Exhibit 10.1
Loan Number: 104239
(WELLS FARGO LOGO) [c04610c0461001.gif]
EXECUTION COPY
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of August 6, 2010
by and among
DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP,
as Borrower,
DIAMONDROCK HOSPITALITY COMPANY,
as Parent,
THE FINANCIAL INSTITUTIONS PARTY HERETO
AND THEIR ASSIGNEES UNDER SECTION 13.6.,
as Lenders,
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent,
BANK OF AMERICA, N.A.,
as Syndication Agent,
DEUTSCHE BANK SECURITIES INC. and CITIBANK, N.A.,
as Co — Documentation Agents,
and
WELLS FARGO SECURITIES, LLC and BANC OF AMERICA SECURITIES LLC,
as Joint Lead Arrangers and
Joint Lead Bookrunners,

 

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TABLE OF CONTENTS

         
Article I. Definitions
    1  
 
       
Section 1.1. Definitions
    1  
Section 1.2. General; References to Pacific Time
    27  
Section 1.3. Financial Attributes of Non-Wholly Owned Subsidiaries
    27  
 
       
Article II. Credit Facility
    27  
 
       
Section 2.1. Loans
    27  
Section 2.2. Letters of Credit
    29  
Section 2.3. Rates and Payment of Interest on Loans
    33  
Section 2.4. Number of Interest Periods
    34  
Section 2.5. Repayment of Loans
    34  
Section 2.6. Prepayments
    34  
Section 2.7. Continuation
    35  
Section 2.8. Conversion
    36  
Section 2.9. Notes
    36  
Section 2.10. Voluntary Reductions of the Commitment
    37  
Section 2.11. Extension of Termination Date
    37  
Section 2.12. Expiration Date of Letters of Credit Past Commitment Termination
    38  
Section 2.13. Amount Limitations
    38  
Section 2.14. Increase in Commitments
    38  
Section 2.15. Funds Transfer Disbursements
    39  
 
       
Article III. Payments, Fees and Other General Provisions
    40  
 
       
Section 3.1. Payments
    40  
Section 3.2. Pro Rata Treatment
    41  
Section 3.3. Sharing of Payments, Etc.
    42  
Section 3.4. Several Obligations
    42  
Section 3.5. Fees
    42  
Section 3.6. Computations
    43  
Section 3.7. Usury
    44  
Section 3.8. Statements of Account
    44  
Section 3.9. Defaulting Lenders
    44  
Section 3.10. Taxes; Foreign Lenders
    47  
 
       
Article IV. Unencumbered Borrowing Base Properties
    49  
 
       
Section 4.1. Eligibility of Properties
    49  
Section 4.2. Reclassification of Properties
    52  
 
       
Article V. Yield Protection, Etc.
    53  
 
       
Section 5.1. Additional Costs; Capital Adequacy
    53  
Section 5.2. Suspension of LIBOR Loans
    55  
Section 5.3. Illegality
    55  
Section 5.4. Compensation
    55  
Section 5.5. Treatment of Affected Loans
    56  
Section 5.6. Change of Lending Office
    57  
Section 5.7. Assumptions Concerning Funding of LIBOR Loans
    57  
Section 5.8. Affected Lenders
    57  

 

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Article VI. Conditions Precedent
    58  
 
       
Section 6.1. Initial Conditions Precedent
    58  
Section 6.2. Conditions Precedent to All Loans and Letters of Credit
    60  
 
       
Article VII. Representations and Warranties
    61  
 
       
Section 7.1. Representations and Warranties
    61  
Section 7.2. Survival of Representations and Warranties, Etc.
    67  
 
       
Article VIII. Affirmative Covenants
    68  
 
       
Section 8.1. Preservation of Existence and Similar Matters
    68  
Section 8.2. Compliance with Applicable Law and Material Contracts
    68  
Section 8.3. Maintenance of Property
    68  
Section 8.4. Conduct of Business
    68  
Section 8.5. Insurance
    68  
Section 8.6. Payment of Taxes and Claims
    69  
Section 8.7. Inspections
    69  
Section 8.8. Use of Proceeds; Letters of Credit
    69  
Section 8.9. Environmental Matters
    70  
Section 8.10. Books and Records
    70  
Section 8.11. Further Assurances
    70  
Section 8.12. REIT Status
    71  
Section 8.13. Exchange Listing
    71  
Section 8.14. Additional Guarantors
    71  
Section 8.15. Release of Guarantors
    71  
 
       
Article IX. Information
    72  
 
       
Section 9.1. Quarterly Financial Statements
    72  
Section 9.2. Year-End Statements
    72  
Section 9.3. Compliance Certificate
    73  
Section 9.4. Other Information
    73  
Section 9.5. Electronic Delivery of Certain Information
    76  
Section 9.6. Public/Private Information
    76  
Section 9.7. USA Patriot Act Notice; Compliance
    76  
 
       
Article X. Negative Covenants
    77  
 
       
Section 10.1. Financial Covenants
    77  
Section 10.2. Restricted Payments
    79  
Section 10.3. Indebtedness
    79  
Section 10.4. Certain Permitted Investments
    79  
Section 10.5. Investments Generally
    80  
Section 10.6. Negative Pledge
    80  
Section 10.7. Merger, Consolidation, Sales of Assets and Other Arrangements
    81  
Section 10.8. Fiscal Year
    82  
Section 10.9. Modifications of Material Contracts
    83  
Section 10.10. Modifications of Organizational Documents
    83  
Section 10.11. Transactions with Affiliates
    83  
Section 10.12. ERISA Exemptions
    83  
Section 10.13. Environmental Matters
    83  
Section 10.14. Derivatives Contracts
    84  

 

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Article XI. Default
    84  
 
       
Section 11.1. Events of Default
    84  
Section 11.2. Remedies Upon Event of Default
    87  
Section 11.3. Remedies Upon Default
    88  
Section 11.4. Marshaling; Payments Set Aside
    89  
Section 11.5. Allocation of Proceeds
    89  
Section 11.6. Letter of Credit Collateral Account
    89  
Section 11.7. Performance by Administrative Agent
    91  
Section 11.8. Rights Cumulative
    91  
 
       
Article XII. The Administrative Agent
    91  
 
       
Section 12.1. Appointment and Authorization
    91  
Section 12.2. Administrative Agent’s Reliance
    92  
Section 12.3. Notice of Events of Default
    93  
Section 12.4. Wells Fargo as Lender
    93  
Section 12.5. Approvals of Lenders
    93  
Section 12.6. Lender Credit Decision, Etc.
    94  
Section 12.7. Indemnification of Administrative Agent
    95  
Section 12.8. Successor Administrative Agent
    96  
Section 12.9. Titled Agents
    96  
 
       
Article XIII. Miscellaneous
    97  
 
       
Section 13.1. Notices
    97  
Section 13.2. Expenses
    99  
Section 13.3. Stamp, Intangible and Recording Taxes
    100  
Section 13.4. Setoff
    100  
Section 13.5. Litigation; Jurisdiction; Other Matters; Waivers
    100  
Section 13.6. Successors and Assigns
    101  
Section 13.7. Amendments and Waivers
    104  
Section 13.8. Nonliability of Administrative Agent and Lenders
    106  
Section 13.9. Confidentiality
    106  
Section 13.10. Indemnification
    107  
Section 13.11. Termination; Survival
    109  
Section 13.12. Severability of Provisions
    109  
Section 13.13. GOVERNING LAW
    109  
Section 13.14. Counterparts
    109  
Section 13.15. Obligations with Respect to Loan Parties
    110  
Section 13.16. Independence of Covenants
    110  
Section 13.17. Limitation of Liability
    110  
Section 13.18. Entire Agreement
    110  
Section 13.19. Construction
    111  
Section 13.20. Headings
    111  
Section 13.21. No Novation
    111  

     
SCHEDULE I
  Commitments
SCHEDULE 1.1.
  List of Loan Parties
SCHEDULE 4.1.
  Initial Unencumbered Borrowing Base Properties
SCHEDULE 7.1.(b)
  Ownership Structure
SCHEDULE 7.1.(f)
  Title to Properties; Occupancy Rates; Liens

 

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

 

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THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) dated as of
August 6, 2010 by and among DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP, a
limited partnership formed under the laws of the State of Delaware (the
“Borrower”), DIAMONDROCK HOSPITALITY COMPANY, a corporation formed under the
laws of the State of Maryland (the “Parent”), each of the financial institutions
initially a signatory hereto together with their successors and assignees under
Section 13.6. (the “Lenders”), WELLS FARGO BANK, NATIONAL ASSOCIATION, successor
in interest to Wachovia Bank, National Association, as Administrative Agent (the
“Administrative Agent”), BANK OF AMERICA, N.A., as Syndication Agent (the
“Syndication Agent”), DEUTSCHE BANK SECURITIES INC. and CITIBANK, N.A., as Co-
Documentation Agents (the “Documentation Agents”), and each of WELLS FARGO
SECURITIES, LLC and BANC OF AMERICA SECURITIES LLC, as Joint Lead Arrangers and
Joint Lead Bookrunners (collectively, the “Lead Arrangers”).
WHEREAS, certain of the Lenders and other financial institutions have made
available to the Borrower a revolving credit facility in the amount of
$200,000,000, including a $50,000,000 letter of credit subfacility and a
$25,000,000 swingline subfacility, on the terms and conditions contained in that
certain Amended and Restated Credit Agreement dated as of February 28, 2007 (as
amended and in effect immediately prior to the date hereof, the “Existing Credit
Agreement”) by and among the Parent, the Borrower, such Lenders, certain other
financial institutions, the Agent and the other parties thereto; and
WHEREAS, the Administrative Agent, the Issuing Bank and the Lenders desire to
amend and restate the terms of the Existing Credit Agreement to make available
to the Borrower a revolving credit facility in the initial amount of
$200,000,000, which will include a $30,000,000 letter of credit subfacility, on
the terms and conditions contained herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties hereto, the parties hereto agree
that the Existing Credit Agreement is amended and restated in its entirety as
follows:
Article I. Definitions
Section 1.1. Definitions.
In addition to terms defined elsewhere herein, the following terms shall have
the following meanings for the purposes of this Agreement:
“Accession Agreement” means an Accession Agreement substantially in the form of
Annex I to the Guaranty.
“Accommodation Subsidiary” has the meaning given that term in Section 4.1.(d).
“Additional Costs” has the meaning given that term in Section 5.1.(b).
“Adjusted EBITDA” means, for any given period, (a) the EBITDA of the Parent and
its Subsidiaries determined on a consolidated basis for such period, minus
(b) FF&E Reserves for such period.

 

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“Adjusted Funds From Operations” means, with respect to a Person and for a given
period, (a) net income (loss) of such Person determined on a consolidated basis
for such period minus (or plus) (b) gains (or losses) from debt restructuring
and sales of property during such period plus (c) depreciation with respect to
such Person’s real estate assets and amortization of such Person for such
period, all after adjustment for unconsolidated partnerships and joint ventures.
The following shall be excluded from Adjusted Funds From Operations (but only to
the extent otherwise included above): (i) Interest Expense; (ii) income tax
expense; (iii) extraordinary or non-recurring gains and losses; (iv) closing
costs expensed which are directly attributable to the acquisition of Property;
(v) severance costs; and (vi) other non-cash charges including, without
limitation, impairment charges (other than non-cash charges that constitute an
accrual of a reserve for future cash payments). Adjustments for Unconsolidated
Affiliates will be calculated to reflect funds from operations on the same
basis.
“Adjusted NOI” means, for any Property and for any period (or if no applicable
period is stated, the period of twelve consecutive fiscal months then ended),
Net Operating Income for such Property for such period minus the greater of
(a) the actual amount of franchise fees paid with respect to such Property
during such period and (b) an imputed franchise fee in the amount of four
percent (4.0%) of the gross revenues for such Property for such period; provided
however, for purposes of this definition, no imputed franchise fee shall be
deducted from Net Operating Income with respect to any Property that is not
subject to a franchise agreement. If a Property has not continuously operated
the immediately preceding period of twelve consecutive months, then the Adjusted
NOI of such Property shall be calculated by annualizing the historical Net
Operating Income of such Property for the most recently ending period for which
it has been in continuous operation, determined on a pro forma basis reasonably
acceptable to the Administrative Agent.
“Adjusted Total Asset Value” means Total Asset Value determined exclusive of
assets that are owned by Excluded Subsidiaries, Foreign Subsidiaries and
Unconsolidated Affiliates.
“Administrative Agent” means Wells Fargo Bank, National Association as
contractual representative of the Lenders under this Agreement, or any successor
Administrative Agent appointed pursuant to Section 12.8.
“Administrative Questionnaire” means the Administrative Questionnaire completed
by each Lender and delivered to the Administrative Agent in a form supplied by
the Administrative Agent to the Lenders from time to time.
“Affected Lender” has the meaning given that term in Section 5.8.
“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. In no event
shall the Administrative Agent or any Lender be deemed to be an Affiliate of the
Borrower.
“Agreement Date” means the date as of which this Agreement is dated.
“Applicable Law” means all international, foreign, federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes, executive
orders, and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority.

 

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“Applicable Margin” means the percentage rate set forth below corresponding to
the ratio of Total Indebtedness to Total Asset Value as determined in accordance
with Section 10.1.(a) in effect at such time:

                  Ratio of Total           Indebtedness to Total       Level  
Asset Value   Applicable Margin  
1
  Less than or equal to 0.35 to 1.00     2.75 %
2
  Greater than 0.35 to 1.00 but less than 0.45 to 1.00     3.00 %
3
  Greater than or equal to 0.45 to 1.00 but less than 0.50 to 1.00     3.25 %
4
  Greater than or equal to 0.50 to 1.00 but less than 0.55 to 1.00     3.50 %
5
  Greater than or equal to 0.55 to 1.00     3.75 %

The Applicable Margin shall be determined by the Administrative Agent from time
to time, based on the ratio of Total Indebtedness to Total Asset Value as set
forth in the Compliance Certificate most recently delivered by the Borrower
pursuant to Section 9.3. Any adjustment to the Applicable Margin shall be
effective as of the first day of the calendar month immediately following the
month during which the Borrower delivers to the Administrative Agent the
applicable Compliance Certificate pursuant to Section 9.3. If the Borrower fails
to deliver a Compliance Certificate pursuant to Section 9.3., the Applicable
Margin shall equal the percentage corresponding to Level 5 until the first day
of the calendar month immediately following the month that the required
Compliance Certificate is delivered. Notwithstanding the foregoing, for the
period from the Effective Date through but excluding the date on which the
Administrative Agent first determines the Applicable Margin for Loans as set
forth above, the Applicable Margin shall be determined based on Level 2.
Thereafter, the Applicable Margin shall be adjusted from time to time as set
forth in this definition. The provisions of this definition shall be subject to
Section 2.3.(c).
“Appraisal” means, with respect to any Property, an M.A.I. appraisal (reasonably
acceptable to the Administrative Agent as to form, substance and appraisal
date), prepared by a professional appraiser reasonably acceptable to the
Administrative Agent, and determining the “as is” market value of such Property
as between a willing buyer and a willing seller.
“Appraised Value” means, with respect to any Property, (a) the “as is” market
value of such Property as reflected in the most recent Appraisal of such
Property as the same may have been reasonably adjusted by the Administrative
Agent based upon its internal review of such Appraisal which is based on
criteria and factors then generally used and considered by the Administrative
Agent in determining the value of similar real estate Properties, which review
shall be conducted, and any resulting adjustment shall be made, prior to
acceptance of such Appraisal by the Administrative Agent and the initial
inclusion of such property as an Unencumbered Borrowing Base Property or (b) if
such Property was acquired by the Borrower or a Subsidiary after the Agreement
Date and such “as is” market value is greater than the purchase price paid by
the Borrower or such Subsidiary for such Property, such purchase price of such
Property (less any amounts paid to the Borrower or such Subsidiary as a purchase
price adjustment, held in escrow, retained as a contingency reserve, or in
connection with other similar arrangements).

 

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“Approved Accounting Firm” means Deloitte LLP, KPMG LLP, PricewaterhouseCoopers
International Limited, Ernst & Young LLP or such other independent certified
public accountant of recognized national standing reasonably acceptable to the
Administrative Agent.
“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender, or (c) an entity or an Affiliate of any entity
that administers or manages a Lender.
“Approved Manager” means Marriott International, Inc., Hilton Worldwide, Inc.,
Interstate Hotels & Resorts, Inc., Davidson Hotel Company, HEI Hospitality, LLC,
Crestline Hotels & Resorts, Inc., Starwood Hotels & Resorts Worldwide, Inc.,
Noble Investment Group, Hyatt Hotels Corporation, Kimpton Hotel & Restaurant
Group, LLC, Vail Resorts Management Company, any Affiliate of any of the
foregoing and any other nationally recognized third-party property management
company approved by the Administrative Agent in writing.
“Assignment and Assumption” means an Assignment and Assumption Agreement among a
Lender, an Eligible Assignee and the Administrative Agent, substantially in the
form of Exhibit A.
“Bankruptcy Code” means the Bankruptcy Code of 1978, as amended.
“Base Rate” means the LIBOR Market Index Rate; provided, that if for any reason
the LIBOR Market Index Rate is unavailable, Base Rate shall mean the per annum
rate of interest equal to the Federal Funds Rate plus one and one-half percent
(1.50%).
“Base Rate Loan” means a Loan (or any portion thereof) bearing interest at a
rate based on the Base Rate.
“Benefit Arrangement” means at any time an employee benefit plan within the
meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and
which is maintained or otherwise contributed to by any member of the ERISA
Group.
“Borrower” has the meaning set forth in the introductory paragraph hereof and
shall include the Borrower’s successors and permitted assigns.
“Borrower Information” has the meaning given that term in Section 2.3.(c).
“Business Day” means (a) a day of the week (but not a Saturday, Sunday or
holiday) on which the offices of the Administrative Agent in San Francisco,
California are open to the public for carrying on substantially all of the
Administrative Agent’s business functions, and (b) if such day relates to a
LIBOR Loan, any such day that is also a day on which dealings in Dollars are
carried on in the London interbank market. Unless specifically referenced in
this Agreement as a Business Day, all references to “days” shall be to calendar
days.

 

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“Capitalization Rate” means 8.50% (or such higher percentage to which this rate
may be increased pursuant to Section 2.11.) for assets categorized
Select-Service, Upper Upscale or Luxury. Such categorization shall be as
determined by Smith Travel Research or as otherwise requested by the Borrower
and consented to in writing by the Requisite Lenders.
“Capitalized Lease Obligation” means obligations under a lease that are required
to be capitalized for financial reporting purposes in accordance with GAAP. The
amount of a Capitalized Lease Obligation is the capitalized amount of such
obligation as would be required to be reflected on a balance sheet of the
applicable Person prepared in accordance with GAAP as of the applicable date.
“Cash Equivalents” means: (a) securities issued, guaranteed or insured by the
United States of America or any of its agencies with maturities of not more than
one year from the date acquired; (b) certificates of deposit with maturities of
not more than one year from the date acquired issued by a United States federal
or state chartered commercial bank of recognized standing, or a commercial bank
organized under the laws of any other country which is a member of the
Organisation for Economic Co-operation and Development, or a political
subdivision of any such country, acting through a branch or agency, which bank
has capital and unimpaired surplus in excess of $500,000,000 and which bank or
its holding company has a short-term commercial paper rating of at least A-2 or
the equivalent by S&P or at least P-2 or the equivalent by Moody’s; (c) reverse
repurchase agreements with terms of not more than seven days from the date
acquired, for securities of the type described in clause (a) above and entered
into only with commercial banks having the qualifications described in clause
(b) above; (d) commercial paper issued by any Person incorporated under the laws
of the United States of America or any State thereof and rated at least A-2 or
the equivalent thereof by S&P or at least P-2 or the equivalent thereof by
Moody’s, in each case with maturities of not more than one year from the date
acquired; and (e) investments in money market funds registered under the
Investment Company Act of 1940, as amended, which have net assets of at least
$500,000,000 and at least 85% of whose assets consist of securities and other
obligations of the type described in clauses (a) through (d) above.
“Commitment” means, as to each Lender, such Lender’s obligation to make Loans
pursuant to Section 2.1., to issue (in the case of the Issuing Bank) and to
participate (in the case of the other Lenders) in Letters of Credit pursuant to
Section 2.2.(i), in an amount up to, but not exceeding, the amount set forth for
such Lender on Schedule I as such Lender’s “Commitment Amount” or as set forth
in the applicable Assignment and Assumption, as the same may be reduced from
time to time pursuant to Section 2.10. or increased or reduced as appropriate to
reflect any assignments to or by such Lender effected in accordance with
Section 13.6.
“Commitment Percentage” means, as to each Lender, the ratio, expressed as a
percentage, of (a) the amount of such Lender’s Commitment to (b) the aggregate
amount of the Commitments of all Lenders; provided, however, that if at the time
of determination the Commitments have been terminated or been reduced to zero,
the “Commitment Percentage” of each Lender shall be the Commitment Percentage of
such Lender in effect immediately prior to such termination or reduction.
“Compliance Certificate” has the meaning given that term in Section 9.3.

 

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“Continue”, “Continuation” and “Continued” each refers to the continuation of a
LIBOR Loan from one Interest Period to another Interest Period pursuant to
Section 2.7.
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.
“Convert”, “Conversion” and “Converted” each refers to the conversion of a Loan
of one Type into a Loan of another Type pursuant to Section 2.8.
“Credit Event” means any of the following: (a) the making (or deemed making) of
any Loan, (b) the Conversion of a Base Rate Loan into a LIBOR Loan and (c) the
issuance of a Letter of Credit.
“Credit Rating” means the rating assigned by a Rating Agency to the senior
unsecured long term Indebtedness of a Person.
“Default” means any of the events specified in Section 11.1., whether or not
there has been satisfied any requirement for the giving of notice, the lapse of
time, or both.
“Defaulting Lender” means any Lender, as determined by the Administrative Agent
in good faith, that (a) has failed to fund (or has failed, within 3 Business
Days after request by the Administrative Agent, to confirm that it will comply
with the terms of this Agreement relating to its obligations to fund) any
portion of a Loan or participations in Letter of Credit Liabilities under
Section 2.2.(j), required to be funded by it hereunder within 2 Business Days of
the date required to be funded by it hereunder, (b) has otherwise failed to pay
to the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within 2 Business Days 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, or has made a
public statement to the effect that, it does not intend to comply with any of
its funding obligations under this Agreement, or (d) has become or is
(i) insolvent or (ii) 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.
“Defaulting Lender Excess” means, with respect to any Defaulting Lender, the
excess, if any, of such Defaulting Lender’s Commitment Percentage of the
aggregate outstanding principal amount of Loans of all Lenders (calculated as if
all Defaulting Lenders other than such Defaulting Lender had funded all of their
respective Loans) over the aggregate outstanding principal amount of all Loans
of such Defaulting Lender.
“Derivatives Contract” means any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement. Not in limitation of the
foregoing, the term “Derivatives Contract” includes any and all transactions of
any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement, including any such
obligations or liabilities under any such master agreement.

 

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“Derivatives Support Document” means (i) any Credit Support Annex comprising
part of (and as defined in) any Specified Derivatives Contract, and (ii) any
document or agreement, pursuant to which cash, deposit accounts, securities
accounts or similar financial asset collateral are pledged to or made available
for set-off by, a Specified Derivatives Provider, including any banker’s lien or
similar right, securing or supporting Specified Derivatives Obligation.
“Derivatives Termination Value” means, in respect of any one or more Derivatives
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Derivatives Contracts, (a) for any date on or
after the date such Derivatives Contracts have been closed out and termination
value(s) determined in accordance therewith, such termination value(s), and
(b) for any date prior to the date referenced in clause (a) the amount(s)
determined as the mark-to-market value(s) for such Derivatives Contracts, as
determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Derivatives Contracts
(which may include the Administrative Agent or any Lender).
“Development Property” means, as of any date of determination, any Property on
which the existing building or other improvements are undergoing renovation and
redevelopment that will either (a) disrupt the occupancy of at least 15% of the
rentable rooms of such Property or (b) temporarily reduce the Net Operating
Income attributable to such Property by more than 15% as compared to the
immediately preceding comparable prior period. A Property shall cease to be a
Development Property once all improvements related to the renovation or
redevelopment of such Property have been substantially completed.
“Dollars” or “$” means the lawful currency of the United States of America.
“Domestic Subsidiary” means any Subsidiary that is incorporated or organized
under the laws of any state of the United States or the District of Columbia.
“EBITDA” means, with respect to a Person for any period (without duplication):
(a) net income (loss) of such Person for such period determined on a
consolidated basis (before minority interests), exclusive of the following (but
only to the extent included in determination of such net income (loss)):
(i) depreciation and amortization expense; (ii) Interest Expense; (iii) income
tax expense; (iv) extraordinary or non-recurring gains and losses; (v) closing
costs expensed which are directly attributable to the acquisition of Property;
(vi) severance costs; and (vii) other non-cash charges including, without
limitation, impairment charges (other than non-cash charges that constitute an
accrual of a reserve for future cash payments) plus (b) such Person’s Ownership
Share of EBITDA of its Unconsolidated Affiliates. EBITDA shall be adjusted to
remove any impact from (x) non-cash amortization of stock grants to members of
the Parent’s management, (y) straight line rent leveling adjustments required
under GAAP and (z) amortization of intangibles pursuant to FASB ASC 805.

 

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“Effective Date” means the later of (a) the Agreement Date or (b) the date on
which all of the conditions precedent set forth in Section 6.1. shall have been
fulfilled or waived.
“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an
Approved Fund and (d) any other Person (other than a natural person) approved by
the Administrative Agent; provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or
Subsidiaries.
“Eligible Unencumbered Borrowing Base Property” means a Property which satisfies
all of the following requirements: (a) such Property (i) is either an
(x) Upper-Upscale or Luxury (as defined by Smith Travel Research) full-service
hotel with not less than 150 keys or (y) a Select-Service (as defined by Smith
Travel Research) hotel located in a major urban market and (ii) other than the
Properties listed on Schedule 4.1, is located in a top 50 metropolitan
statistical area or, subject to the written approval of the Requisite Lenders, a
destination resort; (b) such Property is currently open for business to the
public and has been continuously operating for the immediately preceding
twelve-month period; (c) such Property is branded by a nationally recognized
hotel company; (d) such Property is located in one of the 48 contiguous States
of the United States of America or in the District of Columbia; (e) such
Property is owned in fee simple or leased under a Ground Lease entirely by the
Borrower or a Subsidiary; (f) neither such Property, nor any interest of the
Borrower or any Subsidiary therein, is subject to any Lien (other than Permitted
Liens (but not Liens of the types described in clauses (f), (g) and (h) of the
definition of Permitted Liens)) or a Negative Pledge; (g) if such Property is
owned or leased by a Subsidiary (i) none of the Borrower’s direct or indirect
ownership interest in such Subsidiary is subject to any Lien (other than
Permitted Liens (but not Liens of the types described in clauses (f), (g) and
(h) of the definition of Permitted Liens)) or to a Negative Pledge; and (ii) the
Borrower directly, or indirectly through a Subsidiary, has the right to take the
following actions without the need to obtain the consent of any Person: (x) to
sell, transfer or otherwise dispose of such Property and (y) to create a Lien on
such Property as security for Indebtedness of the Borrower or such Subsidiary,
as applicable; (h) such Property is managed by an Approved Manager pursuant to a
Property Management Agreement acceptable to the Administrative Agent; provided
however that any Property Management Agreement with Marriott International, Inc.
or one of its Affiliates that is substantially in the same form as another
Property Management Agreement with Marriott International, Inc. or one of its
Affiliates approved previously by the Administrative Agent shall be deemed
acceptable to Administrative Agent; (i) such Property is free of all structural
defects, title defects, environmental conditions or other adverse matters except
for defects, deficiencies, conditions or other matters individually or
collectively which are not material to the profitable operation of such
Property; (j) such Property is covered by property insurance in amounts and upon
terms that satisfy criteria set forth in Section 8.5., (k) such Property has all
material occupancy and operating permits and licenses required by Applicable Law
and (l) the Administrative Agent has received, in form and substance
satisfactory to the Administrative Agent, information and reports regarding such
Property as required under Section 4.1.(b).
“Environmental Laws” means any Applicable Law relating to environmental
protection or the manufacture, storage, remediation, disposal or clean-up of
Hazardous Materials including, without limitation, the following: Clean Air Act,
42 U.S.C. § 7401 et seq.; Federal Water Pollution Control Act, 33 U.S.C. § 1251
et seq.; Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act, 42 U.S.C. § 6901 et seq.; Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601 et seq.; National Environmental
Policy Act, 42 U.S.C. § 4321 et seq.; regulations of the Environmental
Protection Agency, any applicable rule of common law relating primarily to the
environment or Hazardous Materials, and any analogous or comparable state or
local laws, regulations or ordinances that concern Hazardous Materials or
protection of the environment.

 

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“Equity Interest” means, with respect to any Person, any share of capital stock
of (or other ownership or profit interests in) such Person, any warrant, option
or other right for the purchase or other acquisition from such Person of any
share of capital stock of (or other ownership or profit interests in) such
Person, any security convertible into or exchangeable for any share of capital
stock of (or other ownership or profit interests in) such Person or warrant,
right or option for the purchase or other acquisition from such Person of such
shares (or such other interests), and any other ownership or profit interest in
such Person (including, without limitation, partnership, member or trust
interests therein), whether voting or nonvoting, and whether or not such share,
warrant, option, right or other interest is authorized or otherwise existing on
any date of determination.
“Equity Issuance” means any issuance by a Person of any Equity Interest in such
Person and shall in any event include the issuance of any Equity Interest upon
the conversion or exchange of any security constituting Indebtedness that is
convertible or exchangeable, or is being converted or exchanged, for Equity
Interests.
“ERISA” means the Employee Retirement Income Security Act of 1974, as in effect
from time to time.
“ERISA Event” means, with respect to the ERISA Group, (a) any “reportable event”
as defined in Section 4043 of ERISA with respect to a Plan (other than an event
for which the 30-day notice period is waived); (b) the withdrawal of a member of
the ERISA Group from a Plan subject to Section 4063 of ERISA during a plan year
in which it was a “substantial employer” as defined in Section 4001(a)(2) of
ERISA or a cessation of operations that is treated as such a withdrawal under
Section 4062(e) of ERISA; (c) the incurrence by a member of the ERISA Group of
any liability with respect to the withdrawal or partial withdrawal from any
Multiemployer Plan; (d) the incurrence by any member of the ERISA Group of any
liability under Title IV of ERISA with respect to the termination of any Plan or
Multiemployer Plan; (e) the institution of proceedings to terminate a Plan or
Multiemployer Plan by the PBGC; (f) the failure by any member of the ERISA Group
to make when due required contributions to a Multiemployer Plan or Plan unless
such failure is cured within 30 days or the filing pursuant to Section 412(c) of
the Internal Revenue Code or Section 302(c) of ERISA of an application for a
waiver of the minimum funding standard; (g) any other event or condition that
might reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan
or Multiemployer Plan or the imposition of liability under Section 4069 or
4212(c) of ERISA; (h) the receipt by any member of the ERISA Group of any notice
or the receipt by any Multiemployer Plan from any member of the ERISA Group of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent (within the
meaning of Section 4245 of ERISA), in reorganization (within the meaning of
Section 4241 of ERISA), or in “critical” status (within the meaning of
Section 432 of the Internal Revenue Code or Section 305 of ERISA); (i) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon any member of
the ERISA Group or the imposition of any Lien in favor of the PBGC under Title
IV of ERISA; or (j) a determination that a Plan is, or is reasonably expected to
be, in “at risk” status (within the meaning of Section 430 of the Internal
Revenue Code or Section 303 of ERISA).

 

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“ERISA Group” means the Borrower, the Parent and all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
under common control, which, together with the Borrower or the Parent, are
treated as a single employer under Section 414 of the Internal Revenue Code.
“Event of Default” means any of the events specified in Section 11.1., provided
that any requirement for notice or lapse of time or any other condition has been
satisfied.
“Excluded Subsidiary” means any Subsidiary as to which both of the following
apply (a) such Subsidiary holds title to, or beneficially owns, assets which are
or are intended to become collateral for any Secured Indebtedness of such
Subsidiary, or is a direct or indirect beneficial owner of a Subsidiary holding
title to or beneficially owning such assets (but having no material assets other
than such beneficial ownership interests); and (b) which (i) is, or is expected
to be, prohibited from Guarantying the Indebtedness of any other Person pursuant
to any document, instrument or agreement evidencing such Secured Indebtedness or
(ii) is prohibited from Guarantying the Indebtedness of any other Person
pursuant a provision of such Subsidiary’s organizational documents which
provision was included in such Subsidiary’s organizational documents as a
condition to the extension of such Secured Indebtedness.
“Existing Credit Agreement” has the meaning given such term in the first
“WHEREAS” clause of this Agreement.
“Fair Market Value” means, (a) with respect to a security listed on a national
securities exchange or the NASDAQ National Market, the price of such security as
reported on such exchange or market by any widely recognized reporting method
customarily relied upon by financial institutions and (b) with respect to any
other property, the price which could be negotiated in an arm’s-length free
market transaction, for cash, between a willing seller and a willing buyer,
neither of which is under pressure or compulsion to complete the transaction.
“FASB ASC” means the Accounting Standards Codification of the Financial
Accounting Standards Board.
“Federal Funds Rate” means, for any day, the rate per annum (rounded upward to
the nearest 1/100th of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day, provided
that (a) if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the immediately preceding Business
Day, and (b) if no such rate is so published on such Business Day, the Federal
Funds Rate for such day shall be the average rate quoted to the Administrative
Agent by federal funds dealers selected by the Administrative Agent on such day
on such transaction as determined by the Administrative Agent.
“Fee Letter” means that certain fee letter dated as of April 16, 2010, by and
between the Borrower, the Parent, the Administrative Agent and the Lead
Arrangers.
“Fees” means the fees and commissions provided for or referred to in
Section 3.5. and any other fees payable by the Borrower hereunder, under any
other Loan Document or under the Fee Letter.

 

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“FF&E Reserves” means, for any period and with respect to a Property, an amount
equal to the greater of (a) 4.0% of total gross revenues for such Property for
such period and (b) the aggregate amount of reserves in respect to furniture,
fixtures and equipment required under any Property Management Agreement or
Franchise Agreement applicable to such Properties for such period. If the term
FF&E Reserves is used without reference to a specific Property, then the amount
shall be determined on an aggregate basis with respect to all Properties of the
Parent and its Subsidiaries and a proportionate share of all Properties of all
Unconsolidated Affiliates.
“Fixed Charges” means, for any period, the sum of the following (without
duplication): (a) Interest Expense of the Parent and its Subsidiaries determined
on a consolidated basis for such period, (b) all regularly scheduled principal
payments made with respect to Indebtedness of the Parent and its Subsidiaries
during such period, other than any balloon, bullet or similar principal payment
which repays such Indebtedness in full, (c) all Preferred Dividends paid during
such period on Preferred Equity Interests not owned by the Parent or any of its
Subsidiaries and (d) payments in respect of Capitalized Lease Obligations. The
Parent’s pro rata share of the Fixed Charges of Unconsolidated Affiliates of the
Parent shall be included in determinations of Fixed Charges.
“Floating Rate Indebtedness” means all Indebtedness of a Person which bears
interest at a variable rate during the scheduled life of such Indebtedness and
for which such Person has not obtained interest rate swap agreements, interest
rate “cap” or “collar” agreements or other similar Derivatives Contracts which
effectively cause such variable rates to be equivalent to fixed rates or subject
to maximum interest rates which, in each case, are reasonably acceptable to the
Administrative Agent.
“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes.
For purposes of this definition, the United States of America, each State
thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.
“Foreign Subsidiary” means a Subsidiary that is not a Domestic Subsidiary.
“Franchise Agreement” means an agreement permitting the use of the applicable
hotel brand name, hotel system trademarks, trade names and any related rights in
connection with the ownership or operation of a Property.
“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
“GAAP” means generally accepted accounting principles in the United States of
America set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by a significant
segment of the accounting profession in the United States of America, which are
applicable to the circumstances as of the date of determination.
“Governmental Approvals” means all authorizations, consents, approvals, licenses
and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.

 

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“Governmental Authority” means any national, state or local government (whether
domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory instrumentality,
authority, body, agency, bureau, commission, board, department or other
comparable authority (including, without limitation, the Federal Deposit
Insurance Corporation, the Comptroller of the Currency or the Federal Reserve
Board, any central bank or any comparable authority) or any arbitrator with
authority to bind a party at law.
“Ground Lease” means a ground lease containing the following terms and
conditions: (a) a remaining term (exclusive of any unexercised extension
options) of 50 years or more from the Agreement Date; (b) the right of the
lessee to mortgage and encumber its interest in the leased property without the
consent of the lessor, or, if consent is required, such consent has been
obtained or is required to be given upon the satisfaction of conditions
reasonably acceptable to the Administrative Agent; (c) the obligation of the
lessor to give the holder of any mortgage Lien on such leased property written
notice of any defaults on the part of the lessee and agreement of such lessor
that such lease will not be terminated until such holder has had a reasonable
opportunity to cure or complete foreclosures, and fails to do so;
(d) transferability of the lessee’s interest under such lease, including ability
to sublease without lessor consent or, if consent is required, such consent is
required to be given upon the satisfaction of conditions reasonably acceptable
to the Administrative Agent; and (e) such other rights customarily required by
mortgagees making a loan secured by the interest of the holder of the leasehold
estate demised pursuant to a ground lease.
“Guarantor” means any Person that is a party to the Guaranty as a “Guarantor”
and, in any event, shall include each Material Subsidiary (other than Excluded
Subsidiaries and Foreign Subsidiaries).
“Guaranty”, “Guaranteed”, “Guarantying” or to “Guarantee” as applied to any
obligation means and includes: (a) a guaranty (other than by endorsement of
negotiable instruments for collection or deposit in the ordinary course of
business), directly or indirectly, in any manner, of any part or all of such
obligation, or (b) an agreement, direct or indirect, contingent or otherwise,
and whether or not constituting a guaranty, the practical effect of which is to
assure the payment or performance (or payment of damages in the event of
nonperformance) of any part or all of such obligation whether by: (i) the
purchase of securities or obligations, (ii) the purchase, sale or lease (as
lessee or lessor) of property or the purchase or sale of services primarily for
the purpose of enabling the obligor with respect to such obligation to make any
payment or performance (or payment of damages in the event of nonperformance) of
or on account of any part or all of such obligation, or to assure the owner of
such obligation against loss, (iii) the supplying of funds to or in any other
manner investing in the obligor with respect to such obligation, (iv) repayment
of amounts drawn down by beneficiaries of letters of credit (including Letters
of Credit), or (v) the supplying of funds to or investing in a Person on account
of all or any part of such Person’s obligation under a Guaranty of any
obligation or indemnifying or holding harmless, in any way, such Person against
any part or all of such obligation. Obligations in respect of customary
performance guaranties and Guaranties constituting Nonrecourse Indebtedness
shall not be deemed to give rise to Indebtedness or otherwise constitute a
Guaranty except as otherwise provided in the definition of “Nonrecourse
Indebtedness”. As the context requires, “Guaranty” shall also mean the Guaranty
executed and delivered pursuant to Section 6.1. or 8.14. and substantially in
the form of Exhibit B.

 

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“Hazardous Materials” means all or any of the following: (a) substances that are
defined or listed in, or otherwise classified pursuant to, any applicable
Environmental Laws as “hazardous substances”, “hazardous materials”, “hazardous
wastes”, “toxic substances” or any other formulation intended to define, list or
classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, “TCLP”
toxicity, or “EP toxicity”; (b) oil, petroleum or petroleum derived substances,
natural gas, natural gas liquids or synthetic gas and drilling fluids, produced
waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (c) any flammable
substances or explosives or any radioactive materials; (d) asbestos in any form;
(e) toxic mold; and (f) electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million.
“Implied Debt Service” means, for any period, an amount equal to the annual
principal and interest payment sufficient to amortize in full during a 25-year
period the aggregate principal balance of Loans and the amount of all Letter of
Credit Liabilities outstanding during such period calculated using a per annum
interest rate equal to the greatest of (i) the yield on a 10 year United States
Treasury Note at such time as determined by the Administrative Agent plus 3.50%,
(ii) 10% or (iii) the highest interest rate then applicable to any of the
outstanding principal balance of the Loans.
“Indebtedness” means, with respect to a Person, at the time of computation
thereof, all of the following (without duplication): (a) all obligations of such
Person in respect of money borrowed (other than trade debt incurred in the
ordinary course of business which is not more than 180 days past due); (b) all
obligations of such Person, whether or not for money borrowed (i) represented by
notes payable, or drafts accepted, in each case representing extensions of
credit, (ii) evidenced by bonds, debentures, notes or similar instruments, or
(iii) constituting purchase money indebtedness, conditional sales contracts,
title retention debt instruments or other similar instruments, upon which
interest charges are customarily paid or that are issued or assumed as full or
partial payment for property or services rendered; (c) Capitalized Lease
Obligations of such Person; (d) all reimbursement obligations of such Person
under any letters of credit or acceptances (whether or not the same have been
presented for payment); (e) all Off-Balance Sheet Obligations of such Person;
(f) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Mandatorily Redeemable Stock issued
by such Person or any other Person, valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends; (g) all
obligations of such Person in respect of any (i) purchase obligation, repurchase
obligation or takeout commitment, in each case evidenced by a binding agreement
and to the extent such obligation is to acquire Equity Interests of another
Person, assets of another Person that constitute the business or a division or
operating unit of such Person, real estate, bonds, debentures, notes or similar
instruments or (ii) forward equity commitment evidenced by a binding agreement
(provided, however that this clause (g) shall exclude any such obligation to the
extent the obligation can be satisfied by the issuance of Equity Interests
(other than Mandatorily Redeemable Stock)); (h) net obligations under any
Derivatives Contract not entered into as a hedge against existing Indebtedness,
in an amount equal to the Derivatives Termination Value thereof; (i) all
Indebtedness of other Persons which such Person has Guaranteed or is otherwise
recourse to such Person (except for Guaranties constituting Nonrecourse
Indebtedness); (j) all Indebtedness of another Person secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on property or assets owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness or other payment obligation and (k) such Person’s Ownership Share
of the Indebtedness of any Unconsolidated Affiliate of such Person. Indebtedness
of any Person shall include Indebtedness of any partnership or joint venture in
which such Person is a general partner or joint venturer to the extent of such
Person’s Ownership Share of the ownership of such partnership or joint venture
(except if such Indebtedness, or portion

 

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thereof, is recourse (other than in respect of exceptions referred to in the
definition of Nonrecourse Indebtedness) to such Person, in which case the
greater of such Person’s Ownership Share of such Indebtedness or the amount of
such recourse portion of the Indebtedness, shall be included as Indebtedness of
such Person). All Loans and Letter of Credit Liabilities shall constitute
Indebtedness of the Borrower. Notwithstanding the foregoing, (A) in the case of
any Nonrecourse Indebtedness as to which recourse for payment thereof is
expressly limited to the property or asset on which a Lien is granted, such
Indebtedness shall be valued at the lesser of (i) the stated or determinable
amount of the Indebtedness that is so secured or, if not stated or determinable,
the maximum reasonably anticipated liability in respect thereof subject to
confirmation by the Administrative Agent in its reasonable discretion and
(ii) the Fair Market Value of such property or asset; and (B) in the case of any
Indebtedness of other Persons which such Person has Guaranteed, the amount of
such Indebtedness attributable to such Person shall be equal to the lesser of
the stated or determinable amount of the Indebtedness such Person Guaranteed or,
if the amount of such Indebtedness is not stated or determinable, the maximum
reasonably anticipated liability in respect thereof subject to confirmation by
the Administrative Agent in its reasonable discretion. The calculation of
Indebtedness shall not include any fair value adjustments to the carrying value
of liabilities to record such Indebtedness at fair value pursuant to electing
the fair value option election under FASB ASC 825-10-25 (formerly known as FAS
159, The Fair Value Option for Financial Assets and Financial Liabilities) or
other FASB standards allowing entities to elect fair value option for financial
liabilities. Therefore, the amount of Indebtedness shall be the historical cost
basis, which generally is the contractual amount owed adjusted for amortization
or accretion of any premium or discount.
“Intellectual Property” has the meaning given that term in Section 7.1.(t).
“Interest Expense” means, with respect to a Person and for any period, and
without duplication (a) all paid, accrued or capitalized interest expense
(including, without limitation, capitalized interest expense (other than
capitalized interest funded from a construction loan interest reserve account
held by another lender and not included in the calculation of cash for balance
sheet reporting purposes) and interest expense attributable to Capitalized Lease
Obligations) of such Person and in any event shall include all letter of credit
fees and all interest expense with respect to any Indebtedness in respect of
which such Person is wholly or partially liable whether pursuant to any
repayment, interest carry, performance guarantee or otherwise, plus (b) to the
extent not already included in the foregoing clause (a), such Person’s Ownership
Share of all paid, accrued or capitalized interest expense for such period of
Unconsolidated Affiliates of such Person. The term “Interest Expense” shall
exclude all costs and expenses of defeasing any Indebtedness encumbering any
Property following the acquisition thereof.
“Interest Period” means with respect to each LIBOR Loan, each period commencing
on the date such LIBOR Loan is made, or in the case of the Continuation of a
LIBOR Loan the last day of the preceding Interest Period for such Loan, and
ending on the numerically corresponding day in the first, third or sixth
calendar month thereafter, as the Borrower may select in a Notice of Borrowing,
Notice of Continuation or Notice of Conversion, as the case may be, except that
each Interest Period that commences on the last Business Day of a calendar month
(or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month. Notwithstanding the foregoing: (i) if any
Interest Period would otherwise end after the Termination Date, such Interest
Period shall end on the Termination Date; and (ii) each Interest Period that
would otherwise end on a day which is not a Business Day shall end on the
immediately following Business Day (or, if such immediately following Business
Day falls in the next calendar month, on the immediately preceding Business
Day).

 

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“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.
“Investment” means, with respect to any Person, any acquisition or investment
(whether or not of a controlling interest) by such Person, by means of any of
the following: (a) the purchase or other acquisition of any Equity Interest in
another Person, (b) a loan, advance or extension of credit to, capital
contribution to, Guaranty of Indebtedness of, or purchase or other acquisition
of any Indebtedness of, another Person, including any partnership or joint
venture interest in such other Person, or (c) the purchase or other acquisition
(in one transaction or a series of transactions) of assets of another Person
that constitute the business or a division or operating unit of another Person.
Any binding commitment to make an Investment in any other Person, as well as any
option of another Person to require an Investment in such Person, shall
constitute an Investment. Except as expressly provided otherwise, for purposes
of determining compliance with any covenant contained in a Loan Document, the
amount of any Investment shall be the amount actually invested, without
adjustment for subsequent increases or decreases in the value of such
Investment.
“Issuing Bank” means Wells Fargo in its capacity as the issuer of Letters of
Credit pursuant to Section 2.2.
“L/C Commitment Amount” has the meaning given that term in Section 2.2.(a).
“Lender” means each financial institution from time to time party hereto as a
“Lender”, together with its respective successors and permitted assigns
provided, however, that the term “Lender” except as otherwise expressly provided
herein, shall exclude any Lender (or its Affiliates) in its capacity as a
Specified Derivatives Provider.
“Lending Office” means, for each Lender and for each Type of Loan, the office of
such Lender specified in such Lender’s Administrative Questionnaire or in the
applicable Assignment and Assumption, or such other office of such Lender as
such Lender may notify the Administrative Agent in writing from time to time.
“Letter of Credit” has the meaning given that term in Section 2.2.(a).
“Letter of Credit Collateral Account” means a special deposit account maintained
by the Administrative Agent and under its sole dominion and control.
“Letter of Credit Documents” means, with respect to any Letter of Credit,
collectively, any application therefor, any certificate or other document
presented in connection with a drawing under such Letter of Credit and any other
agreement, instrument or other document governing or providing for (a) the
rights and obligations of the parties concerned or at risk with respect to such
Letter of Credit or (b) any collateral security for any of such obligations.
“Letter of Credit Liabilities” means, without duplication, at any time and in
respect of any Letter of Credit, the sum of (a) the Stated Amount of such Letter
of Credit plus (b) the aggregate unpaid principal amount of all Reimbursement
Obligations of the Borrower at such time due and payable in respect of all
drawings made under such Letter of Credit. For purposes of this Agreement, a
Lender (other than the Lender then acting as Issuing Bank) shall be deemed to
hold a Letter of Credit Liability in an amount equal to its participation
interest under Section 2.2. in the related Letter of Credit, and the Lender then
acting as the Issuing Bank shall be deemed to hold a Letter of Credit Liability
in an amount equal to its retained interest in the related Letter of Credit
after giving effect to the acquisition by the Lenders (other than the Lender
then acting as the Issuing Bank) of their participation interests under such
Section.

 

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“LIBOR” means, for the Interest Period for any LIBOR Loan, the greater of
(a) the rate of interest, rounded up to the nearest whole multiple of
one-hundredth of one percent (0.01%), obtained by dividing (i) the rate of
interest, rounded upward to the nearest whole multiple of one-sixteenth of one
percent (0.0625%), referred to as the BBA (British Bankers’ Association) LIBOR
rate as set forth by any service selected by the Administrative Agent that has
been nominated by the British Bankers’ Association as an authorized information
vendor for the purpose of displaying such rate for deposits in U.S. Dollars at
approximately 9:00 a.m. Pacific time, two (2) Business Days prior to the date of
commencement of such Interest Period for purposes of calculating effective rates
of interest for loans or obligations making reference thereto, for an amount
approximately equal to the applicable LIBOR Loan and for a period of time
approximately equal to such Interest Period by (ii) a percentage equal to 1
minus the stated maximum rate (stated as a decimal) of all reserves, if any,
required to be maintained with respect to Eurocurrency funding (currently
referred to as “Eurocurrency liabilities”) as specified in Regulation D of the
Board of Governors of the Federal Reserve System (or against any other category
of liabilities which includes deposits by reference to which the interest rate
on LIBOR Loans is determined or any applicable category of extensions of credit
or other assets which includes loans by an office of any Lender outside of the
United States of America) or (b) one percent (1.00%) per annum. Any change in
such maximum rate shall result in a change in LIBOR on the date on which such
change in such maximum rate becomes effective.
“LIBOR Loan” means a Loan (or any portion thereof) (other than a Base Rate Loan)
bearing interest at a rate based on LIBOR.
“LIBOR Market Index Rate” means, for any day, LIBOR as of that day that would be
applicable for a LIBOR Loan having a one-month Interest Period determined at
approximately 9:00 a.m. Pacific time for such day (or if such day is not a
Business Day, the immediately preceding Business Day). The LIBOR Market Index
Rate shall be determined on a daily basis.
“Lien” as applied to the property of any Person means: (a) any security
interest, encumbrance, mortgage, deed to secure debt, deed of trust, assignment
of leases and rents, pledge, lien, charge or lease constituting a Capitalized
Lease Obligation, conditional sale or other title retention agreement, or other
security title or encumbrance of any kind in respect of any property of such
Person, or upon the income, rents or profits therefrom; (b) any arrangement,
express or implied, under which any property of such Person is transferred,
sequestered or otherwise identified for the purpose of subjecting the same to
the payment of Indebtedness or performance of any other obligation in priority
to the payment of the general, unsecured creditors of such Person; (c) the
filing of any financing statement under the Uniform Commercial Code or its
equivalent in any jurisdiction, other than any precautionary filing not
otherwise constituting or giving rise to a Lien, including a financing statement
filed (i) in respect of a lease not constituting a Capitalized Lease Obligation
pursuant to Section 9-505 (or a successor provision) of the Uniform Commercial
Code or its equivalent as in effect in an applicable jurisdiction or (ii) in
connection with a sale or other disposition of accounts or other assets not
prohibited by this Agreement in a transaction not otherwise constituting or
giving rise to a Lien; and (d) any agreement by such Person to grant, give or
otherwise convey any of the foregoing.

 

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“Loan” means a loan made by a Lender to the Borrower pursuant to
Section 2.1.(a).
“Loan Document” means this Agreement, each Note, each Letter of Credit Document,
the Guaranty, and each other document or instrument now or hereafter executed
and delivered by a Loan Party in connection with, pursuant to or relating to
this Agreement.
“Loan Party” means the Borrower, the Parent and each other Guarantor.
Schedule 1.1. sets forth the Loan Parties in addition to the Borrower and the
Parent as of the Agreement Date.
“Mandatorily Redeemable Stock” means, with respect to any Person, any Equity
Interest of such Person which by the terms of such Equity Interest (or by the
terms of any security into which it is convertible or for which it is
exchangeable or exercisable), upon the happening of any event or otherwise
(a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation
or otherwise (other than an Equity Interest to the extent redeemable in exchange
for common stock or other equivalent common Equity Interests), (b) is
convertible into or exchangeable or exercisable for Indebtedness or Mandatorily
Redeemable Stock, or (c) is redeemable at the option of the holder thereof, in
whole or in part (other than an Equity Interest which is redeemable solely in
exchange for common stock or other equivalent common Equity Interests), in each
case on or prior to the date on which all Loans are scheduled to be due and
payable in full.
“Marketable Securities” means (a) bank deposits and certificates of deposit from
a bank rated Baa1 or BBB+ or better by a Rating Agency; (b) government
obligations; and (c) commercial paper rated A1 or P1 by a Rating Agency.
“Material Adverse Effect” means a materially adverse effect on (a) the business,
assets, liabilities, financial condition or results of operations of the Parent
and its Subsidiaries, or the Borrower and its Subsidiaries, in each case, taken
as a whole, (b) the ability of the Borrower or any other Loan Party to perform
its obligations under any Loan Document to which it is a party, (c) the validity
or enforceability of any of the material provisions of the Loan Documents, or
(d) the material rights and remedies of the Lenders and the Administrative Agent
under any of the Loan Documents.
“Material Contract” means any contract or other arrangement (other than Loan
Documents), whether written or oral, to which the Parent, the Borrower, or any
other Subsidiary is a party as to which the breach, nonperformance, cancellation
or failure to renew by any party thereto could reasonably be expected to have a
Material Adverse Effect.
“Material Subsidiary” means any Subsidiary (a) that owns in fee simple, or
leases pursuant to a ground lease, an Unencumbered Borrowing Base Property or
(b) to which more than 5% of Total Asset Value is attributable on an individual
basis.
“Maximum Loan Availability” means, at any time, the lesser of (a) the aggregate
amount of the Commitments at such time and (b) the amount by which (i) the
lesser of (x) the Unencumbered Borrowing Base Value and (y) the aggregate
principal balance of Loans and the amount of all Letter of Credit Liabilities
that would cause the ratio of (A) Adjusted NOI of the Unencumbered Borrowing
Base Properties at such time to (B) Implied Debt Service for such period
determined with respect to such principal balance of Loans and amount of Letter
of Credit Liabilities to equal 1.60 to 1.00 exceeds (ii) all Secured Recourse
Indebtedness of the Parent and its Subsidiaries.
“Moody’s” means Moody’s Investors Service, Inc. and its successors.

 

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“Mortgage” means a mortgage, deed of trust, deed to secure debt or similar
security instrument made by a Person owning an interest in real property
granting a Lien on such interest in real property as security for the payment of
Indebtedness of such Person or another Person.
“Mortgage Receivable” means a promissory note secured by a Mortgage of which the
Parent, the Borrower or another Subsidiary is the holder and retains the rights
of collection of all payments thereunder.
“Multiemployer Plan” means at any time a multiemployer plan within the meaning
of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then
making or accruing an obligation to make contributions or has within the
preceding six plan years made contributions, including for these purposes any
Person which ceased to be a member of the ERISA Group during such six-year
period.
“Negative Pledge” means, with respect to a given asset, any provision of a
document, instrument or agreement (other than any Loan Document or Specified
Derivatives Contract) which prohibits or purports to prohibit the creation or
assumption of any Lien on such asset as security for Indebtedness of the Person
owning such asset or any other Person; provided, however, that an agreement that
conditions a Person’s ability to encumber its assets upon the maintenance of one
or more specified ratios that limit such Person’s ability to encumber its assets
but that do not generally prohibit the encumbrance of its assets, or the
encumbrance of specific assets, shall not constitute a Negative Pledge.
“Net Operating Income” or “NOI” means, for any Property and for a given period,
the sum of the following (without duplication and determined on a consistent
basis with prior periods): (a) gross revenues received in the ordinary course
from such Property minus (b) all expenses paid (excluding interest but including
an appropriate accrual for property taxes and insurance) related to the
ownership, operation or maintenance of such Property, including but not limited
to property taxes, assessments and the like, insurance, utilities, payroll
costs, maintenance, repair and landscaping expenses, marketing expenses, and
general and administrative expenses (including an appropriate allocation for
legal, accounting, advertising, marketing and other expenses incurred in
connection with such Property, but specifically excluding general overhead
expenses of the Borrower or any Subsidiary and any property management fees)
minus (c) the FF&E Reserves for such Property as of the end of such period minus
(d) the greater of (i) the actual property management fee paid during such
period and (ii) an imputed management fee in the amount of three percent (3.0%)
of the gross revenues for such Property for such period.
“Net Tangible Proceeds” means with respect to any Equity Issuance by a Person,
the aggregate amount of all cash and the Fair Market Value of all other property
(other than (a) securities of such Person being converted or exchanged in
connection with such Equity Issuance and (b) assets separately classified as
intangible assets under GAAP) received by such Person in respect of such Equity
Issuance net of investment banking fees, legal fees, accountants’ fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred by such Person in connection with such Equity Issuance.
“Nonrecourse Indebtedness” means, with respect to a Person, (a) Indebtedness for
borrowed money in respect of which recourse for payment (except for customary
exceptions for fraud, misapplication of funds, environmental indemnities,
voluntary bankruptcy, collusive involuntary bankruptcy and other similar
exceptions to nonrecourse liability) is contractually limited to specific assets
of such Person encumbered by a Lien securing such Indebtedness, (b) obligations
in respect of guaranties of customary exceptions for fraud, misapplication of
funds, environmental indemnities, voluntary bankruptcy, collusive involuntary
bankruptcy and other similar exceptions to nonrecourse liability, provided that,
once any such obligation shall cease to be contingent, then such obligation
shall cease to be Nonrecourse Indebtedness, or (c) if such Person is a Single
Asset Entity, any Indebtedness for borrowed money of such Person.

 

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“Note” means a promissory note of the Borrower substantially in the form of
Exhibit C, payable to the order of a Lender in a principal amount equal to the
amount of such Lender’s Commitment.
“Notice of Borrowing” means a notice substantially in the form of Exhibit D (or
such other form reasonably acceptable to the Administrative Agent and containing
the information required in such Exhibit) to be delivered to the Administrative
Agent pursuant to Section 2.1.(b) evidencing the Borrower’s request for a
borrowing of Loans.
“Notice of Continuation” means a notice substantially in the form of Exhibit E
(or such other form reasonably acceptable to the Administrative Agent and
containing the information required in such Exhibit) to be delivered to the
Administrative Agent pursuant to Section 2.7. evidencing the Borrower’s request
for the Continuation of a LIBOR Loan.
“Notice of Conversion” means a notice substantially in the form of Exhibit F (or
such other form reasonably acceptable to the Administrative Agent and containing
the information required in such Exhibit) to be delivered to the Administrative
Agent pursuant to Section 2.8. evidencing the Borrower’s request for the
Conversion of a Loan from one Type to another Type.
“Obligations” means, individually and collectively: (a) the aggregate principal
balance of, and all accrued and unpaid interest on, all Loans; (b) all
Reimbursement Obligations and all other Letter of Credit Liabilities; and
(c) all other indebtedness, liabilities, obligations, covenants and duties of
the Borrower and the other Loan Parties owing to the Administrative Agent or any
Lender of every kind, nature and description, under or in respect of this
Agreement or any of the other Loan Documents, including, without limitation, the
Fees and indemnification obligations, whether direct or indirect, absolute or
contingent, due or not due, contractual or tortious, liquidated or unliquidated,
and whether or not evidenced by any promissory note. The term “Obligations” does
not include any Specified Derivatives Obligations.
“OFAC” has the meaning given that term in Section 7.1.(z).
“Off-Balance Sheet Obligations” means liabilities and obligations of the Parent,
any Subsidiary or any other Person in respect of “off-balance sheet
arrangements” (as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated
under the Securities Act) which the Parent would be required to disclose in the
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” section of the Parent’s report on Form 10-Q or Form 10-K (or their
equivalents) which the Parent is required to file with the Securities and
Exchange Commission (or any Governmental Authority substituted therefor).
“Ownership Share” means, with respect to any Subsidiary of a Person (other than
a Wholly Owned Subsidiary) or any Unconsolidated Affiliate of a Person, the
greater of (a) such Person’s relative nominal direct and indirect ownership
interest (expressed as a percentage) in such Subsidiary or Unconsolidated
Affiliate or (b) subject to compliance with Section 9.4.(p), such Person’s
relative direct and indirect economic interest (calculated as a percentage) in
such Subsidiary or Unconsolidated Affiliate determined in accordance with the
applicable provisions of the declaration of trust, articles or certificate of
incorporation, articles of organization, partnership agreement, joint venture
agreement or other applicable organizational document of such Subsidiary or
Unconsolidated Affiliate.

 

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“Parent” has the meaning given such term in the introductory paragraph hereof.
“Participant” has the meaning given that term in Section 13.6.(d).
“PBGC” means the Pension Benefit Guaranty Corporation and any successor agency.
“Permitted Liens” means, as to any Person: (a) Liens securing taxes, assessments
and other charges or levies imposed by any Governmental Authority (excluding any
Lien imposed pursuant to any of the provisions of ERISA or pursuant to any
Environmental Laws) or the claims of materialmen, mechanics, carriers,
warehousemen or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, which are not at the time required to be paid
or discharged under Section 8.6.; (b) Liens consisting of deposits or pledges
made, in the ordinary course of business, in connection with, or to secure
payment of, obligations under workers’ compensation, unemployment insurance or
similar Applicable Laws; (c) Liens consisting of encumbrances in the nature of
zoning restrictions, easements, and rights or restrictions of record on the use
of real property, which do not materially detract from the value of such
property or impair the intended use thereof in the business of such Person;
(d) the rights of tenants under leases or subleases or licenses not interfering
with the ordinary conduct of business of such Person; (e) Liens in favor of the
Administrative Agent for the benefit of the Lenders; (f) Liens in favor of the
Borrower or a Guarantor securing obligations owing by a Subsidiary to the
Borrower or a Guarantor; (g) Liens in existence as of the Agreement Date and set
forth in Part II of Schedule 7.1.(f); (h) Liens arising out of judgments or
awards in respect of the Parent or any of its Subsidiaries not constituting an
Event of Default under Section 11.1.(i); (i) any interest or title of a lessor
under any lease of equipment (not constituting a fixture) entered into by the
Borrower or any Subsidiary in the ordinary course of its business and covering
only the assets so leased and (j) Liens arising in the ordinary course of
business by virtue of any contractual, statutory or common law provision
relating to banker’s liens, rights of set-off or similar rights and remedies
covering deposit or securities accounts (including funds or other assets
credited thereto).
“Person” means any natural person, corporation, limited partnership, general
partnership, joint stock company, limited liability company, limited liability
partnership, joint venture, association, company, trust, bank, trust company,
land trust, business trust or other organization, whether or not a legal entity,
or any other nongovernmental entity, or any Governmental Authority.
“Plan” means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (a) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (b) has at any time within the
preceding six years been maintained, or contributed to, by any Person which was
at such time a member of the ERISA Group for employees of any Person which was
at such time a member of the ERISA Group.

 

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“Post-Default Rate” means, in respect of any principal of any Loan or any other
Obligation that is not paid when due (whether at stated maturity, by
acceleration, by mandatory prepayment or otherwise), a rate per annum equal to
the Base Rate as in effect from time to time plus the Applicable Margin for Base
Rate Loans plus three percent (3.0%).
“Potential Defaulting Lender” means any Lender, as reasonably determined by the
Administrative Agent or the Issuing Bank, as applicable, that: (a) has failed to
comply with, or has made a public statement to the effect that it does not
intend to comply with, its funding obligations under one or more syndicated
credit facilities or other agreements in which it commits or is obligated to
extend credit (other than this Agreement); (b) has a parent corporation or other
Affiliate that is subject to any condition or event described in the immediately
preceding clause (a); or (c) has, or whose parent corporation has, a Credit
Rating of less than BBB-/Baa3 (or equivalent) from either S&P or Moody’s. As
used in this definition, the term “parent corporation” means, with respect to a
Lender, any Person Controlling such Lender, including without limitation, the
bank holding company (as defined in Regulation Y of the Board of Governors of
the Federal Reserve System), if any, of such Lender.
“Preferred Dividends” means, for any period and without duplication, all
Restricted Payments paid during such period on Preferred Equity Interests issued
by the Parent or a Subsidiary. Preferred Dividends shall not include dividends
or distributions (a) paid or payable solely in Equity Interests (other than
Mandatorily Redeemable Stock) payable to holders of such class of Equity
Interests, (b) paid or payable to the Parent or a Subsidiary, or
(c) constituting or resulting in the redemption of Preferred Equity Interests,
other than scheduled redemptions not constituting balloon, bullet or similar
redemptions in full.
“Preferred Equity Interests” means, with respect to any Person, Equity Interests
in such Person which are entitled to preference or priority over any other
Equity Interest in such Person in respect of the payment of dividends or
distribution of assets upon liquidation or both.
“Principal Office” means the office of the Administrative Agent located at
NorthStar East Building, MAC:N9303-110, 608 Second Avenue S., Minneapolis,
Minnesota 55402, or any other subsequent office that the Administrative Agent
shall have specified as the Principal Office by written notice to the Borrower
and the Lenders.
“Property” means any parcel of real property owned or leased (in whole or in
part) or operated by the Parent, the Borrower, any other Subsidiary or any
Unconsolidated Affiliate of the Parent and which is located in a state of the
United States of America or the District of Columbia.
“Property Management Agreement” means, collectively, all agreements entered into
by a Loan Party pursuant to which such Loan Party engages a Person to advise it
with respect to the management of an Unencumbered Borrowing Base Property or to
provide management services with respect to the same.
“Qualified Plan” means a Benefit Arrangement or Plan that is intended to be
tax-qualified under Section 401(a) of the Internal Revenue Code.
“Qualified REIT Subsidiary” shall have the meaning given to such term in the
Internal Revenue Code.

 

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“Rating Agencies” means S&P and Moody’s.
“Register” has the meaning given that term in Section 13.6.(c).
“Regulatory Change” means, with respect to any Lender, any change effective
after the Agreement Date in Applicable Law (including without limitation,
Regulation D of the Board of Governors of the Federal Reserve System) or the
adoption or making after such date of any interpretation, directive or request
applying to a class of banks, including such Lender, of or under any Applicable
Law (whether or not having the force of law and whether or not failure to comply
therewith would be unlawful) by any Governmental Authority or monetary authority
charged with the interpretation or administration thereof or compliance by any
Lender with any request or directive regarding capital adequacy.
“Reimbursement Obligation” means the absolute, unconditional and irrevocable
obligation of the Borrower to reimburse the Issuing Bank for any drawing honored
by the Issuing Bank under a Letter of Credit.
“REIT” means a Person qualifying for treatment as a “real estate investment
trust” under the Internal Revenue Code.
“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person’s Affiliates.
“Requisite Lenders” means, as of any date, Lenders (which must include Wells
Fargo at all times during which Wells Fargo is acting as the Administrative
Agent and the Commitment Percentage of Wells Fargo is not less than ten percent
(10.0%)) having greater than 51% of the aggregate amount of the Commitments (not
held by Defaulting Lenders who are not entitled to vote), or, if the Commitments
have been terminated or reduced to zero, Lenders (which must include Wells Fargo
at all times during which Wells Fargo is acting as the Administrative Agent and
the Commitment Percentage of Wells Fargo is not less than ten percent (10.0%)),
holding greater than 51% of the principal amount of the aggregate outstanding
Loans and Letter of Credit Liabilities (not held by Defaulting Lenders who are
not entitled to vote).
“Responsible Officer” means with respect to the Parent, the Borrower or any
Subsidiary, the chief executive officer, the chief financial officer, chief
operating officer or general counsel of the Parent, the Borrower or such
Subsidiary.
“Restricted Payment” means: (a) any dividend or other distribution, direct or
indirect, on account of any Equity Interest of the Parent, the Borrower or any
Subsidiary now or hereafter outstanding, except a dividend payable solely in
Equity Interests; (b) any redemption, conversion, exchange, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct or
indirect, of any Equity Interest of the Parent, the Borrower or any Subsidiary
now or hereafter outstanding; and (c) any payment made to retire, or to obtain
the surrender of, any outstanding warrants, options or other rights to acquire
any Equity Interests of the Parent, the Borrower or any Subsidiary now or
hereafter outstanding.

 

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“Secured Indebtedness” means, with respect to any Person, (a) all Indebtedness
of such Person that is secured in any manner by any Lien on any Property plus
(b) such Person’s pro rata share of the Secured Indebtedness of any of such
Person’s Unconsolidated Affiliates.
“Secured Recourse Indebtedness” means all Indebtedness (including Guaranties of
Secured Indebtedness) that is Secured Indebtedness and is not Nonrecourse
Indebtedness.
“Securities Act” means the Securities Act of 1933, as amended from time to time,
together with all rules and regulations issued thereunder.
“Significant Subsidiary” means any Subsidiary to which more than $10,000,000 of
Total Asset Value is attributable.
“Single Asset Entity” means a Person (other than an individual) that (a) only
owns a single Property; (b) is engaged only in the business of owning,
developing and/or leasing such Property; and (c) receives substantially all of
its gross revenues from such Property. In addition, if the assets of a Person
consist solely of (i) Equity Interests in one or more Single Asset Entities that
directly or indirectly own such single Property and (ii) cash and other assets
of nominal value incidental to such Person’s ownership of the other Single Asset
Entity, such Person shall also be deemed to be a Single Asset Entity for
purposes of this Agreement.
“Solvent” means, when used with respect to any Person, that (a) the fair value
and the fair salable value of its assets (excluding any Indebtedness due from
any Affiliate of such Person) are each in excess of the fair valuation of its
total liabilities (including all contingent liabilities computed at the amount
which, in light of all the facts and circumstances existing at such time,
represents the amount that could reasonably be expected to become an actual and
matured liability); (b) such Person is able to pay its debts or other
obligations in the ordinary course as they mature; and (c) such Person has
capital not unreasonably small to carry on its business and all business in
which it proposes to be engaged.
“Specified Derivatives Contract” means any Derivatives Contract, together with
any Derivatives Support Document relating thereto, that is made or entered into
at any time, or in effect at any time now or hereafter, whether as a result of
an assignment or transfer or otherwise, between the Parent, the Borrower or any
Subsidiary of the Parent and an Specified Derivatives Provider.
“Specified Derivatives Obligations” means all indebtedness, liabilities,
obligations, covenants and duties of the Parent, the Borrower or any
Subsidiaries under or in respect of any Specified Derivatives Contract, whether
direct or indirect, absolute or contingent, due or not due, liquidated or
unliquidated, and whether or not evidenced by any written confirmation.
“Specified Derivatives Provider” means any Lender, or any Affiliate of a Lender
that is a party to a Derivatives Contract at the time the Derivatives Contract
is entered into.
“S&P” means Standard & Poor’s Rating Services, a division of The McGraw-Hill
Companies, Inc. and its successors.
“Stated Amount” means the amount available to be drawn by a beneficiary under a
Letter of Credit from time to time, as such amount may be increased or reduced
from time to time in accordance with the terms of such Letter of Credit.

 

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“Subsidiary” means, for any Person, any corporation, partnership, limited
liability company or other entity of which at least a majority of the Equity
Interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other individuals performing similar functions of
such corporation, partnership, limited liability company or other entity
(without regard to the occurrence of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person, and
shall include all Persons the accounts of which are consolidated with those of
such Person pursuant to GAAP.
“Tangible Net Worth” means, as of any given time: (a) the unallocated gross book
value (exclusive of depreciation and amortization) of all real estate assets of
the Parent and its Subsidiaries that constitute Properties at such time; plus
(b) the book value of other assets (excluding any real estate assets but
including Investments in Unconsolidated Affiliates) of the Parent and its
Subsidiaries; less (c) all amounts appearing on the assets side of a
consolidated balance sheet of the Parent for assets separately classified as
intangible assets under GAAP (except for allocations of property purchase prices
pursuant to FASB ASC 805); less (d) all Total Indebtedness of the Parent and its
Subsidiaries (excluding such Person’s Ownership Share of Indebtedness of any
Unconsolidated Affiliate to the extent included in Total Indebtedness)
determined on a consolidated basis; less (e) all other liabilities of the Parent
and its Subsidiaries determined on a consolidated basis (except liabilities
resulting from allocations of property purchase prices pursuant to FASB ASC 805.
“Taxable REIT Subsidiary” means any corporation (other than a REIT) in which the
Parent directly or indirectly owns stock and the Parent and such corporation
have jointly elected that such corporation be treated as a taxable REIT
subsidiary of the Parent under and pursuant to Section 856 of the Internal
Revenue Code.
“Taxes” has the meaning given that term in Section 3.10.
“Termination Date” means August 6, 2013, or such later date to which the
Termination Date may be extended pursuant to Section 2.11.
“Titled Agents” has the meaning given that term in Section 12.9.
“Total Asset Value” means the sum of all of the following of the Borrower and
its Subsidiaries (without duplication) on a consolidated basis determined in
accordance with GAAP applied on a consistent basis: (a) unrestricted and
lien-free cash and Cash Equivalents and Marketable Securities, plus (b) with
respect to each Property owned by the Borrower or any Subsidiary (other than
Unimproved Land) (i) from the Effective Date through March 31, 2012, the value
of each such Property equal to its Appraised Value; provided, however, that from
the Effective Date through March 31, 2012, the value of the Marriott Downtown
Chicago Magnificent Mile Hotel in Chicago, Illinois and the Conrad Chicago Hotel
in Chicago, Illinois shall be $221,630,000 and $69,975,000, respectively and
(ii) after March 31, 2012, the Adjusted NOI of such Property for the period of
four consecutive fiscal quarters most recently ending, divided by the
Capitalization Rate, plus (c) the book value of Unimproved Land, Mortgage
Receivables and other promissory notes, plus (d) the Borrower’s Ownership Share
of the preceding items for its Unconsolidated Affiliates (excluding assets of
the type described in the immediately preceding clause (a)), plus (e) the
contractual purchase price of any real property subject to a purchase
obligation, repurchase obligation or forward commitment which at such time could
be specifically enforced by the seller of such real property, but only to the
extent such obligations are included in the Indebtedness of the Borrower and its
Subsidiaries on a consolidated basis, plus (f) in the case of any real property
subject to a purchase obligation, repurchase obligation or forward commitment
which at such time could not be specifically

 

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enforced by the seller of such real property, the aggregate amount of due
diligence deposits, earnest money payments and other similar payments made under
the applicable contract which, at such time, would be subject to forfeiture upon
termination of the contract, but only to the extent such amounts are included in
the Indebtedness of the Borrower and its Subsidiaries on a consolidated basis.
Notwithstanding the foregoing, for purposes of determining Total Asset Value,
the amount, if any, by which the value of Marketable Securities included under
the immediately preceding clause (a) would account for more than 10% of Total
Asset Value shall be excluded. The percentage of Total Asset Value attributable
to a given Subsidiary shall be equal to the ratio expressed as a percentage of
(x) an amount equal to Total Asset Value calculated solely with respect to
assets owned directly by such Subsidiary to (y) Total Asset Value. For purposes
of determining Total Asset Value, (x) Adjusted NOI from Properties disposed of
by the Borrower or any Subsidiary during the immediately preceding period of
four consecutive fiscal quarters of the Borrower shall be excluded and
(y) Adjusted NOI for the period of four consecutive fiscal quarters most
recently ended for any Property acquired by the Borrower or any Subsidiary
during such period shall be utilized regardless of the date such Property was
acquired by the Borrower or such Subsidiary.
“Total Indebtedness” means all Indebtedness of the Parent, the Borrower and all
other Subsidiaries of the Parent determined on a consolidated basis.
“Transfer Authorizer Designation Form” means a form substantially in the form of
Exhibit G to be delivered to the Administrative Agent pursuant to
Section 6.1.(a), as the same may be amended, restated or modified from time to
time with the prior written approval of the Administrative Agent.
“Type” with respect to any Loan, refers to whether such Loan or portion thereof
is a LIBOR Loan or a Base Rate Loan.
“UCC” means the Uniform Commercial Code as in effect in any applicable
jurisdiction.
“Unconsolidated Affiliate” means, with respect to any Person, any other Person
in whom such Person holds an Investment, which Investment is accounted for in
the financial statements of such Person on an equity basis of accounting and
whose financial results would not be consolidated under GAAP with the financial
results of such Person on the consolidated financial statements of such Person.
“Unencumbered Borrowing Base Property” means a Property which is to be included
in calculations of the Unencumbered Borrowing Base Value pursuant to
Section 4.1. A Property shall cease to be an Unencumbered Borrowing Base
Property if at any time such Property shall cease to be an Eligible Unencumbered
Borrowing Base Property unless otherwise agreed by the Requisite Lenders.

 

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“Unencumbered Borrowing Base Value” means, at any time of determination, 55.0%
of (a) from the Effective Date through March 31, 2012, the sum of the values of
all Unencumbered Borrowing Base Properties equal to the Appraised Values of all
such Properties at such time; provided, however, that from the Effective Date
through March 31, 2012, the value for the Conrad Chicago Hotel in Chicago,
Illinois shall be $69,975,000, and (b) after March 31, 2012, the aggregate
Adjusted NOI of all Unencumbered Borrowing Base Properties at such time for the
period of four consecutive fiscal quarters most recently ending, divided by the
Capitalization Rate. For purposes of this definition, the Adjusted NOI for any
Unencumbered Borrowing Base Property shall be reduced by an amount equal to the
greater of (x) the amount by which the Adjusted NOI of such Unencumbered
Borrowing Base Property would exceed 40.0% of the aggregate Adjusted NOI of all
Unencumbered Borrowing Base Properties and (y) the amount by which the Adjusted
NOI of Unencumbered Borrowing Base Properties located in the same metropolitan
statistical area as such Property would exceed 40.0% of the aggregate Adjusted
NOI of all Unencumbered Borrowing Base Properties. In addition, to the extent
that Unencumbered Borrowing Base Value attributable to Properties leased under
Ground Leases (excluding the Boston Westin Waterfront Hotel in Boston,
Massachusetts) would exceed 33.0% of Unencumbered Borrowing Base Value, such
excess shall be excluded. For purposes of determining Unencumbered Borrowing
Base Value, (x) Adjusted NOI from Properties disposed of by the Borrower or any
Subsidiary during the immediately preceding period of four consecutive fiscal
quarters of the Borrower shall be excluded and (y) Adjusted NOI for the period
of four consecutive fiscal quarters most recently ended for any Property
acquired by the Borrower or any Subsidiary during such period shall be utilized
regardless of the date such Property was acquired by the Borrower or such
Subsidiary.
“Unimproved Land” means land on which no development (other than improvements
that are not material and are temporary in nature) has occurred and for which no
development is scheduled in the following 12 months. Unimproved Land shall not
include any undeveloped parcels of a Property that has been developed unless and
until the Borrower intends to develop such parcel.
“Unsecured Indebtedness” means with respect to a Person as of any given date,
(a) the aggregate principal amount of (a) all Indebtedness of such Person
outstanding at such date that is not Secured Indebtedness plus (b) all
Nonrecourse Indebtedness which such Person has Guaranteed but only to the extent
of such Guaranty (excluding obligations in respect of Guaranties of customary
exceptions to nonrecourse liability).
“Wells Fargo” means Wells Fargo Bank, National Association, and its successors
and assigns.
“Wholly Owned Subsidiary” means any Subsidiary of a Person in respect of which
all of the Equity Interests (other than, in the case of a corporation,
directors’ qualifying shares) are at the time directly or indirectly owned or
controlled by such Person or one or more other Subsidiaries of such Person or by
such Person and one or more other Subsidiaries of such Person.
“Withdrawal Liability” means any liability as a result of a complete or partial
withdrawal from a Multiemployer Plan as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.

 

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Section 1.2. General; References to Pacific Time.
Unless otherwise indicated, all accounting terms, ratios and measurements shall
be interpreted or determined in accordance with GAAP; provided that, if at any
time any change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and either the Borrower or the
Requisite Lenders shall so request, the Administrative Agent, the Lenders and
the Borrower shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject to
the approval of the Requisite Lenders); provided further that, until so amended,
(i) such ratio or requirement shall continue to be computed in accordance with
GAAP prior to such change therein and (ii) the Borrower shall provide to the
Administrative Agent and the Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting forth
a reconciliation between calculations of such ratio or requirement made before
and after giving effect to such change in GAAP. References in this Agreement to
“Sections”, “Articles”, “Exhibits” and “Schedules” are to sections, articles,
exhibits and schedules herein and hereto unless otherwise indicated. References
in this Agreement to any document, instrument or agreement (a) shall include all
exhibits, schedules and other attachments thereto, (b) shall include all
documents, instruments or agreements issued or executed in replacement thereof,
to the extent permitted hereby and (c) shall mean such document, instrument or
agreement, or replacement or predecessor thereto, as amended, supplemented,
restated or otherwise modified from time to time to the extent not prohibited
hereby and in effect at any given time. Wherever from the context it appears
appropriate, each term stated in either the singular or plural shall include the
singular and plural, and pronouns stated in the masculine, feminine or neuter
gender shall include the masculine, the feminine and the neuter. Unless
explicitly set forth to the contrary, a reference to “Subsidiary” means a
Subsidiary of the Parent or a Subsidiary of such Subsidiary and a reference to
an “Affiliate” means a reference to an Affiliate of the Parent. Titles and
captions of Articles, Sections, subsections and clauses in this Agreement are
for convenience only, and neither limit nor amplify the provisions of this
Agreement. Unless otherwise indicated, all references to time are references to
Pacific time. The calculation of liabilities shall not include any fair value
adjustments to the carrying value of liabilities to record such liabilities at
fair value pursuant to electing the fair value option election under FASB ASC
825-10-25 (formerly known as FAS 159, The Fair Value Option for Financial Assets
and Financial Liabilities) or other FASB standards allowing entities to elect
fair value option for financial liabilities. Therefore, the amount of
liabilities shall be the historical cost basis, which generally is the
contractual amount owed adjusted for amortization or accretion of any premium or
discount.
Section 1.3. Financial Attributes of Non-Wholly Owned Subsidiaries.
When determining compliance by the Borrower or the Parent with any financial
covenant contained in any of the Loan Documents, only the Ownership Share of the
Borrower or the Parent, as applicable, of the financial attributes of a
Subsidiary that is not a Wholly Owned Subsidiary shall be included.
Article II. Credit Facility
Section 2.1. Loans.
(a) Making of Loans. Subject to the terms and conditions set forth in this
Agreement, including without limitation, Section 2.13., each Lender severally
and not jointly agrees to make Loans to the Borrower during the period from and
including the Effective Date to but excluding the Termination Date, in an
aggregate principal amount at any one time outstanding up to, but not exceeding,
such Lender’s Commitment. Each borrowing of Base Rate Loans shall be in an
aggregate minimum amount of $500,000 and integral multiples of $100,000 in
excess thereof. Each borrowing and Continuation under Section 2.7. of, and each
Conversion under Section 2.8. of Base Rate Loans into, LIBOR Loans shall be in
an aggregate minimum of $1,000,000 and integral multiples of $100,000 in excess
of that amount. Notwithstanding the immediately preceding two sentences but
subject to Section 2.13., a borrowing of Loans may be in the aggregate amount of
the unused Commitments. Within the foregoing limits and subject to the terms and
conditions of this Agreement, the Borrower may borrow, repay and reborrow Loans.

 

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(b) Requests for Loans. Not later than 9:00 a.m. Pacific time at least one
Business Day prior to a borrowing of Loans that are to be Base Rate Loans and
not later than 9:00 a.m. Pacific time at least three Business Days prior to a
borrowing of Loans that are to be LIBOR Loans, the Borrower shall deliver to the
Administrative Agent a Notice of Borrowing. Each Notice of Borrowing shall
specify the aggregate principal amount of the Loans to be borrowed, the date
such Loans are to be borrowed (which must be a Business Day), a general
description of the use of the proceeds of such Loans, the Type of the requested
Loans, and if such Loans are to be LIBOR Loans, the initial Interest Period for
such Loans. Each Notice of Borrowing shall be irrevocable once given and binding
on the Borrower. Prior to delivering a Notice of Borrowing, the Borrower may
(without specifying whether a Loan will be a Base Rate Loan or a LIBOR Loan)
request that the Administrative Agent provide the Borrower with the most recent
LIBOR available to the Administrative Agent. The Administrative Agent shall
provide such quoted rate to the Borrower on the date of such request or as soon
as possible thereafter.
(c) Funding of Loans. Promptly after receipt of a Notice of Borrowing under the
immediately preceding subsection (b), the Administrative Agent shall notify each
Lender of the proposed borrowing. Each Lender shall deposit an amount equal to
the Loan to be made by such Lender to the Borrower with the Administrative Agent
at the Principal Office, in immediately available funds not later than 9:00 a.m.
Pacific time on the date of such proposed Loans. Subject to fulfillment of all
applicable conditions set forth herein, the Administrative Agent shall make
available to the Borrower in the account specified in the Transfer Authorizer
Designation Form, not later than 12:00 noon Pacific time on the date of the
requested borrowing of Loans, the proceeds of such amounts received by the
Administrative Agent.
(d) Assumptions Regarding Funding by Lenders. With respect to Loans to be made
after the Effective Date, unless the Administrative Agent shall have been
notified by any Lender that such Lender will not make available to the
Administrative Agent a Loan to be made by such Lender in connection with any
borrowing, the Administrative Agent may assume that such Lender will make the
proceeds of such Loan available to the Administrative Agent in accordance with
this Section, and the Administrative Agent may (but shall not be obligated to),
in reliance upon such assumption, make available to the Borrower the amount of
such Loan to be provided by such Lender. In such event, if such Lender does not
make available to the Administrative Agent the proceeds of such Loan, then such
Lender and the Borrower severally agree to pay to the Administrative Agent on
demand the amount of such Loan with interest thereon, for each day from and
including the date such Loan is made available to the Borrower but excluding the
date of payment to the Administrative Agent, at (i) in the case of a payment to
be made by such Lender, the greater of the Federal Funds Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation and (ii) in the case of a payment to be made by the
Borrower, the interest rate applicable to Base Rate Loans. If the Borrower and
such Lender shall pay the amount of such interest to the Administrative Agent
for the same or overlapping period, the Administrative Agent shall promptly
remit to the Borrower the amount of such interest paid by the Borrower for such
period. If such Lender pays to the Administrative Agent the amount of such Loan,
the amount so paid shall constitute such Lender’s Loan included in the
borrowing. Any payment by the Borrower shall be without prejudice to any claim
the Borrower may have against a Lender that shall have failed to make available
the proceeds of a Loan to be made by such Lender.

 

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Section 2.2. Letters of Credit.
(a) Letters of Credit. Subject to the terms and conditions of this Agreement,
including without limitation, Section 2.13., the Issuing Bank, on behalf of the
Lenders, agrees to issue for the account of the Borrower during the period from
and including the Effective Date to, but excluding, the date 30 days prior to
the Termination Date, one or more standby letters of credit (each a “Letter of
Credit”) up to a maximum aggregate Stated Amount at any one time outstanding not
to exceed $30,000,000, as such amount may be reduced from time to time in
accordance with the terms hereof (the “L/C Commitment Amount”).
(b) Terms of Letters of Credit. At the time of issuance, the amount, form, terms
and conditions of each Letter of Credit, and of any drafts or acceptances
thereunder, shall be subject to approval by the Issuing Bank and the Borrower.
Notwithstanding the foregoing, in no event may (i) the expiration date of any
Letter of Credit extend beyond the date that is 30 days prior to the Termination
Date, or (ii) any Letter of Credit have an initial duration in excess of one
year; provided, however, a Letter of Credit may contain a provision providing
for the automatic extension of the expiration date in the absence of a notice of
non-renewal from the Issuing Bank but in no event shall any such provision
permit the extension of the expiration date of such Letter of Credit beyond the
date that is thirty (30) days prior to the Termination Date; provided, further,
that a Letter of Credit may, as a result of its express terms or as the result
of the effect of an automatic extension provision, have an expiration date of
not more than one year beyond the date that is 30 days prior to the Termination
Date so long as the Borrower delivers to the Administrative Agent for the
benefit of the Issuing Bank no later than 30 days prior to the Termination Date
cash collateral for such Letter of Credit for deposit into the Letter of Credit
Collateral Account in an amount equal to the Stated Amount of such Letter of
Credit. The initial Stated Amount of each Letter of Credit shall be at least
$100,000 (or such lesser amount as may be reasonably acceptable to the
Administrative Agent and the Issuing Bank).
(c) Requests for Issuance of Letters of Credit. The Borrower shall give the
Issuing Bank and the Administrative Agent written notice at least 5 Business
Days prior to the requested date of issuance of a Letter of Credit, such notice
to describe in reasonable detail the proposed terms of such Letter of Credit and
the nature of the transactions or obligations proposed to be supported by such
Letter of Credit, and in any event shall set forth with respect to such Letter
of Credit the proposed (i) initial Stated Amount, (ii) beneficiary, and
(iii) expiration date. The Borrower shall also execute and deliver such
customary applications and agreements for standby letters of credit, and other
forms as requested from time to time by the Issuing Bank. Provided the Borrower
has given the notice prescribed by the first sentence of this subsection and
delivered such application and agreements referred to in the preceding sentence,
subject to the other terms and conditions of this Agreement, including the
Issuing Bank’s approval of the form of the requested Letter of Credit pursuant
to Section 2.2.(b) and the satisfaction of any applicable conditions precedent
set forth in Article VI, the Issuing Bank shall issue the requested Letter of
Credit on the requested date of issuance for the benefit of the stipulated
beneficiary but in no event prior to the date 5 Business Days following the date
after which the Issuing Bank has received all of the items required to be
delivered to it under this subsection. The Issuing Bank shall not at any time be
obligated to issue any Letter of Credit if such issuance would conflict with, or
cause the Administrative Agent or any Lender to exceed any limits imposed by,
any Applicable Law. References herein to “issue” and derivations thereof with
respect to Letters of Credit shall also include extensions or modifications of
any outstanding Letters of Credit, unless the context otherwise requires. Upon
the written request of the Borrower, the Issuing Bank shall deliver to the
Borrower a copy of each issued Letter of Credit within a reasonable time after
the date of issuance thereof. To the extent any term of a Letter of Credit
Document is inconsistent with a term of any Loan Document, the term of such Loan
Document shall control.

 

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(d) Reimbursement Obligations. Upon receipt by the Issuing Bank from the
beneficiary of a Letter of Credit of any demand for payment under such Letter of
Credit, the Issuing Bank shall promptly notify the Borrower and the
Administrative Agent of the amount to be paid by the Issuing Bank as a result of
such demand and the date on which payment is to be made by the Issuing Bank to
such beneficiary in respect of such demand; provided, however, that the Issuing
Bank’s failure to give, or delay in giving, such notice shall not discharge the
Borrower in any respect from the applicable Reimbursement Obligation. The
Borrower hereby absolutely, unconditionally and irrevocably agrees to pay and
reimburse the Issuing Bank for the amount of each demand for payment under such
Letter of Credit on or prior to the date on which payment is to be made by the
Issuing Bank to the beneficiary thereunder, without presentment, demand, protest
or other formalities of any kind (other than notice as provided in this
subsection). Upon receipt by the Issuing Bank of any payment in respect of any
Reimbursement Obligation, the Issuing Bank shall promptly pay to each Lender
that has acquired a participation therein under the second sentence of the
immediately following subsection (i) such Lender’s Commitment Percentage of such
payment.
(e) Manner of Reimbursement. Upon its receipt of a notice referred to in the
immediately preceding subsection (d), the Borrower shall advise the
Administrative Agent and the Issuing Bank whether or not the Borrower intends to
borrow hereunder to finance its obligation to reimburse the Issuing Bank for the
amount of the related demand for payment and, if it does, the Borrower shall
submit a timely request for such borrowing as provided in the applicable
provisions of this Agreement. If the Borrower fails to so advise the
Administrative Agent and the Issuing Bank, or if the Borrower fails to reimburse
the Issuing Bank for a demand for payment under a Letter of Credit by the date
of such payment, the failure of which the Issuing Bank shall promptly notify the
Administrative Agent, then (i) if the applicable conditions contained in
Article VI. would permit the making of Loans, the Borrower shall be deemed to
have requested a borrowing of Loans (which shall be Base Rate Loans) in an
amount equal to the unpaid Reimbursement Obligation and the Administrative Agent
shall give each Lender prompt notice of the amount of the Loan to be made
available to the Administrative Agent not later than 10:00 a.m. Pacific time and
(ii) if such conditions would not permit the making of Loans, the provisions of
subsection (j) of this Section shall apply. The limitations set forth in the
second sentence of Section 2.1.(a) shall not apply to any borrowing of Base Rate
Loans under this subsection.
(f) Effect of Letters of Credit on Commitments. Upon the issuance by the Issuing
Bank of any Letter of Credit and until such Letter of Credit shall have expired
or been cancelled, the Commitment of each Lender shall be deemed to be utilized
for all purposes of this Agreement in an amount equal to the product of (i) such
Lender’s Commitment Percentage and (ii) the sum of (A) the Stated Amount of such
Letter of Credit plus (B) any related Reimbursement Obligations then
outstanding.

 

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(g) Issuing Bank’s Duties Regarding Letters of Credit; Unconditional Nature of
Reimbursement Obligations. In examining documents presented in connection with
drawings under Letters of Credit and making payments under such Letters of
Credit against such documents, the Issuing Bank shall only be required to use
the same standard of care as it uses in connection with examining documents
presented in connection with drawings under letters of credit in which it has
not sold participations and making payments under such letters of credit. The
Borrower assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, none of the Issuing Bank,
Administrative Agent or any of the Lenders shall be responsible for, and the
Borrower’s obligations in respect of Letters of Credit shall not be affected in
any manner by, (i) the form, validity, sufficiency, accuracy, genuineness or
legal effects of any document submitted by any party in connection with the
application for and issuance of or any drawing honored under any Letter of
Credit even if such document should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit, or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (iii) failure of the beneficiary of any Letter of
Credit to comply fully with conditions required in order to draw upon such
Letter of Credit; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, facsimile, electronic
mail, telecopy or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any Letter
of Credit, or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any Letter of Credit, or of the proceeds of any drawing under any
Letter of Credit; or (viii) any consequences arising from causes beyond the
control of the Issuing Bank, Administrative Agent or the Lenders. None of the
above shall affect, impair or prevent the vesting of any of the Issuing Bank’s
or Administrative Agent’s rights or powers hereunder. Any action taken or
omitted to be taken by the Issuing Bank under or in connection with any Letter
of Credit, if taken or omitted in the absence of gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final,
non-appealable judgment), shall not create against the Issuing Bank any
liability to the Borrower, the Administrative Agent or any Lender. In this
connection, the obligation of the Borrower to reimburse the Issuing Bank for any
drawing made under any Letter of Credit, and to repay any Loan made pursuant to
the second sentence of the immediately preceding subsection (e), shall be
absolute, unconditional and irrevocable and shall be paid strictly in accordance
with the terms of this Agreement and any other applicable Letter of Credit
Document under all circumstances whatsoever, including without limitation, the
following circumstances: (A) any lack of validity or enforceability of any
Letter of Credit Document or any term or provisions therein; (B) any amendment
or waiver of or any consent to departure from all or any of the Letter of Credit
Documents; (C) the existence of any claim, setoff, defense or other right which
the Borrower may have at any time against the Issuing Bank, the Administrative
Agent or any Lender, any beneficiary of a Letter of Credit or any other Person,
whether in connection with this Agreement, the transactions contemplated hereby
or in the Letter of Credit Documents or any unrelated transaction; (D) any
breach of contract or dispute between the Borrower, the Issuing Bank, the
Administrative Agent, any Lender or any other Person; (E) any demand, statement
or any other document presented under a Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein or
made in connection therewith being untrue or inaccurate in any respect
whatsoever; (F) any non-application or misapplication by the beneficiary of a
Letter of Credit or of the proceeds of any drawing under such Letter of Credit;
(G) payment by the Issuing Bank under any Letter of Credit against presentation
of a draft or certificate which does not strictly comply with the terms of such
Letter of Credit; and (H) any other act, omission to act, delay or circumstance
whatsoever that might, but for the provisions of this Section, constitute a
legal or equitable defense to or discharge of the Borrower’s Reimbursement
Obligations. Notwithstanding anything to the contrary contained in this Section
or Section 13.10., but not in limitation of the Borrower’s unconditional
obligation to reimburse the Issuing Bank for any drawing made under a Letter of
Credit as provided in this Section and to repay any Loan made pursuant to the
second sentence of the immediately preceding subsection (e), the Borrower shall
have no obligation to indemnify the Administrative Agent, the Issuing Bank or
any Lender in respect of any liability incurred by the Administrative Agent, the
Issuing Bank or such Lender arising solely out of the gross negligence or
willful misconduct of the Administrative Agent, the Issuing Bank or such Lender
in respect of a Letter of Credit as determined by a court of competent
jurisdiction in a final, non-appealable judgment. Notwithstanding the above,
nothing in this Section shall affect any rights the Borrower may have with
respect to the gross negligence or willful misconduct of the Administrative
Agent, the Issuing Bank or any Lender with respect to any Letter of Credit.

 

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(h) Amendments, Etc. The issuance by the Issuing Bank of any amendment,
supplement or other modification to any Letter of Credit shall be subject to the
same conditions applicable under this Agreement to the issuance of new Letters
of Credit (including, without limitation, that the request therefor be made
through the Issuing Bank), and no such amendment, supplement or other
modification shall be issued unless either (i) the respective Letter of Credit
affected thereby would have complied with such conditions had it originally been
issued hereunder in such amended, supplemented or modified form or (ii) the
Administrative Agent and Requisite Lenders (or all of the Lenders if required by
Section 13.7.) shall have consented thereto. In connection with any such
amendment, supplement or other modification, the Borrower shall pay the fees, if
any, payable under the last sentence of Section 3.5.(c).
(i) Lenders’ Participation in Letters of Credit. Immediately upon the issuance
by the Issuing Bank of any Letter of Credit each Lender shall be deemed to have
absolutely, irrevocably and unconditionally purchased and received from the
Issuing Bank, without recourse or warranty, an undivided interest and
participation to the extent of such Lender’s Commitment Percentage of the
liability of the Issuing Bank with respect to such Letter of Credit and each
Lender thereby shall absolutely, unconditionally and irrevocably assume, as
primary obligor and not as surety, and shall be unconditionally obligated to the
Issuing Bank to pay and discharge when due, such Lender’s Commitment Percentage
of the Issuing Bank’s liability under such Letter of Credit. In addition, upon
the making of each payment by a Lender to the Administrative Agent for the
account of the Issuing Bank in respect of any Letter of Credit pursuant to the
immediately following subsection (j), such Lender shall, automatically and
without any further action on the part of the Issuing Bank, Administrative Agent
or such Lender, acquire (i) a participation in an amount equal to such payment
in the Reimbursement Obligation owing to the Issuing Bank by the Borrower in
respect of such Letter of Credit and (ii) a participation in a percentage equal
to such Lender’s Commitment Percentage in any interest or other amounts payable
by the Borrower in respect of such Reimbursement Obligation (other than the Fees
payable to the Issuing Bank pursuant to the second and the last sentences of
Section 3.5.(c)).
(j) Payment Obligation of Lenders. Each Lender severally agrees to pay to the
Administrative Agent, for the account of the Issuing Bank, on demand in
immediately available funds in Dollars the amount of such Lender’s Commitment
Percentage of each drawing paid by the Issuing Bank under each Letter of Credit
to the extent such amount is not reimbursed by the Borrower pursuant to the
immediately preceding subsection (d); provided, however, that in respect of any
drawing under any Letter of Credit, the maximum amount that any Lender shall be
required to fund, whether as a Loan or as a participation, shall not exceed such
Lender’s Commitment Percentage of such drawing. If the notice referenced in the
second sentence of the immediately preceding subsection (e) is received by a
Lender not later than 9:00 a.m. Pacific time, then such Lender shall make such
payment available to the Administrative Agent not later than 12:00 p.m. Pacific
time on the date of demand therefor; otherwise, such payment shall be made
available to the Administrative Agent not later than 11:00 a.m. Pacific time on
the next succeeding Business Day. Each Lender’s obligation to make such payments
to the Administrative Agent under this subsection, and the Administrative
Agent’s right to receive the same for the account of the Issuing Bank, shall be
absolute, irrevocable and unconditional and shall not be affected in any way by
any circumstance whatsoever, including without limitation, (i) the failure of
any other Lender to make its payment under this subsection, (ii) the financial
condition of the Borrower or any other Loan Party, (iii) the existence of any
Default or Event of Default, including any Event of Default described in
Section 11.1.(f) or (g) or (iv) the termination of the Commitments. Each such
payment to the Administrative Agent for the account of the Issuing Bank shall be
made without any offset, abatement, withholding or deduction whatsoever.

 

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(k) Information to Lenders. Periodically, the Issuing Bank shall deliver to the
Administrative Agent, who shall promptly deliver the same to each Lender and the
Borrower, a notice describing the aggregate amount of all Letters of Credit
outstanding at such time. Upon the request of any Lender from time to time, the
Issuing Bank shall deliver any other information reasonably requested by such
Lender with respect to each Letter of Credit then outstanding. Other than as set
forth in this subsection, the Issuing Bank shall have no duty to notify the
Lenders regarding the issuance or other matters regarding Letters of Credit
issued hereunder. The failure of the Issuing Bank to perform its requirements
under this subsection shall not relieve any Lender from its obligations under
the immediately preceding subsection (j).
(l) Defaulting Lenders. Upon demand by the Administrative Agent at any time
while a Lender is a Defaulting Lender or a Potential Defaulting Lender, the
Borrower shall deliver to the Administrative Agent, for the benefit of the
Issuing Bank, within one Business Day of such demand, cash collateral or other
credit support satisfactory to the Issuing Bank in its sole discretion in an
amount equal to such Defaulting Lender’s or Potential Defaulting Lender’s
Commitment Percentage of the Letter of Credit Liabilities then outstanding.
Section 2.3. Rates and Payment of Interest on Loans.
(a) Rates. The Borrower promises to pay to the Administrative Agent for the
account of each Lender interest on the unpaid principal amount of each Loan made
by such Lender for the period from and including the date of the making of such
Loan to but excluding the date such Loan shall be paid in full, at the following
per annum rates:
(i) during such periods as such Loan is a Base Rate Loan, at the Base Rate (as
in effect from time to time), plus the Applicable Margin; and
(ii) during such periods as such Loan is a LIBOR Loan, at LIBOR for such Loan
for the Interest Period therefor, plus the Applicable Margin.
Notwithstanding the foregoing, while an Event of Default exists, the Borrower
shall pay to the Administrative Agent for the account of each Lender and the
Issuing Bank, as the case may be, interest at the Post-Default Rate on the
outstanding principal amount of any Loan made by such Lender, on all
Reimbursement Obligations and on any other amount payable by the Borrower
hereunder or under the Notes held by such Lender to or for the account of such
Lender (including without limitation, accrued but unpaid interest to the extent
permitted under Applicable Law).
(b) Payment of Interest. All accrued and unpaid interest on the outstanding
principal amount of each Loan shall be payable (i) monthly in arrears on the
first day of each month, commencing with the first full calendar month occurring
after the Effective Date and (ii) on any date on which the principal balance of
such Loan is due and payable in full (whether at maturity, due to acceleration
or otherwise). Interest payable at the Post-Default Rate shall be payable from
time to time on demand. All determinations by the Administrative Agent of an
interest rate hereunder shall be conclusive and binding on the Lenders and the
Borrower for all purposes, absent manifest error.

 

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(c) Borrower Information Used to Determine Applicable Interest Rates. The
parties understand that the applicable interest rate for the Obligations and
certain fees set forth herein may be determined and/or adjusted from time to
time based upon certain financial ratios and/or other information to be provided
or certified to the Lenders by the Parent or the Borrower (the “Borrower
Information”). If it is subsequently determined that any such Borrower
Information was incorrect (for whatever reason, including without limitation
because of a subsequent restatement of earnings by the Parent or the Borrower)
at the time it was delivered to the Administrative Agent, and if the applicable
interest rate or fees calculated for any period were lower than they should have
been had the correct information been timely provided, then, such interest rate
and such fees for such period shall be automatically recalculated using correct
Borrower Information. The Administrative Agent shall promptly notify the
Borrower in writing of any additional interest and fees due because of such
recalculation, and the Borrower shall pay such additional interest or fees due
to the Administrative Agent, for the account of each Lender, within 5 Business
Days of receipt of such written notice. Any recalculation of interest or fees
required by this provision shall survive the termination of this Agreement, and
this provision shall not in any way limit any of the Administrative Agent’s, the
Issuing Bank’s, or any Lender’s other rights under this Agreement.
Section 2.4. Number of Interest Periods.
There may be no more than 5 different Interest Periods for LIBOR Loans
outstanding at the same time.
Section 2.5. Repayment of Loans.
The Borrower shall repay the entire outstanding principal amount of, and all
accrued but unpaid interest on, the Loans on the Termination Date.
Section 2.6. Prepayments.
(a) Optional. Subject to Section 5.4., the Borrower may prepay any Loan at any
time without premium or penalty. The Borrower shall give the Administrative
Agent at least 2 Business Days prior written notice of the prepayment of any
Loan. Each voluntary partial prepayment of Loans shall be in an aggregate
minimum amount of $100,000 and integral multiples of $100,000 in excess thereof.

 

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(b) Mandatory.
(i) Commitment Overadvance. If at any time the aggregate principal amount of all
outstanding Loans, together with the aggregate amount of all Letter of Credit
Liabilities, exceeds the aggregate amount of the Commitments, the Borrower shall
immediately upon demand pay to the Administrative Agent for the account of the
Lenders then holding Commitments (or if the Commitments have been terminated,
then holding outstanding Loans and/or Letter of Credit Liabilities), the amount
of such excess.
(ii) Maximum Loan Availability Overadvance. If at any time the aggregate
principal amount of all outstanding Loans, together with the aggregate amount of
all Letter of Credit Liabilities, exceeds the Maximum Loan Availability, the
Borrower shall within 5 Business Days of a Responsible Officer of the Parent or
the Borrower obtaining knowledge of the occurrence of any such excess either
(i) pay to the Administrative Agent for the account of the Lenders then holding
Commitments (or if the Commitments have been terminated, then holding
outstanding Loans and/or Letter of Credit Liabilities), the amount of such
excess or (ii) deliver to the Administrative Agent for prompt distribution to
each Lender notice of the Borrower’s intent to eliminate such excess by adding
one or more Properties as Unencumbered Borrowing Base Properties in accordance
with the final paragraph of Section 4.1.(b) within 10 Business Days of such
Responsible Officer obtaining knowledge of such excess. If such excess is not
eliminated in accordance with this subsection (b)(ii), then the entire
outstanding principal balance of all Loans, together with all accrued interest
thereon, and an amount equal to all Letter of Credit Liabilities for deposit
into the Letter of Credit Collateral Account, shall be immediately due and
payable in full.
(iii) Application of Mandatory Prepayments. Amounts paid under the preceding
subsections (b)(i) and (b)(ii) shall be applied to pay all amounts of principal
outstanding on the Loans and any Reimbursement Obligations pro rata in
accordance with Section 3.2. and if any Letters of Credit are outstanding at
such time, the remainder, if any, shall be deposited into the Letter of Credit
Collateral Account for application to any Reimbursement Obligations. If the
Borrower is required to pay any outstanding LIBOR Loans by reason of this
Section prior to the end of the applicable Interest Period therefor, the
Borrower shall pay all amounts due under Section 5.4.
Section 2.7. Continuation.
So long as no Default or Event of Default exists, the Borrower may on any
Business Day, with respect to any LIBOR Loan, elect to maintain such LIBOR Loan
or any portion thereof as a LIBOR Loan by selecting a new Interest Period for
such LIBOR Loan. Each Continuation of a LIBOR Loan shall be in an aggregate
minimum amount of $1,000,000 and integral multiples of $100,000 in excess of
that amount, and each new Interest Period selected under this Section shall
commence on the last day of the immediately preceding Interest Period. Each
selection of a new Interest Period shall be made by the Borrower giving to the
Administrative Agent a Notice of Continuation not later than 9:00 a.m. Pacific
time on the third Business Day prior to the date of any such Continuation. Such
notice by the Borrower of a Continuation shall be by telecopy, electronic mail
or other similar form of communication in the form of a Notice of Continuation,
specifying (a) the proposed date of such Continuation, (b) the LIBOR Loans and
portions thereof subject to such Continuation and (c) the duration of the
selected Interest Period, all of which shall be specified in such manner as is
necessary to comply with all limitations on Loans outstanding hereunder. Each
Notice of Continuation shall be irrevocable by and binding on the Borrower once
given. Promptly after receipt of a Notice of Continuation, the Administrative
Agent shall notify each Lender of the proposed Continuation. If the Borrower
shall fail to select in a timely manner a new Interest Period for any LIBOR Loan
in accordance with this Section, such Loan will automatically, on the last day
of the current Interest Period therefor, continue as a LIBOR Loan with an
Interest Period of one month; provided, however that if a Default or Event of
Default exists, such Loan will automatically, on the last day of the current
Interest Period therefore, Convert into a Base Rate Loan notwithstanding the
first sentence of Section 2.8. or the Borrower’s failure to comply with any of
the terms of such Section.

 

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Section 2.8. Conversion.
The Borrower may on any Business Day, upon the Borrower’s giving of a Notice of
Conversion to the Administrative Agent by telecopy, electronic mail or other
similar form of communication, Convert all or a portion of a Loan of one Type
into a Loan of another Type; provided, however, a Base Rate Loan may not be
Converted into a LIBOR Loan if a Default or Event of Default exists. Each
Conversion of Base Rate Loans into LIBOR Loans shall be in an aggregate minimum
amount of $1,000,000 and integral multiples of $100,000 in excess of that
amount. Each such Notice of Conversion shall be given not later than 9:00 a.m.
Pacific time 3 Business Days prior to the date of any proposed Conversion.
Promptly after receipt of a Notice of Conversion, the Administrative Agent shall
notify each Lender of the proposed Conversion. Subject to the restrictions
specified above, each Notice of Conversion shall be by telecopy, electronic mail
or other similar form of communication in the form of a Notice of Conversion
specifying (a) the requested date of such Conversion, (b) the Type of Loan to be
Converted, (c) the portion of such Type of Loan to be Converted, (d) the Type of
Loan such Loan is to be Converted into and (e) if such Conversion is into a
LIBOR Loan, the requested duration of the Interest Period of such Loan. Each
Notice of Conversion shall be irrevocable by and binding on the Borrower once
given.
Section 2.9. Notes.
(a) Notes. The Loans made by each Lender shall, in addition to this Agreement,
also be evidenced by a Note, payable to the order of such Lender in a principal
amount equal to the amount of its Commitment as originally in effect and
otherwise duly completed.
(b) Records. The date, amount, interest rate, Type and duration of Interest
Periods (if applicable) of each Loan made by each Lender to the Borrower, and
each payment made on account of the principal thereof, shall be recorded by such
Lender on its books and such entries shall be binding on the Borrower absent
manifest error; provided, however, that (i) the failure of a Lender to make any
such record shall not affect the obligations of the Borrower under any of the
Loan Documents and (ii) if there is a discrepancy between such records of a
Lender and the statements of accounts maintained by the Administrative Agent
pursuant to Section 3.8., in the absence of manifest error, the statements of
account maintained by the Administrative Agent pursuant to Section 3.8. shall be
controlling.
(c) Lost, Stolen, Destroyed or Mutilated Notes. Upon receipt by the Borrower of
(i) written notice from a Lender that a Note of such Lender has been lost,
stolen, destroyed or mutilated, and (ii)(A) in the case of loss, theft or
destruction, an unsecured agreement of indemnity from such Lender in form
reasonably satisfactory to the Borrower, or (B) in the case of mutilation, upon
surrender and cancellation of such Note, the Borrower shall at its own expense
execute and deliver to such Lender a new Note dated the date of such lost,
stolen, destroyed or mutilated Note.

 

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Section 2.10. Voluntary Reductions of the Commitment.
The Borrower shall have the right to terminate or reduce the aggregate unused
amount of the Commitments (for which purpose use of the Commitments shall be
deemed to include the aggregate amount of all Letter of Credit Liabilities) at
any time and from time to time without penalty or premium upon not less than 5
Business Days prior written notice to the Administrative Agent of each such
termination or reduction, which notice shall specify the effective date thereof
and the amount of any such reduction (which in the case of any partial reduction
of the Commitments shall not be less that $10,000,000 and integral multiples of
$5,000,000 in excess of that amount in the aggregate) and shall be irrevocable
once given and effective only upon receipt by the Administrative Agent
(“Commitment Reduction Notice”); provided, however, the Borrower may not reduce
the aggregate amount of the Commitments below $100,000,000 unless the Borrower
is terminating the Commitments in full. Promptly after receipt of a Commitment
Reduction Notice the Administrative Agent shall notify each Lender of the
proposed termination or Commitment reduction. The Commitments, once reduced or
terminated pursuant to this Section, may not be increased or reinstated. The
Borrower shall pay all interest and fees on the Loans accrued to the date of
such reduction or termination of the Commitments to the Administrative Agent for
the account of the Lenders, including but not limited to any applicable
compensation due to each Lender in accordance with Section 5.4. of this
Agreement.
Section 2.11. Extension of Termination Date.
(a) Generally. The Borrower shall have the right, exercisable one time, to
extend the Termination Date by one year. The Borrower may exercise such right
only by executing and delivering to the Administrative Agent at least 60 days
but not more than 120 days prior to the current Termination Date, a written
request for such extension (an “Extension Request”). The Administrative Agent
shall notify the Lenders if it receives an Extension Request promptly upon
receipt thereof. Not later than the date that is 15 days after the
Administrative Agent’s receipt of the Extension Request, the Administrative
Agent shall notify the Borrower if the Requisite Lenders have determined to
condition the extension of the Termination Date on an increase in the
Capitalization Rate to a percentage not to exceed 9.0%, and if so, what the new
Capitalization Rate to become effective on the current Termination Date would
be. Any new Capitalization Rate shall be the rate determined by the Requisite
Lenders on the basis of then current market conditions and data. If the
Requisite Lenders determine to condition the extension of the Termination Date
on an increase in the Capitalization Rate, then not later than the date that is
30 days prior to the current Termination Date (the “Extension Notification
Date”), the Borrower shall notify the Administrative Agent in writing of its
decision to extend or not to extend the Termination Date by one year. If the
Borrower fails to provide such written notification on or prior to the Extension
Notification Date, the Borrower shall be deemed to have elected to extend the
Termination Date by one year. If the Borrower elects, or is deemed to have
elected, to extend the Termination Date, then subject to satisfaction of the
following conditions, the Termination Date shall be extended for one year
effective upon receipt by the Administrative Agent of the Extension Request and
payment of the fee referred to in the following clause (y): (x) immediately
prior to such extension and immediately after giving effect thereto, (i) no
Default or Event of Default shall exist and (ii) the representations and
warranties made or deemed made by the Borrower and each other Loan Party in the
Loan Documents to which any of them is a party, shall be true and correct in all
material respects on and as of the date of such extension with the same force
and effect as if made on and as of such date except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and correct
in all material respects on and as of such earlier date) and except for changes
in factual circumstances not prohibited under the Loan Documents and (y) the
Borrower shall have paid the Fees payable under Section 3.5.(d). At any time
prior to the effectiveness of any such extension, upon the Administrative
Agent’s request, the Borrower shall deliver to the Administrative Agent a
certificate executed by a Responsible Officer of the Parent or the Borrower
certifying the matters referred to in the immediately preceding clauses (x)(i)
and (x)(ii).

 

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Section 2.12. Expiration Date of Letters of Credit Past Commitment Termination.
If on the date the Commitments are terminated or reduced to zero (whether
voluntarily, by reason of the occurrence of an Event of Default or otherwise),
there are any Letters of Credit outstanding hereunder with respect to which the
Borrower has not complied with the conditions set forth in the second proviso of
the second sentence of Section 2.2.(b), the Borrower shall, on such date, pay to
the Administrative Agent, for its benefit and the benefit of the Lenders and the
Issuing Bank, an amount of money sufficient to cause the balance of available
funds on deposit in the Letter of Credit Collateral Account to equal the Stated
Amount of such Letters of Credit for deposit into the Letter of Credit
Collateral Account.
Section 2.13. Amount Limitations.
Notwithstanding any other term of this Agreement or any other Loan Document, no
Lender shall be required to make a Loan, the Issuing Bank shall not be required
to issue a Letter of Credit and no reduction of the Commitments pursuant to
Section 2.10. shall take effect, if immediately after the making of such Loan,
the issuance of such Letter of Credit or such reduction in the Commitments:
(a) the aggregate principal amount of all outstanding Loans, together with the
aggregate amount of all Letter of Credit Liabilities, would exceed the aggregate
amount of the Commitments at such time; or
(b) the aggregate principal amount of all outstanding Loans, together with
aggregate amount of all Letter of Credit Liabilities, would exceed the Maximum
Loan Availability at such time.
Section 2.14. Increase in Commitments.
The Borrower shall have the right to request increases in the aggregate amount
of the Commitments by providing written notice to the Administrative Agent,
which notice shall be irrevocable once given; provided, however, that after
giving effect to any such increases the aggregate amount of the Commitments
shall not exceed $275,000,000. Each such increase in the Commitments must be an
aggregate minimum amount of $10,000,000 and integral multiples of $5,000,000 in
excess thereof. The Administrative Agent, in consultation with and with the
consent of the Borrower, shall manage all aspects of the syndication of such
increase in the Commitments, including decisions as to the selection of the
existing Lenders and/or other banks, financial institutions and other
institutional lenders to be approached with respect to such increase and the
allocations of the increase in the Commitments among such existing Lenders
and/or other banks, financial institutions and other institutional lenders. No
Lender

 

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shall be obligated in any way whatsoever to increase its Commitment or provide a
new Commitment, and any new Lender becoming a party to this Agreement in
connection with any such requested increase must be an Eligible Assignee. If a
new Lender becomes a party to this Agreement, or if any existing Lender is
increasing its Commitment, such Lender shall on the date it becomes a Lender
hereunder (or in the case of an existing Lender, increases its Commitment) (and
as a condition thereto) purchase from the other Lenders its Commitment
Percentage (determined with respect to the Lenders’ relative Commitments and
after giving effect to the increase of Commitments) of any outstanding Loans, by
making available to the Administrative Agent for the account of such other
Lenders, in immediately available funds, an amount equal to the sum of (A) the
portion of the outstanding principal amount of such Loans to be purchased by
such Lender, plus (B) the aggregate amount of payments previously made by the
other Lenders under Section 2.2.(j) that have not been repaid, plus (C) interest
accrued and unpaid to and as of such date on such portion of the outstanding
principal amount of such Loans. The Borrower shall pay to the Lenders amounts
payable, if any, to such Lenders under Section 5.4. as a result of the
prepayment of any such Loans. Effecting the increase of the Commitments under
this Section is subject to the following conditions precedent: (x) no Default or
Event of Default shall be in existence on the effective date of such increase,
(y) the representations and warranties made or deemed made by the Borrower or
any other Loan Party in any Loan Document to which such Loan Party is a party
shall be true and accurate in all material respects on the effective date of
such increase except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and accurate on and as of such earlier date)
and except for changes in factual circumstances not prohibited hereunder, and
(z) the Administrative Agent shall have received each of the following, in form
and substance satisfactory to the Administrative Agent: (i) if not previously
delivered to the Administrative Agent, copies certified by the Secretary or
Assistant Secretary of (A) all corporate, partnership or other necessary action
taken by the Parent and the Borrower to authorize such increase and (B) all
corporate, partnership, member or other necessary action taken by each Guarantor
authorizing the guaranty of such increase; (ii) an opinion of counsel to the
Parent, the Borrower and the Guarantors, and addressed to the Administrative
Agent and the Lenders covering such matters as reasonably requested by the
Administrative Agent, and (iii) new Notes executed by the Borrower, payable to
any new Lenders and replacement Notes executed by the Borrower, payable to any
existing Lenders increasing their Commitments, in the amount of such Lender’s
Commitment at the time of the effectiveness of the applicable increase in the
aggregate amount of the Commitments. In connection with any increase in the
aggregate amount of the Commitments pursuant to this Section 2.14. any Lender
becoming a party hereto shall execute such documents and agreements as the
Administrative Agent may reasonably request.
Section 2.15. Funds Transfer Disbursements.
(a) Generally. The Borrower hereby authorizes the Administrative Agent to
disburse the proceeds of any Loan made by the Lenders or any of their Affiliates
pursuant to the Loan Documents as requested by an authorized representative of
the Borrower to any of the accounts designated in the Transfer Authorizer
Designation Form. The Borrower agrees to be bound by any transfer request:
(i) authorized or transmitted by the Borrower; or (ii) made in the Borrower’s
name and accepted by the Administrative Agent in good faith and in compliance
with these transfer instructions, even if not properly authorized by the
Borrower. The Borrower further agrees and acknowledges that the Administrative
Agent may rely solely on any bank routing number or identifying bank account
number or name provided by the Borrower to effect a wire of funds transfer even
if the information provided by the Borrower identifies a different bank or
account holder than named by the Borrower. The Administrative Agent is not
obligated or required in any way to take any actions to detect errors in
information provided by the Borrower. If the Administrative Agent takes any
actions in an attempt to detect errors in the transmission or content of
transfer or requests or takes any actions in an attempt to detect unauthorized
funds transfer requests, the Borrower agrees that no matter how many times the
Administrative Agent takes these actions the Administrative Agent will not in
any situation be liable for failing to take or correctly perform these actions
in the future and such actions shall not become any part of the transfer
disbursement procedures authorized under this provision, the Loan Documents, or
any agreement between the Administrative Agent and the Borrower. The Borrower
agrees to notify the Administrative Agent of any errors in the transfer of any
funds or of any unauthorized or improperly authorized transfer requests within
14 days after the Administrative Agent’s confirmation to the Borrower of such
transfer.

 

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(b) Funds Transfer. The Administrative Agent will, in its sole discretion,
determine the funds transfer system and the means by which each transfer will be
made. The Administrative Agent may delay or refuse to accept a funds transfer
request if the transfer would: (i) violate the terms of this authorization,
(ii) require use of a bank unacceptable to the Administrative Agent or any
Lender or prohibited by any Governmental Authority, (iii) cause the
Administrative Agent or any Lender to violate any Federal Reserve or other
regulatory risk control program or guideline or (iv) otherwise cause the
Administrative Agent or any Lender to violate any Applicable Law or regulation.
(c) Limitation of Liability. None of the Administrative Agent, the Issuing Bank
or any Lender shall be liable to the Parent, the Borrower or any other party for
(i) errors, acts or failures to act of others, including other entities, banks,
communications carriers or clearinghouses, through which the Borrower’s
transfers may be made or information received or transmitted, and no such entity
shall be deemed an agent of the Administrative Agent, the Issuing Bank or any
Lender, (ii) any loss, liability or delay caused by fires, earthquakes, wars,
civil disturbances, power surges or failures, acts of government, labor
disputes, failures in communications networks, legal constraints or other events
beyond Administrative Agent’s, Issuing Bank’s or any Lender’s control, or
(iii) any special, consequential, indirect or punitive damages, whether or not
(x) any claim for these damages is based on tort or contract or (y) the
Administrative Agent, the Issuing Bank, any Lender or the Borrower knew or
should have known the likelihood of these damages in any situation. Neither the
Administrative Agent, the Issuing Bank nor any Lender makes any representations
or warranties other than those expressly made in this Agreement.
Article III. Payments, Fees and Other General Provisions
Section 3.1. Payments.
(a) Payments by Borrower. Except to the extent otherwise provided herein, all
payments of principal, interest, Fees and other amounts to be made by the
Borrower under this Agreement, the Notes or any other Loan Document shall be
made in Dollars, in immediately available funds, without setoff, deduction or
counterclaim, to the Administrative Agent at the Principal Office, not later
than 11:00 a.m. Pacific time on the date on which such payment shall become due
(each such payment made after such time on such due date to be deemed to have
been made on the next succeeding Business Day). Subject to Section 11.5., the
Borrower shall, at the time of making each payment under this Agreement or any
other Loan Document, specify to the Administrative Agent the amounts payable by
the Borrower hereunder to which such payment is to be applied.

 

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Each payment received by the Administrative Agent for the account of a Lender
under this Agreement or any Note shall be paid to such Lender by wire transfer
of immediately available funds in accordance with the wiring instructions
provided by such Lender to the Administrative Agent from time to time, for the
account of such Lender at the applicable Lending Office of such Lender. Each
payment received by the Administrative Agent for the account of the Issuing Bank
under this Agreement shall be paid to the Issuing Bank by wire transfer of
immediately available funds in accordance with the wiring instructions provided
by the Issuing Bank to the Administrative Agent from time to time, for the
account of the Issuing Bank. In the event the Administrative Agent fails to pay
such amounts to such Lender or the Issuing Bank, as the case may be, (i) by 5:00
p.m. Pacific time on the Business Day such funds are received by the
Administrative Agent, if such amounts are received by 11:00 a.m. Pacific time on
such date or (ii) by 5:00 p.m. Pacific time on the Business Day following the
date such funds are received by the Administrative Agent, if such amounts are
received after 11:00 a.m. Pacific time on any Business Day, the Administrative
Agent shall pay interest on such amount until paid at a rate per annum equal to
the Federal Funds Rate from time to time in effect. If the due date of any
payment under this Agreement or any other Loan Document would otherwise fall on
a day which is not a Business Day such date shall be extended to the next
succeeding Business Day and interest shall continue to accrue at the rate, if
any, applicable to such payment for the period of such extension.
(b) Presumptions Regarding Payments by Borrower. Unless the Administrative Agent
shall have received notice from the Borrower prior to the date on which any
payment is due to the Administrative Agent for the account of the Lenders or the
Issuing Bank hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may (but shall not be obligated to), in reliance
upon such assumption, distribute to the Lenders or the Issuing Bank, as the case
may be, the amount due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent on demand that amount so
distributed to such Lender or the Issuing Bank, with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation.
Section 3.2. Pro Rata Treatment.
Except to the extent otherwise provided herein: (a) each borrowing from the
Lenders under Section 2.1.(a) and 2.2.(e) shall be made from the Lenders, each
payment of the Fees under Sections 3.5.(a), 3.5.(b), the first sentence of
3.5.(c) and 3.5.(d) shall be made for the account of the Lenders, and each
termination or reduction of the amount of the Commitments under Section 2.10.
shall be applied to the respective Commitments of the Lenders, pro rata
according to the amounts of their respective Commitments; (b) each payment or
prepayment of principal of Loans shall be made for the account of the Lenders
pro rata in accordance with the respective unpaid principal amounts of the Loans
held by them, provided that, subject to Section 3.9., if immediately prior to
giving effect to any such payment in respect of any Loans the outstanding
principal amount of the Loans shall not be held by the Lenders pro rata in
accordance with their respective Commitments in effect at the time such Loans
were made, then such payment shall be applied to the Loans in such manner as
shall result, as nearly as is practicable, in the outstanding principal amount
of the Loans being held by the Lenders pro rata in accordance with their
respective Commitments; (c) each payment of interest on Loans shall be made for
the account of the Lenders, pro rata in accordance with the amounts of interest
on such Loans then due and payable to the respective Lenders; (d) the making,
Conversion and Continuation of Loans of a particular Type (other than
Conversions provided for by Section 5.5.) shall be made pro rata among the
Lenders, according to the amounts of their respective Loans and the then current
Interest Period for each Lender’s portion of each such Loan of such Type shall
be coterminous; and (e) the Lenders’ participation in, and payment obligations
in respect of, Letters of Credit under Section 2.2., shall be in accordance with
their respective Commitment Percentages.

 

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Section 3.3. Sharing of Payments, Etc.
If a Lender shall obtain payment of any principal of, or interest on, any of its
Loans under this Agreement or shall obtain payment on any other Obligation owing
by the Borrower or any other Loan Party through the exercise of any right of
set-off, banker’s lien, counterclaim or similar right or otherwise or through
voluntary prepayments directly to a Lender or other payments made by the
Borrower or any other Loan Party to a Lender (other than a payment in respect of
Specified Derivatives Obligations) not in accordance with the terms of this
Agreement and such payment should be distributed to the Lenders in accordance
with Section 3.2. or Section 11.5., as applicable, such Lender shall promptly
purchase from the other Lenders participations in (or, if and to the extent
specified by such Lender, direct interests in) the Loans made by the other
Lenders or other Obligations owed to such other Lenders in such amounts, and
make such other adjustments from time to time as shall be equitable, to the end
that all the Lenders shall share the benefit of such payment (net of any
reasonable expenses which may actually be incurred by such Lender in obtaining
or preserving such benefit) in accordance with the requirements of Section 3.2.
or Section 11.5., as applicable. To such end, all the Lenders shall make
appropriate adjustments among themselves (by the resale of participations sold
or otherwise) if such payment is rescinded or must otherwise be restored. The
Borrower agrees that any Lender so purchasing a participation (or direct
interest) in the Loans or other Obligations owed to such other Lenders may
exercise all rights of set-off, banker’s lien, counterclaim or similar rights
with respect to such participation as fully as if such Lender were a direct
holder of Loans in the amount of such participation. Nothing contained herein
shall require any Lender to exercise any such right or shall affect the right of
any Lender to exercise and retain the benefits of exercising, any such right
with respect to any other indebtedness or obligation of the Borrower.
Section 3.4. Several Obligations.
No Lender shall be responsible for the failure of any other Lender to make a
Loan or to perform any other obligation to be made or performed by such other
Lender hereunder, and the failure of any Lender to make a Loan or to perform any
other obligation to be made or performed by it hereunder shall not relieve the
obligation of any other Lender to make any Loan or to perform any other
obligation to be made or performed by such other Lender.
Section 3.5. Fees.
(a) Closing Fee. On the Effective Date, the Borrower agrees to pay to the
Administrative Agent and each Lender all loan fees as have been agreed to in
writing by the Borrower and the Administrative Agent.

 

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

          Amount by Which Commitments Exceed Loans and Letter of Credit
Liabilities   Unused Fee  
$0 to and including an amount equal to 50% of the aggregate amount of
Commitments
  0.40% per annum
Greater than an amount equal to 50% of the aggregate amount of Commitments
  0.50% per annum

Such fee shall be computed on a daily basis and payable quarterly in arrears on
the first day of each January, April, July and October during the term of this
Agreement and on the Termination Date or any earlier date of termination of the
Commitments or reduction of the Commitments to zero.
(c) Letter of Credit Fees. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a letter of credit fee at a rate per annum
equal to the Applicable Margin for LIBOR Loans times the daily average Stated
Amount of each Letter of Credit for the period from and including the date of
issuance of such Letter of Credit (x) to and including the date such Letter of
Credit expires or is cancelled or (y) to but excluding the date such Letter of
Credit is drawn in full. In addition to such fees, the Borrower shall pay to the
Issuing Bank solely for its own account, a fronting fee in respect of each
Letter of Credit equal to fifteen one hundredths of one percent (0.15%) of the
Stated Amount of such Letter of Credit; provided, however, in no event shall the
aggregate amount of such fee in respect of any Letter of Credit be less than
$500. The fees provided for in this subsection shall be nonrefundable and
payable, in the case of the fee provided for in the first sentence, in arrears
(i) quarterly on the first day of January, April, July and October, (ii) on the
Termination Date, (iii) on the date the Commitments are terminated or reduced to
zero and (iv) thereafter from time to time on demand of the Administrative Agent
and in the case of the fee provided for in the second sentence, at the time of
issuance of such Letter of Credit. The Borrower shall pay directly to the
Issuing Bank from time to time on demand all commissions, charges, costs and
expenses in the amounts customarily charged or incurred by the Issuing Bank from
time to time in like circumstances with respect to the issuance, amendment,
renewal or extension of any Letter of Credit or any other transaction relating
thereto.
(d) Credit Extension Fee. If the Termination Date is being extended in
accordance with Section 2.11., the Borrower shall pay to the Administrative
Agent for the account of each Lender a fee equal to one-half of one percent
(0.50%) of the amount of such Lender’s Commitment (whether or not utilized).
Such fee shall be due and payable in full on the effective date of such
extension.
(e) Administrative and Other Fees. The Borrower agrees to pay the administrative
and other fees of the Administrative Agent as provided in the Fee Letter and as
may be otherwise agreed to in writing from time to time by the Borrower and the
Administrative Agent.
Section 3.6. Computations.
Unless otherwise expressly set forth herein, any accrued interest on any Loan,
any Fees or any other Obligations due hereunder shall be computed on the basis
of a year of 360 days and the actual number of days elapsed.

 

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Section 3.7. Usury.
In no event shall the amount of interest due or payable on the Loans or other
Obligations exceed the maximum rate of interest allowed by Applicable Law and,
if any such payment is paid by the Borrower or any other Loan Party or received
by any Lender, then such excess sum shall be credited as a payment of principal,
unless the Borrower shall notify the respective Lender in writing that the
Borrower elects to have such excess sum returned to it forthwith. It is the
express intent of the parties hereto that the Borrower not pay and the Lenders
not receive, directly or indirectly, in any manner whatsoever, interest in
excess of that which may be lawfully paid by the Borrower under Applicable Law.
The parties hereto hereby agree and stipulate that the only charge imposed upon
the Borrower for the use of money in connection with this Agreement is and shall
be the interest specifically described in Section 2.3.(a)(i) and (ii).
Notwithstanding the foregoing, the parties hereto further agree and stipulate
that all agency fees, syndication fees, unused facility fees, closing fees,
letter of credit fees, underwriting fees, default charges, late charges, funding
or “breakage” charges, increased cost charges, attorneys’ fees and reimbursement
for costs and expenses paid by the Administrative Agent or any Lender to third
parties or for damages incurred by the Administrative Agent or any Lender, in
each case in connection with the transactions contemplated by this Agreement and
the other Loan Documents are charges made to compensate the Administrative Agent
or any such Lender for underwriting or administrative services and costs or
losses performed or incurred, and to be performed or incurred, by the
Administrative Agent and the Lenders in connection with this Agreement and shall
under no circumstances be deemed to be charges for the use of money. All charges
other than charges for the use of money shall be fully earned and nonrefundable
when due.
Section 3.8. Statements of Account.
The Administrative Agent will account to the Borrower quarterly with a statement
of Loans, accrued interest and Fees, charges and payments made pursuant to this
Agreement and the other Loan Documents, and such account rendered by the
Administrative Agent shall be deemed conclusive upon the Borrower absent
manifest error. The failure of the Administrative Agent to deliver such a
statement of accounts shall not relieve or discharge the Borrower from any of
its obligations hereunder.
Section 3.9. Defaulting Lenders.
(a) Generally. If any Lender shall become a Defaulting Lender, then such
Defaulting Lender’s right to participate in the administration of the Loans,
this Agreement and the other Loan Documents, including without limitation, any
right to vote in respect of any amendment, consent or waiver of the terms of
this Agreement or any other Loan Document, or to direct any action or inaction
of the Administrative Agent or to be taken into account in the calculation of
the Requisite Lenders, shall be suspended while such Lender remains a Defaulting
Lender; provided, however, that the foregoing shall not permit an increase in
such Lender’s Commitment or an extension of the maturity date of such Lender’s
Loans or other Obligations owing to such Lender, in each case, without such
Lender’s consent. If a Lender is a Defaulting Lender because it has failed to
make timely payment to the Administrative Agent of any amount required to be
paid to the Administrative Agent hereunder (without giving effect to any notice
or cure periods), then the Administrative Agent shall be entitled (i) to collect
interest from such Defaulting Lender on such delinquent payment for the period
from the date on which the payment was due until the date on which the

 

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payment is made at the Federal Funds Rate, (ii) to withhold or setoff and to
apply in satisfaction of the defaulted payment and any related interest, any
amounts otherwise payable to such Defaulting Lender under this Agreement or any
other Loan Document and (iii) to bring an action or suit against such Defaulting
Lender in a court of competent jurisdiction to recover the defaulted amount and
any related interest. No Commitment of any Lender shall be increased or
otherwise affected, and except as otherwise expressly provided in this Section,
performance by the Borrower of its obligations hereunder and the other Loan
Documents shall not be excused or otherwise modified, as a result of the
operation of this Section. The rights and remedies of the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders against a Defaulting
Lender under this Section are in addition to any other rights and remedies the
Borrower, the Administrative Agent, the Issuing Bank and the Lenders may have
against such Defaulting Lender under this Agreement, any of the other Loan
Documents, Applicable Law or otherwise.
(b) Treatment of Payments. Until the Defaulting Lender Excess of a Defaulting
Lender has been reduced to zero, any payment of the principal of the Loans owing
to the Defaulting Lender shall, unless the Requisite Lenders agree otherwise, be
applied to the outstanding principal balance of the Loans of the applicable
Lenders that are not Defaulting Lenders. Any other amount paid by the Borrower
for the account of a Defaulting Lender under this Agreement or any other Loan
Document will not be paid or distributed to such Defaulting Lender, but will
instead be retained by the Administrative Agent in a segregated non-interest
bearing account until such Defaulting Lender has ceased to be a Defaulting
Lender in accordance with subsection (f) below or the termination of the
Commitments and payment in full of all Obligations of the Borrower hereunder and
the other Loan Documents, at which time such amounts will be applied by the
Administrative Agent to the making of payments from time to time in the
following order of priority: first, to the payment of any amounts owing by such
Defaulting Lender to the Administrative Agent; second, if determined by the
Administrative Agent or requested by the Issuing Bank, held in such account as
cash collateral for such Defaulting Lender’s Commitment Percentage of the Letter
of Credit Liabilities then outstanding; third, to the funding of any Loan in
respect of which the such Defaulting Lender has failed to fund its portion
thereof as required by this Agreement, as determined by the Administrative
Agent; fourth, if so determined by the Administrative Agent and the Borrower,
held in such account as cash collateral for future funding obligations of the
Defaulting Lender in respect of any Loans under this Agreement. If such Lender
is still a Defaulting Lender and any amounts remain in such account on the date
that the Commitments are terminated and all Obligations of the Borrower
hereunder and under the other Loan Documents are paid in full, at which time
such amounts will be applied by the Administrative Agent to the making of
payments from time to time in the following order of priority: first, to the
payment of any amounts owing by such Defaulting Lender to the Administrative
Agent and the Issuing Bank under this Agreement; second, to the payment of
interest then due and payable to the Lenders hereunder other than Defaulting
Lenders, ratably among them in accordance with the amounts of such interest then
due and payable to them; third, to the payment of Fees then due and payable to
the Lenders other than Defaulting Lenders, ratably among them in accordance with
the amounts of such Fees then due and payable to them; fourth, to pay principal
of all Loans, Reimbursement Obligations and other Letter of Credit Liabilities
then due and payable to the Lenders other than Defaulting Lenders hereunder
ratably in accordance with the amounts thereof then due and payable to them;
fifth, to the ratable payment of all other Obligations then due and payable to
the Lenders other than Defaulting Lenders; and sixth, after the termination of
the Commitments and payment in full of all obligations of the Borrower
hereunder, to pay amounts owing under this Agreement to such Defaulting Lender
or as a court of competent jurisdiction may otherwise direct.

 

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(c) Fees. During any period that a Lender is a Defaulting Lender, such
Defaulting Lender’s Commitment and outstanding Loans shall be excluded for
purposes of calculating any Fee payable to the Lenders under Sections 3.5.(b)
and 3.5.(c), and during such period the Borrower shall not be required to pay,
and such Defaulting Lender shall not be entitled to receive, any such Fees
otherwise payable to such Defaulting Lender under such Sections. In addition, if
at the time a Fee is payable under Section 3.5.(d) there is a Lender that is a
Defaulting Lender, then such Defaulting Lender’s Commitment shall be excluded
for purposes of calculating the Fee payable to the Lenders under
Section 3.5.(d); provided, however, if such Lender shall cease to be a
Defaulting Lender, then the Borrower shall promptly pay to such Lender the Fee
that would have otherwise been payable to such Lender under such Section had it
not been a Defaulting Lender.
(d) Borrowing Requests. While any Lender is a Defaulting Lender or a Potential
Defaulting Lender, the Borrower authorizes each of the Administrative Agent and
the Issuing Bank (which authorization is irrevocable and coupled with an
interest) to give, in such Person’s discretion, Notices of Borrowing pursuant to
Section 2.1. in such amounts and at such times as may be required to
(i) reimburse any Reimbursement Obligation that has become due and payable, or
(ii) cash collateralize the Obligations of the Borrower in respect of
outstanding Letters of Credit in an amount equal to the aggregate amount of the
obligations (contingent or otherwise) of such Defaulting Lender or Potential
Defaulting Lender in respect of such Letters of Credit.
(e) Purchase of Defaulting Lender’s Commitment. During any period that a Lender
is a Defaulting Lender, the Borrower may, by giving written notice thereof to
the Administrative Agent, such Defaulting Lender and the other Lenders, demand
that such Defaulting Lender assign its Commitment, to an Eligible Assignee (at
such amount to be agreed to by the Borrower, the Defaulting Lender and the
Eligible Assignee) subject to and in accordance with the provisions of
Section 13.6.(b). No party hereto shall have any obligation whatsoever to
initiate any such replacement or to assist in finding an Eligible Assignee. In
addition, any Lender who is not a Defaulting Lender may, but shall not be
obligated to, in its sole discretion, acquire the face amount of all or a
portion of such Defaulting Lender’s Commitment via an assignment subject to and
in accordance with the provisions of Section 13.6.(b). In connection with any
such assignment, such Defaulting Lender shall promptly execute all documents
reasonably requested to effect such assignment, including an appropriate
Assignment and Acceptance and, notwithstanding Section 13.6.(b), shall pay to
the Administrative Agent an assignment fee in the amount of $10,000.
(f) Termination of Defaulting Lender’s Commitments. During any period that a
Lender is a Defaulting Lender, the Borrower may terminate in full the
Commitments of such Defaulting Lender by giving notice to such Defaulting Lender
and the Administrative Agent (such termination, a “Defaulting Lender
Termination”) so long as on the effective date of such Defaulting Lender
Termination and after giving effect thereto and to any repayment of Loans in
connection therewith: (i) no Default or Event of Default exists (unless the
Requisite Lenders otherwise consent to such Defaulting Lender Termination),
(ii) no Loans shall be outstanding, and (iii) the sum of (x) the Letter of
Credit Liabilities and (y) the amount of cash collateral or other credit support
then held by the Administrative Agent pursuant to Section 2.2.(l) shall not
exceed the aggregate Commitments of all Lenders that are not Defaulting Lenders.
Each such notice shall specify the effective date of such Defaulting Lender
Termination (the “Defaulting Lender Termination Date”), which shall be not less
than 5 Business Days (or such shorter period as agreed to by the Administrative
Agent and such Defaulting Lender) after the date on which such notice is
delivered to such Defaulting Lender and the Administrative Agent. On each such
Defaulting Lender Termination Date, (i) the Commitments of such Defaulting

 

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Lender shall be reduced to zero, (ii) such Defaulting Lender shall cease to be a
“Lender” hereunder (provided that any Defaulting Lender shall continue to be
entitled to the indemnification provisions contained herein, but only with
respect to matters arising prior to the applicable Defaulting Lender Termination
Date), (iii) the Commitments of all other Lenders shall remain unchanged and
(iv) the Commitment Percentages of outstanding Letter of Credit Liabilities will
be reallocated by the Administrative Agent among the Lenders (other than the
Defaulting Lender) in accordance with their Commitment Percentages after giving
effect to the Defaulting Lender Termination.
(g) Cure. If the Borrower, the Administrative Agent and the Issuing Bank agree
in writing in their discretion that a Lender that is a Defaulting Lender or a
Potential Defaulting Lender should no longer be deemed to be a Defaulting Lender
or Potential Defaulting Lender, as the case may be, the Administrative Agent
will so notify the Lenders, whereupon as of the effective date specified in such
notice and subject to any conditions set forth therein, such Lender, if a
Lender, will, to the extent applicable, purchase such portion of outstanding
Loans of the other Lenders and make such other adjustments as the Administrative
Agent may determine to be necessary to cause the interest of the Lenders in the
Loans and Letter of Credit Liabilities to be on a pro rata basis in accordance
with their respective Commitment Percentages, whereupon such Lender will cease
to be a Defaulting Lender or Potential 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 cure by a Lender under this subsection of its status as
a Defaulting Lender or Potential Defaulting Lender will constitute a waiver or
release of any claim of any party hereunder arising from such Lender’s having
been a Defaulting Lender or Potential Defaulting Lender.
Section 3.10. Taxes; Foreign Lenders.
(a) Taxes Generally. All payments by the Borrower of principal of, and interest
on, the Loans and all other Obligations shall be made free and clear of and
without deduction for any present or future excise, stamp or other taxes, fees,
duties, levies, imposts, charges, deductions, withholdings or other charges of
any nature whatsoever imposed by any taxing authority, but excluding
(i) franchise taxes, (ii) any taxes (other than withholding taxes) that would
not be imposed but for a connection between the Administrative Agent, the
Issuing Bank or a Lender and the jurisdiction imposing such taxes (other than a
connection arising solely by virtue of the activities of the Administrative
Agent, the Issuing Bank or such Lender pursuant to or in respect of this
Agreement or any other Loan Document), (iii) any taxes imposed on or measured by
the Issuing Bank’s or any Lender’s assets, net income, receipts or branch
profits, (iv) any taxes arising after the Agreement Date solely as a result of
or attributable to a Lender changing its designated Lending Office after the
date such Lender becomes a party hereto and (v) any taxes that are United States
withholding taxes imposed on amounts payable to such Lender at the time such
Lender becomes a party to this Agreement, except to the extent that such
Lender’s assignor or Participant’s assignor (if any) was entitled, at the time
of assignment, to receive additional amounts from the Borrower with respect to
such taxes pursuant to this paragraph (such non-excluded items being
collectively called “Taxes”). If any withholding or deduction from any payment
to be made by the Borrower hereunder is required in respect of any Taxes
pursuant to any Applicable Law, then the Borrower will:
(i) pay directly to the relevant Governmental Authority the full amount required
to be so withheld or deducted;

 

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(ii) promptly forward to the Administrative Agent an official receipt or other
documentation reasonably satisfactory to the Administrative Agent evidencing
such payment to such Governmental Authority; and
(iii) pay to the Administrative Agent for its account or the account of the
applicable Lender or the Issuing Bank, as the case may be, such additional
amount or amounts as is necessary to ensure that the net amount actually
received by the Administrative Agent, the Issuing Bank or such Lender will equal
the full amount that the Administrative Agent, the Issuing Bank or such Lender
would have received had no such withholding or deduction been required.
(b) Tax Indemnification. If the Borrower fails to pay any Taxes when due to the
appropriate Governmental Authority or fails to remit to the Administrative
Agent, for its account or the account of the Issuing Bank or respective Lender,
as the case may be, the required receipts or other required documentary
evidence, the Borrower shall indemnify the Administrative Agent, the Issuing
Bank and the Lenders for any incremental Taxes, interest or penalties that may
become payable by the Administrative Agent, the Issuing Bank or any Lender as a
result of any such failure. For purposes of this Section, a distribution
hereunder by the Administrative Agent or any Lender to or for the account of any
Lender shall be deemed a payment by the Borrower. If the Administrative Agent, a
Lender or the Issuing Bank determines, in its sole discretion, that it has
received a refund of any Taxes as to which it has been indemnified by the
Borrower pursuant to this Section (including additional amounts paid by the
Borrower pursuant to this Section), it shall pay to the Borrower an amount equal
to such refund (but only to the extent of indemnity payments made under this
Section with respect to the indemnified Taxes giving rise to such refund), net
of all out-of-pocket expenses (including Taxes) of the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund), provided that the Borrower, upon the request of the Administrative
Agent, such Lender or the Issuing Bank, as the case may be, agrees to repay the
amount paid over pursuant to this Section (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to the Administrative
Agent, such Lender or the Issuing Bank in the event the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this subsection (b), in no event will the Administrative Agent, the Issuing
Bank or any Lender be required to pay any amount to the Borrower pursuant to
this subsection (b) the payment of which would place the Administrative Agent,
Issuing Bank or any Lender in a less favorable net after-Tax position than the
Administrative Agent, Issuing Bank or such Lender would have been in if the
indemnification payments or additional amounts giving rise to such refund had
never been paid. This paragraph shall not be construed to require the
Administrative Agent, any Lender or the Issuing Bank to make available its tax
returns (or any other information relating to its Taxes that it deems
confidential) to the Borrower or any other Person.
(c) Tax Forms. Prior to the date that any Lender or Participant becomes a party
hereto, such Person shall deliver to the Borrower and the Administrative Agent
such certificates, documents or other evidence, as required by the Internal
Revenue Code or Treasury Regulations issued pursuant thereto (including Internal
Revenue Service Forms W-8ECI and W-8BEN, as applicable, or appropriate successor
forms, and IRS Form W-9 for any Non-exempt U.S. Lender or Participant, as
applicable), properly completed, currently effective and duly executed by such
Lender or Participant establishing that payments to it hereunder and under the
Notes are (i) not subject to United States Federal backup withholding tax and
(ii) not subject to United

 

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States Federal withholding tax under the Internal Revenue Code. Each such Lender
or Participant shall, to the extent it may lawfully do so, (x) deliver further
copies of such forms or other appropriate certifications on or before the date
that any such forms expire or become obsolete and after the occurrence of any
event requiring a change in the most recent form delivered to the Borrower or
the Administrative Agent and (y) obtain such extensions of the time for filing,
and renew such forms and certifications thereof, as may be reasonably requested
by the Borrower or the Administrative Agent. The Borrower shall not be required
to pay any amount pursuant to the last sentence of subsection (a) above to any
Lender or Participant, if such Lender, Participant or the Administrative Agent,
as applicable, fails to comply with the requirements of this subsection. If any
such Lender or Participant, to the extent it may lawfully do so, fails to
deliver the above forms or other documentation, then the Administrative Agent
may withhold from such payment to such Lender such amounts as are required by
the Internal Revenue Code. If any Governmental Authority asserts that the
Administrative Agent did not properly withhold or backup withhold, as the case
may be, any tax or other amount from payments made to or for the account of any
Lender, such Lender shall indemnify the Administrative Agent therefor, including
all penalties and interest, any taxes imposed by any jurisdiction on the amounts
payable to the Administrative Agent under this Section, and costs and expenses
(including all reasonable fees and disbursements of any law firm or other
external counsel and the allocated cost of internal legal services and all
disbursements of internal counsel) of the Administrative Agent. The obligation
of the Lenders under this Section shall survive the termination of the
Commitments, repayment of all Obligations and the resignation or replacement of
the Administrative Agent.
(d) USA Patriot Act Notice; Compliance. In order for the Administrative Agent to
comply with the USA Patriot Act of 2001 (Public Law 107-56), prior to any Lender
or Participant that is organized under the laws of a jurisdiction outside of the
United States of America becoming a party hereto, the Administrative Agent may
request, and such Lender or Participant shall provide to the Administrative
Agent, its name, address, tax identification number and/or such other
identification information as shall be necessary for the Administrative Agent to
comply with federal law.
Article IV. Unencumbered Borrowing Base Properties
Section 4.1. Eligibility of Properties.
(a) Initial Unencumbered Borrowing Base Properties. On the Effective Date the
Properties identified on Schedule 4.1. shall be Unencumbered Borrowing Base
Properties.
(b) Additional Unencumbered Borrowing Base Properties. If after the Effective
Date, the Borrower desires that any additional Property become an Unencumbered
Borrowing Base Property and therefore included in calculations of the
Unencumbered Borrowing Base Value, the Borrower shall so notify the
Administrative Agent in writing (as referred to in this subsection, a “Notice of
Additional Unencumbered Borrowing Base Property”). Except as otherwise provided
in the immediately following subsection (c), no Property will become an
Unencumbered Borrowing Base Property unless it is an Eligible Unencumbered
Borrowing Base Property, and unless and until the Borrower delivers to the
Administrative Agent the following, in form and substance satisfactory to the
Administrative Agent (unless waived by the Requisite Lenders):
(i) a description of such Property, such description to include the age,
location and size of such Property;

 

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(ii) an operating statement with respect to such Property for each of the two
prior fiscal years and for the current fiscal year through the fiscal quarter
most recently ending and for the current fiscal quarter, which shall be audited
(to the extent available) or certified by a representative of the Borrower to
the best of such representative’s knowledge as being true and correct in all
material respects; provided, that with respect to any period such Property was
not owned by a Loan Party, such information shall only be required to be
delivered to the extent reasonably available to the Borrower;
(iii) a pro forma operating statement or an operating budget for such Property
with respect to the current and immediately following fiscal years;
(iv) a budget for capital expenditures for the immediately following 12-month
period showing funding sources acceptable to the Administrative Agent; and
(v) a Compliance Certificate showing pro forma compliance with the covenants set
forth in Section 10.1. after giving effect to the addition of such Property in
the calculations of the Unencumbered Borrowing Base Values; and
(vi) such other information the Administrative Agent may reasonably request in
order to evaluate the Property including, without limitation, the following:
(1) a copy of the ALTA Owner’s Policy of Title Insurance (“Owner’s Policy”) of
the Borrower or a Subsidiary, as applicable, covering such Property showing the
identity of the fee titleholder thereto and all matters of record as of the date
of such policy;
(2) solely with respect to a property located in an earthquake zone, an
engineering report or structural inspection report for such Property that is
(w) prepared by an engineering firm reasonably acceptable to the Administrative
Agent, (x) if requested by the Administrative Agent, addressed to the
Administrative Agent, (y) not more than 12 months old and (z) otherwise in form
and substance acceptable to the Administrative Agent;
(3) (x) a “Phase I” environmental assessment of such Property, which report has
been (A) prepared by an environmental engineering firm reasonably acceptable to
the Administrative Agent, (B) if requested by the Administrative Agent,
addressed to the Administrative Agent and (C) is otherwise in form and substance
acceptable to the Administrative Agent and (y) any other environmental
assessments or other reports relating to such Property, including any “Phase II”
environmental assessment prepared or recommended by such environmental
engineering firm to be prepared for such Property;
(4) copies of all Property Management Agreements relating to such Property;
(5) an Appraisal of such Property that is (x) not more than 6 months old and
(y) either addressed to the Administrative Agent or the Administrative Agent and
the Lenders are expressly permitted to rely pursuant to a reliance letter
addressed to the Administrative Agent and the Lenders; provided however that
such Appraisals shall not be required to be delivered after March 31, 2012; and
(6) evidence that the insurance required by Section 8.5. is in effect and, to
the extent applicable, covers such Property.

 

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A Notice of Additional Unencumbered Borrowing Base Property executed and
delivered by the Borrower to the Administrative Agent shall constitute a
certification by the Borrower to the Administrative Agent and the Lenders that
such Property satisfies all of the requirements contained in the definition of
“Eligible Unencumbered Borrowing Base Property” unless such notice states
otherwise (in which case the provisions of the immediately following subsection
(c) shall apply). Within 5 Business Days of the Administrative Agent’s receipt
of a Notice of Additional Unencumbered Borrowing Base Property and the other
reports and documents set forth in the immediately preceding subsections (b)(i)
through (vi), the Administrative Agent will send such notice, reports and
documents to each of the Lenders. Within 15 Business Days of the Administrative
Agent’s receipt of a Notice of Additional Unencumbered Borrowing Base Property
and other reports and documents set forth in subsections (b)(i) through (vi),
the Administrative Agent shall notify the Borrower and the Lenders if (1) the
Administrative Agent has confirmed that such Property satisfies all of the
requirements contained in the definition of “Eligible Unencumbered Borrowing
Base Property” and (2) if such Property is to become an Unencumbered Borrowing
Base Property prior to March 31, 2012, the approved Appraised Value of such
Property.
Notwithstanding the foregoing, if a Notice of Additional Unencumbered Borrowing
Base Property is delivered in connection with the submission of a Property as a
result of Section 2.6.(b)(ii) and within 10 Business Days of the providing of
such notice the Borrower has delivered all reports and documents required under
the immediately preceding subsections (b)(i), (ii), (iii), (iv), (v) and (vi)(1)
through (4), the Administrative Agent shall notify the Borrower and the Lenders
if the Administrative Agent has confirmed that such Property satisfies all of
the requirements contained in the definition of “Eligible Unencumbered Borrowing
Base Property”; provided however if such Property is to become an Unencumbered
Borrowing Base Property prior to March 31, 2012, the Borrower shall deliver to
the Administrative Agent an Appraisal described in immediately preceding clause
(b)(vi)(4) with respect to such Property within 30 days of delivery of such
Notice of Additional Unencumbered Borrowing Base Property. In the event that
such Property is to become an Unencumbered Borrowing Base Property prior to
March 31, 2012 in accordance with this paragraph, the Unencumbered Borrowing
Base Value shall be determined by using the Adjusted NOI of the Property at such
time for the period of four consecutive fiscal quarters most recently ending,
divided by the Capitalization Rate. If the Borrower fails to deliver an
Appraisal within 30 days, as provided in the immediately preceding sentence,
such Property shall cease being an Unencumbered Borrowing Base Property until
such time as the Appraisal is delivered. Upon review of such Appraisal by the
Administrative Agent, the Administrative Agent shall notify the Borrower and the
Lenders of the approved Appraised Value of such Property and the Unencumbered
Borrowing Base Value shall be determined in accordance with such definition.
(c) Nonconforming Properties. If a Property which the Borrower wants to have
included in calculation of the Unencumbered Borrowing Base Value does not
satisfy the requirements of an Eligible Unencumbered Borrowing Base Property,
then the Administrative Agent, upon written request of the Borrower shall
request that the Requisite Lenders determine whether such Property shall be
included as an Unencumbered Borrowing Base Property. In connection therewith,
the Borrower shall deliver the information required by the immediately preceding
subsection (b) to each of the Lenders. If such a request is made by the
Administrative Agent to the Lenders, within 15 Business Days after the date on
which a Lender has received such request and all of the items referred to in the
immediately preceding subsection (b), each such Lender shall notify the
Administrative Agent in writing whether or not such Lender accepts such Property
as an Unencumbered Borrowing Base Property. If a Lender fails to give such
notice within such time period, such Lender shall be deemed to have approved
such Property as an Unencumbered Borrowing Base Property. A Property shall
become an Unencumbered Borrowing Base Property under this subsection (c) only
upon the approval and/or deemed approval of the Requisite Lenders.

 

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(d) Documents with Respect to Subsidiary. If a Property owned by a Subsidiary
that is not a Guarantor is to become an Unencumbered Borrowing Base Property,
the Borrower shall deliver to the Administrative Agent an Accession Agreement
executed by such Subsidiary together with the items that would have been
delivered with respect to such Subsidiary under Sections 6.1.(a)(iv) through
(viii) and (xv) as if such Subsidiary had been a Guarantor on the Effective
Date. If the improvements on such a Property or the furniture, fixtures and
equipment utilized in the operation of such Property are owned or leased by a
Subsidiary (the “Accommodation Subsidiary”) other than the Subsidiary that owns
or leases such Property, then the Borrower shall also deliver to the
Administrative Agent an Accession Agreement executed by such Accommodation
Subsidiary. Until such time as the Administrative Agent shall have received the
items referred to in the immediately preceding two sentences with respect to
such Subsidiary and any applicable Accommodation Subsidiary, the applicable
Property shall not be considered to be an Unencumbered Borrowing Base Property.
Section 4.2. Reclassification of Properties.
From time to time the Borrower may request, upon not less than 10 Business Days
prior written notice to the Administrative Agent, that an Unencumbered Borrowing
Base Property be no longer classified as an Unencumbered Borrowing Base Property
and therefore not included in the calculations of the Unencumbered Borrowing
Base Value, which reclassification (a “Reclassification”) shall be effected by
the Administrative Agent if all the following conditions are satisfied as of the
date of such Reclassification:
(a) no Default or Event of Default exists or will exist immediately after giving
effect to such Reclassification and any prepayments of the Loans to be made in
connection therewith, and the reduction in the Unencumbered Borrowing Base Value
by reason of the release of such Property as of the date of such
Reclassification (any such request from the Borrower shall include a
representation regarding no Default or Event of Default to the effect set forth
in the preceding sentence);
(b) the Borrower shall have delivered a Compliance Certificate showing pro forma
compliance with the covenants set forth in Section 10.1. after giving effect to
such Reclassification; and
(c) in the case of a Reclassification of the Conrad Chicago Hotel in Chicago,
Illinois or the Vail Marriott Mountain Resort and Spa in Vail, Colorado:
(i) the Requisite Lenders shall have approved of such Reclassification in
writing; and
(ii) either (x) such Property is being sold to a Person that is not an Affiliate
of the Borrower or (y) another Property will be accepted as an Unencumbered
Borrowing Base Property simultaneously with such Reclassification.

 

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Notwithstanding the foregoing, the Boston Westin Waterfront Hotel in Boston,
Massachusetts shall not be subject to a Reclassification. Upon the Borrower’s
request and at the Borrower’s sole cost and expense, the Administrative Agent
agrees to execute and deliver such instruments, documents, certificates and
other agreements as the Borrower may reasonably request to confirm such
Reclassification.
Article V. Yield Protection, Etc.
Section 5.1. Additional Costs; Capital Adequacy.
(a) Capital Adequacy. If any Lender or any Participant in the Loan determines
that compliance with any law or regulation or with any guideline or request from
any central bank or other Governmental Authority (whether or not having the
force of law) affects or would affect the amount of capital required or expected
to be maintained by such Lender or such Participant, or any corporation
controlling such Lender or such Participant, as a consequence of, or with
reference to, such Lender’s Commitments or its making or maintaining Loans below
the rate which such Lender or such Participant or such corporation controlling
such Lender or such Participant could have achieved but for such compliance
(taking into account the policies of such Lender or such Participant or such
corporation with regard to capital), then the Borrower shall, from time to time,
within thirty (30) days after written demand by such Lender or such Participant,
pay to such Lender or such Participant additional amounts sufficient to
compensate such Lender or such Participant or such corporation controlling such
Lender or such Participant to the extent that such Lender or such Participant
determines such increase in capital is allocable to such Lender’s or such
Participant’s obligations hereunder.
(b) Additional Costs. In addition to, and not in limitation of the immediately
preceding subsection (a), the Borrower shall promptly pay to the Administrative
Agent for the account of a Lender from time to time such amounts as such Lender
may determine to be necessary to compensate such Lender for any costs incurred
by such Lender that it reasonably determines are attributable to its making or
maintaining of any LIBOR Loans or its obligation to make any LIBOR Loans
hereunder, any reduction in any amount receivable by such Lender under this
Agreement or any of the other Loan Documents in respect of any of such LIBOR
Loans or such obligation or the maintenance by such Lender of capital in respect
of its LIBOR Loans or its Commitment (such increases in costs and reductions in
amounts receivable being herein called “Additional Costs”), resulting from any
Regulatory Change that: (i) changes the basis of taxation of any amounts payable
to such Lender under this Agreement or any of the other Loan Documents in
respect of any of such LIBOR Loans or its Commitment (other than taxes, fees,
duties, levies, imposts, charges, deductions, withholdings, or other charges
which are excluded from the definition of Taxes pursuant to the first sentence
of Section 3.10.(a)) imposed on or measured by the overall net income of such
Lender or of its Lending Office for any of such LIBOR Loans by the jurisdiction
in which such Lender has its principal office or such Lending Office or taxes
covered by Section 3.10.(b), or (ii) imposes or modifies any reserve, special
deposit or similar requirements (other than Regulation D of the Board of
Governors of the Federal Reserve System or other similar reserve requirement
applicable to any other category of liabilities or category of extensions of
credit or other assets by reference to which the interest rate on LIBOR Loans is
determined to the extent utilized when determining LIBOR for such Loans)
relating to any extensions of credit or other assets of, or any deposits with or
other liabilities of, or other credit extended by, or any other acquisition of
funds by such Lender (or its parent corporation), or any commitment of such
Lender (including, without limitation, the Commitment of such Lender hereunder)
or (iii) has or would have the effect of reducing the rate of return on capital
of such Lender to a level below that which such Lender could have achieved but
for such Regulatory Change (taking into consideration such Lender’s policies
with respect to capital adequacy).

 

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(c) Lender’s Suspension of LIBOR Loans. Without limiting the effect of the
provisions of the immediately preceding subsection (a) and (b), if by reason of
any Regulatory Change, any Lender either (i) incurs Additional Costs based on or
measured by the excess above a specified level of the amount of a category of
deposits or other liabilities of such Lender that includes deposits by reference
to which the interest rate on LIBOR Loans is determined as provided in this
Agreement or a category of extensions of credit or other assets of such Lender
that includes LIBOR Loans or (ii) becomes subject to restrictions on the amount
of such a category of liabilities or assets that it may hold, then, if such
Lender so elects by notice to the Borrower (with a copy to the Administrative
Agent), the obligation of such Lender to make or Continue, or to Convert Base
Rate Loans into, LIBOR Loans shall be suspended until such Regulatory Change
ceases to be in effect (in which case the provisions of Section 5.5. shall
apply).
(d) Additional Costs in Respect of Letters of Credit. Without limiting the
obligations of the Borrower under the preceding subsections of this Section (but
without duplication), if as a result of any Regulatory Change or any risk-based
capital guideline or other requirement heretofore or hereafter issued by any
Governmental Authority there shall be imposed, modified or deemed applicable any
tax (other than taxes covered by Section 3.10.), reserve, special deposit,
capital adequacy or similar requirement against or with respect to or measured
by reference to Letters of Credit and the result shall be to increase the cost
to the Issuing Bank of issuing (or any Lender of purchasing participations in)
or maintaining its obligation hereunder to issue (or purchase participations in)
any Letter of Credit or reduce any amount receivable by the Issuing Bank or any
Lender hereunder in respect of any Letter of Credit, then, upon demand by the
Issuing Bank or such Lender, the Borrower shall pay promptly, and in any event
within 3 Business Days of demand, to the Issuing Bank or, in the case of such
Lender, to the Administrative Agent for the account of such Lender, from time to
time as specified by the Issuing Bank or such Lender, such additional amounts as
shall be sufficient to compensate the Issuing Bank or such Lender for such
increased costs or reductions in amount.
(e) Notification and Determination of Additional Costs. Each of the
Administrative Agent, Issuing Bank, each Lender, and each Participant, as the
case may be, agrees to notify the Borrower of any event occurring after the
Agreement Date entitling the Administrative Agent, the Issuing Bank, such Lender
or such Participant to compensation under any of the preceding subsections of
this Section as promptly as practicable; provided, however, that the failure of
the Administrative Agent, the Issuing Bank, any Lender or any Participant to
give such notice shall not release the Borrower from any of its obligations
hereunder (and in the case of a Lender, to the Administrative Agent); provided
further that no Lender shall be entitled to claim any additional cost, reduction
in amounts, loss, tax or other additional amount under this Article V if such
Lender fails to provide such notice to the Borrower within 180 days of the date
such Lender becomes aware of the occurrence of the event giving rise to the
additional cost, reduction in amounts, loss, tax or other additional amount. The
Administrative Agent, the Issuing Bank, each Lender and each Participant, as the
case may be, agrees to furnish to the Borrower (and in the case of the Issuing
Bank, a Lender or a Participant to the Administrative Agent as well) a
certificate setting forth in reasonable detail the basis and amount of each
request for compensation under this Section. Determinations by the
Administrative Agent, the Issuing Bank, such Lender, or such Participant, as the
case may be, of the effect of any Regulatory Change shall be conclusive and
binding for all purposes, provided that such determination is made on a
reasonable basis and in good faith.

 

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Section 5.2. Suspension of LIBOR Loans.
Anything herein to the contrary notwithstanding, if, on or prior to the
determination of LIBOR for any Interest Period:
(a) the Administrative Agent reasonably determines (which determination shall be
conclusive) that quotations of interest rates for the relevant deposits referred
to in the definition of LIBOR are not being provided in the relevant amounts or
for the relevant maturities for purposes of determining rates of interest for
LIBOR Loans as provided herein or is otherwise unable to determine LIBOR; or
(b) the Administrative Agent reasonably determines (which determination shall be
conclusive) that the relevant rates of interest referred to in the definition of
LIBOR upon the basis of which the rate of interest for LIBOR Loans for such
Interest Period is to be determined are not likely to adequately cover the cost
to any Lender of making or maintaining LIBOR Loans for such Interest Period;
then the Administrative Agent shall give the Borrower and each Lender prompt
notice thereof and, so long as such condition remains in effect, the Lenders
shall be under no obligation to, and shall not, make additional LIBOR Loans
(without limiting the obligation to make Base Rate Loans), Continue LIBOR Loans
or Convert Loans into LIBOR Loans and the Borrower shall, on the last day of
each current Interest Period for each outstanding LIBOR Loan, either prepay such
Loan or Convert such Loan into a Base Rate Loan.
Section 5.3. Illegality.
Notwithstanding any other provision of this Agreement, if any Lender shall
reasonably determine (which determination shall be conclusive and binding) that
it has become unlawful for such Lender to honor its obligation to make or
maintain LIBOR Loans hereunder, then such Lender shall promptly notify the
Borrower thereof (with a copy of such notice to the Administrative Agent) and
such Lender’s obligation to make or Continue, or to Convert Loans of any other
Type into, LIBOR Loans shall be suspended, in each case, until such time as such
Lender may again make and maintain LIBOR Loans (in which case the provisions of
Section 5.5. shall be applicable (without limiting the obligation to make Base
Rate Loans)).
Section 5.4. Compensation.
The Borrower shall pay to the Administrative Agent for the account of each
Lender, upon the request of the Administrative Agent, such amount or amounts as
the Administrative Agent shall determine in its reasonable discretion shall be
sufficient to compensate such Lender for any loss, cost or expense (excluding
lost profits) attributable to:
(a) any payment or prepayment (whether mandatory or optional) of a LIBOR Loan,
or Conversion of a LIBOR Loan, made by such Lender for any reason (including,
without limitation, acceleration) on a date other than the last day of the
Interest Period for such Loan; or

 

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(b) any failure by the Borrower for any reason (including, without limitation,
the failure of any of the applicable conditions precedent specified in
Article VI. to be satisfied) to borrow a LIBOR Loan from such Lender on the date
for such borrowing, or to Convert a Base Rate Loan into a LIBOR Loan or Continue
a LIBOR Loan on the requested date of such Conversion or Continuation.
Not in limitation of the foregoing, such compensation shall include, without
limitation, in the case of a LIBOR Loan, an amount equal to the then present
value of (A) the amount of interest that would have accrued on such LIBOR Loan
for the remainder of the Interest Period at the rate applicable to such LIBOR
Loan, less (B) the amount of interest that would accrue on the same LIBOR Loan
for the same period if LIBOR were set on the date on which such LIBOR Loan was
repaid, prepaid or Converted or the date on which the Borrower failed to borrow,
Convert or Continue such LIBOR Loan calculating present value by using as a
discount rate LIBOR quoted on such date. Upon the Borrower’s request, the
Administrative Agent shall provide the Borrower with a statement setting forth
in reasonable detail the basis for requesting such compensation and the method
for determining the amount thereof. Any such statement shall be conclusive
provided that such determination is made on a reasonable basis and in good
faith.
Section 5.5. Treatment of Affected Loans.
If the obligation of any Lender to make LIBOR Loans or to Continue, or to
Convert Base Rate Loans into, LIBOR Loans shall be suspended pursuant to
Section 5.1.(c), Section 5.2. or Section 5.3. then such Lender’s LIBOR Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for LIBOR Loans (or, in the case of a Conversion
required by Section 5.1.(c), Section 5.2., or Section 5.3. on such earlier date
as such Lender may specify to the Borrower with a copy to the Administrative
Agent) and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 5.1., Section 5.2. or Section 5.3. that gave
rise to such Conversion no longer exist:
(i) to the extent that such Lender’s LIBOR Loans have been so Converted, all
payments and prepayments of principal that would otherwise be applied to such
Lender’s LIBOR Loans shall be applied instead to its Base Rate Loans; and
(ii) all Loans that would otherwise be made or Continued by such Lender as LIBOR
Loans shall be made or Continued instead as Base Rate Loans, and all Base Rate
Loans of such Lender that would otherwise be Converted into LIBOR Loans shall
remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in Section 5.1.(c) or 5.3. that gave
rise to the Conversion of such Lender’s LIBOR Loans pursuant to this Section no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when LIBOR Loans made by other Lenders are
outstanding, then such Lender’s Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding LIBOR Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding LIBOR Loans and by such
Lender are held pro rata (as to principal amounts, Types and Interest Periods)
in accordance with their respective Commitments.

 

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Section 5.6. Change of Lending Office.
Each Lender agrees that it will use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate an alternate
Lending Office with respect to any of its Loans affected by the matters or
circumstances described in Sections 3.10., 5.1. or 5.3. to reduce the liability
of the Borrower or avoid the results provided thereunder, so long as such
designation is not disadvantageous to such Lender as determined by such Lender
in its sole discretion, except that such Lender shall have no obligation to
designate a Lending Office located in the United States of America.
Section 5.7. Assumptions Concerning Funding of LIBOR Loans.
Calculation of all amounts payable to a Lender under this Article shall be made
as though such Lender had actually funded LIBOR Loans through the purchase of
deposits in the relevant market bearing interest at the rate applicable to such
LIBOR Loans in an amount equal to the amount of the LIBOR Loans and having a
maturity comparable to the relevant Interest Period; provided, however, that
each Lender may fund each of its LIBOR Loans in any manner it sees fit and the
foregoing assumption shall be used only for calculation of amounts payable under
this Article.
Section 5.8. Affected Lenders.
If (a) a Lender requests compensation pursuant to Section 3.10. or 5.1., and the
Requisite Lenders are not also doing the same, or (b) the obligation of any
Lender to make LIBOR Loans or to Continue, or to Convert Base Rate Loans into,
LIBOR Loans shall be suspended pursuant to Section 5.1.(b) or 5.3. but the
obligation of the Requisite Lenders shall not have been suspended under such
Sections, or (c) a Lender does not vote in favor of any amendment, modification
or waiver to this Agreement which, pursuant to Section 13.7., requires the vote
of all of the Lenders, and the Requisite Lenders shall have voted in favor of
such amendment, modification or waiver then, so long as there does not then
exist any Default or Event of Default, the Borrower may demand that such Lender
(the “Affected Lender”), and upon such demand the Affected Lender shall
promptly, assign its Commitment to an Eligible Assignee subject to and in
accordance with the provisions of Section 13.6.(d) for a purchase price equal to
the aggregate principal balance of all Loans then owing to the Affected Lender
plus any accrued but unpaid interest thereon and accrued but unpaid fees owing
to the Affected Lender, or any other amount as may be mutually agreed upon by
such Affected Lender and Eligible Assignee. Each of the Administrative Agent and
the Affected Lender shall reasonably cooperate in effectuating the replacement
of such Affected Lender under this Section, but at no time shall the
Administrative Agent, such Affected Lender nor any other Lender nor any Titled
Agent be obligated in any way whatsoever to initiate any such replacement or to
assist in finding an Eligible Assignee. The exercise by the Borrower of its
rights under this Section shall be at the Borrower’s sole cost and expense and
at no cost or expense to the Administrative Agent, the Affected Lender or any of
the other Lenders. The terms of this Section shall not in any way limit the
Borrower’s obligation to pay to any Affected Lender compensation owing to such
Affected Lender pursuant to this Agreement (including, without limitation,
pursuant to Sections 3.10., 5.1. or 5.4.) with respect to the periods up to the
date of replacement.

 

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Article VI. Conditions Precedent
Section 6.1. Initial Conditions Precedent.
The obligation of the Lenders to effect or permit the occurrence of the first
Credit Event hereunder, whether as the making of a Loan or the issuance of a
Letter of Credit, is subject to the satisfaction of the following conditions
precedent:
(a) The Administrative Agent shall have received each of the following, in form
and substance satisfactory to the Administrative Agent:
(i) counterparts of this Agreement executed by each of the parties hereto;
(ii) Notes executed by the Borrower, payable to each Lender and complying with
the terms of Section 2.9.(a);
(iii) the Guaranty executed by each of the Parent and each Material Subsidiary
(other than an Excluded Subsidiary or a Foreign Subsidiary) existing as of the
Effective Date;
(iv) the certificate or articles of incorporation or formation, articles of
organization, certificate of limited partnership, declaration of trust or other
comparable organizational instrument (if any) of each Loan Party certified
(x) as of a recent date by the Secretary of State of the state of formation of
such Loan Party and (y) by the Secretary or Assistant Secretary (or other
individual performing similar functions) of such Loan Party as being a true,
correct and complete copy thereof as of the Agreement Date;
(v) a certificate of good standing (or certificate of similar meaning) with
respect to each Loan Party issued as of a recent date by the Secretary of State
of the state of formation of each such Loan Party and certificates of
qualification to transact business or other comparable certificates issued as of
a recent date by each Secretary of State (and any state department of taxation,
as applicable) of each state in which such Loan Party is required to be so
qualified and where failure to be so qualified could reasonably be expected to
have a Material Adverse Effect;
(vi) a certificate of incumbency signed by the Secretary or Assistant Secretary
(or other individual performing similar functions) of each Loan Party with
respect to each of the officers of such Loan Party authorized to execute and
deliver the Loan Documents to which such Loan Party is a party, and in the case
of the Borrower, authorized to execute and deliver on behalf of the Borrower
Notices of Borrowing, Notices of Conversion, Notices of Continuation and to
request issuance of Letters of Credit;
(vii) copies certified by the Secretary or Assistant Secretary (or other
individual performing similar functions) of each Loan Party of (A) the by-laws
of such Loan Party, if a corporation, the operating agreement, if a limited
liability company, the partnership agreement, if a limited or general
partnership, or other comparable document in the case of any other form of legal
entity and (B) all corporate, partnership, member or other necessary action
taken by such Loan Party to authorize the execution, delivery and performance of
the Loan Documents to which it is a party;

 

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(viii) an opinion of counsel to the Loan Parties, addressed to the
Administrative Agent and the Lenders and covering the matters set forth in
Exhibit H;
(ix) evidence that the Fees then due and payable under Section 3.5., together
with all other fees, expenses and reimbursement amounts due and payable to the
Administrative Agent and any of the Lenders, including without limitation, the
fees and expenses of counsel to the Administrative Agent, have been paid;
(x) a Compliance Certificate calculated as of the Effective Date (giving pro
forma effect to the financing evidenced by this Agreement and the use of the
proceeds of the Loans to be funded on the Agreement Date);
(xi) with respect to each Property identified on Schedule 4.1., each of the
items referred to in Section 4.1.(b)(i), (ii), (iv) and (vi) required to be
delivered in connection with any Unencumbered Borrowing Base Property and a pro
forma operating budget for such Property with respect to the current fiscal
year;
(xii) a Transfer Authorizer Designation Form effective as of the Agreement Date;
(xiii) insurance certificates, or other evidence, providing that the insurance
coverage required under Section 8.5. (including, without limitation, both
property and liability insurance) is in full force and effect;
(xiv) an Appraisal for each Property addressed to the Administrative Agent and
otherwise in form and substance reasonably acceptable to the Administrative
Agent; and
(xv) such other documents, agreements and instruments as the Administrative
Agent, or any Lender through the Administrative Agent, may reasonably request;
and
(b) In the good faith and reasonable judgment of the Administrative Agent:
(i) there shall not have occurred or become known to the Administrative Agent or
any of the Lenders any event, condition, situation or status since the date of
the information contained in the financial and business projections, budgets,
pro forma data and forecasts concerning the Parent, the Borrower and its
Subsidiaries delivered to the Administrative Agent and the Lenders prior to the
Agreement Date that has had or could reasonably be expected to result in a
Material Adverse Effect;
(ii) no litigation, action, suit, investigation or other arbitral,
administrative or judicial proceeding shall be pending or threatened in writing
which could reasonably be expected to (A) result in a Material Adverse Effect or
(B) restrain or enjoin, impose materially burdensome conditions on, or otherwise
materially and adversely affect, the ability of the Borrower or any other Loan
Party to fulfill its obligations under the Loan Documents to which it is a
party; and

 

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(iii) the Parent, the Borrower and its Subsidiaries shall have received all
approvals, consents and waivers, and shall have made or given all necessary
filings and notices as shall be required to consummate the transactions
contemplated hereby without the occurrence of any default under, conflict with
or violation of (A) any Applicable Law or (B) any agreement, document or
instrument to which any Loan Party is a party or by which any of them or their
respective properties is bound, except for such approvals, consents, waivers,
filings and notices the receipt, making or giving of which would not reasonably
be likely to (A) have a Material Adverse Effect, or (B) restrain or enjoin
impose materially burdensome conditions on, or otherwise materially and
adversely affect the ability of the Borrower or any other Loan Party to fulfill
its obligations under the Loan Documents to which it is a party.
The provisions of clauses (iv) through (viii) of the immediately preceding
subsection (a) shall not apply to Accommodation Subsidiaries that are not also
Material Subsidiaries.
Section 6.2. Conditions Precedent to All Loans and Letters of Credit.
The obligations of (i) Lenders to make any Loans and (ii) the Issuing Bank to
issue Letters of Credit are each subject to the further conditions precedent
that: (a) no Default or Event of Default shall exist as of the date of the
making of such Loan or date of issuance of such Letter of Credit or would exist
immediately after giving effect thereto, and no violation of the limits
described in Section 2.13. would occur after giving effect thereto; (b) the
representations and warranties made or deemed made by the Parent, the Borrower
and each other Loan Party in the Loan Documents to which any of them is a party,
shall be true and correct in all material respects on and as of the date of the
making of such Loan or date of issuance of such Letter of Credit with the same
force and effect as if made on and as of such date except to the extent that
such representations and warranties expressly relate solely to an earlier date
(in which case such representations and warranties shall have been true and
correct in all material respects on and as of such earlier date) and except for
changes in factual circumstances not prohibited under the Loan Documents; (c) in
the case of the borrowing of Loans, the Administrative Agent shall have received
a timely Notice of Borrowing and (d) in the case of the issuance of a Letter of
Credit, no Lender shall be a Defaulting Lender or Potential Defaulting Lender;
provided, however, in the case of the issuance of a Letter of Credit, the
Issuing Bank may, in its sole and absolute discretion, waive this condition
precedent on behalf of itself and all Lenders if cash collateral or other credit
support satisfactory to the Issuing Bank has been pledged or otherwise provided
to the Administrative Agent for the benefit of the Issuing Bank in respect of
such Defaulting Lender’s or Potential Defaulting Lender’s participation in such
Letter of Credit in accordance with Section 2.2.(l). Each Credit Event shall
constitute a certification by the Borrower to the effect set forth clauses
(a) and (b) in the preceding sentence (both as of the date of the giving of
notice relating to such Credit Event and, unless the Borrower otherwise notifies
the Administrative Agent prior to the date of such Credit Event, as of the date
of the occurrence of such Credit Event). In addition, the Borrower shall be
deemed to have represented to the Administrative Agent and the Lenders at the
time any Loan is made or any Letter of Credit is issued that all conditions to
the making of such Loan or issuing of such Letter of Credit contained in this
Section (other than the condition set forth in clauses (d) above) have been
satisfied.

 

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Article VII. Representations and Warranties
Section 7.1. Representations and Warranties.
In order to induce the Administrative Agent and each Lender to enter into this
Agreement and to make Loans and, in the case of the Issuing Bank, to issue
Letters of Credit, the Parent and the Borrower represent and warrant to the
Administrative Agent, the Issuing Bank and each Lender as follows:
(a) Organization; Power; Qualification. Each of the Parent, the Borrower, the
other Loan Parties and the other Subsidiaries is a corporation, partnership or
other legal entity, duly organized or formed, validly existing and in good
standing under the jurisdiction of its incorporation or formation, has the power
and authority to own or lease its respective properties and to carry on its
respective business as now being and hereafter proposed to be conducted and is
duly qualified and is in good standing as a foreign corporation, partnership or
other legal entity, and authorized to do business, in each jurisdiction in which
the character of its properties or the nature of its business requires such
qualification or authorization and where the failure to be so qualified or
authorized could reasonably be expected to have, in each instance, a Material
Adverse Effect.
(b) Ownership Structure. As of the Agreement Date, Part I of Schedule 7.1.(b) is
a complete and correct list of all Subsidiaries of the Parent setting forth for
each such Subsidiary, (i) the jurisdiction of organization of such Subsidiary,
(ii) each Person holding any Equity Interests in such Subsidiary, (iii) the
nature of the Equity Interests held by each such Person, (iv) the percentage of
ownership of such Subsidiary represented by such Equity Interests and
(v) whether such Subsidiary is a Material Subsidiary or a Significant
Subsidiary. Except as disclosed in such Schedule (A) as of the Agreement Date,
each of the Parent and its Subsidiaries owns, free and clear of all Liens (other
than Permitted Liens), and has the unencumbered right to vote, all outstanding
Equity Interests in each Person shown to be held by it on such Schedule 7.1.(b),
(B) all of the issued and outstanding capital stock of each such Person
organized as a corporation is validly issued, fully paid and nonassessable and
(C) there are no outstanding subscriptions, options, warrants, commitments,
preemptive rights or agreements of any kind (including, without limitation, any
stockholders’ or voting trust agreements) for the issuance, sale, registration
or voting of, or outstanding securities convertible into, any additional shares
of capital stock of any class, or partnership or other ownership interests of
any type in, any such Person. As of the Agreement Date, Part II of
Schedule 7.1.(b) correctly sets forth all Unconsolidated Affiliates of the
Parent, including the correct legal name of such Person, the type of legal
entity which each such Person is, and all Equity Interests in such Person held
directly or indirectly by the Parent.
(c) Authorization of Loan Documents and Borrowings. The Borrower has the right
and power, and has taken all necessary action to authorize it, to borrow and
obtain other extensions of credit hereunder. The Borrower and each other Loan
Party has the right and power, and has taken all necessary action to authorize
it, to execute, deliver and perform each of the Loan Documents and the Fee
Letter to which it is a party in accordance with their respective terms and to
consummate the transactions contemplated hereby and thereby. The Loan Documents
and the Fee Letter to which any Loan Party is a party have been duly executed
and delivered by the duly authorized officers, agents and/or signatories of such
Person and each is a legal, valid and binding obligation of such Person
enforceable against such Person in accordance with its respective terms, except
as the same may be limited by bankruptcy, insolvency, and other similar laws
affecting the rights of creditors generally and the availability of equitable
remedies for the enforcement of certain obligations (other than the payment of
principal) contained herein or therein and as may be limited by equitable
principles generally.

 

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(d) Compliance of Loan Documents with Laws, Etc. The execution, delivery and
performance of this Agreement, the Notes, the other Loan Documents to which any
Loan Party is a party and of the Fee Letter in accordance with their respective
terms and the borrowings and other extensions of credit hereunder do not and
will not, by the passage of time, the giving of notice, or both: (i) require any
Governmental Approval or violate any Applicable Law (including all Environmental
Laws) relating to the Borrower or any other Loan Party; (ii) conflict with,
result in a breach of or constitute a default under the organizational documents
of any Loan Party, or any indenture, agreement or other instrument to which the
Borrower or any other Loan Party is a party or by which it or any of its
respective properties may be bound; or (iii) result in or require the creation
or imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by any Loan Party.
(e) Compliance with Law; Governmental Approvals. Each of the Borrower, the other
Loan Parties and the other Subsidiaries is in compliance with each Governmental
Approval applicable to it and in compliance with all other Applicable Laws
(including, without limitation, Environmental Laws) relating to it except for
noncompliances which, and Governmental Approvals the failure to possess which,
could not, in the aggregate, reasonably be expected to cause a Default or Event
of Default or have a Material Adverse Effect.
(f) Title to Properties; Liens. As of the Agreement Date, Part I of
Schedule 7.1.(f) is a complete and correct listing of all real estate assets of
the Parent, the Borrower, each other Loan Party and each other Subsidiary,
setting forth, for each such Property, the average occupancy status of such
Property for the period of twelve consecutive calendar fiscal months ending
closest to July 16, 2010. Each of the Parent, the Borrower, each other Loan
Party and each other Subsidiary has good, marketable and legal title to, or a
valid leasehold interest in, its respective assets (other than Permitted Liens
and Liens on assets of an Excluded Subsidiary securing the Indebtedness which
causes such Subsidiary to be an Excluded Subsidiary). As of the Agreement Date,
there are no Liens against any assets of the Parent, the Borrower or any other
Subsidiary except for Permitted Liens and Liens on assets of an Excluded
Subsidiary securing the Indebtedness which causes such Subsidiary to be an
Excluded Subsidiary.
(g) Existing Indebtedness; Total Indebtedness. Schedule 7.1.(g) is, as of the
Agreement Date, a complete and correct listing of all Indebtedness (including
all Guarantees) of each of the Parent, the Borrower, the other Loan Parties and
the other Subsidiaries, and if such Indebtedness is secured by any Lien, a
description of all of the property subject to such Lien.
(h) Material Contracts. Excluding Material Contracts evidencing Indebtedness
listed on Schedule 7.1.(g), if any, Schedule 7.1.(h) is, as of the Agreement
Date, a true, correct and complete listing of all Material Contracts. No event
or condition which with the giving of notice, the lapse of time, or both, would
permit any party to any such Material Contract to terminate such Material
Contract exists.
(i) Litigation. Except as set forth on Schedule 7.1.(i), there are no actions,
suits, investigations or proceedings pending (nor, to the knowledge of any
Responsible Officer of the Parent or the Borrower, are there any actions, suits
or proceedings threatened) against or in any other way relating adversely to or
affecting the Parent, the Borrower, any other Loan Party, any other Subsidiary
or any of their respective property in any court or before any arbitrator of any
kind or before or by any other Governmental Authority which, (i) could
reasonably be expected to have a Material Adverse Effect or (ii) in any manner
draws into question the validity or enforceability of any Loan Documents or the
Fee Letter.

 

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(j) Taxes. Subject to applicable extensions, all federal, state and other
material tax returns of the Parent, the Borrower, each other Loan Party and each
other Subsidiary required by Applicable Law to be filed have been duly filed,
and all federal, state and other material taxes, assessments and other
governmental charges or levies upon, the Parent, the Borrower, each other Loan
Party, each other Subsidiary and their respective properties, income, profits
and assets which are due and payable have been paid, except any such nonpayment
which is at the time permitted under Section 8.6. As of the Agreement Date, none
of the United States income tax returns of the Parent, the Borrower any other
Loan Party or any other Subsidiary is under audit. All charges, accruals and
reserves on the books of the Parent, the Borrower, the other Loan Parties and
the other Subsidiaries in respect of any taxes or other governmental charges are
in accordance with GAAP.
(k) Financial Statements. The (i) audited consolidated balance sheet of the
Parent and its consolidated Subsidiaries for the fiscal year ended December 31,
2009 and the related audited consolidated statements of operations, cash flows
and shareholders’ equity for the fiscal year ended on such date, with the
opinion thereon of KPMG LLP, and (ii) unaudited consolidated balance sheet of
the Parent and its consolidated Subsidiaries for the fiscal quarter ended March
26, 2010, and the related unaudited consolidated statements of operations, cash
flow, shareholders’ equity of the Parent and its consolidated Subsidiaries for
the one fiscal quarter period ended on such date, are complete and correct in
all material respects and present fairly, in all material respects and in
accordance with GAAP consistently applied throughout the periods involved, the
consolidated financial position of the Parent and its consolidated Subsidiaries
as at their respective dates and the results of operations and the cash flow for
such periods (subject, as to interim statements, to changes resulting from
normal year-end audit adjustments). Neither the Parent nor any of its
Subsidiaries has on the Agreement Date any material contingent liabilities,
liabilities, liabilities for taxes, unusual or long-term commitments or
unrealized or forward anticipated losses from any unfavorable commitments that
would be required to be set forth in its financial statements or notes thereto,
except as referred to or reflected or provided for in said financial statements.
(l) No Material Adverse Change. Since December 31, 2009, there has been no
material adverse change in the business, assets, liabilities, financial
condition or results of operations of the Parent and its Subsidiaries or the
Borrower and its Subsidiaries, in each case, taken as a whole. Each of the Loan
Parties is Solvent.
(m) ERISA.
(i) Each Benefit Arrangement and Plan is in compliance with the applicable
provisions of ERISA, the Internal Revenue Code and other Applicable Laws in all
material respects. Except with respect to Multiemployer Plans, each Qualified
Plan (A) has received a favorable determination from the Internal Revenue
Service applicable to the Qualified Plan’s current remedial amendment cycle (as
defined in Revenue Procedure 2007-44 or “2007-44” for short), (B) has timely
filed for a favorable determination letter from the Internal Revenue Service
during its staggered remedial amendment cycle (as defined in 2007-44) and such
application is currently being processed by the Internal Revenue Service,
(C) had filed for a determination letter prior to its “GUST remedial amendment
period” (as defined in 2007-44) and received such determination letter and the
staggered remedial amendment cycle first following the GUST remedial amendment
period for such Qualified Plan has not yet expired, or (D) is maintained under a
prototype or volume submitter plan and is entitled to rely upon a favorable
opinion or advisory letter issued by the Internal Revenue Service with respect
to such prototype or volume submitter plan. To the best knowledge of the Parent
and the Borrower, nothing has occurred which could reasonably be expected to
result in the loss of their reliance on the Qualified Plan’s or Plan’s favorable
determination letter, opinion or advisory letter.

 

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(ii) With respect to any Benefit Arrangement that is a retiree welfare benefit
arrangement, all amounts have been accrued on the applicable ERISA Group’s
financial statements in accordance with FASB ASC 715. The “benefit obligation”
of all Plans does not exceed the “fair market value of plan assets” for such
Plans by more than $10,000,000 all as determined by and with such terms defined
in accordance with FASB ASC 715.
(iii) Except as could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect: (i) no ERISA Event has occurred or
is expected to occur; (ii) there are no pending, or to the best knowledge of the
Parent and the Borrower, threatened, claims, actions or lawsuits or other action
by any Governmental Authority, plan participant or beneficiary with respect to a
Benefit Arrangement; (iii) there are no violations of the fiduciary
responsibility rules with respect to any Benefit Arrangement or Plan; and
(iv) no member of the ERISA Group has engaged in a non-exempt “prohibited
transaction,” as defined in Section 406 of ERISA and Section 4975 of the
Internal Revenue Code, in connection with any Benefit Arrangement or Plan, that
would subject the Parent or Borrower to a tax on prohibited transactions imposed
by Section 502(i) of ERISA or Section 4975 of the Internal Revenue Code.
(n) Not Plan Assets; No Prohibited Transactions. None of the assets of the
Parent, the Borrower, any other Loan Party or any other Subsidiary constitutes
“plan assets” within the meaning of ERISA, the Internal Revenue Code and the
respective regulations promulgated thereunder. Assuming that no Lender funds any
amount payable by it hereunder with “plan assets,” as that term is defined in 29
C.F.R. 2510.3-101, the execution, delivery and performance of this Agreement and
the other Loan Documents, and the borrowing and repayment of amounts hereunder,
do not and will not constitute “prohibited transactions” under ERISA or the
Internal Revenue Code.
(o) Absence of Defaults. None of the Loan Parties or any of the other
Subsidiaries is in default under its certificate or articles of incorporation or
formation, bylaws, partnership agreement or other similar organizational
documents, and no event has occurred, which has not been remedied, cured or
waived, which, in any such case: (i) constitutes a Default or an Event of
Default; or (ii) constitutes, or which with the passage of time, the giving of
notice, or both, would constitute, a default or event of default by the Parent,
the Borrower, any other Loan Party or any other Subsidiary under any agreement
(other than this Agreement) or judgment, decree or order to which any such
Person is a party or by which any such Person or any of its respective
properties may be bound where such default or event of default could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(p) Environmental Laws. In the ordinary course of business each of the Parent,
the Borrower, each other Loan Party and each other Subsidiary reviews the
compliance with Environmental Laws of its respective business, operations and
properties. Each of the Parent, the Borrower, each other Loan Party and the
other Subsidiary: (i) is in compliance with all Environmental Laws applicable to
its business, operations and the Properties, (ii) has obtained all Governmental
Approvals which are required under Environmental Laws, and each such
Governmental Approval is in full force and effect, and (iii) is in compliance
with all terms and conditions of such Governmental Approvals, where with respect
to each of the immediately preceding clauses (i) through (iii) the failure to
obtain or to comply with could reasonably be expected to have a Material Adverse
Effect. Except for any of the following matters that could not reasonably be
expected to have a Material Adverse Effect, no Loan Party has any

 

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knowledge of, or has received notice of, any past, present, or pending releases,
events, conditions, circumstances, activities, practices, incidents, facts,
occurrences, actions, or plans that, with respect to any Loan Party or any other
Subsidiary, their respective businesses, operations or with respect to the
Properties, may: (i) cause or contribute to an actual or alleged violation of or
noncompliance with Environmental Laws, (ii) cause or contribute to any other
potential common-law or legal claim or other liability, or (iii) cause any of
the Properties to become subject to any restrictions on ownership, occupancy,
use or transferability under any Environmental Law or require the filing or
recording of any notice, approval or disclosure document under any Environmental
Law and, with respect to the immediately preceding clauses (i) through (iii) is
based on or related to the on-site or off-site manufacture, generation,
processing, distribution, use, treatment, storage, disposal, transport, removal,
clean up or handling, or the emission, discharge, release or threatened release
of any wastes or Hazardous Material, or any other requirement under
Environmental Law. There is no civil, criminal, or administrative action, suit,
demand, claim, hearing, notice, or demand letter, mandate, order, lien, request,
investigation, or proceeding pending or, to the Parent’s or Borrower’s knowledge
after due inquiry, threatened, against the Parent, the Borrower, any other Loan
Party or any other Subsidiary relating in any way to Environmental Laws which,
reasonably could be expected to have a Material Adverse Effect. None of the
Properties of the Parent, the Borrower, any other Loan Party or any other
Subsidiary is listed on or proposed for listing on the National Priority List
promulgated pursuant to the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 and its implementing regulations, or any state or
local priority list promulgated pursuant to any analogous state or local law. To
Parent’s or Borrower’s knowledge, no Hazardous Materials generated at or
transported from any such Properties is or has been transported to, or disposed
of at, any location that is listed or proposed for listing on the National
Priority List or any analogous state or local priority list, or any other
location that is or has been the subject of a clean-up, removal or remedial
action pursuant to any Environmental Law, except to the extent that such
transportation or disposal could not reasonably be expected to result in a
Material Adverse Effect.
(q) Investment Company. None of the Parent, the Borrower, any other Loan Party
or any other Subsidiary is (i) an “investment company” or a company “controlled”
by an “investment company” within the meaning of the Investment Company Act of
1940, as amended, or (ii) subject to any other Applicable Law which purports to
regulate or restrict its ability to borrow money or obtain other extensions of
credit or to consummate the transactions contemplated by this Agreement or to
perform its obligations under any Loan Document to which it is a party.
(r) Margin Stock. None of the Parent, the Borrower, any other Loan Party or any
other Subsidiary is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose, whether immediate,
incidental or ultimate, of buying or carrying “margin stock” within the meaning
of Regulation U of the Board of Governors of the Federal Reserve System.
(s) Affiliate Transactions. Except as permitted by Section 10.11., none of the
Parent, the Borrower, any other Loan Party or any other Subsidiary is a party to
or bound by any agreement or arrangement with any Affiliate.
(t) Intellectual Property. Each of the Loan Parties and each other Subsidiary
owns or has the right to use, under valid license agreements or otherwise, all
material patents, licenses, franchises, trademarks, trademark rights, service
marks, service mark rights, trade names, trade name rights, trade secrets and
copyrights (collectively, “Intellectual Property”) necessary to the conduct of
its businesses as now conducted and as contemplated by the Loan Documents,
without known conflict with any patent, license, franchise, trademark, trademark
right, service mark, service mark right, trade secret, trade name, copyright, or
other proprietary right of any other Person. The Parent, the Borrower and each
other Subsidiary have taken all such steps as they deem reasonably necessary to
protect their respective rights under and with respect to such Intellectual
Property.

 

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(u) Business. As of the Agreement Date, the Parent, the Borrower, the other Loan
Parties and the other Subsidiaries are engaged in the business of developing,
construction, acquiring, owning and operating hotel properties, together with
other business activities incidental thereto.
(v) Broker’s Fees. No broker’s or finder’s fee, commission or similar
compensation will be payable with respect to the transactions contemplated
hereby. No other similar fees or commissions will be payable by any Loan Party
for any other services rendered to the Parent, the Borrower, any other Loan
Party or any other Subsidiary ancillary to the transactions contemplated hereby.
(w) Accuracy and Completeness of Information. All written information, reports
and data (other than financial projections and other forward looking statements)
furnished to the Administrative Agent or any Lender by, on behalf of, or at the
direction of, the Parent, the Borrower, any other Loan Party or any other
Subsidiary were, at the time the same were so furnished, and when taken as a
whole, complete and correct in all material respects, to the extent necessary to
give the recipient a true and accurate knowledge of the subject matter, or, in
the case of financial statements, present fairly, in accordance with GAAP
consistently applied throughout the periods involved in each case, the financial
position of the Persons involved as at the date thereof and the results of
operations for such periods (subject, as to interim statements, to changes
resulting from normal year end audit adjustments and absence of full footnote
disclosure). All financial projections and other forward looking statements
prepared by or on behalf of the Parent, the Borrower, any other Loan Party or
any other Subsidiary that have been or may hereafter be made available to the
Administrative Agent or any Lender were or will be prepared in good faith based
on reasonable assumptions but with it being understood that such projections and
statement are not a guarantee of future performance. As of the Effective Date,
no fact is known to any Loan Party which has had, or may reasonably be expected
in the future to have (so far as any Loan Party can reasonably foresee), a
Material Adverse Effect which has not been set forth in the financial statements
referred to in Section 7.1.(k) or in such information, reports or data or
otherwise disclosed in writing to the Administrative Agent and the Lenders.
(x) REIT Status. For all dates after January 1, 2005, the Parent is organized
and operated in a manner such that upon its election of REIT status, it shall be
treated as a REIT for purposes of the Internal Revenue Code (beginning with the
effective date of such election) and each of its Subsidiaries that are
corporations (if any) are organized and operated in a manner such that upon such
election they will qualify as Qualified REIT Subsidiaries or Taxable REIT
Subsidiaries (beginning with the effective date of such election), except where
a Subsidiary’s failure to so qualify could not reasonably be expected to have an
adverse effect on the Parent’s qualification as a REIT. The Parent has elected
to be treated as a REIT under the Internal Revenue Code and for all dates
thereafter, the Parent is qualified as a REIT and each of its Subsidiaries that
is a corporation is a Qualified REIT Subsidiary or Taxable REIT Subsidiary
(beginning with the effective date of such election), except where a
Subsidiary’s failure to so qualify could not reasonably be expected to have an
adverse effect on the Parent’s qualification as a REIT.

 

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(y) Unencumbered Borrowing Base Properties. Each of the Properties included in
calculations of the Unencumbered Borrowing Base Value satisfies all of the
requirements contained in the definition of “Eligible Unencumbered Borrowing
Base Property” (except to the extent such requirements were waived by the
Requisite Lenders pursuant to Section 4.1.(c) at the time such Property was
approved as an Unencumbered Borrowing Base Property).
(z) OFAC. None of the Parent, the Borrower, any of the other Loan Parties, any
of the other Subsidiaries, or any other Affiliate of the Borrower: (i) is a
person named on the list of Specially Designated Nationals or Blocked Persons
maintained by the U.S. Department of the Treasury’s Office of Foreign Assets
Control (“OFAC”) available at
http://www.treas.gov/offices/enforcement/ofac/index.shtml or as otherwise
published from time to time; (ii) is (A) an agency of the government of a
country, (B) an organization controlled by a country, or (C) a person resident
in a country that is subject to a sanctions program identified on the list
maintained by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/index.shtml, or as otherwise
published from time to time, as such program may be applicable to such agency,
organization or person; or (iii) derives any of its assets or operating income
from investments in or transactions with any such country, agency, organization
or person; and none of the proceeds from the Loan will be used to finance any
operations, investments or activities in, or make any payments to, any such
country, agency, organization, or person.
Section 7.2. Survival of Representations and Warranties, Etc.
All statements contained in any certificate, financial statement or other
instrument delivered by or on behalf of any Loan Party or any other Subsidiary
to the Administrative Agent or any Lender pursuant to or in connection with this
Agreement or any of the other Loan Documents (including, but not limited to, any
such statement made in or in connection with any amendment thereto or any
statement contained in any certificate, financial statement or other instrument
delivered by or on behalf of any Loan Party prior to the Agreement Date and
delivered to the Administrative Agent or any Lender in connection with the
underwriting or closing the transactions contemplated hereby) shall constitute
representations and warranties made by the Parent and the Borrower to the
Administrative Agent and the Lenders under this Agreement. All representations
and warranties made under this Agreement and the other Loan Documents shall be
deemed to be made at and as of the Agreement Date, the Effective Date, the date
on which any extension of the Termination Date is effectuated pursuant to
Section 2.11. and at and as of the date of the occurrence of each Credit Event,
except to the extent that such representations and warranties expressly relate
solely to an earlier date (in which case such representations and warranties
shall have been true and correct in all material respects on and as of such
earlier date) and except for changes in factual circumstances not prohibited
under the Loan Documents. All such representations and warranties shall survive
the effectiveness of this Agreement, the execution and delivery of the Loan
Documents and the making of the Loans and the issuance of the Letters of Credit.

 

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Article VIII. Affirmative Covenants
For so long as this Agreement is in effect, unless the Requisite Lenders (or, if
required pursuant to Section 13.7., all of the Lenders) shall otherwise consent
in the manner provided for in Section 13.7., the Parent and the Borrower shall
comply with the following covenants:
Section 8.1. Preservation of Existence and Similar Matters.
Except as otherwise permitted under Section 10.7., the Parent and the Borrower
shall, and shall cause each other Loan Party and each other Subsidiary to,
preserve and maintain its respective existence, rights, franchises, licenses and
privileges in the jurisdiction of its incorporation or formation and qualify and
remain qualified and authorized to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification and authorization and where the failure to be so authorized and
qualified could reasonably be expected to have a Material Adverse Effect.
Section 8.2. Compliance with Applicable Law and Material Contracts.
The Parent and the Borrower shall, and shall cause each other Loan Party and
each other Subsidiary to, comply with (a) all Applicable Laws, including the
obtaining of all Governmental Approvals, the failure with which to comply could
reasonably be expected to have a Material Adverse Effect, and (b) all terms and
conditions of all Material Contracts to which it is a party, the failure with
which to comply could give any other party thereto the right to terminate such
Material Contract.
Section 8.3. Maintenance of Property.
In addition to the requirements of any of the other Loan Documents, the Parent
and the Borrower shall, and shall cause each other Loan Party and each other
Subsidiary to, (a) protect and preserve all of its respective material
properties, including, but not limited to, all Intellectual Property (to the
extent reasonably necessary in connection with operations), and maintain in good
repair, working order and condition all tangible properties, ordinary wear and
tear and insured casualty losses excepted, and (b) make or cause to be made all
repairs, renewals, replacements and additions to such properties necessary or
appropriate in the Borrower’s good faith and reasonable judgment, so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times.
Section 8.4. Conduct of Business.
The Parent and the Borrower shall, and shall cause each other Loan Party and
each other Subsidiary taken as a whole to, carry on the business as described in
Section 7.1.(u) and not enter into any line of business not otherwise engaged in
by such Person as of the Agreement Date.
Section 8.5. Insurance.
In addition to the requirements of any of the other Loan Documents, the Parent
and the Borrower shall, and shall cause each other Loan Party and each other
Subsidiary to, maintain insurance (on a replacement cost basis) with financially
sound and reputable insurance companies (with an A.M. Best policyholders rating
of at least A-IX (with respect to liability) or A-X (with respect to property
damage)) against such risks (including, without limitation, acts of terrorism)
and in such amounts as is customarily maintained by prudent Persons engaged in
similar businesses and in similar locations or as may be required by Applicable
Law. At the time financial statements are furnished pursuant to Section 9.2. and
from time to time upon the request of the Administrative Agent, the Borrower
shall deliver to the Administrative Agent a detailed list, together with copies
of all policies of the insurance then in effect, stating the names of the
insurance companies, the amounts and rates of the insurance, the dates of the
expiration thereof and the properties and risks covered thereby.

 

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Section 8.6. Payment of Taxes and Claims.
The Parent and the Borrower shall, and shall cause each other Loan Party and
each other Subsidiary to, pay and discharge before delinquent (a) all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or upon any properties belonging to it, and (b) all lawful
claims of materialmen, mechanics, carriers, warehousemen and landlords for
labor, materials, supplies and rentals which, if unpaid, might become a Lien on
any properties of such Person; provided, however, that this Section shall not
require the payment or discharge of any such tax, assessment, charge, levy or
claim (i) which is being contested in good faith by appropriate proceedings
which operate to suspend the collection thereof and for which adequate reserves
have been established on the books of such Person in accordance with GAAP or
(ii) to the extent covered by title insurance.
Section 8.7. Inspections.
The Parent and the Borrower shall, and shall cause each other Loan Party and
each other Subsidiary to, permit the representatives or agents of any Lender or
the Administrative Agent, from time to time after reasonable prior notice and in
a manner that does not unreasonably disrupt the normal business operations of
the Parent, the Borrower or such Subsidiary, in each case so long as no Event of
Default shall be in existence, as often as may be reasonably requested, but only
during normal business hours, as the case may be, to: (a) visit and inspect all
properties of the Parent, the Borrower or such Subsidiary to the extent any such
right to visit or inspect is within the control of such Person; provided that
such visit and inspection shall not include the extraction of soil or other
sample testing related to Environmental Law or Hazardous Materials, unless a
Default or Event of Default exists; (b) inspect and make extracts from their
respective books and records, including but not limited to management letters
prepared by independent accountants; and (c) discuss with its officers and
employees, and its independent accountants, its business, properties, condition
(financial or otherwise), results of operations and performance. If requested by
the Administrative Agent, the Parent and the Borrower shall execute an
authorization letter addressed to their accountants authorizing the
Administrative Agent or any Lender to discuss the financial affairs of the
Parent, the Borrower, any other Loan Party or any other Subsidiary with their
accountants. The Parent may designate a representative to accompany any Lender
or Administrative Agent in connection with such visits, inspections and
discussion unless a Default or Event of Default exists. The Borrower shall be
obligated to reimburse the Administrative Agent and the Lenders for their
reasonable costs and expenses incurred in connection with the exercise of their
rights under this Section only if such exercise occurs while an Event of Default
exists.
Section 8.8. Use of Proceeds; Letters of Credit.
The Borrower will use the proceeds of the Loans only (a) to finance acquisitions
otherwise not prohibited under this Agreement; (b) to finance capital
expenditures and the repayment of Indebtedness of the Borrower and its
Subsidiaries; and (c) to provide for the general working capital and other
general corporate purposes of the Borrower and its Subsidiaries, including
without limitation, short-term bridge advances and the payment of fees and
expenses related to this Agreement. The Borrower shall only use Letters of
Credit for the same purposes for which it may use the proceeds of Loans. The
Borrower shall not, and shall not permit any other Loan Party or any other
Subsidiary to, use any part of such proceeds to purchase or carry, or to reduce
or retire or refinance any credit incurred to purchase or carry, any margin
stock (within the meaning of Regulation U or Regulation X of the Board of
Governors of the Federal Reserve System) or to extend credit to others for the
purpose of purchasing or carrying any such margin stock.

 

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Section 8.9. Environmental Matters.
The Parent and the Borrower shall, and shall cause each other Loan Party and
each other Subsidiary to, comply with all Environmental Laws the failure with
which to comply could reasonably be expected to have a Material Adverse Effect.
If the Parent, the Borrower, or any other Subsidiary shall (a) receive notice
that any violation of any Environmental Law may have been committed or is about
to be committed by such Person, (b) receive notice that any administrative or
judicial complaint or order has been filed or is about to be filed against the
Parent, the Borrower or any other Subsidiary alleging violations of any
Environmental Law or requiring any such Person to take any action in connection
with the release of Hazardous Materials or (c) receive any notice from a
Governmental Authority or private party alleging that any such Person may be
liable or responsible for costs associated with a response to or cleanup of a
release of Hazardous Materials or any damages caused thereby, and the matters
referred to in such notices, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, the Borrower shall provide the
Administrative Agent with a copy of such notice promptly, and in any event
within 10 Business Days, after the receipt thereof. The Parent and the Borrower
shall, and shall cause each other Loan Party and each other Subsidiary to,
promptly take all actions necessary to prevent the imposition of any material
Liens on any of their respective properties arising out of or related to any
Environmental Laws (other than a Lien (i) which is being contested in good faith
by appropriate proceedings which operate to suspend the enforcement thereof and
for which adequate reserves have been established on the books of the Parent,
the Borrower or such Subsidiary, as applicable, in accordance with GAAP,
(ii) which has been bonded-off in a manner reasonably acceptable to the
Administrative Agent, (iii) consisting of restrictions on the use of real
property, which restrictions do not materially detract from the value of such
property or impair the intended use thereof in the business of the Parent, the
Borrower and its other Subsidiaries or (iv) which could not reasonably be
expected to have a Material Adverse Effect). Nothing in this Section shall
impose any obligation or liability whatsoever on the Administrative Agent or any
Lender.
Section 8.10. Books and Records.
The Parent and the Borrower shall, and shall cause each Subsidiary to, maintain
books and records pertaining to its respective business operations in such
detail, form and scope as is consistent with good business practice and in
accordance with GAAP.
Section 8.11. Further Assurances.
The Parent and the Borrower shall, at their cost and expense and upon request of
the Administrative Agent, execute and deliver or cause to be executed and
delivered, to the Administrative Agent such further instruments, documents and
certificates consistent with the existing terms and conditions of the Loan
Documents, and do and cause to be done such further acts that may be reasonably
necessary or advisable in the reasonable opinion of the Administrative Agent to
carry out more effectively the provisions and purposes of this Agreement and the
other Loan Documents.

 

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Section 8.12. REIT Status.
The Parent shall at all times maintain its status as a REIT and election to be
treated as a REIT under the Internal Revenue Code.
Section 8.13. Exchange Listing.
The Parent shall maintain at least one class of common Equity Interest of the
Parent having trading privileges on the New York Stock Exchange or the American
Stock Exchange or which is subject to price quotations on the over-the-counter
market as reported by the National Association of Securities Dealers Automated
Quotation System.
Section 8.14. Additional Guarantors.
(a) Within 30 days of any Person (other than an Excluded Subsidiary or a Foreign
Subsidiary) becoming a Material Subsidiary after the Effective Date, the
Borrower shall deliver to the Agent each of the following items, each in form
and substance satisfactory to the Agent: (i) an Accession Agreement executed by
such Material Subsidiary and (ii) the items with respect to such Material
Subsidiary that would have been delivered under Sections 6.1.(a)(iv) through
(viii) if such Material Subsidiary had been one on the Effective Date; provided,
however, promptly (and in any event within 30 days) upon any Excluded Subsidiary
that is a Material Subsidiary ceasing to be subject to the restriction which
prevented it from delivering an Accession Agreement pursuant to this Section,
such Subsidiary shall comply with the provisions of this Section.
(b) The Borrower may, at its option, cause any Subsidiary that is not already a
Guarantor to become a Guarantor by executing and delivering to the Agent the
items required to be delivered under Section 4.1.(d) with respect to a
Subsidiary that owns or leases an Unencumbered Borrowing Base Property.
Section 8.15. Release of Guarantors.
The Borrower may request in writing that the Administrative Agent release, and
upon receipt of such request the Administrative Agent shall release (subject to
the terms of the Guaranty), a Guarantor from the Guaranty so long as: (i) such
Guarantor meets, or will meet simultaneously with its release from the Guaranty,
all of the provisions of the definition of the term “Excluded Subsidiary” or has
ceased to be, or simultaneously with its release from the Guaranty will cease to
be, a Material Subsidiary or a Subsidiary, or in the case of a Material
Subsidiary that does not own or lease an Unencumbered Borrowing Base Property,
such release will not result in a violation of Section 10.1.(g) or (h);
(ii) such Guarantor is not otherwise required to be a party to the Guaranty
under Section 8.14.(a); (iii) no Default or Event of Default shall then be in
existence or would occur as a result of such release, including without
limitation, a Default or Event of Default resulting from a violation of any of
the covenants contained in Section 10.1.; (iv) the representations and
warranties made or deemed made by the Borrower and each other Loan Party in the
Loan Documents to which any of them is a party, shall be true and correct on and
as of the date of such release with the same force and effect as if made on and
as of such date except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and accurate on and as of such earlier date)
and except for changes in factual circumstances not prohibited under the Loan
Documents; and (v) the Administrative Agent shall have received such written
request at least 10 Business Days (or such shorter

 

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period as may be acceptable to the Administrative Agent) prior to the requested
date of release. Delivery by the Borrower to the Administrative Agent of any
such request shall constitute a representation by the Borrower that the matters
set forth in the preceding sentence (both as of the date of the giving of such
request and as of the date of the effectiveness of such request) are true and
correct with respect to such request. If such Guarantor owns an Unencumbered
Borrowing Base Property, then the release of such Guarantor shall also be
subject to and in accordance with Section 4.2. The Administrative Agent agrees
to furnish to the Borrower, at the Borrower’s request and at the Borrower’s sole
cost and expense, any release, termination, or other agreement or document
evidencing the foregoing release as may be reasonably requested by the Borrower.
Article IX. Information
For so long as this Agreement is in effect, unless the Requisite Lenders (or, if
required pursuant to Section 13.7., all of the Lenders) shall otherwise consent
in the manner set forth in Section 13.7., the Borrower shall furnish to the
Administrative Agent for distribution to each of the Lenders:
Section 9.1. Quarterly Financial Statements.
As soon as available and in any event within 5 days after the same is required
to be filed with the Securities and Exchange Commission (but in no event later
than 45 days after the end of each of the first, second and third fiscal
quarters of the Parent), the unaudited consolidated balance sheet of the Parent
and its Subsidiaries as at the end of such period and the related unaudited
consolidated statements of income and cash flows of the Parent and its
Subsidiaries for such period, setting forth in each case in comparative form the
figures as of the end of and for the corresponding periods of the previous
fiscal year, all of which shall be certified by the chief executive officer, or
chief financial officer or chief accounting officer of the Parent, in his or her
opinion, to present fairly, in accordance with GAAP and in all material
respects, the consolidated financial position of the Parent and its Subsidiaries
as at the date thereof and the results of operations for such period (subject to
normal year-end audit adjustments); provided, however, the Parent shall not be
required to deliver an item required under this Section if such item is
contained in a Form 10-Q filed by the Parent with the Securities and Exchange
Commission (or any Governmental Authority substituted therefore) and is publicly
available to the Administrative Agent and the Lenders.
Section 9.2. Year-End Statements.
As soon as available and in any event within 5 days after the same is required
to be filed with the Securities and Exchange Commission (but in no event later
than 120 days after the end of each fiscal year of the Parent), the audited
consolidated balance sheet of the Parent and its Subsidiaries as at the end of
such fiscal year and the related audited consolidated statements of income,
shareholders’ equity and cash flows of the Parent and its Subsidiaries for such
fiscal year, setting forth in comparative form the figures as at the end of and
for the previous fiscal year, all of which shall be (a) certified by the chief
executive officer, chief financial officer or chief accounting officer of the
Parent, in his or her opinion, to present fairly, in accordance with GAAP and in
all material respects, the consolidated financial position of the Parent, the
Borrower and its other Subsidiaries as at the date thereof and the results of
operations for such period and (b) accompanied by the report thereon of an
Approved Accounting Firm, whose certificate shall be unqualified and in scope
and substance reasonably satisfactory to the Administrative Agent and who shall
have authorized the Borrower to deliver such financial statements and
certification thereof to the Administrative Agent and the Lenders pursuant to
this Agreement; provided, however, the Parent shall not be required to deliver
an item required under this Section if such item is contained in a Form 10-K
filed by the Parent with the Securities and Exchange Commission (or any
Governmental Authority substituted therefore) and is publicly available to the
Administrative Agent and the Lenders.

 

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Section 9.3. Compliance Certificate.
At the time financial statements are furnished pursuant to Sections 9.1. and
9.2., and if the Requisite Lenders reasonably believe that an Event of Default
specified in Sections 11.1.(a), 11.1.(b), 11.1.(c)(1) resulting from
noncompliance with Section 10.1. and 11.1.(f) or a Default specified in
Section 11.1.(g) may occur, then within 10 days of the Administrative Agent’s
request with respect to any other fiscal period, a certificate substantially in
the form of Exhibit I (a “Compliance Certificate”) executed by the chief
financial officer or chief accounting officer of the Parent, among other things,
(a) setting forth in reasonable detail as of the end of such quarterly
accounting period, fiscal year, or other fiscal period, as the case may be, the
calculations required to establish whether the Borrower was in compliance with
the covenants contained in Sections 10.1., 10.2 and 10.4.; and (b) stating that,
to the best of his or her knowledge, information and belief after due inquiry,
no Default, Event of Default or breach of any covenant under this Credit
Agreement exists, or, if such is not the case, specifying such Default or Event
of Default and its nature, when it occurred, whether it is continuing and the
steps being taken by the Borrower with respect to such event, condition or
failure. Together with the delivery of each Compliance Certificate, the Borrower
shall deliver (A) a report, in form and detail reasonably satisfactory to the
Administrative Agent, setting forth a statement of Adjusted Funds From
Operations for the fiscal period then ending; (B) a list of all Persons that
have become a Material Subsidiary or a Significant Subsidiary since the date of
the Compliance Certificate most recently delivered by the Borrower hereunder and
(C) a report of newly acquired Properties, including their Net Operating Income
for the period of four consecutive fiscal quarters most recently ending,
purchase price, and principal amount of the mortgage debt as of the date of such
Compliance Certificate, if any, since the date of the Compliance Certificate
most recently delivered by the Borrower hereunder.
Section 9.4. Other Information.
(a) Management Reports. Promptly upon receipt thereof, copies of all reports, if
any, submitted to the Parent or its Board of Directors by its independent public
accountants, including without limitation, any management report;
(b) Securities Filings. Within 5 Business Days of the filing thereof, copies of
all registration statements (excluding the exhibits thereto (unless reasonably
requested by the Administrative Agent) and any registration statements on Form
S-8 or its equivalent), reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) and all other periodic reports which the Parent, the Borrower, any
other Loan Party or any other Subsidiary shall file with the Securities and
Exchange Commission (or any Governmental Authority substituted therefor) or any
national securities exchange. The materials described in this subsection shall
be deemed to have been delivered to each Lender if same are contained in a
filing by the Parent with the Securities and Exchange Commission (or any
Governmental Authority substituted therefor) and is publicly available to the
Administrative Agent and the Lenders, or if same are otherwise available on
Parent’s website;
(c) Shareholder Information. Promptly upon the mailing thereof to the
shareholders of the Parent generally, copies of all financial statements,
reports and proxy statements so mailed and promptly upon the issuance thereof
copies of all press releases issued by the Parent, the Borrower, other Loan
Party or any other Subsidiary;

 

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(d) Partnership Information. To the extent not delivered in connection with
clause (c) above, promptly upon the mailing thereof to the partners of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(e) Development Property Updates. At the time financial statements are furnished
pursuant to Sections 9.1. and 9.2., a schedule of all Development Properties of
the Parent, the Borrower and each other Subsidiary (including Frenchman’s Reef &
Morning Star Marriott Beach Resort in St. Thomas, Virgin Islands if such
Property has been excluded as a Development Property under the last sentence of
Section 10.1.) which are under development as of the fiscal quarter most
recently ended, setting forth for each such Property its percentage of
completion, the estimated completion date, the total amount of development
funded and the status of such development against the development budget;
(f) Litigation. To the extent the Parent, the Borrower, any other Loan Party or
any other Subsidiary is aware of the same, prompt notice of the commencement of
any proceeding or investigation by or before any Governmental Authority and any
action or proceeding in any court or other tribunal or before any arbitrator
against or in any other way relating adversely to, or adversely affecting, such
Person or any of its respective properties, assets or businesses which could
reasonably be expected to have a Material Adverse Effect, and prompt notice of
the receipt of notice that any United States income tax returns of the Parent,
the Borrower, any other Loan Party or any other Subsidiary are being audited;
(g) Change of Management or Financial Condition. Prompt notice of any change in
the senior management of the Parent or the Borrower and any change in the
business, assets, liabilities, financial condition or results of operations of
the Parent, the Borrower, any other Loan Party or any other Subsidiary which has
had, or could reasonably be expected to have, a Material Adverse Effect;
(h) Default. Notice of the occurrence of any of the following promptly upon a
Responsible Officer of the Parent obtaining knowledge thereof: (i) any Default
or Event of Default or (ii) any event which with the passage of time, the giving
of notice, or otherwise, would permit any party to a Material Contract to
terminate such Material Contract;
(i) Judgments. Prompt notice of any order, judgment or decree in excess of
$5,000,000 having been entered against the Parent, the Borrower, any other Loan
Party or any other Subsidiary or any of their respective properties or assets;
(j) Notice of Violation of Law. Prompt notice if the Parent, the Borrower or any
other Subsidiary shall receive any notification from any Governmental Authority
alleging a violation of any Applicable Law or any inquiry which, in either case,
could reasonably be expected to have a Material Adverse Effect;
(k) Material Contracts. Promptly upon entering into any Material Contract after
the Agreement Date (other than a Material Contract evidencing Indebtedness), a
copy to the Administrative Agent of such Material Contract unless such Material
Contract is otherwise publicly available to the Administrative Agent in a Form
10-K, 10-Q and/or 8-K (or their equivalents) or any other periodic report which
the Parent, the Borrower, or any other Subsidiary files with the Securities and
Exchange Commission; provided, that the Borrower shall not be required to
deliver to the Administrative Agent a copy of any Material Contract that
contains a confidentiality provision prohibiting such disclosure; provided
further that the Borrower shall use its commercially reasonable efforts to
obtain the other party’s consent to disclose such Material Contract to the
Administrative Agent and the Lenders;

 

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(l) ERISA. If any ERISA Event shall occur that individually, or together with
any other ERISA Event that has occurred, could reasonably be expected to result
in liability to any member of the ERISA Group aggregating in excess of
$10,000,000, a certificate of the chief executive officer or chief financial
officer of the Parent setting forth details as to such occurrence and the
action, if any, which the Parent or applicable member of the ERISA Group is
required or proposes to take;
(m) Material/Significant Subsidiary. Prompt notice of any Person becoming a
Material Subsidiary or a Significant Subsidiary;
(n) Material Asset Sales. Prompt notice of the sale, transfer or other
disposition of any assets having an undepreciated book value of at least
$20,000,000 of the Parent, the Borrower, any Subsidiary or any other Loan Party
to any Person other than the Parent, the Borrower, any Subsidiary or any other
Loan Party;
(o) Ownership Share of Subsidiaries and Unconsolidated Affiliates. Promptly upon
the request of the Administrative Agent, evidence of the Parent’s calculation of
the Ownership Share with respect to a Subsidiary or an Unconsolidated Affiliate,
such evidence to be in form and detail satisfactory to the Administrative Agent;
(p) Projections and Budgets. Within ninety (90) days after the end of each
calendar year ending prior to the Termination Date, (x) projected sources and
uses of cash statements, balance sheets, income statements, EBITDA, and Adjusted
Funds From Operation, of the Parent, the Borrower and the other Subsidiaries on
a consolidated and annual basis for the next succeeding fiscal year and, to the
extent available, for the next three succeeding fiscal years, all itemized in
reasonable detail; (y) operating statements for the prior year, a property
budget for the then current year and planned capital expenditure budget on both
an individual and consolidated basis for each Property of the Parent, the
Borrower and each of the other Subsidiaries and (z) the most current Smith
Travel Research STAR Report available, which will compare the individual
Unencumbered Borrowing Base Properties to the primary competitive set. The
foregoing shall be accompanied by pro forma calculations, together with detailed
assumptions, required to establish whether or not the Borrower, and when
appropriate its consolidated Subsidiaries, will be in compliance with the
covenants contained in Section 10.1. at the end of each fiscal quarter of the
next succeeding fiscal year;
(q) Other Information. From time to time and promptly upon each request, such
data, certificates, reports, statements, opinions of counsel, documents or
further information regarding any Property or the business, assets, liabilities,
financial condition, results of operations or business prospects of the Parent,
the Borrower, any other Loan Party or any other Subsidiary as the Administrative
Agent or any Lender may reasonably request (subject to limitations imposed under
confidentiality requirements and agreements to which the Parent, Borrower or a
Subsidiary is subject).

 

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Section 9.5. Electronic Delivery of Certain Information.
(a) Documents required to be delivered pursuant to the Loan Documents shall be
delivered by electronic communication and delivery, including, the Internet,
e-mail or intranet websites to which the Administrative Agent and each Lender
have access (including a commercial, third-party website such as www.Edgar.com
<http://www.Edgar.com> or a website sponsored or hosted by the Administrative
Agent or the Borrower) provided that the foregoing shall not apply to
(i) notices to any Lender (or the Issuing Bank) pursuant to Article II. and
(ii) any Lender that has notified the Administrative Agent and the Borrower that
it cannot or does not want to receive electronic communications. The
Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic delivery pursuant
to procedures approved by it for all or particular notices or communications.
Documents or notices delivered electronically shall be deemed to have been
delivered twenty-four (24) hours after the date and time on which the
Administrative Agent or the Borrower posts such documents or the documents
become available on a commercial website and the Administrative Agent or
Borrower notifies each Lender of said posting and provides a link thereto
provided if such notice or other communication is not sent or posted during the
normal business hours of the recipient, said posting date and time shall be
deemed to have commenced as of 9:00 a.m. Pacific time on the opening of business
on the next Business Day for the recipient. Notwithstanding anything contained
herein, in every instance the Borrower shall be required to provide paper copies
of the certificate required by Section 9.3. to the Administrative Agent and
shall deliver paper copies of any documents to the Administrative Agent or to
any Lender that requests such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender.
Except for the certificates required by Section 9.3., the Administrative Agent
shall have no obligation to request the delivery of or to maintain paper copies
of the documents delivered electronically, and in any event shall have no
responsibility to monitor compliance by the Borrower with any such request for
delivery. Each Lender shall be solely responsible for requesting delivery to it
of paper copies and maintaining its paper or electronic documents.
(b) Documents required to be delivered pursuant to Article II. may be delivered
electronically to a website provided for such purpose by the Administrative
Agent pursuant to the procedures provided to the Borrower by the Administrative
Agent.
Section 9.6. Public/Private Information.
The Borrower shall cooperate with the Administrative Agent in connection with
the publication of certain materials and/or information provided by or on behalf
of the Borrower. Documents required to be delivered pursuant to the Loan
Documents shall be delivered by or on behalf of the Borrower to the
Administrative Agent and the Lenders (collectively, “Information Materials”)
pursuant to this Article and the Borrower shall designate Information Materials
(a) that are either available to the public or not material with respect to the
Borrower and its Subsidiaries or any of their respective securities for purposes
of United States federal and state securities laws, as “Public Information” and
(b) that are not Public Information as “Private Information”.
Section 9.7. USA Patriot Act Notice; Compliance.
The USA Patriot Act of 2001 (Public Law 107-56) and federal regulations issued
with respect thereto require all financial institutions to obtain, verify and
record certain information that identifies individuals or business entities
which open an “account” with such financial institution. Consequently, a Lender
(for itself and/or as Administrative Agent for all Lenders hereunder) may from
time-to-time request, and the Borrower shall, and shall cause the other Loan
Parties, to provide to such Lender, such Loan Party’s name, address, tax
identification number and/or such other identification information as shall be
necessary for such Lender to comply with federal law. An “account” for this
purpose may include, without limitation, a deposit account, cash management
service, a transaction or asset account, a credit account, a loan or other
extension of credit, and/or other financial services product.

 

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Article X. Negative Covenants
For so long as this Agreement is in effect, unless the Requisite Lenders (or, if
required pursuant to Section 13.7., all of the Lenders) shall otherwise consent
in the manner set forth in Section 13.7., the Parent and the Borrower shall
comply with the following covenants in accordance with their respective terms:
Section 10.1. Financial Covenants.
(a) Maximum Leverage Ratio. The Parent and the Borrower shall not permit the
ratio of (i) Total Indebtedness to (ii) Total Asset Value to exceed 0.60 to 1.00
at any time.
(b) Minimum Fixed Charge Coverage Ratio. The Parent and the Borrower shall not
at any time permit the ratio of (i) Adjusted EBITDA of the Parent and its
Subsidiaries for the period of twelve consecutive fiscal months most recently
ending to (ii) Fixed Charges for such period, to be less than the minimum ratio
set forth in the table below corresponding to such period:

              Minimum Fixed Charge   Period Ending   Coverage Ratio  
On or before June 29, 2012
    1.30 to 1.00  
On or after June 30, 2012 and on or before June 29, 2013
    1.40 to 1.00  
On or after June 30, 2013
    1.50 to 1.00  

(c) Floating Rate Indebtedness. The Parent and the Borrower shall not permit the
ratio of (i) Floating Rate Indebtedness of the Parent and its Subsidiaries
determined on a consolidated basis to (ii) Total Indebtedness, to exceed 0.35 to
1.00 at any time.
(d) Minimum Tangible Net Worth. The Parent and the Borrower shall not permit
Tangible Net Worth at any time to be less than (i) $1,300,000,000 plus (ii) 85%
of the Net Tangible Proceeds of all Equity Issuances effected by the Parent and
its Subsidiaries after March 26, 2010 (other than Equity Issuances to the
Parent, the Borrower or any Subsidiary).
(e) Secured Recourse Indebtedness. The Parent and the Borrower shall not permit
the aggregate amount of Secured Recourse Indebtedness of the Parent and its
Subsidiaries determined on a consolidated basis to exceed $25,000,000 at any
time.

 

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(f) Unsecured Indebtedness. The Parent and the Borrower shall not, and shall not
permit any other Loan Party or any other Subsidiary to, create, incur, assume or
suffer to exist any Unsecured Indebtedness, except for the following:
(i) the Obligations;
(ii) intercompany Unsecured Indebtedness among (i) the Parent and the Borrower
and (ii) the Borrower and its Wholly Owned Subsidiaries provided that such
Indebtedness is permitted by the terms of Section 10.3. and Section 10.5.;
(iii) Guarantees incurred by the Borrower or any Guarantor in respect of
Unsecured Indebtedness of the Borrower, the Parent or any other Guarantor that
is otherwise permitted by this subsection (f);
(iv) Unsecured Indebtedness of the Parent, the Borrower or any other Subsidiary
in respect of (x) overdraft facilities, employee and corporate credit card
programs, netting services, automatic clearinghouse arrangements and other cash
management and similar arrangements, in each case incurred or arising in the
ordinary course of business; and (y) obligations to pay insurance premiums, and
take or pay obligations contained in supply agreements, in each case incurred or
arising in the ordinary course of business (including in respect of construction
or restoration activities); provided, however, that the aggregate outstanding
amount of all such obligations and liabilities under this subsection (iv) shall
not exceed $2,000,000 at any time; or
(v) Obligations of the Parent, the Borrower, or any other Subsidiary to acquire
real estate or any other assets under purchase agreements, construction
contracts, renovation contracts or any other similar agreement, in each case,
entered into in the ordinary course of business.
(g) Minimum Number and Value of Unencumbered Borrowing Base Properties. The
number of Unencumbered Borrowing Base Properties shall not be less than 5 at any
time and the aggregate Unencumbered Borrowing Base Values (determined without
giving effect to the 55.0% reduction provided in the definition of such term) of
the Unencumbered Borrowing Base Properties shall not be less than $250,000,000
at any time.
(h) Adjusted Total Asset Value. The Parent and the Borrower shall not permit the
amount of Adjusted Total Asset Value attributable to assets directly owned by
the Borrower and the Guarantors to be less than 90.0% of Adjusted Total Asset
Value at any time.
Notwithstanding the foregoing or Section 11.1.(c)(i), (x) the Parent and the
Borrower shall not be required to comply with the financial covenants contained
in this Section during any fiscal quarter in which no Loans and no Letters of
Credit Liabilities are outstanding; provided, that the Borrower must be in
compliance with such financial covenants as a condition to the making of a Loan
or the issuance of a Letter of Credit as provided in Section 6.2.; provided
further any such period of noncompliance by the Parent and the Borrower shall
not apply to more than two fiscal quarters during the term of this Agreement.
Solely with respect to the 2011 calendar year, the Borrower may, by written
notice to the Administrative Agent, elect to have all financial attributes,
including without limitation, Indebtedness, interest expense, income (or loss),
attributable to the Frenchman’s Reef & Morning Star Marriott Beach Resort in St.
Thomas, Virgin Islands excluded from calculations of the financial covenants
contained in this Section and in Section 10.1. (and to have such asset excluded
from the definition of Development Property) so long as, at such time of the
Borrower’s election (i) such Property is undergoing an extensive renovation and
(ii) the Borrower has deposited $4,200,000 in a deposit account in which the
Borrower has granted a Lien to the Administrative Agent for the benefit of the
Lenders, as security for the Obligations and over which the Administrative Agent
has control.

 

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Section 10.2. Restricted Payments.
Subject to the following sentence, if an Event of Default exists, the Parent
shall not, and shall not permit any of its Subsidiaries to, declare or make any
Restricted Payments except that, subject to the following sentence, the Borrower
may declare and make cash distributions to the Parent and other holders of
partnership interests in the Borrower, and the Parent may declare and make cash
distributions to its shareholders, each, in an aggregate amount not to exceed
the minimum amount necessary for the Parent to remain in compliance with
Section 8.12. If an Event of Default specified in Section 11.1.(a),
Section 11.1.(b), Section 11.1.(f) or Section 11.1.(g) shall exist, or if as a
result of the occurrence of any other Event of Default any of the Obligations
have been accelerated pursuant to Section 11.2.(a), the Parent and the Borrower
shall not, and shall not permit any Subsidiary to, make any Restricted Payments
to any Person except that Subsidiaries may pay Restricted Payments to the
Parent, the Borrower or any other Subsidiary.
Section 10.3. Indebtedness.
The Parent and the Borrower shall not, and shall not permit any Subsidiary to,
incur, assume, or otherwise become obligated in respect of any Indebtedness
after the Agreement Date if immediately prior to the assumption, incurring or
becoming obligated in respect thereof, or immediately thereafter and after
giving effect thereto, a Default or Event of Default is or would be in
existence, including without limitation, a Default or Event of Default resulting
from a violation of any of the covenants contained in Section 10.1.
Section 10.4. Certain Permitted Investments.
The Parent and the Borrower shall not, and shall not permit any Loan Party or
other Subsidiary to, make any Investment in or otherwise own the following items
which would cause the aggregate value of such holdings of the Parent, the
Borrower and such other Subsidiaries to exceed the applicable limits set forth
below:
(a) Investments in Unconsolidated Affiliates and other Persons that are not
Subsidiaries, such that the aggregate value of such Investments (determined in a
manner consistent with the definition of Total Asset Value or, if not
contemplated under the definition of Total Asset Value, as determined in
accordance with GAAP) exceeds the greater of 10.0% of Total Asset Value and
$200,000,000 at any time;
(b) Development Properties, such that the aggregate current book value of all
such Development Properties exceeds 5.0% of Total Asset Value at any time;
(c) Unimproved Land such that the aggregate book value of all such Unimproved
Land exceeds 5.0% of Total Asset Value at any time; and
(d) Mortgage Receivables, such that the aggregate book value of such Mortgage
Receivables exceeds the greater of 10.0% of Total Asset Value and $200,000,000
at any time.

 

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In addition to the foregoing limitations, the aggregate value of all of the
items subject to the limitations in the preceding clauses (a) through (d) shall
not exceed 20.0% of Total Asset Value at any time.
Section 10.5. Investments Generally.
The Parent and the Borrower shall not, and shall not permit any other Loan Party
or any other Subsidiary to, directly or indirectly, acquire, make or purchase
any Investment, or permit any Investment of such Person to be outstanding on and
after the Agreement Date, other than the following:
(a) Investments in Subsidiaries in existence on the Agreement Date and disclosed
on Part I of Schedule 7.1.(b);
(b) Investments to acquire Equity Interests of a Subsidiary or any other Person
who after giving effect to such acquisition would be a Subsidiary, so long as in
each case immediately prior to such Investment, and after giving effect thereto,
no Default or Event of Default is or would be in existence;
(c) Investments permitted under Section 10.4.;
(d) Investments in Cash Equivalents;
(e) intercompany Indebtedness among (i) the Parent and the Borrower and (ii) the
Borrower and its Wholly Owned Subsidiaries provided that such Indebtedness is
permitted by the terms of Section 10.3. and Section 10.1.(f);
(f) Guarantees incurred by the Borrower or any Guarantor in respect of Unsecured
Indebtedness of the Borrower, the Parent or any other Guarantor that is
otherwise permitted by Section 10.1.(f);
(g) loans and advances to employees for moving, entertainment, travel and other
similar expenses in the ordinary course of business consistent with past
practices; and
(h) any other Investment as long as immediately prior to making such Investment,
and immediately thereafter and after giving effect thereto, no Default or Event
of Default is or would be in existence.
Section 10.6. Negative Pledge.
(a) The Parent and the Borrower shall not, and shall not permit any other Loan
Party or any other Subsidiary to, create, assume, or incur any Lien (other than
Permitted Liens and Liens on assets of an Excluded Subsidiary securing the
Indebtedness which causes such Subsidiary to be an Excluded Subsidiary) upon any
of its properties, assets, income or profits of any character whether now owned
or hereafter acquired if immediately prior to the creation, assumption or
incurring of such Lien, or immediately thereafter, a Default or Event of Default
is or would be in existence.

 

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(b) The Parent and the Borrower shall not, and shall not permit any other Loan
Party or any other Subsidiary to, enter into, assume or otherwise be bound by
any Negative Pledge except for a Negative Pledge contained in any agreement
(i)(x) evidencing Indebtedness which the Parent, the Borrower, such other Loan
Party or such Subsidiary may create, incur, assume, or permit or suffer to exist
under Section 10.3., (y) which Indebtedness is secured by a Lien permitted to
exist, and (z) which prohibits the creation of any other Lien on only the
property securing such Indebtedness as of the date such agreement was entered
into; or (ii) relating to the sale of a Subsidiary or assets pending such sale,
provided that in any such case the Negative Pledge applies only to the
Subsidiary or the assets that are the subject of such sale.
(c) The Parent and the Borrower shall not, and shall not permit any other Loan
Party or any other Subsidiary (other than an Excluded Subsidiary) to, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary (other
than an Excluded Subsidiary) to: (i) pay dividends or make any other
distribution on any of such Subsidiary’s capital stock or other equity interests
owned by the Borrower or any Subsidiary; (ii) pay any Indebtedness owed to the
Parent, the Borrower or any other Subsidiary; (iii) make loans or advances to
the Parent, the Borrower or any other Subsidiary; or (iv) transfer any of its
property or assets to the Parent, the Borrower or any other Subsidiary, except
for any such encumbrances or restrictions, (A) contained in agreements relating
to the sale of a Subsidiary or assets pending such sale, or relating to
Indebtedness secured by a Lien on assets that the Borrower or such Subsidiary
may create, incur, assume, or permit or suffer to exist under Sections 10.3. and
10.6.(a), provided that in any such case the encumbrances and restrictions apply
only to the Subsidiary or the assets that are the subject of such sale or Lien,
as the case may be, (B) set forth in the organizational documents or other
agreements binding on or applicable to any Excluded Subsidiary or any Subsidiary
that is not a Wholly Owned Subsidiary (but only to the extent such encumbrance
or restriction covers any Equity Interest in such Subsidiary or the property or
assets of such Subsidiary) or (C) contained in an agreement that governs an
Investment in an Unconsolidated Affiliate (but only to the extent such
encumbrance or restriction covers any Equity Interest in such Unconsolidated
Affiliate).
Section 10.7. Merger, Consolidation, Sales of Assets and Other Arrangements.
The Parent and the Borrower shall not, and shall not permit any other Loan Party
or any other Subsidiary to: (i) enter into any transaction of merger or
consolidation; (ii) liquidate, windup or dissolve itself (or suffer any
liquidation or dissolution); or (iii) convey, sell, lease, sublease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or any
substantial part of its business or assets, or the capital stock of or other
Equity Interests in any of its Subsidiaries, whether now owned or hereafter
acquired; provided, however, that:
(a) any of the actions described in the immediately preceding clauses
(i) through (iii) may be taken with respect to any Subsidiary so long as
(x) immediately prior to the taking of such action, and immediately thereafter
and after giving effect thereto, no Default or Event of Default is or would be
in existence, (y) if such action includes the sale of all Equity Interests in a
Subsidiary that is a Guarantor owned directly or indirectly by the Parent, such
Subsidiary can and will be released from the Guaranty in accordance with
Section 8.15 and (z) if such action includes the disposition of an Unencumbered
Borrowing Base Property (regardless of whether such disposition takes the form
of a direct sale of such Unencumbered Borrowing Base Property, the sale of the
Equity Interests of the Subsidiary that owns such Unencumbered Borrowing Base
Property or a merger of such Subsidiary), such Unencumbered Borrowing Base
Property can and will be released in accordance with Section 4.2.;

 

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(b) the Parent, the Borrower, the other Loan Parties and the other Subsidiaries
may lease and sublease their respective assets, as lessor or sublessor (as the
case may be), in the ordinary course of their business;
(c) a Person may merge with a Loan Party so long as (i) the survivor of such
merger is such Loan Party or becomes a Loan Party at the time of such merger,
(ii) immediately prior to such merger, and immediately thereafter and after
giving effect thereto, (x) no Default or Event of Default is or would be in
existence, including, without limitation, a Default or Event of Default
resulting from a breach of Section 10.1. and (y) the representations and
warranties made or deemed made by the Borrower and each other Loan Party in the
Loan Documents to which any of them is a party are and shall be true and correct
in all material respects, except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and correct in all material
respects on and as of such earlier date) and except for changes in factual
circumstances not prohibited under the Loan Documents, (iii) the Borrower shall
have given the Agent at least 30-days’ prior written notice of such merger, such
notice to include a certification as to the matters described in the immediately
preceding clause (ii) (except that such prior notice shall not be required in
the case of the merger of a Subsidiary that does not own an Unencumbered
Borrowing Base Property with and into a Loan Party but the Borrower shall give
the Agent notice of any such merger promptly following the effectiveness of such
merger) and (4) at the time the Borrower gives notice pursuant to clause (1) of
this subsection, the Borrower shall have delivered to the Administrative Agent
for distribution to each of the Lenders a Compliance Certificate, calculated on
a pro forma basis, evidencing the continued compliance by the Loan Parties, as
applicable, with the terms and conditions of this Agreement and the other Loan
Documents, including without limitation, the financial covenants contained in
Section 10.1., after giving effect to such consolidation, merger, acquisition,
Investment, sale, lease or other transfer and any prepayment of Loans to be made
in connection therewith; and
(d) the Parent, the Borrower and each other Subsidiary may sell, transfer or
dispose of assets among themselves.
Further, no Loan Party nor any Subsidiary, shall enter into any sale-leaseback
transactions or other transaction by which such Person shall remain liable as
lessee (or the economic equivalent thereof) of any real or personal property
that it has sold or leased to another Person.
Section 10.8. Fiscal Year.
The Parent shall not change its fiscal year from that in effect as of the
Agreement Date; provided that if Marriot International, Inc. shall change its
fiscal year to a calendar fiscal year, the Parent may change its fiscal year to
a calendar fiscal year.

 

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Section 10.9. Modifications of Material Contracts.
The Parent and the Borrower shall not enter into, and shall not permit any
Subsidiary or other Loan Party to enter into, any amendment or modification to
any Material Contract which could reasonably be expected to have a Material
Adverse Effect.
Section 10.10. Modifications of Organizational Documents.
The Parent and the Borrower shall not, and shall not permit any other Loan Party
or any other Subsidiary to, amend, supplement, restate or otherwise modify its
certificate or articles of incorporation or formation, by-laws, operating
agreement, declaration of trust, partnership agreement or other applicable
organizational document if such amendment, supplement, restatement or other
modification (a) is materially adverse to the interest of the Administrative
Agent, the Issuing Bank or the Lenders or (b) could reasonably be expected to
have a Material Adverse Effect.
Section 10.11. Transactions with Affiliates.
The Parent and the Borrower shall not permit to exist or enter into, and shall
not permit any other Loan Party or any other Subsidiary to permit to exist or
enter into, any transaction (including the purchase, sale, lease or exchange of
any property or the rendering of any service) with any Affiliate (other than the
Parent, the Borrower, any other Loan Party or any Wholly Owned Subsidiary),
except transactions in the ordinary course of and pursuant to the reasonable
requirements of the business of the Parent, the Borrower, such other Loan Party
or such other Subsidiary and upon fair and reasonable terms which are no less
favorable to the Parent, the Borrower, such other Loan Party or such other
Subsidiary, as applicable, than would be obtained in a comparable arm’s length
transaction with a Person that is not an Affiliate.
Section 10.12. ERISA Exemptions.
The Parent and the Borrower shall not, and shall not permit any other Loan Party
or any other Subsidiary to, permit any of its respective assets to become or be
deemed to be “plan assets” within the meaning of ERISA, the Internal Revenue
Code and the respective regulations promulgated thereunder. The Parent and the
Borrower shall not cause or permit to occur, and shall not permit any other
member of the ERISA Group to cause or permit to occur, any ERISA Event if such
ERISA Event could reasonably be expected to have a Material Adverse Effect.
Section 10.13. Environmental Matters.
The Parent and the Borrower shall not, and shall not permit any other Loan
Party, any other Subsidiary or any other Person to, use, generate, discharge,
emit, manufacture, handle, process, store, release, transport, remove, dispose
of or clean up any Hazardous Materials on, under or from the Properties in
material violation of any Environmental Law or in a manner that could reasonably
be expected to lead to any material environmental claim or pose a material risk
to human health, safety or the environment. Nothing in this Section shall impose
any obligation or liability whatsoever on the Administrative Agent or any
Lender.

 

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Section 10.14. Derivatives Contracts.
The Parent and the Borrower shall not, and shall not permit any other Loan Party
or any other Subsidiary to, enter into or become obligated in respect of,
Derivatives Contracts, other than Derivatives Contracts entered into by the
Parent, the Borrower, any such Loan Party or any such Subsidiary in the ordinary
course of business and which establish an effective hedge in respect of
liabilities, commitments or assets held or reasonably anticipated by the Parent,
the Borrower, such other Loan Party or such other Subsidiary.
Article XI. Default
Section 11.1. Events of Default.
Each of the following shall constitute an Event of Default, whatever the reason
for such event and whether it shall be voluntary or involuntary or be effected
by operation of Applicable Law or pursuant to any judgment or order of any
Governmental Authority:
(a) Default in Payment of Principal. The Borrower shall fail to pay when due
(whether upon demand, at maturity, by reason of acceleration or otherwise) the
principal of any of the Loans, or any Reimbursement Obligation.
(b) Default in Payment of Interest and Other Obligations. The Borrower shall
fail to pay when due any interest on any of the Loans or any of the other
payment Obligations owing by the Borrower under this Agreement, any other Loan
Document or the Fee Letter or any other Loan Party shall fail to pay when due
any payment Obligation owing by such other Loan Party under any Loan Document to
which it is a party, and such failure shall continue for a period of 3 Business
Days.
(c) Default in Performance.
(i) Any Loan Party shall fail to perform or observe any term, covenant,
condition or agreement on its part to be performed or observed and contained in
Section 9.4. (h), or Article X.; or
(ii) Any Loan Party shall fail to perform or observe any term, covenant,
condition or agreement contained in this Agreement or any other Loan Document to
which it is a party and not otherwise mentioned in this Section, and in the case
of this clause (ii) only, such failure shall continue for a period of 30 days
after the earlier of (x) the date upon which a Responsible Officer of the Parent
or the Borrower obtains knowledge of such failure or (y) the date upon which the
Parent or any other Loan Party has received written notice of such failure from
the Administrative Agent.
(d) Misrepresentations. Any written statement, representation or warranty made
or deemed made by or on behalf of any Loan Party under this Agreement or under
any other Loan Document, or any amendment hereto or thereto, or in any other
writing or statement at any time furnished or made or deemed made by, or on
behalf of, any Loan Party to the Administrative Agent, the Issuing Bank or any
Lender, shall at any time prove to have been incorrect or misleading, in light
of the circumstances in which made or deemed made, in any material respect when
furnished or made or deemed made.

 

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(e) Indebtedness Cross-Default; Derivatives Contracts.
(i) The Borrower, any other Loan Party or any other Subsidiary shall fail to pay
when due and payable, within any applicable grace or cure period, the principal
of, or interest on, any Indebtedness (other than the Loans and Reimbursement
Obligations) having an aggregate outstanding principal amount (or, in the case
of any Derivatives Contract, having, without regard to the effect of any
close-out netting provision, a Derivatives Termination Value) of $20,000,000 or
more (or $25,000,000 or more in the case of Nonrecourse Indebtedness) (all such
Indebtedness being “Material Indebtedness”); or
(ii) (x) The maturity of any Material Indebtedness shall have been accelerated
in accordance with the provisions of any indenture, contract or instrument
evidencing, providing for the creation of or otherwise concerning such Material
Indebtedness or (y) any Material Indebtedness shall have been required to be
prepaid or repurchased prior to the stated maturity thereof; or
(iii) Any other event shall have occurred and be continuing which would permit
any holder or holders of any Material Indebtedness, any trustee or agent acting
on behalf of such holder or holders or any other Person, to accelerate the
maturity of any such Material Indebtedness or require any such Material
Indebtedness to be prepaid or repurchased prior to its stated maturity; or
(iv) There occurs an “Event of Default” under and as defined in any Derivatives
Contract as to which the Borrower, any Loan Party or any of other Subsidiary is
a “Defaulting Party” (as defined therein), or there occurs an “Early Termination
Date” (as defined therein) in respect of any such Derivatives Contract as a
result of a “Termination Event” (as defined therein) as to which the Borrower or
any of its Subsidiaries is an “Affected Party” (as defined therein), in each
case, if the Derivatives Termination Value payable by the Borrower, any other
Loan Party or any other Subsidiary exceeds $10,000,000 in the aggregate.
(f) Voluntary Bankruptcy Proceeding. The Borrower, any other Loan Party or any
Significant Subsidiary shall: (i) commence a voluntary case under the Bankruptcy
Code or other federal bankruptcy laws (as now or hereafter in effect); (ii) file
a petition seeking to take advantage of any other Applicable Laws, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts; (iii) consent to, or fail to contest in a
timely and appropriate manner, any petition filed against it in an involuntary
case under such bankruptcy laws or other Applicable Laws or consent to any
proceeding or action described in the immediately following subsection;
(iv) apply for or consent to, or fail to contest in a timely and appropriate
manner, the appointment of, or the taking of possession by, a receiver,
custodian, trustee, or liquidator of itself or of a substantial part of its
property, domestic or foreign; (v) admit in writing its inability to pay its
debts as they become due; (vi) make a general assignment for the benefit of
creditors; (vii) make a conveyance fraudulent as to creditors under any
Applicable Law; or (viii) take any corporate or partnership action for the
purpose of effecting any of the foregoing.

 

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(g) Involuntary Bankruptcy Proceeding. A case or other proceeding shall be
commenced against any Loan Party or any other Significant Subsidiary in any
court of competent jurisdiction seeking: (i) relief under the Bankruptcy Code or
other federal bankruptcy laws (as now or hereafter in effect) or under any other
Applicable Laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts; or (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of such
Person, or of all or any substantial part of the assets, domestic or foreign, of
such Person, and such case or proceeding shall continue undismissed or unstayed
for a period of 60 consecutive days, or an order granting the remedy or other
relief requested in such case or proceeding against such Loan Party or such
Significant Subsidiary (including, but not limited to, an order for relief under
such Bankruptcy Code or such other federal bankruptcy laws) shall be entered.
(h) Revocation of Loan Documents. Any Loan Party shall (or shall attempt to)
disavow, revoke or terminate any Loan Document or the Fee Letter to which it is
a party or shall otherwise challenge or contest in any action, suit or
proceeding in any court or before any Governmental Authority the validity or
enforceability of any Loan Document or the Fee Letter, or any Loan Document or
the Fee Letter shall cease to be in full force and effect (except as a result of
the express terms thereof).
(i) Judgment. A judgment or order for the payment of money or for an injunction
shall be entered against the Borrower, any other Loan Party, or any other
Subsidiary by any court or other tribunal and (i) such judgment or order shall
continue for a period of 30 days without being paid, stayed or dismissed through
appropriate appellate proceedings and (ii) either (A) the amount of such
judgment or order for which insurance has not been acknowledged in writing by
the applicable insurance carrier (or the amount as to which the insurer has
denied liability) exceeds, individually or together with all other such
outstanding judgments or orders entered against any Loan Parties or any other
Subsidiary, $20,000,000 or (B) in the case of an injunction or other
non-monetary judgment, such injunction or judgment or order could reasonably be
expected to have a Material Adverse Effect.
(j) Attachment. A warrant, writ of attachment, execution or similar process
shall be issued against any property of any Loan Party or any other Subsidiary,
which exceeds, individually or together with all other such warrants, writs,
executions and processes, $20,000,000 in amount and such warrant, writ,
execution or process shall not be paid, discharged, vacated, stayed or bonded
for a period of 30 days; provided, however, that if a bond has been issued in
favor of the claimant or other Person obtaining such warrant, writ, execution or
process, the issuer of such bond shall execute a waiver or subordination
agreement in form and substance satisfactory to the Administrative Agent
pursuant to which the issuer of such bond subordinates its right of
reimbursement, contribution or subrogation to the Obligations and waives or
subordinates any Lien it may have on the assets of any Loan Party.
(k) ERISA.
(i) Any ERISA Event shall have occurred that results or could reasonably be
expected to result in liability to any member of the ERISA Group aggregating in
excess of $20,000,000; or
(ii) The “benefit obligation” of all Plans exceeds the “fair market value of
plan assets” for such Plans by more than $20,000,000, all as determined, and
with such terms defined, in accordance with FASB ASC 715.
(l) Loan Documents. An Event of Default (as defined therein) shall occur under
any of the other Loan Documents.

 

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(m) Change of Control/Change in Management.
(i) Any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), is or
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a Person will be deemed to have “beneficial ownership”
of all securities that such Person has the right to acquire, whether such right
is exercisable immediately or only after the passage of time), directly or
indirectly, of more than 35% of the total voting power of the then outstanding
voting stock of the Parent;
(ii) During any period of 12 consecutive months ending after the Agreement Date,
individuals who at the beginning of any such 12-month period constituted the
Board of Directors of the Parent (together with any new directors whose election
by such Board or whose nomination for election by the shareholders of the Parent
was approved by a vote of a majority of the directors then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of the Parent then in office; or
(iii) The Parent or a Wholly Owned Subsidiary of the Parent shall cease to be
the sole general partner of the Borrower or shall cease to have the sole and
exclusive power to exercise all management and control over the Borrower.
Section 11.2. Remedies Upon Event of Default.
Upon the occurrence of an Event of Default the following provisions shall apply:
(a) Acceleration; Termination of Facilities.
(i) Automatic. Upon the occurrence of an Event of Default specified in
Sections 11.1.(f) or 11.1.(g), (A)(1) the principal of, and all accrued interest
on, the Loans and the Notes at the time outstanding, (2) an amount equal to the
Stated Amount of all Letters of Credit outstanding as of the date of the
occurrence of such Event of Default for deposit into the Letter of Credit
Collateral Account pursuant to Section 11.5. and (3) all of the other
Obligations, including, but not limited to, the other amounts owed to the
Lenders and the Administrative Agent under this Agreement, the Notes or any of
the other Loan Documents shall become immediately and automatically due and
payable without presentment, demand, protest, or other notice of any kind, all
of which are expressly waived by the Borrower on behalf of itself and the other
Loan Parties, and (B) the Commitments and the obligation of the Issuing Bank to
issue Letters of Credit hereunder, shall all immediately and automatically
terminate.
(ii) Optional. If any other Event of Default shall exist, the Administrative
Agent may, and at the direction of the Requisite Lenders shall: (A) declare
(1) the principal of, and accrued interest on, the Loans and the Notes at the
time outstanding, (2) an amount equal to the Stated Amount of all Letters of
Credit outstanding as of the date of the occurrence of such Event of Default for
deposit into the Letter of Credit Collateral Account pursuant to Section 11.5.
and (3) all of the other Obligations, including, but not limited to, the other
amounts owed to the Lenders and the Administrative Agent under this Agreement,
the Notes or any of the other Loan Documents to be forthwith due and payable,
whereupon the same shall immediately become due and payable without presentment,
demand, protest or other notice of any kind, all of which are expressly waived
by the Borrower on behalf of itself and the other Loan Parties, and
(B) terminate the Commitments and the obligation of the Issuing Bank to issue
Letters of Credit hereunder.

 

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(b) Loan Documents. The Requisite Lenders may direct the Administrative Agent
to, and the Administrative Agent if so directed shall, exercise any and all of
its rights under any and all of the other Loan Documents.
(c) Applicable Law. The Requisite Lenders may direct the Administrative Agent
to, and the Administrative Agent if so directed shall, exercise all other rights
and remedies it may have under any Applicable Law.
(d) Appointment of Receiver. To the extent permitted by Applicable Law, the
Administrative Agent and the Lenders shall be entitled to the appointment of a
receiver for the assets and properties of the Borrower and its Subsidiaries
(other than Excluded Subsidiaries), without notice of any kind whatsoever and
without regard to the adequacy of any security for the Obligations or the
solvency of any party bound for its payment, to take possession of all or any
portion of the property or the business operations of the Borrower and its
Subsidiaries (other than Excluded Subsidiaries) and to exercise such power as
the court shall confer upon such receiver.
(e) Specified Derivatives Contract Remedies. Notwithstanding any other provision
of this Agreement or other Loan Document, each Specified Derivatives Provider
shall have the right, with prompt notice to the Administrative Agent, but
without the approval or consent of or other action by the Administrative Agent
or the Lenders, and without limitation of other remedies available to such
Specified Derivatives Provider under contract or Applicable Law, to undertake
any of the following: (a) to declare an event of default, termination event or
other similar event under any Specified Derivatives Contract and to create an
“Early Termination Date” (as defined therein) in respect thereof, (b) to
determine net termination amounts in respect of any and all Specified
Derivatives Contracts in accordance with the terms thereof, and to set off
amounts among such contracts, (c) to set off or proceed against deposit account
balances, securities account balances and other property and amounts held by
such Specified Derivatives Provider pursuant to any Derivatives Support
Document, including any “Posted Collateral” (as defined in any credit support
annex included in any such Derivatives Support Document to which such Specified
Derivatives Provider may be a party), and (d) to prosecute any legal action
against the Parent, the Borrower, any other Loan Party or any other Subsidiary
to enforce or collect net amounts owing to such Specified Derivatives Provider
pursuant to any Specified Derivatives Contract.
Section 11.3. Remedies Upon Default.
Upon the occurrence of a Default specified in Section 11.1.(g), the Commitments
shall immediately and automatically terminate.

 

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Section 11.4. Marshaling; Payments Set Aside.
None of the Administrative Agent, the Issuing Bank or any Lender shall be under
any obligation to marshal any assets in favor of any Loan Party or any other
party or against or in payment of any or all of the Obligations or the Specified
Derivatives Obligations. To the extent that any Loan Party makes a payment or
payments to the Administrative Agent, the Issuing Bank, or any Lender, or the
Administrative Agent, the Issuing Bank or any Lender enforce their security
interests or exercise their rights of setoff, and such payment or payments or
the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then to the
extent of such recovery, the Obligations, or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor, shall be revived and
continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.
Section 11.5. Allocation of Proceeds.
If an Event of Default exists and maturity of any of the Obligations has been
accelerated, all payments received by the Administrative Agent under any of the
Loan Documents, in respect of any principal of or interest on the Obligations or
any other amounts payable by the Borrower hereunder or thereunder, shall be
applied in the following order and priority:
(a) amounts due to the Administrative Agent, the Issuing Bank and the Lenders in
respect of expenses due under Section 13.2. until paid in full, and then Fees;
(b) payments of interest on all Loans and Reimbursement Obligations to be
applied for the ratable benefit of the Lenders;
(c) payments of principal of all Loans, Reimbursement Obligations and other
Letter of Credit Liabilities, to be applied for the ratable benefit of the
Lenders; provided, however, to the extent that any amounts available for
distribution pursuant to this subsection are attributable to the issued but
undrawn amount of an outstanding Letter of Credit, such amounts shall be paid to
the Administrative Agent for deposit into the Letter of Credit Collateral
Account;
(d) amounts due to the Administrative Agent and the Lenders pursuant to
Sections 12.7. and 13.10.;
(e) payments of all other Obligations and other amounts due and owing by the
Borrower and the other Loan Parties under any of the Loan Documents, if any, to
be applied for the ratable benefit of the Lenders; and
(f) any amount remaining after application as provided above, shall be paid to
the Borrower or whomever else may be legally entitled thereto.
Section 11.6. Letter of Credit Collateral Account.
(a) As collateral security for the prompt payment in full when due of all Letter
of Credit Liabilities and the other Obligations, the Borrower hereby pledges and
grants to the Administrative Agent, for the ratable benefit of the
Administrative Agent, the Issuing Bank and the Lenders as provided herein, a
security interest in all of its right, title and interest in and to the Letter
of Credit Collateral Account and the balances from time to time in the Letter of
Credit Collateral Account (including the investments and reinvestments therein
provided for below). The balances from time to time in the Letter of Credit
Collateral Account shall not constitute payment of any Letter of Credit
Liabilities until applied by the Issuing Bank as provided herein. Anything in
this Agreement to the contrary notwithstanding, funds held in the Letter of
Credit Collateral Account shall be subject to withdrawal only as provided in
this Section.

 

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(b) Amounts on deposit in the Letter of Credit Collateral Account shall be
invested and reinvested by the Administrative Agent in such Cash Equivalents as
the Administrative Agent shall determine in its sole discretion. All such
investments and reinvestments shall be held in the name of and be under the sole
dominion and control of the Administrative Agent for the ratable benefit of the
Administrative Agent, the Issuing Bank and the Lenders; provided, that all
earnings on such investments will be credited to and retained in the Letter of
Credit Collateral Account. The Administrative Agent shall exercise reasonable
care in the custody and preservation of any funds held in the Letter of Credit
Collateral Account and shall be deemed to have exercised such care if such funds
are accorded treatment substantially equivalent to that which the Administrative
Agent accords other funds deposited with the Administrative Agent, it being
understood that the Administrative Agent shall not have any responsibility for
taking any necessary steps to preserve rights against any parties with respect
to any funds held in the Letter of Credit Collateral Account.
(c) If a drawing pursuant to any Letter of Credit occurs on or prior to the
expiration date of such Letter of Credit, the Borrower and the Lenders authorize
the Administrative Agent to use the monies deposited in the Letter of Credit
Collateral Account to reimburse the Issuing Bank for the payment made by the
Issuing Bank to the beneficiary with respect to such drawing or the payee with
respect to such presentment.
(d) If an Event of Default exists, the Administrative Agent may (and, if
instructed by the Requisite Lenders, shall) in its (or their) discretion at any
time and from time to time elect to liquidate any such investments and
reinvestments and apply the proceeds thereof to the Obligations in accordance
with Section 11.5.
(e) So long as no Default or Event of Default exists, and to the extent amounts
on deposit in or credited to the Letter of Credit Collateral Account exceed the
aggregate amount of the Letter of Credit Liabilities then due and owing, the
Administrative Agent shall, from time to time, at the request of the Borrower,
deliver to the Borrower within 10 Business Days after the Administrative Agent’s
receipt of such request from the Borrower, against receipt but without any
recourse, warranty or representation whatsoever, such amount of the credit
balances in the Letter of Credit Collateral Account as exceeds the aggregate
amount of Letter of Credit Liabilities at such time. When all of the Obligations
shall have been indefeasibly paid in full and no Letters of Credit remain
outstanding, the Administrative Agent shall deliver to the Borrower, against
receipt but without any recourse, warranty or representation whatsoever, the
balances remaining in the Letter of Credit Collateral Account.
(f) The Borrower shall pay to the Administrative Agent from time to time such
fees as the Administrative Agent normally charges for similar services in
connection with the Administrative Agent’s administration of the Letter of
Credit Collateral Account and investments and reinvestments of funds therein.

 

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Section 11.7. Performance by Administrative Agent.
If the Borrower or any other Loan Party shall fail to perform any covenant, duty
or agreement contained in any of the Loan Documents, the Administrative Agent
may, after notice to the Borrower, perform or attempt to perform such covenant,
duty or agreement on behalf of the Borrower or such other Loan Party after the
expiration of any cure or grace periods set forth herein. In such event, the
Borrower shall, at the request of the Administrative Agent, promptly pay any
amount reasonably expended by the Administrative Agent in such performance or
attempted performance to the Administrative Agent, together with interest
thereon at the applicable Post-Default Rate from the date of such expenditure
until paid. Notwithstanding the foregoing, neither the Administrative Agent nor
any Lender shall have any liability or responsibility whatsoever for the
performance of any obligation of the Borrower under this Agreement or any other
Loan Document.
Section 11.8. Rights Cumulative.
The rights and remedies of the Administrative Agent, the Issuing Bank, and the
Lenders under this Agreement, each of the other Loan Documents and the Fee
Letter shall be cumulative and not exclusive of any rights or remedies which any
of them may otherwise have under Applicable Law. In exercising their respective
rights and remedies the Administrative Agent, the Issuing Bank and the Lenders
may be selective and no failure or delay by the Administrative Agent, the
Issuing Bank or any of the Lenders in exercising any right shall operate as a
waiver of it, nor shall any single or partial exercise of any power or right
preclude its other or further exercise or the exercise of any other power or
right.
Article XII. The Administrative Agent
Section 12.1. Appointment and Authorization.
Each Lender hereby irrevocably appoints and authorizes the Administrative Agent
to take such action as contractual representative on such Lender’s behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
specifically delegated to the Administrative Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto. Not in
limitation of the foregoing, each Lender authorizes and directs the
Administrative Agent to enter into the Loan Documents for the benefit of the
Lenders. Each Lender hereby agrees that, except as otherwise set forth herein,
any action taken by the Requisite Lenders in accordance with the provisions of
this Agreement or the Loan Documents, and the exercise by the Requisite Lenders
of the powers set forth herein or therein, together with such other powers as
are reasonably incidental thereto, shall be authorized and binding upon all of
the Lenders. Nothing herein shall be construed to deem the Administrative Agent
a trustee or fiduciary for any Lender or to impose on the Administrative Agent
duties or obligations other than those expressly provided for herein. Without
limiting the generality of the foregoing, the use of the terms “Agent”,
“Administrative Agent”, “agent” and similar terms in the Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
Applicable Law. Instead, use of such terms is merely a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties. The Administrative Agent shall deliver to each
Lender, promptly upon receipt thereof by the Administrative Agent, copies of
each of the financial statements, certificates, notices and other documents
delivered to the Administrative Agent pursuant to Article IX. that the Borrower
is not otherwise required to deliver directly to the Lenders. The Administrative
Agent will furnish to any Lender, upon the request of such Lender, a copy (or,
where appropriate, an original) of any document, instrument, agreement,
certificate or notice furnished to the Administrative Agent by the Borrower, any
other Loan Party or any other Affiliate of the Borrower, pursuant to this
Agreement or any other Loan Document

 

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not already delivered to such Lender pursuant to the terms of this Agreement or
any such other Loan Document. As to any matters not expressly provided for by
the Loan Documents (including, without limitation, enforcement or collection of
any of the Obligations), the Administrative Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Requisite Lenders (or all of the
Lenders if explicitly required under any other provision of this Agreement), and
such instructions shall be binding upon all Lenders and all holders of any of
the Obligations; provided, however, that, notwithstanding anything in this
Agreement to the contrary, the Administrative Agent shall not be required to
take any action which exposes the Administrative Agent to personal liability or
which is contrary to this Agreement or any other Loan Document or Applicable
Law. Not in limitation of the foregoing, the Administrative Agent may exercise
any right or remedy it or the Lenders may have under any Loan Document upon the
occurrence of a Default or an Event of Default unless the Requisite Lenders have
directed the Administrative Agent otherwise. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against the Administrative
Agent as a result of the Administrative Agent acting or refraining from acting
under this Agreement or any of the other Loan Documents in accordance with the
instructions of the Requisite Lenders, or where applicable, all the Lenders.
Section 12.2. Administrative Agent’s Reliance.
Notwithstanding any other provisions of this Agreement or any other Loan
Documents, neither the Administrative Agent nor any of its directors, officers,
agents, employees or counsel shall be liable for any action taken or not taken
by it under or in connection with this Agreement or any other Loan Document,
except for its or their own gross negligence or willful misconduct in connection
with its duties expressly set forth herein or therein as determined by a court
of competent jurisdiction in a final non-appealable judgment. Without limiting
the generality of the foregoing, the Administrative Agent may consult with legal
counsel (including its own counsel or counsel for the Parent, the Borrower or
any other Loan Party), independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel, accountants or
experts. Neither the Administrative Agent nor any of its directors, officers,
agents, employees or counsel: (a) makes any warranty or representation to any
Lender, the Issuing Bank or any other Person, and shall be responsible to any
Lender, the Issuing Bank or any other Person for any statement, warranty or
representation made or deemed made by the Borrower, any other Loan Party or any
other Person in or in connection with this Agreement or any other Loan Document;
(b) shall have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or any
other Loan Document or the satisfaction of any conditions precedent under this
Agreement or any Loan Document on the part of the Borrower or other Persons, or
to inspect the property, books or records of the Borrower or any other Person;
(c) shall be responsible to any Lender or the Issuing Bank for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any other Loan Document, any other instrument or document
furnished pursuant thereto or any collateral covered thereby or the perfection
or priority of any Lien in favor of the Administrative Agent on behalf of the
Lenders and the Issuing Bank in any such collateral; (d) shall have any
liability in respect of any recitals, statements, certifications,
representations or warranties contained in any of the Loan Documents or any
other document, instrument, agreement, certificate or statement delivered in
connection therewith; and (e) shall incur any liability under or in respect of
this Agreement or any other Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telephone, telecopy
or electronic mail) believed by it to be genuine and signed, sent or given by
the proper party or parties. The Administrative Agent may execute any of its
duties under the Loan Documents by or through agents, employees or
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects in the absence of gross
negligence or willful misconduct as determined by a court of competent
jurisdiction in a final non-appealable judgment. Unless set forth in writing to
the contrary, the making of its initial Loan by a Lender shall constitute a
certification by such Lender to the Administrative Agent and the other Lenders
that the conditions precedent for initial Loans set forth in Sections 6.1. and
6.2. that have not previously been waived by the Requisite Lenders have been
satisfied.

 

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Section 12.3. Notice of Events of Default.
The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Administrative Agent has
received notice from a Lender or the Borrower referring to this Agreement,
describing with reasonable specificity such Default or Event of Default and
stating that such notice is a “notice of default.” If any Lender (excluding the
Lender which is also serving as the Administrative Agent) becomes aware of any
Default or Event of Default, it shall promptly send to the Administrative Agent
such a “notice of default”. Further, if the Administrative Agent receives such a
“notice of default,” the Administrative Agent shall give prompt notice thereof
to the Lenders.
Section 12.4. Wells Fargo as Lender.
Wells Fargo, as a Lender, shall have the same rights and powers under this
Agreement and any other Loan Document, as the case may be, as any other Lender
and may exercise the same as though it were not the Administrative Agent; and
the term “Lender” or “Lenders” shall, unless otherwise expressly indicated,
include Wells Fargo in each case in its individual capacity. Wells Fargo and its
affiliates may each accept deposits from, maintain deposits or credit balances
for, invest in, lend money to, act as trustee under indentures of, serve as
financial advisor to, and generally engage in any kind of business with, the
Parent, the Borrower, any other Loan Party or any other affiliate thereof as if
it were any other bank and without any duty to account therefor to the Issuing
Bank or other Lenders. Further, the Administrative Agent and any affiliate may
accept fees and other consideration from the Loan Parties for services in
connection with this Agreement or otherwise without having to account for the
same to the Issuing Bank or the other Lenders. The Issuing Bank and the Lenders
acknowledge that, pursuant to such activities, Wells Fargo or its affiliates may
receive information regarding the Parent, the Borrower, other Loan Parties,
other Subsidiaries and other Affiliates (including information that may be
subject to confidentiality obligations in favor of such Person) and acknowledge
that the Administrative Agent shall be under no obligation to provide such
information to them.
Section 12.5. Approvals of Lenders.
All communications from the Administrative Agent to any Lender requesting such
Lender’s determination, consent, approval or disapproval (a) shall be given in
the form of a written notice to such Lender, (b) shall be accompanied by a
description of the matter or issue as to which such determination, approval,
consent or disapproval is requested, or shall advise such Lender where
information, if any, regarding such matter or issue may be inspected, or shall
otherwise describe the matter or issue to be resolved, (c) shall include, if
reasonably requested by such Lender and to the extent not previously provided to
such Lender, written materials and, as appropriate, a brief summary of all oral
information provided to the Administrative Agent by the Parent or the Borrower
in respect of the matter or issue to be resolved, and (d) shall include the
Administrative Agent’s recommended course of action or determination in respect
thereof. Unless a Lender shall give written notice to the Administrative Agent
that it specifically objects to the recommendation or determination of the
Administrative Agent (together with a reasonable written explanation of the
reasons behind such objection) within ten (10) Business Days (or such lesser or
greater period as may be specifically required under the express terms of the
Loan Documents) of receipt of such communication, such Lender shall be deemed to
have conclusively approved of or consented to such recommendation or
determination. With respect to decisions requiring the approval of the Requisite
Lenders, Administrative Agent shall timely submit any required written notices
to all Lenders and upon receiving the required approval or consent shall follow
the course of action or determination recommended by Administrative Agent or
such other course of action recommended by the Requisite Lenders, and each
non-responding Lender shall be deemed to have concurred with such recommended
course of action. Notwithstanding the foregoing, any matter requiring all
Lenders’ approval or consent shall not be deemed given by any Lender’s failure
to respond within any such Lender’s Reply Period.

 

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Section 12.6. Lender Credit Decision, Etc.
Each of the Lenders and the Issuing Bank expressly acknowledges and agrees that
neither the Administrative Agent nor any of its officers, directors, employees,
agents, counsel, attorneys-in-fact or other affiliates has made any
representations or warranties to the Issuing Bank or such Lender and that no act
by the Administrative Agent hereafter taken, including any review of the affairs
of the Parent, the Borrower, any other Loan Party or any other Subsidiary or
Affiliate, shall be deemed to constitute any such representation or warranty by
the Administrative Agent to the Issuing Bank or any Lender. Each of the Lenders
and the Issuing Bank acknowledges that it has made its own credit and legal
analysis and decision to enter into this Agreement and the transactions
contemplated hereby, independently and without reliance upon the Administrative
Agent, any other Lender or counsel to the Administrative Agent, or any of their
respective officers, directors, employees, agents or counsel, and based on the
financial statements of the Parent, the Borrower, the other Loan Parties, the
other Subsidiaries and other Affiliate thereof, and inquiries of such Persons,
its independent due diligence of the business and affairs of the Parent, the
Borrower, the other Loan Parties, the other Subsidiaries and other Persons, its
review of the Loan Documents, the legal opinions required to be delivered to it
hereunder, the advice of its own counsel and such other documents and
information as it has deemed appropriate. Each of the Lenders and the Issuing
Bank also acknowledges that it will, independently and without reliance upon the
Administrative Agent, any other Lender or counsel to the Administrative Agent or
any of their respective officers, directors, employees and agents, and based on
such review, advice, documents and information as it shall deem appropriate at
the time, continue to make its own decisions in taking or not taking action
under the Loan Documents. The Administrative Agent shall not be required to keep
itself informed as to the performance or observance by the Parent, the Borrower
or any other Loan Party of the Loan Documents or any other document referred to
or provided for therein or to inspect the properties or books of, or make any
other investigation of, the Parent, the Borrower, any other Loan Party or any
other Subsidiary. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders and the Issuing
Bank by the Administrative Agent under this Agreement or any of the other Loan
Documents, the Administrative Agent shall have no duty or responsibility to
provide any Lender or the Issuing Bank with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Parent, the Borrower, any other Loan Party or any other
Affiliate thereof which may come into possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or other
Affiliates. Each of the Lenders and the Issuing Bank acknowledges that the
Administrative Agent’s legal counsel in connection with the transactions
contemplated by this Agreement is only acting as counsel to the Administrative
Agent and is not acting as counsel to any Lender or the Issuing Bank.

 

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Section 12.7. Indemnification of Administrative Agent.
Each Lender agrees to indemnify the Administrative Agent (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so) pro rata in accordance with such Lender’s respective Commitment
Percentage, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, reasonable out-of-pocket costs
and expenses of any kind or nature whatsoever which may at any time be imposed
on, incurred by, or asserted against the Administrative Agent (in its capacity
as Administrative Agent but not as a Lender) in any way relating to or arising
out of the Loan Documents, any transaction contemplated hereby or thereby or any
action taken or omitted by the Administrative Agent under the Loan Documents
(collectively, “Indemnifiable Amounts”); provided, however, that no Lender shall
be liable for any portion of such Indemnifiable Amounts to the extent resulting
from the Administrative Agent’s gross negligence or willful misconduct as
determined by a court of competent jurisdiction in a final, non-appealable
judgment; provided, however, that no action taken in accordance with the
directions of the Requisite Lenders (or all of the Lenders, if expressly
required hereunder) shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section. Without limiting the generality of the
foregoing, each Lender agrees to reimburse the Administrative Agent (to the
extent not reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so) promptly upon demand for its ratable share of any
out-of-pocket expenses (including the reasonable fees and expenses of the
counsel to the Administrative Agent) incurred by the Administrative Agent in
connection with the preparation, negotiation, execution, administration, or
enforcement (whether through negotiations, legal proceedings, or otherwise) of,
or legal advice with respect to the rights or responsibilities of the parties
under, the Loan Documents, any suit or action brought by the Administrative
Agent to enforce the terms of the Loan Documents and/or collect any Obligations,
any “lender liability” suit or claim brought against the Administrative Agent
and/or the Lenders, and any claim or suit brought against the Administrative
Agent and/or the Lenders arising under any Environmental Laws. Such
out-of-pocket expenses (including counsel fees) shall be advanced by the Lenders
on the request of the Administrative Agent notwithstanding any claim or
assertion that the Administrative Agent is not entitled to indemnification
hereunder upon receipt of an undertaking by the Administrative Agent that the
Administrative Agent will reimburse the Lenders if it is actually and finally
determined by a court of competent jurisdiction that the Administrative Agent is
not so entitled to indemnification. The agreements in this Section shall survive
the payment of the Loans and all other amounts payable hereunder or under the
other Loan Documents and the termination of this Agreement. If the Borrower
shall reimburse the Administrative Agent for any Indemnifiable Amount following
payment by any Lender to the Administrative Agent in respect of such
Indemnifiable Amount pursuant to this Section, the Administrative Agent shall
share such reimbursement on a ratable basis with each Lender making any such
payment.

 

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Section 12.8. Successor Administrative Agent.
(a) The Administrative Agent may (i) resign at any time as Administrative Agent
under the Loan Documents by giving written notice thereof to the Lenders and the
Borrower or (ii) be removed as Administrative Agent under the Loan Documents for
gross negligence or willful misconduct upon 30 day’s prior written notice by all
Lenders (other than the Lender then acting as Administrative Agent). Upon any
such resignation or removal, the Requisite Lenders shall have the right to
appoint a successor Administrative Agent which appointment shall, provided no
Default or Event of Default exists, be subject to the Borrower’s approval, which
approval shall not be unreasonably withheld or delayed (except that the Borrower
shall, in all events, be deemed to have approved each Lender and any of its
Affiliates as a successor Administrative Agent). If no successor Administrative
Agent shall have been so appointed in accordance with the immediately preceding
sentence, and shall have accepted such appointment, within 30 days after the
resigning Administrative Agent’s giving of notice of resignation or the giving
of notice of removal of the Administrative Agent, then the current
Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint
a successor Administrative Agent, which shall be a Lender, if any Lender shall
be willing to serve, or otherwise shall be a financial institution having total
combined assets of at least $50,000,000,000 and an Eligible Assignee or another
Person acceptable to the Requisite Lenders.
(b) The Administrative Agent may be removed as Administrative Agent under the
Loan Documents, with or without cause, upon 15 days’ prior written notice from
the Borrower to the Administrative Agent and all the Lenders; provided that upon
such removal Bank of America, N.A. is appointed as successor Administrative
Agent (in such capacity, “Successor Agent”) and accepts such appointment
thereof. Wells Fargo, as the retiring Administrative Agent, shall, at the sole
cost and expense of the Borrower, take such actions and furnish such
information, documents, instruments and agreements as are customary in its
business practices and may be reasonably requested from time to time by
Successor Agent in order to facilitate and complete the transfer of the
administrative agency function to the Successor Agent.
(c) Upon the acceptance of any appointment as Administrative Agent hereunder by
a successor Administrative Agent pursuant to the terms of clause (a) or
(b) above, such successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the current
Administrative Agent, and the current Administrative Agent shall be discharged
from its duties and obligations under the Loan Documents. Such successor
Administrative Agent shall issue letters of credit in substitution for the
Letters of Credit, if any, outstanding at the time of such succession or shall
make other arrangements satisfactory to the current Administrative Agent, in
either case, to assume effectively the obligations of the current Administrative
Agent with respect to such Letters of Credit. After any Administrative Agent’s
resignation or removal hereunder as Administrative Agent pursuant to the terms
of clause (a) or (b) above, the provisions of this Article XII. shall continue
to inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under the Loan Documents. Notwithstanding
anything contained herein to the contrary, the Administrative Agent may assign
its rights and duties under the Loan Documents to any of its Affiliates by
giving the Borrower and each Lender prior written notice.
Section 12.9. Titled Agents.
Each of the Lead Arrangers, the Syndication Agent and the Documentation Agents
(each a “Titled Agent”) in each such respective capacity, assumes no
responsibility or obligation hereunder, including, without limitation, for
servicing, enforcement or collection of any of the Loans, nor any duties as an
agent hereunder for the Lenders. The titles given to the Titled Agents are
solely honorific and imply no fiduciary responsibility on the part of the Titled
Agents to the Administrative Agent, the Issuing Bank, any Lender, the Parent,
the Borrower or any other Loan Party and the use of such titles does not impose
on the Titled Agents any duties or obligations greater than those of any other
Lender or entitle the Titled Agents to any rights other than those to which any
other Lender is entitled.

 

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Article XIII. Miscellaneous
Section 13.1. Notices.
Unless otherwise provided herein (including without limitation as provided in
Section 9.5.), communications provided for hereunder shall be in writing and
shall be mailed, telecopied, or delivered as follows:
If to the Borrower and/or the Parent:
DiamondRock Hospitality Limited Partnership
3 Metro Center
Bethesda, Maryland 20817
Attn: Chief Financial Officer and General Counsel
Telephone:      240-744-1190
Telecopy:        240-744-1199
with a copy to:
Willkie Farr & Gallagher LLP
787 Seventh Ave.
New York, New York 10019
Attn: Steven D. Klein
Telephone:      (212) 728-8221
Telecopy:        (212) 728-9221
If to the Administrative Agent:
Wells Fargo Bank, National Association
MAC D1053-04R
301 S. College Street, 4th Floor
Charlotte, NC 28202-6000
Attention: D. Bryan Gregory
Telecopier:      704-383-6205
Telephone:      704-715-5450
with a copy to:
Wells Fargo Bank, National Association
MAC E2231-050
2030 Main Street, Suite 500
Irvine, CA 92614
Attention: Sherrie Courtney-Sanders
Telecopier:      949-251-4983
Telephone:      949-251-4344

 

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If to the Issuing Bank:
Wells Fargo Bank, National Association
MAC D1053-04R
301 S. College Street, 4th Floor
Charlotte, NC 28202-6000
Attention: D. Bryan Gregory
Telecopier:       704-383-6205
Telephone:       704-715-5450
with a copy to:
Wells Fargo Bank, National Association
MAC E2231-050
2030 Main Street, Suite 500
Irvine, CA 92614
Attention: Sherrie Courtney-Sanders
Telecopier:      949-251-4983
Telephone:      949-251-4344
with a copy to:
Wells Fargo Bank, N.A.
U.S. Trade Services — Standby Letter of Credit
One Front Street, 21st Floor
San Francisco, CA 94111
Telephone:       800-798-2815, Option 1
Telecopier:       415-296-8905
If to any other Lender:
To such Lender’s address or telecopy number as set forth in the applicable
Administrative Questionnaire.
or, as to each party at such other address as shall be designated by such party
in a written notice to the other parties delivered in compliance with this
Section; provided, a Lender or the Issuing Bank shall only be required to give
notice of any such other address to the Administrative Agent and the Borrower.
All such notices and other communications shall be effective (i) if mailed or
sent by overnight courier, upon the first to occur of receipt or the expiration
of 3 days after the deposit in the United States Postal Service mail, postage
prepaid and addressed to the address of the Parent or the Borrower or the
Administrative Agent, the Issuing Bank and Lenders at the addresses specified;
(ii) if telecopied, when transmitted; (iii) if hand delivered, when delivered;
or (iv) if delivered in accordance with Section 9.5. to the extent applicable;
provided, however, that, in the case of the immediately preceding clauses (i),
(ii) and (iii), non-receipt of any communication as of the result of any change
of address of which the sending party was not notified or as the result of a
refusal to accept delivery shall be deemed receipt of such communication.
Notwithstanding the immediately preceding sentence, all notices or
communications to the Administrative Agent, the Issuing Bank or any Lender under
Article II. shall be effective only when actually received. None of the
Administrative Agent, the Issuing Bank or any Lender shall incur any liability
to any Loan Party (nor shall the Administrative Agent incur any liability to the
Issuing Bank or the Lenders) for acting upon any telephonic notice referred to
in this Agreement which the Administrative Agent, the Issuing Bank or such
Lender, as the case may be, believes in good faith to have been given by a
Person authorized to deliver such notice or for otherwise acting in good faith
hereunder. Failure of a Person designated to get a copy of a notice to receive
such copy shall not affect the validity of notice properly given to another
Person.

 

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Section 13.2. Expenses.
The Borrower agrees (a) to pay or reimburse the Administrative Agent for all of
its reasonable out-of-pocket costs and expenses incurred in connection with the
preparation, negotiation and execution of, and any amendment, supplement or
modification to, any of the Loan Documents (including due diligence expenses and
reasonable travel expenses related to closing), and the consummation of the
transactions contemplated hereby and thereby, including the reasonable fees and
disbursements of counsel to the Administrative Agent and all costs and expenses
of the Administrative Agent in connection with the use of IntraLinks, SyndTrak
or other similar information transmission systems in connection with the Loan
Documents and of the Administrative Agent in connection with the review of
Properties for inclusion as Unencumbered Borrowing Base Properties and the
Administrative Agent’s other activities under Article IV., including the
reasonable fees and disbursements of counsel to the Administrative Agent
relating to all such activities, (b) to pay or reimburse the Administrative
Agent, the Issuing Bank and the Lenders for all their reasonable costs and
expenses incurred in connection with the enforcement or preservation of any
rights under the Loan Documents and the Fee Letter, including the reasonable
fees and disbursements of their respective counsel (including the allocated fees
and expenses of in-house counsel) and any payments in indemnification or
otherwise payable by the Lenders to the Administrative Agent pursuant to the
Loan Documents, (c) to pay, and indemnify and hold harmless the Administrative
Agent, the Issuing Bank and the Lenders from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any failure
to pay or delay in paying, documentary, stamp, excise and other similar taxes,
if any, which may be payable or determined to be payable in connection with the
execution and delivery of any of the Loan Documents, or consummation of any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, any Loan Document and (d) to the extent not already covered by any
of the preceding subsections, to pay or reimburse the fees and disbursements of
counsel to the Administrative Agent, the Issuing Bank and any Lender incurred in
connection with the representation of the Administrative Agent, the Issuing Bank
or such Lender in any matter relating to or arising out of any bankruptcy or
other proceeding of the type described in Sections 11.1.(f) or 11.1.(g),
including, without limitation (i) any motion for relief from any stay or similar
order, (ii) the negotiation, preparation, execution and delivery of any document
relating to the Obligations and (iii) the negotiation and preparation of any
debtor-in-possession financing or any plan of reorganization of the Borrower or
any other Loan Party, whether proposed by the Borrower, such Loan Party, the
Lenders or any other Person, and whether such fees and expenses are incurred
prior to, during or after the commencement of such proceeding or the
confirmation or conclusion of any such proceeding. If the Borrower shall fail to
pay any amounts required to be paid by it pursuant to this Section, the
Administrative Agent and/or the Lenders may pay such amounts on behalf of the
Borrower and such amounts shall be deemed to be Obligations owing hereunder.

 

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Section 13.3. Stamp, Intangible and Recording Taxes.
The Borrower will pay any and all stamp, excise, intangible, registration,
recordation and similar taxes, fees or charges and shall indemnify the
Administrative Agent and each Lender against any and all liabilities with
respect to or resulting from any delay in the payment or omission to pay any
such taxes, fees or charges, which may be payable or determined to be payable in
connection with the execution, delivery, recording, performance or enforcement
of this Agreement, the Notes and any of the other Loan Documents, the amendment,
supplement, modification or waiver of or consent under this Agreement, the Notes
or any of the other Loan Documents or the perfection of any rights or Liens
under this Agreement, the Notes or any of the other Loan Documents.
Section 13.4. Setoff.
Subject to Section 3.3. and in addition to any rights now or hereafter granted
under Applicable Law and not by way of limitation of any such rights, the
Borrower hereby authorizes the Administrative Agent, the Issuing Bank, each
Lender, each Affiliate of the Administrative Agent, the Issuing Bank or any
Lender, and each Participant, at any time or from time to time while an Event of
Default exists, without notice to the Borrower or to any other Person, any such
notice being hereby expressly waived, but in the case of the Issuing Bank, a
Lender, an Affiliate of the Issuing Bank or a Lender, or a Participant, subject
to receipt of the prior written consent of the Administrative Agent exercised in
its sole discretion, to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness at any time held or owing by the Administrative Agent, the
Issuing Bank, such Lender, any Affiliate of the Administrative Agent, the
Issuing Bank or such Lender, or such Participant, to or for the credit or the
account of the Borrower against and on account of any of the Obligations,
irrespective of whether or not any or all of the Loans and all other Obligations
have been declared to be, or have otherwise become, due and payable as permitted
by Section 11.2., and although such Obligations shall be contingent or
unmatured.
Section 13.5. Litigation; Jurisdiction; Other Matters; Waivers.
(a) EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN OR
AMONG THE PARENT, THE BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR
ANY OF THE LENDERS WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND
FACT AND WOULD RESULT IN DELAY AND EXPENSE TO THE PARTIES. ACCORDINGLY, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE LENDERS, THE ADMINISTRATIVE
AGENT, THE ISSUING BANK, THE PARENT AND THE BORROWER HEREBY WAIVES ITS RIGHT TO
A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT
OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO
ARISING OUT OF THIS AGREEMENT, THE NOTES, ANY OTHER LOAN DOCUMENT OR THE FEE
LETTER OR BY REASON OF ANY OTHER SUIT, CAUSE OF ACTION OR DISPUTE WHATSOEVER
BETWEEN OR AMONG THE PARENT, THE BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING
BANK OR ANY OF THE LENDERS OF ANY KIND OR NATURE RELATING TO ANY OF THE LOAN
DOCUMENTS.

 

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(b) EACH OF THE PARENT, THE BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING BANK
AND EACH LENDER HEREBY AGREES THAT THE FEDERAL DISTRICT COURT OF THE SOUTHERN
DISTRICT OF NEW YORK AND ANY STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN OF
NEW YORK, NEW YORK SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN OR AMONG THE PARENT, THE BORROWER, THE ADMINISTRATIVE AGENT,
THE ISSUING BANK OR ANY OF THE LENDERS, ARISING OUT OF THIS AGREEMENT, ANY OTHER
LOAN DOCUMENT OR THE FEE LETTER OR IN CONNECTION WITH OR BY REASON OF ANY OTHER
SUIT, CAUSE OF ACTION OR DISPUTE WHATSOEVER BETWEEN OR AMONG THE PARENT, THE
BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY OF THE LENDERS OF
ANY KIND OR NATURE RELATING TO ANY OF THE LOAN DOCUMENTS. THE PARENT, THE
BORROWER, THE ISSUING BANK AND EACH OF THE LENDERS EXPRESSLY SUBMIT AND CONSENT
IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH
COURTS. EACH PARTY FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT
SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACH AGREES
NOT TO PLEAD OR CLAIM THE SAME. THE CHOICE OF FORUM SET FORTH IN THIS SECTION
SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE ADMINISTRATIVE
AGENT, THE ISSUING BANK OR ANY LENDER OR THE ENFORCEMENT BY THE ADMINISTRATIVE
AGENT, THE ISSUING BANK OR ANY LENDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN
ANY OTHER APPROPRIATE JURISDICTION.
(c) THE PROVISIONS OF THIS SECTION HAVE BEEN CONSIDERED BY EACH PARTY WITH THE
ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES
THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS
PAYABLE HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS, THE TERMINATION OR
EXPIRATION OF ALL LETTERS OF CREDIT AND THE TERMINATION OF THIS AGREEMENT.
Section 13.6. Successors and Assigns.
(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that neither the Parent or the
Borrower may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Administrative Agent and each
Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of the immediately following subsection (b), (ii) by way of
participation in accordance with the provisions of the immediately following
subsection (d) or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of the immediately following subsection (f) (and any
other attempted assignment or transfer by any party hereto shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
the immediately following subsection (d) and, to the extent expressly
contemplated hereby, the Related Parties of the Administrative Agent and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

 

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(b) Assignments by Lenders. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it); provided that any such assignment shall be subject to the
following conditions:
(i) Minimum Amounts.
(A) in the case of an assignment of the entire remaining amount of an assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum
amount need be assigned; and
(B) in any case not described in the immediately preceding subsection (A), the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loans of the assigning Lender subject
to each such assignment (in each case, determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date) shall not be less than $5,000,000 in the case
of any assignment of a Commitment, unless each of the Administrative Agent and,
so long as no Default or Event of Default shall exist, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed).
(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan or the Commitment
assigned.
(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by clause (i)(B) of this subsection (b) and, in addition:
(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (x) a Default or Event of Default shall exist
at the time of such assignment or (y) such assignment is to a Lender that is not
a Defaulting Lender, to an Affiliate of a Lender that is not a Defaulting Lender
or to an Approved Fund; provided that the Borrower shall be deemed to have
consented to any such assignment unless it shall object thereto by written
notice to the Administrative Agent within 5 Business Days after having received
notice thereof;
(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of a
Commitment if such assignment is to a Person that is not already a Lender with a
Commitment, an Affiliate of such Lender or an Approved Fund with respect to such
Lender; and
(C) the consent of the Issuing Bank (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more Letters
of Credit (whether or not then outstanding); provided, however, that no such
consent is required if such assignment is to a Person that is already a Lender
with a Commitment, an Affiliate of such Lender or an Approved Fund with respect
to such Lender.

 

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(iv) Assignment and Acceptance. The parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500 for each assignment, and the
assignee, if it is not a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.
(v) No Assignment to Borrower. No such assignment shall be made to the Borrower
or any of the Borrower’s Affiliates or Subsidiaries.
(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to the immediately following subsection (c), from and after the effective date
specified in each Assignment and Assumption, the assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 5.4., 13.2. and 13.10. and the other
provisions of this Agreement and the other Loan Documents as provided in
Section 13.11. with respect to facts and circumstances occurring prior to the
effective date of such assignment. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with the
immediately following subsection (d).
(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Principal Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans owing to, each Lender pursuant to the terms hereof from
time to time (the “Register”). The entries in the Register shall be conclusive,
and the Borrower, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Parent, the Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person or the Borrower or any
of their respective Affiliates or Subsidiaries) (each, a “Participant”) in all
or a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans owing to it);
provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Parent, the
Borrower, the Administrative Agent and the Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and
obligations under this

 

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Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver of any provision of any Loan Document
described in the second sentence of Section 13.7. that adversely affects such
Participant. Subject to the immediately following subsection (e), the Borrower
agrees that each Participant shall be entitled to the benefits of
Sections 3.10., 5.1., 5.4. to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by Applicable Law, each Participant also shall be
entitled to the benefits of Section 13.4. as though it were a Lender, provided
such Participant agrees to be subject to Section 3.3. as though it were a
Lender. Upon request from the Administrative Agent, a Lender shall notify the
Administrative Agent and the Borrower of the sale of any participation
hereunder.
(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Sections 3.10. and 5.1. than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 3.10. unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrower and the Administrative Agent, to comply with Section 3.10.(c) as though
it were a Lender.
(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(g) No Registration. Each Lender agrees that, without the prior written consent
of the Borrower and the Administrative Agent, it will not make any assignment
hereunder in any manner or under any circumstances that would require
registration or qualification of, or filings in respect of, any Loan or Note
under the Securities Act or any other securities laws of the United States of
America or of any other jurisdiction.
Section 13.7. Amendments and Waivers.
(a) Generally. Except as otherwise expressly provided in this Agreement, (i) any
consent or approval required or permitted by this Agreement or in any other Loan
Document to be given by the Lenders may be given, (ii) any term of this
Agreement or of any other Loan Document may be amended, (iii) the performance or
observance by the Parent, the Borrower, any other Loan Party or any other
Subsidiary of any terms of this Agreement or such other Loan Document may be
waived, and (iv) the continuance of any Default or Event of Default may be
waived (either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Requisite Lenders
(or the Administrative Agent at the written direction of the Requisite Lenders),
and, in the case of an amendment to any Loan Document, the written consent of
each Loan Party which is party thereto.

 

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(b) Consent of Lenders Directly Affected. Notwithstanding the foregoing, no
amendment, waiver or consent shall, unless in writing, and signed by each of the
Lenders directly and adversely affected thereby (or the Administrative Agent at
the written direction of such Lenders), do any of the following:
(i) increase the Commitments of the Lenders (excluding any increase as a result
of an assignment of Commitments permitted under Section 13.6. and any increases
contemplated under Section 2.14.) or subject the Lenders to any additional
obligations;
(ii) reduce the principal of, or interest that has accrued or the rates of
interest that will be charged on the outstanding principal amount of, any Loans
or other Obligations;
(iii) reduce the amount of any Fees payable to the Lenders hereunder or postpone
any date fixed for payment thereof;
(iv) modify the definition of “Termination Date” (except in accordance with
Section 2.11.) or otherwise postpone any date fixed for any payment of principal
of, or interest on, any Loans or for the payment of Fees or any other
Obligations (including the waiver of any Default or Event of Default as a result
of the nonpayment of any such Obligations as and when due), or extend the
expiration date of any Letter of Credit beyond the Termination Date;
(v) modify the definitions of “Commitment Percentage” or amend or otherwise
modify the provisions of Section 3.2.;
(vi) amend this Section or amend the definitions of the terms used in this
Agreement or the other Loan Documents insofar as such definitions affect the
substance of this Section;
(vii) modify the definition of the term “Requisite Lenders” or modify in any
other manner the number or percentage of the Lenders required to make any
determinations or waive any rights hereunder or to modify any provision hereof;
(viii) release any Guarantor from its obligations under the Guaranty except as
contemplated by Section 8.15.;
(ix) waive a Default or Event of Default under Section 11.1.(a) or
Section 11.1.(b); or
(x) amend, or waive the Borrower’s compliance with, Section 2.13.
(c) Amendment of Administrative Agent’s Duties, Etc. No amendment, waiver or
consent unless in writing and signed by the Administrative Agent, in addition to
the Lenders required hereinabove to take such action, shall affect the rights or
duties of the Administrative Agent under this Agreement or any of the other Loan
Documents. Any amendment, waiver or consent relating to Section 2.2. or the
obligations of the Issuing Bank under this Agreement or any other Loan Document
shall, in addition to the Lenders required hereinabove to take such action,
require the written consent of the Issuing Bank. No waiver shall extend to or
affect any obligation not expressly waived or impair any right consequent
thereon and any amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose set forth therein. Except as
otherwise provided in Section 12.5., no course of dealing or delay or omission
on the part of the Administrative Agent or any Lender in exercising any right
shall operate as a waiver thereof or otherwise be prejudicial thereto. Any Event
of Default occurring hereunder shall continue to exist until such time as such
Event of Default is waived in writing in accordance with the terms of this
Section, notwithstanding any attempted cure or other action by the Borrower, any
other Loan Party or any other Person subsequent to the occurrence of such Event
of Default. Except as otherwise explicitly provided for herein or in any other
Loan Document, no notice to or demand upon any Loan Party shall entitle such
Loan Party to other or further notice or demand in similar or other
circumstances.

 

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Section 13.8. Nonliability of Administrative Agent and Lenders.
The relationship between the Borrower, on the one hand, and the Lenders and the
Administrative Agent, on the other hand, shall be solely that of borrower and
lender. Neither the Administrative Agent nor any Lender shall have any fiduciary
responsibilities to the Borrower or the Parent and no provision in this
Agreement or in any of the other Loan Documents, and no course of dealing
between or among any of the parties hereto, shall be deemed to create any
fiduciary duty owing by the Administrative Agent or any Lender to any Lender,
the Borrower, any Subsidiary or any other Loan Party. Neither the Administrative
Agent nor any Lender undertakes any responsibility to the Borrower or the Parent
to review or inform the Borrower or the Parent of any matter in connection with
any phase of the business or operations of the Borrower or the Parent.
Section 13.9. Confidentiality.
Except as otherwise provided by Applicable Law, the Administrative Agent, the
Issuing Bank and each Lender shall utilize all non-public information obtained
pursuant to the requirements of this Agreement which has been identified as
confidential or proprietary by the Parent, Borrower, the other Loan Parties and
other Subsidiaries in accordance with its customary procedure for handling
confidential information of this nature and in accordance with safe and sound
banking practices but in any event may make disclosure: (a) to any of their
respective Affiliates (provided any such Affiliate shall agree to keep such
information confidential in accordance with the terms of this Section); (b) as
reasonably requested by any bona fide potential Eligible Assignee, Participant
or other transferee in connection with the contemplated transfer of any
Commitment or participations therein as permitted hereunder (provided they shall
agree to keep such information confidential in accordance with the terms of this
Section or pursuant to terms at least as restrictive as this Section); (c) as
required or requested by any Governmental Authority or representative thereof or
pursuant to legal process or in connection with any legal proceedings; (d) to
the Administrative Agent’s, Issuing Bank’s or such Lender’s independent auditors
and other professional advisors (provided they shall be notified of the
confidential nature of the information); (e) if an Event of Default exists, to
any other Person, in connection with the exercise by the Administrative Agent,
the Issuing Bank or the Lenders of rights hereunder or under any of the other
Loan Documents; (f) upon Borrower’s prior consent (which consent shall not be
unreasonably withheld), to any contractual counter-parties to any swap or
similar hedging agreement or to any rating agency; and (g) to the extent such
information (x) becomes publicly available other than as a result of a breach of
this Section or (y) becomes available to the Administrative Agent, the Issuing
Bank or any Lender on a nonconfidential basis from a source other than the
Borrower or any Affiliate.

 

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Section 13.10. Indemnification.
(a) The Borrower shall and hereby agrees to indemnify, defend and hold harmless
the Administrative Agent, the Issuing Bank, the Lenders, all of the Affiliates
of each of the Administrative Agent, the Issuing Bank or any of the Lenders, and
their respective directors, officers, shareholders, agents, employees and
counsel (each referred to herein as an “Indemnified Party”) from and against any
and all of the following (collectively, the “Indemnified Costs”): losses, costs,
claims, penalties, damages, liabilities, deficiencies, judgments or reasonable
expenses of every kind and nature (including, without limitation, amounts paid
in settlement, court costs and the reasonable fees and disbursements of counsel
incurred in connection with any litigation, investigation, claim or proceeding
or any advice rendered in connection therewith, but excluding Indemnified Costs
indemnification in respect of which is specifically covered by Section 3.10. or
5.1. or expressly excluded from the coverage of such Sections) incurred by an
Indemnified Party in connection with, arising out of, or by reason of, any suit,
cause of action, claim, arbitration, investigation or settlement, consent decree
or other proceeding (the foregoing referred to herein as an “Indemnity
Proceeding”) which is in any way related directly or indirectly to: (i) this
Agreement or any other Loan Document or the transactions contemplated thereby;
(ii) the making of any Loans or issuance of Letters of Credit hereunder;
(iii) any actual or proposed use by the Borrower of the proceeds of the Loans or
Letters of Credit; (iv) the Administrative Agent’s, the Issuing Bank’s or any
Lender’s entering into this Agreement; (v) the fact that the Administrative
Agent, the Issuing Bank and the Lenders have established the credit facility
evidenced hereby in favor of the Borrower; (vi) the fact that the Administrative
Agent, the Issuing Bank and the Lenders are creditors of the Parent, the
Borrower and have or are alleged to have information regarding the financial
condition, strategic plans or business operations of the Parent, the Borrower
and the Subsidiaries; (vii) the fact that the Administrative Agent, the Issuing
Bank and the Lenders are material creditors of the Parent, the Borrower and are
alleged to influence directly or indirectly the business decisions or affairs of
the Parent, the Borrower and the Subsidiaries or their financial condition;
(viii) the exercise of any right or remedy the Administrative Agent, the Issuing
Bank or the Lenders may have under this Agreement or the other Loan Documents;
(ix) any civil penalty or fine assessed by the OFAC against, and all reasonable
costs and expenses (including counsel fees and disbursements) incurred in
connection with defense thereof by, the Administrative Agent, the Issuing Bank
or any Lender as a result of conduct of the Borrower, any other Loan Party or
any other Subsidiary that violates a sanction administered or enforced by the
OFAC; or (x) any violation or non-compliance by the Parent, Borrower, any other
Loan Party or any other Subsidiary of any Applicable Law (including any
Environmental Law) including, but not limited to, any Indemnity Proceeding
commenced by (A) the Internal Revenue Service or state taxing authority or
(B) any Governmental Authority or other Person under any Environmental Law,
including any Indemnity Proceeding commenced by a Governmental Authority or
other Person seeking remedial or other action to cause the Borrower or its
Subsidiaries (or its respective properties) (or the Administrative Agent and/or
the Lenders and/or the Issuing Bank as successors to the Borrower) to be in
compliance with such Environmental Laws; provided, however, that the Borrower
shall not be obligated to indemnify any Indemnified Party for any acts or
omissions of such Indemnified Party in connection with matters described in this
subsection to the extent arising from the gross negligence or willful misconduct
of such Indemnified Party, as determined by a court of competent jurisdiction in
a final, non-appealable judgment.

 

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(b) The Borrower’s indemnification obligations under this Section shall apply to
all Indemnity Proceedings arising out of, or related to, the foregoing whether
or not an Indemnified Party is a named party in such Indemnity Proceeding. In
this connection, this indemnification shall cover all Indemnified Costs of any
Indemnified Party in connection with any deposition of any Indemnified Party or
compliance with any subpoena (including any subpoena requesting the production
of documents). This indemnification shall, among other things, apply to any
Indemnity Proceeding commenced by other creditors of the Borrower or any
Subsidiary, any shareholder of the Borrower or any Subsidiary (whether such
shareholder(s) are prosecuting such Indemnity Proceeding in their individual
capacity or derivatively on behalf of the Borrower), any account debtor of the
Borrower or any Subsidiary or by any Governmental Authority. If indemnification
is to be sought hereunder by an Indemnified Party, then such Indemnified Party
shall notify the Borrower of the commencement of any Indemnity Proceeding;
provided, however, that the failure to so notify the Borrower shall not relieve
the Borrower from any liability that it may have to such Indemnified Party
pursuant to this Section except to the extent such failure to notify materially
and adversely affects the Borrower.
(c) This indemnification shall apply to any Indemnity Proceeding arising during
the pendency of any bankruptcy proceeding filed by or against the Borrower
and/or any Subsidiary.
(d) All out-of-pocket fees and expenses of, and all amounts paid to
third-persons by, an Indemnified Party shall be advanced by the Borrower at the
request of such Indemnified Party notwithstanding any claim or assertion by the
Borrower that such Indemnified Party is not entitled to indemnification
hereunder upon receipt of an undertaking by such Indemnified Party that such
Indemnified Party will reimburse the Borrower if it is actually and finally
determined by a court of competent jurisdiction that such Indemnified Party is
not so entitled to indemnification hereunder.
(e) An Indemnified Party may conduct its own investigation and defense of, and
may formulate its own strategy with respect to, any Indemnity Proceeding covered
by this Section and, as provided above, all Indemnified Costs incurred by such
Indemnified Party shall be reimbursed by the Borrower. No action taken by legal
counsel chosen by an Indemnified Party in investigating or defending against any
such Indemnity Proceeding shall vitiate or in any way impair the obligations and
duties of the Borrower hereunder to indemnify and hold harmless each such
Indemnified Party; provided, however, that if (i) the Borrower is required to
indemnify an Indemnified Party pursuant hereto and (ii) the Borrower has
provided evidence reasonably satisfactory to such Indemnified Party that the
Borrower has the financial wherewithal to reimburse such Indemnified Party for
any amount paid by such Indemnified Party with respect to such Indemnity
Proceeding, such Indemnified Party shall not settle or compromise any such
Indemnity Proceeding without the prior written consent of the Borrower (which
consent shall not be unreasonably withheld or delayed). Notwithstanding the
foregoing, an Indemnified Party may settle or compromise any such Indemnity
Proceeding without the prior written consent of the Borrower where (x) no
monetary relief is sought against such Indemnified Party in such Indemnity
Proceeding or (y) there is an allegation of a violation of law by such
Indemnified Party.
(f) If and to the extent that the obligations of the Borrower hereunder are
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under Applicable Law.
(g) The Borrower’s obligations hereunder shall survive any termination of this
Agreement and the other Loan Documents and the payment in full in cash of the
Obligations, and are in addition to, and not in substitution of, any of the
other obligations set forth in this Agreement or any other Loan Document to
which it is a party.

 

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Section 13.11. Termination; Survival.
At such time as (a) all of the Commitments have been terminated, (b) all Letters
of Credit have terminated or expired (other than Letters of Credit the
expiration dates of which extend beyond the Termination Date as permitted under
Section 2.2.(b) and in respect of which the Borrower has satisfied the
requirements of such Section), (c) none of the Lenders is obligated any longer
under this Agreement to make any Loans and the Issuing Bank is no longer
obligated under this Agreement to issue Letters of Credit and (d) all
Obligations (other than obligations which survive as provided in the following
sentence) have been paid and satisfied in full, this Agreement shall terminate;
provided, however, if on the Termination Date or any other date the Commitments
are terminated or reduced to zero (whether voluntarily, by reason of the
occurrence of an Event of Default or otherwise) any Letters of Credit remain
outstanding, then the provisions of this Agreement applicable to the Borrower
and the Agent with respect to Letters of Credit, including without limitation,
the terms of Section 2.13. and the Borrower’s reimbursement obligations under
Section 2.2.(d), shall remain in effect until all such Letters of Credit have
expired, have been cancelled or have otherwise terminated. The indemnities to
which the Administrative Agent, the Issuing Bank and the Lenders are entitled
under the provisions of Sections 3.10., 5.1., 5.4., 12.7., 13.2. and 13.10. and
any other provision of this Agreement and the other Loan Documents, and the
provisions of Section 13.5., shall continue in full force and effect and shall
protect the Administrative Agent, the Issuing Bank and the Lenders
(i) notwithstanding any termination of this Agreement, or of the other Loan
Documents, against events arising after such termination as well as before and
(ii) at all times after any such party ceases to be a party to this Agreement
with respect to all matters and events existing on or prior to the date such
party ceased to be a party to this Agreement. The Administrative Agent agrees to
furnish to the Borrower, upon the Borrower’s request and at the Borrower’s sole
cost and expense, any release, termination, or other agreement or document
evidencing the foregoing termination.
Section 13.12. Severability of Provisions.
If any provision under this Agreement or the other Loan Documents shall be
determined by a court of competent jurisdiction to be invalid or unenforceable,
that provision shall be deemed severed from the Loan Documents, and the
validity, legality and enforceability of the remaining provisions shall remain
in full force as though the invalid, illegal, or unenforceable provision had
never been part of the Loan Documents.
Section 13.13. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.
Section 13.14. Counterparts.
To facilitate execution, this Agreement and any amendments, waivers, consents or
supplements may be executed in any number of counterparts as may be convenient
or required. It shall not be necessary that the signature of, or on behalf of,
each party, or that the signature of all persons required to bind any party,
appear on each counterpart. All counterparts shall collectively constitute a
single document. It shall not be necessary in making proof of this document to
produce or account for more than a single counterpart containing the respective
signatures of, or on behalf of, each of the parties hereto.

 

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Section 13.15. Obligations with Respect to Loan Parties.
The obligations of the Parent or the Borrower to direct or prohibit the taking
of certain actions by the other Loan Parties as specified herein shall be
absolute and not subject to any defense the Parent or the Borrower may have that
the Parent or the Borrower does not control such Loan Parties.
Section 13.16. Independence of Covenants.
All covenants hereunder shall be given in any jurisdiction independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists.
Section 13.17. Limitation of Liability.
None of the Administrative Agent, the Issuing Bank or any Lender, or any
affiliate, officer, director, employee, attorney, or agent of the Administrative
Agent, the Issuing Bank or any Lender shall have any liability with respect to,
and each of the Parent and the Borrower hereby waives, releases, and agrees not
to sue any of them upon, any claim for any special, indirect, incidental, or
consequential damages suffered or incurred by the Borrower in connection with,
arising out of, or in any way related to, this Agreement, any of the other Loan
Documents or the Fee Letter, or any of the transactions contemplated by this
Agreement or any of the other Loan Documents. Each of the Parent and the
Borrower hereby waives, releases, and agrees not to sue the Administrative
Agent, the Issuing Bank or any Lender or any of the Administrative Agent’s, the
Issuing Bank’s or any Lender’s affiliates, officers, directors, employees,
attorneys, or agents for punitive damages in respect of any claim in connection
with, arising out of, or in any way related to, this Agreement, any of the other
Loan Documents, the Fee Letter, or any of the transactions contemplated by this
Agreement or financed hereby.
Section 13.18. Entire Agreement.
This Agreement, the Notes, the other Loan Documents and the Fee Letter embody
the final, entire agreement among the parties hereto and supersede any and all
prior commitments, agreements, representations, and understandings, whether
written or oral, relating to the subject matter hereof and thereof and may not
be contradicted or varied by evidence of prior, contemporaneous, or subsequent
oral agreements or discussions of the parties hereto. There are no oral
agreements among the parties hereto.

 

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Section 13.19. Construction.
The Administrative Agent, the Issuing Bank, the Parent, the Borrower and each
Lender acknowledge that each of them has had the benefit of legal counsel of its
own choice and has been afforded an opportunity to review this Agreement and the
other Loan Documents with its legal counsel and that this Agreement and the
other Loan Documents shall be construed as if jointly drafted by the
Administrative Agent, the Issuing Bank, the Parent, the Borrower and each
Lender.
Section 13.20. Headings.
The paragraph and section headings in this Agreement are provided for
convenience of reference only and shall not affect its construction or
interpretation.
Section 13.21. No Novation.
THE PARTIES HERETO HAVE ENTERED INTO THIS AGREEMENT SOLELY TO AMEND AND RESTATE
THE TERMS OF THE EXISTING CREDIT AGREEMENT. THE PARTIES DO NOT INTEND THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION OF
ANY OF THE OBLIGATIONS OWING BY THE BORROWER UNDER OR IN CONNECTION WITH THE
EXISTING CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS (AS DEFINED IN THE
EXISTING CREDIT AGREEMENT).
[Signatures on Following Pages]

 

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

                       BORROWER:
 
                     DiamondRock Hospitality Limited Partnership
 
                     By:   DiamondRock Hospitality Company, its sole General
Partner
 
                        By:   /s/ William J. Tennis             Name:   William
J. Tennis
 
          Title:   Executive Vice President, General Counsel and Corporate
Secretary

            PARENT:

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

[Signatures Continued on Next Page]

 

 

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[Signature Page to Second Amended and Restated Credit Agreement
with DiamondRock Hospitality Limited Partnership]

            WELLS FARGO BANK, NATIONAL ASSOCIATION, as
Administrative Agent and as a Lender
      By:           Name:   Mark F. Monahan        Title:   Senior Vice
President   

[Signatures Continued on Next Page]

 

 

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[Signature Page to Second Amended and Restated Credit Agreement
with DiamondRock Hospitality Limited Partnership]

            [LENDER]
      By:           Name:           Title:      

 

 

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EXHIBIT A
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the “Assignment and Assumption”) is
dated as of the Effective Date set forth below and is entered into by and
between [the][each]1 Assignor identified in item 1 below ([the][each, an]
“Assignor”) and [the][each]2 Assignee identified in item 2 below ([the][each,
an] “Assignee”). [It is understood and agreed that the rights and obligations of
[the Assignors][the Assignees]3 hereunder are several and not joint.]4
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (as amended, the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by [the][each]
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, [the][each] Assignor hereby irrevocably sells and
assigns to [the Assignee][the respective Assignees], and [the][each] Assignee
hereby irrevocably purchases and assumes from [the Assignor][the respective
Assignors], subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of [the Assignor’s][the
respective Assignors’] rights and obligations in [its capacity as a
Lender][their respective capacities as Lenders] under the Credit Agreement and
any other documents or instruments delivered pursuant thereto to the extent
related to the amount and percentage interest identified below of all of such
outstanding rights and obligations of [the Assignor][the respective Assignors]
under the respective facilities identified below (including without limitation
any guarantees included in such facilities) and (ii) to the extent permitted to
be assigned under applicable law, all claims, suits, causes of action and any
other right of [the Assignor (in its capacity as a Lender)][the respective
Assignors (in their respective capacities as Lenders)] against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause
(i) above (the rights and obligations sold and assigned by [the][any] Assignor
to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to
herein collectively as [the][an] “Assigned Interest”). Each such sale and
assignment is without recourse to [the][any] Assignor and, except as expressly
provided in this Assignment and Assumption, without representation or warranty
by [the][any] Assignor.
 

      1  
For bracketed language here and elsewhere in this form relating to the
Assignor(s), if the assignment is from a single Assignor, choose the first
bracketed language. If the assignment is from multiple Assignors, choose the
second bracketed language.
  2  
For bracketed language here and elsewhere in this form relating to the
Assignee(s), if the assignment is to a single Assignee, choose the first
bracketed language. If the assignment is to multiple Assignees, choose the
second bracketed language.
  3  
Select as appropriate.
  4  
Include bracketed language if there are either multiple Assignors or multiple
Assignees.

 

 

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1.  
Assignor[s]:                                                             
                                                             
  2.  
Assignee[s]:                                                             
                                                             
     
[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]
  3.  
Borrower(s): DiamondRock Hospitality Limited Partnership
  4.  
Administrative Agent: Wells Fargo Bank, National Association, as the
administrative agent under the Credit Agreement
  5.  
Credit Agreement: The $200,000,000.00 Second Amended and Restated Credit
Agreement dated as of August 6, 2010 among DiamondRock Hospitality Limited
Partnership, the Lenders parties thereto, Wells Fargo Bank, National
Association, as Administrative Agent, and the other agents parties thereto.
  6.  
Assigned Interest[s]:

                                                                      Aggregate
                                          Amount of     Amount of     Percentage
                            Commitment/     Commitment/     Assigned of        
            Facility     Loans for all     Loans     Commitment/     CUSIP  
Assignor[s]5   Assignee[s]6     Assigned7     Lenders8     Assigned     Loans9  
  Number  
 
                  $       $           %        
 
                  $       $           %        

[7. Trade Date:                      ]10
[Page break]
 

      5  
List each Assignor, as appropriate.
  6  
List each Assignee, as appropriate.
  7  
Fill in the appropriate terminology for the types of facilities under the Credit
Agreement that are being assigned under this Assignment (e.g. “Revolving Credit
Commitment,” “Term Loan Commitment,” etc.)
  8  
Amount to be adjusted by the counterparties to take into account any payments or
prepayments made between the Trade Date and the Effective Date.
  9  
Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.
  10  
To be completed if the Assignor(s) and the Assignee(s) intend that the minimum
assignment amount is to be determined as of the Trade Date.

 

A-2

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Effective Date:                       _____, 20_____ [TO BE INSERTED BY
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:

            ASSIGNOR[S]11

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

[NAME OF ASSIGNEE]
      By:           Name:           Title:           [NAME OF ASSIGNEE]
      By:           Name:           Title:        

[Page Break]
 

      11  
Add additional signature blocks as needed.
  12  
Add additional signature blocks as needed.

 

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            [Consented to and]13 Accepted:

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent
      By:           Name:           Title:           [Consented to:]14

DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP
      By:  DiamondRock Hospitality Company,        its sole General Partner     
  By:           Name:           Title:      

 

      13  
To be added only if the consent of the Administrative Agent is required by the
terms of the Credit Agreement.
  14  
Include signature of the Borrower only if required under Section 13.6.(b) of the
Credit Agreement.

 

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ANNEX 1
[                                        ]15
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor[s]. [The][Each] Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii)
[the][such] Assigned Interest is free and clear of any lien, encumbrance or
other adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document or (iv) the performance or
observance by the Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.
1.2. Assignee[s]. [The][Each] Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all the requirements to be an Eligible Assignee as defined in the Credit
Agreement (subject to such consents, if any, as may be required under such
definition), (iii) from and after the Effective Date specified for this
Assignment and Assumption, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of [the][the relevant]
Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is
sophisticated with respect to decisions to acquire assets of the type
represented by the Assigned Interest and either it, or the person exercising
discretion in making its decision to acquire the Assigned Interest, is
experienced in acquiring assets of such type, (v) it has received a copy of the
Credit Agreement, and has received or has been accorded the opportunity to
receive copies of the most recent financial statements delivered pursuant to
Section 9.1 or 9.2., as applicable, and such other documents and information as
it deems appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase [the][such] Assigned Interest,
(vi) it has, independently and without reliance upon the Administrative Agent or
any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase [the][such] Assigned Interest, and
(vii) if it is a Foreign Lender, attached to the Assignment and Assumption is
any documentation required to be delivered by it pursuant to the terms of the
Credit Agreement, duly completed and executed by [the][such] Assignee; and
(b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, [the][any] Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.
 

      15  
Describe Credit Agreement at option of Administrative Agent.

 

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2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of [the][each] Assigned Interest (including
payments of principal, interest, fees and other amounts) to [the][the relevant]
Assignee whether such amounts have accrued prior to, on or after the Effective
Date specified for this Assignment and Assumption. The Assignor[s] and the
Assignee[s] shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to such Effective Date or with respect to
the making of this assignment directly between themselves.
3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.

 

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EXHIBIT B
FORM OF AMENDED AND RESTATED GUARANTY
THIS GUARANTY dated as of August 6, 2010 executed and delivered by each of the
undersigned and the other Persons from time to time party hereto pursuant to the
execution and delivery of an Accession Agreement in the form of Annex I hereto
(all of the undersigned, together with such other Persons each a “Guarantor” and
collectively, the “Guarantors”) in favor of WELLS FARGO BANK, NATIONAL
ASSOCIATION (“Wells Fargo”) successor in interest to Wachovia Bank, National
Association, in its capacity as Administrative Agent (the “Administrative
Agent”) for the Lenders under that certain Second Amended and Restated Credit
Agreement dated as of August 6, 2010 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
DiamondRock Hospitality Limited Partnership (the “Borrower”), DiamondRock
Hospitality Company (the “Parent”), the financial institutions party thereto and
their assignees under Section 13.6. thereof (the “Lenders”), Wells Fargo, in its
capacity as Issuing Bank (the “Issuing Bank”), the Administrative Agent and the
other parties thereto.
WHEREAS, pursuant to the Credit Agreement, the Administrative Agent, the Lenders
and the Issuing Bank have agreed to make available to the Borrower certain
financial accommodations on the terms and conditions set forth in the Credit
Agreement;
WHEREAS, certain Guarantors previously executed and delivered to the
Administrative Agent that certain Guaranty dated as of February 28, 2007 (as
amended and in effect immediately prior to the date hereof, the “Existing
Guaranty”);
WHEREAS, the Borrower and each of the Guarantors, though separate legal
entities, are mutually dependent on each other in the conduct of their
respective businesses as an integrated operation and have determined it to be in
their mutual best interests to obtain financing from the Administrative Agent,
the Lenders and the Issuing Bank through their collective efforts;
WHEREAS, each Guarantor acknowledges that it will receive direct and indirect
benefits from the Administrative Agent, the Lenders and the Issuing Bank making
such financial accommodations available to the Borrower under the Credit
Agreement and, accordingly, each Guarantor is willing to guarantee the
Borrower’s obligations to the Administrative Agent, the Lenders and the Issuing
Bank on the terms and conditions contained herein; and
WHEREAS, the amendment and restatement of the Existing Guaranty effected by each
Guarantor’s execution and delivery of this Guaranty is a condition to the
Administrative Agent and the Lenders making, and continuing to make, such
financial accommodations to the Borrower.

 

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NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by each Guarantor, each Guarantor agrees that
the Existing Guaranty is amended and restated in its entirety as follows:
Section 1. Guaranty. Each Guarantor hereby absolutely, irrevocably and
unconditionally guaranties the due and punctual payment and performance when
due, whether at stated maturity, by acceleration or otherwise, of all of the
following (collectively referred to as the “Guarantied Obligations”): (a) all
indebtedness and obligations owing by the Borrower to any Lender, the Issuing
Bank or the Administrative Agent under or in connection with the Credit
Agreement and any other Loan Document to which the Borrower or such other Loan
Party is a party, including without limitation, the repayment of all principal
of the Revolving Loans and the Reimbursement Obligations, and the payment of all
interest, Fees, charges, attorneys’ fees and other amounts payable to any Lender
or the Administrative Agent thereunder or in connection therewith; (b) any and
all extensions, renewals, modifications, amendments or substitutions of the
foregoing; (c) all reasonable expenses, including, without limitation,
reasonable attorneys’ fees and disbursements, that are incurred by the Lenders
and the Administrative Agent in the enforcement of any of the foregoing or any
obligation of such Guarantor hereunder; and (d) all other Obligations.
Section 2. Guaranty of Payment and Not of Collection. This Guaranty is a
guaranty of payment, and not of collection, and a debt of each Guarantor for its
own account. Accordingly, none of the Lenders, the Issuing Bank or the
Administrative Agent shall be obligated or required before enforcing this
Guaranty against any Guarantor: (a) to pursue any right or remedy any of them
may have against the Borrower, any other Guarantor or any other Person or
commence any suit or other proceeding against the Borrower, any other Guarantor
or any other Person in any court or other tribunal; (b) to make any claim in a
liquidation or bankruptcy of the Borrower, any other Guarantor or any other
Person; or (c) to make demand of the Borrower, any other Guarantor or any other
Person or to enforce or seek to enforce or realize upon any collateral security
held by the Lenders, the Issuing Bank or the Administrative Agent which may
secure any of the Guarantied Obligations.
Section 3. Guaranty Absolute. Each Guarantor guarantees that the Guarantied
Obligations will be paid strictly in accordance with the terms of the documents
evidencing the same, regardless of any Applicable Law now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of the
Administrative Agent, the Lenders or the Issuing Bank with respect thereto. The
liability of each Guarantor under this Guaranty shall be absolute, irrevocable
and unconditional in accordance with its terms and shall remain in full force
and effect without regard to, and shall not be released, suspended, discharged,
terminated or otherwise affected by, any circumstance or occurrence whatsoever,
including without limitation, the following (whether or not such Guarantor
consents thereto or has notice thereof):
(a) (i) any change in the amount, interest rate or due date or other term of any
of the Guarantied Obligations, (ii) any change in the time, place or manner of
payment of all or any portion of the Guarantied Obligations, (iii) any amendment
or waiver of, or consent to the departure from or other indulgence with respect
to, the Credit Agreement, any other Loan Document, or any other document or
instrument evidencing or relating to any Guarantied Obligations, or (iv) any
waiver, renewal, extension, addition, or supplement to, or deletion from, or any
other action or inaction under or in respect of, the Credit Agreement, any of
the other Loan Documents, or any other documents, instruments or agreements
relating to the Guarantied Obligations or any other instrument or agreement
referred to therein or evidencing any Guarantied Obligations or any assignment
or transfer of any of the foregoing;
(b) any lack of validity or enforceability of the Credit Agreement, any of the
other Loan Documents, or any other document, instrument or agreement referred to
therein or evidencing any Guarantied Obligations or any assignment or transfer
of any of the foregoing;
(c) any furnishing to the Administrative Agent, the Lenders or the Issuing Bank
of any security for the Guarantied Obligations, or any sale, exchange, release
or surrender of, or realization on, any collateral securing any of the
Obligations;

 

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(d) any settlement or compromise of any of the Guarantied Obligations, any
security therefor, or any liability of any other party with respect to the
Guarantied Obligations, or any subordination of the payment of the Guarantied
Obligations to the payment of any other liability of the Borrower or any other
Loan Party;
(e) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to such Guarantor,
the Borrower, any other Loan Party or any other Person, or any action taken with
respect to this Guaranty by any trustee or receiver, or by any court, in any
such proceeding;
(f) any act or failure to act by the Borrower, any other Loan Party or any other
Person which may adversely affect such Guarantor’s subrogation rights, if any,
against the Borrower to recover payments made under this Guaranty;
(g) any nonperfection or impairment of any security interest or other Lien on
any collateral, if any, securing in any way any of the Obligations;
(h) any application of sums paid by the Borrower, any Guarantor or any other
Person with respect to the liabilities of the Borrower to the Administrative
Agent, the Lenders or the Issuing Bank, regardless of what liabilities of the
Borrower remain unpaid;
(i) any defect, limitation or insufficiency in the borrowing powers of the
Borrower or in the exercise thereof;
(j) any defense, set-off, claim or counterclaim (other than indefeasible payment
and performance in full) which may at any time be available to or be asserted by
the Borrower or any other Person against the Administrative Agent or any Lender;
(k) any statement, representation or warranty made or deemed to be made by or on
behalf of the Borrower, any Guarantor or any other Loan Party under the Credit
Agreement, any Loan Document, or any amendment hereto or thereto, proves to have
been incorrect or misleading in any respect;
(l) any change in the corporate existence or structure of the Borrower; or
(m) any other circumstance which might otherwise constitute a defense available
to, or a discharge of, a Guarantor hereunder (other than indefeasible payment
and performance in full).
Section 4. Action with Respect to Guarantied Obligations. The Lenders and the
Administrative Agent may, at any time and from time to time, without the consent
of, or notice to, any Guarantor, and without discharging any Guarantor from its
obligations hereunder, take any and all actions described in Section 3 and may
otherwise: (a) amend, modify, alter or supplement the terms of any of the
Guarantied Obligations, including, but not limited to, extending or shortening
the time of payment of any of the Guarantied Obligations or changing the
interest rate that may accrue on any of the Guarantied Obligations; (b) amend,
modify, alter or supplement the Credit Agreement or any other Loan Document;
(c) sell, exchange, release or otherwise deal with all, or any part, of any
collateral securing any of the Obligations; (d) release any other Loan Party or
other Person liable in any manner for the payment or collection of the
Guarantied Obligations; (e) exercise, or refrain from exercising, any rights
against the Borrower, any other Guarantor or any other Person; and (f) apply any
sum, by whomsoever paid or however realized, to the Guarantied Obligations in
such order as the Lenders shall elect.

 

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Section 5. Representations and Warranties. Each Guarantor hereby makes to the
Administrative Agent, the Lenders and the Issuing Bank all of the
representations and warranties made by the Borrower with respect to or in any
way relating to such Guarantor in the Credit Agreement and the other Loan
Documents, as if the same were set forth herein in full.
Section 6. Covenants. Each Guarantor will comply with all covenants that the
Borrower is to cause such Guarantor to comply with under the terms of the Credit
Agreement or any of the other Loan Documents.
Section 7. Waiver. Each Guarantor, to the fullest extent permitted by Applicable
Law, hereby waives notice of acceptance hereof or any presentment, demand,
protest or notice of any kind, and any other act or thing, or omission or delay
to do any other act or thing, which in any manner or to any extent might vary
the risk of such Guarantor or which otherwise might operate to discharge such
Guarantor from its obligations hereunder.
Section 8. Inability to Accelerate Loan. If the Administrative Agent, the
Issuing Bank and/or the Lenders are prevented under Applicable Law or otherwise
from demanding or accelerating payment of any of the Guarantied Obligations by
reason of any automatic stay or otherwise, the Administrative Agent, the Issuing
Bank and/or the Lenders shall be entitled to receive from each Guarantor, upon
demand therefor, the sums which otherwise would have been due had such demand or
acceleration occurred.
Section 9. Reinstatement of Guarantied Obligations. If claim is ever made on the
Administrative Agent, any Lender or the Issuing Bank for repayment or recovery
of any amount or amounts received in payment or on account of any of the
Guarantied Obligations, and the Administrative Agent, such Lender or the Issuing
Bank repays all or part of said amount by reason of (a) any judgment, decree or
order of any court or administrative body of competent jurisdiction, or (b) any
settlement or compromise of any such claim effected by the Administrative Agent,
such Lender or the Issuing Bank with any such claimant (including the Borrower
or a trustee in bankruptcy for the Borrower), then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding on it, notwithstanding any revocation hereof or the
cancellation of the Credit Agreement, any of the other Loan Documents, or any
other instrument evidencing any liability of the Borrower, and such Guarantor
shall be and remain liable to the Administrative Agent, such Lender or the
Issuing Bank for the amounts so repaid or recovered to the same extent as if
such amount had never originally been paid to the Administrative Agent, such
Lender or the Issuing Bank.
Section 10. Subrogation. Upon the making by any Guarantor of any payment
hereunder for the account of the Borrower, such Guarantor shall be subrogated to
the rights of the payee against the Borrower; provided, however, that such
Guarantor shall not enforce any right or receive any payment by way of
subrogation or otherwise take any action in respect of any other claim or cause
of action such Guarantor may have against the Borrower arising by reason of any
payment or performance by such Guarantor pursuant to this Guaranty, unless and
until all of the Guarantied Obligations have been indefeasibly paid and
performed in full. Once the Guarantied Obligations have been indefeasibly paid
and performed in full, the Administrative Agent agrees to furnish to such
Guarantor, at such Guarantor’s request and at such Guarantor’s sole cost and
expense, any agreement evidencing the foregoing subrogation as may be reasonably
requested by such Guarantor and reasonably satisfactory to the Administrative
Agent. If any amount shall be paid to such Guarantor on account of or in respect
of such subrogation rights or other claims or causes of action, such Guarantor
shall hold such amount in trust for the benefit of the Administrative Agent, the
Lenders and the Issuing Bank and shall forthwith pay such amount to the
Administrative Agent to be credited and applied against the Guarantied
Obligations, whether matured or unmatured, in accordance with the terms of the
Credit Agreement or to be held by the Administrative Agent as collateral
security for any Guarantied Obligations existing.

 

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Section 11. Right of Contribution. The Guarantors hereby agree as among
themselves that, if any Guarantor shall make an Excess Payment (as defined
below), such Guarantor shall have a right of contribution from each other
Guarantor in an amount equal to such other Guarantor’s Contribution Share (as
defined below) of such Excess Payment. The payment obligations of any Guarantor
under this Section shall be subordinate and subject in right of payment to the
Obligations until such time as the Obligations have been paid in full and the
Commitments have expired or terminated, and none of the Guarantors shall
exercise any right or remedy under this Section against any other Guarantor
until such Obligations have been paid in full and the Commitments have expired
or terminated. This Section shall not be deemed to affect any right of
subrogation, indemnity, reimbursement or contribution that any Guarantor may
have under Applicable Law against the Borrower in respect of any payment of
Guarantied Obligations. Notwithstanding the foregoing, all rights of
contribution against any Guarantor shall terminate from and after such time, if
ever, that such Guarantor shall cease to be a Guarantor in accordance with the
applicable provisions of the Loan Documents. For purposes of this Section, the
following terms have the indicated meanings:
(a) “Excess Payment” means the amount paid by any Guarantor in excess of its
Ratable Share of any Guarantied Obligations.
(b) “Ratable Share” means, for any Guarantor in respect of any payment of
Obligations, the ratio (expressed as a percentage) as of the date of such
payment of Guarantied Obligations of (i) the amount by which the aggregate
present fair salable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of all
of the Loan Parties exceeds the amount of all of the debts and liabilities
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of the Loan Parties hereunder) of the Loan
Parties; provided, however, that, for purposes of calculating the Ratable Shares
of the Guarantors in respect of any payment of Obligations, any Guarantor that
became a Guarantor subsequent to the date of any such payment shall be deemed to
have been a Guarantor on the date of such payment and the financial information
for such Guarantor as of the date such Guarantor became a Guarantor shall be
utilized for such Guarantor in connection with such payment.
(c) “Contribution Share” means, for any Guarantor in respect of any Excess
Payment made by any other Guarantor, the ratio (expressed as a percentage) as of
the date of such Excess Payment of (i) the amount by which the aggregate present
fair salable value of all of its assets and properties exceeds the amount of all
debts and liabilities of such Guarantor (including contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of such
Guarantor hereunder) to (ii) the amount by which the aggregate present fair
salable value of all assets and other properties of the Loan Parties other than
the maker of such Excess Payment exceeds the amount of all of the debts and
liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Loan Parties) of the Loan
Parties other than the maker of such Excess Payment; provided, however, that,
for purposes of calculating the Contribution Shares of the Guarantors in respect
of any Excess Payment, any Guarantor that became a Guarantor subsequent to the
date of any such Excess Payment shall be deemed to have been a Guarantor on the
date of such Excess Payment and the financial information for such Guarantor as
of the date such Guarantor became a Guarantor shall be utilized for such
Guarantor in connection with such Excess Payment.

 

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Section 12. Payments Free and Clear. All sums payable by each Guarantor
hereunder, whether of principal, interest, Fees, expenses, premiums or
otherwise, shall be paid in full, without set-off or counterclaim or any
deduction or withholding whatsoever (including any Taxes), and if any Guarantor
is required by Applicable Law or by any Governmental Authority to make any such
deduction or withholding, such Guarantor shall pay to the Administrative Agent,
the Lenders and the Issuing Bank such additional amount as will result in the
receipt by the Administrative Agent, the Lenders and the Issuing Bank of the
full amount payable hereunder had such deduction or withholding not occurred or
been required.
Section 13. Set-off. In addition to any rights now or hereafter granted under
any of the other Loan Documents or Applicable Law and not by way of limitation
of any such rights, each Guarantor hereby authorizes the Administrative Agent
and each Lender, at any time during the continuance of an Event of Default,
without any prior notice to such Guarantor or to any other Person, any such
notice being hereby expressly waived, but in the case of a Lender or Participant
subject to receipt of the prior written consent of the Administrative Agent
exercised in its sole discretion, to set off and to appropriate and to apply any
and all deposits (general or special, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or unmatured)
and any other indebtedness at any time held or owing by the Administrative
Agent, such Lender, or any Affiliate of the Administrative Agent or such Lender,
to or for the credit or the account of such Guarantor against and on account of
any of the Guarantied Obligations, although such obligations shall be contingent
or unmatured. Each Guarantor agrees, to the fullest extent permitted by
Applicable Law, that any Participant may exercise rights of setoff or
counterclaim and other rights with respect to its participation as fully as if
such Participant were a direct creditor of such Guarantor in the amount of such
participation. Each Lender agrees to notify the Borrower and such Guarantor
after any such set off made by such Lender; provided, that the failure to give
such notice shall not affect the validity of such set off.
Section 14. Subordination. Each Guarantor hereby expressly covenants and agrees
for the benefit of the Administrative Agent, the Lenders and the Issuing Bank
that all obligations and liabilities of the Borrower to such Guarantor of
whatever description, including without limitation, all intercompany receivables
of such Guarantor from the Borrower (collectively, the “Junior Claims”) shall be
subordinate and junior in right of payment to all Guarantied Obligations. If an
Event of Default shall exist, then no Guarantor shall accept any direct or
indirect payment (in cash, property or securities, by setoff or otherwise) from
the Borrower on account of or in any manner in respect of any Junior Claim until
all of the Guarantied Obligations have been indefeasibly paid in full.

 

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Section 15. Avoidance Provisions. It is the intent of each Guarantor, the
Administrative Agent, the Lenders and the Issuing Bank that in any Proceeding,
such Guarantor’s maximum obligation hereunder shall equal, but not exceed, the
maximum amount which would not otherwise cause the obligations of such Guarantor
hereunder (or any other obligations of such Guarantor to the Administrative
Agent, the Lenders and the Issuing Bank) to be avoidable or unenforceable
against such Guarantor in such Proceeding as a result of Applicable Law,
including without limitation, (a) Section 548 of the Bankruptcy Code of 1978, as
amended (the “Bankruptcy Code”) and (b) any state fraudulent transfer or
fraudulent conveyance act or statute applied in such Proceeding, whether by
virtue of Section 544 of the Bankruptcy Code or otherwise. The Applicable Laws
under which the possible avoidance or unenforceability of the obligations of
such Guarantor hereunder (or any other obligations of such Guarantor to the
Administrative Agent, the Lenders and the Issuing Bank) shall be determined in
any such Proceeding are referred to as the “Avoidance Provisions”. Accordingly,
to the extent that the obligations of any Guarantor hereunder would otherwise be
subject to avoidance under the Avoidance Provisions, the maximum Guarantied
Obligations for which such Guarantor shall be liable hereunder shall be reduced
to that amount which, as of the time any of the Guarantied Obligations are
deemed to have been incurred under the Avoidance Provisions, would not cause the
obligations of such Guarantor hereunder (or any other obligations of such
Guarantor to the Administrative Agent, the Lenders and the Issuing Bank), to be
subject to avoidance under the Avoidance Provisions. This Section is intended
solely to preserve the rights of the Administrative Agent, the Lenders and the
Issuing Bank hereunder to the maximum extent that would not cause the
obligations of any Guarantor hereunder to be subject to avoidance under the
Avoidance Provisions, and no Guarantor or any other Person shall have any right
or claim under this Section as against the Administrative Agent, the Lenders and
the Issuing Bank that would not otherwise be available to such Person under the
Avoidance Provisions.
Section 16. Information. Each Guarantor assumes all responsibility for being and
keeping itself informed of the financial condition of the Borrower and the other
Guarantors, and of all other circumstances bearing upon the risk of nonpayment
of any of the Guarantied Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder, and agrees that none of
the Administrative Agent, the Lenders or the Issuing Bank shall have any duty
whatsoever to advise any Guarantor of information regarding such circumstances
or risks.
Section 17. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
SECTION 18. WAIVER OF JURY TRIAL.
(a) EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN OR
AMONG ANY GUARANTOR, THE ADMINISTRATIVE AGENT OR ANY OF THE LENDERS WOULD BE
BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT AND WOULD RESULT IN DELAY
AND EXPENSE TO THE PARTIES. ACCORDINGLY, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH OF THE LENDERS, THE ADMINISTRATIVE AGENT AND EACH GUARANTOR HEREBY
WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR
NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR
AGAINST ANY PARTY HERETO ARISING OUT OF THIS GUARANTY OR ANY OTHER LOAN DOCUMENT
OR BY REASON OF ANY OTHER SUIT, CAUSE OF ACTION OR DISPUTE WHATSOEVER BETWEEN OR
AMONG ANY GUARANTOR, THE AGENT OR ANY OF THE LENDERS OF ANY KIND OR NATURE
RELATING TO ANY OF THE LOAN DOCUMENTS.

 

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(b) EACH OF THE GUARANTORS, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY
AGREES THAT THE FEDERAL DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OR
ANY STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN OF NEW YORK, SHALL HAVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG ANY
GUARANTOR, THE ADMINISTRATIVE AGENT OR ANY OF THE LENDERS, PERTAINING DIRECTLY
OR INDIRECTLY TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR TO ANY MATTER
ARISING HEREFROM OR THEREFROM. EACH GUARANTOR AND EACH OF THE LENDERS EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMMENCED IN SUCH COURTS WITH RESPECT TO SUCH CLAIMS OR DISPUTES. EACH GUARANTOR
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR
PAPERS ISSUED THEREIN, AND AGREES THAT SERVICE OF SUCH SUMMONS AND COMPLAINT, OR
OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO
SUCH GUARANTOR AT ITS ADDRESS FOR NOTICES PROVIDED FOR HEREIN. SHOULD A
GUARANTOR FAIL TO APPEAR OR ANSWER ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO
SERVED WITHIN THIRTY DAYS AFTER THE MAILING THEREOF, SUCH GUARANTOR SHALL BE
DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BE ENTERED AGAINST IT AS
DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS. EACH PARTY
FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF
ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACH AGREES NOT TO PLEAD OR
CLAIM THE SAME. THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE
DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE ADMINISTRATIVE AGENT OR ANY
LENDER OR THE ENFORCEMENT BY THE ADMINISTRATIVE AGENT OR ANY LENDER OF ANY
JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.
(c) THE PROVISIONS OF THIS SECTION HAVE BEEN CONSIDERED BY EACH PARTY WITH THE
ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES
THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS
PAYABLE HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS, THE TERMINATION OR
EXPIRATION OF ALL LETTERS OF CREDIT AND THE TERMINATION OF THIS GUARANTY.
Section 19. Loan Accounts. The Administrative Agent, each Lender and the Issuing
Bank may maintain books and accounts setting forth the amounts of principal,
interest and other sums paid and payable with respect to the Guarantied
Obligations, and in the case of any dispute relating to any of the outstanding
amount, payment or receipt of any of the Guarantied Obligations or otherwise,
the entries in such books and accounts shall be deemed conclusive evidence of
the amounts and other matters set forth herein, absent manifest error. The
failure of the Administrative Agent, any Lender or the Issuing Bank to maintain
such books and accounts shall not in any way relieve or discharge any Guarantor
of any of its obligations hereunder.

 

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Section 20. Waiver of Remedies. No delay or failure on the part of the
Administrative Agent, any Lender or the Issuing Bank in the exercise of any
right or remedy it may have against any Guarantor hereunder or otherwise shall
operate as a waiver thereof, and no single or partial exercise by the
Administrative Agent, any Lender or the Issuing Bank of any such right or remedy
shall preclude any other or further exercise thereof or the exercise of any
other such right or remedy.
Section 21. Termination. This Guaranty shall remain in full force and effect
with respect to each Guarantor until indefeasible payment in full of the
Guarantied Obligations and the other Obligations and the termination or
cancellation of the Credit Agreement in accordance with its terms.
Section 22. Successors and Assigns. Each reference herein to the Administrative
Agent or the Lenders shall be deemed to include such Person’s respective
successors and assigns (including, but not limited to, any holder of the
Guarantied Obligations) in whose favor the provisions of this Guaranty also
shall inure, and each reference herein to each Guarantor shall be deemed to
include such Guarantor’s successors and assigns, upon whom this Guaranty also
shall be binding. The Lenders and the Issuing Bank may, in accordance with the
applicable provisions of the Credit Agreement, assign, transfer or sell any
Guarantied Obligation, or grant or sell participations in any Guarantied
Obligations, to any Person without the consent of, or notice to, any Guarantor
and without releasing, discharging or modifying any Guarantor’s obligations
hereunder. Subject to Section 13.9 of the Credit Agreement, each Guarantor
hereby consents to the delivery by the Administrative Agent or any Lender to any
Assignee or Participant (or any prospective Assignee or Participant) of any
financial or other information regarding the Borrower or any Guarantor. No
Guarantor may assign or transfer its obligations hereunder to any Person without
the prior written consent of all Lenders and any such assignment or other
transfer to which all of the Lenders have not so consented shall be null and
void.
Section 23. JOINT AND SEVERAL OBLIGATIONS. THE OBLIGATIONS OF THE GUARANTORS
HEREUNDER SHALL BE JOINT AND SEVERAL, AND ACCORDINGLY, EACH GUARANTOR CONFIRMS
THAT IT IS LIABLE FOR THE FULL AMOUNT OF THE “GUARANTIED OBLIGATIONS” AND ALL OF
THE OBLIGATIONS AND LIABILITIES OF EACH OF THE OTHER GUARANTORS HEREUNDER.
Section 24. Amendments. This Guaranty may not be amended except in writing
signed by the Requisite Lenders (or all of the Lenders if required under the
terms of the Credit Agreement), the Administrative Agent and each Guarantor.
Section 25. Payments. All payments to be made by any Guarantor pursuant to this
Guaranty shall be made in Dollars, in immediately available funds to the
Administrative Agent at the Principal Office, not later than 2:00 p.m. on the
date of demand therefor.
Section 26. Notices. All notices, requests and other communications hereunder
shall be in writing (including facsimile transmission or similar writing) and
shall be given (a) to each Guarantor at its address set forth below its
signature hereto, (b) to the Administrative Agent, any Lender or the Issuing
Bank at its respective address for notices provided for in the Credit Agreement,
or (c) as to each such party at such other address as such party shall designate
in a written notice to the other parties. Each such notice, request or other
communication shall be effective (i) if mailed, when received; (ii) if
telecopied, when transmitted; or (iii) if hand delivered, when delivered;
provided, however, that any notice of a change of address for notices shall not
be effective until received.
Section 27. Severability. In case any provision of this Guaranty shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

 

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Section 28. Headings. Section headings used in this Guaranty are for convenience
only and shall not affect the construction of this Guaranty.
Section 29. Limitation of Liability. Neither the Administrative Agent nor any
Lender, nor any Affiliate, officer, director, employee, attorney, or agent of
the Administrative Agent or any Lender, shall have any liability with respect
to, and each Guarantor hereby waives, releases, and agrees not to sue any of
them upon, any claim for any special, indirect, incidental, or consequential
damages suffered or incurred by a Guarantor in connection with, arising out of,
or in any way related to, this Guaranty or any of the other Loan Documents, or
any of the transactions contemplated by this Guaranty, the Credit Agreement or
any of the other Loan Documents. Each Guarantor hereby waives, releases, and
agrees not to sue the Administrative Agent or any Lender or any of the
Administrative Agent’s or any Lender’s Affiliates, officers, directors,
employees, attorneys, or agents for punitive damages in respect of any claim in
connection with, arising out of, or in any way related to, this Guaranty, the
Credit Agreement or any of the other Loan Documents, or any of the transactions
contemplated by Credit Agreement or financed thereby.
Section 30. Electronic Delivery of Certain Information. Each Guarantor
acknowledges and agrees that information regarding the Guarantor may be
delivered electronically pursuant to Section 9.5 of the Credit Agreement.
Section 31. Release of Guarantor. If expressly permitted by the Credit
Agreement, a Guarantor may be released from this Guaranty in accordance with the
terms of the Credit Agreement.
Section 32. NO NOVATION. THE PARTIES HERETO HAVE ENTERED INTO THIS AMENDED AND
RESTATED GUARANTY SOLEY TO AMEND AND RESTATE THE TERMS OF, AND THE OBLIGATIONS
OWING UNDER AND IN CONNECTON WITH, THE EXISTING GUARANTY. THE PARTIES DO NOT
INTEND THIS AMENDED AND RESTATED GUARANTY NOR THE TRANSACTIONS CONTEMPLATED
HEREBY TO BE, AND THIS AMENDED AND RESTATED GUARANTY AND THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION OF ANY OF THE
OBLIGATIONS OWING BY THE GUARANTORS UNDER OR IN CONNECTION WITH THE EXISTING
GUARANTY.
Section 33. Definitions. (a) For the purposes of this Guaranty:
“Proceeding” means any of the following: (i) a voluntary or involuntary case
concerning any Guarantor shall be commenced under the Bankruptcy Code of 1978,
as amended; (ii) a custodian (as defined in such Bankruptcy Code or any other
applicable bankruptcy laws) is appointed for, or takes charge of, all or any
substantial part of the property of any Guarantor; (iii) any other proceeding
under any Applicable Law, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding-up or composition for adjustment of debts,
whether now or hereafter in effect, is commenced relating to any Guarantor;
(iv) any Guarantor is adjudicated insolvent or bankrupt; (v) any order of relief
or other order approving any such case or proceeding is entered by a court of
competent jurisdiction; (vi) any Guarantor makes a general assignment for the
benefit of creditors; (vii) any Guarantor shall fail to pay, or shall state that
it is unable to pay, or shall be unable to pay, its debts generally as they
become due; (viii) any Guarantor shall call a meeting of its creditors with a
view to arranging a composition or adjustment of its debts; (ix) any Guarantor
shall by any act or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing; or (x) any corporate action shall be taken
by any Guarantor for the purpose of effecting any of the foregoing.
(b) Terms not otherwise defined herein are used herein with the respective
meanings given them in the Credit Agreement.

 

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

            [GUARANTOR]
      By:           Name:           Title:      

Address for Notices for all Guarantors:
c/o DiamondRock Hospitality Limited Partnership
3 Metro Center
Bethesda, Maryland 20817
Attention: Chief Financial Officer and General Counsel
Telephone: 240-744-1190
Telecopy: 240-744-1199

 

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ANNEX I
FORM OF ACCESSION AGREEMENT
THIS ACCESSION AGREEMENT dated as of                     ,  _____, executed and
delivered by                                         , a                     
(the “New Guarantor”) in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells
Fargo”), in its capacity as Administrative Agent (the “Administrative Agent”)
for the Lenders under that certain Second Amended and Restated Credit Agreement
dated as of August 6, 2010 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), by and among DiamondRock
Hospitality Limited Partnership (the “Borrower”), DiamondRock Hospitality
Company (the “Parent”), the financial institutions party thereto and their
assignees under Section 13.6. thereof (the “Lenders”), Wells Fargo, in its
capacity as Issuing Bank (the “Issuing Bank”), the Administrative Agent, and the
other parties thereto.
WHEREAS, pursuant to the Credit Agreement, the Administrative Agent, the Issuing
Bank and the Lenders have agreed to make available to the Borrower certain
financial accommodations on the terms and conditions set forth in the Credit
Agreement;
WHEREAS, the Borrower, the New Guarantor and the existing Guarantors, though
separate legal entities, are mutually dependent on each other in the conduct of
their respective businesses as an integrated operation and have determined it to
be in their mutual best interests to obtain financing from the Administrative
Agent, the Lenders and the Issuing Bank through their collective efforts;
WHEREAS, the New Guarantor acknowledges that it will receive direct and indirect
benefits from the Administrative Agent, the Lenders and the Issuing Bank making
such financial accommodations available to the Borrower under the Credit
Agreement and, accordingly, the New Guarantor is willing to guarantee the
Borrower’s obligations to the Administrative Agent, the Lenders and the Issuing
Bank on the terms and conditions contained herein; and
WHEREAS, the New Guarantor’s execution and delivery of this Agreement is a
condition to the Administrative Agent, the Lenders and the Issuing Bank
continuing to make such financial accommodations to the Borrower.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the New Guarantor, the New Guarantor agrees
as follows:
Section 1. Accession to Guaranty. The New Guarantor hereby agrees that it is a
“Guarantor” under that certain Amended and Restated Guaranty dated as of
August 6, 2010 (as amended, supplemented, restated or otherwise modified from
time to time, the “Guaranty”), made by the Guarantors party thereto in favor of
the Administrative Agent, for its benefit and the benefit of the Lenders and
Issuing Bank and assumes all obligations of a “Guarantor” thereunder and agrees
to be bound thereby, all as if the New Guarantor had been an original signatory
to the Guaranty. Without limiting the generality of the foregoing, the New
Guarantor hereby:
(a) irrevocably and unconditionally guarantees the due and punctual payment and
performance when due, whether at stated maturity, by acceleration or otherwise,
of all Guarantied Obligations (as defined in the Guaranty);

 

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(b) makes to the Administrative Agent, the Lenders and the Issuing Bank as of
the date hereof each of the representations and warranties contained in
Section 5 of the Guaranty and agrees to be bound by each of the covenants
contained in Section 6 of the Guaranty; and
(c) consents and agrees to each provision set forth in the Guaranty.
SECTION 2. GOVERNING LAW. THIS ACCESSION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
Section 3. Definitions. Capitalized terms used herein and not otherwise defined
herein shall have their respective defined meanings given them in the Credit
Agreement.
IN WITNESS WHEREOF, the New Guarantor has caused this Accession Agreement to be
duly executed and delivered under seal by its duly authorized officers as of the
date first written above.

            [NEW GUARANTOR]
      By:           Name:           Title:      

Address for Notices:
c/o DiamondRock Hospitality Limited Partnership
                                                            
                                                            
Attention:                                                                  
Telecopier:     (__)
                                                            
Telephone:     (__)                                                             

           
Accepted:

WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Administrative Agent

    By:           Name:           Title:      

 

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EXHIBIT C
FORM OF [AMENDED AND RESTATED] REVOLVING NOTE

      $                                           , 20     

FOR VALUE RECEIVED, the undersigned, DIAMONDROCK HOSPITALITY LIMITED
PARTNERSHIP, a limited partnership formed under the laws of the State of
Delaware (the “Borrower”) hereby unconditionally promises to pay to the order of
                                         (the “Lender”), in care of Wells Fargo
Bank, National Association, as Administrative Agent (the “Administrative
Agent”), to Wells Fargo Bank, National Association, NorthStar East Building,
MAC:N9303-110, 608 Second Avenue S., Minneapolis, Minnesota 55402, or at such
other address as may be specified in writing by the Administrative Agent to the
Borrower, the principal sum of                      AND      /100 DOLLARS
($                    ) (or such lesser amount as shall equal the aggregate
unpaid principal amount of Loans made by the Lender to the Borrower under the
Credit Agreement (as herein defined)), on the dates and in the principal amounts
provided in the Credit Agreement, and to pay interest on the unpaid principal
amount owing hereunder, at the rates and on the dates provided in the Credit
Agreement.
The date, amount of each Loan made by the Lender to the Borrower, and each
payment made on account of the principal thereof, shall be recorded by the
Lender on its books and, prior to any transfer of this Note, endorsed by the
Lender on the schedule attached hereto or any continuation thereof, provided
that the failure of the Lender to make any such recordation or endorsement shall
not affect the obligations of the Borrower to make a payment when due of any
amount owing under the Credit Agreement or hereunder in respect of the Loans
made by the Lender.
This Note is one of the “Notes” referred to in the Second Amended and Restated
Credit Agreement dated as of August 6, 2010 (as amended, restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”), by and among
the Borrower, DiamondRock Hospitality Company (the “Parent”), the financial
institutions party thereto and their assignees under Section 13.6. thereof, the
Administrative Agent, and the other parties thereto, and is subject to, and
entitled to, all provisions and benefits thereof. Capitalized terms used herein
and not defined herein shall have the respective meanings given to such terms in
the Credit Agreement.
The Credit Agreement, among other things, (a) provides for the making of Loans
evidenced by this Note by the Lender to the Borrower from time to time in an
aggregate amount not to exceed at any time outstanding the Dollar amount first
above mentioned, (b) permits the prepayment of the Loans evidenced by this Note
by the Borrower subject to certain terms and conditions and (c) provides for the
acceleration of the maturity of the Loans evidenced by this Note upon the
occurrence of certain specified events.
Except as permitted by Section 13.6. of the Credit Agreement, this Note may not
be assigned by the Lender to any other Person.
[This Note is being issued in replacement of that certain Revolving Note dated
as of February 28, 2007, executed and delivered by Borrower party thereto and
payable to the order of the Lender, as amended and in effect immediately prior
to the date hereof. THIS NOTE IS NOT INTENDED TO BE, AND SHALL NOT BE CONSTRUED
TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING UNDER OR IN CONNECTION WITH
SUCH OTHER REVOLVING NOTE.]

 

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THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.
The Borrower hereby waives presentment for payment, demand, notice of demand,
notice of non-payment, protest, notice of protest and all other similar notices.
Time is of the essence for this Note.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Note under
seal as of the date first written above.

            DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP
      By:   DiamondRock Hospitality Company,         its sole General Partner   
          By:           Name:           Title:      

 

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

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

 

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EXHIBIT D
FORM OF NOTICE OF BORROWING
                    , 20     
Wells Fargo Bank, National Association
MAC D1053-04R
301 S. College Street, 4th Floor
Charlotte, NC 28202-6000
Attention: D. Bryan Gregory
Telecopier: 704-383-6205
Telephone: 704-715-5450
Wells Fargo Bank, National Association
MAC E2231-050
2030 Main Street, Suite 500
Irvine, CA 92614
Attention: Sherrie Courtney-Sanders
Telecopier: 949-251-4983
Telephone: 949-251-4344
Ladies and Gentlemen:
Reference is made to that certain Second Amended and Restated Credit Agreement
dated as of August 6, 2010 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), by and among DiamondRock
Hospitality Limited Partnership (the “Borrower”), the financial institutions
party thereto and their assignees under Section 13.6. thereof (the “Lenders”),
Wells Fargo Bank, National Association, as Administrative Agent (the
“Administrative Agent”), and the other parties thereto. Capitalized terms used
herein, and not otherwise defined herein, have their respective meanings given
them in the Credit Agreement.

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

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

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

[Check one box only]
oBase Rate Loans
oLIBOR Loans, each with an initial Interest Period for a duration of:

         
[Check one box only]
  o   1 month
 
  o   3 months
 
  o   6 months

 

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  4.  
The proceeds of this borrowing of Loans will be used for the following purpose:
                                                                               
                     .

  5.  
The Borrower requests that the proceeds of this borrowing of Loans be made
available to the Borrower by wire transfer in immediately available funds to:

[insert wire instructions for Borrower’s account].
The Borrower hereby certifies to the Administrative Agent and the Lenders that
as of the date hereof and as of the date of the making of the requested Loans
and after giving effect thereto, (a) no Default or Event of Default exists or
shall exist, and (b) the representations and warranties made or deemed made by
the Borrower and each other Loan Party in the Loan Documents to which any of
them is a party are and shall be true and correct in all material respects,
except to the extent that such representations and warranties expressly relate
solely to an earlier date (in which case such representations and warranties
shall have been true and correct on and as of such earlier date) and except for
changes in factual circumstances not prohibited under the Loan Documents. In
addition, the Borrower certifies to the Administrative Agent and the Lenders
that all conditions to the making of the requested Loans contained in
Article VI. of the Credit Agreement will have been satisfied (or waived in
accordance with the applicable provisions of the Loan Documents) at the time
such Loans are made.
If notice of the requested borrowing of Loans was previously given by telephone,
this notice is to be considered the written confirmation of such telephone
notice required by Section 2.1.(b) of the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice
of Borrowing as of the date first written above.

            DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP
      By:   DiamondRock Hospitality Company,         its sole General Partner   
          By:           Name:           Title:      

 

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EXHIBIT E
FORM OF NOTICE OF CONTINUATION
                    , 20     
Wells Fargo Bank, National Association
MAC D1053-04R
301 S. College Street, 4th Floor
Charlotte, NC 28202-6000
Attention: D. Bryan Gregory
Telecopier: 704-383-6205
Telephone: 704-715-5450
Wells Fargo Bank, National Association
MAC E2231-050
2030 Main Street, Suite 500
Irvine, CA 92614
Attention: Sherrie Courtney-Sanders
Telecopier: 949-251-4983
Telephone: 949-251-4344
Ladies and Gentlemen:
Reference is made to that certain Second Amended and Restated Credit Agreement
dated as of August 6, 2010 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), by and among DiamondRock
Hospitality Limited Partnership (the “Borrower”), the financial institutions
party thereto and their assignees under Section 13.6. thereof (the “Lenders”),
Wells Fargo Bank, National Association, as Administrative Agent (the
“Administrative Agent”), and the other parties thereto. Capitalized terms used
herein, and not otherwise defined herein, have their respective meanings given
them in the Credit Agreement.
Pursuant to Section 2.7. of the Credit Agreement, the Borrower hereby requests a
Continuation of a borrowing of Loans under the Credit Agreement, and in that
connection sets forth below the information relating to such Continuation as
required by such Section of the Credit Agreement:

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

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

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

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

 

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

         
[Check one box only]
  o   1 month
 
  o   3 months
 
  o   6 months

The Borrower hereby certifies to the Administrative Agent and the Lenders that
as of the date hereof and as of the proposed date of the requested Continuation
and after giving effect thereto, no Default or Event of Default exists or will
exist.
If notice of the requested Continuation was given previously by telephone, this
notice is to be considered the written confirmation of such telephone notice
required by Section 2.7. of the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice
of Continuation as of the date first written above.

            DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP
      By:   DiamondRock Hospitality Company,         its sole General Partner   
          By:           Name:           Title:      

 

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EXHIBIT F
FORM OF NOTICE OF CONVERSION
                    , 200     
Wells Fargo Bank, National Association
MAC D1053-04R
301 S. College Street, 4th Floor
Charlotte, NC 28202-6000
Attention: D. Bryan Gregory
Telecopier: 704-383-6205
Telephone: 704-715-5450
Wells Fargo Bank, National Association
MAC E2231-050
2030 Main Street, Suite 500
Irvine, CA 92614
Attention: Sherrie Courtney-Sanders
Telecopier: 949-251-4983
Telephone: 949-251-4344
Ladies and Gentlemen:
Reference is made to that certain Second Amended and Restated Credit Agreement
dated as of August 6, 2010 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), by and among DiamondRock
Hospitality Limited Partnership (the “Borrower”), the financial institutions
party thereto and their assignees under Section 13.6. thereof (the “Lenders”),
Wells Fargo Bank, National Association, as Administrative Agent (the
“Administrative Agent”), and the other parties thereto. Capitalized terms used
herein, and not otherwise defined herein, have their respective meanings given
them in the Credit Agreement.
Pursuant to Section 2.8. of the Credit Agreement, the Borrower hereby requests a
Conversion of a borrowing of Loans of one Type into Loans of another Type under
the Credit Agreement, and in that connection sets forth below the information
relating to such Conversion as required by such Section of the Credit Agreement:

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

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

         
[Check one box only]
  o   Base Rate Loans
 
  o   LIBOR Loans

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

 

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  4.  
The portion of such principal amount subject to such Conversion is
$                    .

  5.  
The amount of such Loans to be so Converted is to be converted into Loans of the
following Type:

         
[Check one box only]
  o   Base Rate Loans
 
  o   LIBOR Loans, each with an initial Interest Period for a duration of:

         
[Check one box only]
  o   1 month
 
  o   3 months
 
  o   6 months

The Borrower hereby certifies to the Administrative Agent and the Lenders that
as of the date hereof and as of the date of the requested Conversion and after
giving effect thereto, (a) no Default or Event of Default exists or will exist
(provided the certification under this clause (a) shall not be made in
connection with the Conversion of a Loan into a Base Rate Loan), and (b) the
representations and warranties made or deemed made by the Borrower and each
other Loan Party in the Loan Documents to which any of them is a party are and
shall be true and correct in all material respects, except to the extent that
such representations and warranties expressly relate solely to an earlier date
(in which case such representations and warranties shall have been true and
correct on and as of such earlier date) and except for changes in factual
circumstances not prohibited under the Loan Documents.
If notice of the requested Conversion was given previously by telephone, this
notice is to be considered the written confirmation of such telephone notice
required by Section 2.8. of the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice
of Conversion as of the date first written above.

            DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP
      By:   DiamondRock Hospitality Company,         its sole General Partner   
          By:           Name:           Title:      

 

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EXHIBIT G
TRANSFER AUTHORIZER DESIGNATION
(For Disbursement of Loan Proceeds by Funds Transfer)
o NEW o REPLACE PREVIOUS DESIGNATION o ADD o CHANGE o DELETE LINE NUMBER
                    
The following representatives of DiamondRock Hospitality Limited Partnership
(“Borrower”) are authorized to request the disbursement of Loan Proceeds and
initiate funds transfers for Loan Number 104239 assigned to the unsecured
revolving credit facility evidenced by the Second Amended and Restated Credit
Agreement dated August 6, 2010 among the Borrower, DiamondRock Hospitality
Company, each of the financial institutions initially a signatory thereto
together with their assignees under Section 13.6. thereof (the “Lenders”), Wells
Fargo Bank, National Association, as the Administrative Agent for the Lenders
(the “Administrative Agent”) and the other parties thereto. The Administrative
Agent is authorized to rely on this Transfer Authorizer Designation until it has
received a new Transfer Authorizer Designation signed by Borrower, even in the
event that any or all of the foregoing information may have changed.

                                      Maximum                   Wire   Name    
Title     Amount1  

[Continued on next page]
 

      1  
Maximum Wire Amount may not exceed the Loan Amount.

 

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Beneficiary Bank and Account Holder Information
1.

     
Transfer Funds to (Receiving Party Account Name):
   
 
   
Receiving Party Account Number:
   
 
   
Receiving Bank Name, City and State:
  Receiving Bank Routing (ABA) Number
 
   
Maximum Transfer Amount:
   
 
   
Further Credit Information/Instructions:
   

2.

     
Transfer Funds to (Receiving Party Account Name):
   
 
   
Receiving Party Account Number:
   
 
   
Receiving Bank Name, City and State:
  Receiving Bank Routing (ABA) Number
 
   
Maximum Transfer Amount:
   
 
   
Further Credit Information/Instructions:
   

3.

     
Transfer Funds to (Receiving Party Account Name):
   
 
   
Receiving Party Account Number:
   
 
   
Receiving Bank Name, City and State:
  Receiving Bank Routing (ABA)
Number
 
   
Maximum Transfer Amount:
   
 
   
Further Credit Information/Instructions:
   

 

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Date:                     , 2010
DIAMONDROCK HOSPITALITY LIMITED
PARTNERSHIP

           
By:
  DiamondRock Hospitality Company,    
 
  its sole General Partner    
 
       
By:
       
 
 
 
Name:    
 
  Title:      

 

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EXHIBIT H
FORM OF OPINION OF COUNSEL
[To Be Attached]

 

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EXHIBIT I
FORM OF COMPLIANCE CERTIFICATE
                    , 20     
Wells Fargo Bank, National Association
MAC D1053-04R
301 S. College Street, 4th Floor
Charlotte, NC 28202-6000
Attention: D. Bryan Gregory
Telecopier: 704-383-6205
Telephone: 704-715-5450
Wells Fargo Bank, National Association
MAC E2231-050
2030 Main Street, Suite 500
Irvine, CA 92614
Attention: Sherrie Courtney-Sanders
Telecopier: 949-251-4983
Telephone: 949-251-4344
Each of the Lenders Party to the Credit Agreement referred to below
Ladies and Gentlemen:
Reference is made to that certain Second Amended and Restated Credit Agreement
dated as of August 6, 2010 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), by and among DiamondRock
Hospitality Limited Partnership (the “Borrower”), DiamondRock Hospitality
Company (the “Parent”), the financial institutions party thereto and their
assignees under Section 13.6. thereof (the “Lenders”), Wells Fargo Bank,
National Association, as Administrative Agent (the “Administrative Agent”), and
the other parties thereto. Capitalized terms used herein, and not otherwise
defined herein, have their respective meanings given to them in the Credit
Agreement.
Pursuant to Section 9.3 of the Credit Agreement, the undersigned hereby
certifies, in such person’s corporate and not individual capacity, to the
Administrative Agent and the Lenders that:
1. The undersigned is the [                                        ] of the
Parent.
2. The undersigned has examined the books and records of the Parent and the
Borrower and has conducted such other examinations and investigations as are
reasonably necessary to provide this Compliance Certificate.
3. As of the date of this Compliance Certificate, to the best of my knowledge,
information and belief after due inquiry, no Default or Event of Default exists
and the Borrower and its Subsidiaries are in compliance with all covenants under
the Credit Agreement. [if such is not the case, specify such Default, Event of
Default or covenant non-compliance and its nature, when it occurred and whether
it is continuing and the steps being taken by the Borrower with respect to such
event, condition or failure].

 

I-1

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4. Attached hereto as Schedule 1 are reasonably detailed calculations
establishing whether or not the Borrower and its Subsidiaries were in compliance
with the covenants contained in Sections 10.1., 10.2. and 10.4. of the Credit
Agreement.
5. [Attached hereto as Schedule 2 is a report setting forth a statement of
Adjusted Funds From Operations for the trailing four (4) fiscal quarters ending
June 18, 2010, the last day of our 2010 Second Fiscal Quarter1 [Attached hereto
as Schedule 2 is a report setting forth a statement of Adjusted Funds From
Operations as of the last day of the [fiscal [quarter/year]]].
6. [Attached hereto as Schedule 3 is a list of all Persons that are a Material
Subsidiary or a Significant Subsidiary as of the date hereof] 2 [Attached hereto
as Schedule 3 is a list of all Persons that have become a Material Subsidiary or
a Significant Subsidiary since the date of the Compliance Certificate most
recently delivered by the Borrower or the Parent prior to the date hereof.]
7. [Attached hereto as Schedule 4 is a report of the Properties of the Parent,
the Borrower and each of the other Subsidiaries, including their Net Operating
Income for the trailing four (4) fiscal quarters ending June 18, 2010, the last
day of our 2010 Second Fiscal Quarter and mortgage debt as of the date hereof,
if any, in each case, as of the date hereof.]3 [Attached hereto as Schedule 4 is
a report of newly acquired Properties of the Parent, the Borrower and each of
the other Subsidiaries, including their Net Operating Income for the trailing
four (4) fiscal quarters ending                     , purchase price, and
principal amount of the mortgage debt as of the date hereof, if any, since the
date of the Compliance Certificate most recently delivered by the Borrower or
the Parent prior to the date hereof.]
8. As of the date hereof [the aggregate outstanding principal amount of all
outstanding Loans is less than or equal to the Maximum Loan Availability at such
time]. [there are no Loans outstanding.]
9. Schedule 5 attached hereto accurately and completely sets forth, in
reasonable detail, the information to determine the Unencumbered Borrowing Base
Value of all Unencumbered Borrowing Base Properties and Maximum Loan
Availability as of                     , 20     , including, without limitation,
the aggregate principal amount of all Secured Recourse Indebtedness. 4
 

      1  
Substitute this statement and the corresponding Schedule, upon the delivery of
this Certificate on the Closing Date.
  2  
Substitute this statement and the corresponding Schedule, upon the delivery of
this Certificate on the Closing Date.
  3  
Substitute this statement and the corresponding Schedule, upon the delivery of
this Certificate on the Closing Date.
  4  
If this Certificate is delivered in connection with the submission of an
Eligible Unencumbered Borrowing Base Property as an Unencumbered Borrowing Base
Property pursuant to Section 4.1.(b), then each of the calculations set forth on
Schedules 3 should include such Property as if it is already an Unencumbered
Borrowing Base Property.

 

I-2

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10. [Each Property listed on Schedule 6 attached hereto constitutes an Eligible
Borrowing Base Property and the Administrative Agent has received such
information and reports regarding such Property as required under
Section 4.1.(b) of the Credit Agreement.]5
11. [Schedule 7 attached hereto accurately and completely sets forth, in
reasonable detail, the information required to determine the Unencumbered
Borrowing Base Value of each Eligible Unencumbered Borrowing Base Property as of
                    , 20     .]6
12. The representations and warranties of the Borrower and the other Loan
Parties contained in the Credit Agreement and the other Loan Documents to which
any is a party, are true and correct in all material respects on and as of the
date hereof, except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and correct on and as of such earlier date)
and except for changes in factual circumstances not prohibited under the Credit
Agreement or the other Loan Documents.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date
first above written.

         
 
 
 
[INSERT NAME], as [                    ] of    
 
  DiamondRock Hospitality Company    

 

      5  
Include this statement and the corresponding Schedule, if this Certificate is
delivered in connection with the submission of an Eligible Unencumbered
Borrowing Base Property as an Unencumbered Borrowing Base Property pursuant to
Section 4.1.(b).
  6  
Include this statement and the corresponding Schedule, if this Certificate is
delivered in connection with the submission of an Eligible Unencumbered
Borrowing Base Property as an Unencumbered Borrowing Base Property pursuant to
Section 4.1.(b).

 

I-3