EX-10.2






EXHIBIT 10.2




U.S. $108,000,000




AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT




Dated as of January 14, 2005




Among




INTERSTATE OPERATING COMPANY, L.P.




as the Borrower,




SOCIÉTÉ GÉNÉRALE




As the Administrative Agent,




SG AMERICAS SECURITIES, LLC




as Sole Lead Arranger and Book Runner,




and




VARIOUS LENDERS






1






2



3



4




AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT




THIS AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT (this “Agreement”), dated as of
January 14, 2005 (the “Closing Date”), is among INTERSTATE OPERATING COMPANY, L.P., a
Delaware limited partnership, as the Borrower; SOCIÉTÉ GÉNÉRALE, as the Administrative Agent and
the Issuing Bank; SG AMERICAS SECURITIES, LLC, as Sole Lead Arranger and Book Runner; and the
Lenders (as defined below).



PRELIMINARY STATEMENTS:




WHEREAS, many of the parties hereto previously entered into a Senior Secured Credit Agreement
(the “Existing Credit Agreement”), dated as of July 31, 2002, by and between the Borrower
(fka MeriStar H & R Operating Company, L.P.); Société Générale, as the Administrative Agent, the
Issuing Bank and the Alternate Currency Swing Line Lender; SG Americas Securities, LLC
(successor-in-interest to SG Cowen Securities Corporation), as Joint Lead Arranger and Book Runner;
Salomon Smith Barney Inc., as Joint Lead Arranger, Book Runner and Co-Syndication Agent; Lehman
Brothers, Inc., as Joint Lead Arranger, Book Runner and Co-Syndication Agent; Credit Lyonnais New
York Branch, as Documentation Agent; and the banks and other lenders a party thereto;



WHEREAS, pursuant to the Existing Credit Agreement the banks and other lenders party thereto
(the “Existing Lenders”) have made advances to the Borrower, and have issued or
participated in letters of credit (each an “Existing Letter of Credit”, and collectively
the “Existing Letters of Credit”) for the account of the Borrower, in each case on the
terms and conditions set forth therein;



WHEREAS, the Borrower has requested that the Existing Lenders amend the Existing Credit
Agreement and the other Credit Documents (as defined in the Existing Credit Agreement, and as used
herein, the “Existing Credit Documents”) in order to increase the Commitments under this
Agreement and revise certain terms thereof and the Existing Lenders party hereto have agreed to do
so on the terms and conditions set forth herein; and



WHEREAS, the parties hereto have agreed to amend and restate the Existing Credit Agreement in
its entirety for clarity only, and amend the other Existing Credit Documents, in order to
memorialize such amendments;



WHEREAS, this Amended and Restated Senior Secured Credit Agreement constitutes for all
purposes an amendment to the Existing Credit Agreement and not a new or substitute agreement or a
novation of the Existing Credit Agreement and each reference to an “Advance” and “Letter of Credit”
herein shall mean such Advance made and each Letter of Credit issued heretofore under the Existing
Credit Agreement;



NOW, THEREFORE, in consideration of the foregoing recitals and the provisions contained in
this Agreement, the parties hereto do hereby agree as follows:



5



ARTICLE I




DEFINITIONS AND ACCOUNTING TERMS




Section 1.01 Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (unless otherwise indicated, such meanings to be equally
applicable to both the singular and plural forms of the terms defined):



"Acceptable Lien” means a Lien which (a) exists in favor of the Administrative Agent
for its benefit and the ratable benefit of the Lenders, (b) secures the Obligations and (c) is
perfected and enforceable against all Persons in preference to any rights of any Person in the
property encumbered thereby and superior to all other Liens except for Permitted Encumbrances;
provided that the Lien on any Ownership Interests in an Unconsolidated Entity may be
subordinate to the Liens securing any Indebtedness of such Unconsolidated Entity.



"Accession Agreement” means an Accession Agreement in the form attached respectively
to the Guaranty, Environmental Indemnity and Security Agreement as Annex 1 thereto, which agreement
causes the Person executing and delivering the same to the Administrative Agent to become a party,
respectively, to the Guaranty, Environmental Indemnity and Security Agreement.




"Act” has the meaning set forth in Section 10.20.



"Adjusted Base Rate” means, for any day, the fluctuating rate per annum of interest
equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Rate in
effect on such day plus one-half of one percent (.50%).



"Adjusted Base Rate Advance” means an Advance which bears interest as provided in
Section 2.06(a).



"Adjusted EBITDA” means, for any Person or Hospitality Property, as applicable, for
any Rolling Period, the EBITDA of such Person or Hospitality Property, as applicable, for such
Rolling Period; provided that:




(a) the EBITDA from any Unconsolidated Entity or Minority-Owned Fund (but not the
EBITDA from any Permitted Property Agreement with such Person) shall be excluded from the
calculation of Adjusted EBITDA;




(b) if the Parent or any of its Subsidiaries during such Rolling Period or in the
period from the end of such Rolling Period to the Status Reset Date which occurs in the
Fiscal Quarter following such Rolling Period either (i) sells, disposes of or terminates any
Permitted Property Agreements or (ii) sells or disposes of any Investments or Non-Replaced
Property with an Investment Amount in excess of $1,000,000, the EBITDA arising from such
Permitted Property Agreement, Investment, or Non-Replaced Property, as applicable, for the
applicable Rolling Period shall be excluded from the calculation of Adjusted EBITDA,
provided, however, that with respect to any termination payments received in
connection with the termination of a Permitted Property Agreement with MHC or its
Subsidiary, the Parent shall include within the calculation of Adjusted EBITDA for the
applicable Rolling Periods in which termination payments were received (A) 80% of the
termination payments received in the first year following the termination of such Permitted
Property Agreement, (B) 60% of the termination payments received in the second year
following the termination of such Permitted Property Agreement, (C) 40% of the termination
payments received in the third year following the termination of such Permitted Property
Agreement and (D) 20% of the termination payments received in the fourth year following the
termination of such Permitted Property Agreement;




(c) if the Parent or any of its Subsidiaries during such Rolling Period or in the
period from the end of such Rolling Period to the Status Reset Date which occurs in the
Fiscal Quarter following such Rolling Period either (i) purchases or acquires any Permitted
Property Agreements or (ii) purchases or acquires any Investments with an Investment Amount
in excess of $1,000,000, the EBITDA arising from such Permitted Property Agreement or
Investment, as applicable, for the applicable Rolling Period on a pro forma basis shall be
included in the calculation of Adjusted EBITDA; and




(d) the non-cash employee compensation up to $2,000,000 per Fiscal Year in the
aggregate commencing with the 2004 Fiscal Year, and other non-cash items of such Person or
Hospitality Property, as applicable, for such Rolling Period shall be excluded from the
calculation of Adjusted EBITDA.



"Adjusted Net Worth” means, for the Parent as of any date, the sum of (a) the Parent’s
Net Worth on such date plus (b) the minority interest reflected as a liability on the
Parent’s balance sheet on such date determined in accordance with GAAP (excluding that portion of
the minority interest attributable to Ownership Interests in any Subsidiary of the Borrower which
is not a Guarantor).




"Adjustment Event” has the meaning set forth in Section 2.14(a).



"Adjustment Report” means a certificate of the Borrower in substantially the form of
the attached Exhibit B.



"Administrative Agent” means Société Générale in its capacity as Administrative Agent
for the Lenders pursuant to Article IX and any successor Administrative Agent appointed pursuant to
Section 9.06.




"Advance” means a Revolving Advance or a Term Advance.




"Affected Lender” has the meaning set forth in Section 2.15(a).



"Affiliate” means, as to any Person, any other Person that, directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under common control with,
such Person or any Subsidiary of such Person. The term “control” (including the terms “controlled
by” or “under common control with”) means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person, whether through ownership
of a Control Percentage, by contract or otherwise.



"Agreement” has the meaning given such term in the initial paragraph of this
agreement.



"Applicable Lending Office” means, with respect to each Lender, (a) in the case of an
Adjusted Base Rate Advance, such Lender’s Domestic Lending Office, (b) in the case of all
Eurodollar Rate Advances, such Lender’s Eurodollar Lending Office, and (c) in the case of any other
notice or request under the Credit Documents, the office of such Lender specified as its “Credit
Contact” in the questionnaire such Lender provided to the Administrative Agent, or such other
office of such Lender as such Lender may from time to time specify to the Borrower and the
Administrative Agent.



"Applicable Margin” means, (a) with respect to any Advance at any date, the applicable
percentage per annum set forth below based upon the Status then in effect under the column for such
Class and Type of Advance, and (b) with respect to the letter of credit fee payable under Section
2.03(b) at any date, the applicable percentage per annum set forth below based upon the Status then
in effect under the column for Revolving Advances which are Eurodollar Rate Advances.



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Revolving Advances	 	 	 	 	 	 	 	 	 	Term Advances

	 
	 	 	 	 	 	Adjusted Base Rate              
	 	Eurodollar Rate            
	 	Adjusted Base Rate              
	 	Eurodollar  Rate

	 
	 	 	 	 	 	Advances                        
	 	Advances	 	Advances                        
	 	Advances

	Level I Status
	 	 	 	 	 	 	1.25	%	 	 	3.25	%	 	 	2.50	%	 	 	4.50	%
	Level II Status
	 	 	 	 	 	 	1.50	%	 	 	3.50	%	 	 	2.50	%	 	 	4.50	%
	Level III Status
	 	 	 	 	 	 	1.50	%	 	 	3.50	%	 	 	3.50	%	 	 	5.50	%







"Appraisal” means an appraisal prepared by an M.A.I. appraiser approved by the
Administrative Agent which appraisal is acceptable to the Administrative Agent and done in
conformity with the following standards: Uniform Standards of Professional Appraisal Practice, the
requirements of the Code of Professional Ethics and the Standards of Professional Appraisal
Practice of the Appraisal Institute, the appraisal guidelines set forth by the office of the
Comptroller of the Currency and the Federal Reserve Board.



"Approved Fund” means any fund that invests in commercial loans in the ordinary course
which is advised or managed by an investment advisor, an Affiliate of an investment advisor, a
Lender or an Affiliate of a Lender.



"Approved Inter-Company Indebtedness” means (a) the Indebtedness described on Schedule
1.01(a), which Indebtedness (i) may not exceed $50,000,000 without the approval of the
Administrative Agent, (ii) is unsecured, (iii) is subordinated to the Obligations in a manner
acceptable to the Administrative Agent, and (iv) is Collateral and (b) any future Indebtedness of
the Borrower to the Parent created with the proceeds of a Parent Capitalization Event which
satisfies the requirements of the foregoing clauses (ii), (iii) and (iv).



"Approved Inter-Company Indebtedness Loan Documents” means the documents described on
Schedule 1.01(a), together with any additional promissory notes or other documents evidencing
Approved Inter-Company Indebtedness.



"Asset Disposition” means any conveyance, exchange, transfer, assignment, or
condemnation of any Investment or Non-Replaced Property by the Borrower or a Guarantor to a Person
other than the Borrower or a Guarantor.



"Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an Eligible Assignee, and accepted by the Administrative Agent, in substantially the
form of the attached Exhibit C.



"Assignment of Leases” means an assignment of leases, rents and security deposits
executed by the Borrower or any Guarantor to secure the Obligations, each in form reasonably
approved by the Administrative Agent with such modifications as may be necessary and appropriate in
the opinion of counsel to the Administrative Agent to comply with the state law of the filing
jurisdiction and as may be reasonably satisfactory to the Administrative Agent, as the same may be
amended or terminated in accordance with its terms.



"Beverage Entity” means any Subsidiary or Unconsolidated Entity of the Parent for
which substantially all of such Person’s Property is directly related to the sale of beverages at a
Hospitality Property, and “Beverage Entities” means all such Persons.




"Borrower” means Interstate Operating Company, L.P., a Delaware limited partnership.



"Borrowing” means a borrowing consisting of simultaneous Advances of the same Type (a)
made by each Lender pursuant to Section 2.01(a) or 2.01(b) or (b) Converted by each Lender to
Advances of a different Type pursuant to Section 2.02(b).



"Business Day” means (a) with respect to Adjusted Base Rate Advances, a day of the
year on which banks are not required or authorized to close in New York, New York, and (b) with
respect to Eurodollar Rate Advances, a day of the year on which banks are not required or
authorized to close in New York, New York, or London, England.



"Capital Expenditure” means any payment made directly or indirectly for the purpose of
acquiring or constructing fixed assets, real property, improvements, equipment, or other personal
property, or for replacements or substitutions therefore or additions thereto, which in accordance
with GAAP would be capitalized in the fixed asset accounts of such Person making such expenditure,
including, without limitation, amounts paid or payable for such purpose under any conditional sale
or other title retention agreement or under any Capital Lease, but excluding repairs or maintenance
of any Hospitality Property in the normal and ordinary course of business in keeping with the past
practices of the Borrower or the Parent.



"Capital Lease” means, for any Person, any lease of any Property (whether real,
personal or mixed) by that Person as lessee which, in accordance with GAAP, is or should be
accounted for as a capital lease on the balance sheet of that Person.



"Capitalization Event” means any sale or issuance by the Parent or any of its
Subsidiaries of equity securities except for the issuance of the Borrower’s limited partnership
interests in accordance with the provisions of Section 6.05.



"Capitalized Lease Obligations” means, as to any Person, the capitalized amount of all
obligations of such Person or any of its Subsidiaries under Capitalized Leases, as determined on a
consolidated basis in conformity with GAAP.



"Cash Collateral Account” means a special cash collateral account containing cash
deposited pursuant to the terms of this Agreement to be maintained at the Administrative Agent’s
office in accordance with Section 8.04.



"CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended, all rules and regulations and requirements thereunder in each case as now
or hereafter in effect.



"Change in Control” means for any Person a change in ownership or control of such
Person effected through either of the following transactions:




(a) any Person or related group of Persons (other than such Person or an Affiliate of
such Person) directly or indirectly acquires beneficial ownership (within the meaning of
Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of (i) securities
possessing more than fifty percent (50%) of the total combined voting power of such Person’s
outstanding securities, or (ii) with respect to the Parent or the Borrower, securities
(excluding securities held by transferees of CGLH Partners I LP and CGLH Partners II LP as
of the Closing Date) possessing more than thirty five percent (35%) of the total combined
voting power of such Person’s outstanding securities; or




(b) there is a change in the composition of such Person’s Board of Directors over a
period of thirty-six (36) consecutive months (or less) such that a majority of Board members
(rounded up to the nearest whole number) ceases, by reason of one or more proxy contests for
the election of Board members, to be comprised of individuals who either (i) have been Board
members continuously since the beginning of such period or (ii) have been elected or
nominated for election as Board members during such period by at least a majority of the
Board members described in clause (i) who were still in office at the time such election or
nomination was approved by the Board.




"Class” has the meaning set forth in Section 1.04.



"Closing Date” has the meaning given such term in the initial paragraph of this
agreement.




"Code” means the Internal Revenue Code of 1986, as amended, and any successor statute.



"Collateral” means all of the Parent’s and its Subsidiaries’ interests in the
following, whether owned on or acquired after the Closing Date: (a) the Ownership Interests of all
existing Subsidiaries and Unconsolidated Entities of the Parent and the Borrower and any future
Material Subsidiary or Material Unconsolidated Entity except for the Ownership Interests in
Beverage Entities (the Ownership Interests required to be Collateral pursuant to this definition
being referred to herein as the “Ownership Interests Collateral”), (b) the rights to
receive payments for its account (including the right to receive termination payments) under all
Permitted Property Agreements, (c) Owned Hospitality Properties, (d) the Approved Inter-Company
Indebtedness and the Approved Inter-Company Indebtedness Loan Documents, (e) any other collateral
described in the Security Agreement or other Security Documents; provided that the pledge
of such Property is not prohibited by the terms of (i) Permitted Property Agreements, joint venture
agreements, organizational documents and other contractual arrangements to which the Borrower or a
Subsidiary is a party and which are in effect on the Closing Date, in each case as approved by the
Administrative Agent; (ii) with respect to any Ownership Interests in or Property of a Permitted
Other Subsidiary, the loan documentation for any Permitted Other Indebtedness incurred by such
Permitted Other Subsidiary; and (iii) with respect to any Ownership Interests in an Unconsolidated
Entity, the loan documentation for Indebtedness incurred by such Unconsolidated Entity or joint
venture agreements or other contractual arrangements for such Unconsolidated Entity. The Ownership
Interests which cannot be pledged as of the date of this Agreement are those certain Ownership
Interests designated in Schedule 1.01(b) as Non-Pledgable.



"Commitment” means, as to any Lender, its Revolving Commitment and its Term
Commitment.



"Commitment Fee Rate” means, with respect to the commitment fee payable under Section
2.03(a) at any date, .50% percent per annum.



"Compliance Certificate” means a certificate of the Borrower in substantially the form
of the attached Exhibit D.



"Consolidated” refers, with respect to any Person, to the consolidation of the
accounts of such Person with such Person’s Subsidiaries in accordance with GAAP.



"Control Percentage” means, with respect to any Person, the percentage of the
outstanding capital stock of such Person having ordinary voting power which gives the direct or
indirect holder of such stock the power to elect a majority of the Board of Directors of such
Person.



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



"Convert”, “Conversion”, and “Converted” each refers to a conversion
of Advances of one Type into Advances of another Type pursuant to Section 2.02(b).



"Credit Documents” means this Agreement, the Notes, the Guaranties, the Environmental
Indemnities, the Security Documents, the Fee Letter, and each other agreement, instrument or
document executed by the Borrower or any of its Subsidiaries at any time in connection with this
Agreement.



"Currency Agreements” means all swaps, caps or collar agreements or similar
arrangements providing for protection against fluctuations in currency exchange rates, either
generally or under specific contingencies.



"Customary Management Agreement” means a management agreement for a Hospitality
Property by and between a Person, as owner, and Borrower or Borrower’s Subsidiary or Unconsolidated
Entity, as manager, which (a) has a term and early termination payment provisions which are
reasonable based upon the amount of any Investment made to obtain such management agreement and (b)
is in substantially the form of an Existing Management Agreement, a form which does not include
materially adverse provisions which are not customary for management agreements of Hospitality
Properties or such other form as is approved by the Administrative Agent in writing (which approval
shall not be unreasonably withheld).



"Customary Participating Lease” means a lease (except for a Ground Lease) for a
Hospitality Property by and between a Person, as lessor, and Borrower or Borrower’s Subsidiary, as
lessee, which (a) has expected economics and a term and early termination payment provisions which
are reasonable based upon the amount of any Investment made to obtain such lease and (b) are in a
form which does not include materially adverse provisions which are not customary for participating
leases of Hospitality Properties or such other form as is approved by the Administrative Agent in
writing (which approval shall not be unreasonably withheld).



"Customary Property Agreement” means a Customary Management Agreement or a Customary
Participating Lease, and “Customary Property Agreements” means all such agreements and
leases.



"Dallas Pledgors” means Interstate/Dallas GP, LLC and Interstate/Dallas Partnership,
LP.



"Default” means (a) an Event of Default or (b) any event or condition which with
notice or lapse of time or both would, unless cured or waived, become an Event of Default.



"Defaulting Lender” means any Lender which has wrongfully refused or failed to make
available its portion of any Borrowing or to fund its portion of any unreimbursed payment under
Section 9.05, or notified in writing the Borrower or the Administrative Agent that such Lender does
not intend to comply with its obligations under this Agreement.



"Dollar Equivalent” means the equivalent in another currency of an amount in Dollars
to be determined by reference to the rate of exchange quoted by Société Générale at 10:00 a.m. (New
York City time) on the date of determination, for the spot purchase in the foreign exchange market
of such amount of Dollars with such other currency.




"Dollars” and “$” means lawful money of the United States of America.



"Domestic Lending Office” means, with respect to any Lender, the office of such Lender
specified as its “Operations Contact” for Adjusted Base Rate Advances in the questionnaire such
Lender provided to the Administrative Agent, or such other office of such Lender as such Lender may
from time to time specify to the Borrower and the Administrative Agent.



"EBITDA” means for any Person or Hospitality Property, as applicable, for any period
for which such amount is being determined, an amount equal to (a) the Net Income for such Person or
Hospitality Property, as applicable, for such period plus (b) to the extent deducted in
determining Net Income, Interest Expense, income taxes, depreciation, and amortization, as
determined on a Consolidated basis in accordance with GAAP plus (c) to the extent deducted
in determining Net Income, deductions for minority interest attributable to the Ownership Interests
in the Borrower not owned (directly or indirectly) by the Parent.



"Effective Date” means the date all of the conditions precedent set forth in Section
3.01 have been satisfied.



"Eligible Assignee” means any of the following approved by those Persons who have
approval rights pursuant to the provisions of Section 10.06, which approval will not be
unreasonably withheld: (a) a commercial bank organized under the laws of the United States, or any
State thereof, and having primary capital of not less than $250,000,000 (b) a commercial bank
organized under the laws of any other country which is a member of the Organization for Economic
Cooperation and Development and having primary capital (or its equivalent) of not less than
$250,000,000 (or its Dollar Equivalent), (c) an investment bank organized under the laws of the
United States, or any State thereof, and having total assets in excess of $5,000,000,000, (d) an
insurance company, finance company or financial institution (whether a corporation, partnership,
trust or other Person) organized under the laws of the United States, or any state thereof, and
having total assets in excess of $5,000,000,000, (e) with respect to Term Advances only, any
Approved Fund or Related Fund, (f) with respect to Term Advances only, any “accredited investor”
(as defined in Regulation D of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder) which has total assets in excess of $100,000,000, (g) a Lender,
(h) an Affiliate of the respective assigning Lender meeting the eligibility requirements of (a),
(b), (c), (d), (e) or (f) above, and (i) any other Person approved by the Administrative Agent and
the Borrower, and if such Person will hold a Revolving Commitment, the Issuing Bank.



"Engineering Report” means with respect to any Owned Hospitality Property, an
engineering report which (a) is prepared for the Lenders and the Administrative Agent by a Person
reasonably satisfactory to the Administrative Agent, (b) is prepared in accordance with a scope of
services reasonably satisfactory to the Administrative Agent, (c) is prepared within three (3)
months of the date of acquisition of such Owned Hospitality Property, and (d) reflects no material
concerns pertaining to the physical condition of the Owned Hospitality Property, including without
limitation the structural, electrical, plumbing, mechanical and other essential components of the
Owned Hospitality Property.



"Environment” or “Environmental” shall have the respective meanings set forth
in 42 U.S.C. ' 9601(8), as amended.



"Environmental Claim” means any third party (including governmental agencies and
employees) action, lawsuit, claim, demand, regulatory action or proceeding, order, decree, consent
agreement or notice of potential or actual responsibility or violation (including claims or
proceedings under the Occupational Safety and Health Acts or similar laws or requirements relating
to health or safety of employees) which seeks to impose liability under any Environmental Law.



"Environmental Indemnity” means one or more environmental indemnity agreements dated
of even date herewith in substantially the form of the attached Exhibit E executed or to be
executed by the Borrower, the Parent and all Guarantors, and any future environmental indemnities
executed in connection with any Hospitality Property, as any of such environmental indemnities may
be amended hereafter in accordance with the terms of such agreements.



"Environmental Law” means all Legal Requirements arising from, relating to, or in
connection with the Environment, health, or safety, including without limitation CERCLA, relating
to (a) pollution, contamination, injury, destruction, loss, protection, cleanup, reclamation or
restoration of the air, surface water, groundwater, land surface or subsurface strata, or other
natural resources; (b) solid, gaseous or liquid waste generation, treatment, processing, recycling,
reclamation, cleanup, storage, disposal or transportation; (c) exposure to pollutants,
contaminants, hazardous, medical, infectious, or toxic substances, materials or wastes; (d) the
safety or health of employees; or (e) the manufacture, processing, handling, transportation,
distribution in commerce, use, storage or disposal of hazardous, medical, infectious, or toxic
substances, materials or wastes.



"Environmental Permit” means any permit, license, order, approval or other
authorization under Environmental Law.



"Environmental Report” means with respect to any Owned Hospitality Property, an
environmental report which (a) is prepared for the Lenders and the Administrative Agent by a Person
reasonably satisfactory to the Administrative Agent, (b) is prepared in accordance with a scope of
services reasonably satisfactory to the Administrative Agent, (c) is prepared within three (3)
months of the date of acquisition of such Owned Hospitality Property, and (d) certifies to the
Administrative Agent and the Lenders that the Owned Hospitality Property and the soil and the
groundwater thereunder do not contain Hazardous Substances except for Permitted Hazardous
Substances.



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



"Eurodollar Lending Office” means, with respect to any Lender, the office or offices
of such Lender specified as its “Operations Contact” for each type of Eurodollar Rate Advance in
the questionnaire such Lender provided to the Administrative Agent, or such other office of such
Lender as such Lender may from time to time specify to the Borrower and the Administrative Agent
for each type of Eurodollar Rate Advance.



"Eurodollar Rate” means, for the Interest Period for each Eurodollar Rate Advance
comprising part of the same Borrowing, an interest rate per annum (rounded upward to the nearest
whole multiple of 1/16 of 1% per annum) equal to (a) the rate per annum at which deposits in
Dollars are offered to prime banks in the London interbank market at 11:00 a.m. (London time) two
Business Days before the first day of such Interest Period as shown on the display designated
“British Banker’s Association Interest Settlement Rates” on Telerate at Page 3750 or Page 3740, or
such other page or pages as may replace such pages on Telerate for purposes of displaying such
rate, in an amount substantially equal to Société Générale’s Eurodollar Rate Advance comprising
part of such Borrowing and for a period equal to such Interest Period divided by (b) one minus the
Eurodollar Reserve Requirement. However, if the aforementioned Telerate offered rate is not
available, then such offered rate shall be otherwise independently determined by Administrative
Agent from an alternate, substantially similar source available to Administrative Agent or shall be
calculated by Administrative Agent by a substantially similar methodology as that theretofore used
to determine such offered rate in Telerate.



"Eurodollar Rate Advance” means an Advance which bears interest as provided in Section
2.06(b).



"Eurodollar Reserve Requirement” shall mean, on any day, that percentage (expressed as
a decimal fraction) which is in effect on such date, as provided by the Federal Reserve System for
determining the maximum reserve requirements generally applicable to financial institutions
regulated by the Federal Reserve Board comparable in size and type to the Administrative Agent
(including, without limitation, basic, supplemental, marginal and emergency reserves) under
Regulation D with respect to “Eurocurrency liabilities” as currently defined as Regulation D, or
under any similar or successor regulation with respect to Eurocurrency liabilities or Eurocurrency
funding (or other category of liabilities which includes deposits by reference to which the
interest rate on a LIBOR Advance is determined or any category or extensions of credit which
includes loans by a non-United States office of the Administrative Agent to United States
residents). Each determination by the Administrative Agent of the Eurodollar Reserve Requirement,
shall, in the absence of manifest error, be conclusive and binding upon the Borrower.




"Event of Default” has the meaning set forth in Section 8.01.



"Exchange Act” means the Securities Exchange Act of 1934,15 U.S.C., as amended, and
the rules and regulations promulgated thereunder.



"Existing Credit Agreement” has the meaning set forth in the preliminary statements to
this Agreement.



"Existing Credit Documents” has the meaning set forth in the preliminary statements to
this Agreement.



"Existing Lenders” has the meaning set forth in the preliminary statements to this
Agreement.



"Existing Letter of Credit” and “Existing Letters of Credit” have the
respective meanings set forth in the preliminary statements to this Agreement.



"Existing Management Agreements” means the management agreements listed on Schedule
1.01(c).



"Existing Notes” means the promissory notes payable under the Existing Credit
Agreement.



"Existing Owned Hospitality Property Investments” means the Owned Hospitality Property
Investments set forth on Schedule 1.01(d) and other Owned Hospitality Property Investments in which
the Borrower’s direct or indirect ownership in such Owned Hospitality Property Investment is equal
to or less than twenty percent (20%) of the total ownership in such Owned Hospitality Property
Investment.



"Expiration Date” means, with respect to any Letter of Credit, the date on which such
Letter of Credit will expire or terminate in accordance with its terms.



"Federal Funds Rate” means, for any period, a fluctuating interest rate per annum
equal for each day during such period to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is
a Business Day, the average of the quotations for any such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing selected by it.



"Federal Reserve Board” means the Board of Governors of the Federal Reserve System or
any of its successors.



"Fee Letter” means the letter agreement dated as of July 16, 2004, among the Borrower,
the Parent, SG Americas and Société Générale, as amended.




"FelCor” means FelCor Lodging Limited Partnership.



"Financial Statements” means the financial statements of the Parent and its
Subsidiaries dated as of September 30, 2004.



"Financing Statement” means any Uniform Commercial Code — Financing Statement — Form
UCC-1 to be executed (if necessary or desirable) and delivered by the Parent or any of its
Subsidiaries in connection with perfecting the security interest assigned by any Security Document,
and any extension, renewal, or amendment thereof.



"Fiscal Quarter” means each of the three-month periods ending on March 31, June 30,
September 30 and December 31.




"Fiscal Year” means the twelve-month period ending on December 31.



"Fund” means the Hazardous Substance Response Trust Fund, established pursuant to 42
U.S.C. ' 9631 (1988) and the Post-closure Liability Trust Fund, established pursuant to 42
U.S.C. ' 9641 (1988), which statutory provisions have been amended or repealed by the
Superfund Amendments and Reauthorization Act of 1986, and the “Fund,” “Trust Fund,” or “Superfund”
that are now maintained pursuant to 42 U.S.C. ' 9507.



"GAAP” means United States generally accepted accounting principles as in effect from
time to time, applied on a basis consistent with the requirements of Section 1.03.



"Governmental Authority” means any foreign governmental authority, the United States
of America, any state of the United States of America and any subdivision of any of the foregoing,
and any agency, department, commission, board, authority or instrumentality, bureau or court having
jurisdiction over any Lender, the Parent, the Borrower, any Subsidiaries of the Borrower or the
Parent or any of their respective Properties.



"Ground Lease” means a lease by and between a Person, as lessor, and Borrower or
Borrower’s Subsidiary, as lessee, where the term of such lease is in excess of twenty (20) years.



"Guarantor” means each of the Parent, each Subsidiary of the Parent (except the (a)
Permitted Other Subsidiaries, (b) the Beverage Entities, (c) certain other non-Material
Subsidiaries which are prohibited from acting as a Guarantor because of joint venture agreements,
organizational documents and other contractual arrangements to which such non-Material Subsidiary
is a party and which are in effect on the Closing Date, in each case as approved by the
Administrative Agent and (d) Subsidiaries with assets and revenues less than $100,000) existing as
of the Closing Date, and any future Material Subsidiary, and “Guarantors” means all of such
Persons. The Guarantors on the Closing Date are identified on Schedule 1.01(e).



"Guaranty” means one or more Amended and Restated Guaranty and Contribution Agreements
in substantially the form of the attached Exhibit F executed by the Guarantors, evidencing the
joint and several guaranty by the signatories thereto of the obligations of Borrower in respect of
the Credit Documents, and any future guaranty and contribution agreement executed to secure
Advances, as any of such agreements may be amended hereafter in accordance with the terms of such
agreements.



"Hazardous Substance” or “Hazardous Material” means the substances identified
as such pursuant to CERCLA and those regulated under any other Environmental Law, including without
limitation pollutants, contaminants, petroleum, petroleum products, radio nuclides, radioactive
materials, and medical and infectious waste.



"Hazardous Waste” means the substances regulated as such pursuant to any Environmental
Law.



"Hospitality Management Business” shall mean the management, operation or leasing as
lessee of any Hospitality Property, including timeshare sales and brokerage, and the operation of
any Permitted Housing Business.



"Hospitality Property” shall mean a full service or limited service hotel or resort, a
condominium or timeshare resort, an extended stay property, or a conference center, and other
facilities incidental to, or in support of such property, including without limitation, restaurants
and other food-service facilities, golf facilities or other entertainment facilities or club,
conference or meeting facilities and Intellectual Property related thereto; provided that
such property shall not include any casino or other gaming property (even if only a part of
a Hospitality Property) or senior living property.



"Improvements” for any Owned Hospitality Property means all buildings, structures,
fixtures, tenant improvements and other improvements of every kind and description now or hereafter
located in or on or attached to the Land for such Owned Hospitality Property; and all additions and
betterments thereto and all renewals, substitutions and replacements thereof.



"Indebtedness” means (without duplication), at any time and with respect to any
Person, (a) indebtedness of such Person for borrowed money (whether by loan or the issuance and
sale of debt securities) or for the deferred purchase price of property or services purchased
(other than amounts constituting trade payables or bank drafts arising in the ordinary course of
business); (b) indebtedness of others in the amount which such Person has directly or indirectly
assumed or guaranteed or otherwise provided credit support therefore or for which such Person is
liable as a partner of such Person; (c) indebtedness of others in the amount secured by a Lien on
assets of such Person, whether or not such Person shall have assumed such indebtedness unless the
validity of such Lien is being contested in good faith and with due diligence by appropriate
proceedings, provided that such Lien is subordinate to the Liens created by the Security
Documents and such Person shall have delivered a bond or other security acceptable to the
Administrative Agent equal to 125% of the contested amount; (d) obligations of such Person in
respect of letters of credit, acceptance facilities, or drafts or similar instruments issued or
accepted by banks and other financial institutions for the account of such Person (other than trade
payables or bank drafts arising in the ordinary course); (e) Capitalized Lease Obligations of such
Person; (f) all obligations, contingent or otherwise, of such Person under any synthetic lease, tax
retention operating lease, off balance sheet loan or similar off balance sheet financing
arrangement if the transaction giving rise to such obligation (1) is considered indebtedness for
borrowed money for U.S. federal income tax purposes but is classified as an operating lease under
GAAP and (2) does not (and is not required pursuant to GAAP to) appear as a liability on the
balance sheet of such Person; (g) 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; (h) all obligations of such Person in respect of any
take-out commitment or forward equity commitment (excluding, in the case of the Borrower and its
Subsidiaries, any such obligation that can be satisfied solely by the issuance of Ownership
Interests (other than Mandatorily Redeemable Stock)); and (i) to the extent treated as a liability
under GAAP, obligations under interest rate swap agreements, interest rate cap agreements, interest
rate collar agreements or other similar agreements or arrangements designed to protect against
fluctuations in interest rates.



"Insurance Annual Statement” means the annual statutory financial statements of each
Insurance Company required to be filed with the insurance commissioner (or similar Governmental
Authority) of its jurisdiction of incorporation, which statement shall be in the form required by
the jurisdiction of incorporation of such Insurance Company or, if no specific form is so required,
in the form of financial statements permitted by such insurance commissioner (or such similar
Governmental Authority) to be used for filing annual statutory financial statements and shall
contain the type of information permitted by such insurance commissioner (or such similar
Governmental Authority) to be disclosed therein, together with all exhibits or schedules filed
therewith.



"Insurance Contract” means each outstanding insurance contract of each Insurance
Company.



"Insurance Company” means each of the Borrower, the Parent or their respective
Subsidiaries that is or acts as an insurance company or provides a guaranty for a Person acting as
an insurance company.



"Insurance License” means any license, certificate of authority, permit or other
authorization which is required to be obtained from any Governmental Authority in connection with
the operation, ownership or transaction of insurance business.



"Insurance Reserve Liabilities” means all reserves and other liabilities with respect
to insurance and for claims and benefits incurred but not reported.



"Insurance Surplus” means an estimate of the amount by which an insurance plan’s
assets exceed its expected current and future liabilities, including the amount expected to be
needed to fund future benefit payments.



"Intellectual Property” shall have the meaning given such term in the Security
Agreement.



"Interest Coverage Ratio” means, as of the end of any Rolling Period, a ratio of (a)
the Parent’s Adjusted EBITDA to (b) the Parent’s Interest Expense, for such Rolling Period.



"Interest Expense” means, for any Person for any period for which such amount is being
determined, the total interest expense (including that properly attributable to Capital Leases in
accordance with GAAP) and all charges incurred with respect to letters of credit determined on a
Consolidated basis in conformity with GAAP, plus capitalized interest of such Person and
its Subsidiaries.



"Interest Period” means, for each Eurodollar Rate Advance comprising part of the same
Borrowing, the period commencing on the date of such Advance or the date of the Conversion of any
Adjusted Base Rate Advance into such an Advance and ending on the last day of the period selected
by the Borrower pursuant to the provisions below and Section 2.02 and, thereafter, each subsequent
period commencing on the last day of the immediately preceding Interest Period and ending on the
last day of the period selected by the Borrower pursuant to the provisions below and Section 2.02.
To the extent available for a Eurodollar Rate Advance, the duration of each such Interest Period
shall be one, two, three or six months for all other Eurodollar Rate Advances, in each case as the
Borrower may select, upon notice received by the Administrative Agent not later than 12:00 noon
(New York, New York time) on the third Business Day prior to the first day of such Interest Period,
provided, however, that:




(a) Interest Periods for Advances of the same Borrowing shall be of the same duration;




(b) whenever the last day of any Interest Period would otherwise occur on a day other
than a Business Day, the last day of such Interest Period shall be extended to occur on the
next succeeding Business Day, provided that if such extension would cause the last
day of such Interest Period to occur in the next following calendar month, the last day of
such Interest Period shall occur on the preceding Business Day;




(c) any Interest Period which begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day of the calendar month in
which it would have ended if there were a numerically corresponding day in such calendar
month;




(d) each successive Interest Period shall commence on the day on which the next
preceding Interest Period expires; and




(e) no Interest Period with respect to any portion of any Advance shall extend beyond
the Maturity Date.



"Interest Rate Agreements” means any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement or other similar agreement or arrangement pertaining to
the fluctuations in interest rates.



"Investment” means, with respect to any Person, (a) any loan or advance to any other
Person, (b) the ownership, purchase or other acquisition of any Ownership Interests or Ownership
Interest Equivalents in any other Person, (c) any joint venture or partnership with, or any capital
contribution to, or other investment in, any other Person, including by way of merger, (d) any
Capital Expenditure, and (e) any payment, whether capitalized or not, to acquire a management
agreement or lease (including, without limitation, any Permitted Property Agreement or Permitted
Housing Agreement).



"Investment Amount” means (a) for any Owned Hospitality Property the sum of (i) the
aggregate purchase price paid by the Borrower or its Subsidiary for such Owned Hospitality
Property, and (ii) the actual cost of any Capital Expenditures for such Owned Hospitality Property
made by the Borrower or its Subsidiaries after the acquisition of such Owned Hospitality Property,
and (b) for any other Investment or Property the aggregate purchase price paid by the Borrower or
its Subsidiary for such other Investment or Property. The Investment Amount shall include any
Ownership Interests or Ownership Interest Equivalents used to purchase such Investment at their
fair market value at the time of purchase; provided that any such Ownership Interests or
Ownership Interest Equivalents which are convertible into the Parent’s common stock shall be valued
at the price at which they could be exchanged into the Parent’s common stock assuming such exchange
occurred on the date of acquiring such Investment. Investment Amount shall not include
Indebtedness incurred in connection with an Investment, or any refinancing of such Indebtedness,
unless such Indebtedness was provided by the Parent, the Borrower or one of their respective
Subsidiaries.



"Issuing Bank” means Société Générale or any Lender acting as a successor Issuing Bank
pursuant to Section 9.06, and “Issuing Banks” means, collectively, all of such Lenders.



"Land” for any Owned Hospitality Property means the real property upon which the Owned
Hospitality Property is located, together with all rights, title and interests appurtenant to such
real property, including without limitation all rights, title and interests to (a) all strips and
gores within or adjoining such property, (b) the streets, roads, sidewalks, alleys, and ways
adjacent thereto, (c) all of the tenements, hereditaments, easements, reciprocal easement
agreements, rights-of-way and other rights, privileges and appurtenances thereunto belonging or in
any way pertaining thereto, (d) all reversions and remainders, (e) all air space rights, and all
water, sewer and wastewater rights, (e) all mineral, oil, gas, hydrocarbon substances and other
rights to produce or share in the production of anything related to such property, and (f) all
other appurtenances appurtenant to such property, including without limitation, any now or
hereafter belonging or in anywise appertaining thereto.



"Legal Requirement” means any law, statute, ordinance, decree, requirement, order,
judgment, rule, regulation (or official interpretation of any of the foregoing) of, and the terms
of any license or permit issued by, any Governmental Authority.




"Lehman” means Lehman Commercial Paper Inc.



"Lehman Indebtedness” means the Subordinate Indebtedness owed by the Borrower and the
Borrower’s Subsidiaries to Lehman and other lenders of approximately $40,000,000, as evidenced by
that certain Subordinate Unsecured Term Loan Agreement dated as of January 10, 2003, between the
Borrower, Lehman, as administrative agent and lender, and certain other financial institutions
party thereto, as amended.



"Lenders” means the lenders who have a Revolving Commitment or a Term Commitment as of
the Effective Date and each Eligible Assignee that shall become a party to this Agreement pursuant
to Section 10.06, and “Lender” means any such Person.



"Letter of Credit” means, individually, any letter of credit issued by the Issuing
Bank in accordance with the provisions of Section 2.13 of this Agreement, including any Existing
Letter of Credit, and “Letters of Credit” means all such letters of credit collectively.



"Letter of Credit Documents” means, with respect to any Letter of Credit, such Letter
of Credit and any reimbursement or other agreements, documents, and instruments entered into in
connection with or relating to such Letter of Credit.



"Letter of Credit Exposure” means, at any time, the sum of (a) the aggregate undrawn
maximum face amount of each Letter of Credit and (b) the aggregate unpaid amount of all Letter of
Credit Obligations at such time.



"Letter of Credit Obligations” means all obligations of the Borrower arising in
respect of the Letter of Credit Documents, including without limitation the aggregate drawn amounts
of Letters of Credit which have not been reimbursed by the Borrower or converted into an Adjusted
Base Rate Advance pursuant to the provisions of Section 2.13(c).



"Leverage Ratio” means the ratio on any date of (a) the Total Indebtedness on such
date to (b) the Parent’s Adjusted EBITDA for the Rolling Period immediately preceding such date.



"Lien” means any mortgage, deed of trust, lien, pledge, charge, security interest,
encumbrance or other type of preferential arrangement to secure or provide for the payment of any
obligation of any Person, whether arising by contract, operation of law or otherwise (including,
without limitation, the interest of a vendor or lessor under any conditional sale agreement,
Capital Lease or other title retention agreement).




"Liquid Investments” means:




(a) direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States;




(b) (i) negotiable or nonnegotiable certificates of deposit, time deposits, or other
similar banking arrangements maturing within 180 days from the date of acquisition thereof
(“bank debt securities”), issued by (A) any Lender with a Revolving Commitment or (B) any
other bank or trust company which has a combined capital surplus and undivided profit of not
less than $250,000,000 or the Dollar Equivalent thereof, if at the time of deposit or
purchase, such bank debt securities are rated not less than “A” (or the then equivalent) by
the rating service of S&P or of Moody’s, and (ii) commercial paper issued by (A) any Lender
with a Revolving Commitment or (B) any other Person if at the time of purchase such
commercial paper is rated not less than “A-2” (or the then equivalent) by the rating service
of S&P or not less than “P-2” (or the then equivalent) by the rating service of Moody’s, or
upon the discontinuance of both of such services, such other nationally recognized rating
service or services, as the case may be, as shall be selected by the Borrower with the
consent of the Administrative Agent;




(c) repurchase agreements relating to investments described in clauses (a) and (b)
above with a market value at least equal to the consideration paid in connection therewith,
with any Person who regularly engages in the business of entering into repurchase agreements
and has a combined capital surplus and undivided profit of not less than $250,000,000 or the
Dollar Equivalent thereof, if at the time of entering into such agreement the debt
securities of such Person are rated not less than “A” (or the then equivalent) by the rating
service of S&P or of Moody’s; and




(d) such other instruments (within the meaning of New York’s Uniform Commercial Code)
as the Borrower may request and the Administrative Agent may approve in writing, which
approval will not be unreasonably withheld.



"Mandatorily Redeemable Stock” means, with respect to any Person, any Ownership
Interest of such Person which by the terms of such Ownership 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 Ownership Interest which is redeemable solely in
exchange for common stock or Ownership Interests Equivalent thereof), (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 Ownership Interest which is
redeemable solely in exchange for common stock or Ownership Interests Equivalent thereof), in each
case on or prior to the Term Maturity Date.




"Margin Stock” shall have the meaning provided in Regulation U.



"Material Adverse Change” shall mean a material adverse change (a) in the business,
property, condition (financial or otherwise), prospects or results of operations of the Borrower,
the Parent and the other Guarantors taken as a whole, in each case since December 31, 2003, or (b)
in the validity or enforceability of this Agreement or any of the other Credit Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or thereunder.



"Material Subsidiary” means any Subsidiary of the Parent having assets or annual
revenues in excess of $1,000,000.



"Material Unconsolidated Entity” means any Unconsolidated Entity of the Parent for
which the Investment Amount is in excess of $1,000,000.




"Materials” has the meaning set forth in Section 5.05.



"Maturity Date” means, (a) with respect to any Revolving Advances, the Revolving
Maturity Date, and (b) with respect to any Term Advances, the Term Maturity Date.




"Maximum Facility Amount” shall have the meaning provided in Section 2.01(c)(i).




"Maximum Rate” means the maximum nonusurious interest rate under applicable law.




"MHC” means MeriStar Hospitality Corporation, a Maryland corporation.



"MHC Letter” means a comfort letter and estoppel certificate executed by MHC and MHC
OP for the benefit of the Administrative Agent and the Lenders, and acknowledged by the Borrower,
pertaining to the Permitted Property Agreements entered into between MHC and MHC’s Subsidiaries and
the Parent and the Parent’s Subsidiaries, in form and substance acceptable to the Administrative
Agent.



"MHC OP” means MeriStar Hospitality Operating Partnership, L.P., a Delaware limited
partnership.



"Minimum Net Worth” means, with respect to the Parent, at any time, the sum of
$100,000,000 plus (a) 75% of the aggregate net proceeds or value received by the Parent or
any of its Subsidiaries after the date of this Agreement in connection with any Capitalization
Events taken as a whole, including without limitation in connection with the acquisition of any
Investment or other Property, plus (b) to the extent a positive number, 75% of the
aggregate Net Income of the Parent and the Parent’s Subsidiaries for the period from and including
October 1, 2004 to the date of testing, on a Consolidated basis, minus (c) an amount equal
to the lesser of (i) $25,000,000 or (ii) the aggregate amount of all of the Parent’s write-offs
under GAAP of intangible assets that occur after September 30, 2004.



"Minority-Owned Fund” shall be defined as any fund for which the Parent and its
Subsidiaries collectively own less than 50% of the Ownership Interests of such fund, but whose
financial results are consolidated with the financial results of the Parent and the Parent’s
Subsidiaries under GAAP.




"Moody’s” means Moody’s Investor Service Inc.



"Mortgages” means, collectively, the deeds of trust and mortgages executed by the
Borrower or any Guarantor to secure the Obligations, each in form reasonably acceptable to the
Administrative Agent with such modifications as may be necessary and appropriate in the opinion of
counsel to the Administrative Agent to comply with the state law of the filing jurisdiction and as
may be reasonably satisfactory to the Administrative Agent, as the same may be amended or
terminated in accordance with their terms, and “Mortgage” means any of such instruments.



"Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of
ERISA to which the Parent, the Borrower or any member of the Controlled Group is making or accruing
an obligation to make contributions.



"Net Cash Proceeds” means (a) the aggregate cash proceeds (including, without
limitation, insurance and condemnation proceeds) received by the Parent, the Borrower or any of
their respective Subsidiaries (as applicable) in connection with any Indebtedness incurrence on or
after the Closing Date (excluding the Obligations and the incurrence of other Indebtedness which
does not trigger a Repayment Event), Asset Disposition, Capitalization Event or casualty,
minus (b) the reasonable expenses of such Person in connection with such Indebtedness
incurrence, Asset Disposition, Capitalization Event or casualty, minus (c) to the extent
that assets disposed of in connection with an Asset Disposition secure Indebtedness permitted
pursuant to the provisions of Section 6.02(a), the amount of such Indebtedness which is required to
be repaid pursuant to the terms of such Indebtedness in connection with such Asset Disposition, as
reasonably evidenced by the Borrower to the Administrative Agent.



"Net Income” means, for any Person or Hospitality Property, as applicable, for any
period for which such amount is being determined, the net income or net loss of such Person (on a
Consolidated basis) or Hospitality Property, as applicable, after taxes, as determined on a
Consolidated basis in accordance with GAAP, excluding, however, (a) non-recurring expenses and (b)
extraordinary items, including but not limited to (i) any net gain or loss during such period
arising from the sale, exchange, or other disposition of capital assets (such term to include all
fixed assets and all securities) other than in the ordinary course of business, and (ii) any
write-up or write-down of assets.



"Net Worth” means, for any Person, stockholders equity of such Person determined in
accordance with GAAP.



"Non-Defaulting Lender” shall mean and include each Lender other than a Defaulting
Lender.



"Non-Replaced Property” means any Property owned by the Borrower or any of the
Guarantors which (a) was used in the ownership, operation or management of any Hospitality
Property, (b) has been conveyed, exchanged, transferred, or assigned by the Borrower or a
Guarantor to a Person other than the Borrower or a Guarantor, (c) has not been replaced in the
ordinary course of business by Property of equal or better quality, and (d) was not included within
the definition of “Investments”.



"Note” means any of the Revolving Notes or the Term Notes, and “Notes” means
all of such promissory notes.



"Notice of Borrowing” means a notice of borrowing in the form of the attached Exhibit
G signed by a Responsible Officer of the Borrower.



"Notice of Conversion or Continuation” means a notice of conversion or continuation in
the form of the attached Exhibit H signed by a Responsible Officer of the Borrower.



"Obligations” means all Advances, Letter of Credit Obligations, and other amounts
payable by the Borrower to the Administrative Agent, an Issuing Bank or the Lenders under the
Credit Documents.




"Other Taxes” has the meaning set forth in Section 2.11(b).



"Owned Hospitality Property” means a Hospitality Property owned by the Parent or one
of the Parent’s Subsidiaries or leased by the Parent or one of the Parent’s Subsidiaries pursuant
to a Ground Lease.



"Owned Hospitality Property Investments” shall mean Investments in (a) Owned
Hospitality Properties or (b) in Persons for which Hospitality Properties are substantially all of
such Person’s Property which results in the Parent directly or indirectly owning 50% or more of the
applicable Hospitality Property.



"Owned Hospitality Property Security Documents” for any Owned Hospitality Property
(other than one owned by a Permitted Other Subsidiary), means collectively (a) a Mortgage, (b) an
Assignment of Leases, and (c) such other security agreements, pledge agreements, assignments,
mortgages, financing statements, stock powers, and other collateral documentation as the
Administrative Agent may reasonably request.



"Ownership Interests” means shares of stock, other securities, partnership interests,
member interests, beneficial interests or other interests in any Person, whether voting or
non-voting, and participations or other equivalents (regardless of how designated) of or in a
Person.



"Ownership Interests Collateral” has the meaning given such term in the definition of
“Collateral.”



"Ownership Interest Equivalents” means all securities (other than Ownership Interests)
convertible into or exchangeable for Ownership Interests and all warrants, options or other rights
to purchase or subscribe for any Ownership Interests, whether or not presently convertible,
exchangeable or exercisable.




"Parent” means Interstate Hotels & Resorts, Inc., a Delaware corporation.



"PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any
or all of its functions under ERISA.



"Permitted Asset Disposition” means an Asset Disposition which (a) occurs at a time in
which no Default has occurred and is continuing, and (b) would not cause a Default to occur upon
the consummation of such Asset Disposition.




"Permitted Encumbrances” means the Liens permitted to exist pursuant to Section 6.01.



"Permitted Hazardous Substances” means (a) Hazardous Substances, petroleum and
petroleum products which are (i) used in the ordinary course of business and in typical quantities
for a Hospitality Property and (ii) generated, used and disposed of in accordance with all Legal
Requirements and good industry practice, and (b) non-friable asbestos to the extent (i) that no
applicable Legal Requirements require removal of such asbestos from the Hospitality Property and
(ii) such asbestos is encapsulated in accordance with all applicable Legal Requirements and such
reasonable operations and maintenance program as may be required by the Administrative Agent.



"Permitted Housing Agreements” means leases of Units as part of the Permitted Housing
Business (a) by the Borrower and its Subsidiaries to third parties and (b) by third parties to the
Borrower and its Subsidiaries.



"Permitted Housing Business” means the business of leasing Units, subleasing such
Units to another Person and providing ancillary services to such Person in connection with such
Units; provided that without the written consent of the Required Lenders the Borrower and
the Borrower’s Subsidiaries shall not enter into new leases of Units or extend the term of existing
leases of Units where the leases cause the Borrower to violate any of the Permitted Housing
Business Leasing Guidelines.



"Permitted Housing Business Leasing Guidelines” means the requirement that the
Borrower and the Borrower’s Subsidiaries not lease Units or renew the lease of Units if, upon
consummation of such lease or renewal, (a) the aggregate number of Units which have a term which
exceeds 1 year without having a corresponding sublease for such Unit to a credit-worthy Person for
a similar term is equal to or greater than 400, (b) the aggregate number of Units which have a term
which exceeds 5 years without having a corresponding sublease for such Unit to a credit-worthy
Person for a similar term is equal to or greater than 200, and (c) the Borrower’s and the
Borrower’s Subsidiaries’ aggregate lease obligations for the leases of Units outside the United
States, Canada and Western Europe exceeds 15% of the Borrower’s and the Borrower’s Subsidiaries’
aggregate lease obligations for Units.



"Permitted New Investments” means the following Investments made after the Closing
Date:




(a) Investments (i) to acquire Permitted Property Agreements and (ii) in Persons for
which Permitted Property Agreements are substantially all of such Person’s Property, which
Persons become majority-owned Subsidiaries of the Borrower, provided that no
individual Investment under the foregoing clauses (i) or (ii) shall have an Investment
Amount which exceeds $5,000,000;




(b) Sliver Investments for which (i) the Investment Amount for any individual
Investment does not exceed $10,000,000 and (ii) the Investment Amount for all such
Investments in the aggregate does not exceed $50,000,000.




(c) an equity Investment in one fund (or parallel funds investing in the same
Investments) (i) whose Investments will be limited to Hospitality Properties for which the
Borrower or its wholly-owned subsidiary will have a Customary Property Agreement, (ii) whose
Investments will be limited such that the Borrower’s direct or indirect share of any
individual Investment does not exceed an Investment Amount of $10,000,000, (iii) for which
Borrower’s direct or indirect Investment in such fund(s) does not exceed an Investment
Amount of $50,000,000 in the aggregate, and (iv) in which the Borrower or its Subsidiary
owns 25% or less of the Ownership Interests in such fund(s), provided that the
Borrower and its Subsidiaries and Affiliates cannot invest in more than one fund (or
parallel funds) under this paragraph (c), nor treat any Investment that would qualify as the
one fund (or parallel funds) under this paragraph (c) as any other type of Permitted
Investment;




(d) Investments in Persons that have Permitted Property Agreements which meet the
requirements of the foregoing paragraph (a), but are not majority-owned Subsidiaries of the
Borrower; provided that the aggregate Investment Amount of all such Investments can
not exceed $10,000,000;




(e) Investments (i) in Persons that are in the Permitted Housing Business, or (ii) for
agreements related to the Permitted Housing Business; provided that the aggregate
Investment Amount of all such Investments can not exceed $5,000,000;




(f) Owned Hospitality Property Investments, provided that:




(i) the aggregate Investment Amount in Owned Hospitality Property Investments,
excluding the Investment Amount in Existing Owned Hospitality Property Investments,
shall not at any time exceed the sum of (A) $100,000,000 plus (B) the Net
Cash Proceeds from a Capitalization Event which are not required by the terms of
this Agreement to repay Advances and which are utilized within one year of the date
of such Capitalization Event to make such type of Investment. For purposes of such
calculation the value of any limited partnership interests in the Borrower exchanged
in connection with such Investment shall be excluded from the Investment Amount,




(ii) at least five (5) Business Days prior to acquiring an Owned Hospitality
Property Investment the Borrower shall have delivered to the Administrative Agent
the Property Information for the applicable Hospitality Property,




(iii) any Ground Lease for an Owned Hospitality Property must be financable in
the reasonable opinion of the Administrative Agent,




(iv) no more than twenty percent (20%) of the hotel rooms in the applicable
Hospitality Property may be subject to a timeshare regime, and




(v) to the extent that such Investment would be included in the definition of
Collateral, the provisions of Section 5.09(a) are satisfied;




(g) Equity Investments in Persons that provide services to current or future
Hospitality Properties for which either (i) the Parent or its direct or indirect Subsidiary
has a Permitted Property Agreement or (ii) the Parent directly or indirectly owns 50% or
more of the applicable Hospitality Property; provided that the aggregate Investment
Amount of all such Investments can not exceed $10,000,000; and




(h) up to $5,000,000 for non-Hospitality Property related Investments.



If any Investment involves (a) multiple Permitted Property Agreements or an Investment in a
Person which has multiple Permitted Property Agreements and (b) is in a class of permitted
investment subject to individual Investment Amount limitations, then for purposes of testing such
individual Investment Amount limitations only, the total Investment Amount for such Investment
shall be divided by the number of Hospitality Properties which would be subject to Permitted
Property Agreements with the Borrower or its majority-owned Subsidiary.



In addition to the foregoing limitations, with respect to Investments in Persons that
qualified under paragraphs (a) or (b) above, the Investment Amount of the Borrower’s additional
Investments in such Person following the respective initial Investments shall not in any year
exceed $10,000,000 in the aggregate for all such Investments.



"Permitted Non-Recourse Designated Entity Indebtedness” means Indebtedness of an
Unconsolidated Entity or a Minority-Owned Fund which (a) is incurred by an Unconsolidated Entity or
a Minority-Owned Fund to acquire a Hospitality Property or Hospitality Management Business or
refinance such acquisition Indebtedness, and (b) is non-recourse to the Parent, the Borrower and
their respective Subsidiaries except for the Property of or the Ownership Interests in such
Unconsolidated Entity or Minority-Owned Fund, as applicable, and customary recourse “carve-outs”.




"Permitted Other Indebtedness” means:




(a) Indebtedness which (i) is incurred by a Permitted Other Subsidiary to (A) acquire
an Owned Hospitality Property Investment which qualifies as a Permitted New Investment, (B)
refinance Indebtedness incurred to acquire a Permitted New Investment, or (C) finance the
Pittsburgh Property, where the Indebtedness incurred does not exceed 65% of the Investment
Amount for such Permitted New Investment or Pittsburgh Property, as applicable, and (ii) is
non-recourse to the Parent, the Borrower and their respective Subsidiaries except for the
Property of or the Ownership Interests in such Permitted Other Subsidiary and customary
recourse “carve-outs”;




(b) Unsecured Indebtedness (excluding the Obligations and any other Indebtedness
separately listed in this definition of “Permitted Other Indebtedness”) (i) which in the
aggregate does not exceed $200,000,000, (ii) for which not more than $100,000,000 may be
Senior Indebtedness, (iii) which matures after the Maturity Date, and (iv) which is subject
to terms and conditions reasonably acceptable to the Administrative Agent;




(c) Approved Inter-Company Indebtedness;




(d) Indebtedness of the Dallas Pledgors to FelCor in the amount of approximately
$4,170,000, secured by the interests of the Dallas Pledgors in FCH/IHC Hotels, L.P.;




(e) Pre-Existing Designated Indebtedness, provided that the Borrower will use a
portion of the first Advances under this Agreement to repay such Indebtedness;




(f) Permitted Non-Recourse Designated Entity Indebtedness;




(g) Indebtedness in the amount of $2,000,000 payable to Sunstone Hotel Investors LLC on
December 31, 2005.




(h) minority Ownership Interests reflected on the Parent’s financial statements as
Indebtedness.



"Permitted Other Subsidiary” means a Subsidiary of the Parent which (a) is a
single-purpose Person, (b) has never been a Guarantor, nor owned any Collateral, and (c) only owns
Permitted New Investments acquired in whole or in part with the proceeds of Indebtedness excluding
the proceeds of Advances and other Property ancillary to such Permitted New Investments.



"Permitted Property Agreements” means (a) Existing Management Agreements and (b)
Customary Property Agreements related to Hospitality Properties entered into after the Closing
Date.



"Person” means an individual, partnership, corporation (including a business trust),
joint stock company, trust, unincorporated association, limited liability company, joint venture or
other entity, or a government or any political subdivision or agency thereof or any trustee,
receiver, custodian or similar official.



"Pittsburgh Property” means the Pittsburgh, Pennsylvania Airport Residence Inn (Park
Lane).



"Plan” means an employee benefit plan (other than a Multiemployer Plan) maintained for
employees of the Parent, the Borrower or any member of the Controlled Group and covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the Code.




"Platform” has the meaning set forth in Section 5.05.



"Pre-Existing Designated Indebtedness” means the Lehman Indebtedness and the advances
under the Existing Credit Agreement to the extent that such advances are not continued as Advances
under this Agreement.



"Prescribed Forms” means such duly executed form(s) or statement(s), and in such
number of copies, which may, from time to time, be prescribed by law and which, pursuant to
applicable provisions of (a) an income tax treaty between the United States and the country of
residence of the Lender providing the form(s) or statement(s), (b) the Code, or (c) any applicable
rule or regulation under the Code, permit the Borrower to make payments hereunder for the account
of such Lender free of (or, upon written request of the Borrower specifying the applicable form, at
a reduced rate of) deduction or withholding of income or similar taxes (except for any deduction or
withholding of income or similar taxes as a result of any change in or in the interpretation of any
such treaty, the Code or any such rule or regulation).



"Prime Rate” means a fluctuating interest rate per annum as shall be in effect from
time to time equal to the rate of interest publicly announced by the Administrative Agent as its
prime commercial lending rate (which may not be the lowest rate offered to its customers), whether
or not the Borrower has notice thereof.



"Property” of any Person means any property or assets (whether real, personal, or
mixed, tangible or intangible) of such Person, including without limitation, the Permitted Property
Agreements, the Permitted Housing Agreements, and all Owned Hospitality Properties.



"Property Information” for any Owned Hospitality Property means the following
information and documentation for such Owned Hospitality Property:




(a) an Engineering Report;




(b) an Environmental Report;




(c) a commitment for a Title Policy, together with a legible copy of all documents
referred to in such commitment;




(d) a current Appraisal satisfactory to the Administrative Agent;




(e) a copy of the agreements pursuant to which the Owned Hospitality Property is being
acquired;




(f) a ALTA/ASCM survey reasonably satisfactory to the Administrative Agent; and




(g) all financial statements reasonably required by the Administrative Agent.



"Pro Rata Share” means, at any time with respect to any Lender, the ratio (expressed
as a percentage) of (a) such Lender’s Commitments, plus, to the extent any Class of Commitment has
been terminated, such Lender’s outstanding Advances for such Class (and participation interest in
the Letter of Credit Exposure if the Revolving Commitments have been terminated) to (b) all
Lenders’ aggregate Commitments, plus, to the extent any Class of Commitment has been terminated,
all Lenders’ aggregate outstanding Advances for such Class (and participation interest in the
Letter of Credit Exposure if the Revolving Commitments have been terminated).




"Public Lender” has the meaning set forth in Section 5.05.




"Register” has the meaning set forth in paragraph (c) of Section 10.06.



"Regulation U” shall mean Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a portion thereof.



"Reinsurance Contract” means each outstanding reinsurance, coinsurance and other
similar contract of each Insurance Company.



"Reinvestment Amount” means $10,000,000, provided that for the Rolling Periods
which fall during and immediately after the Fiscal Quarter in which the Parent and the Borrower
sells all or substantially all of the Permitted Housing Business the Reinvestment Amount shall be
$25,000,000.



"Related Fund” means, with respect to any Approved Fund, any other Approved Fund that
invests in commercial loans which is advised or managed by the same investment advisor as such
Approved Fund or an Affiliate of such investment advisor.



"Release” shall have the meaning set forth in CERCLA or under any other Environmental
Law.



"Repayment Amount” means (a) with respect to any Indebtedness incurrence or Asset
Disposition, the Net Cash Proceeds from such event, and (b) with respect to any Capitalization
Event, (i) if at the time of such Capitalization Event the Leverage Ratio prior to use of the Net
Cash Proceeds from such Capitalization Event is greater than 3.00 to 1.00, then the lesser of (A)
50% of the Net Cash Proceeds from such Capitalization Event and (B) the amount that would reduce
the Leverage Ratio to 3.00 to 1.00 after taking into account the repayment of Advances by such
amount, and (ii) otherwise, $0.



"Repayment Event” means the incurrence of any of the following on or after the Closing
Date by the Parent, the Borrower or one of their respective Subsidiaries:




(a) the incurrence of any Indebtedness excluding (i) the incurrence of any Obligations,
(ii) the incurrence of Indebtedness under clause (a) of the definition of “Permitted Other
Indebtedness” incurred to make a Permitted New Investment, and (iii) the refinancing of
Indebtedness previously incurred under clause (a), (b) or (f) of the definition of
“Permitted Other Indebtedness” up to the amount of the Indebtedness refinanced;




(b) a Capitalization Event;




(c) an Asset Disposition or the payment to the Borrower or one of the Borrower’s
Subsidiaries of a termination payment under a Permitted Property Agreement or a Permitted
Housing Agreement after the Closing Date, provided that a Repayment Event shall not
be deemed to have occurred for:




(i) Asset Dispositions (but not termination payments) for which the aggregate
Net Cash Proceeds do not exceed $1,000,000 in any Rolling Period, and




(ii) Asset Dispositions (including termination payments) for which:




(A) the aggregate Net Cash Proceeds do not exceed the Reinvestment
Amount during any Rolling Period; provided that (1) the Net Cash
Proceeds from termination payments shall not be counted toward such
Reinvestment Amount threshold; (2) the Net Cash Proceeds from a condemnation
shall not be counted toward such Reinvestment Amount threshold to the extent
such Net Cash Proceeds are utilized for the restoration of the Owned
Hospitality Property affected by such casualty or condemnation within one
year of the date of such casualty or condemnation; and (3) only the
aggregate Net Cash Proceeds in excess of the Reinvestment Amount during any
Rolling Period shall be deemed to be part of a Repayment Event under this
paragraph (c); and




(B) the Net Cash Proceeds from such Asset Disposition are used to make
a Permitted New Investment(s) by the end of the Rolling Period which
commences after the Fiscal Quarter in which such Asset Disposition occurred.




(d) A casualty to an Owned Hospitality Property other than a casualty for which the
aggregate Net Cash Proceeds either (i) does not exceed $1,000,000 or (ii) are utilized for
the restoration of the Owned Hospitality Property affected by such casualty within one year
of the date of such casualty.




"Reportable Event” means any of the events set forth in Section 4043(b) of ERISA.



"Required Lenders” means Non-Defaulting Lenders the sum of whose outstanding Term
Advances (and, prior to the termination thereof, Term Commitments) and Revolving Commitments (or
after the termination thereof, outstanding Revolving Advances and participations in Letter of
Credit Exposure) represent at least 51% of the sum of all outstanding Term Advances (and, if prior
to the termination thereof, Term Commitments) of Non-Defaulting Lenders and the sum of all
Revolving Commitments of Non-Defaulting Lenders (or after the termination of the Revolving
Commitments, the sum of the then total outstanding Revolving Advances of Non-Defaulting Lenders,
and the aggregate participations of all Non-Defaulting Lenders of Letter of Credit Exposure at such
time); provided that with respect to a vote which only involves a certain Class or Classes,
only the Commitments and Advances for the applicable Class or Classes shall be used in the
calculation of Required Lenders.



"Response” shall have the meaning set forth in CERCLA or under any other Environmental
Law.



"Responsible Officer” means the Chairman of the Board, Chief Executive Officer,
President, Executive Vice President, Chief Financial Officer, Chief Accounting Officer or Treasurer
of any Person, or, with respect to a partnership, the general partner of such Person.



"Restricted Payment” means (a) any direct or indirect payment, prepayment, redemption,
purchase, or deposit of funds or Property for the payment (including any sinking fund or
defeasance), prepayment, redemption or purchase of any Indebtedness not permitted by this Agreement
or any Subordinate Indebtedness, and (b) the making by any Person of any dividends or other
distributions (in cash, property, or otherwise) on, or payment for the purchase, redemption or
other acquisition of, any Ownership Interests of such Person, other than dividends or distributions
payable in such Person’s Ownership Interests.



"Revolving Advance” means any advance by a Lender to the Borrower in Dollars pursuant
to such Lender’s Revolving Commitment or a continuation of an existing Revolving Advance, and
refers to an Adjusted Base Rate Advance or a Eurodollar Rate Advance.



"Revolving Commitment” means, for each Lender, the Revolving Commitment set forth for
such Lender as its Revolving Commitment in the Register maintained by the Administrative Agent
pursuant to Section 10.06(c). As of the Effective Date, the aggregate amount of the Revolving
Commitments under this Agreement is $55,000,000.



"Revolving Exposure” at any time shall mean the sum of (i) the aggregate principal
amount of all Revolving Advances and (ii) the aggregate amount of all Letter of Credit Exposure at
such time.



"Revolving Incremental Funding Date” shall have the meaning provided in Section
2.01(c)(iii).




"Revolving Maturity Date” means January 14, 2008.



"Revolving Note” means a promissory note of the Borrower payable to the order of any
Lender, in substantially the form of the attached Exhibit A-1, evidencing Indebtedness of the
Borrower to such Lender resulting from Revolving Advances from such Lender, and “Revolving
Notes” means all of such promissory notes.



"Revolving Required Lenders” means Non-Defaulting Lenders the sum of whose Revolving
Commitments (or after the termination thereof, outstanding Revolving Advances and participations in
Letter of Credit Exposure) represent at least 51% of the sum of all Revolving Commitments of
Non-Defaulting Lenders (or after the termination of the Revolving Commitments, the sum of the then
total outstanding Revolving Advances of Non-Defaulting Lenders, and the aggregate participations of
all Non-Defaulting Lenders of Letter of Credit Exposure at such time).



"Revolving Share” means, at any time with respect to any Lender with a Revolving
Commitment or outstanding Revolving Advance, the ratio (expressed as a percentage) of such Lender’s
Revolving Commitment at such time to the aggregate Revolving Commitments at such time, or, if the
Revolving Commitments have been terminated, the ratio (expressed as a percentage) of such Lender’s
Revolving Advances at such time to the aggregate Revolving Advances at such time.



"Rolling Period” means, as of any date, the four Fiscal Quarters ending immediately
preceding such date.



"S&P” means Standard & Poor’s Ratings Group, a division of McGraw-Hill, Inc., or any
successor thereof.



"SAP” means, with respect to each Insurance Company, the statutory accounting
practices prescribed or permitted by the insurance commissioner (or other similar Governmental
Authority) in the jurisdiction of such Insurance Company for the preparation of Insurance Annual
Statements and other financial reports by insurance companies of the same type in effect from time
to time, applied in a manner consistent with those used in preparing the SAP Financial Statements.



"SAP Financial Statements” means the audited annual and unaudited quarterly convention
statements filed with the domiciliary state insurance departments of each Insurance Company.



"Security Agreement” means the Amended and Restated Security Agreement in favor of the
Administrative Agent from the Borrower, the Parent and the other Guarantors, granting a Lien in all
existing and future Collateral of the Borrower and its Subsidiaries in substantially the form of
the attached Exhibit I.



"Security Documents” means the Security Agreement, all Owned Hospitality Property
Security Documents, all Financing Statements and each other document, instrument or agreement
executed in connection therewith or otherwise executed in order to secure all or a portion of the
Obligations; and any “Security Document” means any one of the foregoing.




"Senior Indebtedness” means the Total Indebtedness minus the Subordinate Indebtedness.




"SG Americas” means SG Americas Securities, LLC.



"Sliver Investments” shall mean debt and equity investments in partnerships, companies
or limited liability companies (a) for which the Borrower’s direct or indirect ownership interest
is less than 50% and (b) that own hospitality properties for which the Borrower or its wholly-owned
subsidiary will have a Customary Property Agreement.



"Status” means the existence of Level I Status, Level II Status or Level III Status,
as the case may be. As used in this definition:



"Level I Status” exists at any date if, at such date, the Leverage Ratio at the end of
the preceding Rolling Period is less than 3.0;



"Level II Status” exists at any date if, at such date, the Leverage Ratio at the end
of the preceding Rolling Period is equal to or greater than 3.0, but less than 3.25; or



"Level III Status” exists at any date if, at such date, the Leverage Ratio at the end
of the preceding Rolling Period is equal to or greater than 3.25.



Status shall be determined and changed as of the Status Reset Date following any Fiscal
Quarter; provided that if the Borrower fails to timely provide (a) the financial statements
needed to recalculate the Leverage Ratio as required by the provisions of Section 5.05(a) prior to
the 50th day following the end of any Fiscal Quarter (except for the Fiscal Quarter which ends on
the date the Fiscal Year ends), (b) the draft Compliance Certificate related to the end of the
Fiscal Year as required by the provisions of Section 5.05(b) prior to the 50th day following the
end of any Fiscal Year or (c) the financial statements needed to recalculate the Leverage Ratio as
required by the provisions of Section 5.05(b) prior to the 95th day following the end of any Fiscal
Year, then Status shall automatically be reset at the Status one level higher than the Status
existing immediately prior to such Status reset until such time as the Borrower provides such
financial statements or draft Compliance Certificate, as applicable; provided further that
at the Closing Date the Status under the Credit Agreement will be set at Level III Status and such
Status shall not be reduced until the next Status Reset Date following the Closing Date.



"Status Reset Date” means the date following the end of any Fiscal Quarter which is
the earlier of (a) the 50th day following the end of such Fiscal Quarter and (b) the date which is
five (5) days following the delivery of the reports and other documents required by (i) the
provisions of Section 5.05(a) for such Fiscal Quarter (except for the Fiscal Quarter which ends on
the date the Fiscal Year ends) or (ii) the provisions of Section 5.05(b) for the Fiscal Quarter
which ends on the date the Fiscal Year ends; provided that the documents contemplated by
the preceding clause (ii) shall never be deemed delivered prior to the 40th day
following the end of the Fiscal Year.



"Subordinate Indebtedness” means Indebtedness of the Borrower, the Parent and their
respective Subsidiaries which (a) shall not mature, become payable or require the payment of any
principal amount thereof (or any amount in lieu thereof) or be mandatorily redeemable, pursuant to
a sinking fund or otherwise redeemable at the option of the holder thereof, in any case in whole or
in part, before the date that is 181 days after the Term Maturity Date and (b) shall be junior and
subordinate to the Obligations and subject to an intercreditor agreement or subordination
provisions and other terms and provisions which are acceptable to the Administrative Agent.



"Subsidiary” means, with respect to any Person, at any date, any other Person in whom
such Person holds an Investment and whose financial results would be consolidated under GAAP with
the financial results of such Person if such statements were prepared as of such date.




"Taxes” has the meaning set forth in Section 2.11(a).




"Telerate” means the Telerate System.



"Term Advance” means any advance by a Lender to the Borrower pursuant to such Lender’s
Term Commitment or a continuation of an existing Term Advance, and refers to an Adjusted Base Rate
Advance or a Eurodollar Rate Advance.



"Term Commitment” means, for each Lender, the Term Commitment set forth for such
Lender as its Term Commitment in the Register maintained by the Administrative Agent pursuant to
Section 10.06(b); provided, however, that after the date the initial Term Advance of a
Lender is made, the Term Commitment for such Lender shall be zero. As of the Effective Date, the
aggregate amount of the Term Commitments under this Agreement is $53,000,000.



"Term Incremental Funding Date” shall have the meaning provided in Section
2.01(c)(ii).




"Term Maturity Date” means January 14, 2008.



"Term Note” means a promissory note of the Borrower payable to the order of any Lender
in substantially the form of the attached Exhibit A-2, evidencing Indebtedness of the Borrower to
such Lender resulting from any Term Advance from such Lender, and “Term Notes” means all
such Term Notes.



"Term Required Lenders” means Non-Defaulting Lenders the sum of whose outstanding Term
Advances (and, prior to the termination thereof, Term Commitments) represent at least 51% of the
sum of all outstanding Term Advances (and, if prior to the termination thereof, Term Commitments)
of Non-Defaulting Lenders.



"Term Share” means, at any time with respect to any Lender with a Term Commitment or
outstanding Term Advance, the ratio (expressed as a percentage) of such Lender’s Term Commitment at
such time to the aggregate Term Commitments at such time, or, if the Term Commitments have been
terminated, the ratio (expressed as a percentage) of such Lender’s Term Advances at such time to
the aggregate Term Advances at such time.



"Termination Event” means (a) the occurrence of a Reportable Event with respect to a
Plan, as described in Section 4043 of ERISA and the regulations issued thereunder (other than a
Reportable Event not subject to the provision for 30-day notice to the PBGC under such
regulations), (b) the withdrawal of the Borrower or any of the Controlled Group from a Plan during
a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA, (c)
the giving of a notice of intent to terminate a Plan under Section 4041(c) of ERISA, (d) the
institution of proceedings to terminate a Plan by the PBGC, or (e) any other event or condition
which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of
a trustee to administer, any Plan.



"Threshold Amount” means (a) with respect to Indebtedness which is either Subordinate
Indebtedness or Indebtedness which is non-recourse to the Borrower and the Guarantors (except for
customary recourse “carve-outs”) which is outstanding in a principal amount of at least $10,000,000
individually or when aggregated with all such Indebtedness and (b) with respect to any other
Indebtedness which is outstanding in a principal amount of at least $5,000,000 individually or when
aggregated with all such Indebtedness.



"Title Policy” means a Mortgagee Policy of Title Insurance which (a) is in the form of
American Land Title Association Standard Loan Policy — 1970 (without modification, revision or
amendment) (or such other form as approved by the Administrative Agent) with endorsements
reasonably requested by the Administrative Agent, (b) is issued by an underwriter reasonably
acceptable to the Administrative Agent, (c) insures that the grantor of the Lien insured by such
policy owns the Owned Hospitality Property subject to such Lien in fee simple or pursuant to a
leasehold estate and that the Mortgage covering such Owned Hospitality Property is a valid lien on
such Owned Hospitality Property in favor of the Administrative Agent for the benefit of the Lenders
(subject only to Permitted Encumbrances), (d) does not contain any exceptions for rights of parties
in possession, or unpaid delinquent installments of taxes, special assessments or subsequent
assessments due to changes in ownership or usage, or any other exceptions to coverage other than
Permitted Encumbrances.



"Total Indebtedness” means all Indebtedness of the Borrower, the Parent and their
respective Subsidiaries on a Consolidated basis, provided that “Total Indebtedness”




(a) shall not include any Permitted Non-Recourse Designated Entity Indebtedness;




(b) shall include, without duplication, any Indebtedness of an Unconsolidated Entity or
a Minority-Owned Fund which does not qualify under the foregoing clause (a); and




(c) shall not include the amount of any minority interests.




"Type” has the meaning set forth in Section 1.04.



"Unconsolidated Entity” means, with respect to any Person, at any date, any other
Person in whom such Person holds an Investment and whose financial results would not be
consolidated under GAAP with the financial results of such Person if such statements were prepared
as of such date.




"Units” means apartment or condominium units.



"Unsecured Indebtedness” of any Person means the Indebtedness of such Person for which
the obligations thereunder are not secured by a Lien on any assets of such Person or its
Subsidiaries.




"Wyndham” means Wyndham International, Inc.



Section 1.02 Computation of Time Periods. In this Agreement in the computation
of periods of time from a specified date to a later specified date, the word “from” means “from and
including” and the words “to” and “until” each means “to but excluding”.




Section 1.03 Accounting Terms; Changes in GAAP.




(a) All accounting terms not specifically defined in this Agreement shall be construed
in accordance with GAAP applied on a consistent basis.




(b) Unless otherwise indicated, all financial statements of the Borrower and the
Parent, all calculations for compliance with covenants in this Agreement, and all
calculations of any amounts to be calculated under the definitions in Section 1.01 shall be
based upon the Consolidated accounts of the Borrower, the Parent and their respective
Subsidiaries (as applicable) in accordance with GAAP.




(c) If any changes in accounting principles after December 31, 2003 required by GAAP or
the Financial Accounting Standards Board of the American Institute of Certified Public
Accountants or similar agencies results in a change in the method of calculation of, or
affects the results of such calculation of, any of the financial covenants, standards or
terms found in this Agreement, then the parties shall enter into and diligently pursue
negotiations in order to amend such financial covenants, standards or terms so as to
equitably reflect such change, with the desired result that the criteria for evaluating the
financial condition of Borrower and its Subsidiaries (determined on a Consolidated basis)
shall be the same after such change as if such change had not been made.



Section 1.04 Classes and Types of Advances. Advances are distinguished by “Class” and
“Type”. The “Class” of an Advance refers to the determination whether such Advance is a
Term Advance or a Revolving Advance, each of which constitutes a Class. The “Type” of an
Advance refers to the determination whether such Advance is a Eurodollar Rate Advance or an
Adjusted Base Rate Advance, each of which constitutes a Type.



Section 1.05 Miscellaneous. Article, Section, Schedule and Exhibit references are to
Articles and Sections, of and Schedules and Exhibits, to this Agreement, unless otherwise
specified.



Section 1.06 Amendment and Restatement. The parties hereto agree that this Amended
and Restated Senior Secured Credit Agreement constitutes for all purposes an amendment to the
Existing Credit Agreement and not a new or substitute agreement or a novation of the Existing
Credit Agreement. In addition, the parties hereto agree to use reasonable efforts to accomplish
the matters set forth in the preliminary statements of this Agreement and, without limitation,
agree to the following:




(a) For each Lender which does not have an Existing Note which requests a Note, the
Borrower will execute a Revolving Note and/or Term Note, as applicable, payable to such
Lender in the amount of such Lender’s Revolving Commitment and/or Term Commitment, as
applicable, which Note(s) will constitute the Note(s) the Borrower is obligated to deliver
to such Lender as provided in Section 2.02(g).




(b) For each Lender which has an Existing Note which requests a Note, the Borrower will
execute a Revolving Note and/or Term Note, as applicable, payable to such Lender in the
amount of such Lender’s Revolving Commitment and/or Term Commitment, as applicable, which
Note(s) (i) will replace in its/their entirety such Lender’s Existing Note(s) and either
increase or decrease, as applicable, the Indebtedness evidenced by the Existing Note(s) and
(ii) constitute the Note(s) the Borrower is obligated to deliver to such Lender as provided
in Section 2.02(g).



ARTICLE II




THE ADVANCES AND THE LETTERS OF CREDIT





Section 2.01 The Advances.




(a) Term Advances. Subject to the terms and conditions set forth in this
Agreement, each Lender severally agrees to make a Term Advance to the Borrower on the
Effective Date, in an aggregate amount equal to such Lender’s Term Commitment. No amount of
any Term Advance that has been repaid or prepaid may be reborrowed.




(b) Revolving Advances. Subject to and upon the terms and conditions set forth
herein, each Lender severally agrees at any time and from time to time on any Business Day
up to fifteen (15) days prior to the Revolving Maturity Date to make Revolving Advances;
provided that Revolving Advances shall not be made (or be required to be made) by
any Lender on any date if, after giving effect thereto, (i) such Lender’s Revolving Share of
the Revolving Exposure would exceed such Lender’s Revolving Commitment at such time, or (ii)
the Revolving Exposure would exceed the aggregate Revolving Commitments of the Lenders at
such time. Within the limits of each Lender’s Revolving Commitment, the Borrower may from
time to time prepay Revolving Advances pursuant to the provisions of Section 2.07 and
reborrow Revolving Advances under this Section 2.01(b).




(c) Commitments Increase.




(i) The Borrower shall be entitled to request that the aggregate Commitments be
increased by an amount not exceeding Fifty Million Dollars ($50,000,000), which may
be allocated between Revolving Commitments, Term Commitments and commitments for
other term advances as the Borrower shall elect; provided that (A) no
Default then exists or would result therefrom, (B) the Borrower gives the Lenders
twenty (20) days prior written notice of such election, (C) no Lender shall be
obligated to increase such Lender’s Commitment without such Lender’s written consent
which may be withheld in such Lender’s sole discretion, (D) the Borrower, not the
Lenders or the Administrative Agent, is responsible for arranging for Persons to
provide the additional Commitment amounts, (E) if any Person providing any
additional Commitment amount is not already a Lender, then such Person must qualify
as an Eligible Assignee and be reasonably acceptable to the Borrower, the
Administrative Agent, and, if a Revolving Commitment increase is proposed, the
Issuing Bank, (F) such increase in the Commitments shall not cause the sum of (1)
the Revolving Commitments (and following termination thereof, Revolving Exposure)
and (2) the Term Advances (and, prior to the termination thereof, Term Commitments)
to exceed $158,000,000 (the “Maximum Facility Amount”), (G) each existing
Lender shall have the right, but not the obligation, to provide such Lender’s Pro
Rata Share of any increase in Commitments, with each such Lender having to make such
election within ten (10) days of receipt of the Borrower’s notice of election to
increase the Commitments; provided that if following such elections by
existing Lenders the Borrower has not yet reached the Maximum Facility Amount, then
in connection with the Borrower’s pending request for additional Commitments the
Borrower will be entitled to offer additional Commitments to non-Lenders without
having to again offer additional Commitments to existing Lenders in an amount up to
the lesser of (1) the original amount of increase in Commitments proposed by the
Borrower and (2) the amount of increase in Commitments which would cause the
Borrower to reach the Maximum Facility Amount, and (H) to the extent that the
Borrower desires to add additional term loan commitments which do not have the same
maturity date or interest rate as the existing Term Advances, then (1) such
additional term loans will not have a weighted average life to maturity shorter than
that of the existing Term Advances, and (2) such term loans will not have an
Applicable Margin greater than that for the existing Term Advances unless the
Applicable Margin for the existing Term Advances is also increased to the same
Applicable Margin as that for the new term loans. In connection with any such
increase in the Commitments (A) the Borrower will provide pro forma projections
reasonably acceptable to the Administrative Agent that reflect compliance with the
financial covenants contained in this Agreement following such increase, (B) the
parties shall execute any documents reasonably requested in connection with or to
evidence such increase, including without limitation an amendment to this Agreement,
and (C) the Administrative Agent shall be authorized on behalf of the Lenders and
the Issuing Bank to execute any amendments to the Credit Documents which are
reasonably necessary or desirable in connection with such increase.




(ii) With respect to any increase in Term Commitments permitted under the
foregoing paragraph (i), each Lender whose Term Commitment has increased would
severally agree to make a Term Advance to the Borrower in the amount of such
Lender’s Term Commitment increase on the date (the “Term Incremental Funding
Date”) designated by the Administrative Agent. After the date such Term Advance
of a Lender is made, the increased Term Commitment for such Lender shall be zero
and such Term Advance will be treated as a Term Advance for all purposes under the
Credit Documents. However, the first payment of interest received by the
Administrative Agent after such Term Incremental Funding Date shall be paid to the
Lenders in amounts adjusted to reflect their respective outstanding Term Advances
over the period for which interest was paid.




(iii) With respect to any increase in Revolving Commitments permitted under the
foregoing paragraph (i), on the date (the “Revolving Incremental Funding
Date”) designated by the Administrative Agent, the Lenders whose Revolving
Commitments have increased in connection with such future increase in the Total
Commitments shall fund to the Administrative Agent such amounts as may be required
to cause each of them to hold its Revolving Share of Revolving Advances based upon
the Commitments as of such Revolving Incremental Funding Date, and the
Administrative Agent shall distribute the funds so received to the other Lenders in
such amounts as may be required to cause each of them to hold its Revolving Share of
Revolving Advances as of such Revolving Incremental Funding Date. The Lenders
receiving such amounts to be applied to Eurodollar Rate Advances may demand payment
of the breakage costs under Section 2.08 as though Borrower had elected to prepay
such Eurodollar Rate Advances on such date and the Borrower shall pay the amount so
demanded as provided in Section 2.08. The first payment of interest and letter of
credit fees received by the Administrative Agent after such Revolving Incremental
Funding Date shall be paid to the Lenders in amounts adjusted to reflect the
adjustments of their respective Revolving Shares of the Revolving Advances as of the
Revolving Incremental Funding Date. On the Revolving Incremental Funding Date each
Lender shall be deemed to have either sold or purchased, as applicable,
participations in the Letter of Credit Exposure sold to the Lenders pursuant to
Section 2.13(b) so that upon consummation of all such sales and purchases each
Lender holds participations in the Letter of Credit Exposure equal to such Lender’s
Revolving Share of the total Letter of Credit Exposure as of such Revolving
Incremental Funding Date.




Section 2.02 Method of Borrowing.




(a) Notice.




(i) Each Borrowing shall be made pursuant to a Notice of Borrowing, given not
later than 12:00 noon (New York, New York time) (A) on the third Business Day before
the date of the proposed Borrowing, in the case of a Borrowing consisting of
Eurodollar Rate Advances, or (B) on the Business Day before the date of the proposed
Borrowing, in the case of a Borrowing consisting of Adjusted Base Rate Advances, by
the Borrower to the Administrative Agent, which shall give each Lender prompt notice
on the day of receipt of such timely Notice of Borrowing of such proposed Borrowing
by telecopier. Each Notice of Borrowing shall be in writing or by telecopier
specifying the requested (A) date of such Borrowing, (B) Type and Class of Advance
comprising such Borrowing, (C) aggregate amount of such Borrowing, and (D) if such
Borrowing is to be comprised of Eurodollar Rate Advances, the Interest Period for
each such Advance. In the case of a proposed Borrowing comprised of Eurodollar Rate
Advances, the Administrative Agent shall promptly notify each Lender of the
applicable interest rate under Section 2.06(b). With respect to all Advances, each
Lender shall, before 12:00 noon (New York, New York time) on the date of such
Borrowing, make available for the account of its Applicable Lending Office to the
Administrative Agent at its address referred to in Section 10.02, or such other
location as the Administrative Agent may specify by notice to the Lenders, in same
day funds, such Lender’s Revolving Share or Term Share, as applicable, of such
Borrowing. After the Administrative Agent’s receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the Borrower at its account
with the Administrative Agent.




(ii) Notwithstanding the foregoing, the Borrower may for Adjusted Base Rate
Advances requested on the Effective Date only request that such Advances be made on
the same day as the Notice of Borrowing, provided that such Notice of
Borrowing shall be given not later than 9:00 a.m. (New York, New York time) on the
Effective Date. If such Notice of Borrowing on the Effective Date is delivered to
the Administrative Agent by such time, (A) the Administrative Agent will promptly
notify each Lender who is obligated to fund an Advance under such Notice of
Borrowing of such Notice of Borrowing not later than 12:00 noon (New York, New York
time) on the Effective Date and (B) each Lender shall, before 3:00 p.m. (New York,
New York time) on the Effective Date, make available for the account of its
Applicable Lending Office to the Administrative Agent at its address referred to in
Section 10.02, or such other location as the Administrative Agent may specify by
notice to the Lenders, in same day funds, such Lender’s Revolving Share or Term
Share, as applicable, of such Borrowing.




(b) Conversions and Continuations. In order to elect to Convert or continue
Advances comprising part of the same Borrowing under this Section, the Borrower shall
deliver an irrevocable Notice of Conversion or Continuation to the Administrative Agent at
the Administrative Agent’s office no later than 12:00 noon (New York, New York time) (i) on
the date which is at least three (3) Business Days in advance of the proposed Conversion or
continuation date in the case of a Conversion to or a continuation of a Borrowing comprised
of Eurodollar Rate Advances and (ii) on the Business Day prior to the proposed conversion
date in the case of a Conversion to a Borrowing comprised of Adjusted Base Rate Advances.
Each such Notice of Conversion or Continuation shall be in writing or by telecopier,
specifying (i) the requested Conversion or continuation date (which shall be a Business
Day), (ii) the Borrowing amount, Type and Class of the Advances to be Converted or
continued, (iii) whether a Conversion or continuation is requested, and if a Conversion,
into what Type of Advances, and (iv) in the case of a Conversion to, or a continuation of,
Eurodollar Rate Advances, the requested Interest Period. Promptly after receipt of a Notice
of Conversion or Continuation under this paragraph, the Administrative Agent shall provide
each Lender with a copy thereof and, in the case of a Conversion to or a continuation of
Eurodollar Rate Advances, notify each Lender of the applicable interest rate under Section
2.06(b). If the Borrower shall fail to specify an Interest Period for a Eurodollar Rate
Advance including the continuation of a Eurodollar Rate Advance, the Borrower shall be
deemed to have selected an Adjusted Base Rate Advance.




(c) Certain Limitations. Notwithstanding anything in paragraphs (a) and (b)
above:




(i) in the case of Eurodollar Rate Advances each Borrowing shall be in an
aggregate amount of not less than $1,000,000 or greater multiples of $100,000;




(ii) in the case of Adjusted Base Rate Advances each Borrowing shall be in an
aggregate amount of not less than $500,000 or greater multiples of $100,000;




(iii) except for Borrowings for the acquisition of Permitted New Investments by
the Borrower or its Subsidiary, the Borrower may not request Borrowings on more than
four (4) days in any calendar month;




(iv) at no time shall there be more than five (5) Interest Periods applicable
to outstanding Eurodollar Rate Advances;




(v) the Borrower may not select Eurodollar Rate Advances for any Borrowing to
be made, Converted or continued if a Default has occurred and is continuing;




(vi) if any Lender shall, at any time prior to the making of any requested
Borrowing comprised of Eurodollar Rate Advances, notify the Administrative Agent
that the introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or that any central bank or other governmental
authority asserts that it is unlawful, for such Lender or its Applicable Lending
Office to perform its obligations under this Agreement to make Eurodollar Rate
Advances or to fund or maintain Eurodollar Rate Advances, then such Lender’s
Revolving Share or Term Share, as applicable, of such Borrowing shall be made as an
Adjusted Base Rate Advance, provided that such Adjusted Base Rate Advance
shall be considered part of the same Borrowing and interest on such Adjusted Base
Rate Advance shall be due and payable at the same time that interest on the
Eurodollar Rate Advances comprising the remainder of such Borrowing shall be due and
payable; and such Lender agrees to use commercially reasonable efforts (consistent
with its internal policies and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such designation would avoid
the effect of this paragraph and would not, in the reasonable judgment of such
Lender, be otherwise materially disadvantageous to such Lender;




(vii) if the Administrative Agent is unable to determine the applicable
Eurodollar Rate for Eurodollar Rate Advances comprising any requested Borrowing, the
right of the Borrower to select Eurodollar Rate Advances for such Borrowing or for
any subsequent Borrowing shall be suspended until the Administrative Agent shall
notify the Borrower and the Lenders that the circumstances causing such suspension
no longer exist, and each Advance comprising such Borrowing shall be an Adjusted
Base Rate Advance;




(viii) if the Required Lenders shall, at least one Business Day before the date
of any requested Borrowing, notify the Administrative Agent that the Applicable
Eurodollar Rate for Eurodollar Rate Advances comprising such Borrowing will not
adequately reflect the cost to such Lenders of making or funding their respective
Eurodollar Rate Advances, as the case may be, for such Borrowing, the right of the
Borrower to select Eurodollar Rate Advances for such Borrowing or for any subsequent
Borrowing shall be suspended until the Administrative Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no longer
exist, and each Advance comprising such Borrowing shall be an Adjusted Base Rate
Advance;




(ix) if the Borrower shall fail to select the duration or continuation of any
Interest Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of “Interest Period” in Section 1.01 and paragraph (a)
or (b) above, the Administrative Agent will forthwith so notify the Borrower and the
Lenders and such Advances will be made available to the Borrower on the date of such
Borrowing as Adjusted Base Rate Advances or, if an existing Advance, Converted into
Adjusted Base Rate Advances; and




(x) the Borrower may not select Eurodollar Rate Advances prior to the
5th Business Day following the Effective Date.




(d) Notices Irrevocable. Each Notice of Borrowing and Notice of Conversion or
Continuation shall be irrevocable and binding on the Borrower. In the case of any Borrowing
which the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate
Advances, the Borrower shall indemnify each Lender against any loss, out-of-pocket cost or
expense incurred by such Lender as a result of any condition precedent for Borrowing set
forth in Article III not being satisfied for any reason, including, without limitation, any
loss, cost or expense actually incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Advance to be made by such
Lender as part of such Borrowing when such Advance, as a result of such failure, is not made
on such date.




(e) Administrative Agent Reliance. Unless the Administrative Agent shall have
received notice from a Lender before the date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender’s Revolving Share or Term Share, as
applicable, of the Borrowing, the Administrative Agent may assume that such Lender has made
its Revolving Share or Term Share, as applicable, of such Borrowing available to the
Administrative Agent on the date of such Borrowing in accordance with paragraph (a) of this
Section 2.02 and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and to the extent that
such Lender shall not have so made its Revolving Share or Term Share, as applicable, of such
Borrowing available to the Administrative Agent, such Lender and the Borrower severally
agree to immediately repay to the Administrative Agent on demand such corresponding amount,
together with interest on such amount, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the Administrative Agent,
at (i) in the case of the Borrower, the interest rate applicable on each such day to
Advances comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds
Rate for each such day. If such Lender shall repay to the Administrative Agent such
corresponding amount and interest as provided above, such corresponding amount so repaid
shall constitute such Lender’s Advance as part of such Borrowing for purposes of this
Agreement even though not made on the same day as the other Advances comprising such
Borrowing.




(f) Lender Obligations Several. The failure of any Lender to make the Advance
to be made by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, to make its Advance on the date of such Borrowing. No Lender shall be
responsible for the failure of any other Lender to make the Advance to be made by such other
Lender on the date of any Borrowing.




(g) Notes. The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will promptly execute and deliver to such Lender a
promissory note of the Borrower evidencing any Revolving Advances or Term Advances, as the
case may be, of such Lender, substantially in the forms of Exhibit A-1, or A-2, as the case
may be, with appropriate insertions as to date and principal amount; provided, that
delivery of Notes shall not be a condition precedent to the occurrence of the Effective Date
or the making of Advances.




Section 2.03 Fees.




(a) Commitment Fees. For the period from the Closing Date until the Revolving
Maturity Date the Borrower agrees to pay to the Administrative Agent for the account of each
Lender a commitment fee on the average daily amount by which such Lender’s Revolving
Commitment exceeds the sum of such Lender’s Revolving Share of the Revolving Exposure at a
rate per annum equal to the Commitment Fee Rate (computed on the actual number of days
elapsed, including the first day and excluding the last, based upon a 360-day year). Such
fees shall be due and payable quarterly in arrears (i) on the date which is thirty (30) days
following the end of the last Business Day of each March, June, September and December and
(ii) on the Revolving Maturity Date.




(b) Letter of Credit Fees. The Borrower agrees to pay to the Administrative
Agent for the benefit of the Lenders, fees in respect of all Letters of Credit outstanding
at a rate per annum equal to the Applicable Margin (computed on the actual number of days
elapsed, including the first day and excluding the last, based upon a 360-day year) on the
average daily amount of the aggregate undrawn maximum amount of each Letter of Credit
outstanding, payable in arrears (i) on the date which is thirty (30) days following the last
Business Day of each March, June, September and December and (ii) on the Revolving Maturity
Date. In addition, the Borrower agrees to pay to the Issuing Bank for its own account a fee
on the average daily amount of the aggregate undrawn maximum face amount of each Letter of
Credit issued by such Issuing Bank at a rate per annum equal to one-quarter of one percent
(.25%), such fees due and payable quarterly in arrears (i) on the date which is thirty (30)
days following the last Business Day of each March, June, September and December and (ii) on
the Maturity Date.




(c) Administrative Agent’s Fees. The Borrower agrees to pay to the
Administrative Agent for its benefit the fees set forth in the Fee Letter for acting as
Administrative Agent, as and when the same are due and payable pursuant to the terms of the
Fee Letter.



Section 2.04 Reduction of the Revolving Commitments. The Borrower may, upon at least
three (3) Business Days’ prior notice to the Administrative Agent, permanently terminate in whole
or permanently reduce ratably in part the Revolving Commitments of the Lenders; provided,
however, that (a) each partial reduction shall be in the aggregate amount of not less than
$5,000,000 or an integral multiple of $1,000,000 in excess thereof, (b) no such reduction shall
result in an overdraft status as provided in Section 2.07(c)(iv), and (c) no such reduction shall
result in the total aggregate Revolving Commitments of the Lenders being less than $25,000,000
unless the total aggregate Revolving Commitments are permanently terminated in their entirety.



Section 2.05 Repayment of Advances on Maturity Date. The Borrower shall repay the
outstanding principal amount of each Advance on the applicable Maturity Date for such Class of
Advance.



Section 2.06 Interest, Late Payment Fee. The Borrower shall pay interest on the
unpaid principal amount of each Advance made by each Lender from the date of such Advance until
such principal amount shall be paid in full, at the following rates per annum:




(a) Adjusted Base Rate Advances. If such Advance is an Adjusted Base Rate
Advance, a rate per annum (computed on the actual number of days elapsed, including the
first day and excluding the last, based on a 365 day year) equal at all times to the lesser
of (i) the Adjusted Base Rate in effect from time to time plus the Applicable Margin
and (ii) the Maximum Rate, payable in arrears on the first Business Day of each calendar
month and on the date such Adjusted Base Rate Advance shall be paid in full,
provided that during the continuance of an Event of Default, Adjusted Base Rate
Advances shall bear interest at a rate per annum equal at all times to the lesser of (i) the
rate required to be paid on such Advance had such Event of Default not occurred plus
three percent (3%) and (ii) the Maximum Rate.




(b) Eurodollar Rate Advances. If such Advance is a Eurodollar Rate Advance, a
rate per annum (computed on the actual number of days elapsed, including the first day and
excluding the last, based on a 360 day year) equal at all times during the Interest Period
for such Advance to the lesser of (i) the applicable Eurodollar Rate for such Advance for
such Interest Period plus the Applicable Margin and (ii) the Maximum Rate, payable
in arrears on the last day of such Interest Period, and on the date such Eurodollar Rate
Advance shall be paid in full, and, with respect to Eurodollar Rate Advances having an
Interest Period in excess of thirty (30) days, the first Business Day of each calendar month
during such Interest Period excluding the month in which such Eurodollar Rate Advance shall
be paid in full; provided that during the continuance of an Event of Default,
Eurodollar Rate Advances shall bear interest at a rate per annum equal at all times to the
lesser of (i) the rate required to be paid on such Advance had such Event of Default not
occurred plus three percent (3%) and (ii) the Maximum Rate.




(c) Usury Recapture. In the event the rate of interest chargeable under this
Agreement or the Notes at any time is greater than the Maximum Rate, the unpaid principal
amount of the Notes shall bear interest at the Maximum Rate until the total amount of
interest paid or accrued on the Notes equals the amount of interest which would have been
paid or accrued on the Notes if the stated rates of interest set forth in this Agreement had
at all times been in effect. In the event, upon payment in full of the Notes, the total
amount of interest paid or accrued under the terms of this Agreement and the Notes is less
than the total amount of interest which would have been paid or accrued if the rates of
interest set forth in this Agreement had, at all times, been in effect, then the Borrower
shall, to the extent permitted by applicable law, pay the Administrative Agent for the
account of the Lenders an amount equal to the difference between (i) the lesser of (A) the
amount of interest which would have been charged on the Notes if the Maximum Rate had, at
all times, been in effect and (B) the amount of interest which would have accrued on the
Notes if the rates of interest set forth in this Agreement had at all times been in effect
and (ii) the amount of interest actually paid or accrued under this Agreement on the Notes.
In the event the Lenders ever receive, collect or apply as interest any sum in excess of the
Maximum Rate, such excess amount shall, to the extent permitted by law, be applied to the
reduction of the principal balance of the Notes, and if no such principal is then
outstanding, such excess or part thereof remaining shall be paid to the Borrower.




(d) Other Amounts Overdue. Subject to the provisions of Section 10.11, if any
amount payable under this Agreement other than the Advances is not paid when due and
payable, including without limitation, accrued interest and fees, then such overdue amount
shall accrue interest hereon due and payable on demand at a rate per annum equal to the
Adjusted Base Rate plus three percent (3%), from the date such amount became due
until the date such amount is paid in full.




(e) Late Payment Fee. Subject to the provisions of Section 10.11, if any
interest payable under this Agreement is not paid when due and payable (after taking into
account any applicable grace period), then the Borrower will pay to the Lenders
contemporaneously with the payment of such past due interest a late payment fee equal to an
amount equal to the product of (i) such overdue interest times (ii) four percent
(4%).




Section 2.07 Prepayments.




(a) Right to Prepay. The Borrower shall have no right to prepay any principal
amount of any Advance except as provided in this Section 2.07.




(b) Optional Prepayments. The Borrower may elect to prepay any of the
Advances, after giving by 12:00 noon (New York, New York time) (i) in the case of Eurodollar
Rate Advances, at least three (3) Business Days’, or (ii) in case of Adjusted Base Rate
Advances, at least one (1) Business Day’s prior written notice to the Administrative Agent,
stating the proposed date and aggregate principal amount of such prepayment, and if
applicable, the relevant Interest Period for the Advances to be prepaid. If any such notice
is given, the Borrower shall prepay Advances comprising part of the same Borrowing in whole
or ratably in part in an aggregate principal amount equal to the amount specified in such
notice, and shall also pay accrued interest to the date of such prepayment on the principal
amount prepaid and amounts, if any, required to be paid pursuant to Sections 2.07(c)(iii) or
2.08 as a result of such prepayment being made on such date; provided,
however, that each partial prepayment shall be in an aggregate principal amount not
less than $500,000 and in integral multiples of $100,000.




(c) Mandatory Prepayments.




(i) Repayment Event. Upon the occurrence of any Repayment Event, the
Borrower shall prepay Advances on the Business Day the Net Cash Proceeds from such
Repayment Event are received by the Borrower or the Parent, as applicable, in an
amount equal to the lesser of (A) the amount of the outstanding Advances on such
Business Day and (B) the Repayment Amount for such Repayment Event. If, in
connection with an Asset Disposition which qualifies as a Repayment Event for which
the Borrower has not used the Net Cash Proceeds to repay the Obligations, the
Borrower has failed to make a Permitted New Investment or Permitted New Investments
with such Net Cash Proceeds by the end of the Rolling Period commencing after the
Fiscal Quarter in which such Asset Disposition occurred, then the Borrower shall
prepay Advances on or prior to the end of such Rolling Period, in the amount equal
to the lesser of (A) the amount of the outstanding Advances on such date and (B) the
portion of the Repayment Amount for such Repayment Event which has not been used to
make a Permitted Investment or Permitted Investments.




(ii) Allocation of Payments. Prepayments under the foregoing paragraph
(i) shall be applied (A) first, to Term Advances in the reverse order of maturity,
and (B) second, to Revolving Advances. Notwithstanding the foregoing, any holder of
Term Advances may, at its sole discretion, so long as any Revolving Advances are
then outstanding (after giving effect to the application of the required prepayment
to the Term Advances and Revolving Advances under this Section 2.07(c)), elect by
written notice provided to the Administrative Agent not to have all or any amount of
any such required prepayments applied to such holder’s Term Advances, in which case
the aggregate amount so declined shall be applied to Revolving Advances;
provided, however, that to the extent that the aggregate amount so
declined by the holders of the Term Advances exceeds the aggregate principal amount
of the Revolving Advances, the excess shall be allocated between the declining
holders of the Term Advances pro rata based on the aggregate amount declined by each
such holder




(iii) Term Advances. Commencing on April 1, 2005 and on each July 1,
October 1, January 1 and April 1 thereafter, the Borrower shall repay the Term
Advances by an amount equal to $1,250,000. In addition, except for the repayment
made pursuant to the preceding sentence or a repayment or prepayment in connection
with the replacement of a Lender contemplated by Section 2.15, if any Term Advances
are prepaid or repaid prior to the second anniversary of the Closing Date, then in
addition to such prepayment of Term Advances the Borrower shall pay to the
Administrative Agent for the account of each Lender an amount equal to (A) the
amount of such Lender’s Term Advances so prepaid times (B) a percentage equal to (1)
if prior to the first anniversary of the Closing Date, then 2%, and (2) if on or
after the first anniversary of the Closing Date, but before the second anniversary
of the Closing Date, then 1%. The Borrower acknowledges and agrees that the amount
payable by it in connection with the prepayment of Term Advances is a reasonable
calculation of the Lenders’ damages in view of the difficulties and impracticability
of determining actual damages resulting from the prepayment of Term Advances.




(iv) Overdraft. On any date on which the Revolving Exposure exceeds
the aggregate Revolving Commitments, the Borrower agrees to make a prepayment of the
Revolving Advances in the amount of such excess, and if all the Revolving Advances
have been then repaid, then to deposit with the Administrative Agent into the Cash
Collateral Account an amount equal to the lesser of (A) the Letter of Credit
Exposure or (B) the amount of such excess less the amount of Revolving Advances then
repaid.




(v) Accrued Interest. Each prepayment pursuant to this Section 2.07(c)
shall be accompanied by accrued interest on the amount prepaid to the date of such
prepayment and amounts, if any, required to be paid pursuant to Section 2.08 as a
result of such prepayment being made on such date.




(vi) Avoidance of Breakage Costs. In the event that the amount of any
mandatory prepayment of Advances under this Section 2.07(c) exceeds the aggregate
principal amount of Advances which consist of Adjusted Base Rate Advances (the
amount of such excess being the “Excess Amount”), the Borrower shall have
the right, in lieu of making such prepayment in full, to prepay such outstanding
Advances which are Adjusted Base Rate Advances and to deposit an amount equal to the
Excess Amount with the Administrative Agent in the Cash Collateral Account
maintained by and in the sole dominion and control of the Administrative Agent for
the ratable benefit of the Lenders. Any amount so deposited shall be held by the
Administrative Agent as collateral for the Obligations, earn interest on behalf of
the Borrower and be applied to the prepayment of Advances which are Eurodollar Rate
Advances at the end of the current Interest Period(s) applicable thereto. On any
day on which amounts collected in the Cash Collateral Account remain on deposit in
or to the credit of the Cash Collateral Account after giving effect to the payment
made on such day pursuant to this Section 2.07(c), and the Borrower shall have
delivered to the Administrative Agent a written request or a telephonic request
(which shall be promptly confirmed in writing) prior to 12:00 noon (New York, New
York time) that such remaining collected amounts be invested in cash equivalents
specified in such request, the Administrative Agent shall invest such funds, to the
extent the Administrative Agent is reasonably able to do so, in such cash
equivalents as are acceptable to, and with no risk to, the Administrative Agent on
an overnight basis or with maturities such that amounts will be available to pay the
Obligations secured thereby as they become due, whether at maturity, by acceleration
or otherwise; provided, however, that any loss resulting from such
investments shall be charged to and be immediately payable by the Borrower on demand
by the Administrative Agent.




(vii) Repayment of Revolving Advances. Any mandatory repayments of
Revolving Advances pursuant to this Section 2.07(c) shall be applied (A) if no
Default or Event of Default exists, then to Revolving Advances comprising the same
Borrowing or Borrowings, at the Borrower’s option, and (B) if a Default or Event of
Default exists, then to all Revolving Advances pro rata based upon the amount of
outstanding Revolving Advances.




(d) Ratable Payments. Each payment of any Advance pursuant to this Section 2.07
or any other provision of this Agreement shall be made in a manner such that all Advances
comprising part of the same Borrowing are paid in whole or ratably in part.




(e) Effect of Notice. All notices given pursuant to this Section 2.07 shall be
irrevocable and binding upon the Borrower.




(f) Payments with respect to Liens on an Owned Hospitality Property.
Notwithstanding anything in this Agreement or any other Credit Document to the contrary,
except in connection with the release of Liens on an Owned Hospitality Property contemplated
by the provisions of Section 5.09, each payment of any Advance pursuant to this Section 2.07
or any other provision of this Agreement shall be made in a manner such that all Advances
secured by a Lien on an Owned Hospitality Property shall be deemed the last Advances repaid.



Section 2.08 Breakage Costs. If (a) any payment of principal of any Eurodollar Rate
Advance is made other than on the last day of the Interest Period for such Advance as a result of
any payment pursuant to Section 2.07 or the acceleration of the maturity of the Notes pursuant to
Article VIII or otherwise; (b) any Conversion of a Eurodollar Rate Advance is made other than on
the last day of the Interest Period for such Advance pursuant to Section 2.02(b) or Section 2.12 or
otherwise; or (c) the Borrower fails to make a principal or interest payment with respect to any
Eurodollar Rate Advance on the date such payment is due and payable, the Borrower shall, within ten
(10) days of any written demand sent by any Lender to the Borrower through the Administrative
Agent, pay to the Administrative Agent for the account of such Lender any amounts (without
duplication of any other amounts payable in respect of breakage costs) required to compensate such
Lender for any additional losses, out-of-pocket costs or expenses which it may reasonably incur as
a result of such payment or nonpayment, including, without limitation, any loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance.




Section 2.09 Increased Costs.




(a) Eurodollar Rate Advances. If, due to either (i) the introduction of or any
change in or in the interpretation of any law or regulation (except with respect to Taxes or
Other Taxes) following the date of this Agreement or (ii) the compliance with any guideline
or request from any central bank or other Governmental Authority (whether or not having the
force of law) not complied with prior to the date of this Agreement, there shall be any
increase in the cost to any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, then the Borrower shall from time to time, upon demand by such
Lender (with a copy of such demand to the Administrative Agent), immediately pay to the
Administrative Agent for the account of such Lender additional amounts (without duplication
of any other amounts payable in respect of increased costs) sufficient to compensate such
Lender for such increased cost; provided, however, that, before making any
such demand, each Lender agrees to use commercially reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different Applicable
Lending Office if the making of such a designation would avoid the need for, or reduce the
amount of, such increased cost and would not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender. A certificate as to the amount of such increased
cost and detailing the calculation of such cost submitted to the Borrower and the
Administrative Agent by such Lender at the time such Lender demands payment under this
Section shall be conclusive and binding for all purposes, absent manifest error.




(b) Capital Adequacy. If any Lender or the Issuing Bank determines in good
faith that compliance with any law or regulation or any guideline or request from any
central bank or other Governmental Authority (whether or not having the force of law)
implemented or effective after the date of this Agreement affects or would affect the amount
of capital required or expected to be maintained by such Lender or the Issuing Bank and that
the amount of such capital is increased by or based upon the existence of such Lender’s
commitment to lend or the Issuing Bank’s commitment to issue Letters of Credit or any
Lender’s commitment to risk participate in Letters of Credit and other commitments of this
type, then, upon thirty (30) days prior written notice by such Lender or the Issuing Bank
(with a copy of any such demand to the Administrative Agent), the Borrower shall immediately
pay to the Administrative Agent for the account of such Lender or to the Issuing Bank, as
the case may be, from time to time as specified by such Lender or the Issuing Bank,
additional amounts (without duplication of any other amounts payable in respect of increased
costs) sufficient to compensate such Lender or the Issuing Bank, in light of such
circumstances, (i) with respect to such Lender, to the extent that such Lender reasonably
determines such increase in capital to be allocable to the existence of such Lender’s
commitment to lend under this Agreement or its commitment to risk participate in Letters of
Credit and (ii) with respect to the Issuing Bank, to the extent that such Issuing Bank
reasonably determines such increase in capital to be allocable to the issuance or
maintenance of the Letters of Credit. A certificate as to such amounts and detailing the
calculation of such amounts submitted to the Borrower and the Administrative Agent by such
Lender or the Issuing Bank shall be conclusive and binding for all purposes, absent manifest
error.




(c) Letters of Credit. If any change in any law or regulation (except with
respect to Taxes or Other Taxes) or in the interpretation thereof by any court or
administrative or Governmental Authority charged with the administration thereof following
the date of this Agreement shall either (i) impose, modify, or deem applicable any reserve,
special deposit, or similar requirement against letters of credit issued by, or assets held
by, or deposits in or for the account of, Issuing Bank or any Lender or (ii) impose on
Issuing Bank or any Lender any other condition regarding the provisions of this Agreement
relating to the Letters of Credit or any Letter of Credit Obligations, and the result of any
event referred to in the preceding clause (i) or (ii) shall be to increase the cost to
Issuing Bank of issuing or maintaining any Letter of Credit, or increase the cost to such
Lender of its risk participation in any Letter of Credit (which increase in cost shall be
determined by Issuing Bank’s or such Lender’s reasonable allocation of the aggregate of such
cost increases resulting from such event), then, upon demand by Issuing Bank or such Lender
(with a copy sent to the Administrative Agent), as the case may be, the Borrower shall pay
to the Administrative Agent for the account of Issuing Bank or Lender, as the case may be,
from time to time as specified by Issuing Bank or such Lender, additional amounts which
shall be sufficient to compensate such Issuing Bank or such Lender for such increased cost.
Issuing Bank and each Lender agrees to use commercially reasonable efforts (consistent with
internal policy and legal and regulatory restrictions) to designate a different Applicable
Lending Office for the booking of its Letters of Credit or risk participations if the making
of such designation would avoid the effect of this paragraph and would not, in the
reasonable judgment of Issuing Bank or such Lender, be otherwise disadvantageous to Issuing
Bank or such Lender, as the case may be. A certificate as to such increased cost incurred
by Issuing Bank or such Lender, as the case may be, as a result of any event mentioned in
clause (i) or (ii) above, and detailing the calculation of such increased costs submitted by
Issuing Bank or such Lender to the Borrower and the Administrative Agent, shall be
conclusive and binding for all purposes, absent manifest error.




Section 2.10 Payments and Computations.




(a) Payment Procedures. Except if otherwise set forth herein, the Borrower
shall make each payment under this Agreement and under the Notes not later than 12:00 noon
(New York, New York time) on the day when due in Dollars to the Administrative Agent at the
location referred to in the Notes (or such other location as the Administrative Agent shall
designate in writing to the Borrower) in same day funds without set-off, deduction or
counterclaim. Except for amounts payable solely to the Administrative Agent, the Issuing
Banks, or a specific Lender pursuant to Section 2.03(b), 2.03(c), 2.08, 2.09, 2.11, 2.12, or
2.13(c) but after taking into account payments effected pursuant to Section 10.04, the
Administrative Agent will on the same day cause to be distributed like funds relating to the
payment of principal, interest or fees ratably to the Lenders in accordance with, in the
case of a payment made in respect of a Borrowing, each Lender’s Revolving Share or Term
Share, as applicable, for the account of their respective Applicable Lending Offices, and
like funds relating to the payment of any other amount payable to any Lender or Issuing Bank
for the account of its Applicable Lending Office, in each case to be applied in accordance
with the terms of this Agreement.




(b) Computations. All computations of interest based on the Adjusted Base Rate
shall be made by the Administrative Agent on the basis of a year of 365 days and all
computations of fees and interest based on the Applicable Eurodollar Rate and the Federal
Funds Rate shall be made by the Administrative Agent on the basis of a year of 360 days, in
each case for the actual number of days (including the first day, but excluding the last
day) occurring in the period for which such interest or fees are payable. Each
determination by the Administrative Agent of an interest rate shall be conclusive and
binding for all purposes, absent manifest error.




(c) Non-Business Day Payments. Whenever any payment shall be stated to be due
on a day other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the computation
of payment of interest or fees, as the case may be; provided, however, that
if such extension would cause payment of interest on or principal of Eurodollar Rate
Advances to be made in the next following calendar month, such payment shall be made on the
next preceding Business Day.




(d) Administrative Agent Reliance. Unless the Administrative Agent shall have
received written notice from the Borrower prior to the date on which any payment is due to
the Lenders that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative Agent on
such date and the Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such date an amount equal to the amount then due such Lender.
If and to the extent the Borrower shall not have so made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent forthwith on
demand such amount distributed to such Lender, together with interest, for each day from the
date such amount is distributed to such Lender until the date such Lender repays such amount
to the Administrative Agent, at the Federal Funds Rate for each such day.




(e) Application of Payments. Unless otherwise specified in Section 2.07
hereof, whenever any payment received by the Administrative Agent under this Agreement is
insufficient to pay in full all amounts then due and payable under this Agreement and the
Notes, such payment shall be distributed and applied by the Administrative Agent and the
Lenders in the following order: first, to the payment of fees and expenses due and
payable to the Administrative Agent, in its capacity as such, under and in connection with
this Agreement or any other Credit Document; second, to the payment of all expenses
due and payable under Section 2.11(c), to all fees due and payable to the Issuing Bank
pursuant to Section 2.03(b), and to all other fees due and payable under Section 2.03,
ratably among the Lenders and the Issuing Bank in accordance with the aggregate amount of
such payments owed to each such Lender and the Issuing Bank; third, to the payment
of the interest accrued on all Advances and all Letter of Credit Obligations, regardless of
whether any such amount is then due and payable, ratably among the Lenders in accordance
with the aggregate accrued interest owed to such Lenders; and fourth, to the payment
of the principal amount of all Advances and all Letter of Credit Obligations, regardless of
whether any such amount is then due and payable, ratably among the Lenders in accordance
with the aggregate principal amount owed to such Lenders.




(f) Register. The Administrative Agent shall record in the Register the
Commitment and the Advances from time to time of each Lender and each repayment or
prepayment in respect to the principal amount of such Advances of each Lender. Any such
recordation shall be conclusive and binding on the Borrower and each Lender, absent manifest
error; provided however, that failure to make any such recordation, or any
error in such recordation, shall not affect the Borrower’s obligations hereunder in respect
of such Advances.




Section 2.11 Taxes.




(a) No Deduction for Certain Taxes. Any and all payments by the Borrower shall
be made, in accordance with Section 2.10, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, (i) in the case of each Lender, Issuing
Bank, and the Administrative Agent, taxes imposed on its income, and franchise taxes imposed
on it, by the jurisdiction under the laws of which such Lender, Issuing Bank, or the
Administrative Agent (as the case may be) is organized or carries on business (other than as
a result of a connection arising primarily from the Lender, Issuing Bank, or the
Administrative Agent (as the case may be) having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement) or any political
subdivision or taxing authority of such jurisdictions (all such nonexcluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as
“Taxes”) and, (ii) in the case of each Lender and Issuing Bank, Taxes by the
jurisdiction of such Lender’s Applicable Lending Office or any political subdivision of such
jurisdiction. If the Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable to any Lender, Issuing Bank, or the Administrative Agent, (i) the
sum payable shall be increased as may be necessary so that, after making all required
deductions (including deductions applicable to additional sums payable under this Section
2.11), such Lender, Issuing Bank, or the Administrative Agent (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been made;
provided, however, that if the Borrower’s obligation to deduct or withhold
Taxes is caused solely by such Lender’s, Issuing Bank’s, or the Administrative Agent’s
failure to provide the forms described in paragraph (e) of this Section 2.11 and such
Lender, Issuing Bank, or the Administrative Agent could have provided such forms or if such
Lender, Issuing Bank, or the Administrative Agent (as the case may be) fails to comply with
Section 2.11(g), no such increase shall be required; (ii) the Borrower shall make such
deductions; and (iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable Legal Requirements.




(b) Other Taxes. In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or similar levies
which arise from any payment made or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement, the Notes, or the other Credit Documents
(hereinafter referred to as “Other Taxes”).




(c) Indemnification. The Borrower will indemnify each Lender, Issuing Bank,
and the Administrative Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any Governmental Authority on amounts
payable under this Section 2.11) paid by such Lender, Issuing Bank, or the Administrative
Agent (as the case may be) and any liability (including interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted. Each payment required to be made by the Borrower in respect of this
indemnification shall be made to the Administrative Agent for the benefit of any party
claiming such indemnification within thirty (30) days from the date the Borrower receives
written demand detailing the calculation of such amounts therefore from the Administrative
Agent on behalf of itself as Administrative Agent, Issuing Bank, or any such Lender. If any
Lender, the Administrative Agent, or Issuing Bank receives a refund, offset, credit or
deduction in respect of any Taxes or Other Taxes paid by the Borrower under this paragraph
(c), such Lender, the Administrative Agent, or Issuing Bank, as the case may be, shall
promptly pay to the Borrower the Borrower’s share of such refund, offset, credit or
deduction, received by or credited to the Lender, the Administrative Agent, or Issuing Bank,
as the case may be, (reduced by any Taxes imposed on the Lender, the Administrative Agent,
or Issuing Bank, as the case may be, by reason of the receipt, accrual or payment of such
refund, offset, credit or deduction).




(d) Evidence of Tax Payments. The Borrower will pay prior to delinquency all
Taxes and Other Taxes payable in respect of any payment. Within thirty (30) days after the
date of any payment of Taxes, the Borrower will furnish to the Administrative Agent, at its
address referred to in Section 10.02, the original or a certified copy of a receipt
evidencing payment of such Taxes or Other Taxes.




(e) Foreign Lender Withholding Exemption. Each Lender and Issuing Bank that is
not incorporated under the laws of the United States of America or a state thereof agrees
that it will deliver to the Borrower and the Administrative Agent on the date of this
Agreement or upon the effectiveness of any Assignment and Acceptance two duly completed
copies of the Prescribed Forms, as the case may be, certifying in each case that such Lender
is entitled to receive payments under this Agreement and the Notes payable to it, without
deduction or withholding of any United States federal income taxes. Each Lender which
delivers to the Borrower and the Administrative Agent a Prescribed Form further undertakes
to deliver to the Borrower and the Administrative Agent on or before the date that any such
form expires or becomes obsolete or after the occurrence of any event requiring a change in
the most recent form previously delivered by it to the Borrower and the Administrative Agent
two further copies of a replacement Prescribed Form. If an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the date on which
any delivery required by the preceding sentence would otherwise be required which renders
all such forms inapplicable or which would prevent any Lender from duly completing and
delivering any such letter or form with respect to it and such Lender advises the Borrower
and the Administrative Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax, and in the case of a
Prescribed Form establishing an exemption from, or a reduced rate of, United States backup
withholding tax, such Lender shall not be required to deliver such forms. The Borrower
shall withhold tax at the rate and in the manner required by the laws of the United States
with respect to payments made to a Lender failing to timely provide the Prescribed Forms.




(f) Nothing in this Section 2.11 shall require any Lender or the Administrative Agent
to make available any of its tax returns (or any other information that it deems to be
confidential or proprietary, in its sole discretion).




(g) If the Issuing Bank or any Lender claims any additional amounts payable pursuant to
this Section 2.11, then such Issuing Bank or Lender (as the case may be) shall use its
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Applicable Lending Office if the making of
such a change would avoid the need for, or reduce the amount of, any such additional amounts
that would be payable or may thereafter accrue and would not be otherwise disadvantageous to
such Issuing Bank or Lender.




(h) 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, that Lender shall indemnify the
Administrative Agent therefore, 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 attorney fees) of the Administrative Agent. The obligation of
the Lenders under this Section shall survive the termination of the Commitments, repayment
of all other Obligations hereunder and the resignation of the Administrative Agent.



Section 2.12 Illegality. If any Lender shall notify the Administrative Agent and the
Borrower that the introduction of or any change in or in the interpretation of any Legal
Requirement makes it unlawful, or that any central bank or other Governmental Authority asserts
that it is unlawful for such Lender or its Applicable Lending Office to perform its obligations
under this Agreement to maintain any Eurodollar Rate Advances of such Lender then outstanding
hereunder, then, notwithstanding anything herein to the contrary, the Borrower shall, if demanded
by such Lender by notice to the Borrower and the Administrative Agent no later than 12:00 noon (New
York, New York time), (a) if not prohibited by Legal Requirement to maintain such Eurodollar Rate
Advances for the duration of the Interest Period, on the last day of the Interest Period for each
outstanding Eurodollar Rate Advance of such Lender or (b) if prohibited by Legal Requirement to
maintain such Eurodollar Rate Advances for the duration of the Interest Period, on the second
Business Day following its receipt of such notice from such Lender, Convert all such affected
Eurodollar Rate Advances of such Lender then outstanding to Adjusted Base Rate Advances, and pay
accrued interest on the principal amount Converted to the date of such Conversion and amounts, if
any, required to be paid pursuant to Section 2.08 as a result of such Conversion being made on such
date. Each Lender agrees to use commercially reasonable efforts (consistent with its internal
policies and legal and regulatory restrictions) to designate a different Applicable Lending Office
if the making of such designation would avoid the effect of this paragraph and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.




Section 2.13 Letters of Credit.




(a) Issuance. From time to time from the date of this Agreement until three
months before the Maturity Date, at the request of the Borrower, the Issuing Bank shall, on
any Business Day and on the terms and conditions hereinafter set forth, issue, increase,
decrease, amend, or extend the expiration date of Letters of Credit for the account of the
Borrower (for its own benefit or for the benefit of any of its Subsidiaries). Upon the
Effective Date, but subject to the limitations contained in the following sentence, each
Existing Letter of Credit shall be automatically converted to a Letter of Credit. No Letter
of Credit will be issued, increased, or extended and no Existing Letter of Credit will be
converted to a Letter of Credit (i) if such issuance, increase, extension or conversion
would cause the Letter of Credit Exposure to exceed the lesser of (x) $10,000,000 or (y) an
amount equal to (A) the aggregate Revolving Commitments less (B) the sum of the
aggregate Revolving Exposure at such time; (ii) unless such Letter of Credit has an
Expiration Date not later than the earlier of (A) one year after the date of issuance
thereof and (B) ten (10) days prior to the Maturity Date; (iii) unless such Letter of Credit
is in form and substance acceptable to the Issuing Bank; (iv) unless such Letter of Credit
is a standby letter of credit not supporting the repayment of indebtedness for borrowed
money of any Person; (v) unless the Borrower has delivered to the Issuing Bank the completed
and executed Letter of Credit Documents (other than the Letter of Credit) on such Issuing
Bank’s standard form, which shall contain terms no more restrictive than the terms of this
Agreement; (vi) unless such Letter of Credit is governed by the International Standby
Practices (1998) (“ISP”) or any successor to the ISP; and (vii) unless no Default has
occurred and is continuing or would result from the issuance of such Letter of Credit. If
the terms of any of the Letter of Credit Documents referred to in the foregoing clause (v)
conflicts with the terms of this Agreement, the terms of this Agreement shall control.




(b) Participations. On the date of the issuance or increase of any Letter of
Credit on or after the Effective Date or the conversion of any Existing Letter of Credit to
a Letter of Credit in accordance with provisions of the preceding Section 2.13(a), Issuing
Bank shall be deemed to have sold to each other Lender with a Revolving Commitment and each
other Lender with a Revolving Commitment shall have been deemed to have purchased from such
Issuing Bank a participation in the Letter of Credit Exposure related to the Letters of
Credit issued by such Issuing Bank equal to such Lender’s Revolving Share at such date and
such sale and purchase shall otherwise be in accordance with the terms of this Agreement.
Issuing Bank shall promptly notify each such participant Lender by telex, telephone, or
telecopy of each Letter of Credit of such Issuing Bank issued, increased or decreased, and
the actual dollar amount of such Lender’s participation in such Letter of Credit. Each
Lender’s obligation to purchase participating interests pursuant to this Section and to
reimburse the Issuing Bank for such Lender’s Revolving Share of any payment under a Letter
of Credit by such Issuing Bank not reimbursed in full by the Borrower shall be absolute and
unconditional and shall not be affected by any circumstance, including, without limitation,
(i) any of the circumstances described in paragraph (d) below, (ii) the occurrence and
continuance of a Default, (iii) an adverse change in the financial condition of the Borrower
or any Guarantor, or (iv) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing, except for any such circumstance, happening or event
that is determined by a court of competent jurisdiction by a final and non-appealable
judgment to have resulted from the gross negligence or willful misconduct on the part of
such Issuing Bank.




(c) Reimbursement. The Borrower shall have the right (but not the obligation)
to pay promptly on demand to Issuing Bank in respect of each Letter of Credit issued by such
Issuing Bank an amount equal to any amount paid by such Issuing Bank under or in respect of
such Letter of Credit. In the event any Issuing Bank makes a payment pursuant to a request
for draw presented under a Letter of Credit and such payment is not promptly reimbursed by
the Borrower upon demand, such Issuing Bank shall give notice of such payment to the
Administrative Agent and, upon receipt of such notice, the Administrative Agent shall give
notice of such payment to the Lenders, and each Lender shall promptly reimburse such Issuing
Bank for such Lender’s Revolving Share of such payment, and such reimbursement shall be
deemed for all purposes of this Agreement to constitute an Adjusted Base Rate Advance to the
Borrower from such Lender. If such reimbursement is not made by any Lender to any Issuing
Bank on the same day on which such Issuing Bank shall have made payment on any such draw,
such Lender shall pay interest thereon to such Issuing Bank for each such day from the date
such payment should have been made until the date repaid at a rate per annum equal to the
Federal Funds Rate for each such day. The Borrower hereby unconditionally and irrevocably
authorizes, empowers, and directs the Administrative Agent and the Lenders to record and
otherwise treat each payment under a Letter of Credit not immediately reimbursed by the
Borrower as a Borrowing comprised of Adjusted Base Rate Advances to the Borrower.




(d) Obligations Unconditional. The obligations of the Borrower under this
Agreement in respect of each Letter of Credit shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under
all circumstances, notwithstanding the following circumstances:




(i) any lack of validity or enforceability of any Letter of Credit Documents;




(ii) any amendment or waiver of or any consent to departure from any Letter of
Credit Documents;




(iii) the existence of any claim, set-off, defense or other right which the
Borrower or any Lender or any other Person may have at any time against any
beneficiary or transferee of such Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank or any other
Person or entity, whether in connection with this Agreement, the transactions
contemplated in this Agreement or in any Letter of Credit Documents or any unrelated
transaction;




(iv) any statement or any other document presented under such Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect to the extent the
Issuing Bank would not be liable therefore pursuant to the following paragraph (e);




(v) payment by the Issuing Bank under such Letter of Credit against
presentation of a draft or certificate which does not comply with the terms of such
Letter of Credit; or




(vi) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing.




(e) Liability of Issuing Banks. The Borrower assumes all risks of the acts or
omissions of any beneficiary or transferee of any Letter of Credit with respect to its use
of such Letter of Credit. No Issuing Bank, nor any other Lender, nor any of their
respective officers or directors shall be liable or responsible for:




(i) the use which may be made of any Letter of Credit or any acts or omissions
of any beneficiary or transferee in connection therewith;




(ii) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged;




(iii) payment by such Issuing Bank against presentation of documents which do
not comply with the terms of a Letter of Credit, including failure of any documents
to bear any reference or adequate reference to the relevant Letter of Credit; or




(iv) any other circumstances whatsoever in making or failing to make payment
under any Letter of Credit (including such Issuing Bank’s own negligence),




except that the Borrower shall have a claim against such Issuing Bank, and such
Issuing Bank shall be liable to, and shall promptly pay to, the Borrower, to the extent of
any direct, as opposed to consequential, damages suffered by the Borrower that are
determined by a court of competent jurisdiction by a final and non-appealable judgment to
have resulted from (A) such Issuing Bank’s willful misconduct or gross negligence in
determining whether documents presented under a Letter of Credit comply with the terms of
such Letter of Credit or (B) such Issuing Bank’s gross negligence in failing to make lawful
payment under any Letter of Credit after the presentation to it of a draft and certificate
strictly complying with the terms and conditions of such Letter of Credit. In furtherance
and not in limitation of the foregoing, any Issuing Bank may accept documents that appear on
their face to be in order, without responsibility for further investigation.



Section 2.14 Determination of Leverage Ratio. In addition to the determination of the
Leverage Ratio in a Compliance Certificate, the Leverage Ratio shall be determined by the
Administrative Agent, as follows:




(a) Adjustments. Following each making, acquisition or disposition by the
Parent or its Subsidiary of an Investment or any Non-Replaced Property with an Investment
Amount in excess of $5,000,000 or the incurrence by the Parent or its Subsidiary of
additional Indebtedness (excluding any Obligations) in excess of $5,000,000 (an
“Adjustment Event”), and the Administrative Agent’s receipt of an Adjustment Report
with respect thereto, the Administrative Agent shall adjust the Leverage Ratio accordingly.




(b) Notice of Leverage Ratio Change. Promptly following any date the Leverage
Ratio is determined in accordance with the preceding paragraph, the Administrative Agent
shall give notice to the Lenders and the Borrower of the new Leverage Ratio.




Section 2.15 Lender Replacement.




(a) Right to Replace. The Borrower shall have the right to replace each Lender
affected by a condition under Section 2.02(c)(vi), 2.09, 2.11, or 2.12 for more than 60 days
(each such affected Lender, an “Affected Lender”) in accordance with the procedures
in this Section 2.15 and provided that no reduction of the total Commitments occurs as a
result thereof.




(b) Replacement Allocation.




(i) Upon the occurrence of any condition permitting the replacement of a
Lender, the Administrative Agent in its sole discretion shall have the right to
reallocate the amount of the Commitments of the Affected Lenders, including without
limitation to Persons which are not already party to this Agreement but which
qualify as Eligible Assignees, which election shall be made by written notice within
thirty (30) days after the date such condition occurs.




(ii) If the aggregate amount of the reallocated Commitments is less than the
Commitments of the Affected Lenders, (A) the respective Commitments of the Lenders
which have received such reallocated Commitments shall be increased by the
respective amounts of their proposed reallocations, and (B) the Borrower shall have
the right to add additional Lenders which are Eligible Assignees to this Agreement
to replace such Affected Lenders, which additional Lenders would have aggregate
Commitments no greater than those of the Affected Lenders minus the amounts
of the Commitments already reallocated.




(iii) Notwithstanding any provision in this Section 2.15 to the contrary, no
Lender may have such Lender’s Commitment increased pursuant to the provisions of
this Section 2.15 without such Lender’s written consent.




(c) Procedure. Any assumptions of Commitments pursuant to this Section 2.15
shall be (i) made by the purchasing Lender or Eligible Assignee and the selling Lender
entering into an Assignment and Assumption and by following the procedures in Section 10.06
for adding a Lender; provided that no processing fee shall be charged by the
Administrative Agent in connection with such assignment. In connection with the
reallocation of the Commitments of any Lender pursuant to the foregoing paragraph (b), each
Lender with a reallocated Commitment shall purchase from the Affected Lenders at par such
Lender’s Revolving Share or Term Share, as applicable, of the outstanding Advances of the
Affected Lenders and assume such Lender’s Revolving Share of the Affected Lenders’ Letter of
Credit Exposure.



Section 2.16 Sharing of Payments, Etc. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off or otherwise) on
account of the Advances made by it in excess of its Revolving Share or Term Share, as applicable,
of payments or collateral on account of the Advances or Letter of Credit Obligations obtained by
all the Lenders, such Lender shall notify the Administrative Agent and forthwith purchase from the
other Lenders such participations in the Advances, as applicable, made by them or Letter of Credit
Obligations held by them as shall be necessary to cause such purchasing Lender to share the excess
payment or benefits of such collateral or proceeds ratably in accordance with the requirements of
this Agreement with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the
extent of such Lender’s ratable share (according to the proportion of (a) the amount of the
participation sold by such Lender to the purchasing Lender as a result of such excess payment to
(b) the total amount of such excess payment) of such recovery, together with an amount equal to
such Lender’s ratable share (according to the proportion of (a) the amount of such Lender’s
required repayment to the purchasing Lender to (b) the total amount of all such required repayments
to the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender
in respect of the total amount so recovered. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.16 may, to the fullest extent
permitted by Legal Requirement, unless and until rescinded as provided above, exercise all its
rights of payment (including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such participation.



ARTICLE III




CONDITIONS OF LENDING




Section 3.01 Conditions Precedent to the Initial Advance. The obligation of each
Lender to make an initial Advance hereunder and of the Issuing Bank to issue an initial Letter of
Credit are subject to the following conditions precedent being satisfied on or prior to January 31,
2005:




(a) Documentation. The Administrative Agent shall have received counterparts
of this Agreement executed by the Borrower and the Lenders, and the following duly executed
by all the parties thereto, in form and substance satisfactory to the Administrative Agent,
and, with respect to this Agreement, all Guaranties and Environmental Indemnities, in
sufficient copies for each Lender:




(i) the Guaranties and the Environmental Indemnities;




(ii) the Security Documents (or amendments thereto) to the extent applicable
executed by the Borrower, the Parent and the other Guarantors granting to the
Administrative Agent for the benefit of the Lenders an Acceptable Lien in the
Collateral, together with stock certificates, stock powers executed in blank, UCC-1
financing statements and any other documents, agreements or instruments necessary or
desirable to create an Acceptable Lien in the Collateral, provided that in
the Administrative Agent’s discretion certain Security Documents necessary for the
granting to the Administrative Agent for the benefit of the Lenders of an Acceptable
Lien in Ownership Interests in Persons which are domiciled outside the United States
may be executed and delivered within ten (10) Business Days of the Closing;




(iii) a certificate from a Responsible Officer of the Parent on behalf of the
Borrower dated as of the Closing Date stating that as of the Closing Date (A) all
representations and warranties of the Borrower set forth in this Agreement and the
Credit Documents are true and correct in all material respects; (B) no Default has
occurred and is continuing; (C) the conditions in this Section 3.01 have been met or
waived in writing; and (D) to the best of the Borrower’s knowledge there are no
claims, defenses, counterclaims or offsets against the Lenders under the Credit
Documents;




(iv) a certificate of the Secretary or an Assistant Secretary of the Parent on
behalf of the Borrower and each corporation and limited liability company that is
either a Guarantor or a general partner or manager of a Guarantor dated as of the
date of this Agreement certifying as of the Closing Date (A) the names and true
signatures of officers or authorized representatives of the Parent and such other
Persons authorized to sign the Credit Documents to which such Person is a party in
the capacity therein indicated, (B) resolutions of the Board of Directors or the
members of the Parent and such other Persons with respect to the transactions herein
contemplated, (C) either (x) the copies of the organizational documents of the
Parent, the Borrower and such other Persons delivered to the Lenders are still true
and correct and have not been amended or modified since such date or (y) copies of
any modification or amendment to the organizational documents of the Parent, the
Borrower or any such other Persons made since such date, and (D) a true and correct
copy of all partnership, corporate or limited liability company authorizations
necessary or desirable in connection with the transactions herein contemplated;




(v) (A) one or more favorable written opinions of DeCampo, Diamond & Ash,
special counsel for the Borrower, the Parent, and their Subsidiaries, in a form
reasonably acceptable to the Administrative Agent, in each case dated as of the
Closing Date and with such changes as the Administrative Agent may approve, and (B)
such other legal opinions as either of the Administrative Agent shall reasonably
request, in each case dated as of the Closing Date and with such changes as the
Administrative Agent may approve, provided that in the Administrative
Agent’s discretion certain legal opinions related to Persons which are domiciled
outside the United States may be executed and delivered within ten (10) Business
Days of the Closing;




(vi) a Compliance Certificate dated as of the Closing Date reflecting for the
financial tests covered therein the financial performance for the Borrower for the
Rolling Period ended September 30, 2004, together with a certificated pro forma
balance sheet of the Parent as of the Closing Date assuming the Pre-Existing
Designated Indebtedness had been repaid, duly completed and executed by the Chief
Financial Officer or Treasurer of the Parent;




(vii) the MHC Letter; and




(viii) such other documents, governmental certificates, agreements, lien
searches as the Administrative Agent may reasonably request.




(b) Representations and Warranties. The representations and warranties
contained in Article IV hereof, the Security Agreement, the Guaranties and the Environmental
Indemnities shall be true and correct in all material respects.




(c) Certain Payments. The Borrower shall have paid or repaid, as applicable,
(i) the fees required to be paid as of the execution of this Credit Agreement pursuant to
the Fee Letter and (ii) the Pre-Existing Designated Indebtedness.




(d) Security Documents. Except as expressly contemplated by the provisions of
Section 3.01(a)(ii) above, the Administrative Agent shall have received all appropriate
evidence required by the Administrative Agent in its reasonable discretion necessary to
determine that the Administrative Agent has an Acceptable Lien in the Collateral, including,
without limitation, lien searches conducted on the Borrower and the Guarantors and lien
releases with respect to any Collateral currently subject to a Lien other than Permitted
Encumbrances.




(e) Credit Ratings. The Borrower shall have received final minimum credit
ratings in respect of the Obligations of B and B2 from S&P and Moody’s, respectively.




(f) Material Adverse Change. No Material Adverse Change shall have occurred.



Without limiting the generality of the provisions of Section 9.04, for purposes of determining
compliance with the conditions specified in this Section 3.01, each Lender that has signed this
Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received notice from that
Lender prior to the proposed Closing Date specifying its objection thereto.



Section 3.02 Conditions Precedent for Each Borrowing or Letter of Credit. The
obligation of each Lender to fund an Advance on the occasion of each Borrowing (other than the
Conversion or continuation of any existing Borrowing) and of any Issuing Bank to issue or increase
or extend any Letter of Credit shall be subject to the further conditions precedent that on the
date of such Borrowing or the issuance, increase or extension of such Letter of Credit:




(a) the following statements shall be true (and each of the giving of the applicable
Notice of Borrowing and the acceptance by the Borrower of the proceeds of such Borrowing or
the issuance or increase or extension of such Letter of Credit shall constitute a
representation and warranty by the Borrower that on the date of such Borrowing or the
issuance or increase or extension of such Letter of Credit such statements are true):




(i) the representations and warranties contained in Article IV hereof, the
Security Agreement, the Guaranties, the Environmental Indemnities and the other
Credit Documents, as such representations and warranties may change based upon
events or activities permitted by this Agreement, are correct in all material
respects on and as of the date of such Borrowing or the issuance or increase or
extension of such Letter of Credit, before and after giving effect to such Borrowing
or to the issuance or increase or extension of such Letter of Credit and to the
application of the proceeds from such Borrowing, as though made on and as of such
date; and




(ii) no Default has occurred and is continuing or would result from such
Borrowing or from the application of the proceeds therefrom, as evidenced by the
Notice of Borrowing; provided that the Leverage Ratio shown in such Notice
of Borrowing does not need to be updated from the last time the Leverage Ratio was
provided to the Administrative Agent unless an Adjustment Event has occurred since
such date; and




(b) the Administrative Agent shall have received such other approvals, opinions or
documents deemed necessary or desirable by any Lender or the Administrative Agent as such
party may reasonably request.



Section 3.03 Conditions as Covenants. If the Lenders make any Advances, or the
Issuing Bank issues a Letter of Credit, prior to the satisfaction of all conditions precedent set
forth in Sections 3.01 and 3.02., the Borrower shall nevertheless cause such condition or
conditions to be satisfied within two (2) Business Days (ten (10) Business Days for those items for
which the Borrower is permitted such time period pursuant to the provisions of Section 3.01) after
the date of the making of such Advances or the issuance of such Letter of Credit.



ARTICLE IV




REPRESENTATIONS AND WARRANTIES




	 	 	 
	The Borrower represents and warrants as follows:

	 
	 	 
	Section 4.01

	 	Existence; Qualification; Partners; Subsidiaries.
	
 
	 	 








(a) The Borrower is a limited partnership duly organized, validly existing, and in good
standing under the laws of Delaware and in good standing and qualified to do business in
each jurisdiction where its ownership or lease of property or conduct of its business
requires such qualification, except where the failure to so qualify would not cause a
Material Adverse Change to the Borrower.




(b) The Parent is a corporation duly organized, validly existing, and in good standing
under the laws of Delaware and in good standing and qualified to do business in each
jurisdiction where its ownership or lease of property or conduct of its business requires
such qualification, except where the failure to so qualify would not cause a Material
Adverse Change to the Parent.




(c) The Parent is duly listed on the New York Stock Exchange, Inc. and the Parent has
timely filed all reports required to be filed by it with the New York Stock Exchange, Inc.
and the Securities and Exchange Commission.




(d) The Parent owns approximately 99% of the partnership interest in the Borrower and
is the sole general partner of the Borrower.




(e) The entire authorized capital stock of the Parent consists of (i) 250,000,000
shares of Parent common stock of which approximately 30,631,001 shares of Parent common
stock are duly and validly issued and outstanding, fully paid and nonassessable as of
September 30, 2004 and (ii) 5,000,000 shares of Parent preferred stock of which no shares
are issued or outstanding.




(f) Each Subsidiary of the Borrower or the Parent is a limited partnership, general
partnership, corporation or limited liability company duly organized, validly existing, and
in good standing under the laws of its jurisdiction of formation and in good standing and
qualified to do business in each jurisdiction where conduct of its business requires such
qualification, except where the failure to so qualify would not cause a Material Adverse
Change to such Subsidiary. Except for the Beverage Entities, Schedule 4.01 lists the
jurisdiction of formation, and the address of the principal office of each Subsidiary of the
Borrower or the Parent existing on the date of this Agreement. As of the date of this
Agreement, the Parent or the Borrower owns, directly or indirectly, at least the percentage
interests in each such Subsidiary listed on the attached Schedule 4.01.



Section 4.02 Partnership and Corporate Power. The execution, delivery, and
performance by the Borrower and each Guarantor of the Credit Documents to which it is a party and
the consummation of the transactions contemplated hereby and thereby (a) are within such Persons’
partnership, limited liability company and corporate powers, as applicable, (b) have been duly
authorized by all necessary corporate, limited liability company and partnership action, as
applicable, (c) do not contravene (i) such Person’s certificate or articles, as the case may be,
of incorporation or by-laws, operating agreement or partnership agreement, as applicable, or (ii)
any law or any contractual restriction binding on or affecting any such Person, the contravention
of which could reasonably be expected to cause a Material Adverse Change, and (d) will not result
in or require the creation or imposition of any Lien prohibited by this Agreement. At the time of
each Borrowing, such Borrowing and the use of the proceeds of such Borrowing will be within the
Borrower’s partnership powers, will have been duly authorized by all necessary partnership action,
(a) will not contravene (i) the Borrower’s partnership agreement or (ii) any law or any contractual
restriction binding on or affecting the Borrower, the contravention of which could reasonably be
expected to cause a Material Adverse Change, and (b) will not result in or require the creation or
imposition of any Lien prohibited by this Agreement.



Section 4.03 Authorization and Approvals. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority is required for the due
execution, delivery and performance by the Borrower or any Guarantor of the Credit Documents to
which it is a party or the consummation of the transactions contemplated thereby. At the time of
each Borrowing, no authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority will be required for such Borrowing or the use of the proceeds of such
Borrowing the absence of which could reasonably be expected to cause a Material Adverse Change.



Section 4.04 Enforceable Obligations. This Agreement, the Notes, and the other Credit
Documents to which the Borrower is a party have been duly executed and delivered by the Borrower;
each Guaranty and the other Credit Documents to which each Guarantor and the Parent is a party have
been duly executed and delivered by such Guarantor; and the Environmental Indemnity and Security
Agreement have been duly executed and delivered by the respective parties thereto. Each Credit
Document is the legal, valid, and binding obligation of the Borrower, the Parent, and each
Guarantor which is a party to it enforceable against the Borrower, the Parent, and each such
Guarantor in accordance with its terms, except as such enforceability may be limited by any
applicable bankruptcy, insolvency, reorganization, moratorium, or similar law affecting creditors’
rights generally and by general principles of equity (whether considered in proceeding at law or in
equity).



Section 4.05 Financial Statements. The respective Consolidated balance sheets,
statements of operations, shareholders’ equity and cash flows of the Parent and its Subsidiaries
contained in the Financial Statements, and the corresponding pro forma financial statements for the
Parent and its Subsidiaries, fairly present the financial condition in all material respects and
reflects the Indebtedness of such Person and such Person’s Subsidiaries on a Consolidated basis as
of the dates indicated in the Financial Statements and the respective results of the operations for
the periods indicated, and such balance sheets and statements were prepared in accordance with
GAAP, subject to year-end adjustments. Since December 31, 2003, no Material Adverse Change has
occurred.



Section 4.06 True and Complete Disclosure. No representation, warranty, or other
statement made by the Borrower (or on behalf of the Borrower) in this Agreement or any other Credit
Document contains any untrue statement of a material fact or omits to state any material fact
necessary to make the statements contained therein not misleading in light of the circumstances in
which they were made as of the date of this Agreement. There is no fact known to any Responsible
Officer of the Borrower or the Parent on the date of this Agreement that has not been disclosed to
the Administrative Agent which could reasonably be expected to cause a Material Adverse Change.
All projections, estimates, and pro forma financial information furnished by the Borrower and/or
the Parent or on behalf of the Borrower were prepared on the basis of assumptions, data,
information, tests, or conditions believed to be reasonable at the time such projections,
estimates, and pro forma financial information were furnished. No representation, warranty or
other statement made in the Parent’s latest 10K, 10Q or annual report contains any untrue statement
of material fact or omits to state any material fact necessary to make the statements contained
therein not misleading in light of the circumstances in which they were made as of the date same
were made. Borrower and/or Parent has made all filings required by the Exchange Act.



Section 4.07 Litigation. Except as set forth in the attached Schedule 4.07, there is
no pending or, to the best knowledge of the Borrower, threatened investigation, action or
proceeding affecting the Borrower or the Parent or any of their respective Subsidiaries by or
before any court, Governmental Authority or arbitrator either (a) in which in Borrower’s good faith
judgment the anticipated loss is over $500,000 (provided that with respect to the giving of
this representation after the date of this Agreement, the representation shall only be deemed to
apply to those matters for which Administrative Agent would have been entitled to notice under
Section 5.05(j)) or (b) which in Borrower’s good faith judgment would result in criminal penalties
against the Parent, the Borrower or their respective Subsidiaries which could reasonably be
expected to cause a Material Adverse Change.




Section 4.08 Use of Proceeds and Letters of Credit.




(a) Advances. The proceeds of the Advances shall be used by the Borrower for
(i) working capital and general corporate purposes, (ii) the making of Permitted New
Investments pursuant to the provisions of Section 6.06, (iii) the repayment of Pre-Existing
Designated Indebtedness, (iv) for costs incurred in connection with the incurrence of
Indebtedness issued or incurred in compliance with this Agreement, and (v) the repurchase of
the Parent’s currently outstanding common stock as permitted by the provisions of Section
6.04(g).




(b) Regulations. No proceeds of Advances will be used to purchase or carry any
Margin Stock or be used in violation of Regulations T, U or X of the Federal Reserve Board,
as the same is from time to time in effect, and all official rulings and interpretations
thereunder or thereof. The Borrower is not engaged in the business of extending credit for
the purpose of purchasing or carrying Margin Stock.




(c) Letters of Credit. The Letters of Credit shall be used by the Borrower in
connection with (i) the making of Permitted New Investments pursuant to the provisions of
Section 6.06 and (ii) the Borrower’s Hospitality Management Business and ancillary
activities.



Section 4.09 Investment Company Act. Neither the Borrower, the Parent nor any of
their respective Subsidiaries is an “investment company” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940, as amended.



Section 4.10 Taxes. All federal, state, local and foreign tax returns, reports and
statements required to be filed (after giving effect to any extension granted in the time for
filing) by the Parent, the Borrower, their respective Subsidiaries, or any member of a Controlled
Group have been filed with the appropriate governmental agencies in all jurisdictions in which such
returns, reports and statements are required to be filed, and where the failure to file could
reasonably be expected to cause a Material Adverse Change, except where contested in good faith and
by appropriate proceedings; and all taxes and other impositions due and payable (which are material
in amount) have been timely paid prior to the date on which any fine, penalty, interest, late
charge or loss (which are material in amount) may be added thereto for non-payment thereof except
where contested in good faith and by appropriate proceedings. As of the date of this Agreement,
neither the Parent, the Borrower, any of their respective Subsidiaries nor any member of a
Controlled Group has given, or been requested to give, a waiver of the statute of limitations
relating to the payment of any federal, state, local or foreign taxes or other impositions. None
of the Property owned by the Parent, the Borrower, any of their respective Subsidiaries or any
other member of a Controlled Group is Property which the Parent, the Borrower, any of their
respective Subsidiaries or any member of a Controlled Group is required to be treated as being
owned by any other Person pursuant to the provisions of Section 168(f)(8) of the Code. Proper and
accurate amounts have been withheld by the Parent, the Borrower, their respective Subsidiaries and
all members of each Controlled Group from their employees for all periods to comply in all material
respects with the tax, social security and unemployment withholding provisions of applicable
federal, state, local and foreign law. Timely payment of all material sales and use taxes required
by applicable law have been made by the Parent, the Borrower, their respective Subsidiaries and all
other members of each Controlled Group, the failure to timely pay of which could reasonably be
expected to cause a Material Adverse Change. The amounts shown on all tax returns to be due and
payable have been paid in full or adequate provision therefore is included on the books of the
appropriate members of the applicable Controlled Group.



Section 4.11 Pension Plans. All Plans are in compliance in all material respects with
all applicable provisions of ERISA. No Termination Event has occurred with respect to any Plan,
and each Plan has complied with and been administered in all material respects in accordance with
applicable provisions of ERISA and the Code. No “accumulated funding deficiency” (as defined in
Section 302 of ERISA) has occurred and there has been no excise tax imposed under Section 4971 of
the Code. No Reportable Event has occurred with respect to any Multiemployer Plan, and to the
Borrower’s actual knowledge each Multiemployer Plan has complied with and been administered in all
material respects with applicable provisions of ERISA and the Code. Neither the Borrower, nor any
member of a Controlled Group has had a complete or partial withdrawal from any Multiemployer Plan
for which there is any material withdrawal liability. As of the most recent valuation date
applicable thereto, neither the Borrower nor any member of a Controlled Group has received notice
that any Multiemployer Plan is insolvent or in reorganization.



Section 4.12 Insurance. The Borrower and each of its Subsidiaries carry the insurance
required pursuant to the provisions of Section 5.07.




Section 4.13 No Burdensome Restrictions; No Defaults.




(a) Except in connection with Indebtedness which is (i) either permitted pursuant to
the provisions of Section 6.02, or (ii) being repaid with the proceeds of the initial
Borrowing, neither the Borrower nor any of its Subsidiaries is a party to any indenture,
loan or credit agreement. Neither the Borrower, the Parent nor any of their respective
Subsidiaries is a party to any agreement or instrument or subject to any charter or
corporate restriction or provision of applicable law or governmental regulation which could
reasonably be expected to cause a Material Adverse Change. Neither the Borrower, nor the
Parent, nor their respective Subsidiaries has entered into or suffered to exist any
agreement (other than this Agreement and the Credit Documents and as set forth in the
Permitted Property Agreements and the Permitted Housing Agreements) (i) prohibiting the
creation or assumption of any Lien upon the Properties of the Parent, the Borrower or any of
their respective Subsidiaries (except for Properties of and Ownership Interests in the
Permitted Other Subsidiaries), whether now owned or hereafter acquired, or (ii) requiring an
obligation to be secured if some other obligation is or becomes secured.




(b) Neither the Borrower, the Parent nor any of their Subsidiaries is in default under
or with respect to any contract or agreement which could reasonably be expected to cause a
Material Adverse Change. Neither the Borrower, the Parent nor any of their Subsidiaries has
received any notice of default under any material contract or agreement which is continuing
and which, if not cured, could reasonably be expected to cause a Material Adverse Change.
The Indebtedness of the Dallas Pledgors to FelCor is non-recourse to the Borrower and the
Guarantors and is only secured by the interests of the Dallas Pledgors in FCH/IHC Hotels,
L.P.. Under the Financial Statements the interests of the Dallas Pledgors in FCH/IHC
Hotels, L.P. have been written down to $0.




(c) No Default has occurred and is continuing (or with respect to the giving of this
representation after the date of this Agreement, as otherwise disclosed to the
Administrative Agent in writing after the date of this Agreement and prior to the date such
representation is deemed given).




Section 4.14 Environmental Condition.




(a) Except as disclosed in Schedule 4.14 (or with respect to the giving of this
representation after the date of this Agreement, as otherwise disclosed to the
Administrative Agent in writing after the date of this Agreement and prior to the date such
representation is deemed given), to the knowledge of the Borrower, the Borrower, the Parent
and their respective Subsidiaries (i) have obtained all Environmental Permits material for
the operation of their respective Properties and the conduct of their respective businesses;
(ii) have been and are in material compliance with all terms and conditions of such
Environmental Permits and with all other requirements of applicable Environmental Laws;
(iii) have not received notice of any violation or alleged violation of any Environmental
Law or Environmental Permit; and (iv) are not subject to any actual or contingent
Environmental Claim.




(b) Except as disclosed in Schedule 4.14, to the knowledge of Borrower, no Property
which is presently or previously owned or operated by the Borrower, the Parent or of any of
their respective present or former Subsidiaries, wherever located, (i) has been placed on or
proposed to be placed on the National Priorities List, the Comprehensive Environmental
Response Compensation Liability Information System list, or their state or local analogs, or
have been otherwise investigated, designated, listed, or identified as a Fund or other
potential site for removal, remediation, cleanup, closure, restoration, reclamation, or
other response activity under any Environmental Laws which could reasonably be expected to
cause a Material Adverse Change; (ii) is subject to a Lien, arising under or in connection
with any Environmental Laws, that attaches to any revenues or to any Property operated by
the Borrower, the Parent or any of their respective Subsidiaries, wherever located; (iii)
has been the site of any Release, use or storage of Hazardous Substances or Hazardous Wastes
from present or past operations except for Permitted Hazardous Substances, which Permitted
Hazardous Substances have not caused at the site or at any third-party site any condition
that has resulted in or could reasonably be expected to result in the need for Response or
(iv) none of the Improvements are constructed on land designated by any Governmental
Authority having land use jurisdiction as wetlands.



Section 4.15 Legal Requirements, Zoning. Except as set forth on Schedule 4.15
attached hereto, the current use and operation of each Property which is presently owned or
operated by the Borrower, the Parent or of any of their respective Subsidiaries, wherever located,
(a) constitutes a legal use under applicable zoning regulations (as the same may be modified by
special use permits or the granting of variances) and (b) complies in all material respects with
all Legal Requirements, and does not violate in any material respect any material approvals,
material restrictions of record or any material agreement affecting any such Property (or any
portion thereof) except for non-legal use or non-compliance which in the aggregate would not cause
a Material Adverse Change. The Borrower, the Parent and their respective Subsidiaries possess all
certificates of public convenience, authorizations, permits, licenses, patents, patent rights or
licenses, trademarks, trademark rights, trade names rights and copyrights (collectively
"Permits”) required by Governmental Authority to own or operate Properties, as applicable,
the Properties they own or operate, except for those Permits that if not obtained would not cause a
Material Adverse Change. The Borrower, the Parent and their respective Subsidiaries own and
operate their business in material compliance with all applicable Legal Requirements except for
non-compliance which in the aggregate would not cause a Material Adverse Change.




Section 4.16 Existing Indebtedness and Interest Rate Agreements; Solvency.




(a) Except for the Obligations, the only Indebtedness (including Existing Letters of
Credit) or Interest Rate Agreements of the Borrower or any of its Subsidiaries existing as
of the Effective Date are set forth on Schedule 4.16(a) attached hereto. No “default” or
“event of default”, however defined, has occurred and is continuing under any such
Indebtedness or Interest Rate Agreement (or with respect to the giving of this
representation after the date of this Agreement, as otherwise disclosed to the
Administrative Agent in writing after the date of this Agreement and prior to the date such
representation is deemed given) except for the Indebtedness of the Dallas Pledgors to
FelCor.




(b) The only Existing Letters of Credit as of the Effective Date are set forth on
Schedule 4.16(b) attached hereto.




(c) To the best of the Borrower’s knowledge, (i) the fair value and present fair
saleable value on a going concern basis of the Property of the Parent, the Borrower and
their respective Subsidiaries, on a Consolidated basis, exceeds the amount that will be
required to pay the probable liabilities of such Persons, on a Consolidated basis, on their
Indebtedness, as such Indebtedness becomes absolute and matured, (ii) the Parent, the
Borrower and their respective Subsidiaries, on a Consolidated basis, will have sufficient
cash flow to enable them to pay their debts as they mature, and (iii) the Parent, the
Borrower and their respective Subsidiaries, on a Consolidated basis, are able to pay their
Indebtedness as it matures in the normal course of business.



Section 4.17 Leasing Arrangements. The only material leases for which either the
Borrower or a Guarantor is a lessee are office leases and leases of Units in the Permitted Housing
Business which meet the Permitted Housing Business Leasing Guidelines.



Section 4.18 Management Agreements. The only management agreements for which either
the Borrower or a Guarantor is a manager are the Existing Management Agreements. The Existing
Management Agreements are in full force and effect; no monetary defaults by the Borrower or any
Guarantor, or to the actual knowledge of the Borrower by any other party thereto, exist thereunder;
and no other defaults by the Borrower or any Guarantor, or to the actual knowledge of the Borrower
by any other party thereto, exist thereunder which could reasonably be expected to cause a Material
Adverse Change (or with respect to the giving of this representation after the date of this
Agreement, as otherwise disclosed to the Administrative Agent in writing after the date of this
Agreement and prior to the date such representation is deemed given). The Existing Management
Agreements, if any, for which the counter-party has a current right to terminate such agreement
because the Borrower or a Guarantor, as applicable, did not achieve the applicable performance
target in such Existing Management Agreement for the calendar years 2003 and/or 2004 could not
reasonably be expected to cause a Material Adverse Change (or with respect to the giving of this
representation after the date of this Agreement, as otherwise disclosed to the Administrative Agent
in writing after the date of this Agreement and prior to the date such representation is deemed
given). No notice of termination for any such Existing Management Agreement has been received by
the Borrower or any Guarantor. Schedule 4.18 sets forth a true and correct schedule of the
anticipated termination payments to be received by the Parent, the Borrower or their respective
Subsidiaries related to terminations of management agreements or participating leases which
occurred or were announced prior to the Closing Date.



Section 4.19 Termination of Intercompany Agreement. The intercompany agreement that
had at one time existed between the Parent, the Borrower, MHC, and MHC OP has been terminated
pursuant to documentation disclosed to the Administrative Agent in writing.



Section 4.20 Franchise Agreements. The only franchise agreements or license
agreements to which the Borrower or a Guarantor are a party are those certain agreements disclosed
to the Administrative Agent in writing. Any such franchise and license agreements are in full
force and effect and no material defaults by the Borrower or any Subsidiary exist thereunder (or
with respect to the giving of this representation after the date of this Agreement, as otherwise
disclosed to the Administrative Agent in writing after the date of this Agreement and prior to the
date such representation is deemed given).



Section 4.21 Owned Hospitality Properties. Except as set forth on Schedule 4.21
attached hereto, neither the Borrower, the Parent nor of any of their respective Subsidiaries owns
any Owned Hospitality Properties; provided that such Persons do own Ownership Interests in
Unconsolidated Entities which own Owned Hospitality Properties. None of the Owned Hospitality
Properties have been or are subject to a condemnation proceeding or a casualty which individually
or in the aggregate could cause a Material Adverse Change.



Section 4.22 Approved Inter-Company Indebtedness. The only inter-company Indebtedness
between the Parent, the Borrower and any of their respective Subsidiaries is the Approved
Inter-Company Indebtedness. The Approved Inter-Company Indebtedness Loan Documents listed on
Schedule 1.01(a) are all of the documents evidencing or securing the Approved Inter-Company
Indebtedness or executed by the applicable parties in connection with the Approved Inter-Company
Indebtedness. The Borrower has provided the Administrative Agent with a true, correct and complete
copy of the Approved Inter-Company Indebtedness Loan Documents and such documents have not been
amended or modified except as set forth in Schedule 1.01(a). The outstanding amount of the Approved
Inter-Company Indebtedness as of the date hereof is set forth on Schedule 1.01(a).




Section 4.23 Insurance Business.




(a) Insurance Companies, Insurance Licenses and Deposited Securities. Each
Insurance Company is listed in Schedule 4.23(a). Schedule 4.23(a) hereto lists all of the
jurisdictions in which each Insurance Company holds a Insurance License and is authorized to
transact insurance business as of the Closing Date and the line or lines of insurance in
which each Insurance Company is engaged. No Insurance License held by any Insurance Company,
the loss of which could reasonably be expected to cause a Material Adverse Change, is the
subject of a proceeding for suspension or revocation. To the knowledge of the Borrower, the
Parent or any of their respective Subsidiaries, there is not a sustainable basis for such
suspension or revocation, and no such suspension or revocation has been threatened by any
Governmental Authority. Each of the Insurance Companies has filed all reports, statements,
documents, registrations, filings or submissions required to be filed by it with any
applicable Governmental Authority, which filings conform in all material respects to any
applicable Legal Requirements, except where the failure to so file or conform could not,
individually or in the aggregate, be reasonably expected to cause a Material Adverse Change.
Schedule 4.23(a) sets forth a true, correct and complete listing of all securities deposited
with state insurance departments and other Governmental Authority, which deposits have been
completed in accordance with the schedule of deposits set forth in each Insurance Company’s
December 31, 2003 Insurance Annual Statement.




(b) SAP Financial Statements, Examination Reports and Loss Runs. The Borrower
has previously delivered to the Administrative Agent for distribution to each of the Lenders
true and complete copies of the SAP Financial Statements as filed with the domiciliary state
insurance departments of each Insurance Company as of and for the years ended December 31,
2003, 2002 and 2001, prepared in compliance with GAAP. Each of the SAP Financial Statements
fairly presents in all material respects the results of operations of the applicable
Insurance Company for the period therein set forth, in each case in accordance with SAP.
The schedules included in the SAP Financial Statements, when considered in relation to the
basic statutory financial statements included therein, present fairly in all material
respects the information shown therein. Each of the SAP Financial Statements was correct in
all material respects when filed and did not omit to state any material facts required to be
stated or necessary in order to make the SAP Financial Statements not misleading. The
Borrower has previously delivered to the Administrative Agent for distribution to each of
the Lenders true and complete copies of all examination reports of insurance departments and
any insurance regulatory agencies since December 31, 2003 relating to the Insurance
Companies. The loss runs for the years ended December 31, 2003, 2002 and 2001, which the
Borrower has previously delivered to the Administrative Agent for distribution to each of
the Lenders in writing, are true, correct and complete in all material respects.




(c) Investment Portfolios. The Borrower has previously delivered to the
Administrative Agent for distribution to each of the Lenders true and complete lists as of
December 31, 2003 of all assets held in the investment portfolios of the Insurance
Companies. None of the investments included in such investment portfolios is in default
with respect to the payment of principal, interest or dividends thereon or is materially
impaired. All such investments comply with all applicable Legal Requirements except for
non-compliance which in the aggregate would not cause a Material Adverse Change. Each
Insurance Company owns assets which qualify as admitted assets under applicable state
insurance Legal Requirements in an amount at least equal to the sum of all of its Insurance
Reserve Liabilities and minimum statutory capital and Insurance Surplus reflected on the
latest SAP Financial Statements.




(d) Insurance Reserve Liabilities and Adequate Provisions. All Insurance
Reserve Liabilities as established or reflected in the SAP Financial Statements (i) were
determined in accordance with generally accepted actuarial standards consistently applied,
(ii) are fairly stated in accordance with sound actuarial principles, (iii) are based on
actuarial assumptions that are in accordance with those called for by the relevant Insurance
Contract and the related Reinsurance Contract and (iv) meet in all material respects the
requirements of all applicable insurance Legal Requirements. Adequate provision for such
Insurance Reserve Liabilities has been made (under generally accepted actuarial principles
consistently applied) to cover the total amount of all reasonably anticipated matured and
unmatured benefits, dividends, claims and other liabilities of the Insurance Companies under
all Insurance Contracts and Reinsurance Contracts on the date of such SAP Financial
Statement based on then current information that forms a reasonable basis for such
determination. Each of the Insurance Companies owns assets that qualify as legal reserve
assets under applicable insurance Legal Requirements in an amount at least equal to all of
such Insurance Company’s Insurance Reserve Liabilities. Adequate provision has been made for
all estimated losses, settlements, costs and expenses from pending suits, actions and
proceedings contemplated by the SAP Financial Statements.




(e) Insurance Contracts and Reinsurance Contracts. Each outstanding Insurance
Contract issued, reinsured or underwritten by an Insurance Company is listed in Schedule
4.23(e), together with the maximum amount payable by an Insurance Company thereunder. All
outstanding Reinsurance Contracts with respect to such Insurance Contracts are listed in
Schedule 4.23(e), together with the maximum amount payable by an Insurance Company
thereunder. All Insurance Contracts, Reinsurance Contracts and any and all marketing
materials are, to the extent required under applicable Legal Requirements, on forms approved
by the insurance regulatory authority of the jurisdiction where issued or filed and have not
been objected to by such authority within the period provided for objection and have been
filed or registered as required with all other applicable Governmental Authorities. As to
premium rates established by each Insurance Company and required to be filed or approved,
the premiums charged comply with the applicable Legal Requirements. In addition, there is
no pending or, to the knowledge of the Borrower, the Parent or any of their respective
Subsidiaries, threatened charge by any insurance regulatory authority that any of the
Insurance Companies has violated, nor any pending or, to the knowledge of the Borrower, the
Parent or any of their respective Subsidiaries, threatened investigation by any insurance
regulatory authority with respect to possible violations of, any applicable Legal
Requirements where such violations would, individually or in the aggregate, cause a Material
Adverse Change. All Insurance Contracts and Reinsurance Contracts have been marketed, sold
and issued in compliance with all applicable Legal Requirements, except as could not
reasonably be expected to cause a Material Adverse Change, including, without limitation, in
compliance with (i) all applicable prohibitions against “redlining” or withdrawal of
business lines, (ii) all applicable requirements relating to the disclosure of the nature of
insurance products as policies of insurance and (iii) all applicable requirements relating
to insurance product projections and illustrations.




(f) Payment of Benefits. All benefits payable with respect to each Insurance
Contract by a Insurance Company or, to the knowledge of the Borrower, the Parent or any of
their respective Subsidiaries, by any other person that is a party to or bound by such
Insurance Contract, have in all material respects been paid in accordance with the terms of
such Insurance Contract. All benefits payable with respect to each Reinsurance Contract,
have in all material respects been paid in accordance with the terms of such Reinsurance
Contract.




(g) Notice of Likely Defaults. No Insurance Company has received any written,
or to the knowledge of the Borrower, the Parent or any of their respective Subsidiaries,
oral information that would cause it to believe that the financial condition of any other
party to any Insurance Contract or Reinsurance Contract is so impaired as to be reasonably
likely to result in a default by such party under such contract which could reasonably be
expected to cause a Material Adverse Change.



Section 4.24 Permitted Housing Business Leasing. Schedule 4.24 sets forth a true and
accurate summary of the Units currently leased by the Parent and the Parent’s Subsidiaries’,
together with (a) a description of the market for such Units, (b) the breakdown of whether the term
of the applicable lease of such Units is less than or equal to 1 year, greater than 1 year but less
than 5 years, or equal to or greater than 5 years, and (c) the occupancy level by market for such
Units as of the Effective Date.



ARTICLE V




AFFIRMATIVE COVENANTS




So long as any Note or any amount under any Credit Document shall remain unpaid, any Letter of
Credit shall remain outstanding, or any Lender shall have any Commitment hereunder, the Borrower
agrees to comply and cause the Parent and the Parent’s Subsidiaries to comply with the following
covenants.



Section 5.01 Compliance with Laws. The Borrower will comply, and cause the Parent and
each of its Subsidiaries to comply, in all material respects with all Legal Requirements.




Section 5.02 Preservation of Existence; Separateness, Etc.




(a) The Borrower will preserve and maintain, and cause each of its Subsidiaries to
preserve and maintain, its partnership, limited liability company or corporate (as
applicable) existence, rights, franchises and privileges in the jurisdiction of its
formation, and qualify and remain qualified, and cause each such Subsidiary to qualify and
remain qualified, as a foreign partnership, corporation or limited liability company, as
applicable in each jurisdiction in which qualification is necessary or desirable in view of
its business and operations or the ownership of its properties, and, in each case, where
failure to qualify or preserve and maintain its rights and franchises could reasonably be
expected to cause a Material Adverse Change.




(b) The Parent common stock shall at all times be duly listed on the New York Stock
Exchange, Inc. and (ii) the Parent shall timely file all reports required to be filed by it
with the New York Stock Exchange, Inc. and the Securities and Exchange Commission.




(c) The Borrower shall cause the Permitted Other Subsidiaries which have Indebtedness
to, (i) maintain financial statements, accounting records and other corporate records and
other documents separate from all non-Permitted Other Subsidiaries, (ii) maintain their own
bank accounts in their own name, separate from all non-Permitted Other Subsidiaries, (iii)
pay their own expenses and other liabilities from their own assets and incur (or endeavor to
incur) obligations to other Persons based solely upon their own assets and creditworthiness
and not upon the creditworthiness of each other or any other Person, and (iv) file their own
tax returns or, if part of a consolidated group, join in the consolidated tax return of such
group as a separate member thereof.




(d) The Borrower shall, and shall cause the Permitted Other Subsidiaries which have
Indebtedness to, take all actions necessary to keep such Permitted Other Subsidiaries,
separate from the Borrower and the Borrower’s other Subsidiaries, including, without
limitation, (i) the taking of action under the direction of the Board of Directors, members
or partners, as applicable, of such Permitted Other Subsidiaries and, if so required by the
Certificate of Incorporation or the Bylaws, operating agreement or partnership agreement, as
applicable, of such Permitted Other Subsidiaries or by any Legal Requirement, the approval
or consent of the stockholders, members or partners, as applicable, of such Permitted Other
Subsidiaries, (ii) the preparation of corporate, partnership or limited liability company
minutes for or other appropriate evidence of each significant transaction engaged in by such
Permitted Other Subsidiaries, (iii) the observance of separate approval procedures for the
adoption of resolutions by the Board of Directors or consents by the partners, as
applicable, of such Permitted Other Subsidiaries, on the one hand, and of the Borrower and
the Borrower’s other Subsidiaries, on the other hand, and (iv) preventing the cash, cash
equivalents, credit card receipts or other revenues of the Hospitality Properties owned by
such Permitted Other Subsidiaries or any other assets of such Permitted Other Subsidiaries
from being commingled with the cash, cash equivalents, credit card receipts or other
revenues collected by the Borrower or the Borrower’s other Subsidiaries.




(e) The Borrower shall take all steps reasonably necessary to avoid (i) misleading any
other Person as to the identity of the entity with which such Person is transacting business
or (ii) implying that the Borrower is, directly or indirectly, absolutely or contingently,
responsible for the Indebtedness or other obligations of the Permitted Other Subsidiaries or
any other Person.



Section 5.03 Payment of Taxes, Etc. The Borrower will pay and discharge, and cause
each of its Subsidiaries to pay and discharge, before the same shall become delinquent (a) all
taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits
or Property that are material in amount, prior to the date on which penalties attach thereto and
(b) all lawful claims that are material in amount which, if unpaid, might by Legal Requirement
become a Lien upon its Property; provided, however, that neither the Borrower nor
any such Subsidiary shall be required to pay or discharge any such tax, assessment, charge, levy,
or claim (a) which is being contested in good faith and by appropriate proceedings, (b) with
respect to which reserves in conformity with GAAP have been provided, (c) such charge or claim does
not constitute and is not secured by any choate Lien on any portion of any Owned Hospitality
Property and no portion of any Owned Hospitality Property is in jeopardy of being sold, forfeited
or lost during or as a result of such contest, (d) neither the Administrative Agent nor any Lender
could become subject to any civil fine or penalty or criminal fine or penalty, in each case as a
result of non-payment of such charge or claim and (e) such contest does not, and could not
reasonably be expected to, result in a Material Adverse Change.



Section 5.04 Visitation Rights; Lender Meeting. Subject to the rights of the owners
of the Hospitality Properties for which there are Permitted Property Agreements, at any reasonable
time and from time to time and so long as any visit or inspection will not unreasonably interfere
with the Borrower’s or any of its Subsidiary’s operations, upon reasonable notice, the Borrower
will permit the Administrative Agent and any Lender or any of its agents or representatives
thereof, to examine and make copies of and abstracts from the records and books of account of, and
visit and inspect at its reasonable discretion the Properties owned or operated by the Borrower and
any of its Subsidiaries, to discuss the affairs, finances and accounts of such Persons with any of
their respective officers or directors. Without in any way limiting the foregoing, the Borrower
will, upon the request of the Administrative Agent, participate in a meeting with the
Administrative Agent and the Lenders once during each calendar year to be held at the Borrower’s
office in the District of Columbia or New York, New York (or such other location as may be agreed
to by the Borrower and the Administrative Agent) at such time as may be agreed to by the Borrower
and the Administrative Agent.



Section 5.05 Reporting Requirements. The Borrower will furnish to the Administrative
Agent, with respect to those items set forth in clauses (a)-(c) and (i), and each Lender:




(a) Quarterly Financials. As soon as available and in any event not later than
fifty (50) days after the end of each Fiscal Quarter of the Parent (except for the Fiscal
Quarter which ends on the date the Fiscal Year ends), the unaudited Consolidated balance
sheets of the Parent and its Subsidiaries as of the end of such quarter and the related
unaudited statements of income, shareholders’ equity and cash flows of the Parent and its
Subsidiaries for such Fiscal Quarter and the period commencing at the end of the previous
year and ending with the end of such Fiscal Quarter, and the corresponding figures as at the
end of, and for, the corresponding periods in the preceding Fiscal Year, all duly certified
with respect to such statements (subject to reasonable year-end audit adjustments) by a
Responsible Officer of the Parent as having been prepared in accordance with GAAP, together
with a Compliance Certificate duly executed by a Responsible Officer of the Parent;
provided that the Total Indebtedness used to calculate the Leverage Ratio in such
Compliance Certificate shall be the Total Indebtedness as of the Status Reset Date during
the Fiscal Quarter in which such Compliance Certificate was delivered.




(b) Annual Financials. As soon as available and in any event not later than
ninety-five (95) days after the end of each Fiscal Year of the Parent, a copy of the
Consolidated balance sheets of the Parent and its Subsidiaries as of the end of such Fiscal
Year and the related Consolidated statements of income, shareholders’ equity and cash flows
of the Parent and its Subsidiaries for such Fiscal Year, and the corresponding figures as at
the end of, and for, the preceding Fiscal Year, and audited and certified by KPMG, L.L.P. or
other independent certified public accountants of nationally recognized standing reasonably
acceptable to the Administrative Agent in an opinion, without qualification as to the scope
or any other material qualification or exception, and including, if requested by the
Administrative Agent, any management letters delivered by such accountants to the Parent in
connection with such audit, together with (i) the unaudited consolidating financial
statements of the Parent and its Subsidiaries as of such date or for such time period, as
applicable, (ii) a Compliance Certificate duly executed by a Responsible Officer of the
Parent and (iii) a certificate duly executed by a Responsible Officer of the Parent which
reflects in detail reasonably acceptable to the Administrative Agent the financial
performance of the applicable Person related to the financial covenants contained in the
documentation for any Permitted Other Indebtedness. As soon as available and in any event
not later than 50 days after the end of each Fiscal Year of the Parent, the Borrower will
furnish to the Administrative Agent a draft Compliance Certificate duly executed by a
Responsible Officer of the Parent for such end of Fiscal Year financial statements. Such
draft Compliance Certificate will be used for purposes of re-determining Status at the
Status Reset Date following the end of such Fiscal Year. If the final Compliance
Certificate delivered in connection with the financial statements for the end of such Fiscal
Year reflects a different Status than that reflected in the draft Compliance Certificate,
then (a) the Borrower shall be deemed to have been at the Status set forth in the final
Compliance Certificate since the Status Reset Date following the end of the Fiscal Year and
(b) within five (5) Business Days following delivery of such final Compliance Certificate,
either the Borrower will pay to the Lenders or the Lenders will pay to the Borrower, as
applicable, the amount of the adjustment of interest and fees payable by the Borrower under
this Agreement because of such adjustment in Status.




(c) Securities Law Filings. Promptly and in any event within fifteen (15) days
after the sending or filing thereof, copies of all proxy material, reports and other
information which the Borrower, the Parent or any of their respective Subsidiaries sends to
or files with the United States Securities and Exchange Commission or sends to all of the
shareholders of the Parent or partners of the Borrower.




(d) Defaults. As soon as possible and in any event within five (5) days after
the occurrence of each Default known to a Responsible Officer of the Parent, the Borrower or
any of their respective Subsidiaries, a statement of an authorized financial officer or
Responsible Officer of the Borrower setting forth the details of such Default and the
actions which the Borrower has taken and proposes to take with respect thereto.




(e) ERISA Notices. As soon as possible and in any event (i) within thirty (30)
days after the Parent, the Borrower or any of a Controlled Group knows to know that any
Termination Event described in clause (a) of the definition of Termination Event with
respect to any Plan has occurred, (ii) within ten (10) days after the Parent, the Borrower
or any of a Controlled Group knows that any other Termination Event with respect to any Plan
has occurred, a statement of the Chief Financial Officer of the Parent describing such
Termination Event and the action, if any, which the Parent, the Borrower or such member of
such Controlled Group proposes to take with respect thereto; (iii) within ten (10) days
after receipt thereof by the Parent, the Borrower or any of a Controlled Group from the
PBGC, copies of each notice received by the Parent, the Borrower or any such member of such
Controlled Group of the PBGC’s intention to terminate any Plan or to have a trustee
appointed to administer any Plan; and (iv) within ten (10) days after receipt thereof by the
Parent, the Borrower or any member of a Controlled Group from a Multiemployer Plan sponsor,
a copy of each notice received by the Parent, the Borrower or any member of such Controlled
Group concerning the imposition or amount of withdrawal liability pursuant to Section 4202
of ERISA.




(f) Environmental Notices. Promptly upon the knowledge of any Responsible
Officer of the Borrower of receipt thereof by the Borrower or any of its Subsidiaries, a
copy of any form of notice, summons or citation received from the United States
Environmental Protection Agency, or any other Governmental Authority concerning (i)
violations or alleged violations of Environmental Laws, which seeks to impose liability
therefore, (ii) any action or omission on the part of the Parent or the Borrower or any of
their present or former Subsidiaries in connection with Hazardous Waste or Hazardous
Substances which, based upon information reasonably available to the Borrower, could
reasonably be expected to cause a Material Adverse Change or an Environmental Claim in
excess of $1,000,000, (iii) any notice of potential responsibility under CERCLA, or (iv)
concerning the filing of a Lien upon, against or in connection with the Parent, Borrower,
their present or former Subsidiaries, or any of their leased, owned or operated Property,
wherever located.




(g) Other Governmental Notices or Actions. Promptly and in any event within
five Business Days after receipt thereof by the Parent, Borrower or any of their respective
Subsidiaries, (i) a copy of any notice, summons, citation, or proceeding seeking to
adversely modify in any material respect, revoke, or suspend any license, permit, or other
authorization from any Governmental Authority, which action could reasonably be expected to
cause a Material Adverse Change, and (ii) any revocation or involuntary termination of any
license, permit or other authorization from any Governmental Authority, which revocation or
termination could reasonably be expected to cause a Material Adverse Change.




(h) Reports Affecting the Leverage Ratio. On or prior to the 15th day
following any Adjustment Event, an Adjustment Report with respect to such Adjustment Event.




(i) Corporate Activity. Promptly following any merger or dissolution of any
Subsidiary of the Borrower which is permitted hereunder or event which would make any of the
representations in Section 4.01-4.04 untrue, notice thereof.




(j) Material Litigation. As soon as possible and in any event within five (5)
days of any Responsible Officer of the Borrower, the Parent or any of their respective
Subsidiaries having knowledge thereof, notice of any litigation, claim or any other event
which could reasonably be expected to cause a Material Adverse Change.




(k) Insurance Information. Within ten (10) days of request by the
Administrative Agent, the Borrower shall provide the Administrative Agent copies of the
unaudited Insurance Annual Statement of each Insurance Company, certified by a Responsible
Officer of the Parent as fairly presenting the financial condition and results of operations
of such Insurance Company in accordance with SAP consistently applied throughout the periods
reflected therein and the most recent examination reports and loss run sheets of the
Insurance Companies.




(l) Budget. On or prior to January 31st of each Fiscal Year, the
Borrower shall provide the Administrative Agent (for distribution to the Lenders) an
operating budget for the Parent and its Subsidiaries on a Consolidated basis for such Fiscal
Year, including without limitation pro forma balance sheet, income statement, cash flow and
financial covenant compliance.




(m) Other Information. Such other information respecting the business or
Properties, or the condition or operations, financial or otherwise, of the Borrower, the
Parent or any of their respective Subsidiaries, as any Lender through the Administrative
Agent may from time to time reasonably request.



The Borrower hereby acknowledges and agrees that (a) the Administrative Agent and/or its Affiliate
will make available to the Lenders and the Issuing Bank materials and/or information provided by or
on behalf of the Parent and/or the Borrower hereunder (collectively, “Materials”) by
posting the Materials on IntraLinks or another similar electronic system (the “Platform”),
(b) neither the Administrative Agent, nor any Affiliate, nor their respective directors, officers,
employees and agents shall be liable for any damages arising from the use by unintended recipients
of the Materials or other materials distributed through the Platform or other electronic,
telecommunications or information transmissions systems, and (c) certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information
with respect to the Borrower or its securities) (each, a “Public Lender”). The Borrower
hereby agrees that (w) all Materials that are to be made available to Public Lenders shall be
clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC”
shall appear prominently on the first page thereof; (x) by marking Materials “PUBLIC”, the Parent
and the Borrower shall be deemed to have authorized the Administrative Agent, its Affiliates, the
Issuing Lender and the Lenders to treat such Materials as either publicly available information or
not material information (although it may be sensitive and proprietary) with respect to the
Borrower, the Parent or their respective securities for purposes of United States Federal and state
securities laws; (y) all Materials marked “PUBLIC” are permitted to be made available through a
portion of the Platform designated “Public Investor;” and (z) the Administrative Agent and its
Affiliates shall be entitled to treat any Materials that are not marked “PUBLIC” as being suitable
only for posting on a portion of the Platform not designated “Public Investor.”



Section 5.06 Maintenance of Property. The Borrower will, and will cause each of the
Parent and its Subsidiaries to (a) maintain their Owned Hospitality Properties in a manner
consistent for Hospitality Properties and related property of the same quality and character and
shall keep or cause to be kept every part thereof and its other properties in good condition and
repair, reasonable wear and tear excepted, and make all reasonably necessary repairs, renewals or
replacements thereto as may be reasonably necessary to conduct the business of the Borrower and its
Subsidiaries, (b) not knowingly or willfully permit the commission of waste or other injury, or the
occurrence of pollution, contamination or any other condition in, on or about any of their Owned
Hospitality Properties, (c) substantially maintain and repair each of their Owned Hospitality
Properties as required by any franchise agreement, license agreement, management agreement or
ground lease for such Owned Hospitality Property, and (d) perform such Person’s obligations under
the Permitted Property Agreements and the Permitted Housing Agreements to which such Person is a
party except where the non-performance thereof in the aggregate would not reasonably be expected to
cause a Material Adverse Change.



Section 5.07 Insurance. The Borrower will maintain, and cause each of its
Subsidiaries to maintain, the insurance required pursuant to Schedule 5.07.



Section 5.08 Use of Proceeds and Letters of Credit. The Advances and Letters of
Credit shall be used by the Borrower for the purposes set forth in Section 4.08.




Section 5.09 Collateral; Releases.




(a) Subject to the time periods set forth in Section 5.10 and Section 6.06(d) for
executing Security Documents in connection with the acquisition of Permitted New Investments
and subject to the time periods set forth in Section 3.01(a)(ii) with respect to satisfying
certain conditions precedent related to Ownership Interests in Persons domiciled outside the
United States, the Parent, the Borrower and the Subsidiaries (i) will cause at all times the
Administrative Agent to have an Acceptable Lien in the Collateral, (ii) will cause at all
times all material provisions of the Security Documents to be valid and binding on the
Persons executing such Security Documents and (iii) shall execute or re-execute such
Security Documents and take such other actions as the Administrative Agent shall reasonably
request in order for the Administrative Agent to maintain or create an Acceptable Lien in
the Collateral, including without limitation any Collateral acquired by the Borrower the
Parent, or any of the other Guarantors after the Closing Date. Without limiting the
foregoing, on the Closing Date the Parent will grant to the Administrative Agent an
Acceptable Lien in the Parent’s Ownership Interests in the Borrower at the time of granting
such Acceptable Lien and thereafter maintain such Acceptable Lien.




(b) Notwithstanding the foregoing, upon request of the Borrower to the Administrative
Agent and any repayment of Advances required under this Agreement in connection therewith,
the Administrative Agent will release from the Liens of the Security Documents (i) the
Property which is the subject of a Permitted Asset Disposition at the time of such Permitted
Asset Disposition and (ii) any Owned Hospitality Property and the Ownership Interests in the
Permitted Other Subsidiary which owns such Owned Hospitality Property in connection with the
incurrence of Permitted Other Indebtedness to be secured by such Collateral. If the
Property released in connection with any such Permitted Asset Disposition includes all or
substantially all of the Ownership Interests in a Guarantor, or if a Guarantor incurs
Permitted Other Indebtedness, then, upon request of the Borrower to the Administrative
Agent, at the time of such Permitted Asset Disposition or the incurrence of such Permitted
Other Indebtedness, as applicable, the Administrative Agent shall release such Guarantor
from the Guaranty and the other Credit Documents to which such Guaranty is a party. In
addition, the Administrative Agent agrees to take, and the Lenders authorize the
Administrative Agent to take, such actions as are reasonably requested by the Borrower and
at the Borrower’s expense to terminate the Liens and security interests created by the
Credit Documents when all the Obligations are paid in full and all Letters of Credit and
Commitments are terminated.



Section 5.10 New Subsidiaries. Except with respect to a Permitted Other Subsidiary
that has incurred or issued Permitted Other Indebtedness, within ten (10) Business Days after
either (a) the date that any Subsidiary of the Parent that was not a Material Subsidiary becomes a
Material Subsidiary, or (b) the purchase by the Parent or any of its Subsidiaries of the Ownership
Interests of any Person, which purchase results in such Person becoming a Material Subsidiary the
Parent shall, in each case, cause (i) such Material Subsidiary to execute and deliver to the
Administrative Agent either (A) a Guaranty, an Environmental Indemnity and a Security Agreement or
(B) an Accession Agreement, (ii) any of the Borrower and any Guarantor who is a direct owner of the
Ownership Interests of such Material Subsidiary to execute and deliver to the Administrative Agent
a Security Agreement, if necessary, and such other documents as are necessary to create an
Acceptable Lien in the Ownership Interests in the Material Subsidiary owned by such Person (and
such other Security Documents as the Administrative Agent may reasonably request) and (iii) the
Persons who are party to the documents delivered pursuant to the provisions of this Section 5.10 to
provide such evidence of authority to enter into such documents as the Administrative Agent may
reasonably request.




Section 5.11 Insurance Business.




(a) The Borrower will cause each of the Insurance Companies to (i) carry on and conduct
its business only in substantially the same manner and in substantially the same fields of
enterprise as it is presently conducted, (ii) only engage in the insurance business or the
business of a holding company owning entities engaged in the insurance business or the
business of insurance or reasonably incidental activities, (iii) do all things necessary to
renew, extend and continue in effect all Insurance Licenses which may at any time and from
time to time be necessary for each Insurance Company to conduct business in compliance with
all applicable Legal Requirements, including, if applicable, the filing of all appropriate
Insurance Annual Statements and SAP Financial Statements; provided, that each
Insurance Company may withdraw from one or more states (other than its state of domicile) as
an admitted insurer if such withdrawal is determined by the Insurance Company’s Board of
Directors to be in the best interest of the Insurance Companies and could not reasonably be
expected to cause a Material Adverse Change.




(b) The Borrower will not permit the Insurance Surplus, as of the last day of each
Fiscal Quarter, to be less than that required by applicable Legal Requirements. The Borrower
will not permit the maximum amount payable by all Insurance Companies under Insurance
Contracts or Reinsurance Contracts, as of the last day of each Fiscal Quarter, to be greater
than $10,000,000.



Section 5.12 Interest Rate Agreements. From the date 60 days following the Closing
Date until the Maturity Date, the Borrower shall cause the Parent to obtain and thereafter maintain
Interest Rate Agreements reasonably satisfactory to the Administrative Agent, sufficient to ensure
that at least 50% of the Total Indebtedness, measured as of each day during such period, shall be
covered by such Interest Rate Agreements or shall have a fixed rate of interest. Any Interest
Rate Agreements for the Parent shall be provided by either a Lender or a bank or other financial
institution whose long-term debt rating is equal to or greater than “A”; provided that the
Lenders will have a right of first refusal, but not an obligation, to provide any Interest Rate
Agreements for the Parent on substantially such terms as the Parent would be able to obtain from
any such non-Lender. To the extent that any Interest Rate Agreement is provided by a Lender, the
obligations of the Parent or its Subsidiary under such Interest Rate Agreement may be secured by
the Collateral pari passu with the Obligations. However, the pledge of any Collateral to secure any
Interest Rate Agreement from any non-Lender shall be subject to the written approval of the
Required Lenders. The dollar amount subject to Interest Rate Agreements in the aggregate shall not
exceed the sum of the amount of the Advances and the amount of the other Indebtedness of the
Borrower or its Affiliates which bears interest at a variable rate.



ARTICLE VI




NEGATIVE COVENANTS




So long as any Note or any amount under any Credit Document shall remain unpaid, any Letter of
Credit shall remain outstanding, or any Lender shall have any Commitment, the Borrower agrees to
comply and cause the Parent and the Parent’s Subsidiaries to comply with the following covenants.



Section 6.01 Liens, Etc. The Borrower, the Parent and their respective Subsidiaries
will not create, assume, incur or suffer to exist, any Lien on or in respect of any of its Property
whether now owned or hereafter acquired, or assign any right to receive income, except that the
Borrower and its Subsidiaries may create, incur, assume or suffer to exist Liens:




(a) securing the Obligations;




(b) for taxes, assessments or governmental charges or levies on Property of the
Borrower or any Guarantor to the extent not required to be paid pursuant to Sections 5.03;




(c) imposed by law (such as landlords’, carriers’, warehousemen’s and mechanics’ liens
or otherwise arising from litigation) (i) which are being contested in good faith and by
appropriate proceedings, (ii) with respect to which reserves in conformity with GAAP have
been provided, (iii) which have not resulted in any Collateral being in jeopardy of being
sold, forfeited or lost during or as a result of such contest, (iv) neither the
Administrative Agent nor any Lender could become subject to any civil fine or penalty or
criminal fine or penalty, in each case, as a result of non-payment of such charge or claim,
and (v) such contest does not, and could not reasonably be expected to, result in a Material
Adverse Change;




(d) on leased personal property to secure solely the lease obligations associated with
such property;




(e) on the Property of or Ownership Interests in a Permitted Other Subsidiary securing
Indebtedness set forth in paragraph (a) of the definition of “Permitted Other Indebtedness”
incurred by such Permitted Other Subsidiary to the extent such Indebtedness is permitted
pursuant to the provisions of Section 6.02;




(f) on the Ownership Interests in an Unconsolidated Entity or Minority-Owned Fund
securing Permitted Non-Recourse Unconsolidated Entity Indebtedness incurred by such
Unconsolidated Entity or Minority-Owned Fund, as applicable;




(g) granted to the owner of a Hospitality Property subject to a Permitted Property
Agreement on the accounts receivable, inventory, cash or other property owned by the
Borrower or the Borrower’s Subsidiary in connection with such Hospitality Property; and




(h) easements, rights of way, covenants, restrictions, zoning and similar restrictions
and other similar charges or encumbrances not interfering with the ordinary conduct of the
business of the Borrower or its Subsidiaries and which do not detract materially from the
value of any of the Owned Hospitality Properties to which they attach or impair materially
the use thereof by the Borrower or the Borrower’s Subsidiaries.



Section 6.02 Indebtedness. The Borrower, the Parent and their respective Subsidiaries
will not incur or permit to exist any Indebtedness other than the Obligations and the following:




(a) Permitted Other Indebtedness in an amount that does not cause a breach at any time
of the covenants contained in Article VII;




(b) Capital Leases for personal property;




(c) Interest Rate Agreements permitted under this Agreement; and




(d) Any of the following Indebtedness incurred by the Parent or the Borrower:




(i) guaranties in connection with Permitted Other Indebtedness secured by an
Owned Hospitality Property or interest in a Person owning a Hospitality Property of
(A) if the Hospitality Property is subject to a ground lease, the payment of rent
and performance of obligations under such ground lease, (B) real estate taxes
relating to such Hospitality Property, and (C) capital reserves required under such
Indebtedness, provided that such guaranties do not include guaranties of the
Permitted Other Indebtedness itself;




(ii) guaranties of the payment of rent and performance of obligations under a
ground lease for an Owned Hospitality Property which is Collateral;




(iii) customary recourse “carve-outs” for Indebtedness permitted under this
Agreement which is otherwise non-recourse to the Parent, the Borrower and their
respective Subsidiaries;




(iv) guaranties of franchise and license agreements in connection with
Hospitality Properties; and




(v) guaranties of obligations of the Parent’s Subsidiaries or Unconsolidated
Entities with respect to Permitted Property Agreements and Permitted Housing
Agreements; and




(e) extensions, renewals and refinancing of any of the Indebtedness specified in
paragraphs (a) — (d) above so long as the principal amount of such Indebtedness is not
thereby increased.



Section 6.03 Agreements Restricting Distributions From Subsidiaries. The Borrower
will not, nor will it permit any of its Subsidiaries (other than Permitted Other Subsidiaries) to,
enter into any agreement (other than a Credit Document) which limits distributions to or any
advance (including by way of the making of and repayment of Intercompany loans and advances) by any
of the Borrower’s Subsidiaries to the Borrower.



Section 6.04 Restricted Payments. Neither the Parent, nor the Borrower, nor any of
their respective Subsidiaries, will make any Restricted Payment, except that:




(a) provided that no Default has occurred and is continuing or would result therefrom,
the Borrower shall be entitled to make cash distributions to its partners, including the
Parent, which distributions for partners other than the Parent and the Parent’s Subsidiaries
do not in the aggregate in any Fiscal Year exceed $100,000;




(b) a Subsidiary of the Borrower may make a Restricted Payment to the Borrower;




(c) the limited partners of the Borrower shall be entitled to exchange limited
partnership interests in the Borrower for the Parent’s common stock;




(d) the Borrower shall be entitled to issue limited partnership interests in the
Borrower in exchange for Ownership Interests in Subsidiaries and Unconsolidated Entities to
the extent such Investment is permitted pursuant to the provisions of Section 6.06;




(e) provided that no monetary Default or Default in the covenants set forth in Article
VII has occurred and is continuing or would result therefrom, then the Borrower shall be
entitled to pay (i) interest, but not principal (except only as permitted by clause (ii) of
this subsection (g)), of Subordinate Indebtedness permitted pursuant to this Agreement, and
(ii) principal of Approved Inter-Company Indebtedness; provided that any such
principal payments (A) are made to a Guarantor, (B) are either retained by such Guarantor or
distributed to the Borrower, the Parent or another Guarantor and (C) are used in accordance
with the provisions of this Agreement; and




(f) provided that (i) no monetary Default or Default in the covenants set forth in
Article VII has occurred and is continuing or would result therefrom, and (ii) no Material
Adverse Change has occurred, the Parent shall be entitled to repurchase up to $5,000,000 in
the aggregate of the Parent’s currently outstanding common stock after the Closing Date.
Within ten (10) Business Days of any such Restricted Payments in the aggregate reaching
increments of $250,000 (i.e., $250,000, $500,000, $750,000) the Borrower shall execute and
deliver to the Administrative Agent an Adjustment Report dated as of the date of reaching
such Restricted Payment increment which takes into account such Restricted Payments. To the
extent that the Parent reaches multiple $250,000 increments over any ten (10) Business Day
period, then an Adjustment Report need only be provided as of the date of the reaching the
last such $250,000 increment in such ten (10) Business Day period. In addition, any
Compliance Certificate delivered by the Borrower shall state the dollar amount of such
Restricted Payments made in the Rolling Period covered by such Compliance Certificate and
the amount of all such Restricted Payments in the aggregate.



Section 6.05 Fundamental Changes; Asset Dispositions. Neither the Parent, the
Borrower, nor any of their respective Subsidiaries (other than the Permitted Other Subsidiaries),
will (a) merge or consolidate with or into any other Person, unless (i) either (A) a Guarantor is
merged into the Borrower and the Borrower is the surviving Person, (B) a Subsidiary (other than a
Permitted Other Subsidiary which has Indebtedness other than the Obligations) is merged into any
Subsidiary (other than a Permitted Other Subsidiary which has Indebtedness other than the
Obligations) or (C) a Guarantor other than the Parent is merged into another Person (other than a
Permitted Other Subsidiary which has Indebtedness other than the Obligations) and the surviving
Person is or promptly becomes a Guarantor, and (ii) immediately after giving effect to any such
proposed transaction, (X) no Default would exist, (Y) on a pro forma basis the financial covenants
set forth in Article VII would be satisfied and (Z) to the extent a Person who was not a Subsidiary
of the Parent or the Borrower is merged with or into a Guarantor, then the Administrative Agent
shall in its reasonable discretion be entitled to determine the Investment Amount applicable to
such merger; (b) sell, transfer, or otherwise dispose of all or any of such Person’s material
Property except for a Permitted Asset Disposition, or dispositions or replacements of personal
property in the ordinary course of business; (c) enter into, as lessor, a lease (other than a lease
which qualifies as a Permitted Asset Disposition) of all or substantially all of any Owned
Hospitality Property with any Person without the consent of the Administrative Agent; (d) sell or
otherwise dispose of any material Ownership Interests of any Subsidiary (except for a Permitted
Other Subsidiary or a sale which qualifies as a Permitted Asset Disposition); (e) except for (i)
Capitalization Events for which the consideration is principally cash or cash equivalents and for
which the Repayment Amount is applied in accordance with the provisions of Section 2.07(c), (ii)
the issuance of limited partnership interests in the Borrower in exchange for Ownership Interests
in Subsidiaries and Unconsolidated Entities to the extent permitted pursuant to the provisions of
Section 6.04, and (iii) transactions permitted under the preceding clause (a), materially alter the
corporate, capital or legal structure of any such Person (except for a Permitted Other Subsidiary);
(f) enter into any forward sales of the Parent common stock or Ownership Interests in the Borrower;
(g) liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution)
provided that nothing herein shall prohibit the Borrower from dissolving any Subsidiary
which has no assets on the date of dissolution, (h) enter into any leases of Property or management
agreements for any Property except (1) Permitted Property Agreements, (2) Permitted Housing
Agreements, (3) leases of office space for the use of the Parent’s and the Parent’s Subsidiaries’
employees, and (4) the leases of personal property permitted by this Agreement or (i) materially
alter the character of their respective businesses from that conducted as of the date of this
Agreement or otherwise engage in any material business activity outside of the Hospitality
Management Business or the ownership and operation of Hospitality Properties.



Section 6.06 Investments and other Property. Neither the Parent, the Borrower, nor
any of their respective Subsidiaries, shall acquire by purchase or otherwise any Investments or
other Property, except the following:




(a) Investments or Properties owned by such Persons as of the Closing Date;




(b) Liquid Investments;




(c) trade and customer accounts receivable which are for goods furnished or services
rendered in the ordinary course of business and are payable in accordance with customary
trade terms, and receivables purchased in connection with the acquisition of an Owned
Hospitality Property;




(d) Investments in Permitted New Investments or Subsidiaries making Permitted New
Investments; provided that (i) within ten (10) Business Days of the acquisition by
the Parent or any of the Parent’s Subsidiaries of any Collateral for which the
Administrative Agent on behalf of the Lenders does not already have an Acceptable Lien, the
Borrower, the Parent and the other Guarantors will execute such Security Documents as are
necessary or desirable for the Administrative Agent on behalf of the Lenders to have an
Acceptable Lien in such Collateral and (ii) within twenty (20) Business Days of the
acquisition of an Owned Hospitality Property by the Parent or any of the Parent’s
Subsidiaries which is required by the terms of this Agreement to be Collateral, the Borrower
shall deliver to the Administrative Agent a Title Policy for such Owned Hospitality
Property;




(e) other assets, including Capital Expenditures, acquired or made in the ordinary
course of (i) owning the Parent’s and the Parent’s Subsidiaries’ existing Investments and
Properties and any Permitted New Investments and (ii) operating a Hospitality Management
Business; and




(f) loans to employees of the Parent or its Subsidiaries which in the aggregate do not
exceed $1,000,000.



Notwithstanding the foregoing, neither the Borrower, nor the Parent, nor their respective
Subsidiaries shall make an Investment, acquire any other Property, or enter into any Permitted
Property Agreement or Permitted Housing Agreement which would (a) cause a Default, (b) cause or
result in the Borrower or the Parent failing to comply with any of the financial covenants
contained herein, or (c) cause or result in the aggregate Adjusted EBITDA in any Rolling Period
derived from all Permitted Property Agreements, Permitted Housing Agreements or other Investments
related to Hospitality Properties which are not full-service or limited service hotels or resorts
or conference centers to exceed 35% of the Parent’s Adjusted EBITDA for such Rolling Period. In
addition, neither the Borrower, nor the Parent, nor their respective Subsidiaries shall enter into
any agreements to purchase Investments or other Property, unless with respect to such purchase such
Person at all times has available sources of funds equal to pay in full the cost of the purchase of
such Investments or other Property (to the extent that the payment of such cost of purchase
constitutes a recourse obligation of the Parent, the Borrower or its Subsidiary), which available
sources of funds may include Advances to the extent that the Borrower may borrow the same for the
purposes required or other Indebtedness permitted by the terms of this Agreement.



Section 6.07 Affiliate Transactions. Except for certain liquor license agreements,
the Borrower will not, and will not permit any of its Subsidiaries to, make, directly or
indirectly: (a) any transfer, sale, lease, assignment or other disposal of any assets to any
Affiliate of the Borrower which is not a Guarantor or any purchase or acquisition of assets from
any such Affiliate except for purchases of new personal property (i) which in any calendar year do
not exceed $1,000,000 in the aggregate and (ii) for which the sales price is the actual cost to the
party selling; or (b) any arrangement or other transaction directly or indirectly with or for the
benefit of any such Affiliate (including without limitation, guaranties and assumptions of
obligations of an Affiliate), other than in the ordinary course of business and at market rates.



Section 6.08 Sale or Discount of Receivables. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, sell with recourse, or discount or
otherwise sell for less than the face value thereof, any of its notes or accounts receivable.



Section 6.09 Material Documents. The Borrower will not, nor will it permit any of its
Subsidiaries to (a) amend the Borrower’s partnership agreement in any material respect, (b) admit a
new general partner to the Borrower, (c) enter into any termination or material modification or
amendment of Permitted Property Agreements which singly or in the aggregate could reasonably be
expected to cause a Material Adverse Change, or (d) modify the Approved Inter-Company Indebtedness
Loan Documents in any way that is materially adverse to the Lenders.



Any termination, modification or amendment prohibited under this Section 6.09 without the
Required Lender’s written consent shall, to the extent permitted by applicable law, be void and of
no force and effect.



Section 6.10 No Further Negative Pledges. Neither the Borrower, nor the Parent, nor
their respective Subsidiaries shall enter into or suffer to exist any agreement (other than this
Agreement and the Credit Documents and as set forth in the Permitted Property Agreements and the
Permitted Housing Agreements) (a) prohibiting the creation or assumption of any Lien upon the
Properties of the Parent, the Borrower or any of their respective Subsidiaries (except for
Properties of and Ownership Interests in the Permitted Other Subsidiaries), whether now owned or
hereafter acquired, or (b) requiring an obligation to be secured if some other obligation is or
becomes secured; provided that in connection with the incurrence of Unsecured Indebtedness
which is permitted by this Agreement, the Parent and its Subsidiaries may enter into such
agreements which would require that assets of the Parent and its Subsidiaries which secure any
Indebtedness (other than the Obligations, any refinancing or increase in the Obligations, or the
Indebtedness described in clause (a) of the definition of Permitted Other Indebtedness) also secure
on an equal and ratable basis such Unsecured Indebtedness and which agreements must be in form and
substance reasonably acceptable to the Administrative Agent.



Section 6.11 Limitation on Hedge Agreements. Neither the Borrower, the Parent, nor
any of their respective Affiliates shall enter into any Interest Rate Agreement or any Currency
Agreement other than the Interest Rate Agreements permitted by the terms of this Agreement and
non-speculative Currency Agreements which are reasonably necessary or desirable in connection with
such Persons’ foreign operations.



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6






ARTICLE VII




FINANCIAL COVENANTS




So long as any Note or any amount under any Credit Document shall remain unpaid, any Letter of
Credit shall remain outstanding, or any Lender shall have any Commitment hereunder, unless the
Required Lenders shall otherwise consent in writing, the Borrower agrees to comply and cause the
Parent and the Parent’s Subsidiaries to comply with the following covenants:



Section 7.01 Interest Coverage Ratio. The Parent shall maintain at the end of each
Rolling Period (a) for the Rolling Period ending on September 30, 2004, an Interest Coverage Ratio
of not less than 3.00 to 1.00, and (b) for any Rolling Period thereafter, an Interest Coverage
Ratio of not less than 3.50 to 1.00.



Section 7.02 Leverage Ratio. The Parent shall not on any date permit the Leverage
Ratio to exceed during the applicable period indicated in the following chart the amount set forth
in such chart for such period:



	 	 	 	 	 	 	 	 	 
	Beginning Date of	 	Ending Date of	 	 
	Applicable Period	 	Applicable Period	 	Leverage Ratio
	 	 	The day immediately	 	 
	 	 	prior to the Status	 	 
	 	 	Reset Date during	 	 
	 	 	the Fiscal Quarter	 	 
	 	 	commencing April 1,	 	 
	Closing Date	 	2005	 	3.75 to 1.00
	 
	 	The day immediately
	 	 	 	 
	The Status Reset
	 	prior to the Status
	 	 	 	 
	Date during the
	 	Reset Date during
	 	 	 	 
	Fiscal Quarter
	 	the Fiscal Quarter
	 	 	 	 
	commencing April 1,
	 	commencing January
	 	 	 	 
	2005
	 	 	1, 2006	 	 	 	3.50 to 1.00	 
	 
	 	 	 	 	 	 	 	 
	The Status Reset
Date during the
Fiscal Quarter
commencing January
1, 2006
	 	No ending date                   
	 	 	3.00 to 1.00	 
	 
	 	 	 	 	 	 	 	 







Section 7.03 Maintenance of Net Worth. The Parent shall at all times maintain an
Adjusted Net Worth of not less than the Minimum Net Worth.



ARTICLE VIII




EVENTS OF DEFAULT; REMEDIES




Section 8.01 Events of Default. The occurrence of any of the following events shall
constitute an “Event of Default” under any Credit Document:




(a) Principal Payment or Letter of Credit Obligation Payment. The Borrower or
any Guarantor shall fail to pay any principal of any Note or any Letter of Credit Obligation
when the same becomes due and payable as set forth in this Agreement;




(b) Interest or Other Obligation Payment. The Borrower or any Guarantor shall
fail to pay any interest on any Note or any fee or other amount payable hereunder or under
any other Credit Document when the same becomes due and payable as set forth in this
Agreement or such other Credit Document, as applicable, provided however that the
Borrower and the Guarantors will have a grace period of three (3) days after the payments
covered by this Section 8.01(b) becomes due and payable for the first two defaults of such
Persons collectively under this Section 8.01(b) in every calendar year;




(c) Representations and Warranties. Any representation or warranty made or
deemed to be made (i) by the Borrower in this Agreement or in any other Credit Document,
(ii) by the Borrower (or any of its officers) in connection with this Agreement or any other
Credit Document, or (iii) by any Guarantor in any Credit Document shall prove to have been
incorrect in any material respect when made or deemed to be made;




(d) Covenant Breaches. (i) The Borrower shall fail to perform or observe any
covenant contained in Section 5.02, Article VI or Article VII of this Agreement, (ii) the
Borrower shall fail to perform or observe, or shall fail to cause any Guarantor to perform
or observe any covenant in any Credit Document beyond any notice and/or cure period for such
default expressly provided in such Credit Document or (iii) the Borrower or any Guarantor
shall fail to perform or observe any term or covenant set forth in any Credit Document which
is not covered by clause (i) or (ii) above or any other provision of this Section 8.01, in
each case if such failure shall remain unremedied for thirty (30) days after the earlier of
the date written notice of such default shall have been given to the Borrower or such
Guarantor by the Administrative Agent or any Lender or the date a Responsible Officer of the
Borrower or any Guarantor has actual knowledge of such default, unless such default in this
clause (iii) cannot be cured in such thirty (30) day period and the Borrower is diligently
proceeding to cure such default, in which event the cure period shall be extended to ninety
(90) days; provided that the Borrower shall not be entitled to more than the
aforementioned thirty (30) day period to cure a default under Section 5.09 of this
Agreement;




(e) Cross-Defaults. With respect to any Indebtedness of the Borrower, the
Parent or any of their respective Subsidiaries (but excluding Indebtedness evidenced by the
Notes) which exceeds the Threshold Amount, any of the following:




(i) any such Indebtedness shall be declared to be due and payable, or required
to be prepaid (other than by a regularly scheduled required prepayment), prior to
the stated maturity thereof,




(ii) such Person shall fail to pay any principal of or premium or interest of
any of such Indebtedness (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument relating
to such Indebtedness, or




(iii) any other event shall occur or condition shall exist under any agreement
or instrument relating to such Indebtedness, and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect of
such event or condition is to permit the holders of such Indebtedness to accelerate
the maturity of such Indebtedness;




(f) Insolvency. The Borrower, the Parent or any of their respective Material
Subsidiaries shall generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or against the Borrower, the
Parent or any of their respective Material Subsidiaries seeking to adjudicate it a bankrupt
or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding instituted against
the Borrower, the Parent or any of their respective Material Subsidiaries, either such
proceeding shall remain undismissed for a period of 60 days or any of the actions sought in
such proceeding shall occur; or the Borrower, the Parent or any of their respective Material
Subsidiaries shall take any corporate action to authorize any of the actions set forth above
in this paragraph (f);




(g) Judgments. Any judgment or order for the payment of money in excess of
$5,000,000 or the Dollar Equivalent thereof (reduced for purposes of this paragraph for the
amount in respect of such judgment or order that a reputable insurer has acknowledged being
payable under any valid and enforceable insurance policy) shall be rendered against the
Borrower, the Parent or any of their respective Subsidiaries which, within thirty (30) days
from the date such judgment is entered, shall not have been discharged or execution thereof
stayed pending appeal;




(h) ERISA. (i) Any Person shall engage in any “prohibited transaction” (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any
“accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Plan, which Reportable Event or commencement
of proceedings or appointment of a trustee is likely to result in the termination of such
Plan for purposes of Title IV of ERISA, unless such Reportable Event, proceedings or
appointment are being contested by the Borrower in good faith and by appropriate
proceedings, (iv) any Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any member of a Controlled Group shall incur any liability in connection with a
withdrawal from a Multiemployer Plan or the insolvency (within the meaning of Section 4245
of ERISA) or reorganization (within the meaning of Section 4241 of ERISA) of a Multiemployer
Plan, unless such liability is being contested by the Borrower in good faith and by
appropriate proceedings, or (vi) any other event or condition shall occur or exist, with
respect to a Plan; and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could subject the
Borrower or any Guarantor to any tax, penalty or other liabilities in the aggregate
exceeding $10,000,000;




(i) Guaranty. Any provision of any Guaranty shall for any reason cease to be
valid and binding on any Guarantor or any Guarantor shall so state in writing;




(j) Environmental Indemnity. Any Environmental Indemnity shall for any reason
cease to be valid and binding on any Person party thereto or any such Person shall so state
in writing;




(k) Security Document. The Borrower or any Guarantor shall cause any material
Security Document to be invalid or non-binding on any Person party thereto or any such
Person shall so state in writing;




(l) Collateral. A Material Adverse Change occurs because all or a portion of
the Collateral shall for any reason cease to be subject to an Acceptable Lien except as
expressly permitted by this Agreement;




(m) Parent Common Stock; Repayment Event The Parent at any time hereafter
fails to (i) cause the Parent common stock to be duly listed on the New York Stock Exchange,
Inc. and (ii) file timely all reports required to be filed by the Parent with the New York
Stock Exchange, Inc. and the Securities and Exchange Commission and, with respect to a
failure under clause (ii), such failure remains uncured on the date which is the earlier of
(A) the date thirty (30) days following the initial occurrence of such failure and (B) the
date specified by the New York Stock Exchange, Inc. or the Securities and Exchange
Commission as the date such failure needs to be cured by. Upon the receipt by the Parent of
any Net Cash Proceeds from a Repayment Event, (i) the Parent fails to immediately make a
capital contribution or advance to the Borrower or a Subsidiary of the Borrower of the
Repayment Amount for such Repayment Event, or otherwise apply the Repayment Amount for such
Repayment Event in accordance with the provisions of this Agreement or (ii) the Borrower
fails to apply such Repayment Amount in accordance with the provisions of this Agreement;




(n) Change in Ownership or Control. Any of the following occur without the
written consent of the Required Lenders: (i) a Change in Control occurs for either the
Parent or the Borrower; or (ii) the Parent and any wholly-owned Subsidiary of the Parent
collectively owns less than 70% of the legal or beneficial interest in the Borrower;




(o) Permitted Property Agreements. Any of the following occur: (i) sufficient
Permitted Property Agreements shall for any reason cease to be valid and binding on MHC, MHC
OP or other Person party thereto, or MHC, MHC OP or such other Person party thereto shall so
state in writing, that it could reasonably be expected to cause a Material Adverse Change;
or (ii) a default by the Parent, the Borrower or any of their respective Subsidiaries shall
occur under sufficient Permitted Property Agreements that such default could reasonably be
expected to cause a Material Adverse Change; or




(p) Letter. Any provision of the MHC Letter shall for any reason cease to be
valid and binding on any Person, or any Person shall so state in writing.



Section 8.02 Optional Acceleration of Maturity; Other Actions. If any Event of
Default (other than an Event of Default pursuant to paragraph (f) of Section 8.01) shall have
occurred and be continuing, then, and in any such event,




(a) the Administrative Agent (i) shall at the request, or may with the consent, of the
Required Lenders, by notice to the Borrower, declare the obligation of each Lender to make
Advances and the obligation of Issuing Bank to issue, increase, or extend Letters of Credit
to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Notes, all interest thereon, the Letter of Credit Obligations, and all other
amounts payable under this Agreement to be forthwith due and payable, whereupon the Notes,
all such interest, all such Letter of Credit Obligations and all such amounts shall become
and be forthwith due and payable in full, without presentment, demand, protest or further
notice of any kind (including, without limitation, any notice of intent to accelerate or
notice of acceleration), all of which are hereby expressly waived by the Borrower,




(b) the Borrower shall, on demand of the Administrative Agent at the request or with
the consent of the Required Lenders, deposit into the Cash Collateral Account an amount of
cash equal to the Letter of Credit Exposure as security for the Obligations to the extent
the Letter of Credit Obligations are not otherwise paid at such time, and




(c) the Administrative Agent shall at the request of, or may with the consent of, the
Required Lenders proceed to enforce its rights and remedies under the Credit Documents for
the ratable benefit of the Lenders by appropriate proceedings.



Section 8.03 Automatic Acceleration of Maturity. If any Event of Default pursuant to
paragraph (f) of Section 8.01 shall occur,




(a) the obligation of each Lender to make Advances and the obligation of Issuing Bank
to issue, increase, or extend Letters of Credit shall immediately and automatically be
terminated and the Notes, all interest on the Notes, all Letter of Credit Obligations, and
all other amounts payable under this Agreement shall immediately and automatically become
and be due and payable in full, without presentment, demand, protest or any notice of any
kind (including, without limitation, any notice of intent to accelerate or notice of
acceleration), all of which are hereby expressly waived by the Borrower and




(b) to the extent permitted by law or court order, the Borrower shall deposit with the
Administrative Agent into the Cash Collateral Account an amount of cash equal to the
outstanding Letter of Credit Exposure as security for the Obligations to the extent the
Letter of Credit Obligations are not otherwise paid at such time.




Section 8.04 Cash Collateral Account.




(a) Pledge. The Borrower hereby pledges, and grants to the Administrative
Agent for the benefit of the Lenders, a security interest in all funds held in the Cash
Collateral Account maintained with the Administrative Agent from time to time, and all
proceeds thereof, as security for the payment of the Obligations, including without
limitation all Letter of Credit Obligations owing to any Issuing Bank or any other Lender
due and to become due from the Borrower to any Issuing Bank or any other Lender under this
Agreement in connection with the Letters of Credit and the Borrower agrees to execute all
cash management or cash collateral agreements and UCC-1 Financing Statements requested by
the Administrative Agent as needed or desirable for the Administrative Agent to have an
Acceptable Lien in the Cash Collateral Account.




(b) Application against Letter of Credit Obligations. The Administrative Agent
may, at any time or from time to time, apply funds then held in the Cash Collateral Account
to the payment of any Letter of Credit Obligations owing to any Issuing Bank, in such order
as the Administrative Agent may elect, as shall have become or shall become due and payable
by the Borrower to any Issuing Bank under this Agreement in connection with the Letters of
Credit.




(c) Duty of Care. The Administrative Agent shall exercise reasonable care in
the custody and preservation of any funds held in the Cash Collateral Account and the
Administrative Agent shall be deemed to have exercised such care if such funds are accorded
treatment substantially equivalent to that which the Administrative Agent accords its own
property, 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 such funds.



Section 8.05 Non-exclusivity of Remedies. No remedy conferred upon the Administrative
Agent or the Lenders is intended to be exclusive of any other remedy, and each remedy shall be
cumulative of all other remedies existing by contract, at law, in equity, by statute or otherwise.




Section 8.06 Right of Set-off.




(a) Upon (i) the occurrence and during the continuance of any Event of Default pursuant
to paragraph (f) of Section 8.01 or (ii) the making of the request or the granting of the
consent, if any, specified by Section 8.02 to authorize the Administrative Agent to declare
the Notes and any other amount payable hereunder due and payable pursuant to the provisions
of Section 8.02 or the automatic acceleration of the Notes and all amounts payable under
this Agreement pursuant to Section 8.03, each Lender and Affiliate thereof is hereby
authorized at any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender or any
Affiliate thereof to or for the credit or the account of the Borrower against any and all of
the obligations of the Borrower now or hereafter existing under this Agreement, the Note
held by such Lender, and the other Credit Documents, irrespective of whether or not such
Lender shall have made any demand under this Agreement, such Note, or such other Credit
Documents, and although such obligations may be unmatured. Each Lender agrees to promptly
notify the Borrower after any such set-off and application made by such Lender or its
Affiliate, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this Section are
in addition to any other rights and remedies (including, without limitation, other rights of
set-off) which such Lender may have.




(b) The Borrower waives any right of set-off, defense or counterclaim the Borrower has
or may have against any Lender to apply any amounts owed the Borrower by such Lender or any
Affiliate thereof against the Obligations hereunder.



ARTICLE IX




AGENCY AND ISSUING BANK PROVISIONS




Section 9.01 Authorization and Action. Each Lender and each Issuing Bank hereby
appoints and authorizes the Administrative Agent to take such action as Administrative Agent on its
behalf and to exercise such powers under this Agreement and the other Credit Documents as are
delegated to the Administrative Agent by the terms hereof and of the other Credit Documents,
together with such powers as are reasonably incidental thereto. As to any matters not expressly
provided for by this Agreement or any other Credit Document (including, without limitation,
enforcement or collection of the Notes), 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
Required Lenders, and such instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that 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, any other Credit Document, or applicable law. The functions of the Administrative Agent
are administerial in nature and in no event shall the Administrative Agent have a fiduciary or
trustee relation in respect of any Lender by reason of this Agreement or any other Credit Document.
Within five (5) Business Days of the Administrative Agent receiving actual knowledge (without any
duty to investigate) of a Default, the Administrative Agent will provide written notice of such
Default to the Lenders and each Issuing Bank.



Section 9.02 Administrative Agent’s Reliance, Etc. Neither the Administrative Agent
nor any of its directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken (including such Person’s own negligence) by it or them under or in connection
with this Agreement or the other Credit Documents, except for its or their own gross negligence or
willful misconduct. Without limitation of the generality of the foregoing, the Administrative
Agent: (a) may treat the payee of any Note as the holder thereof until the Administrative Agent
receives written notice of the assignment or transfer thereof signed by such payee and in form
satisfactory to the Administrative Agent; (b) may consult with legal counsel (including counsel for
the Borrower), 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; (c) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements, warranties or representations
made in or in connection with this Agreement or the other Credit Documents; (d) shall not 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 Credit Document on the part of the Borrower, the
Parent or their respective Subsidiaries or to inspect the property (including the books and
records) of the Borrower, the Parent or their respective Subsidiaries; (e) shall not be responsible
to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or any other Credit Document other than with respect to the
Administrative Agent’s execution of the documents to which the Administrative Agent is a party; and
(f) shall incur no liability under or in respect of this Agreement or any other Credit Document by
acting upon any notice, consent, certificate or other instrument or writing (which may be by
telecopier, telegram, cable or telex) believed by it to be genuine and signed or sent by the proper
party or parties.



Section 9.03 Administrative Agent and Its Affiliates. With respect to its Commitment,
the Advances made by it and the Notes issued to it, the Administrative Agent and each Issuing Bank
shall have the same rights and powers under this Agreement as any other Lender and may exercise the
same as though it were not an Administrative Agent and an Issuing Bank, respectively. The term
“Lender” or “Lenders” shall, unless otherwise expressly indicated, include the Administrative Agent
and each Issuing Bank in their individual capacities as Lenders. The Administrative Agent, each
Issuing Bank, the Lenders and their respective Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, and generally engage in any kind of business with, the Borrower
or any of its Subsidiaries, and any Person who may do business with or own securities of the
Borrower or any such Subsidiary, all as if the Administrative Agent were not an Administrative
Agent hereunder, an Issuing Bank was not an Issuing Bank hereunder or the Lenders were not Lenders
hereunder and without any duty to account therefore to the Lenders.



Section 9.04 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, an Issuing Bank or any other
Lender and based on the financial statements referred to in Section 4.05 and such other documents
and information as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent, an Issuing Bank or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement.



Section 9.05 Indemnification. The Lenders severally agree to indemnify the
Administrative Agent and Issuing Bank (to the extent not reimbursed by the Borrower), according to
their respective Pro Rata Shares from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the Administrative
Agent or such Issuing Bank in any way relating to or arising out of this Agreement or any action
taken or omitted by the Administrative Agent or such Issuing Bank under this Agreement or any other
Credit Document (including the Administrative Agent’s or such Issuing Bank’s own negligence),
provided that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements that are
determined by a court of competent jurisdiction by a final and non-appealable judgment to have
resulted from the Administrative Agent’s or such Issuing Bank’s gross negligence or willful
misconduct; provided further that to the extent any Issuing Bank is entitled to
indemnification under this Section 9.05, the indemnification provided for in this Section 9.05 will
be the obligation solely of the Lenders with Revolving Commitments. Without limitation of the
foregoing, each applicable Lender agrees to reimburse the Administrative Agent and each Issuing
Bank promptly upon demand for its Pro Rata Share of (a) any out-of-pocket expenses (including
reasonable counsel fees) incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any other Credit Document, to the extent that the
Administrative Agent is not reimbursed for such expenses by the Borrower and (b) any amount that
the Borrower fails to pay that is required to be paid by the Borrower to an Issuing Bank under
Section 10.04.



Section 9.06 Successor Administrative Agent and Issuing Banks. The Administrative
Agent or any Issuing Bank may resign at any time by giving written notice thereof to the Lenders
and the Borrower and may be removed at any time with cause by the Required Lenders upon receipt of
written notice from the Required Lenders to such effect. Upon receipt of notice of any such
resignation or removal, the Required Lenders shall have the right to appoint a successor
Administrative Agent or Issuing Bank. If no successor Administrative Agent or Issuing Bank shall
have been so appointed, and shall have accepted such appointment, within thirty (30) days after the
retiring Administrative Agent’s or Issuing Bank’s giving of notice of resignation or the Required
Lenders’ removal of the retiring Administrative Agent or Issuing Bank, then the retiring
Administrative Agent or Issuing Bank, as applicable, may, on behalf of the Lenders and the
Borrower, appoint a successor Administrative Agent or Issuing Bank, which shall be a commercial
bank meeting the financial requirements of an Eligible Assignee and, in the case of an Issuing
Bank, a Lender. Upon the acceptance of any appointment as Administrative Agent or Issuing Bank by
a successor Administrative Agent or Issuing Bank, such successor Administrative Agent or Issuing
Bank shall thereupon succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent or Issuing Bank, as applicable, and the retiring
Administrative Agent or Issuing Bank shall be discharged from its duties and obligations under this
Agreement and the other Credit Documents, except that the retiring Issuing Bank shall remain an
Issuing Bank with respect to any Letters of Credit issued by such Issuing Bank and outstanding on
the effective date of its resignation or removal and the provisions affecting such Issuing Bank
with respect to such Letters of Credit shall inure to the benefit of the retiring Issuing Bank
until the termination of all such Letters of Credit. After any retiring Administrative Agent’s or
Issuing Bank’s resignation or removal hereunder as Administrative Agent or Issuing Bank, the
provisions of this Article IX shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was such Administrative Agent or Issuing Bank under this Agreement and the
other Credit Documents.



Section 9.07 Arrangers, Book Runners, and other Agents. Under the Credit Documents SG
Americas shall be named Sole Lead Arranger and Bookrunner, and other Persons may be named agents or
other titles, but such Persons in such capacities shall have no right or duty to act as agent on
behalf of the Lenders.



ARTICLE X




MISCELLANEOUS





Section 10.01 Amendments, Etc.




(a) No amendment or waiver of any provision of this Agreement, the Notes, or any other
Credit Document, nor consent to any departure by the Borrower or any Guarantor therefrom,
shall in any event be effective unless the same shall be in writing and signed by the
Required Lenders (or by the Administrative Agent with the consent of such Required Lenders),
as specified in the particular provisions of the Credit Documents, and the Borrower, and
then such waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment shall
increase the Commitment of any Lender without the prior written consent of such Lender, and
no amendment, waiver or consent shall, unless in writing and signed by all the Lenders whose
Commitments or Advances are directly modified thereby, do any of the following: (i)
increase the aggregate Commitments of the Lenders except as permitted by Section 2.01(c),
(ii) reduce or forgive the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder or under any other Credit Document or otherwise release the
Borrower from any Obligations, (iii) postpone any date fixed for any payment of principal of
(including any Maturity Date), or interest on, the Notes or any fees or other amounts
payable hereunder, (iv) amend this Section 10.01, (v) amend the definition of “Required
Lenders”, “Pro Rata Share”, or “Maximum Facility Amount”, (vi) release the Parent from its
obligations under the Guaranty or release any other Guarantor which owns or leases an Owned
Hospitality Property from its obligations under any of the Guaranties except as contemplated
by the provisions of Section 5.09, (vii) release all or substantially all of the Collateral,
(viii) release as Collateral all or substantially all of the Ownership Interests in the
Borrower or (ix) extend the Interest Period beyond six (6) months; and provided,
further, that no amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent or any Issuing Bank, as applicable, in addition to the Lenders required
above to take such action, affect the rights or duties of the Administrative Agent or such
Issuing Bank, as the case may be, under this Agreement or any other Credit Document. In
addition, the definition of “Revolving Required Lenders” cannot be amended without the
unanimous written consent of all Lenders holding Revolving Commitments. In addition, the
definition of “Term Required Lenders” cannot be amended without the unanimous written
consent of all Lenders holding Term Commitments and Term Advances.




(b) In addition, without the consent of each of the Revolving Required Lenders and the
Term Required Lenders voting as separate Classes no amendment or waiver shall (i) amend or
waive the provisions in Sections 2.07(c) and (b), 2.10(a) and (e) or 2.16 regarding the pro
rata treatment, the order of application of proceeds and the sharing of payments or (ii)
permit other Indebtedness to have a Lien on any Collateral.




(c) Any amendment to a covenant of the Parent or any of its Subsidiaries or amendment
to a definition shall require the Borrower’s written consent.




(d) Notwithstanding the foregoing, the Administrative Agent and the Borrower (without
the consent of any other Lender or the Issuing Bank) may enter into amendments of any Credit
Document solely with respect to corrections of formal defects not having any economic
impact.



Section 10.02 Notices, Etc. All notices and other communications shall be in writing
(including telecopy or telex) and mailed, telecopied, telexed, hand delivered or delivered by a
nationally recognized overnight courier, (a) if to the Borrower, at its address at 4501 N. Fairfax
Drive, Arlington, Virginia 22203, Attn: Chief Financial Officer; (b) if to any Lender, at its
Applicable Lending Office; (c) if to the Administrative Agent or the Issuing Bank, at its address
at 4900 Trammell Crow Center, 2001 Ross Avenue, Dallas, Texas 75201, Attention: Thomas K. Day,
Managing Director (telecopy: (214) 979-2727; telephone: (214) 979-2774); or, (d) as to each party,
at such other address or teletransmission number as shall be designated by such party in a written
notice to the other parties. All such notices and communications shall, when mailed, telecopied,
telexed or hand delivered or delivered by overnight courier, be effective three days after
deposited in the mails, when telecopy transmission is completed, when confirmed by telex
answer-back or when delivered, respectively, except that notices and communications to the
Administrative Agent pursuant to Article II or Article IX shall not be effective until received by
the Administrative Agent.



Section 10.03 No Waiver; Remedies. No failure on the part of any Lender, any Agent,
or any Issuing Bank to exercise, and no delay in exercising, any right hereunder or under any Note
shall operate as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other right. The remedies
provided in this Agreement and the other Credit Documents are cumulative and not exclusive of any
remedies provided by law.



Section 10.04 Costs and Expenses. The Borrower agrees to pay on demand all
out-of-pocket costs and expenses of the Administrative Agent in connection with the preparation,
execution, delivery, due diligence, administration, modification and amendment of this Agreement,
the Notes and the other Credit Documents and syndication of the Obligations including, without
limitation, (a) the reasonable fees and out-of-pocket expenses of Bracewell & Patterson, L.L.P.,
counsel for the Administrative Agent, and (b) all reasonable out-of-pocket costs and expenses, if
any, of the Administrative Agent, Issuing Bank, and each Lender (including, without limitation,
reasonable counsel fees and expenses of the Administrative Agent, such Issuing Bank, and each
Lender) in connection with the enforcement (whether through negotiations, legal proceedings or
otherwise) of this Agreement and the other Credit Documents, and (d) to the extent not included in
the foregoing, the costs of any local counsel, travel expenses, Appraisals, Engineering Reports,
Environmental Reports, Title Policies, mortgage and intangible taxes (if any), and any title or
Uniform Commercial Code search costs, any flood plain search costs, insurance consultant costs and
other costs usual and customary in connection with a credit facility of this type.



Section 10.05 Binding Effect. This Agreement shall become effective when it shall
have been executed by the Borrower and the Administrative Agent, and when the Administrative Agent
shall have, as to each Lender, either received a counterpart hereof executed by such Lender or been
notified by such Lender that such Lender has executed it and thereafter shall be binding upon and
inure to the benefit of the Borrower, the Administrative Agent, Issuing Bank, and each Lender and
their respective successors and assigns, except that the Borrower shall not have the right to
assign its rights or delegate its duties under this Agreement or any interest in this Agreement
without the prior written consent of each Lender.




Section 10.06 Lender Assignments and Participations.




(a) Assignments. Any Lender may assign to one or more banks or other entities
all or any portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it, the Notes (if
applicable) held by it, and the participation interest in the Letter of Credit Obligations
held by it); provided, however, that:




(i) each such assignment shall be of a constant, and not a varying, percentage
of all of such Lender’s rights and obligations under this Agreement for a particular
Class and shall involve a ratable assignment of such Lender’s Commitment and
Advances for a particular Class,




(ii) the amount of the resulting Commitments and Advances of the assigning
Lender (unless it is assigning all its Commitments and Advances) and the assignee
Lender pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event be less than
$1,000,000 in total, shall in no event be less than $100,000 for each Class assigned
and shall be an integral multiple of $100,000; provided that with respect to
assignments of Term Advances by a Lender to an Approved Fund, a Related Fund, a
Lender or an Affiliate of a Lender only, the amount of the resulting Term Advances
for the assigning Approved Fund and any such assignee may be for less than
$1,000,000; provided that except as approved by the Administrative Agent
such Approved Fund and all of its Related Funds shall only be entitled collectively
to one notice for all purposes under the Credit Documents,




(iii) each such assignment shall be to an Eligible Assignee,




(iv) the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, and, if applicable, deliver the Notes subject to such
assignment,




(v) if such assignment is of Term Advances and/or Term Commitments and is not
to a Lender, an Affiliate of a Lender, an Approved Fund or a Related Fund, then the
Administrative Agent shall consent to such assignment, which consent shall not be
unreasonably withheld or delayed,




(vi) if such assignment is of Revolving Advances and/or Revolving Commitments
and is not to a Lender with a Revolving Commitment or an Affiliate of a Lender with
a Revolving Commitment, then the Administrative Agent and each Issuing Bank shall
consent to such assignment, which consent shall not be unreasonably withheld or
delayed, and




(vii) each Eligible Assignee (other than an Eligible Assignee which is an
Affiliate of the assigning Lender) shall pay to the Administrative Agent a $3,500
administrative fee; provided that, in the case of contemporaneous
assignments by a Lender to more than one Related Fund (which Related Funds are not
then Lenders hereunder), only a single $3,500 such fee shall be payable for all such
contemporaneous assignments.




Upon such execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at least three
Business Days after the execution thereof or earlier such earlier date as agreed to by the
Administrative Agent, (A) the assignee thereunder shall be a party hereto for all purposes
and, to the extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender hereunder and
(B) such Lender thereunder shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of such Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto). Notwithstanding
anything herein to the contrary, (i) any Lender may assign or pledge, as collateral or
otherwise, any of its rights under the Credit Documents to any Federal Reserve Bank and (ii)
any Lender that is an Approved Fund or Related Fund may, without the consent of the
Administrative Agent or the Borrower, pledge all or any portion of its Advances and Notes
(if applicable) to any trustee for, or any other representative of, holders of obligations
owed, or securities issued, by such Approved Fund or Related Fund, as security for such
obligations or securities; provided that (A) any foreclosure or similar action by
such trustee or representative shall be subject to the provisions of this Section 10.06(a)
concerning assignments, including without limitation the requirement that any assignee of
such Notes (if applicable) and Advances must qualify as an Eligible Assignee and (B) such
Lender shall not require such trustee’s or representative’s consent to any matter under this
Agreement, except (1) for a change in the principal amount of any Advances which has been so
pledged, reductions in fees or interest, or extending the Maturity Date except as permitted
in this Agreement or (2) as otherwise consented to by the Administrative Agent.




(b) Term of Assignments. By executing and delivering an Assignment and
Acceptance, the Lender thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency of value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such Lender makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrower or the Guarantors
or the performance or observance by the Borrower or the Guarantors of any of their
obligations under this Agreement or any other instrument or document furnished pursuant
hereto; (iii) such assignee confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Sections 4.05 and 5.05, if
applicable, and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Administrative Agent, such Lender
or any other Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.




(c) The Register. The Administrative Agent shall maintain at its address
referred to in Section 10.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of the Lenders
and the Commitments of, and principal amount of the Advances owing to, each Lender from time
to time (the “Register”). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the Administrative Agent,
the Issuing Banks, and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time and from time
to time upon reasonable prior notice.




(d) Procedures. Upon its receipt of an Assignment and Acceptance executed by a
Lender and an Eligible Assignee, together with, if applicable, any Note or Notes subject to
such assignment, the Administrative Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of the attached Exhibit C, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the Register,
and (iii) give prompt notice thereof to the Borrower. If requested by the assigning Lender
or such Eligible Assignee, within five Business Days after its receipt of such notice, the
Borrower, at its own expense, shall execute and deliver to the Administrative Agent in
exchange for the surrendered Note or Notes, a new Note or Notes payable to the order of such
Eligible Assignee in amount equal to, respectively, the Commitments and the outstanding
Advances assumed by it pursuant to such Assignment and Acceptance, and if the assigning
Lender has retained any Commitments hereunder, a new Note or Notes payable to the order of
such Lender in an amount equal to, respectively, the Commitments and the outstanding
Advances retained by it hereunder. Any such new Notes shall be dated the date of the
original Notes executed pursuant to this Agreement and shall otherwise be in substantially
the form of the attached Exhibits A-1 or A-2, as applicable.




(e) Participations. Each Lender may sell participations to one or more banks
or other entities in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitments, the Advances
owing to it, its participation interest in the Letter of Credit Obligations, and the Notes
(if applicable) held by it); provided, however, that (i) such Lender’s
obligations under this Agreement (including, without limitation, its Commitments to the
Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely responsible
to the other parties hereto for the performance of such obligations, (iii) such Lender shall
remain the holder of any such Advances (and, if applicable, such Notes) for all purposes of
this Agreement, (iv) the Borrower, the Administrative Agent, and the Issuing Banks and the
other Lenders shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement, and (v) such Lender shall not
require the participant’s consent to any matter under this Agreement, except for change in
the principal amount of any Advance in which the participant has an interest, reductions in
fees or interest, or extending the Maturity Date except as permitted in this Agreement. The
Borrower hereby agrees that participants shall have the same rights under Sections 2.08,
2.09, 2.11(c), and 10.07 hereof as the Lender to the extent of their respective
participations.




(f) Confidentiality. Each Lender agrees to preserve the confidentiality of any
confidential information relating to the Parent, the Borrower and their respective
Subsidiaries received by Lender; provided that (i) each Lender may furnish any such
confidential information in the possession of such Lender from time to time to (A) assignees
and participants (including prospective assignees and participants), (B) its attorneys,
accountants, regulators, the National Association of Insurance Commissioners, governmental
authorities and any self-governing organization to which is a member, (C) any direct or
indirect contractual counterparty to such Lender in swap agreements or such contractual
counterparty’s professional advisor, and (D) the Related Funds, Affiliates, directors,
partners, officers, employees, trustees, agents, advisors, or pledgees of such Person or its
Affiliates or Related Funds; provided that, prior to any such disclosure, such
Person shall agree in writing to preserve the confidentiality of any confidential
information relating to the Borrower and its Subsidiaries received by it from or on behalf
of such Lender, (ii) each Lender may disclose such confidential information as required by
law, regulation or judicial order, and (iii) a Lender’s obligations with respect to
confidential information shall not apply to information which is or becomes available to the
public other than through an act of such Lender.



Section 10.07 Indemnification. The Borrower shall indemnify the Administrative Agent,
the Lenders (including any lender which was a Lender hereunder prior to any full assignment of its
Commitment), any assignees and participants permitted hereunder, the Issuing Banks, and each
affiliate thereof and their respective directors, officers, employees, agents, trustees and
advisors from, and discharge, release, and hold each of them harmless against, any and all losses,
liabilities, claims or damages to which any of them may become subject, insofar as such losses,
liabilities, claims or damages arise out of or result from (i) any actual or proposed use by the
Borrower or any Affiliate of the Borrower of the proceeds of any Advance, (ii) any breach by the
Borrower or any Guarantor of any provision of this Agreement or any other Credit Document, (iii)
any investigation, litigation or other proceeding (including any threatened investigation or
proceeding) relating to the foregoing, or (iv) any Environmental Claim or requirement of
Environmental Laws concerning or relating to the present or previously-owned or operated
properties, or the operations or business, of the Borrower or any of its Subsidiaries, and the
Borrower shall reimburse the Administrative Agent, Issuing Bank, and each Lender, and each
affiliate thereof and their respective directors, officers, employees and agents, upon demand for
any reasonable out-of-pocket expenses (including legal fees) incurred in connection with any such
investigation, litigation or other proceeding; and expressly including any such losses,
liabilities, claims, damages, or expense incurred by reason of such indemnified Person’s own
negligence, but excluding any such losses, liabilities, claims, damages or expenses that are
determined by a court of competent jurisdiction by a final and non-appealable judgment to have
resulted from the gross negligence or willful misconduct of the Person to be indemnified.



Section 10.08 Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall constitute one and
the same agreement.



Section 10.09 Survival of Representations, Indemnifications, etc. All representations
and warranties contained in this Agreement or made in writing by or on behalf of the Borrower in
connection herewith shall survive the execution and delivery of this Agreement and the Credit
Documents, the making of the Advances and any investigation made by or on behalf of the Lenders,
none of which investigations shall diminish any Lender’s right to rely on such representations and
warranties. All obligations of the Borrower provided for in Sections 2.08, 2.09, 2.11(c), and
10.07 and the obligations of the Lenders under Section 9.05 shall survive any termination of this
Agreement and repayment in full of the Obligations.



Section 10.10 Severability. In case one or more provisions of this Agreement or the
other Credit Documents shall be invalid, illegal or unenforceable in any respect under any
applicable law, the validity, legality and enforceability of the remaining provisions contained
herein or therein shall not be affected or impaired thereby.



Section 10.11 Usury Not Intended. It is the intent of the Borrower and each Lender in
the execution and performance of this Agreement and the other Credit Documents to contract in
strict compliance with applicable usury laws, including conflicts of law concepts, governing the
Advances of each Lender including such applicable laws of the State of New York and the United
States of America from time to time in effect. In furtherance thereof, the Lenders and the
Borrower stipulate and agree that none of the terms and provisions contained in this Agreement or
the other Credit Documents shall ever be construed to create a contract to pay, as consideration
for the use, forbearance or detention of money, interest at a rate in excess of the Maximum Rate
and that for purposes hereof “interest” shall include the aggregate of all charges which constitute
interest under such laws that are contracted for, charged or received under this Agreement; and in
the event that, notwithstanding the foregoing, under any circumstances the aggregate amounts taken,
reserved, charged, received or paid on the Advances, include amounts which by applicable law are
deemed interest which would exceed the Maximum Rate, then such excess shall be deemed to be a
mistake and each Lender receiving same shall credit the same on the principal of its Advances (or
if such Advances shall have been paid in full, refund said excess to the Borrower). In the event
that the maturity of the Advances is accelerated by reason of any election of the holder thereof
resulting from any Event of Default under this Agreement or otherwise, or in the event of any
required or permitted prepayment, then such consideration that constitutes interest may never
include more than the Maximum Rate and excess interest, if any, provided for in this Agreement or
otherwise shall be canceled automatically as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited on the applicable Advances (or, if the applicable Advances
shall have been paid in full, refunded to the Borrower). In determining whether or not the
interest paid or payable under any specific contingencies exceeds the Maximum Rate, the Borrower
and the Lenders shall to the maximum extent permitted under applicable law amortize, prorate,
allocate and spread in equal parts during the period of the full term of the Advances all amounts
considered to be interest under applicable law at any time contracted for, charged, received or
reserved in connection with the Obligations. The provisions of this Section shall control over all
other provisions of this Agreement or the other Credit Documents which may be in apparent conflict
herewith.



Section 10.12 GOVERNING LAW. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS SHALL BE
GOVERNED BY, CONSTRUED AND ENFORCED, AND ANY DISPUTE BETWEEN THE BORROWER, THE ADMINISTRATIVE
AGENT, ANY LENDER, OR ANY INDEMNITEE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER
CREDIT DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF
NEW YORK; PROVIDED THAT THE PERFECTION OF THE LIENS OF THE ADMINISTRATIVE AGENT ON THE COLLATERAL
AND THE EXERCISE OF REMEDIES AGAINST THE COLLATERAL SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE APPLICABLE JURISDICTION.




Section 10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.




(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH
OF THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH,
THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS WHETHER ARISING IN CONTRACT, TORT,
EQUITY, OR OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN
THE CITY AND COUNTY OF NEW YORK, STATE OF NEW YORK, BUT THE PARTIES HERETO ACKNOWLEDGE THAT
ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK,
NEW YORK. EACH OF THE PARTIES HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS
SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
CONSIDERING THE DISPUTE.




(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT ANY AGENT, ANY LENDER OR ANY
INDEMNITEE SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A COURT
IN ANY LOCATION TO ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER THE BORROWER
OR (2) ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. THE
BORROWER AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING
BROUGHT BY SUCH PERSON TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON.
THE BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH
SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B).




(C) SERVICE OF PROCESS. THE BORROWER WAIVES PERSONAL SERVICE OF ANY PROCESS
UPON IT AND IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY WRITS, PROCESS OR
SUMMONSES IN ANY SUIT, ACTION OR PROCEEDING BY THE MAILING THEREOF BY ANY AGENT OR THE
LENDERS BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER ADDRESSED AS
PROVIDED HEREIN. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF ANY
AGENT OR THE LENDERS TO SERVE ANY SUCH WRITS, PROCESS OR SUMMONSES IN ANY OTHER MANNER
PERMITTED BY APPLICABLE LAW. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH IN ANY
JURISDICTION SET FORTH ABOVE.




(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT,
TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE
PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.




(E) WAIVER OF BOND. THE BORROWER WAIVES THE POSTING OF ANY BOND OTHERWISE
REQUIRED OF ANY PARTY HERETO IN CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO
REALIZE ON THE COLLATERAL ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH
PARTY, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER, PRELIMINARY OR
PERMANENT INJUNCTION, THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT.




(F) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER PARTY
HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE PROVISIONS OF THIS
SECTION 10.13 AND SECTION 10.20, WITH ITS COUNSEL.



Section 10.14 Knowledge of Borrower. For purposes of this Agreement, “knowledge of
the Borrower” means the actual knowledge of any of the executive officers and all other Responsible
Officers of the Parent.



Section 10.15 Lenders Not in Control. None of the covenants or other provisions
contained in the Credit Documents shall or shall be deemed to, give the Lenders the rights or power
to exercise control over the affairs and/or management of the Borrower, any of its Subsidiaries or
any Guarantor, the power of the Lenders being limited to the right to exercise the remedies
provided in the Credit Documents; provided, however, that if any Lender becomes the owner
of any Ownership Interests in any Person, whether through foreclosure or otherwise, such Lender
shall be entitled (subject to requirements of law) to exercise such legal rights as it may have by
being owner of such Ownership Interests in such Person.



Section 10.16 Headings Descriptive. The headings of the several Sections and
paragraphs of the Agreement are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.



Section 10.17 Time is of the Essence. Time is of the essence under the Credit
Documents.



Section 10.18 Lender Interest Rate Agreements. As more fully set forth in the
Guaranty and the Security Agreement, if any Lender enters into an Interest Rate Agreement with the
Borrower or the Parent which is permitted by the provisions of Section 5.12, the obligations of
such Person to such Lender under such Interest Rate Agreement shall (a) be pari passu with the
Obligations and (b) be secured by the Collateral pursuant to the Security Agreement.



Section 10.19 NO CONSEQUENTIAL DAMAGES. NOTWITHSTANDING ANYTHING CONTAINED TO THE
CONTRARY IN ANY OTHER PROVISION OF THIS AGREEMENT, EACH PERSON PARTY HERETO FOR ITSELF AND ON
BEHALF OF ITS AFFILIATES AGREES THAT THE RECOVERY OF ANY DAMAGES SUFFERED OR INCURRED AS A RESULT
OF ANY BREACH BY ANY PERSON OF ANY OF ITS REPRESENTATIONS, WARRANTIES OR OBLIGATIONS UNDER THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT SHALL BE LIMITED TO THE ACTUAL DAMAGES SUFFERED OR INCURRED
AS A RESULT OF THE BREACH BY THE BREACHING PARTY OF ITS REPRESENTATIONS, WARRANTIES OR OBLGIATIONS
HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT AND IN NO EVENT SHALL THE BREACHING PARTY BE LIABLE TO
ANY NON-BREACHING PARTY FOR ANY INDIRECT, CONSEQUENTIAL, SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES
(INCLUDING, WITHOUT LIMITATION, ANY DAMAGES ON ACCOUNT OF LOST PROFITS OR OPPORTUNITIES OR LOST OR
DELAYED PRODUCTION) SUFFERED OR INCURRED BY THE NON-BREACHING PARTY AS A RESULT OF THE BREACH BY
THE BREACHING PARTY OF ANY OF ITS REPRESENTATIONS, WARRANTIES OR OBLIGATIONS HEREUNDER OR UNDER ANY
OTHER CREDIT DOCUMENT.



Section 10.20 USA PATRIOT Act Notice. Each Lender and the Administrative Agent (for
itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that identifies
the Borrower, which information includes the name and address of the Borrower and other information
that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in
accordance with the Act.



Section 10.21 Reliance on Professional Advisors. It is expressly understood and
agreed that neither the Administrative Agent, nor any Lender, nor any of their respective
Affiliates is undertaking to provide the Borrower or any of its Affiliates with any advice relating
to legal, regulatory, accounting, or tax matters. In furtherance thereof, the Borrower
acknowledges and agree that (a) it and its Affiliates have relied and will continue to rely on the
advice of its and their own legal, regulatory, accounting and tax advisors for all matters relating
to the Credit Documents, the Obligations and otherwise and (b) neither it, nor any of its
Affiliates, has received, or has relied upon, the advice of the Administrative Agent, or any Lender
or any of their respective affiliates or advisors regarding matters of law (including securities
law), regulation, accounting or taxation.



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SIGNATURE PAGE OF AMENDED AND RESTATED

SENIOR SECURED CREDIT AGREEMENT





EXECUTED as of the date first referenced above.




BORROWER:




INTERSTATE OPERATING COMPANY, L.P.




	 	 	 	By:
Interstate Hotels & Resorts, Inc., its
general partner






By:




Name:




Title:



8



SIGNATURE PAGE OF AMENDED AND RESTATED

SENIOR SECURED CREDIT AGREEMENT





SOCIÉTÉ GÉNÉRALE, individually as a Lender and as
Administrative Agent and the Issuing Bank




By:




Thomas K. Day




Managing Director



9



SIGNATURE PAGE OF AMENDED AND RESTATED

SENIOR SECURED CREDIT AGREEMENT





By:


Name:




Title:




10