 days
later as may be agreed by the Administrative Agent, in its discretion), be
delivered to and held by or on behalf of the Administrative Agent pursuant
hereto and shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance reasonably satisfactory to the Administrative Agent. In
addition, upon the occurrence and during the continuance of an Event of Default
and the exercise of remedies pursuant to Section 14 hereof, the Administrative
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Security Collateral for certificates or instruments
of smaller or larger denominations.

 

3

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

(b) With respect to any Security Collateral in which any Grantor has any right,
title or interest and that constitutes an uncertificated security, such Grantor
will either: (1) cause the issuer thereof to register the Administrative Agent
as the registered owner of such security and provide evidence of same to the
Administrative Agent that is satisfactory to the Administrative Agent in its
reasonable discretion, or (2) (A) send to the issuer thereof an Authorization
Statement substantially in the form of Exhibit B hereto and (B) cause the issuer
thereof to deliver to the Administrative Agent (I) an Acknowledgement and
Consent substantially in the form of Exhibit C hereto and (II) a Transaction
Statement substantially in the form of Exhibit D hereto, confirming that such
issuer will comply with instructions with respect to such security originated by
the Administrative Agent without further consent or approval of such Grantor.

(c) With respect to any Security Collateral, upon the request of the
Administrative Agent, such Grantor will notify each such issuer of Pledged
Equity that such Pledged Equity is subject to the security interest granted
hereunder.

(d) Upon the occurrence and during the continuance of an Event of Default and
the exercise of remedies pursuant to Section 15 hereof, the Administrative Agent
shall have the right, at any time in its discretion and upon notice to any
Grantor, to transfer to or to register in the name of the Administrative Agent
or any of its nominees any or all of the Security Collateral, subject only to
the revocable rights specified in Section 9(a).

(e) Grantors covenant and agree that (i) the Pledged Equity is not and will not
be dealt in or traded on securities exchanges or securities markets, (ii) the
terms of the Pledged Equity are not and will not be “investment company
securities” within the meaning of Section 8-103 of the UCC, and (iii) that
portion of the Pledged Equity in respect of any Domestic Subsidiary that is
evidenced by certificates or other instruments shall be deemed to be
“certificated securities” (such portion of the Pledged Equity, the “Certificated
Pledged Equity”) within the meaning of Section 8-102(a)(4) of the UCC.

Section 5. Representations and Warranties. Each Grantor represents and warrants
as follows:

(a) Except as otherwise notified by the Grantors pursuant to Section 7, such
Grantor’s exact legal name is correctly set forth in Schedule I hereto. Except
as otherwise notified by the Grantors pursuant to Section 7, such Grantor is
located (within the meaning of Section 9-307 of the UCC) and has its chief
executive office in the state or jurisdiction set forth in Schedule I hereto
Except as otherwise notified by the Grantors pursuant to Section 7, the
information set forth in Schedule I hereto with respect to such Grantor is true
and accurate in all respects. Such Grantor has not, within the four-month period
ending on the date hereof, changed its name, location, chief executive office,
type of organization, jurisdiction of organization or organizational
identification number from those set forth in Schedule I hereto except as
disclosed on Schedule I hereto.

(b) Such Grantor is the legal and beneficial owner of the Collateral of such
Grantor free and clear of any Lien, except for those Liens permitted under
Section 6.02 of the Credit Agreement (such Liens, the “Permitted Liens”).

(c) The Pledged Interests pledged by such Grantor hereunder have been duly
authorized and, if relating to a corporation, validly issued and are fully paid
and non-assessable. If such Grantor is an issuer of Pledged Interests, such
Grantor confirms, by virtue of its execution of this Agreement, that it has
received notice of such security interest.

(d) The Initial Pledged Equity pledged by such Grantor constitutes the
percentage of the issued and outstanding Capital Stock of the issuers thereof
indicated on Schedule II hereto.

 

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(e) All Initial Pledged Equity consisting of certificated securities has been
delivered to the Administrative Agent. All Security Collateral consisting of
certificated securities has been delivered to the Administrative Agent in
accordance with Section 4(a). None of the Pledged Equity is credited to a
“securities account” (within the meaning of Section 8-501(a) of the UCC). The
Initial Pledged Equity pledged by such Grantor constitutes the percentage of the
issued and outstanding Equity Interests of the issuers thereof indicated on
Schedule I hereto, which is all of the issued and outstanding Equity Interests
in the respective Subsidiary Guarantor issuer of such interests.

(f) Upon filing by Administrative Agent of UCC-1 financing statements and
similar perfection documents and subject to Permitted Liens, this Agreement
creates in favor of the Administrative Agent for the benefit of the Secured
Parties a valid and perfected first priority security interest in the Collateral
of such Grantor to the extent such security interest can be perfected by filing
under the UCC, securing the payment of the Secured Obligations.

(g) To such Grantor’s knowledge, and solely with respect to the Security
Collateral, no authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any other third
party is required for (i) the grant by such Grantor of the security interest
granted hereunder or for the execution, delivery or performance of this
Agreement by such Grantor, (ii) the perfection or maintenance of the security
interest created hereunder (including the first priority nature of such security
interest) or, (iii) other than with respect to the Assigned Agreements, the
exercise by the Administrative Agent of its rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant to this
Agreement, except for the filing of financing and continuation statements under
the UCC, filings with the United States Securities and Exchange Commission, such
actions as may be required by Applicable Laws affecting the offering and sale of
securities generally, such actions as may be required by Applicable Laws
affecting the pledge of the Capital Stock of Foreign Subsidiaries and consents,
authorizations, filings or other actions which have been obtained or made.

Section 6. Further Assurances. (a) Each Grantor agrees that from time to time,
at its own expense, such Grantor will promptly execute and deliver, or otherwise
authenticate, all further instruments and documents, and take all further action
that the Administrative Agent may reasonably request, in order to perfect and
protect any pledge or security interest granted or purported to be granted by
such Grantor hereunder or to enable the Administrative Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral of such
Grantor; provided, however, that in the case of the Agreement Collateral, such
actions shall be limited to the filing of financing statements. Without limiting
the generality of the foregoing, each Grantor will, upon the reasonable request
of the Administrative Agent, promptly with respect to the Security Collateral of
such Grantor deliver to the Administrative Agent evidence that all other action
that the Administrative Agent may reasonably request in order to perfect and
protect, and continue the protection and perfection of, the security interest
created by Grantor under this Agreement in a manner consistent with the
requirements of this Agreement have been taken.

(b) Each Grantor hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto; provided, however,
that such filings shall in any event include a description of collateral no more
expansive than the descriptions in Section 1 of this Agreement (including the
defined terms from the Credit Agreement incorporated therein by reference);
provided further, that if requested by a Grantor, any such financing statement
or amendment shall specifically identify any Excluded Collateral that is not
subject thereto. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law. Each Grantor
ratifies its authorization for the Administrative Agent to have filed such
financing statements, continuation statements or amendments filed prior to the
date hereof.

(c) Each Grantor will furnish to the Administrative Agent from time to time
statements and schedules further identifying and describing the Security
Collateral of such Grantor and such other reports in connection with such
Security Collateral as the Administrative Agent may reasonably request, all in
reasonable detail.

 

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Section 7. Post-Closing Changes; Collections on Assigned Agreements

(a) No Grantor will change its name, type of organization, jurisdiction of
organization, organizational identification number or location from those set
forth in Section 5(a) of this Agreement without first giving at least 20 days’
prior written notice to the Administrative Agent and taking all action required
by the Administrative Agent in connection with such change for the purpose of
perfecting or protecting the security interest granted by this Agreement. Each
Grantor will hold and preserve its records relating to the Collateral,
including, without limitation, the Assigned Agreements, in accordance with
Section 5.07 of the Credit Agreement and will, upon reasonable notice, permit
representatives of the Administrative Agent at any time during normal business
hours to inspect and make abstracts from such records and other documents. So
long as no Event of Default exists, no Grantor shall be required to reimburse
for expenses incurred in connection with more than one inspection or examination
per fiscal year, which such one inspection or examination shall be arranged by
the Administrative Agent. If the Grantor does not have an organizational
identification number and later obtains one, it will promptly notify the
Administrative Agent of such organizational identification number.

(b) Upon the occurrence and during the continuance of an Event of Default and
upon written notice to such Grantor of its intention to do so, the
Administrative Agent shall have the right to notify the franchisees (or
equivalent parties) under any Assigned Agreements of the assignment of such
Assigned Agreements to the Administrative Agent and to direct such franchisees
(or equivalent parties) to make payment of all amounts due or to become due to
such Grantor thereunder directly to the Administrative Agent and, upon such
notification and at the expense of such Grantor, to enforce collection of any
such Assigned Agreements, to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as such Grantor might have
done, and to otherwise exercise all rights with respect to such Assigned
Agreements, including, without limitation, those set forth set forth in
Section 9-607 of the UCC. After receipt by any Grantor of the notice from the
Administrative Agent referred to in the preceding sentence, (i) all amounts and
proceeds (including, without limitation, instruments) received by such Grantor
in respect of the Assigned Agreements of such Grantor shall be received in trust
for the benefit of the Administrative Agent hereunder, shall be segregated from
other funds of such Grantor and shall be promptly paid over to the
Administrative Agent in the same form as so received (with any necessary
indorsement) and either (A) released to such Grantor on the terms set forth in
Section 7 so long as no Event of Default shall have occurred and be continuing
or (B) if any Event of Default shall have occurred and be continuing, applied as
provided in Section 15(b) and (ii) such Grantor will not adjust, settle or
compromise the amount or payment of any amount due on any Assigned Agreement,
release wholly or partly any franchisee (or equivalent party) thereto or allow
any credit or discount thereon.

(c) Except as may be provided under Section 5.09(f) of the Credit Agreement, if
any Grantor shall, as a result of its ownership of the Pledged Equity, become
entitled to receive or shall receive any stock certificate or limited
partnership or regular membership certificate, as applicable (including, without
limitation, any certificate representing a dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights,
whether in addition to, in substitution of, as a conversion of, or in exchange
for any shares of the Pledged Equity, or otherwise in respect thereof, such
Grantor shall receive the same in trust for the benefit of the Administrative
Agent, hold the same in trust for the Administrative Agent and, no later than
the required date of delivery of the certificate required by Section 5.04(c) of
the Credit Agreement for the fiscal period in which such certificate is received
(or such date that is no more than 60 days later as may be agreed by the
Administrative Agent, in its discretion), deliver the same to the Administrative
Agent in the exact form received, duly endorsed by such Grantor to the
Administrative Agent, if required, together with an updated stock, regular
membership or limited partnership interest power covering such certificate duly
executed in blank, to be held by the Administrative Agent hereunder as
additional security for the Secured Obligations. Such Grantor shall also deliver
to the Administrative Agent together with such certificates and powers an
updated Schedule II to this Agreement.

 

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Section 8. UCC Article 8. The Certificated Pledged Equity (i) will continue to
be “securities” within the meaning of Sections 8-102(a)(15) and 8-103 of the UCC
and (ii) will continue to be “financial assets” (within the meaning of
Section 8-102(a)(9) of the UCC). The Pledged Equity will not be credited to a
“securities account” (within the meaning of Section 8-501(a) of the UCC).

Section 9. Voting Rights; Distributions; Etc. (a) So long as no Event of Default
shall have occurred and be continuing:

(i) Each Grantor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Security Collateral of each Grantor or any
part thereof for any purpose.

(ii) Except as provided pursuant to Section 7(c), each Grantor shall be entitled
to receive and retain any and all dividends, interest and other distributions
paid in respect of the Security Collateral of such Grantor if and to the extent
that the payment thereof is not otherwise prohibited by the terms of the Loan
Documents.

(iii) The Administrative Agent will execute and deliver (or cause to be executed
and delivered) to each Grantor all such proxies and other instruments as such
Grantor may reasonably request for the purpose of enabling such Grantor to
exercise the voting and other rights that it is entitled to exercise pursuant to
paragraph (i) above and to receive the dividends or interest payments that it is
authorized to receive and retain pursuant to paragraph (ii) above.

(b) Upon the occurrence and during the continuance of an Event of Default, at
the request of the Administrative Agent (provided that such request shall not be
required in the case of an Event of Default specified in clauses (g) or (h) of
Article VII of the Credit Agreement):

(i) All rights of each Grantor (x) to exercise or refrain from exercising the
voting and other consensual rights that it would otherwise be entitled to
exercise pursuant to Section 9(a)(i) shall, upon notice to such Grantor by the
Administrative Agent, cease and (y) to receive the dividends, interest and other
distributions that it would otherwise be authorized to receive and retain
pursuant to Section 9(a)(ii) shall automatically cease, and all such rights
shall thereupon become vested in the Administrative Agent, which shall thereupon
have the sole right to exercise or refrain from exercising such voting and other
consensual rights and to receive and hold as Security Collateral such dividends,
interest and other distributions.

(ii) All dividends, interest and other distributions that are received by any
Grantor contrary to the provisions of paragraph (i) of this Section 9(b) shall
be received in trust for the benefit of the Administrative Agent, shall be
segregated from other funds of such Grantor and shall be promptly paid over to
the Administrative Agent as Security Collateral in the same form as so received
(with any necessary indorsement).

Section 10. As to the Assigned Agreements.

(a) Upon the occurrence and during the continuance of an Event of Default, at
the request of the Administrative Agent (provided that such request shall not be
required in the case of an Event of Default specified in clauses (g) or (h) of
Article VII of the Credit Agreement), each Grantor agrees that it will not:

(i) cancel or terminate any Assigned Agreement to which it is a party or consent
to or accept any cancellation or termination thereof;

(ii) amend, amend and restate, supplement or otherwise modify any such Assigned
Agreement or give any consent, waiver or approval thereunder;

 

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(iii) waive any default under or breach of any such Assigned Agreement; or

(iv) take any other action in connection with any such Assigned Agreement that
would impair the value of the interests or rights of such Grantor thereunder or
that would impair the interests or rights of any Secured Party.

(b) Each Grantor hereby consents on its behalf and on behalf of its Subsidiaries
to the assignment and pledge to the Administrative Agent for benefit of the
Secured Parties of each Assigned Agreement to which it is a party by any other
Grantor hereunder.

Section 11. Transfers and Other Liens; Additional Capital Stock. (a) Each
Grantor agrees that it will not (i) sell, assign or otherwise dispose of, or
grant any option with respect to, any of the Security Collateral, other than
sales, assignments and other dispositions of Security Collateral, and options
relating to Security Collateral, permitted under the terms of the Credit
Agreement, or (ii) create or suffer to exist any Lien upon or with respect to
any of the Collateral except for the pledge, assignment and security interest
created under this Agreement and Permitted Liens.

(b) Except as otherwise issued in a transaction permitted under the Credit
Agreement, each Grantor agrees that it shall cause each issuer of the Pledged
Interests pledged by such Grantor not to issue any Capital Stock or other
securities in addition to or in substitution for the Pledged Interests issued by
such issuer, except to such Grantor.

Section 12. Administrative Agent Appointed Attorney-in-Fact. To the extent
permitted by applicable law, each Grantor hereby irrevocably appoints the
Administrative Agent such Grantor’s attorney-in-fact, with full authority in the
place and stead of such Grantor and in the name of such Grantor or otherwise,
from time to time upon the occurrence and during the continuance of an Event of
Default in the Administrative Agent’s discretion, to take any action and to
execute any instrument that the Administrative Agent may deem necessary or
advisable to accomplish the purposes of this Agreement, including, without
limitation:

(a) to ask for, demand, collect, sue for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral,

(b) to receive, indorse and collect any drafts or other instruments, documents
and chattel paper, in connection with clause (a) above, and

(c) to file any claims or take any action or institute any proceedings that the
Administrative Agent may deem necessary or desirable for the collection of any
of the Collateral or otherwise to enforce compliance with the terms and
conditions of any Assigned Agreement or the rights of the Administrative Agent
with respect to any of the Collateral.

Section 13. Administrative Agent May Perform. If any Grantor fails to perform
any agreement contained herein, the Administrative Agent may, upon the
occurrence and during the continuance of an Event of Default, but without any
obligation to do so and without notice, itself perform, or cause performance of,
such agreement, and the expenses of the Administrative Agent incurred in
connection therewith shall be payable by such Grantor under Section 16.

Section 14. The Administrative Agent’s Duties. (a) The powers conferred on the
Administrative Agent hereunder are solely to protect the Secured Parties’
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for (i) the exercise of reasonable care with respect to, and
the safe custody of, any Collateral in its possession and the accounting for
moneys actually received by it hereunder, and (ii) the gross negligence or
willful misconduct of any of the Administrative Agent’s officers, directors,
agents or employees, the Administrative Agent shall have no duty as to any

 

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Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not any Secured Party has or is deemed to have knowledge
of such matters, or as to the taking of any necessary steps to preserve rights
against any parties or any other rights pertaining to any Collateral. The
Administrative Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which it accords its own
property.

(b) Anything contained herein to the contrary notwithstanding, the
Administrative Agent may from time to time, when the Administrative Agent deems
it to be necessary, appoint one or more subagents (each, a “Subagent”) for the
Administrative Agent hereunder with respect to all or any part of the
Collateral. In the event that the Administrative Agent so appoints any Subagent
with respect to any Collateral, (i) the assignment and pledge of such Collateral
and the security interest granted in such Collateral by each Grantor hereunder
shall be deemed for purposes of this Security Agreement to have been made to
such Subagent, in addition to the Administrative Agent, for the ratable benefit
of the Secured Parties, as security for the Secured Obligations of such Grantor,
(ii) such Subagent shall automatically be vested, in addition to the
Administrative Agent, with all rights, powers, privileges, interests and
remedies of the Administrative Agent hereunder with respect to such Collateral,
and (iii) the term “Administrative Agent,” when used herein in relation to any
rights, powers, privileges, interests, obligations, duties and remedies of the
Administrative Agent with respect to such Collateral, shall include such
Subagent; provided, however, that no such Subagent shall be authorized to take
any action with respect to any such Collateral unless and except to the extent
expressly authorized in writing by the Administrative Agent.

Section 15. Remedies. If any Event of Default shall have occurred and be
continuing:

(a) The Administrative Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the UCC
(whether or not the UCC applies to the affected Collateral) and also may:
(i) without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the
Administrative Agent’s offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Administrative Agent may deem
commercially reasonable and (ii) exercise any and all rights and remedies of any
of the Grantors under or in connection with the Collateral, or otherwise in
respect of the Collateral, including, without limitation, (A) any and all rights
of such Grantor to demand or otherwise require payment of any amount under, or
performance of any provision of, the Assigned Agreements and (B) exercise all
other rights and remedies with respect to the Assigned Agreements and the other
Collateral, including, without limitation, those set forth in Section 9-607 of
the UCC. Each Grantor agrees that, to the extent notice of sale shall be
required by law, at least ten days’ notice to such Grantor of the time and place
of any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Administrative Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Administrative Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned.

(b) Any cash held by or on behalf of the Administrative Agent and all cash
proceeds received by or on behalf of the Administrative Agent in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral will be applied (after payment of any amounts payable to the
Administrative Agent pursuant to Section 13) by the Administrative Agent for the
benefit of the Secured Parties against the Secured Obligations, in accordance
with the priority for payments set forth in Section 2.12 of the Credit
Agreement. Any surplus of such cash or cash proceeds held by or on the behalf of
the Administrative Agent and remaining after Payment in Full of all the Secured
Obligations shall be paid over to the applicable Grantor or to whomsoever may be
lawfully entitled to receive such surplus. For purposes of this Agreement, “Paid
in Full” or “Payment in Full” means, with respect to

 

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any Secured Obligations, (a) the payment in full in cash of all such Secured
Obligations (other than (i) contingent indemnification obligations to the extent
no claim giving rise thereto has been asserted and (ii) Hedging Obligations and
Cash Management Obligations that, at the time of determination, are allowed by
the Person to whom such Secured Obligations are owing to remain outstanding or
are not required to be repaid or cash collateralized pursuant to the provisions
of any document governing the applicable Hedging Obligations or Cash Management
Obligations), (b) the termination or expiration of all of the Commitments and
(c) in connection with the termination or expiration of the Revolving
Commitment, either (i) the cancellation and return to each Issuing Bank of all
Letters of Credit issued by such Issuing Bank or (ii) the cash collateralization
(or the delivery of a back-to-back letter of credit reasonably acceptable to
such Issuing Bank in form and content and from an issuer reasonably acceptable
to such Issuing Bank) of all Letters of Credit issued by any Issuing Bank (in an
amount equal to 105% of the undrawn amount of such Letters of Credit) in a
manner reasonably acceptable to such Issuing Bank.

(c) All payments received by any Grantor in respect of the Collateral shall be
received in trust for the benefit of the Administrative Agent, shall be
segregated from other funds of such Grantor and, at the request of the
Administrative Agent (provided that such request shall not be required in the
case of an Event of Default specified in clauses (g) or (h) of Article VII of
the Credit Agreement), shall be paid over to the Administrative Agent in the
same form as so received (with any necessary indorsement).

(d) If the Administrative Agent shall determine to exercise its right to sell
all or any of the Security Collateral of any Grantor pursuant to this
Section 15, each Grantor agrees that, upon request of the Administrative Agent,
such Grantor will, at its own expense, provide the Administrative Agent with
such other information and projections as may be necessary or, in the opinion of
the Administrative Agent, advisable to enable the Administrative Agent to effect
the sale of such Security Collateral and otherwise cooperate with such sale of
such Security Collateral or any part thereof as the Administrative Agent
reasonably requires to ensure that such sale is valid and binding and in
compliance with applicable law.

(e) The Administrative Agent is authorized, in connection with any sale of the
Security Collateral pursuant to this Section 14, to deliver or otherwise
disclose to any prospective purchaser of the Security Collateral: (i) any
information and projections provided to it pursuant to subsection (d) above; and
(ii) any other information in its possession relating to such Security
Collateral.

(f) [Reserved.]

(g) The rights of the Administrative Agent under this Agreement shall not be
conditioned or contingent upon the pursuit by the Administrative Agent of any
right or remedy against any Grantor or against any other Person which may be or
become liable in respect of all or any part of the Secured Obligations or
against any other security therefore, guarantee thereof or right of offset with
respect thereto. The Administrative Agent shall not be liable for any failure to
demand, collect or realize upon all or any part of the Collateral or for any
delay in doing so, nor shall it be under any obligation to sell or otherwise
dispose of any Collateral upon the request of and Grantor or any other Person or
to take any other action whatsoever with regard to the Collateral or any part
thereof.

Section 16. Indemnity and Expenses. (a) Each Grantor agrees to indemnify, defend
and save and hold harmless each Indemnitee in accordance with, and in the manner
provided in, Section 9.05(b) of the Credit Agreement.

(b) Each Grantor will pay, in accordance with Section 9.05(a) of the Credit
Agreement, as if each Grantor were a party to the Credit Agreement, mutatis
mutandis, to the Administrative Agent the amount of any and all reasonable and
documented out-of-pocket expenses, including, without limitation, the

 

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reasonable and documented out-of-pocket fees and expenses of its counsel, that
the Administrative Agent may incur in connection with (i) the administration of
this Agreement, (ii) the custody, preservation, use or operation of, or the sale
of, collection from or other realization upon, any of the Collateral of such
Grantor, (iii) the exercise or enforcement of any of the rights of the
Administrative Agent or the other Secured Parties hereunder or (iv) the failure
by such Grantor to perform or observe any of the provisions hereof.

Section 17. Amendments; Waivers; Additional Grantors, Etc. (a) No amendment
shall in any event be effective unless the same shall be in writing and signed
by the parties hereto. No waiver of any provision of this Agreement, and no
consent to any departure by any Grantor herefrom, shall in any event be
effective unless the same shall be in writing and signed by the Administrative
Agent, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part of
the Administrative Agent or any other Secured Party to exercise, and no delay in
exercising any right hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.

(b) Upon the execution and delivery, or authentication, by any Person of a
security agreement supplement in substantially the form of Exhibit A hereto
(each, a “Security Agreement Supplement”) pursuant to Section 5.09 of the Credit
Agreement, (i) such Person shall be referred to as an “Additional Grantor” and
shall be and become a Grantor hereunder, and each reference in this Agreement
and the other Loan Documents to “Grantor” shall also mean and be a reference to
such Additional Grantor, and each reference in this Agreement and the other Loan
Documents to “Collateral” shall also mean and be a reference to the Collateral
of such Additional Grantor, and (ii) the supplemental Schedules I-II attached to
each Security Agreement Supplement shall be incorporated into and become a part
of and supplement Schedules I-II, respectively, hereto, and the Administrative
Agent may attach such supplemental schedules to such Schedules; and each
reference to such Schedules shall mean and be a reference to such Schedules as
supplemented pursuant to each Security Agreement Supplement.

Section 18. Notices, Etc. All notices and other communications provided for
hereunder shall be given in accordance with Section 9.01 of the Credit
Agreement. Delivery by telecopier or email (in pdf format) of an executed
counterpart of any amendment or waiver of any provision of this Agreement or of
any Security Agreement Supplement or Schedule hereto shall be effective as
delivery of an original executed counterpart thereof.

Section 19. Continuing Security Interest; Assignments under the Credit
Agreement. This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the Payment in
Full of the Secured Obligations, (b) be binding upon each Grantor, its
successors and assigns and (c) inure, together with the rights and remedies of
the Administrative Agent hereunder, to the benefit of the Secured Parties and
their respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender may assign or otherwise
transfer all or any portion of its rights and obligations under the Credit
Agreement in accordance with the terms thereof (including, without limitation,
all or any portion of its Commitments, the Loans owing to it and the Note or
Notes, if any, held by it) to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise, in each case as provided in Section 9.04 of the
Credit Agreement.

Section 20. Release; Termination. The pledge and security interest granted
hereby shall automatically terminate, the Liens on the Collateral granted under
the Collateral Documents will automatically be released (i) in whole, upon
Payment in Full of the Secured Obligations, (ii) as to any property constituting
Collateral that is sold, leased, transferred or otherwise disposed of by a
Grantor in accordance with the terms of the Loan Documents, including by way of
merger, consolidation or dissolution that is permitted under the Credit
Agreement, (iii) with respect to any Collateral that is owned by a Grantor that
is released from its Guarantee pursuant to Section 5.09(c) of the Credit
Agreement, (iv) with respect to any Security Collateral associated with a
Restricted Subsidiary that is redesignated as an Unrestricted Subsidiary
pursuant to Section

 

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5.09(b) of the Credit Agreement, (v) with respect to the Agreement Collateral,
on the Agreement Collateral Release Date and (vi) with the consent of the
Required Lenders pursuant to Section 9.08(b) of the Credit Agreement, and, in
each case, all rights to the applicable Collateral shall revert to the
applicable Grantor. Notwithstanding any provision to the contrary herein, as and
when requested by any Grantor, the Administrative Agent shall, at the Grantor’s
cost, (y) execute and deliver UCC financing statement amendments or releases
that remove the released Collateral from any previously filed financing
statements that included such released Collateral in the description of the
assets covered thereby and (z) deliver to such Grantor any such released
Collateral in the Administrative Agent’s possession following the release of
such Collateral. If requested in writing by a Grantor, the Administrative Agent
shall, at the Grantor’s cost, promptly execute and deliver such other documents,
instruments or statements and to take such other action as such Grantor may
reasonably request to evidence or confirm that the Collateral released in
accordance with this Section 20 has been released from the Liens of each of the
Collateral Documents.

Section 21. Security Interest Absolute. The obligations of each Grantor under
this Agreement are independent of the Secured Obligations or any other
Obligations of any other Loan Party under or in respect of the Loan Documents,
and a separate action or actions may be brought and prosecuted against each
Grantor to enforce this Agreement, irrespective of whether any action is brought
against such Grantor or any other Loan Party or whether such Grantor or any
other Loan Party is joined in any such action or actions. All rights of the
Administrative Agent and the other Secured Parties and the pledge, assignment
and security interest hereunder, and all obligations of each Grantor hereunder,
shall be irrevocable, absolute and unconditional irrespective of, and each
Grantor hereby irrevocably waives (to the maximum extent permitted by applicable
law) any defenses it may now have or may hereafter acquire in any way relating
to, any or all of the following:

(a) any lack of validity or enforceability of any Loan Document or any other
agreement or instrument relating thereto;

(b) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Secured Obligations or any other Obligations of any other
Loan Party under or in respect of the Loan Documents or any other amendment or
waiver of or any consent to any departure from any Loan Document, including,
without limitation, any increase in the Secured Obligations resulting from the
extension of additional credit to any Loan Party or any of its Subsidiaries or
otherwise;

(c) any taking, exchange, release or non-perfection of any Collateral or any
other collateral, or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured Obligations;

(d) any manner of application of any Collateral or any other collateral, or
proceeds thereof, to all or any of the Secured Obligations, or any manner of
sale or other disposition of any Collateral or any other collateral for all or
any of the Secured Obligations or any other Obligations of any other Loan Party
under or in respect of the Loan Documents or any other assets of any Loan Party
or any of its Subsidiaries;

(e) any change, restructuring or termination of the corporate structure or
existence of any Loan Party or any of its Subsidiaries;

(f) any failure of any Secured Party to disclose to any Loan Party any
information relating to the business, condition (financial or otherwise),
operations, performance, assets, nature of assets, liabilities or prospects of
any other Loan Party now or hereafter known to such Secured Party (each Grantor
waiving any duty on the part of the Secured Parties to disclose such
information);

 

12

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(g) the failure of any other Person to execute this Agreement or any other
Collateral Document, guaranty or agreement or the release or reduction of
liability of any Grantor or other grantor or surety with respect to the Secured
Obligations; or

(h) any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by any
Secured Party that might otherwise constitute a defense available to, or a
discharge of, such Grantor or any other Grantor or a third party grantor of a
security interest.

This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by any Secured Party or by any other Person upon the
insolvency, bankruptcy or reorganization of any Loan Party or otherwise, all as
though such payment had not been made.

Section 22. Third Party Waivers. (a) Each Grantor authorizes the Administrative
Agent to perform any or all of the following acts at any time in its sole
discretion, all without notice to any Grantor, without affecting such Grantor’s
obligations under this Agreement or any other Loan Documents and without
affecting the liens and encumbrances against the Collateral in favor of the
Administrative Agent:

(i) Subject to Section 9.08 of the Credit Agreement, the Administrative Agent
may alter any terms of the Obligations or any part thereof, including renewing,
compromising, extending or accelerating, or otherwise changing the time for
payment of, or increasing or decreasing the rate of interest on, the Obligations
or any part thereof.

(ii) The Administrative Agent may take and hold security for the Obligations,
accept additional or substituted security, and subordinate, exchange, enforce,
waive, release, compromise, fail to perfect and sell or otherwise dispose of any
such security.

(iii) The Administrative Agent may direct the order and manner of any sale of
all or any part of any security now or later to be held for the Obligations, and
the Administrative Agent (or its nominees or designees) may also bid at any such
sale.

(iv) The Administrative Agent may apply any payments or recoveries from any
Borrower, any Grantor or any other source, and any proceeds of any security, to
the obligations under the Loan Documents in such manner, order and priority as
the Administrative Agent may elect.

(v) The Administrative Agent may release any Borrower or any other person or
entity of its liability for the Obligations or any part thereof.

(vi) The Administrative Agent may substitute, add or release any one or more
guarantors or endorsers.

(vii) In addition to the Obligations, the Administrative Agent may extend other
credit to any Borrower, and may take and hold security for the credit so
extended.

(b) Each Grantor waives:

(i) Any right it may have to require the Administrative Agent to proceed against
any Borrower, any Grantor or any other person or entity, proceed against or
exhaust any security held from any Borrower, any Grantor or any person or
entity, or pursue any other remedy in the Administrative Agent’s power to
pursue;

 

13

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(ii) Any defense based on any claim that any Grantor’s obligations exceed or are
more burdensome than those of any Borrower, any Grantor or any other Person;

(iii) Any defense: (A) based on any legal disability of any other Person,
(B) based on any release, discharge, modification, impairment or limitation of
the liability of any other person or entity to the Administrative Agent from any
cause, whether consented to by the Administrative Agent or arising by operation
of law, (C) arising out of or able to be asserted as a result of any case,
action or proceeding before any court or other governmental authority relating
to bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up or relief of any other person or entity or any of their
respective affiliates, or any general assignment for the benefit of creditors,
composition, marshaling of assets for creditors or other, similar arrangement in
respect of its creditors generally or any substantial portion of its creditors;
in each case as undertaken under any U.S. Federal or State law (each of the
foregoing described in this clause (C) being referred to herein as an
“Insolvency Proceeding”); or (D) arising from any rejection or disaffirmance of
the Obligations, or any part thereof, or any security held therefor, in any such
Insolvency Proceeding;

(iv) Any defense based on any action taken or omitted by the Administrative
Agent in any Insolvency Proceeding involving any other Person, including any
election to have the Administrative Agent’s claim allowed as being secured,
partially secured or unsecured, any extension of credit by the Administrative
Agent to any other Person in any Insolvency Proceeding, and the taking and
holding by the Administrative Agent of any security for any such extension of
credit;

(v) All presentments, demands for performance, notices of nonperformance,
protests, notices of protest, notices of dishonor, notices of intention to
accelerate, notices of acceleration, notices of acceptance of this Agreement or
any other Loan Document and of the existence, creation, or incurring of new or
additional indebtedness, and demands and notices of every kind (except or
expressly required by the Credit Agreement); and

(vi) Except for such notices as required by the Loan Documents, any defense
based on or arising out of any defense that the Borrower or any of its
affiliates may have to the payment or performance of the Obligations (other than
the defense that the Obligations have been Paid in Full).

(c) (i) After the occurrence and during the continuance of any Event of Default,
in its sole discretion, without prior notice (except as required by applicable
law) to or consent of any Grantor, the Administrative Agent may elect to:
(A) foreclose against any collateral for the Secured Obligations, (B) accept any
offer to transfer any such collateral for the Secured Obligations in lieu of
foreclosure, (C) compromise or adjust the Secured Obligations or any part
thereof or make any other accommodation with any Grantor or any Person, or
(D) exercise any other remedy against any Grantor or any Person or any
collateral for the Secured Obligations. No such action by the Administrative
Agent shall release or limit the Administrative Agent’s rights hereunder or
under the other Loan Documents, even if the effect of the action is to deprive
any Grantor of any subrogation rights, rights of indemnity, or other rights to
collect reimbursement from any other Grantor or any other Person for any sums
paid to the Administrative Agent, whether contractual or arising by operation of
law or otherwise. Each Grantor expressly agrees that under no circumstances
shall such Grantor be deemed to have any right, title, interest or claim in or
to any real or personal property to be held by the Administrative Agent or any
third party after any foreclosure or transfer in lieu of foreclosure of any
security for the Secured Obligations.

(ii) Subject to the Payment in Full of all Secured Obligations, each Grantor
shall retain its rights to seek contribution and reimbursement from, and rights
of subrogation with respect to, any other Grantor to the extent the Secured
Obligations hereunder render such Grantor insolvent. Such rights of subrogation,
contribution and reimbursement shall be subordinate to the Secured Obligations,
and no Grantor shall enforce any such rights until the Secured Obligations shall
have been Paid in Full.

 

14

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(d) Without limiting the provisions of Sections 22(a), (b) and (c) herein, to
the extent permitted by Applicable Law, Choice International Hospitality
Services, Inc. (the “Subject Grantor”) expressly waives all of the following
rights and defenses (and agrees not to take advantage of or assert any such
right or defense):

(i) any defense based upon the failure of the Administrative Agent or any other
Secured Party to commence an action in respect of the Secured Obligations
against the Borrower, any guarantor or any other Person or any security for the
payment and performance of the Secured Obligations;

(ii) any right to insist upon, plead or in any manner whatever claim or take the
benefit or advantage of, any appraisal, valuation, stay, extension, marshalling
of assets or redemption laws, or exemption, whether now or at any time hereafter
in force, which may delay, prevent or otherwise affect the performance by such
Subject Grantor of its obligations under, or the enforcement by the
Administrative Agent or the other Secured Parties of this Agreement;

(iii) any right of diligence, presentment, demand, protest and notice (except as
specifically required herein or any other Loan Document) of whatever kind or
nature with respect to any of the Secured Obligations and, to the fullest extent
permitted by Applicable Law, the benefit of all provisions of Applicable Law
which are or might be in conflict with the terms of this Agreement;

(iv) any right to revoke this Agreement, other than as provided in Section 20
hereto;

(v) any defense arising by reason of any claim or defense based upon an election
of remedies by any Secured Party that in any manner impairs, reduces, releases
or otherwise adversely affects the subrogation, reimbursement, exoneration,
contribution or indemnification rights of such Subject Grantor or other rights
of such Subject Grantor to proceed against any of the other Loan Parties, any
guarantor or any other Person or any Collateral;

(vi) any defense based on any right of set-off or counterclaim against or in
respect of the Secured Obligations of such Subject Grantor hereunder;

(vii) any duty on the part of any Secured Party to disclose to such Subject
Grantor any information relating to the business, condition (financial or
otherwise), operations, performance, properties or prospects of any other Loan
Party or any of its Subsidiaries now or hereafter known by such Secured Party;
and

(viii) any and all right to notice of the creation, renewal, extension or
accrual of any of the Secured Obligations and notice of or proof of reliance by
the Administrative Agent or any other Secured Party upon, or acceptance of, this
Agreement.

The Subject Grantor agrees that any notice or directive given at any time to the
Administrative Agent or any other Secured Party which is inconsistent with any
of the foregoing waivers shall be null and void and may be ignored by the
Administrative Agent or such other Secured Party, and, in addition, may not be
pleaded or introduced as evidence in any litigation relating to this Agreement
for the reason that such pleading or introduction would be at variance with the
written terms of this Agreement, unless the Administrative Agent and the
Required Lenders have specifically agreed otherwise in writing. The foregoing
waivers are of the essence of the transaction contemplated by the Credit
Agreement, the other Loan Documents and the Hedging Agreements and, but for this
Agreement and such waivers, the Administrative Agent and the other Secured
Parties would decline to enter into the Credit Agreement, the other Loan
Documents and the Hedging Agreements.

 

15

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Section 23. Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier or email (in pdf format) shall be effective as delivery
of an original executed counterpart of this Agreement.

Section 24. The Credit Agreement. If any conflict or inconsistency exists
between this Agreement and the Credit Agreement, the Credit Agreement shall
control and govern to the extent of such inconsistency.

Section 25. Jurisdiction, Etc. (a) Each of the parties hereto hereby irrevocably
and unconditionally submits, for itself and its property, to the exclusive
jurisdiction of any New York State court or Federal court of the United States
of America sitting in the County and City of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Loan Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State court or, to the extent permitted by law,
in such Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement shall affect any right that any Secured Party may
otherwise have to bring any action or proceeding relating to this Agreement or
the other Loan Documents against the Loan Parties or their properties in the
courts of any jurisdiction.

(b) Each of the parties hereto irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this agreement or the other Loan Documents in any
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

Section 26. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.

Section 27. WAIVER OF JURY TRIAL. Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent permitted by applicable law,
(a) any right it may have to a trial by jury in respect of any litigation
directly or indirectly arising out of, under or in connection with this
Agreement or any of the other Loan Documents and (b) any claims for punitive
damages (to the extent such claims arise from the use of proceeds of the Loans
for the purpose of acquisitions). Each party hereto (i) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce the foregoing waiver and (ii) acknowledges that it and the other
parties hereto have been induced to enter into this Agreement and the other Loan
Documents, as applicable, by, among other things, the mutual waivers and
certifications in this Section 27.

[Signatures on following pages]

 

16

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IN WITNESS WHEREOF, each Grantor and the Administrative Agent has caused this
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.

 

DEUTSCHE BANK AG NEW YORK BRANCH,

as Administrative Agent

By:  

 

  Name:   Title: By:  

 

  Name:   Title:

[Signatures continue on following pages]

 

S-1   

Choice Hotels – Security Agreement

JULY 2012

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

GRANTORS:

 

CHOICE HOTELS INTERNATIONAL SERVICES CORP.

By:  

 

Name:  

 

Title:   CHOICE HOTELS INTERNATIONAL, INC. By:  

 

Name:  

 

Title:  

 

SUBURBAN FRANCHISE HOLDING CO., INC. By:  

 

Name:  

 

Title:  

 

CHOICE INTERNATIONAL HOSPITALITY SERVICES, INC. By:  

 

Name:  

 

Title:  

 

[End of Signatures]

 

S-2   

Choice Hotels – Security Agreement

JULY 2012

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

Schedule I to the

Security Agreement

LOCATION, CHIEF EXECUTIVE OFFICE, TYPE OF ORGANIZATION, JURISDICTION OF
ORGANIZATION AND ORGANIZATIONAL IDENTIFICATION NUMBER

 

Grantor

  

Location and

Chief Executive Office

  

Type of
Organization

  

Jurisdiction
of
Organization

  

Organizational
I.D. No.

Choice Hotels International, Inc.   

6903 Rockledge Drive, Ste. 1500

Bethesda, Maryland 20817

   Corporation    DE    0904589 Choice Hotels International Services Corp.   

6903 Rockledge Drive, Ste. 1500

Bethesda, Maryland 20817

   Corporation    DE    2953838 Choice International Hospitality Services, Inc.
  

6903 Rockledge Drive, Ste. 1500

Bethesda, Maryland 20817

   Corporation    DE    2401370 Suburban Franchise Holding Company, Inc.   

6903 Rockledge Drive, Ste. 1500

Bethesda, Maryland 20817

   Corporation    GA    0544699

 

Schedule I

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

Schedule II to the

Security Agreement

PLEDGED EQUITY

 

Grantor

  

Issuer

   Class of Equity
Interest    Par Value    Certificate
No(s)    Number
of Shares    Percentage
of
Outstanding
Shares

Choice Hotels International, Inc.

   Choice Hotels International Services Corp.    Common    $0.01/share    A-1   
1,000    100

Choice Hotels International, Inc.

   Choice Capital Corp.    Common    $1.00/share    1    1    100

Choice Hotels International, Inc.

   Suburban Franchise Holding Company, Inc.    Common    None    A-1    1,000   
100

Choice Hotels International, Inc.

   Choice International Hospitality Services, Inc.    Common    $1.00/share   
A-1    65    65

Suburban Franchise Holding Co., Inc.

   Suburban Franchise Systems, Inc.    Common    $0.01/share    A-1    1,000,000
   100

Choice International Hospitality Services, Inc.

   Choice Hotels Netherlands Antilles N.V.    Common    $1.00/share    4   
3,900    65

Choice Hotels International Services Corp.

   Dry Pocket Road Hotel Development, LLC    N/A    N/A    N/A    N/A    100

Choice Hotels International Services Corp.

   Brentwood Boulevard Hotel Development, LLC    N/A    N/A    N/A    N/A    100

Choice Hotels International Services Corp.

   Park Lane Drive Hotel Development, LLC    N/A    N/A    N/A    N/A    100

Choice Hotels International Services Corp.

   CSES, LLC    N/A    N/A    N/A    N/A    100

Schedule II

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

Exhibit A to the

Security Agreement

FORM OF SECURITY AGREEMENT SUPPLEMENT

[Date of Security Agreement Supplement]

 

To: DEUTSCHE BANK AG NEW YORK BRANCH,

as Administrative Agent

60 Wall Street

New York, New York 10022

Attention: Amy Sinensky

Telephone: 212-250-4063

Fax: 212-797-4885

agency.transaction@db.com

Choice Hotels International, Inc.

Ladies and Gentlemen:

Reference is made to (i) the Senior Secured Credit Agreement dated as of
July 25, 2012 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among Choice Hotels
International, Inc., as the Borrower, the Lenders party thereto, Deutsche Bank
AG New York Branch, as administrative agent (together with any successor
administrative agent appointed pursuant to Article VIII of the Credit Agreement,
the “Administrative Agent”), and (ii) the Security Agreement dated July 25, 2012
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the “Security Agreement”) made by the Grantors from time to time party
thereto in favor of the Administrative Agent for the Secured Parties. Terms
defined in the Credit Agreement or the Security Agreement and not otherwise
defined herein are used herein as defined in the Credit Agreement or the
Security Agreement.

SECTION 1. Grant of Security. The undersigned hereby grants to the
Administrative Agent, for the ratable benefit of the Secured Parties, a security
interest in, all of its right, title and interest in and to all of the
Collateral of the undersigned, whether now owned or hereafter acquired by the
undersigned, wherever located and whether now or hereafter existing or arising
(other than any Excluded Collateral), including, without limitation, the
Collateral of the undersigned set forth on the attached supplemental schedules
to the Schedules to the Security Agreement.

SECTION 2. Security for Obligations. The grant of a security interest in, the
Collateral (other than any Excluded Collateral) by the undersigned under this
Security Agreement Supplement and the Security Agreement secures the payment of
all Obligations of the undersigned now or hereafter existing under or in respect
of the Loan Documents, whether direct or indirect, absolute or contingent, and
whether for principal, reimbursement obligations, interest, premiums, penalties,
fees, indemnifications, contract causes of action, costs, expenses or otherwise.
Without limiting the generality of the foregoing, this Security Agreement
Supplement and the Security Agreement secure the payment of all amounts that
constitute part of the Secured Obligations and that would be owed by the
undersigned to any Secured Party under the Loan Documents but for the fact that
such Secured Obligations are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding involving a Loan Party.

 

Exhibit A-1

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

SECTION 3. Supplements to Security Agreement Schedules. The undersigned has
attached hereto supplemental Schedules I and II to Schedules I and II
respectively, to the Security Agreement, and the undersigned hereby certifies,
as of the date first above written, that such supplemental schedules have been
prepared by the undersigned in substantially the form of the equivalent
Schedules to the Security Agreement and are complete and correct.

SECTION 4. Representations and Warranties. The undersigned hereby makes each
representation and warranty set forth in Section 5 of the Security Agreement (as
supplemented by the attached supplemental schedules) to the same extent as each
other Grantor.

SECTION 5. Obligations Under the Security Agreement. The undersigned hereby
agrees, as of the date first above written, to be bound as a Grantor by all of
the terms and provisions of the Security Agreement to the same extent as each of
the other Grantors. The undersigned further agrees, as of the date first above
written, that each reference in the Security Agreement to an “Additional
Grantor” or a “Grantor” shall also mean and be a reference to the undersigned.

SECTION 6. Jurisdiction, Etc. (a) Each of the parties hereto hereby irrevocably
and unconditionally submits, for itself and its property, to the exclusive
jurisdiction of any New York State court or Federal court of the United States
of America sitting in the County and City of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Loan Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State court or, to the extent permitted by law,
in such Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement shall affect any right that any Secured Party may
otherwise have to bring any action or proceeding relating to this Agreement or
the other Loan Documents against the Loan Parties or their properties in the
courts of any jurisdiction.

(b) Each of the parties hereto irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this agreement or the other Loan Documents in any
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

SECTION 7. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.

SECTION 8. WAIVER OF JURY TRIAL. unconditionally waives, to the fullest extent
permitted by applicable law, (a) any right it may have to a trial by jury in
respect of any litigation directly or indirectly arising out of, under or in
connection with this Agreement or any of the other Loan Documents and (b) any
claims for punitive damages (to the extent such claims arise from the use of
proceeds of the Loans for the purpose of acquisitions). Each party hereto
(i) certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver and (ii) acknowledges
that it and the other parties hereto have been induced to enter into this
Agreement and the other Loan Documents, as applicable, by, among other things,
the mutual waivers and certifications in this Section 8.

 

Exhibit A-2

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

Very truly yours, [NAME OF ADDITIONAL GRANTOR] By  

 

  Title:       Address for notices:    

 

   

 

   

 

 

Exhibit A-3

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

Exhibit B to the

Security Agreement

FORM OF AUTHORIZATION STATEMENT

[            ] [    ], 20[    ]

 

To: [Name and Address of Issuer]

Reference is made to the Security Agreement, dated July 25, 2012 (the “Security
Agreement”; capitalized terms used herein without definition shall have the
respective meanings ascribed to them in the Security Agreement), made by the
undersigned and certain other Loan Parties to Deutsche Bank AG New York Branch,
as Administrative Agent, a copy of which is attached hereto. Pursuant to the
Security Agreement, the undersigned hereby notifies [Name of Issuer] that the
undersigned has granted to the Administrative Agent, for the ratable benefit of
the Secured Parties, a security interest (the “Security Interest”) in all of the
undersigned’s right, title and interest in and to all of the Pledged Equity
(including all of the Equity Interests of the undersigned in [Name of Issuer]),
and hereby instructs [Name of Issuer] to register the Security Interest in favor
of:

Deutsche Bank AG New York Branch, as Administrative Agent

60 Wall Street

New York, New York 10005

Attention: Amy Sinensky

Telephone: 212-250-4063

Fax: 212-797-4885

 

Very truly yours, [NAME OF PLEDGOR] By:  

 

  Name:   Title:

 

Exhibit B-1

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

Exhibit C to the

Security Agreement

FORM OF ACKNOWLEDGEMENT AND CONSENT

The undersigned hereby acknowledges receipt of a copy of the Authorization
Statement, dated as of [            ] [    ], [20    ] and the Security
Agreement referred to therein.

 

[NAME OF ISSUER] By:  

 

  Name:   Title:

 

Exhibit C-1

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

Exhibit D to the

Security Agreement

FORM OF TRANSACTION STATEMENT

[            ] [    ], 20[    ]

 

To: [NAME OF PLEDGOR]

and

DEUTSCHE BANK AG NEW YORK BRANCH,

as Administrative Agent

60 Wall Street

New York, New York 10005

Attn.: Amy Sinensky

This Transaction Statement is to advise you that the pledge of [describe Pledged
Equity] (“Pledged Equity”) has been registered in favor of Deutsche Bank AG New
York Branch, as Administrative Agent (“Lienholder”), as follows:

Deutsche Bank AG New York Branch,

as Administrative Agent

60 Wall Street

New York, New York 10005

Attn.: Amy Sinensky

Taxpayer identification number: 35-2420193.

The pledge was registered on [INSERT DATE OF REGISTRATION].

To the extent the Pledged Equity shall at any time be deemed “uncertificated
securities” under Article 8 of the Uniform Commercial Code as in effect from
time to time in the jurisdiction of the undersigned, the undersigned agrees that
it will comply with instructions originated by the Lienholder with respect to
the Pledged Equity without further consent by [Name of Grantor].

 

Exhibit D-1

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

This Transaction Statement is merely a record of the rights of the addressees as
of the time of its issuance. Delivery of this Transaction Statement, of itself,
confers no rights on the recipients. This Transaction Statement is neither a
negotiable instrument nor a security.

 

Very truly yours, [NAME OF ISSUER] By:  

 

  Name:   Title:

 

Exhibit D-2

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

EXHIBIT F-1

to

Senior Secured Credit Agreement

dated as of July 25, 2012

by and among

Choice Hotels International, Inc.,

as Borrower,

the Lenders party thereto

and

Deutsche Bank AG New York Branch,

as Administrative Agent

FORM OF TERM NOTE

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

TERM NOTE

 

$__________    Dated: __________, 2012

FOR VALUE RECEIVED, the undersigned, CHOICE HOTELS INTERNATIONAL, INC. a
Delaware corporation (the “Borrower”), HEREBY PROMISES TO PAY
                     (the “Lender”) the principal amount of the Term Advance (as
defined below) owing to the Lender by the Borrower pursuant to the Senior
Secured Credit Agreement dated as of July 25, 2012 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”; terms defined therein, unless otherwise defined herein, being used
herein as therein defined) among the Borrower, the Lender and certain other
lender parties party thereto, and Deutsche Bank AG New York Branch, as
Administrative Agent for the Lender and such other lender parties.

The Borrower promises to pay interest on the unpaid principal amount of the Term
Advance from the date of such Term Advance until such principal amount is paid
in full, at such interest rates, and payable at such times, as are specified in
the Credit Agreement.

Both principal and interest are payable in lawful money of the United States of
America to Deutsche Bank AG New York Branch, as Administrative Agent, at 60 Wall
Street, New York, New York 10005, in same day funds. The Term Advance owing to
the Lender by the Borrower, and all payments made on account of principal
thereof, shall be recorded by the Lender and, prior to any transfer hereof,
endorsed on the grid attached hereto, which is part of this Promissory Note;
provided, however, that the failure of the Lender to make any such recordation
or endorsement shall not affect the Obligations of the Borrower under this
Promissory Note.

This Promissory Note is one of the Notes referred to in, and is entitled to the
benefits of, the Credit Agreement. The Credit Agreement, among other things,
(i) provides for the making of a single advance (the “Term Advance”) by the
Lender to the Borrower in an amount not to exceed the U.S. dollar amount first
above mentioned, the indebtedness of the Borrower resulting from such Term
Advance being evidenced by this Promissory Note, and (ii) contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified. If any conflict
or inconsistency exists between this Term Note and the Credit Agreement, the
Credit Agreement shall control and govern to the extent of such conflict or
inconsistency. The obligations of the Borrower under this Promissory Note and
the other Loan Documents, and the obligations of the other Loan Parties under
the Loan Documents, are secured by the Collateral as provided in the Loan
Documents.

[Signature Page Follows]

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CHOICE HOTELS INTERNATIONAL, INC.

By:

    Name:  

 

Title:  

 

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PAYMENTS OF PRINCIPAL

 

Date  

Amount of

Principal Paid

or Prepaid

 

Unpaid

Principal

Balance

  

Notation

Made By

                                                                                
                                                                              
                                                                               
                                                                                
                                                                              
                                                                               
                                                                                
                                                                              
                                                                               
                             

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EXHIBIT F-2

to

Senior Secured Credit Agreement

dated as of July 25, 2012

by and among

Choice Hotels International, Inc.,

as Borrower,

the Lenders party thereto

and

Deutsche Bank AG New York Branch,

as Administrative Agent

FORM OF REVOLVING NOTE

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REVOLVING NOTE

 

$                                   Dated:                     , 2012

FOR VALUE RECEIVED, the undersigned, CHOICE HOTELS INTERNATIONAL, INC. a
Delaware corporation (the “Borrower”), HEREBY PROMISES TO PAY
                     (the “Lender”) on the Maturity Date the aggregate principal
amount of the Revolving Credit Advances, the Revolving L/C Advances and the
Swing Line Advances (each as defined below) owing to the Lender by the Borrower
pursuant to the Senior Secured Credit Agreement dated as of July 25, 2012 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”; terms defined therein, unless otherwise defined
herein, being used herein as therein defined) among the Borrower, the Lender and
certain other lender parties party thereto, and Deutsche Bank AG New York
Branch, as Administrative Agent for the Lender and such other lender parties.

The Borrower promises to pay interest on the unpaid principal amount of each
Revolving Credit Advance, Revolving L/C Advance and Swing Line Advance from the
date of such Revolving Credit Advance, Revolving L/C Advance or Swing Line
Advance, as the case may be, until such principal amount is paid in full, at
such interest rates, and payable at such times, as are specified in the Credit
Agreement.

Both principal and interest are payable in the applicable Permitted Currency in
which each Revolving Loan was initially funded to Deutsche Bank AG New York
Branch, as Administrative Agent, at 60 Wall Street, New York, New York 10005, in
same day funds. Each Revolving Credit Advance, Revolving L/C Advance and Swing
Line Advance owing to the Lender by the Borrower, and all payments made on
account of principal thereof, shall be recorded by the Lender and, prior to any
transfer hereof, endorsed on the grid attached hereto, which is part of this
Promissory Note; provided, however, that the failure of the Lender to make any
such recordation or endorsement shall not affect the Obligations of the Borrower
under this Promissory Note.

This Promissory Note is one of the Notes referred to in, and is entitled to the
benefits of, the Credit Agreement. The Credit Agreement, among other things,
(i) provides for the making of advances (variously, the “Revolving Credit
Advances,” the “Revolving L/C Advances” or the “Swing Line Advances”) by the
Lender to or for the benefit of the Borrower from time to time in an aggregate
amount not to exceed at any time outstanding the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from each such Revolving
Credit Advance, Revolving L/C Advance and Swing Line Advance being evidenced by
this Promissory Note, and (ii) contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified. If any conflict or inconsistency exists
between this Revolving Note and the Credit Agreement, the Credit Agreement shall
control and govern to the extent of such conflict or inconsistency. The
obligations of the Borrower under this Promissory Note and the other Loan
Documents, and the obligations of the other Loan Parties under the Loan
Documents, are secured by the Collateral as provided in the Loan Documents.

[Signature Page Follows]

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CHOICE HOTELS INTERNATIONAL, INC.

By:

   

Name:

     

Title:

     

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ADVANCES AND PAYMENTS OF PRINCIPAL

 

Date   Amount of
Advance   Amount of
Principal Paid
or Prepaid    Unpaid
Principal
Balance    Notation
Made By                                                                         
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
      

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EXHIBIT G

to

Senior Secured Credit Agreement

dated as of July 25, 2012

by and among

Choice Hotels International, Inc.,

as Borrower,

the Lenders party thereto

and

Deutsche Bank AG New York Branch,

as Administrative Agent

FORM OF DESIGNATED BANK NOTE

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FORM OF DESIGNATED BANK NOTE

 

$                                                   
     ,20                    

FOR VALUE RECEIVED, Choice Hotels International, Inc., a Delaware corporation
(the “Borrower”), promises to pay to                                         
(the “Lender”) the unpaid principal amount of each Competitive Bid Loan made by
the Lender to the Borrower pursuant to the Credit Agreement referred to below on
the dates specified therein. The Borrower promises to pay interest on the unpaid
principal amount of each such Competitive Bid Loan on the dates and at the rate
or rates provided for in the Credit Agreement. All such payments of principal
and interest shall be made in lawful money of the United States in immediately
available funds at the office of the Administrative Agent.

All Competitive Bid Loans made by the Lender, the respective types and
maturities thereof and all repayments of the principal thereof shall be recorded
by the Lender and, if the Lender so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the foregoing information
with respect to each such Competitive Bid Loan then outstanding may be endorsed
by the Lender on the schedule attached hereto, or on a continuation of such
schedule attached to and made a part hereof; provided that the failure of the
Lender to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Credit Agreement.

This promissory note is one of the Designated Bank Notes referred to in the
Senior Secured Credit Agreement, dated as of July 25, 2012, by and among the
Borrower, the institutions from time to time party thereto, and Deutsche Bank AG
New York Branch, as Administrative Agent (as amended, supplemented, restated, or
otherwise modified from time to time, the “Credit Agreement”). Capitalized terms
used herein and not defined herein shall have the meanings assigned thereto in
the Credit Agreement. Reference is made to the Credit Agreement for provisions
for the prepayment hereof, the acceleration of the maturity hereof upon the
happening of certain events and certain waivers by the Borrower.

THIS PROMISSORY NOTE SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE
PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK.

 

BORROWER: CHOICE HOTELS INTERNATIONAL, INC. By:     Name:   Title:  

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LOANS AND PAYMENTS OF PRINCIPAL

 

Date  

Amount of

Loan

 

Type of

Loan

 

Amount of

Principal

Repaid

 

Maturity

Date

 

Notation

Made By

                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                           

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EXHIBIT H

to

Senior Secured Credit Agreement

dated as of July 25, 2012

by and among

Choice Hotels International, Inc.,

as Borrower,

the Lenders party thereto

and

Deutsche Bank AG New York Branch,

as Administrative Agent

FORM OF DESIGNATION AGREEMENT

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FORM OF DESIGNATION AGREEMENT

Dated                                 , 20        

Reference is made to the Senior Secured Credit Agreement dated as of July 25,
2012 (as amended, supplemented, restated or otherwise modified from time to
time, the “Credit Agreement”), among Choice Hotels International, Inc., a
Delaware corporation (the “Borrower”), the Lenders named therein, and Deutsche
Bank AG New York Branch, as Administrative Agent. Capitalized terms used herein
and not defined herein shall have the meanings assigned thereto in the Credit
Agreement.

[NAME OF DESIGNOR] (the “Designor”), [NAME OF DESIGNEE] (the “Designee”), and
the Administrative Agent agree as follows:

1. The Designor hereby designates the Designee, and the Designee hereby accepts
such designation, to have a right to make Competitive Bid Loans pursuant to
Article II of the Credit Agreement. Any assignment by the Designor to the
Designee of its rights to make a Competitive Bid Loan pursuant to such Article
II shall be effective at the time of the funding of such Competitive Bid Loan
and not before such time.

2. Except as set forth in Section 7 below, the Designor makes no representation
or warranty and assumes no responsibility pursuant to this Designation Agreement
with respect to (a) any statements, warranties or representations made in or in
connection with any Loan Document or any other instrument or document furnished
pursuant thereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Loan Document or any other instrument
and document furnished pursuant thereto and (b) the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under any Loan Document or any other instrument or document
furnished pursuant thereto.

3. The Designee (a) confirms that it has received a copy of each Loan Document,
together with copies of the financial statements referred to in the Credit
Agreement and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Designation
Agreement; (b) agrees that it will independently and without reliance upon the
Administrative Agent, the Designor 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 any Loan
Document; (c) confirms that it is a Designated Bank; (d) appoints and authorizes
the Administrative Agent to take such action as agent on its behalf and to
exercise such powers and discretion under any Loan Document as are delegated to
the Administrative Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; and (e) agrees to be bound by
each and every provision of each Loan Document and further agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of any Loan Document are required to be performed by it as a Designated Bank,
including any and all obligations set forth in Section 9.04(i) of the Credit
Agreement.

4. The Designee hereby appoints the Designor as the Designee’s agent and
attorney in fact, and grants to the Designor an irrevocable power of attorney,
to receive payments made for the benefit of the Designee under the Credit
Agreement, to deliver and receive all communications and notices under the
Credit Agreement and other Loan Documents and to exercise on the Designee’s
behalf all rights to vote and to grant and make approvals, waivers, consents or
amendments to or under the Credit Agreement or other Loan Documents. Any
document executed by the Designor on the Designee’s behalf in connection with
the Credit Agreement or other Loan Documents shall be binding on the Designee to
the same extent as if actually signed by the Designee. The Borrower, the
Administrative Agent and each of the other Lenders may rely on and are
beneficiaries of the preceding provisions.

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

5. Following the execution of this Designation Agreement by the Designor and the
Designee, it will be delivered to the Administrative Agent for acceptance by the
Administrative Agent. The effective date for this Designation Agreement (the
“Effective Date”) shall be the date of acceptance hereof by the Administrative
Agent, unless otherwise specified on the signature page hereto.

6. The Designor unconditionally agrees to pay or reimburse the Designee for, and
save the Designee harmless against, all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed or asserted by any of the
parties to the Loan Documents against the Designee, in its capacity as such, in
any way relating to or arising out of this Designation Agreement or any other
Loan Documents or any action taken or omitted by the Designee hereunder or
thereunder.

7. Upon such acceptance by the Administrative Agent, as of the Effective Date,
the Designee shall be a party to the Credit Agreement with a right to make
Competitive Bid Loans as a Lender pursuant to Sections 2.03 and 2.04 of the
Credit Agreement and the rights and obligations of a Lender related thereto.
Notwithstanding the foregoing, the Designor, as agent for the Designee, shall be
and remain obligated to the Borrower and the other Lenders for each and every
one of the obligations of the Designee and the Designor with respect to the
Credit Agreement and any sums otherwise payable to the Borrower by the Designee.

8. This Designation Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York.

9. This Designation Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Designation Agreement by facsimile transmission shall be
effective as delivery of a manually executed counterpart of this Designation
Agreement.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Designor and the Designee, intending to be legally
bound, have caused this Designation Agreement to be executed by their officers
thereunto duly authorized as of the date first above written.

 

Effective Date:    

                                         , 20        

 

[NAME OF DESIGNOR], as Designor

    By:         Name:       Title:  

 

    [NAME OF DESIGNEE], as Designee     By:         Name:       Title:      

 

Applicable Lending Office (and address for notices):

 

                        [ADDRESS]

 

Accepted this                     day of                     , 20        

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent

By:                                                                       
                                Name: Title: