exv10w2






Exhibit 10.2




 

 




Published CUSIP Number: 70509WAA6




AMENDED AND RESTATED CREDIT AGREEMENT




Dated as of June 3, 2011



among

PEBBLEBROOK HOTEL, L.P.,

as the Borrower,



PEBBLEBROOK HOTEL TRUST,

as the Parent REIT and a Guarantor,



CERTAIN SUBSIDIARIES OF THE BORROWER,

as Guarantors,



BANK OF AMERICA, N.A.,

as Administrative Agent, Swing Line Lender

and

L/C Issuer,



and



The Other Lenders Party Hereto



US BANK NATIONAL ASSOCIATION,



as



Syndication Agent



RAYMOND JAMES BANK, FSB,



as



Documentation Agent



MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,



as



Sole Lead Arranger and Sole Book Runner



 

 












 









 
















TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	Section	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	1.	 	DEFINITIONS AND ACCOUNTING TERMS	 	 	1	 
	 
	 	1.01	 	Defined Terms	 	 	1	 
	 
	 	1.02	 	Other Interpretive Provisions	 	 	29	 
	 
	 	1.03	 	Accounting Terms	 	 	29	 
	 
	 	1.04	 	Rounding	 	 	30	 
	 
	 	1.05	 	Times of Day	 	 	30	 
	 
	 	1.06	 	Letter of Credit Amounts	 	 	30	 
	 
	 	1.07	 	Addition/Removal of Unencumbered Borrowing Base Properties	 	 	31	 
	 
	 	 	 	 	 	 	 	 
	2.	 	THE COMMITMENTS AND CREDIT EXTENSIONS	 	 	32	 
	 
	 	2.01	 	Committed Loans	 	 	32	 
	 
	 	2.02	 	Borrowings, Conversions and Continuations of Committed Loans	 	 	32	 
	 
	 	2.03	 	Letters of Credit	 	 	34	 
	 
	 	2.04	 	Swing Line Loans	 	 	42	 
	 
	 	2.05	 	Prepayments	 	 	44	 
	 
	 	2.06	 	Termination or Reduction of Commitments	 	 	45	 
	 
	 	2.07	 	Repayment of Loans	 	 	45	 
	 
	 	2.08	 	Interest	 	 	46	 
	 
	 	2.09	 	Fees	 	 	46	 
	 
	 	2.10	 	Computation of Interest and Fees; Retroactive Adjustments of Applicable Margin	 	 	47	 
	 
	 	2.11	 	Evidence of Debt	 	 	48	 
	 
	 	2.12	 	Payments Generally; Administrative Agent’s Clawback	 	 	48	 
	 
	 	2.13	 	Sharing of Payments by Lenders	 	 	50	 
	 
	 	2.14	 	Extension of Maturity Date	 	 	50	 
	 
	 	2.15	 	Increase in Commitments	 	 	51	 
	 
	 	2.16	 	Cash Collateral	 	 	53	 
	 
	 	2.17	 	Defaulting Lenders	 	 	54	 
	 
	 	 	 	 	 	 	 	 
	3.	 	TAXES, YIELD PROTECTION AND ILLEGALITY	 	 	55	 
	 
	 	3.01	 	Taxes	 	 	55	 
	 
	 	3.02	 	Illegality	 	 	59	 
	 
	 	3.03	 	Inability to Determine Rates	 	 	59	 
	 
	 	3.04	 	Increased Costs; Reserves on Eurodollar Rate Loans	 	 	60	 
	 
	 	3.05	 	Compensation for Losses	 	 	61	 
	 
	 	3.06	 	Mitigation Obligations; Replacement of Lenders	 	 	62	 
	 
	 	3.07	 	Survival	 	 	62	 
	 
	 	 	 	 	 	 	 	 
	4.	 	CONDITIONS PRECEDENT TO CREDIT EXTENSIONS	 	 	62	 
	 
	 	4.01	 	Conditions of Initial Credit Extension	 	 	62	 
	 
	 	4.02	 	Conditions to all Credit Extensions	 	 	64	 
	 
	 	 	 	 	 	 	 	 
	5.	 	REPRESENTATIONS AND WARRANTIES	 	 	65	 
	 
	 	5.01	 	Existence, Qualification and Power	 	 	65	 
	 
	 	5.02	 	Authorization; No Contravention	 	 	65	 
	 
	 	5.03	 	Governmental Authorization; Other Consents	 	 	66	 
	 
	 	5.04	 	Binding Effect	 	 	66	 






i









 






	 	 	 	 	 	 	 	 	 
	Section	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.05	 	Financial Statements; No Material Adverse Effect	 	 	66	 
	 
	 	5.06	 	Litigation	 	 	67	 
	 
	 	5.07	 	No Default	 	 	67	 
	 
	 	5.08	 	Ownership of Property; Liens; Investments	 	 	67	 
	 
	 	5.09	 	Environmental Compliance	 	 	68	 
	 
	 	5.10	 	Insurance	 	 	69	 
	 
	 	5.11	 	Taxes	 	 	69	 
	 
	 	5.12	 	ERISA Compliance	 	 	69	 
	 
	 	5.13	 	Subsidiaries; Equity Interests	 	 	70	 
	 
	 	5.14	 	Margin Regulations; Investment Company Act	 	 	71	 
	 
	 	5.15	 	Disclosure	 	 	71	 
	 
	 	5.16	 	Compliance with Laws	 	 	71	 
	 
	 	5.17	 	Taxpayer Identification Number	 	 	71	 
	 
	 	5.18	 	Intellectual Property; Licenses, Etc	 	 	71	 
	 
	 	5.19	 	Solvency	 	 	72	 
	 
	 	5.20	 	Casualty, Etc	 	 	72	 
	 
	 	5.21	 	Labor Matters	 	 	72	 
	 
	 	5.22	 	REIT Status	 	 	72	 
	 
	 	5.23	 	Unencumbered Borrowing Base Properties	 	 	72	 
	 
	 	 	 	 	 	 	 	 
	6.	 	AFFIRMATIVE COVENANTS	 	 	73	 
	 
	 	6.01	 	Financial Statements	 	 	73	 
	 
	 	6.02	 	Certificates; Other Information	 	 	73	 
	 
	 	6.03	 	Notices	 	 	76	 
	 
	 	6.04	 	Payment of Obligations	 	 	76	 
	 
	 	6.05	 	Preservation of Existence, Etc	 	 	76	 
	 
	 	6.06	 	Maintenance of Properties	 	 	77	 
	 
	 	6.07	 	Maintenance of Insurance	 	 	77	 
	 
	 	6.08	 	Compliance with Laws and Contractual Obligations	 	 	77	 
	 
	 	6.09	 	Books and Records	 	 	77	 
	 
	 	6.10	 	Inspection Rights	 	 	77	 
	 
	 	6.11	 	Use of Proceeds	 	 	77	 
	 
	 	6.12	 	Additional Guarantors	 	 	78	 
	 
	 	6.13	 	Further Assurances	 	 	78	 
	 
	 	6.14	 	Compliance with Terms of Approved Ground Leases; Material Easement Agreements.	 	 	78	 
	 
	 	6.15	 	Environmental Assessment Report	 	 	81	 
	 
	 	6.16	 	Additional Insurance Requirements for Unencumbered Borrowing Base Properties.	 	 	78	 
	 
	 	 	 	 	 	 	 	 
	7.	 	NEGATIVE COVENANTS	 	 	84	 
	 
	 	7.01	 	Liens	 	 	84	 
	 
	 	7.02	 	Investments	 	 	85	 
	 
	 	7.03	 	Indebtedness	 	 	87	 
	 
	 	7.04	 	Fundamental Changes	 	 	87	 
	 
	 	7.05	 	Dispositions	 	 	88	 
	 
	 	7.06	 	Restricted Payments	 	 	89	 
	 
	 	7.07	 	Change in Nature of Business	 	 	89	 
	 
	 	7.08	 	Transactions with Affiliates	 	 	89	 
	 
	 	7.09	 	Burdensome Agreements	 	 	90	 
	 
	 	7.10	 	Use of Proceeds	 	 	90	 






ii









 






	 	 	 	 	 	 	 	 	 
	Section	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.11	 	Financial Covenants	 	 	90	 
	 
	 	7.12	 	Capital Expenditures	 	 	91	 
	 
	 	7.13	 	Accounting Changes	 	 	91	 
	 
	 	7.14	 	Ownership of Subsidiaries; Certain Real Property Assets	 	 	91	 
	 
	 	7.15	 	Leases	 	 	92	 
	 
	 	7.16	 	Sale Leasebacks	 	 	92	 
	 
	 	7.17	 	Additional Unencumbered Borrowing Base Property Matters	 	 	92	 
	 
	 	 	 	 	 	 	 	 
	8.	 	EVENTS OF DEFAULT AND REMEDIES	 	 	92	 
	 
	 	8.01	 	Events of Default	 	 	92	 
	 
	 	8.02	 	Remedies Upon Event of Default	 	 	95	 
	 
	 	8.03	 	Application of Funds	 	 	95	 
	 
	 	 	 	 	 	 	 	 
	9.	 	ADMINISTRATIVE AGENT	 	 	96	 
	 
	 	9.01	 	Appointment and Authority	 	 	96	 
	 
	 	9.02	 	Rights as a Lender	 	 	96	 
	 
	 	9.03	 	Exculpatory Provisions	 	 	96	 
	 
	 	9.04	 	Reliance by Administrative Agent	 	 	97	 
	 
	 	9.05	 	Delegation of Duties	 	 	97	 
	 
	 	9.06	 	Resignation or Removal of Administrative Agent	 	 	98	 
	 
	 	9.07	 	Non-Reliance on Administrative Agent and Other Lenders	 	 	99	 
	 
	 	9.08	 	No Other Duties, Etc.	 	 	99	 
	 
	 	9.09	 	Administrative Agent May File Proofs of Claim	 	 	99	 
	 
	 	9.10	 	Guaranty Matters	 	 	100	 
	 
	 	 	 	 	 	 	 	 
	10.	 	MISCELLANEOUS	 	 	100	 
	 
	 	10.01	 	Amendments, Etc.	 	 	100	 
	 
	 	10.02	 	Notices; Effectiveness; Electronic Communication	 	 	101	 
	 
	 	10.03	 	No Waiver; Cumulative Remedies; Enforcement	 	 	103	 
	 
	 	10.04	 	Expenses; Indemnity; Damage Waiver	 	 	104	 
	 
	 	10.05	 	Payments Set Aside	 	 	106	 
	 
	 	10.06	 	Successors and Assigns	 	 	106	 
	 
	 	10.07	 	Treatment of Certain Information; Confidentiality	 	 	110	 
	 
	 	10.08	 	Right of Setoff	 	 	111	 
	 
	 	10.09	 	Interest Rate Limitation	 	 	111	 
	 
	 	10.10	 	Counterparts; Integration; Effectiveness	 	 	112	 
	 
	 	10.11	 	Survival of Representations and Warranties	 	 	112	 
	 
	 	10.12	 	Severability	 	 	112	 
	 
	 	10.13	 	Replacement of Lenders	 	 	112	 
	 
	 	10.14	 	Governing Law; Jurisdiction; Etc.	 	 	113	 
	 
	 	10.15	 	Waiver of Jury Trial	 	 	114	 
	 
	 	10.16	 	No Advisory or Fiduciary Responsibility	 	 	114	 
	 
	 	10.17	 	Electronic Execution of Assignments and Certain Other Documents	 	 	114	 
	 
	 	10.18	 	USA PATRIOT Act	 	 	115	 
	 
	 	10.19	 	Entire Agreement	 	 	115	 
	 
	 	10.20	 	Restatement of Original Credit Agreement	 	 	115	 
	 
	 	 	 	 	 	 	 	 
	11.	 	GUARANTY	 	 	115	 
	 
	 	11.01	 	The Guaranty	 	 	115	 
	 
	 	11.02	 	Obligations Unconditional	 	 	116	 
	 
	 	11.03	 	Reinstatement	 	 	117	 






iii









 






	 	 	 	 	 	 	 	 	 
	Section	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.04	 	Certain Waivers	 	 	117	 
	 
	 	11.05	 	Remedies	 	 	117	 
	 
	 	11.06	 	Rights of Contribution	 	 	117	 
	 
	 	11.07	 	Guaranty of Payment; Continuing Guaranty	 	 	118	 






iv









 






	 	 	 	 	 	 	 	 	 
	Section	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 






SCHEDULES




	 	 	 	 	 	 	 	 	 

	 
	 	2.01	 	Commitments and Applicable Percentages	 	 	 	 
	 
	 	5.05	 	Supplement to Interim Financial Statements	 	 	 	 
	 
	 	5.06	 	Litigation	 	 	 	 
	 
	 	5.08(b)	 	Existing Liens	 	 	 	 
	 
	 	5.08(c)	 	Existing Investments	 	 	 	 
	 
	 	5.09	 	Environmental Matters	 	 	 	 
	 
	 	5.10	 	Insurance	 	 	 	 
	 
	 	5.12(d)	 	Pension Plans	 	 	 	 
	 
	 	5.13(a)	 	Capital and Ownership Structure of Borrower and Subsidiaries	 	 	 	 
	 
	 	5.13(b)	 	Subsidiaries of Parent REIT, Borrower and Loan Parties	 	 	 	 
	 
	 	5.18	 	Intellectual Property Matters	 	 	 	 
	 
	 	5.22	 	Taxable REIT Subsidiaries	 	 	 	 
	 
	 	5.23(a)	 	Unencumbered Borrowing Base Properties	 	 	 	 
	 
	 	5.23(b)	 	Approved Managers	 	 	 	 
	 
	 	7.03	 	Existing Indebtedness	 	 	 	 
	 
	 	10.02	 	Administrative Agent’s Office; Certain Addresses for Notices	 	 	 	 






EXHIBITS




	 	 	 	 	 	 	 	 

	 
	 	Form of	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	A	 	Committed Loan Notice	 	 	 
	 
	 	B	 	Swing Line Loan Notice	 	 	 
	 
	 	C	 	Note	 	 	 
	 
	 	D	 	Compliance Certificate	 	 	 
	 
	 	E-1	 	Assignment and Assumption	 	 	 
	 
	 	E-2	 	Administrative Questionnaire	 	 	 
	 
	 	F	 	Joinder Agreement	 	 	 
	 
	 	G	 	Third Party Report Reliance Language	 	 	 







v










 





AMENDED AND RESTATED CREDIT AGREEMENT




     This AMENDED AND RESTATED CREDIT AGREEMENT (“Agreement”) is entered into as of June 3, 2011,
among PEBBLEBROOK HOTEL, L.P., a Delaware limited partnership (the “Borrower”), PEBBLEBROOK HOTEL
TRUST, a Maryland real estate investment trust (the “Parent REIT”), the other Persons party hereto
from time to time as Guarantors (as such term is defined herein), each lender from time to time
party hereto (collectively, the “Lenders” and individually, a “Lender”), and BANK OF AMERICA, N.A.,
as Administrative Agent, Swing Line Lender and L/C Issuer.



     The Borrower, Parent REIT, Administrative Agent, L/C Issuer, and certain Lenders were parties
to that certain Credit Agreement dated as of July 8, 2010 (the “Original Credit Agreement”).



     The Borrower, Parent REIT, Administrative Agent, L/C Issuer and Lenders desire to amend and
restate the Original Credit Agreement in its entirety.



     In consideration of the mutual covenants and agreements herein contained, the parties hereto
covenant and agree as follows:



1. DEFINITIONS AND ACCOUNTING TERMS




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



     “Acceleration” has the meaning specified in Section 8.02.



     “Adjusted Unrestricted Cash” means, on any date, an amount, not less than zero ($0), equal to
the Borrower’s Unrestricted Cash less $10,000,000.



     “Administrative Agent” means Bank of America in its capacity as administrative agent under any
of the Loan Documents, or any successor administrative agent.



     “Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate,
account as set forth on Schedule 10.02, or such other address or account as the Administrative
Agent may from time to time notify the Borrower and the Lenders.



     “Administrative Questionnaire” means an Administrative Questionnaire in substantially the form
of Exhibit E-2 or any other form approved by the Administrative Agent.



     “Affiliate” means, with respect to any Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under common Control with
the Person specified.



     “Aggregate Commitments” means the Commitments of all the Lenders.



     “Agreement” has the meaning specified in the introductory paragraph.



     “Applicable Laws” means, collectively, all applicable international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative
or judicial precedents or authorities, including the interpretation or administration thereof by
any Governmental Authority charged with the enforcement, interpretation or administration thereof,
and all applicable



1









 




administrative orders, directed duties, requests, licenses, authorizations and permits of, and
agreements with, any Governmental Authority, in each case whether or not having the force of law.




     “Applicable Margin” means the applicable percentage per annum set forth below determined by
reference to the Consolidated Leverage Ratio as set forth in the most recent Compliance Certificate
received by the Administrative Agent pursuant to Section 6.02(a):



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Eurodollar	 	Base Rate
	 	 	 	 	 	 	Rate Loans	 	Loans and
	 	 	Consolidated	 	and Letters	 	Swing Line
	Pricing Level	 	Leverage Ratio	 	of Credit	 	Loans
	I
	 	 	< 3.5x	 	 	 	2.50	%	 	 	1.50	%
	II
	 	≥3.5 and <4.5x	 	 	2.75	%	 	 	1.75	%
	III
	 	≥4.5x and <5.5x	 	 	3.00	%	 	 	2.00	%
	IV
	 	≥5.5x and ≦6.0x	 	 	3.25	%	 	 	2.25	%
	V1
	 	 	>6.0x	 	 	 	3.50	%	 	 	2.50	%






     Any increase or decrease in the Applicable Margin resulting from a change in the Consolidated
Leverage Ratio shall become effective as of the first Business Day immediately following the last
day of the fiscal quarter for which such Compliance Certificate has been timely delivered pursuant
to Section 6.02(a); provided, however, that if a Compliance Certificate is not delivered when due
in accordance with such Section, then, upon the request of the Required Lenders, Pricing Level IV
(V through June 30, 2012 if the Borrower consummates the proposed Investment in the New York JV)
shall apply as of the first Business Day after the last day of the fiscal quarter for which such
Compliance Certificate was required to have been delivered and shall remain in effect until the
date on which such Compliance Certificate is actually delivered. The Applicable Margin in effect
from the Closing Date until adjusted as set forth above shall be set at a Pricing Level determined
in accordance with the Compliance Certificate delivered as of the Closing Date.



     Notwithstanding anything to the contrary contained in this definition, the determination of
the Applicable Margin for any period shall be subject to the provisions of Section 2.10(b).



     “Applicable Percentage” means with respect to any Lender at any time, the percentage (carried
out to the ninth decimal place) of the Aggregate Commitments represented by such Lender’s
Commitment at such time, subject to adjustment as provided in Section 2.17. If the Commitment of
each Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have
been terminated pursuant to Section 8.02 or if the Aggregate Commitments have expired, then the
Applicable Percentage of each Lender shall be determined based on the Applicable Percentage of such
Lender most recently in effect, giving effect to any subsequent assignments. The initial
Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01
or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as
applicable.



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





 




			
	1	 	Level V shall only be applicable on and after
the date that the Borrower consummates the Investment in the New York JV
through and including June 30, 2012.




2









 










     “Approved Ground Lease” means a ground lease that is in form and substance reasonably
acceptable to the Administrative Agent and Required Lenders (as evidenced by their approval of the
Unencumbered BBP Deliverables related to a proposed Unencumbered Borrowing Base Property that is
subject to a ground lease). The Monaco DC Ground Lease and the Argonaut Ground Lease are approved
as Approved Ground Leases.



     “Argonaut Ground Lease” means that certain Ground Lease dated October 16, 2000 between United
States Department of the Interior, National Park Service, as ground lessor, and Subsidiary TRS
Wildcats Owner LLC, assignee of Maritime Hotel Associates, L.P., as ground lessee.



     “Approved Manager” means any manager identified on Schedule 5.23(b) or any other manager that
is otherwise approved by the Administrative Agent and the Required Lenders, in each case who is
engaged to manage one or more Unencumbered Borrowing Base Properties pursuant to management
agreements, in form and substance reasonably acceptable to the Administrative Agent and the
Required Lenders, between the applicable manager and the TRS that has leased such Unencumbered
Borrowing Base Property from the owner thereof.



     “Arranger” means Merrill Lynch, Pierce, Fenner & Smith Incorporated, in its capacity as sole
lead arranger and sole book runner.



     “Assignee Group” means two (2) or more Eligible Assignees that are Affiliates of one another
or two (2) or more Approved Funds managed by the same investment advisor.



     “Assignment and Assumption” means an assignment and assumption entered into by a Lender and an
assignee (with the consent of any party whose consent is required by Section 10.06(b)), and
accepted by the Administrative Agent, in substantially the form of Exhibit E-1 or any other form
approved by the Administrative Agent.



     “Attributable Indebtedness” means, on any date, (a) in respect of any capital lease of any
Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared
as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the
capitalized amount of the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were
accounted for as a capital lease.



     “Audited Financial Statements” means the audited consolidated balance sheet of the
Consolidated Parties for the fiscal year ended December 31, 2010, and the related consolidated
statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the
Consolidated Parties, including the notes thereto.



     “Auto-Extension Letter of Credit” has the meaning specified in Section 2.03(b)(iii).



     “Availability Period” means the period from and including the Closing Date to the earliest of
(a) the Maturity Date, (b) the date of termination of the Aggregate Commitments pursuant to Section
2.06, and (c) the date of termination of the commitment of each Lender to make Loans and of the
obligation of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.



     “Bank of America” means Bank of America, N.A. and its successors.



     “Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the
Federal Funds Rate plus one-half of one percent (0.50%), (b) the rate of interest in effect for
such day as



3









 




publicly announced from time to time by Bank of America as its “prime rate,” and (c) the
Eurodollar Rate plus one percent (1%). The “prime rate” is a rate set by Bank of America based
upon various factors including Bank of America’s costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate. Any change in such prime rate announced by Bank of
America shall take effect at the opening of business on the day specified in the public
announcement of such change.




     “Base Rate Committed Loan” means a Committed Loan that is a Base Rate Loan.



     “Base Rate Loan” means a Loan that bears interest based on the Base Rate.



     “Borrower” has the meaning specified in the introductory paragraph.



     “Borrower Materials” has the meaning specified in Section 6.02.



     “Borrowing” means a Committed Borrowing or a Swing Line Borrowing, as the context may require.



     “Business Day” means any day other than a Saturday, Sunday or other day on which commercial
banks are authorized to close under the Applicable Laws of, or are in fact closed in, New York, New
York, Charlotte, North Carolina or Dallas, Texas and, if such day relates to any Eurodollar Rate
Loan, means any such day that is also a London Banking Day.



     “Calculation Period” means, as of any date of determination commencing with the delivery of
the Required Financial Information for the fiscal quarter ending March 31, 2011, the most recent
four (4) fiscal quarter period for which the Borrower has provided the Required Financial
Information; provided that, (a) notwithstanding the foregoing, calculations made with respect to
Required Financial Information for fiscal quarters ending prior to June 30, 2011 shall be based on
the period from April 1, 2010 through the end of the applicable fiscal quarter (with the calculated
amounts annualized to the extent the period from April 1, 2010 through the most-recently ended
fiscal quarter is not at least twelve (12) months); and (b) for calculations made on a Pro Forma
Basis, the amounts calculated for the applicable Calculation Period shall be adjusted as set forth
in Section 1.03(c), but shall otherwise relate to the applicable Calculation Period (as defined
above).



     “Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent,
for the benefit of the Administrative Agent, L/C Issuer or Swing Line Lender (as applicable) and
the Lenders, as collateral for L/C Obligations, Obligations in respect of Swing Line Loans, or
obligations of Lenders to fund participations in respect of either thereof (as the context may
require), cash or deposit account balances or, if the L/C Issuer or Swing Line Lender benefitting
from such collateral shall agree in its sole discretion, other credit support, in each case
pursuant to documentation in form and substance satisfactory to (a) the Administrative Agent and
(b) the L/C Issuer or the Swing Line Lender (as applicable). “Cash Collateral” shall have a meaning
correlative to the foregoing and shall include the proceeds of such cash collateral and other
credit support.



     “Change in Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change
in any law, rule, regulation or treaty or in the administration, interpretation or application
thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or
directive (whether or not having the force of law) by any Governmental Authority; provided that
notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests,



4









 




rules, guidelines or directives promulgated by the Bank for International settlements, the
Basel Committee on Banking Supervision (or any successor or similar authority) or the United States
regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a
“Change in Law,” regardless of the date enacted, adopted or issued.




     “Change of Control” means an event or series of events by which:




     (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or
its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other
fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or
group shall be deemed to have “beneficial ownership” of all securities that such person or
group has the right to acquire, whether such right is exercisable immediately or only after
the passage of time (such right, an “option right”)), directly or indirectly, of twenty-five
percent (25%) or more of the equity securities of the Borrower or Parent REIT entitled to
vote for members of the board of directors or equivalent governing body of the Borrower or
Parent REIT on a fully-diluted basis (and taking into account all such securities that such
person or group has the right to acquire pursuant to any option right);




     (b) during any period of twenty-four (24) consecutive months, a majority of the members
of the board of directors or other equivalent governing body of the Borrower or Parent REIT
cease to be composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or nomination to that
board or equivalent governing body was approved by individuals referred to in clause (i)
above constituting at the time of such election or nomination at least a majority of that
board or equivalent governing body or (iii) whose election or nomination to that board or
other equivalent governing body was approved by individuals referred to in clauses (i) and
(ii) above constituting at the time of such election or nomination at least a majority of
that board or equivalent governing body; or




     (c) the passage of thirty (30) days from the date upon which any Person or two (2) or
more Persons acting in concert shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation thereof, will result in its
or their acquisition of the power to exercise, directly or indirectly, a controlling
influence over the management or policies of the Borrower or Parent REIT, or control over
the equity securities of the Borrower or Parent REIT entitled to vote for members of the
board of directors or equivalent governing body of the Borrower or Parent REIT on a
fully-diluted basis (and taking into account all such securities that such Person or group
has the right to acquire pursuant to any option right) representing twenty-five percent
(25%) or more of the combined voting power of such securities.



     “Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied
or waived in accordance with Section 10.01.



     “Code” means the Internal Revenue Code of 1986.



     “Commitment” means, as to each Lender, its obligation to (a) make Committed Loans to the
Borrower pursuant to Section 2.01, (b) purchase participations in L/C Obligations, and (c) purchase
participations in Swing Line Loans, in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 or in the
Assignment and



5









 




Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount
may be adjusted from time to time in accordance with this Agreement.




     “Committed Borrowing” means a borrowing consisting of simultaneous Committed Loans of the same
Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the
Lenders pursuant to Section 2.01.



     “Committed Loan” has the meaning specified in Section 2.01.



     “Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a conversion of
Committed Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans,
pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.



     “Compliance Certificate” means a certificate substantially in the form of Exhibit D.



     “Conditional Approval Unencumbered BBP Deliverables” means, with respect to each Real Property
for which the Borrower seeks approval as an “Unencumbered Borrowing Base Property,” each of the
Unencumbered BBP Deliverables described in clauses (ii), (iv), (v), (vi), (vii), (viii), (x) and
(xi) of the definition of “Unencumbered BBP Deliverables.”



     “Consolidated Adjusted EBITDA” means, for any period, EBITDA less an annual replacement
reserve equal to four percent (4.0%) of gross property revenues.



     “Consolidated Fixed Charge Coverage Ratio” means, as of any date of determination, the ratio
of (a) Consolidated Adjusted EBITDA for the Calculation Period ending on such date to (b)
Consolidated Fixed Charges for such period.



     “Consolidated Fixed Charges” means, for any period, the sum of (a) Consolidated Interest
Charges for such period, plus (b) current scheduled principal payments on Consolidated Funded
Indebtedness for such period (including, for purposes hereof, current scheduled reductions in
commitments, but excluding any payment of principal under the Credit Documents and any “balloon”
payment or final payment at maturity that is significantly larger than the scheduled payments that
preceded it), plus (c) dividends and distributions paid in cash on preferred stock by the
Consolidated Parties on a consolidated basis and all Unconsolidated Affiliates, if any, for such
period, in each case, determined in accordance with GAAP; provided that, to the extent the
calculations under clauses (a), (b) and (c) above include amounts allocable to Unconsolidated
Affiliates, such calculations shall be without duplication and shall only include such amounts to
the extent attributable to any Unconsolidated Affiliate Interests (or, if greater, amounts that are
attributable to Consolidated Funded Indebtedness that is recourse to a Consolidated Party).



     “Consolidated Funded Indebtedness” means, as of any date of determination, without
duplication, the sum of (a) the outstanding principal amount of all obligations of the Consolidated
Parties on a consolidated basis, whether current or long-term, for borrowed money (including all
obligations hereunder and under the other Loan Documents) and all obligations of the Consolidated
Parties on a consolidated basis evidenced by bonds, debentures, notes, loan agreements or other
similar instruments, (b) all purchase money Indebtedness of the Consolidated Parties on a
consolidated basis, (c) all obligations of the Consolidated Parties on a consolidated basis arising
under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties,
surety bonds and similar instruments, (d) all obligations of the Consolidated Parties on a
consolidated basis in respect of forward purchase agreements or the deferred purchase price of any
property or services (other than trade accounts payable in the ordinary course of business), (e)
Attributable Indebtedness of the Consolidated Parties on a



6









 




consolidated basis in respect of capital leases and Synthetic Lease Obligations, (f) without
duplication, all Guarantees of the Consolidated Parties on a consolidated basis with respect to
outstanding Indebtedness of the types specified in clauses (a) through (e) above of Persons other
than the Parent REIT or any Subsidiary, (g) without duplication, all Indebtedness of the
Consolidated Parties on a consolidated basis of the types referred to in clauses (a) through (f)
above of any partnership or joint venture in which the Parent REIT or a Subsidiary is a general
partner or joint venturer, and (h) without duplication, the aggregate amount of Unconsolidated
Affiliate Funded Indebtedness for all Unconsolidated Affiliates.




     “Consolidated Interest Charges” means, for any period, the sum of (a) all interest, premium
payments, debt discount, fees, charges and related expenses of the Consolidated Parties on a
consolidated basis and all Unconsolidated Affiliates, in connection with borrowed money (including
capitalized interest) or in connection with the deferred purchase price of assets, in each case to
the extent treated as interest in accordance with GAAP, and (b) the portion of rent expense of the
Consolidated Parties on a consolidated basis and all Unconsolidated Affiliates with respect to such
period under capital leases that is treated as interest in accordance with GAAP; provided that, to
the extent the calculations under clauses (a) and (b) above include amounts allocable to
Unconsolidated Affiliates, such calculations shall be without duplication and shall only include
such amounts to the extent attributable to any Unconsolidated Affiliate Interests (or, if greater,
amounts that are attributable to Consolidated Funded Indebtedness that is recourse to a
Consolidated Party).



     “Consolidated Leverage Ratio” means, as of any date of determination, the ratio of (a)
Consolidated Funded Indebtedness less Adjusted Unrestricted Cash as of such date to (b) EBITDA for
the Calculation Period most recently ended.



     “Consolidated Net Income” means, for any period, the sum of (a) the net income of the
Consolidated Parties on a consolidated basis (excluding extraordinary gains, extraordinary losses
and gains and losses from the sale of assets) for such period, calculated in accordance with GAAP,
plus (b) without duplication, an amount equal to the aggregate of net income (excluding
extraordinary gains and extraordinary losses) for such period, calculated in accordance with GAAP,
of each Unconsolidated Affiliate multiplied by the respective Unconsolidated Affiliate Interest in
each such entity.



     “Consolidated Parties” means a collective reference to the Parent REIT and its consolidated
Subsidiaries; and “Consolidated Party” means any one of them.



     “Consolidated Recourse Secured Indebtedness” means, as of any date of determination, for the
Consolidated Parties on a consolidated basis and all Unconsolidated Affiliates, all Secured Debt
that is recourse to any Consolidated Party or any Unconsolidated Affiliate (except to the extent
such recourse is limited to customary non-recourse carve-outs); provided that, to the extent the
calculation of Secured Debt includes amounts allocable to Unconsolidated Affiliates, such
calculation shall be without duplication and shall only include such amounts to the extent
attributable to any Unconsolidated Affiliate Interests (or, if greater, amounts that are
attributable to Secured Debt that is recourse to a Consolidated Party).



     “Consolidated Secured Debt” means, as of any date of determination, for the Consolidated
Parties on a consolidated basis and all Unconsolidated Affiliates, all Secured Debt; provided that,
to the extent the calculation of Secured Debt includes amounts allocable to Unconsolidated
Affiliates, such calculation shall be without duplication and shall only include such amounts to
the extent attributable to any Unconsolidated Affiliate Interests (or, if greater, amounts that are
attributable to Secured Debt that is recourse to a Consolidated Party).



7









 





     “Consolidated Tangible Assets” means, as of any date of determination, for the Consolidated
Parties on a consolidated basis and all Unconsolidated Affiliates, the amount determined in
accordance with GAAP of all assets, minus the amount of all Intangible Assets, plus the amount of
accumulated depreciation; provided that, to the extent the calculation of foregoing amounts
includes amounts allocable to Unconsolidated Affiliates, such calculation shall be without
duplication and shall only include such amounts to the extent attributable to any Unconsolidated
Affiliate Interests.



     “Consolidated Tangible Net Worth” means, as of any date of determination, for the Consolidated
Parties on a consolidated basis and all Unconsolidated Affiliates, Shareholders’ Equity on that
date, minus the amount of Intangible Assets, plus the amount of accumulated depreciation; provided
that there shall be excluded from the calculation of “Consolidated Tangible Net Worth” any effects
resulting from the application of FASB ASC No. 715: Compensation — Retirement Benefits; provided,
further, that, to the extent the calculation of foregoing amounts includes amounts allocable to
Unconsolidated Affiliates, such calculation shall be without duplication and shall only include
such amounts to the extent attributable to any Unconsolidated Affiliate Interests.



     “Consolidated Unencumbered DSCR” means, as of any date of determination, the ratio of (a)
Mortgageability Cash Flow for the Calculation Period ending on such date to (b) Unsecured Debt
Service for such period.



     “Consolidated Unsecured Interest Coverage Ratio” means, as of any date of determination, the
ratio of (a) Net Operating Income from the Unencumbered Borrowing Base Properties for the
Calculation Period ending on such date to (b) Consolidated Interest Charges on Unsecured
Indebtedness for such period.



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



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



     “Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C Credit
Extension.



     “Credit Parties” means, collectively, the Administrative Agent, the Lenders, the L/C Issuer,
the Swing Line Lender, the Hedge Banks, each co-agent or sub-agent appointed by the Administrative
Agent from time to time pursuant to Section 9.05, and the other Persons to whom the Obligations are
owing from time to time; and “Credit Party” means any one of them.



     “DC Hotel Trust” means DC Hotel Trust, a Maryland real estate investment trust.



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



     “Default” means any event or condition that constitutes an Event of Default or that, with the
giving of any notice, the passage of time, or both, would be an Event of Default.



8









 





     “Default Rate” means (a) when used with respect to Obligations other than Letter of Credit
Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Margin, if any,
applicable to Base Rate Loans plus (iii) two percent (2.0%) per annum; provided, however, that with
respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest
rate (including any Applicable Margin) otherwise applicable to such Loan plus two percent (2.0%)
per annum, and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable
Margin plus two percent (2.0%) per annum.



     “Defaulting Lender” means, subject to Section 2.17(b), any Lender that, as determined by the
Administrative Agent, (a) has failed to perform any of its funding obligations hereunder, including
in respect of its Loans or participations in respect of Letters of Credit or Swing Line Loans,
within three (3) Business Days of the date required to be funded by it hereunder, (b) has notified
the Borrower, or the Administrative Agent or any Lender that it does not intend to comply with its
funding obligations or has made a public statement to that effect with respect to its funding
obligations hereunder or under other agreements in which it commits to extend credit, (c) has
failed, within three (3) Business Days after request by the Administrative Agent, to confirm in a
manner satisfactory to the Administrative Agent that it will comply with its funding obligations,
or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a
proceeding under any Debtor Relief Law, (ii) had a receiver, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with reorganization or liquidation
of its business or a custodian appointed for it, or (iii) taken any action in furtherance of, or
indicated its consent to, approval of or acquiescence in any such proceeding or appointment;
provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or
acquisition of any equity interest in that Lender or any direct or indirect parent company thereof
by a Governmental Authority.



     “Disposition” or “Dispose” means the sale, transfer, license, lease (excluding the lease of
any Unencumbered Borrowing Base Property and personal property assets related thereto to any TRS
pursuant to a form of Lease approved by the Administrative Agent, in its reasonable discretion) or
other disposition (including any sale and leaseback transaction) of any property by any Person,
including any sale, assignment, transfer or other disposal, with or without recourse, of any notes
or accounts receivable or any rights and claims associated therewith.



     “Dollar” and “$” mean lawful money of the United States.



     “Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political
subdivision of the United States.



     “EBITDA” means, for any period, the sum of (a) an amount equal to Consolidated Net Income for
such period plus (b) the following to the extent deducted in calculating such Consolidated Net
Income: (i) Consolidated Interest Charges for such period, (ii) the provision for Federal, state,
local and foreign income taxes payable by the Consolidated Parties and Unconsolidated Affiliates
for such period, (iii) depreciation and amortization expense of the Consolidated Parties and
Unconsolidated Affiliates, (iv) other non-recurring expenses of the Consolidated Parties and
Unconsolidated Affiliates reducing such Consolidated Net Income which do not represent a cash item
in such period or any future period, and (v) without duplication of any of the foregoing, amounts
deducted from net income as a result of pre-funded fees or expenses incurred in connection with
acquisitions permitted under the Loan Documents that can no longer be capitalized due to FAS 141R
Changes and charges relating to the under-accrual of earn outs due to the FAS 141R Changes, minus
(c) the following to the extent included in calculating such Consolidated Net Income: (i) Federal,
state, local and foreign income tax credits of the Consolidated Parties and Unconsolidated
Affiliates for such period and (ii) all non-cash items increasing Consolidated Net Income for such
period; provided that, to the extent the calculations under clauses (a), (b) and (c) above include
amounts allocable to Unconsolidated Affiliates, such calculations shall be without



9









 




duplication and shall only include such amounts to the extent attributable to any
Unconsolidated Affiliate Interests.




     “Eligible Assignee” means any Person that meets the requirements to be an assignee under
Section 10.06(b)(iii) and (v) (subject to such consents, if any, as may be required under Section
10.06(b)(iii)).



     “Environmental Laws” means any and all applicable Federal, state, local, and foreign statutes,
laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or Governmental Authority restrictions relating to pollution and
the protection of the environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to waste or public
systems.



     “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly
resulting from or based upon (a) violation of any Environmental Laws, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure
to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.



     “Equity Interests” means, with respect to any Person, all of the shares of capital stock of
(or other ownership or profit interests in) such Person, all of the warrants, options or other
rights for the purchase or acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person
or warrants, rights or options for the purchase or acquisition from such Person of such shares (or
such other interests), and all of the other ownership or profit interests in such Person (including
partnership, member or trust interests therein), whether voting or nonvoting, and whether or not
such shares, warrants, options, rights or other interests are outstanding on any date of
determination.



     “Equity Issuance” means the issuance or sale by any Person of any of its Equity Interests or
any capital contribution to such Person by any holder of its Equity Interests.



     “ERISA” means the Employee Retirement Income Security Act of 1974.



     “ERISA Affiliate” means any trade or business (whether or not incorporated) under common
control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections
414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).



     “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal
of the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during
a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of
ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing
of a notice of intent to terminate a Pension Plan or the treatment of a Pension Plan amendment as a
termination under Section 4041 or 4041A of ERISA; (e) the institution by the PBGC of proceedings to
terminate a Pension Plan; (f) any event or condition which constitutes grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan;
(g) the determination that any Pension Plan is



10









 




considered an at-risk plan or a plan in endangered or critical status within the meaning of
Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; or (h) the imposition
of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.




     “Eurodollar Rate” means:




     (a) for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum
equal to (i) the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by
Reuters (or such other commercially available source providing quotations of BBA LIBOR as
may be designated by the Administrative Agent from time to time) at approximately 11:00
a.m., London time, two (2) London Banking Days prior to the commencement of such Interest
Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period, or (ii) if such rate is not available at such time
for any reason, the rate per annum determined by the Administrative Agent to be the rate at
which deposits in Dollars for delivery on the first day of such Interest Period in same day
funds in the approximate amount of the Eurodollar Rate Loan being made, continued or
converted and with a term equivalent to such Interest Period would be offered by Bank of
America’s London Branch to major banks in the London interbank eurodollar market at their
request at approximately 11:00 a.m. (London time) two (2) London Banking Days prior to the
commencement of such Interest Period; and




     (b) for any interest calculation with respect to a Base Rate Loan on any date, the rate
per annum equal to (i) BBA LIBOR, at approximately 11:00 a.m., London time determined two
(2) London Banking Days prior to such date for Dollar deposits being delivered in the London
interbank eurodollar market for a term of one month commencing that day, or (ii) if such
published rate is not available at such time for any reason, the rate per annum determined
by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the
date of determination in same day funds in the approximate amount of the Base Rate Loan
being made or maintained and with a term equal to one month would be offered by Bank of
America’s London Branch to major banks in the London interbank eurodollar market at their
request at the date and time of determination.



     “Eurodollar Rate Loan” means a Committed Loan that bears interest at a rate based on clause
(a) of the definition of Eurodollar Rate.



     “Event of Default” has the meaning specified in Section 8.01.



     “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the L/C Issuer
or any other recipient of any payment to be made by or on account of any obligation of the Borrower
hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and
franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political
subdivision thereof) under the Applicable Laws of which such recipient is organized or in which its
principal office is located or with which it has a connection (other than any such connection
resulting, in whole or in part, from its having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or any other Loan Document) or, in the case
of any Lender, in which its applicable Lending Office is located, (b) any branch profits taxes
imposed by the United States or any similar tax imposed by any other jurisdiction in which the
Borrower is located, (c) any backup withholding tax that is required by the Code to be withheld
from amounts payable to a Lender, and (d) in the case of a Foreign Lender (other than an assignee
pursuant to a request by the Borrower under Section 10.13), any United States withholding tax that
(i) is required to be imposed on amounts payable to such Foreign Lender pursuant to the Applicable
Laws in force at the time such Foreign Lender becomes a party hereto (or



11









 




designates a new Lending Office) or (ii) is attributable to such Foreign Lender’s failure or
inability (other than as a result of a Change in Law) to comply with Section 3.01(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation
of a new Lending Office (or assignment), to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to Section 3.01(a)(ii) or 3.01(c).




     “Extended Maturity Date” has the meaning specified in Section 2.14(b).



     “FAS 141R Changes” means those changes made to a buyer’s accounting practices by the Financial
Accounting Standards Board’s Statement of Financial Accounting Standard No. 141R, Business
Combinations, which is effective for annual reporting periods that begin in calendar year 2009.



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



     “Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate (rounded upward, if necessary, to a whole multiple of one one-hundredth of one percent
(1/100 of 1%)) charged to Bank of America on such day on such transactions as determined by the
Administrative Agent.



     “Fee Letter” means the letter agreement, dated April 4, 2011, among the Parent REIT, the
Borrower, the Administrative Agent and the Arranger.



     “FFO Distribution Allowance” means, for any fiscal year of the Consolidated Parties, an amount
equal to ninety-five percent (95%) of Funds From Operations for such fiscal year.



     “Foreign Lender” means any Lender that is organized under the Applicable Laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes (including such a
Lender when acting in the capacity of the L/C Issuer). For purposes of this definition, the United
States, each State thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.



     “FRB” means the Board of Governors of the Federal Reserve System of the United States.



     “Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to the
L/C Issuer, such Defaulting Lender’s Applicable Percentage of the outstanding L/C Obligations other
than L/C Obligations as to which such Defaulting Lender’s participation obligation has been
reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b)
with respect to the Swing Line Lender, such Defaulting Lender’s Applicable Percentage of Swing Line
Loans other than Swing Line Loans as to which such Defaulting Lender’s participation obligation has
been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.



     “Fully Satisfied” means, with respect to the Obligations as of any date, that, as of such
date, (a) all principal of and interest accrued to such date which constitute Obligations shall
have been irrevocably paid in full in cash, (b) all fees, expenses and other amounts then due and
payable which constitute Obligations shall have been irrevocably paid in cash, (c) all outstanding
Letters of Credit shall have been (i) terminated, (ii) fully irrevocably Cash Collateralized or
(iii) secured by one or more letters



12









 




of credit on
terms and conditions, and with one or more financial institutions, satisfactory to the L/C
Issuer and (d) the Commitments shall have expired or been terminated in full (in each case, other
than inchoate indemnification liabilities arising under the Loan Documents).




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



     “Funds From Operations” means, with respect to the immediately prior fiscal quarter period,
Consolidated Net Income, plus depreciation and amortization and after adjustments for
unconsolidated partnerships and joint ventures as hereafter provided; provided that, to the extent
such calculations include amounts allocable to Unconsolidated Affiliates, such calculations shall
be without duplication and shall only include such amounts to the extent attributable to any
Unconsolidated Affiliate Interests. Without limiting the foregoing, notwithstanding contrary
treatment under GAAP, for purposes hereof, (a) “Funds From Operations” shall include, and be
adjusted to take into account, (i) the Parent REIT’s interests in unconsolidated partnerships and
joint ventures, on the same basis as consolidated partnerships and subsidiaries, as provided in the
“white paper” issued in April 2002 by the National Association of Real Estate Investment Trusts, as
may be amended from time to time, and (ii) amounts deducted from net income as a result of
pre-funded fees or expenses incurred in connection with acquisitions permitted under the Loan
Documents that can no longer be capitalized due to FAS 141R Changes and charges relating to the
under-accrual of earn outs due to the FAS 141R Changes, and (b) net income (or loss) of the
Consolidated Parties on a consolidated basis shall not include gains (or, if applicable, losses)
resulting from or in connection with (i) restructuring of indebtedness, (ii) sales of property,
(iii) sales or redemptions of preferred stock or (iv) non-cash asset impairment charges.



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



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



     “Guarantee” means, as to any Person: (a) any obligation, contingent or otherwise, of such
Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other
obligation payable or performable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or services for the purpose of
assuring the obligee in respect of such Indebtedness or other obligation of the payment or
performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of income or cash flow of
the primary obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation, (iv) to guaranty to any Person rental income levels (or shortfalls) or re-tenanting
costs (including tenant improvements, moving expenses, lease commissions and any other costs
associated with procuring new tenants); provided that such obligations shall be determined to be
equal to the maximum potential amount of the payments due from the Person guaranteeing the
applicable rental income



13









 




levels over the term of the applicable lease or (v) entered into for the purpose of assuring
in any other manner the obligee in respect of such Indebtedness or other obligation of the payment
or performance thereof or to protect such obligee against loss in respect thereof (in whole or in
part); or (b) any lien on any assets of such Person securing any Indebtedness or other obligation
of any primary obligor, whether or not such Indebtedness or other obligation is assumed by such
Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any
such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation, or portion thereof, in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof as determined by the guaranteeing Person in good faith; provided that, to the
extent any Guarantee is limited by its terms, then the amount of such Guarantee shall be deemed to
be the stated or determinable amount of such Guarantee. The term “Guarantee” as a verb has a
corresponding meaning.




     “Guarantors” means, collectively, the Parent REIT, all Subsidiaries of the Borrower as of the
Closing Date and as identified on the signature pages hereto as a “Guarantor” as of the Closing
Date (excluding all Non-Guarantor Subsidiaries as of the Closing Date), and each Person that is
required to be a Guarantor pursuant to Section 6.12 (including any Subsidiary that owns an
Unencumbered Borrowing Base Property), unless such subsidiary is a Non-Guarantor Subsidiary, in
each case together with their successors and permitted assigns.



     “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Laws.



     “Hedge Bank” means any Lender or Affiliate of a Lender, in its capacity as a party to a Swap
Contract that is not otherwise prohibited under Section 6 or 7.



     “Immaterial Subsidiary” means any Subsidiary whose assets constitute less than one percent
(1%) of Consolidated Tangible Assets; provided that if at any time the aggregate Consolidated
Tangible Assets of the “Immaterial Subsidiaries” exceeds ten percent (10%) of all Consolidated
Tangible Assets, then the Borrower shall designate certain “Immaterial Subsidiaries” as Guarantors
such that the aggregate Consolidated Tangible Assets of the “Immaterial Subsidiaries” which are not
Guarantors does not exceed ten percent (10%) of all Consolidated Tangible Assets.



     “Implied Loan Amount” means, as of any date, the amount that would result in a Consolidated
Unencumbered DSCR, after giving effect to all Credit Extensions on such date, equal to the minimum
Consolidated Unencumbered DSCR required as of such date pursuant to Section 7.11(e).



     “Increase Effective Date” has the meaning given to such term in Section 2.15(d).



     “Indebtedness” means, as to any Person at a particular time, without duplication, all of the
following, whether or not included as indebtedness or liabilities in accordance with GAAP:




     (a) all obligations of such Person for borrowed money and all obligations of such
Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;




     (b) all direct or contingent obligations of such Person arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and
similar instruments;



14









 






     (c) net obligations of such Person under any Swap Contract;




     (d) all obligations of such Person to pay the deferred purchase price of property or
services (other than trade accounts payable incurred in the ordinary course of business and,
in each case, not overdue by more than ninety (90) days after such trade account payable was
created, except to the extent that any such trade payables are being disputed in good
faith);




     (e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property
owned or being purchased by such Person (including indebtedness arising under conditional
sales or other title retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse;




     (f) capital leases and Synthetic Lease Obligations;




     (g) all obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Equity Interest in such Person or any other Person,
valued, in the case of a redeemable preferred interest, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends; and




     (h) all Guarantees of such Person in respect of any of the foregoing.



     For all purposes hereof, the Indebtedness of any Person shall include, without duplication,
the Indebtedness of any partnership or joint venture in which such Person is a general partner or a
joint venturer. The amount of any net obligation under any Swap Contract on any date shall be
deemed to be the Swap Termination Value thereof as of such date. The amount of any capital lease
or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.



     “Indemnified Taxes” means Taxes other than Excluded Taxes.



     “Indemnitees” has the meaning specified in Section 10.04(b).



     “Information” has the meaning specified in Section 10.07.



     “Initial Maturity Date” has the meaning specified in Section 2.14(a).



     “Intangible Assets” means assets that are considered to be intangible assets under GAAP,
including customer lists, goodwill, computer software, copyrights, trade names, trademarks,
patents, franchises, licenses, unamortized deferred charges, unamortized debt discount and
capitalized research and development costs.



     “Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan, the last day of
each Interest Period applicable to such Loan and the Maturity Date; provided, however, that if any
Interest Period for a Eurodollar Rate Loan exceeds three (3) months, the respective dates that fall
every three (3) months after the beginning of such Interest Period shall also be Interest Payment
Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the last Business Day of
each March, June, September and December and the Maturity Date.



     “Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the date
such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and
ending on the date fourteen (14) days (to the extent each of the Lenders are able to provide a
Eurodollar



15









 




Rate Loan for such period) or one (1), two (2), three (3) or six (6) months thereafter, as
selected by the Borrower in its Committed Loan Notice; provided that:





     (a) any Interest Period that would otherwise end on a day that is not a Business Day
shall be extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the next preceding
Business Day;




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




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



     “Investment” means, as to any Person, any direct or indirect acquisition or investment by such
Person, whether by means of (a) the purchase or other acquisition of capital stock or other
securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or
assumption of debt of, or purchase or other acquisition of any other debt or equity participation
or interest in, another Person, including any partnership or joint venture interest in such other
Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other
Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit. For purposes of covenant compliance,
the amount of any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.



     “IP Rights” has the meaning specified in Section 5.18.



     “ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998”
published by the Institute of International Banking Law & Practice, Inc. (or such later version
thereof as may be in effect at the time of issuance).



     “Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit
Application, and any other document, agreement and instrument entered into by the L/C Issuer and
the Borrower (or any Subsidiary) or in favor of the L/C Issuer and relating to such Letter of
Credit.



     “Joinder Agreement” means a Joinder Agreement substantially in the form of Exhibit F, executed
and delivered by a new Guarantor in accordance with the provisions of Section 6.12.



     “L/C Advance” means, with respect to each Lender, such Lender’s funding of its participation
in any L/C Borrowing in accordance with its Applicable Percentage.



     “L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of
Credit which has not been reimbursed on the date when made or refinanced as a Committed Borrowing.



     “L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or
extension of the expiry date thereof, or the increase of the amount thereof.



     “L/C Issuer” means Bank of America in its capacity as issuer of Letters of Credit hereunder,
or any successor issuer of Letters of Credit hereunder in the event that Bank of America ceases
(for whatever reason) to act in such capacity, or any other Lender (with the consent of the
Administrative Agent, in its sole discretion) as an issuer of Letters of Credit hereunder.



16









 





     “L/C Obligations” means, as at any date of determination, the aggregate amount available to be
drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts,
including all L/C Borrowings. For purposes of computing the amount available to be drawn under any
Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with
Section 1.06. For all purposes of this Agreement, if on any date of determination a Letter of
Credit has expired by its terms but any amount may still be drawn thereunder by reason of the
operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the
amount so remaining available to be drawn.



     “Lease” means a lease, sublease, license, concession agreement or other agreement providing
for the use or occupancy of any portion of any Real Property (and any personal property related
thereto that is covered by such lease, sublease, license, concession agreement or other agreement)
owned or ground leased by any Loan Party, including all amendments, supplements, restatements,
assignments and other modifications thereto.



     “Lender” has the meaning specified in the introductory paragraph and, as the context requires,
includes the Swing Line Lender.



     “Lending Office” means, as to any Lender, the office or offices of such Lender described as
such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may
from time to time notify the Borrower and the Administrative Agent.



     “Letter of Credit” means any letter of credit issued hereunder. A Letter of Credit may be a
standby letter of credit only.



     “Letter of Credit Application” means an application and agreement for the issuance or
amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.



     “Letter of Credit Expiration Date” means the day that is thirty (30) days prior to the
Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business
Day).



     “Letter of Credit Fee” has the meaning specified in Section 2.03(i).



     “Letter of Credit Sublimit” means an amount equal to $30,000,000. The Letter of Credit
Sublimit is part of, and not in addition to, the Aggregate Commitments.



     “Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or other security interest
or preferential arrangement in the nature of a security interest of any kind or nature whatsoever
(including any conditional sale or other title retention agreement, any easement, right of way or
other encumbrance on title to real property, and any financing lease having substantially the same
economic effect as any of the foregoing).



     “Loan” means an extension of credit by a Lender to the Borrower under Section 2 in the form of
a Committed Loan or a Swing Line Loan.



     “Loan Documents” means this Agreement, each Note, each Issuer Document, any agreement creating
or perfecting rights in Cash Collateral pursuant to the provisions of Section 2.16, and the Fee
Letter and “Loan Document” means any of the same individually.



     “Loan Parties” means, collectively, the Borrower and each Guarantor.



17









 





     “London Banking Day” means any day on which dealings in Dollar deposits are conducted by and
between banks in the London interbank eurodollar market.



     “Major MSA” means the metropolitan statistical area of any of the following: (a) New York
City, New York; (b) Chicago, Illinois; (c) Washington, DC; (d) Los Angeles, California (excluding
Santa Monica, California); (e) Boston, Massachusetts; and (f) San Francisco, California.



     “Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect
upon, the operations, business, properties, liabilities (actual or contingent) or condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of the Borrower and the other Loan Parties taken as a whole to perform
their respective obligations under any Loan Document; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to
which it is a party.



     “Material Lease” shall mean as to any Unencumbered Borrowing Base Property (a) any Lease of
such Unencumbered Borrowing Base Property (and any personal property assets related thereto)
between the applicable Loan Party that owns such Unencumbered Borrowing Base Property and any TRS,
(b) any Lease which, individually or when aggregated with all other Leases at such Unencumbered
Borrowing Base Property with the same tenant or any of its Affiliates, accounts for ten percent
(10%) or more of such Unencumbered Borrowing Base Property’s revenue, or (c) any Lease which
contains any option, offer, right of first refusal or other similar entitlement to acquire all or
any portion of the Property.



     “Maturity Date” means (a) the Initial Maturity Date and (b) if maturity is extended pursuant
to Section 2.14, the Extended Maturity Date; provided, however, that, in each case, if such date is
not a Business Day, the Maturity Date shall be the next preceding Business Day.



     “Monaco DC Ground Lease” means that certain ground lease dated December 1, 1999 between the
United States of America, as lessor, and Subsidiary TRS Jayhawk Owner LLC, assignee from Tariff
Building Associates, L.P., lessee.



     “Mortgageability Cash Flow” means, as of any date of calculation, the sum of the Net Operating
Incomes from each of the Unencumbered Borrowing Base Properties for the most recently-ended
Calculation Period (and, if specifically required, including adjustments for subsequent events or
conditions on a Pro Forma Basis); provided that following the fiscal quarter ended June 30, 2012,
there shall be excluded from the calculation of Mortgageability Cash Flow: (a) any excess above
forty percent (40%) of aggregate Mortgageability Cash Flow from any one Major MSA and (b) any
excess above thirty-three percent (33%) of aggregate Mortgageability Cash Flow from any one Other
MSA.



     “Multiemployer Plan” means any employee benefit plan of the type described in Section
4001(a)(3) of ERISA that is subject to Title IV of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding five (5) plan years,
has made or been obligated to make contributions.



     “Multiple Employer Plan” means any employee benefit plan which has two (2) or more
contributing sponsors (including the Borrower or any ERISA Affiliate) at least two (2) of whom are
not under common control, as such a plan is described in Section 4064 of ERISA.



     “Net Operating Income” means, with respect to any Unencumbered Borrowing Base Property and for
the most recently ended Calculation Period, an amount equal to (a) the aggregate gross revenues
from the operations of such Unencumbered Borrowing Base Property during the applicable Calculation
Period, minus (b) the sum of (i) all expenses and other proper charges incurred in connection with
the



18









 




operation of such Unencumbered Borrowing Base Property during such period pro-rated as
appropriate (including real estate taxes, but excluding any management fees, debt service charges,
income taxes, depreciation, amortization and other non-cash expenses), and (ii) a base management
fee that is the greater of three percent (3.0%) of the aggregate revenues from the operations of
such Unencumbered Borrowing Base Property during such period or actual management fees paid and
(iii) an annual replacement reserve equal to four percent (4.0%) of the aggregate revenues from the
operations of such Unencumbered Borrowing Base Property.




     “Net Proceeds” means, with respect to any Equity Issuance by any Consolidated Party, the
amount of cash received by such Consolidated Party in connection with any such transaction after
deducting therefrom the aggregate, without duplication, of the following amounts to the extent
properly attributable to such transaction and such amounts are usual, customary, and reasonable:
(a) brokerage commissions; (b) attorneys’ fees; (c) finder’s fees; (d) financial advisory fees; (e)
accounting fees; (f) underwriting fees; (g) investment banking fees; and (h) other commissions,
costs, fees, expenses and disbursements related to such Equity Issuance, in each case to the extent
paid or payable by such Consolidated Party.



     “New York JV” means that certain joint venture, as previously disclosed to the Lenders, which
owns six (6) real properties located in the borough of Manhattan, New York, New York.



     “Non-Extension Notice Date” has the meaning specified in Section 2.03(b)(iii).



     “Non-Guarantor Subsidiary” means any Subsidiary (whether direct or indirect) of the Borrower,
other than any Subsidiary which owns an Unencumbered Borrowing Base Property or any Subsidiary
which owns any of the Equity Interests of any such Subsidiary, which (a) is a TRS; (b) is DC Hotel
Trust; (c) is (i) formed for or converted to the specific purpose of holding title to Real Property
assets which are collateral for Indebtedness owing or to be owed by such Subsidiary, provided that
such Indebtedness must be incurred or assumed within ninety (90) days (or such longer period as the
Administrative Agent may agree in writing) of such formation or conversion or such Subsidiary shall
cease to qualify as a Non-Guarantor Subsidiary, and (ii) expressly prohibited in writing from
guaranteeing Indebtedness of any other person or entity pursuant to (A) a provision in any
document, instrument or agreement evidencing such Indebtedness of such Subsidiary or (B) a
provision of such Subsidiary’s Organization Documents, in each case, which provision was included
in such Organization Document or such other document, instrument or agreement at the request of the
applicable third party creditor and as an express condition to the extension or assumption of such
Indebtedness; provided that a Subsidiary meeting the requirements set forth in this clause (c)
shall only remain a “Non-Guarantor Subsidiary” for so long as (1) each of the foregoing
requirements set forth in this clause (c) are satisfied, (2) such Subsidiary does not guarantee any
other Indebtedness and (3) the Indebtedness with respect to which the restrictions noted in clause
(c) (ii) are imposed remains outstanding; (d)(i) becomes a Subsidiary following the Closing Date,
(ii) is not a Wholly Owned Subsidiary of the Borrower, and (iii) with respect to which the Borrower
and its Affiliates, as applicable, do not have sufficient voting power to cause such Subsidiary to
become a Guarantor hereunder; or (e) is an Immaterial Subsidiary.



     “Note” means a promissory note made by the Borrower in favor of a Lender evidencing Loans made
by such Lender, substantially in the form of Exhibit C.



     “Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties
of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan or Letter
of Credit, whether direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor



19









 




Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such
interest and fees are allowed claims in such proceeding.




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



     “Original Credit Agreement” has the meaning specified in the introductory paragraph.



     “Other MSA” means any metropolitan statistical area other than a Major MSA. For the avoidance
of doubt, Santa Monica, California shall constitute an Other MSA.



     “Other Taxes” means all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies (other than Excluded Taxes) arising from any payment made
hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Loan Document.



     “Outstanding Amount” means (a) with respect to Committed Loans and Swing Line Loans on any
date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and
prepayments or repayments of Committed Loans and Swing Line Loans, as the case may be, occurring on
such date; and (b) with respect to any L/C Obligations on any date, the amount of such L/C
Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and
any other changes in the aggregate amount of the L/C Obligations as of such date, including as a
result of any reimbursements by the Borrower of Unreimbursed Amounts.



     “Parent REIT” has the meaning specified in the introductory paragraph.



     “Participant” has the meaning specified in Section 10.06(d).



     “PBGC” means the Pension Benefit Guaranty Corporation.



     “Pebblebrook Hotel Lessee” means Pebblebrook Hotel Lessee, Inc., a Delaware corporation, and
its permitted successors.



     “Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section
3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is
sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any
ERISA Affiliate contributes or has an obligation to contribute, or in the case of a Multiple
Employer Plan, has made contributions at any time during the immediately preceding five (5) plan
years.



     “Permitted Liens” has the meaning specified in Section 7.01.



     “Person” means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other entity.



20









 





     “Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA)
other than a Multiemployer Plan established by the Borrower or, with respect to any such plan that
is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.



     “Platform” has the meaning specified in Section 6.02.



     “Pro Forma Basis” means, for purposes of calculating (utilizing the principles set forth in
Section 1.03(c)) the Implied Loan Amount and compliance with each of the financial covenants set
forth in Section 7.11 in respect of a proposed transaction, that such transaction shall be deemed
to have occurred as of the first day of the four (4) fiscal-quarter period ending as of the most
recent fiscal quarter end preceding the date of such transaction with respect to which the
Administrative Agent has received the Required Financial Information. As used herein,
“transaction” shall mean (a) any incurrence or assumption of Indebtedness as referred to in Section
7.03(f), (b) any removal of an Unencumbered Borrowing Base Property from qualification as such
pursuant to Section 7.05(a) or (b) or any other Disposition as referred to in Section 7.05, or (c)
any acquisition of any Person (whether by merger or otherwise) or other property. In connection
with any calculation relating to the Implied Loan Amount or the financial covenants set forth in
Section 7.11 upon giving effect to a transaction on a Pro Forma Basis:




     (i) for purposes of any such calculation in respect of any incurrence or assumption of
Indebtedness as referred to in Section 7.03(f), any Indebtedness which is retired in
connection with such incurrence or assumption shall be excluded and deemed to have been
retired as of the first day of the applicable period;




     (ii) for purposes of any such calculation in respect of any removal of an Unencumbered
Borrowing Base Property from qualification as such pursuant to Section 7.05 or any other
Disposition as referred to in Section 7.05, (A) income statement items (whether positive or
negative) attributable to the Person or property disposed of shall be excluded, (B) any
Indebtedness which is retired in connection with such transaction shall be excluded and
deemed to have been retired as of the first day of the applicable period, and (C) pro forma
adjustments shall be included to the extent that such adjustments would give effect to
events that are (1) directly attributable to such transaction, (2) expected to have a
continuing impact on the Consolidated Parties and (3) factually supportable (in the
reasonable judgment of the Administrative Agent); and




     (iii) for purposes of any such calculation in respect of any acquisition of any Person
(whether by merger or otherwise) or other property, (A) income statement items (whether
positive or negative) and capital expenditures attributable to the Person or property
acquired shall be deemed to be included as of the first day of the applicable period, and
(B) pro forma adjustments (with the calculated amounts annualized to the extent the period
from the date of such acquisition through the most-recently ended fiscal quarter is not at
least twelve (12) months or four (4) fiscal quarters, in the case of any applicable period
that is based on twelve months or four (4) fiscal quarters) shall be included to the extent
that such adjustments would give effect to events that are (1) directly attributable to such
transaction, (2) expected to have a continuing impact on the Consolidated Parties and (3)
factually supportable (in the reasonable judgment of the Administrative Agent).



     “Public Lender” has the meaning specified in Section 6.02.



     “QRS” means a Person qualifying for treatment either as a “qualified REIT subsidiary” under
Section 856(i) of the Code, or as an entity disregarded as an entity separate from its owner under
Treasury Regulations under Section 7701 of the Code.



21









 





     “Register” has the meaning specified in Section 10.06(c).



     “Real Properties” means, at any time, a collective reference to each of the facilities and
real properties owned or leased by the Borrower or any other Subsidiary or in which any such Person
has an interest at such time; and “Real Property” means any one of such Real Properties.



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



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



     “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than
events for which the 30 day notice period has been waived.



     “Request for Credit Extension” means (a) with respect to a Borrowing, conversion or
continuation of Committed Loans, a Committed Loan Notice, (b) with respect to an L/C Credit
Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line
Loan Notice.



     “Required Financial Information” means, with respect to each fiscal period or quarter of the
Borrower, (a) the financial statements required to be delivered pursuant to Section 6.01(a) or (b)
for such fiscal period or quarter of the Parent REIT, and (b) the Compliance Certificate required
by Section 6.02(a) to be delivered with the financial statements described in clause (a) above.



     “Required Lenders” means, as of any date of determination, Lenders having at least fifty-one
percent (51%) of the Aggregate Commitments or, if the commitment of each Lender to make Loans and
the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to
Section 8.02, Lenders holding in the aggregate at least fifty-one percent (51%) of the Total
Outstandings (with the aggregate amount of each Lender’s risk participation and funded
participation in L/C Obligations and Swing Line Loans being deemed “held” by such Lender for
purposes of this definition); provided that the Commitment of, and the portion of the Total
Outstandings held or deemed held by any Defaulting Lender shall be excluded for purposes of making
a determination of Required Lenders.



     “Responsible Officer” means the chief executive officer, president, chief financial officer,
treasurer, or controller of a Loan Party, and solely for purposes of the delivery of incumbency
certificates pursuant to Section 4.01, the secretary or any assistant secretary of a Loan Party.
Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be
conclusively presumed to have been authorized by all necessary corporate, partnership and/or other
action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed
to have acted on behalf of such Loan Party.



     “Restricted Payment” means any dividend or other distribution (whether in cash, securities or
other property) with respect to any capital stock or other Equity Interest of the Parent REIT or
any Subsidiary or any Unconsolidated Affiliate, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such capital stock or other
Equity Interest, or on account of any return of capital to the Parent REIT’s shareholders, partners
or members (or the equivalent Person thereof); provided that, to the extent the calculation of the
amount of any dividend or other distribution for purposes of this definition of “Restricted
Payment” includes amounts allocable to



22









 




Unconsolidated Affiliates, such calculation shall be without duplication and shall only
include such amounts to the extent attributable to any Unconsolidated Affiliate Interests.




     “Sale and Leaseback Transaction” means any arrangement pursuant to which any Consolidated
Party, directly or indirectly, becomes liable as lessee, guarantor or other surety with respect to
any lease, whether an operating lease or a capital lease, of any property (a) which such
Consolidated Party has sold or transferred (or is to sell or transfer) to a Person which is not a
Consolidated Party or (b) which such Consolidated Party intends to use for substantially the same
purpose as any other property which has been sold or transferred (or is to be sold or transferred)
by such Consolidated Party to another Person which is not a Consolidated Party in connection with
such lease.



     “SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding
to any of its principal functions.



     “Secured Debt” means, for any given calculation date, without duplication, the total aggregate
principal amount of any Indebtedness of the Consolidated Parties on a consolidated basis that is
(a) secured in any manner by any lien or (b) entitled to the benefit of a negative pledge (other
than under this Agreement); provided that Indebtedness in respect of obligations under any
capitalized lease shall not be deemed to be “Secured Debt.”



     “Secured Non-Recourse Debt” means Secured Debt that is not recourse to the Parent REIT or any
of its Subsidiaries (except to the extent such recourse is limited to customary non-recourse
carve-outs).



     “Secured Recourse Debt” means Secured Debt that is recourse to the Parent REIT or any of its
Subsidiaries.



     “Shareholders’ Equity” means, as of any date of determination, the sum of (a) consolidated
shareholders’ equity of the Consolidated Parties as of that date determined in accordance with GAAP
plus (b) without duplication, an amount equal to the aggregate shareholders’ equity of each
Unconsolidated Affiliate multiplied by the respective Unconsolidated Affiliate Interest in each
such entity.



     “Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that
on such date (a) the fair value of the property of such Person is greater than the total amount of
liabilities, including contingent liabilities, of such Person, (b) the present fair salable value
of the assets of such Person is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured, (c) such Person does not
intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s
ability to pay such debts and liabilities as they mature, (d) such Person is not engaged in
business or a transaction, and is not about to engage in business or a transaction, for which such
Person’s property would constitute an unreasonably small capital, and (e) such Person is able to
pay its debts and liabilities, contingent obligations and other commitments as they mature in the
ordinary course of business. The amount of contingent liabilities at any time shall be computed as
the amount that, in the light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured liability.



     “Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of securities or other interests
having ordinary voting power for the election of directors or other governing body (other than
securities or interests having such power only by reason of the happening of a contingency) are at
the time beneficially owned, or the management of which is otherwise controlled, directly, or
indirectly through one or more



23









 




intermediaries, or both, by such Person. Unless otherwise specified, all references herein to
a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Parent REIT.




     “Subsidiary TRS” means any TRS other than Pebblebrook Hotel Lessee.



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



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



     “Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.04.



     “Swing Line Lender” means Bank of America in its capacity as provider of Swing Line Loans, or
any successor swing line lender hereunder.



     “Swing Line Loan” has the meaning specified in Section 2.04(a).



     “Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.04(b),
which, if in writing, shall be substantially in the form of Exhibit B.



     “Swing Line Sublimit” means an amount equal to the lesser of (a) $30,000,000 and (b) the
Aggregate Commitments. The Swing Line Sublimit is part of, and not in addition to, the Aggregate
Commitments.



     “Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called
synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession
of property creating obligations that do not appear on the balance sheet of such Person but which,
upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of
such Person (without regard to accounting treatment).



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



24









 





     “Threshold Amount” means $25,000,000.



     “Total Outstandings” means the aggregate Outstanding Amount of all Loans and all L/C
Obligations.



     “TRS” means each of (i) Pebblebrook Hotel Lessee and (ii) each other taxable REIT subsidiary
that is a Wholly Owned Subsidiary of Pebblebrook Hotel Lessee.



     “Type” means, with respect to a Committed Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.



     “Unconsolidated Affiliate” means any corporation, partnership, association, joint venture or
other entity in each case which is not a Consolidated Party and in which a Consolidated Party owns,
directly or indirectly, any Equity Interest.



     “Unconsolidated Affiliate Funded Indebtedness” means, as of any date of determination for any
Unconsolidated Affiliate, the product of (a) the sum of (i) the outstanding principal amount of all
obligations of such Unconsolidated Affiliate, whether current or long-term, for borrowed money and
all obligations of such Unconsolidated Affiliate evidenced by bonds, debentures, notes, loan
agreements or other similar instruments, (ii) all purchase money Indebtedness of such
Unconsolidated Affiliate, (iii) all obligations of such Unconsolidated Affiliate arising under
letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety
bonds and similar instruments, (iv) all obligations of such Unconsolidated Affiliate in respect of
forward purchase agreements or the deferred purchase price of any property or services (other than
trade accounts payable in the ordinary course of business), (v) Attributable Indebtedness of such
Unconsolidated Affiliate in respect of capital leases and Synthetic Lease Obligations, (vi) without
duplication, all Guarantees of such Unconsolidated Affiliate with respect to outstanding
Indebtedness of the types specified in clauses (i) through (v) above of Persons other than such
Unconsolidated Affiliate, and (vii) all Indebtedness of such Unconsolidated Affiliate of the types
referred to in clauses (i) through (vi) above of any partnership or joint venture (other than a
joint venture that is itself a corporation or limited liability company) in which such
Unconsolidated Affiliate is a general partner or joint venturer, multiplied by (b) the respective
Unconsolidated Affiliate Interest of each Consolidated Party in such Unconsolidated Affiliate.



     “Unconsolidated Affiliate Interest” means the percentage of the Equity Interests owned by a
Consolidated Party in an Unconsolidated Affiliate accounted for pursuant to the equity method of
accounting under GAAP.



     “Unencumbered BBP Deliverables” means, with respect to each Real Property for which the
Borrower seeks approval as an “Unencumbered Borrowing Base Property” the following items (except to
the extent the delivery thereof is otherwise waived in writing by the Administrative Agent and the
Required Lenders):




     (i) property condition, engineering and other similar reports as to such Real
Properties ordered by the Borrower (either in connection with the potential acquisition or
otherwise ordered for purposes of this Agreement), from professional firms reasonably
acceptable to the Administrative Agent, in each case including the reliance language set
forth on Exhibit G (or such other reliance language as is acceptable to the Administrative
Agent in its reasonable discretion), dated as of a date within twelve (12) months (except
that with respect to the real property known as Sir Francis Drake, the Borrower shall
deliver such reports to the Administrative Agent as are in its possession as of the Closing
Date and shall deliver to the Administrative Agent updated items acceptable to the
Administrative Agent in its reasonable



25









 






discretion with respect to such reports within 90 days of the Closing Date; provided
that failure to deliver such updated items to the Administrative Agent within 90 days of the
Closing Date shall result in such property being removed as an “Unencumbered Borrowing Base
Property”) of the date such property is to become an Unencumbered Borrowing Base Property,
and otherwise in form and substance reasonably acceptable to the Administrative Agent;




     (ii) to the extent the applicable Real Property is subject to a ground lease pursuant
to which a Loan Party is the ground lessee, a copy of such ground lease (which must be an
Approved Ground Lease);




     (iii) evidence of the insurance required by the terms hereof related to such Real
Property;




     (iv) evidence as to (i) whether such Real Property is in an area designated by the
Federal Emergency Management Agency as having special flood or mud slide hazards (a “Flood
Hazard Property”) and (ii) if such Real Property is a Flood Hazard Property, (A) whether the
community in which such Real Property is located is participating in the National Flood
Insurance Program, (B) the applicable Borrower’s written acknowledgment of receipt of
written notification from the Administrative Agent as to the fact that such Real Property is
a Flood Hazard Property and as to whether the community in which each such Flood Hazard
Property is located is participating in the National Flood Insurance Program and (C) copies
of insurance policies or certificates of insurance of the Consolidated Parties evidencing
flood insurance satisfactory to the Administrative Agent;




     (v) an environmental site assessment (which includes the reliance language set forth on
Exhibit G, or such other reliance language as is acceptable to the Administrative Agent in
its reasonable discretion, or the Administrative Agent is otherwise provided a reliance
letter acceptable to the Administrative Agent in its reasonable discretion) with respect to
such Real Property issued not more than twelve (12) months (except that with respect to the
real property known as Sir Francis Drake, the Borrower shall deliver such environmental
assessment to the Administrative Agent as is in its possession as of the Closing Date and
shall deliver to the Administrative Agent updated items acceptable to the Administrative
Agent in its reasonable discretion with respect to such environmental assessment within 90
days of the Closing Date; provided that failure to deliver such updated items to the
Administrative Agent within 90 days of the Closing Date shall result in such real property
being removed as an “Unencumbered Borrowing Base Property”) prior to the date that Borrower
requests approval of such Real Property as an “Unencumbered Borrowing Base Property” showing
no “recognized environmental conditions” requiring remediation pursuant to an Environmental
Law that have not been properly addressed through remediation completed to the satisfaction
of all Governmental Authorities (or such other resolution which has been accepted in writing
by either the Administrative Agent or all Governmental Authority(ies) with jurisdiction
relating to both the applicable Real Property and such recognized environmental conditions,
and having authority to enforce any Environmental Laws with respect thereto) and otherwise
showing environmental conditions which are reasonably acceptable to the Administrative
Agent;




     (vi) an investment summary prepared by the Borrower respecting such Real Property,
which investment summary shall include a brief narrative, historical and pro forma cash flow
summaries and a preliminary operating budget with respect to such Real Property;




     (vii) with respect to Real Properties located in California (or, in the reasonable
judgment of the Administrative Agent, in any other area with a high degree of seismic risk),
a



26









 






seismic report with respect thereto dated as of a date reasonably acceptable to the
Administrative Agent and earthquake insurance to the extent customarily obtained under the
circumstances described in such report or as otherwise deemed reasonably necessary by the
Administrative Agent;




     (viii) a copy of the fully-executed purchase and sale agreement respecting such Real
Property between the proposed Unencumbered Borrowing Base Entity and the seller of such Real
Property;




     (ix) copies of each Material Lease in existence with respect to such Real Property;




     (x) a copy of the management agreement between the applicable TRS and an Approved
Manager respecting such Real Property (including an abstract of such management agreement);




     (xi) a copy of the franchise agreement, if any, respecting such Real Property
(including an abstract of such franchise agreement);




     (xii) unless the Person owning or acquiring such Real Property is a Guarantor, a
Joinder Agreement executed by such Person as contemplated under and in accordance with
Section 6.12; and




     (xiii) such other documentation as may be reasonably required by the Administrative
Agent.



     “Unencumbered Borrowing Base Entity” means, as of any date of determination, any Person that
owns (or leases as ground lessee pursuant to an Approved Ground Lease) an Unencumbered Borrowing
Base Property.



     “Unencumbered Borrowing Base Properties” means, as of any date, a collective reference to each
Real Property (a) that is set forth on Schedule 5.23(a), as such schedule may be updated from time
to time in accordance with the terms hereof (including, without limitation, Sections 1.07 and
6.02(a)), in each case to the extent that such Real Property has not otherwise been removed as an
“Unencumbered Borrowing Base Property” pursuant to the other criteria for qualification as such set
forth in this definition and the other provisions of this Agreement, and (b) that meets the
following criteria:




     (i) such Real Property is a “luxury”, “upper upscale”, or “upscale” full or select
service hotel;




     (ii) such Real Property is managed by an Approved Manager;




     (iii) such Real Property is wholly-owned by Borrower or a Guarantor (other than the
Parent REIT) in fee simple or ground leased pursuant to an Approved Ground Lease (and such
Real Property, whether owned in fee simple by the Borrower or such Guarantor or ground
leased pursuant to an Approved Ground Lease, is leased to the applicable TRS);




     (iv) such Real Property is free of any Liens (other than Permitted Liens of the type
described in Section 7.01(a)(b), (c), (e), (f) and (i)) or negative pledges;




     (v) Borrower has proposed such Real Property to the Administrative Agent and Lenders in
writing and has provided to Administrative Agent and Lenders all of the



27









 






Unencumbered BBP Deliverables with respect to such Real Property and such Unencumbered
BBP Deliverables are approved as provided herein; and




     (vi) the Required Lenders have approved such Real Property’s inclusion as an
“Unencumbered Borrowing Base Property” in accordance with the terms hereof; provided that a
Lender shall be deemed to have conditionally approved a property’s inclusion as an
“Unencumbered Borrowing Base Property” and confirmed the acceptability of each of the
Conditional Approval Unencumbered BBP Deliverables, with respect to such Real Property to
the extent that such Lender has not, on or prior to the date which is fifteen (15) Business
Days following such Lender’s receipt of all of the Conditional Approval Unencumbered BBP
Deliverables with respect to such Real Property, communicated to the Administrative Agent in
writing its rejection of any of the Conditional Approval Unencumbered BBP Deliverables or
such Real Property’s proposed inclusion as an “Unencumbered Borrowing Base Property”
hereunder. All remaining Unencumbered BBP Deliverables will be approved by the
Administrative Agent and/or Required Lenders, as applicable, promptly after receipt.



     “United States” and “U.S.” mean the United States of America.



     “Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).



     “Unrestricted Cash” means as of any date of determination, all cash of the Borrower on such
date that (a) does not appear (or would not be required to appear) as “restricted” on a balance
sheet of the Borrower, (b) is not subject to a Lien in favor of any Person other than Liens granted
to the Administrative Agent and statutory Liens in favor of any depositary bank where such cash is
maintained, (c) does not consist of or constitute “deposits” or sums legally held by the Borrower
in trust for another Person, (d) is not subject to any contractual restriction or obligation
regarding the payment thereof for a particular purpose (including insurance proceeds that are
required to be used in connection with the repair, restoration or replacement of any property of
the Borrower), and (e) is otherwise generally available for use by the Borrower.



     “Unsecured Debt Service” means, as of any date, the hypothetical annual debt service on all
Unsecured Indebtedness (including any amounts outstanding hereunder plus issued but unfunded
letters of credit) using a 25-year amortization schedule and an interest rate that is the greater
of (a) seven percent (7.0%) and (b) the most-recent rate published on such date in the United
States Federal Reserve Statistical Release (H.15) for ten-year Treasury Constant Maturities plus
three percent (3.0%).



     “Unsecured Indebtedness” means all Indebtedness which is not Secured Debt.



     “Unused Fee” has the meaning specified in Section 2.09(a).



     “Unused Rate” means, as of any date, (a) a percentage per annum equal to fifty basis points
(0.50%) if on such date the Total Outstandings (excluding any Swing Line Loans) are less than fifty
percent (50%) of the Aggregate Commitments and (b) a percentage per annum equal to thirty-five
basis points (0.35%) if on such date the Total Outstandings (excluding any Swing Line Loans) are
greater than or equal to fifty percent (50.0%) of the Aggregate Commitments.



     “Wholly Owned Subsidiary” means, with respect to any direct or indirect Subsidiary of any
Person, that one hundred percent (100%) of the Equity Interests with ordinary voting power issued
by such Subsidiary (other than directors’ qualifying shares and investments by foreign nationals
mandated by Applicable Laws) is beneficially owned, directly or indirectly, by such Person.



28









 





     1.02 Other Interpretive Provisions. With reference to this Agreement and each other Loan Document,
unless otherwise specified herein or in such other Loan Document:




     (a) The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include,” “includes” and
“including” shall be deemed to be followed by the phrase “without limitation.” The word
“will” shall be construed to have the same meaning and effect as the word “shall.” Unless
the context requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document (including any Organization Document) shall be construed as
referring to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such amendments,
supplements or modifications set forth herein or in any other Loan Document), (ii) any
reference herein to any Person shall be construed to include such Person’s successors and
assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import
when used in any Loan Document, shall be construed to refer to such Loan Document in its
entirety and not to any particular provision thereof, (iv) all references in a Loan Document
to Sections, Exhibits and Schedules shall be construed to refer to Sections of, and Exhibits
and Schedules to, the Loan Document in which such references appear, (v) any reference to
any law shall include all statutory and regulatory provisions consolidating, amending,
replacing or interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or supplemented
from time to time, and (vi) the words “asset” and “property” shall be construed to have the
same meaning and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.




     (b) In the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including;” the words “to” and “until” each mean “to
but excluding;” and the word “through” means “to and including.”




     (c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this Agreement or
any other Loan Document.



     1.03 Accounting Terms.




     (a) Generally. All accounting terms not specifically or completely defined herein
shall be construed in conformity with, and all financial data (including financial ratios
and other financial calculations) required to be submitted pursuant to this Agreement shall
be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time
to time, applied in a manner consistent with that used in preparing the Audited Financial
Statements, except as otherwise specifically prescribed herein. Notwithstanding the
foregoing, for purposes of determining compliance with any covenant (including the
computation of any financial covenant) contained herein, Indebtedness of the Borrower and
its Subsidiaries shall be deemed to be carried at one hundred percent (100%) of the
outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on
financial liabilities shall be disregarded.




     (b) Changes in GAAP. If at any time any change in GAAP would affect the computation of
any financial ratio or requirement set forth in any Loan Document, and either the Borrower
or the Required Lenders shall so request, the Administrative Agent, the Lenders and the
Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the
original



29









 






intent thereof in light of such change in GAAP (subject to the approval of the Required
Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to
be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting forth a
reconciliation between calculations of such ratio or requirement made before and after
giving effect to such change in GAAP.




     (c) Financial Covenant Calculation Conventions. Notwithstanding the above, the parties
hereto acknowledge and agree that, for purposes of all calculations made under the financial
covenants set forth in Section 7.11 (including without limitation for purposes of the
definitions of “Pro Forma Basis” set forth in Section 1.01), (i) after consummation of any
Disposition or removal of an Unencumbered Borrowing Base Property pursuant to Section 1.07
(A) income statement items (whether income or expense) and capital expenditures attributable
to the property disposed of or removed shall, to the extent not otherwise excluded in such
income statement items for the Consolidated Parties in accordance with GAAP or in accordance
with any defined terms set forth in Section 1.01, be excluded as of the first day of the
applicable period and (B) Indebtedness which is retired shall be excluded and deemed to have
been retired as of the first day of the applicable period and (ii) after consummation of any
acquisition (A) income statement items (whether positive or negative) and capital
expenditures attributable to the Person or property acquired shall, to the extent not
otherwise included in such income statement items for the Consolidated Parties in accordance
with GAAP or in accordance with any defined terms set forth in Section 1.01, be included to
the extent relating to any period applicable in such calculations, (B) to the extent not
retired in connection with such acquisition, Indebtedness of the Person or property acquired
shall be deemed to have been incurred as of the first day of the applicable period, (iii) in
connection with any incurrence of Indebtedness, any Indebtedness which is retired in
connection with such incurrence shall be excluded and deemed to have been retired as of the
first day of the applicable period and (iv) pro forma adjustments may be included to the
extent that such adjustments would give effect to items that are (1) directly attributable
to the relevant transaction, (2) expected to have a continuing impact on the Consolidated
Parties and (3) factually supportable (in the opinion of the Administrative Agent).




     (d) Consolidation of Variable Interest Entities. All references herein to consolidated
financial statements of the Borrower and its Subsidiaries or to the determination of any
amount for the Borrower and its Subsidiaries on a consolidated basis or any similar
reference shall, in each case, be deemed to include each variable interest entity that the
Borrower is required to consolidate pursuant to FASB ASC 810 as if such variable interest
entity were a Subsidiary as defined herein.



     1.04 Rounding. Any financial ratios required to be maintained by the Borrower pursuant to this
Agreement shall be calculated by dividing the appropriate component by the other component,
carrying the result to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a rounding-up if there is no
nearest number).



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



     1.06 Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit
at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such
time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms
of any Issuer



30









 




Document related thereto, provides for one or more automatic increases in the stated amount
thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of
such Letter of Credit after giving effect to all such increases, whether or not such maximum stated
amount is in effect at such time.




     1.07 Addition/Removal of Unencumbered Borrowing Base Properties.




     (a) The Borrower may from time to time amend Schedule 5.23(a) to add an additional Real
Property that qualifies as an Unencumbered Borrowing Base Property; provided that no Real
Property shall be included as an Unencumbered Borrowing Base Property in any compliance
certificate delivered to the Administrative Agent, on Schedule 5.23(a) or otherwise in any
calculation of the Implied Loan Amount, the Mortgageability Cash Flow or any of the
components of the financial covenants set forth in Section 7.11 that refer to “Unencumbered
Borrowing Base Properties” unless and until (i) the Borrower has delivered to the
Administrative Agent all of the Unencumbered BBP Deliverables with respect to such Real
Property (except to the extent the delivery thereof is otherwise waived in writing by the
Administrative Agent and the Required Lenders) and (ii) the Required Lenders have approved
in writing (or otherwise been deemed to have been approved in accordance with the provisions
of clause (vi) of the definition of “Unencumbered Borrowing Base Properties”) such items and
the qualification of such Real Property as an Unencumbered Borrowing Base Property;
provided, further, that, to the extent the Borrower has delivered to the Administrative
Agent all of the Conditional Approval Unencumbered BBP Deliverables with respect to a
particular Real Property, the Required Lenders may conditionally approve (or be deemed to
have conditionally approved, in accordance with the provisions of clause (vi) of the
definition of “Unencumbered Borrowing Base Properties”) the addition of such Real Property
as an Unencumbered Borrowing Base Property, such conditional approval to be subject only to
the receipt and approval by the Administrative Agent and the Required Lenders (to the extent
subject to Required Lender approval) of each of the remaining Unencumbered BBP Deliverables.
In the case of any conditional approval pursuant to the immediately preceding sentence,
such Real Property will be included as an Unencumbered Borrowing Base Property only upon
receipt and approval by the Administrative Agent and the Required Lenders (to the extent
subject to Required Lender approval) of such remaining Unencumbered BBP Deliverables (except
to the extent the delivery thereof is otherwise waived in writing by the Administrative
Agent and the Required Lenders). In connection with the addition of any Unencumbered
Borrowing Base Property following (or in connection with) such approval by the Required
Lenders, the Administrative Agent will, in good faith, review and consider executing
customary documentation not otherwise included in the Unencumbered BBP Deliverables that may
be requested by any applicable franchisor and/or Approved Manager with respect to such
Unencumbered Borrowing Base Property.




     (b) Notwithstanding anything contained herein to the contrary, to the extent any
property previously-qualifying as an Unencumbered Borrowing Base Property ceases to meet the
criteria for qualification as such, such property shall be immediately removed from all
financial covenant and Implied Loan Amount-related calculations contained herein. Any such
property shall immediately cease to be an “Unencumbered Borrowing Base Property” hereunder
and Schedule 5.23(a) shall be deemed to have been immediately amended to remove such Real
Property from the list of Unencumbered Borrowing Base Properties.




     (c) The Loan Parties may voluntarily remove any Unencumbered Borrowing Base Property
from qualification as such (but only in connection with a proposed refinancing, sale or
other Disposition), if, and to the extent: (i) the Loan Parties shall, immediately following
such removal, be in compliance (on a Pro Forma Basis) with all of the covenants contained in




31











 






Section 7 of this Agreement and with all Implied Loan Amount-related limitations on
Outstanding Amounts set forth in this Agreement; (ii) no Default exists or would result
therefrom; and (iii) a minimum of four (4) Real Properties (and, after September 30, 2012, a
minimum of five (5) Real Properties) having an aggregate value as determined in accordance
with GAAP of at least $250,000,000 remain qualified as Unencumbered Borrowing Base
Properties after such release; provided that, notwithstanding the foregoing, so long as no
Default exists or would result therefrom, on or after September 30, 2012 the Borrower may
have less than five (5) (but not less than four (4)) Unencumbered Borrowing Base Properties
for one full calendar quarter in any fiscal year.




     (d) Upon removal of an Unencumbered Borrowing Base Property pursuant to clauses (b) or
(c) above, (i) Schedule 5.23(a) shall be immediately amended to remove such Real Property
from the list of Unencumbered Borrowing Base Properties; and (ii) the Borrower shall timely
deliver a Compliance Certificate with respect to such removal in accordance with the terms
of Section 6.03(e) after giving effect to such release.



2. THE COMMITMENTS AND CREDIT EXTENSIONS




     2.01 Committed Loans. Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans
(each such loan, a “Committed Loan”) to the Borrower from time to time, on any Business Day during
the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of
such Lender’s Commitment; provided, however, that after giving effect to any Committed Borrowing,
(i) the Total Outstandings shall not exceed the Aggregate Commitments, (ii) the aggregate
Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage
of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the
Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and (iii) the
Total Outstandings shall not exceed the Implied Loan Amount. Within the limits of each Lender’s
Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under
this Section 2.01, prepay under Section 2.05, and reborrow under this Section 2.01. Committed
Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.



     2.02 Borrowings, Conversions and Continuations of Committed Loans.




     (a) Each Committed Borrowing, each conversion of Committed Loans from one Type to the
other, and each continuation of Eurodollar Rate Loans shall be made upon the Borrower’s
irrevocable notice to the Administrative Agent, which may be given by telephone. Each such
notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three (3)
Business Days prior to the requested date of any Borrowing of, conversion to or continuation
of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate
Committed Loans, and (ii) on the requested date of any Borrowing of Base Rate Committed
Loans; provided, however, that if the Borrower wishes to request Eurodollar Rate Loans
having an Interest Period other than one (1), two (2), three (3) or six (6) months in
duration as provided in the definition of “Interest Period,” the applicable notice must be
received by the Administrative Agent not later than 11:00 a.m. four (4) Business Days prior
to the requested date of such Borrowing, conversion or continuation, whereupon the
Administrative Agent shall give prompt notice to the Lenders of such request and determine
whether the requested Interest Period is acceptable to all of them. Not later than 11:00
a.m., three (3) Business Days before the requested date of such Borrowing, conversion or
continuation, the Administrative Agent shall notify the Borrower (which notice may be by
telephone) whether or not the requested Interest Period has been consented to by all
the Lenders. Each telephonic notice by the Borrower pursuant to this Section 2.02(a)
must be confirmed promptly by delivery to the Administrative Agent of a written Committed
Loan



32









 







Notice, appropriately completed and signed by a Responsible Officer of the Borrower.
Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Except
as provided in Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate
Committed Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000
in excess thereof. Each Committed Loan Notice (whether telephonic or written) shall specify
(i) whether the Borrower is requesting a Committed Borrowing, a conversion of Committed
Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the
requested date of the Borrowing, conversion or continuation, as the case may be (which shall
be a Business Day), (iii) the principal amount of Committed Loans to be borrowed, converted
or continued, (iv) the Type of Committed Loans to be borrowed or to which existing Committed
Loans are to be converted, and (v) if applicable, the duration of the Interest Period with
respect thereto. If the Borrower fails to specify a Type of Committed Loan in a Committed
Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or
continuation, then the applicable Committed Loans shall be made as, or converted to,
Eurodollar Rate Loans having an Interest Period of one (1) month. Any such automatic
conversion to Eurodollar Rate Loans shall be effective as of the last day of the Interest
Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Borrower
requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such
Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month. Notwithstanding anything to the contrary herein,
a Swing Line Loan may not be converted to a Eurodollar Rate Loan.




     (b) Following receipt of a Committed Loan Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Applicable Percentage of the applicable
Committed Loans, and if no timely notice of a conversion or continuation is provided by the
Borrower, the Administrative Agent shall notify each Lender of the details of any automatic
conversion to Eurodollar Rate Loans described in the preceding subsection. In the case of a
Committed Borrowing, each Lender shall make the amount of its Committed Loan available to
the Administrative Agent in immediately available funds at the Administrative Agent’s Office
not later than 1:00 p.m. on the Business Day specified in the applicable Committed Loan
Notice. Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if
such Borrowing is the initial Credit Extension, Section 4.01), the Administrative Agent
shall make all funds so received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the books of
Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each
case in accordance with instructions provided to (and reasonably acceptable to) the
Administrative Agent by the Borrower; provided, however, that if, on the date the Committed
Loan Notice with respect to such Borrowing is given by the Borrower, there are L/C
Borrowings outstanding, then the proceeds of such Borrowing, first, shall be applied to the
payment in full of any such L/C Borrowings, and second, shall be made available to the
Borrower as provided above.




     (c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or
converted only on the last day of an Interest Period for such Eurodollar Rate Loan. During
the existence of a Default or an Event of Default, no Loans may be requested as, converted
to or continued as Eurodollar Rate Loans without the consent of the Required Lenders.




     (d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the
interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination
of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative
Agent



33









 







shall notify the Borrower and the Lenders of any change in Bank of America’s prime rate
used in determining the Base Rate promptly following the public announcement of such change.




     (e) After giving effect to all Committed Borrowings, all conversions of Committed Loans
from one Type to the other, and all continuations of Committed Loans as the same Type, there
shall not be more than five (5) Interest Periods in effect with respect to Committed Loans.



     2.03 Letters of Credit.




     (a) The Letter of Credit Commitment.




     (i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer
agrees, in reliance upon the agreements of the Lenders set forth in this Section
2.03, (1) from time to time on any Business Day during the period from the Closing
Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the
account of any Loan Party, and to amend Letters of Credit previously issued by it,
in accordance with subsection (b) below, and (2) to honor drawings under the Letters
of Credit; and (B) the Lenders severally agree to participate in Letters of Credit
issued for the account of the Borrower or any other Loan Party and any drawings
thereunder; provided that after giving effect to any L/C Credit Extension with
respect to any Letter of Credit, (w) the Total Outstandings shall not exceed the
Implied Loan Amount, (x) the Total Outstandings shall not exceed the Aggregate
Commitments, (y) the aggregate Outstanding Amount of the Committed Loans of any
Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all
L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount
of all Swing Line Loans shall not exceed such Lender’s Commitment, and (z) the
Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit
Sublimit. Each request by the Borrower for the issuance or amendment of a Letter of
Credit shall be deemed to be a representation by the Borrower that the L/C Credit
Extension so requested complies with the conditions set forth in the proviso to the
preceding sentence. Within the foregoing limits, and subject to the terms and
conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully
revolving, and accordingly the Borrower may, during the foregoing period, obtain
Letters of Credit to replace Letters of Credit that have expired or that have been
drawn upon and reimbursed.




     (ii) The L/C Issuer shall not issue any Letter of Credit, if:




     (A) subject to Section 2.03(b)(iii), the expiry date of the requested
Letter of Credit would occur more than twelve months after the date of
issuance, unless all the Lenders have approved such expiry date;




     (B) the expiry date of the requested Letter of Credit would occur after
the Letter of Credit Expiration Date, unless the Administrative Agent, L/C
Issuer and each Lender, each acting in its sole discretion, has approved in
writing such expiry date; provided that such approval may be conditioned on
such terms and conditions (including the posting of Cash Collateral or other
collateral) as the Administrative Agent, L/C Issuer and each Lender, each
acting in its sole discretion, may determine; or




     (C) a default of any Lender’s obligations to fund under Section 2.03(c)
exists or any Lender is at such time a Defaulting Lender



34









 







hereunder, unless the L/C Issuer has entered into arrangements satisfactory to the
L/C Issuer with the Borrower or such Lender to eliminate the L/C Issuer’s
risk with respect to such Lender; or




     (D) the requested Letter of Credit is to be denominated in a currency
other than Dollars.




     (iii) The L/C Issuer shall not be under any obligation to issue any Letter of
Credit if:




     (A) any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer
from issuing the Letter of Credit, or any Applicable Laws applicable to the
L/C Issuer or any request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over the L/C Issuer
shall prohibit, or request that the L/C Issuer refrain from, the issuance of
letters of credit generally or the Letter of Credit in particular or shall
impose upon the L/C Issuer with respect to the Letter of Credit any
restriction, reserve or capital requirement (for which the L/C Issuer is not
otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon the L/C Issuer any unreimbursed loss, cost or expense which was
not applicable on the Closing Date and which the L/C Issuer in good faith
deems material to it;




     (B) the issuance of the Letter of Credit would violate one or more
policies of the L/C Issuer applicable to letters of credit generally;




     (C) except as otherwise agreed by the Administrative Agent and the L/C
Issuer, the Letter of Credit is in an initial stated amount less than
$500,000;




     (D) any Lender is at that time a Defaulting Lender, unless the L/C
Issuer has entered into arrangements, including the delivery of Cash
Collateral, satisfactory to the L/C Issuer (in its sole discretion) with the
Borrower or such Lender to eliminate the L/C Issuer’s actual or potential
Fronting Exposure (after giving effect to Section 2.17(a)(iv)) with respect
to the Defaulting Lender arising from either the Letter of Credit then
proposed to be issued or that Letter of Credit and all other L/C Obligations
as to which the L/C Issuer has actual or potential Fronting Exposure, as it
may elect in its sole discretion; or




     (E) the Letter of Credit contains any provisions for automatic
reinstatement of the stated amount after any drawing thereunder.




     (iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer
would not be permitted at such time to issue the Letter of Credit in its amended
form under the terms hereof.




     (v) The L/C Issuer shall be under no obligation to amend any Letter of Credit
if (A) the L/C Issuer would have no obligation at such time to issue the Letter of
Credit in its amended form under the terms hereof, or (B) the beneficiary of the
Letter of Credit does not accept the proposed amendment to such Letter of Credit.



35









 






     (vi) The L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and the L/C
Issuer shall have all of the benefits and immunities (A) provided to the
Administrative Agent in Section 9 with respect to any acts taken or omissions
suffered by the L/C Issuer in connection with Letters of Credit issued by it or
proposed to be issued by it and Issuer Documents pertaining to such Letters of
Credit as fully as if the term “Administrative Agent” as used in Section 9 included
the L/C Issuer with respect to such acts or omissions, and (B) as additionally
provided herein with respect to the L/C Issuer.




     (b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters
of Credit.




     (i) Each Letter of Credit shall be issued or amended, as the case may be, upon
the request of the Borrower delivered to the L/C Issuer (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application, appropriately
completed and signed by a Responsible Officer of the Borrower. Such Letter of
Credit Application must be received by the L/C Issuer and the Administrative Agent
not later than 11:00 a.m. at least two (2) Business Days (or such later date and
time as the Administrative Agent and the L/C Issuer may agree in a particular
instance in their sole discretion) prior to the proposed issuance date or date of
amendment, as the case may be. In the case of a request for an initial issuance of
a Letter of Credit, such Letter of Credit Application shall specify in form and
detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the
requested Letter of Credit (which shall be a Business Day); (B) the amount thereof;
(C) the expiry date thereof; (D) the name and address of the beneficiary thereof;
(E) the documents to be presented by such beneficiary in case of any drawing
thereunder; (F) the full text of any certificate to be presented by such beneficiary
in case of any drawing thereunder; (G) the purpose and nature of the requested
Letter of Credit; and (H) such other matters as the L/C Issuer may reasonably
require. In the case of a request for an amendment of any outstanding Letter of
Credit, such Letter of Credit Application shall specify in form and detail
satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the
proposed date of amendment thereof (which shall be a Business Day); (C) the nature
of the proposed amendment; and (D) such other matters as the L/C Issuer may
reasonably require. Additionally, the Borrower shall furnish to the L/C Issuer and
the Administrative Agent such other documents and information pertaining to such
requested Letter of Credit issuance or amendment, including any Issuer Documents, as
the L/C Issuer or the Administrative Agent may reasonably require.




     (ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer
will confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Application from
the Borrower and, if not, the L/C Issuer will provide the Administrative Agent with
a copy thereof. Unless the L/C Issuer has received written notice from any Lender,
the Administrative Agent or any Loan Party, at least one Business Day prior to the
requested date of issuance or amendment of the applicable Letter of Credit, that one
or more applicable conditions contained in Section 4 shall not then be satisfied,
then, subject to the terms and conditions hereof, the L/C Issuer shall, on the
requested date, issue a Letter of Credit for the account of the Borrower (or the
applicable Loan Party) or enter into the applicable amendment, as the case may be,
in each case in accordance with the L/C Issuer’s usual and customary business
practices. Immediately upon the issuance of each Letter of Credit, each Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase
from the L/C Issuer a risk participation in such Letter



36









 







of Credit in an amount equal to the product of such Lender’s Applicable
Percentage times the amount of such Letter of Credit.




     (iii) If the Borrower so requests in any applicable Letter of Credit
Application, the L/C Issuer may, in its sole discretion, agree to issue a Letter of
Credit that has automatic extension provisions (each, an “Auto-Extension Letter of
Credit”); provided that any such Auto-Extension Letter of Credit must permit the L/C
Issuer to prevent any such extension at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by giving prior
notice to the beneficiary thereof not later than a day (the “Non-Extension Notice
Date”) in each such twelve-month period to be agreed upon at the time such Letter of
Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower shall
not be required to make a specific request to the L/C Issuer for any such extension.
Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be
deemed to have authorized (but may not require) the L/C Issuer to permit the
extension of such Letter of Credit at any time to an expiry date not later than the
Letter of Credit Expiration Date; provided, however, that the L/C Issuer shall not
permit any such extension if (A) the L/C Issuer has determined that it would not be
permitted, or would have no obligation, at such time to issue such Letter of Credit
in its revised form (as extended) under the terms hereof (by reason of the
provisions of clause (ii) or (iii) of Section 2.03(a) or otherwise), or (B) it has
received notice (which may be by telephone or in writing) on or before the day that
is seven (7) Business Days before the Non-Extension Notice Date (1) from the
Administrative Agent that the Required Lenders have elected not to permit such
extension or (2) from the Administrative Agent, any Lender or the Borrower that one
or more of the applicable conditions specified in Section 4.02 is not then
satisfied, and in each such case directing the L/C Issuer not to permit such
extension.




     (iv) Promptly after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the L/C Issuer will also deliver to the Borrower and the Administrative
Agent a true and complete copy of such Letter of Credit or amendment.




     (c) Drawings and Reimbursements; Funding of Participations.




     (i) Upon receipt from the beneficiary of any Letter of Credit of any notice of
a drawing under such Letter of Credit, the L/C Issuer shall notify the Borrower and
the Administrative Agent thereof. Not later than 11:00 a.m. on the date of any
payment by the L/C Issuer under a Letter of Credit (each such date, an “Honor
Date”), the Borrower shall reimburse the L/C Issuer through the Administrative Agent
in an amount equal to the amount of such drawing. If the Borrower fails to so
reimburse the L/C Issuer by such time, the Administrative Agent shall promptly
notify each Lender of the Honor Date, the amount of the unreimbursed drawing (the
“Unreimbursed Amount”), and the amount of such Lender’s Applicable Percentage
thereof. In such event, the Borrower shall be deemed to have requested a Committed
Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to
the Unreimbursed Amount, without regard to the minimum and multiples specified in
Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount
of the unutilized portion of the Aggregate Commitments and the conditions set forth
in Section 4.02 (other than the delivery of a Committed Loan Notice). Any notice
given by the L/C Issuer or the Administrative Agent pursuant to this Section
2.03(c)(i) may be given by telephone if immediately confirmed in writing;



37









 







provided that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.




     (ii) Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make
funds available (and the Administrative Agent may apply Cash Collateral provided for
such purpose) for the account of the L/C Issuer at the Administrative Agent’s Office
in an amount equal to its Applicable Percentage of the Unreimbursed Amount not later
than 1:00 p.m. on the Business Day specified in such notice by the Administrative
Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Lender
that so makes funds available shall be deemed to have made a Base Rate Committed
Loan to the Borrower in such amount. The Administrative Agent shall remit the funds
so received to the L/C Issuer.




     (iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Committed Borrowing of Base Rate Loans because the conditions set forth in Section
4.02 cannot be satisfied or for any other reason, the Borrower shall be deemed to
have incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed
Amount that is not so refinanced, which L/C Borrowing shall be due and payable on
demand (together with interest) and shall bear interest at the Default Rate. In
such event, each Lender’s payment to the Administrative Agent for the account of the
L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance from such
Lender in satisfaction of its participation obligation under this Section 2.03.




     (iv) Until each Lender funds its Committed Loan or L/C Advance pursuant to this
Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under any Letter of
Credit, interest in respect of such Lender’s Applicable Percentage of such amount
shall be solely for the account of the L/C Issuer.




     (v) Each Lender’s obligation to make Committed Loans or L/C Advances to
reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated
by this Section 2.03(c), shall be absolute and unconditional and shall not be
affected by any circumstance, including (A) any setoff, counterclaim, recoupment,
defense or other right which such Lender may have against the L/C Issuer, the
Borrower or any other Person for any reason whatsoever; (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition, whether
or not similar to any of the foregoing; provided, however, that each Lender’s
obligation to make Committed Loans pursuant to this Section 2.03(c) is subject to
the conditions set forth in Section 4.02 (other than delivery by the Borrower of a
Committed Loan Notice). No such making of an L/C Advance shall relieve or otherwise
impair the obligation of the Borrower to reimburse the L/C Issuer for the amount of
any payment made by the L/C Issuer under any Letter of Credit, together with
interest as provided herein.




     (vi) If any Lender fails to make available to the Administrative Agent for the
account of the L/C Issuer any amount required to be paid by such Lender pursuant to
the foregoing provisions of this Section 2.03(c) by the time specified in Section
2.03(c)(ii), then, without limiting the other provisions of this Agreement, the L/C
Issuer shall be entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the period
from the date such payment is required to the date on which such payment is
immediately available to the L/C Issuer at a rate per annum equal to the greater of
the Federal Funds Rate and a rate determined by



38









 







the L/C Issuer in accordance with banking industry rules on interbank
compensation, plus any administrative, processing or similar fees customarily
charged by the L/C Issuer in connection with the foregoing. If such Lender pays
such amount (with interest and fees as aforesaid), the amount so paid shall
constitute such Lender’s Committed Loan included in the relevant Committed Borrowing
or L/C Advance in respect of the relevant L/C Borrowing, as the case may be. A
certificate of the L/C Issuer submitted to any Lender (through the Administrative
Agent) with respect to any amounts owing under this clause (vi) shall be conclusive
absent manifest error.




     (d) Repayment of Participations.




     (i) At any time after the L/C Issuer has made a payment under any Letter of
Credit and has received from any Lender such Lender’s L/C Advance in respect of such
payment in accordance with Section 2.03(c), if the Administrative Agent receives for
the account of the L/C Issuer any payment in respect of the related Unreimbursed
Amount or interest thereon (whether directly from the Borrower or otherwise,
including proceeds of Cash Collateral applied thereto by the Administrative Agent),
the Administrative Agent will distribute to such Lender its Applicable Percentage
thereof in the same funds as those received by the Administrative Agent.




     (ii) If any payment received by the Administrative Agent for the account of the
L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of
the circumstances described in Section 10.05 (including pursuant to any settlement
entered into by the L/C Issuer in its discretion), each Lender shall pay to the
Administrative Agent for the account of the L/C Issuer its Applicable Percentage
thereof on demand of the Administrative Agent, plus interest thereon from the date
of such demand to the date such amount is returned by such Lender, at a rate per
annum equal to the Federal Funds Rate from time to time in effect. The obligations
of the Lenders under this clause shall survive the payment in full of the
Obligations and the termination of this Agreement.




     (e) Obligations Absolute. The obligation of the Borrower to reimburse the L/C Issuer
for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be
absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including the following:




     (i) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other Loan Document;




     (ii) the existence of any claim, counterclaim, setoff, defense or other right
that the Borrower or any Subsidiary may have at any time against any beneficiary or
any transferee of such Letter of Credit (or any Person for whom any such beneficiary
or any such transferee may be acting), the L/C Issuer or any other Person, whether
in connection with this Agreement, the transactions contemplated hereby or by such
Letter of Credit or any agreement or instrument relating thereto, or any unrelated
transaction;




     (iii) any draft, demand, certificate or 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; or any
loss or delay in the transmission or otherwise of any document required in order to
make a drawing under such Letter of Credit;



39









 






     (iv) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the terms
of such Letter of Credit; or any payment made by the L/C Issuer under such Letter of
Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession,
assignee for the benefit of creditors, liquidator, receiver or other representative
of or successor to any beneficiary or any transferee of such Letter of Credit,
including any arising in connection with any proceeding under any Debtor Relief Law;
or




     (v) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Borrower or any
Subsidiary.



     The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto
that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s
instructions or other irregularity, the Borrower will promptly notify the L/C Issuer. The Borrower
shall be conclusively deemed to have waived, to the extent permitted by Applicable Laws, any such
claim against the L/C Issuer and its correspondents with respect to any particular Letter of Credit
unless such notice is given within five (5) Business Days after the issuance of such Letter of
Credit or amendment thereto.




     (f) Role of L/C Issuer. Each Lender and the Borrower agree that, in paying any drawing
under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any
document (other than any sight draft, certificates and documents expressly required by the
Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such
document or the authority of the Person executing or delivering any such document. None of
the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable to any Lender for
(i) any action taken or omitted in connection herewith at the request or with the approval
of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in
the absence of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related to any
Letter of Credit or Issuer Document. The Borrower hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not, preclude the
Borrower’s pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. None of the L/C Issuer, the Administrative
Agent, any of their respective Related Parties nor any correspondent, participant or
assignee of the L/C Issuer shall be liable or responsible for any of the matters described
in clauses (i) through (v) of Section 2.03(e); provided, however, that anything in clauses
(i) through (v) of Section 2.03(e) and this Section 2.03(f) to the contrary notwithstanding,
the Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be liable to
the Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrower which the Borrower proves were
caused by the L/C Issuer’s willful misconduct or gross negligence or the L/C Issuer’s
willful failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the terms and
conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing,
the L/C Issuer may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or information to the
contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a Letter of Credit
or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason.



40









 






     (g) Applicability of ISP. Unless otherwise expressly agreed by the L/C Issuer and the
Borrower when a Letter of Credit is issued, the rules of the ISP shall apply to each standby
Letter of Credit.




     (h) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent for the
account of each Lender in accordance with its Applicable Percentage a Letter of Credit fee
(the “Letter of Credit Fee”) for each Letter of Credit equal to the Applicable Margin times
the daily amount available to be drawn under such Letter of Credit; provided, however, any
Letter of Credit Fees otherwise payable for the account of a Defaulting Lender with respect
to any Letter of Credit as to which such Defaulting Lender has not provided Cash Collateral
satisfactory to the L/C Issuer pursuant to this Section 2.03 shall be payable, to the
maximum extent permitted by Applicable Laws, to the other Lenders in accordance with the
upward adjustments in their respective Applicable Percentages allocable to such Letter of
Credit pursuant to Section 2.17(a)(iv), with the balance of such fee, if any, payable to the
L/C Issuer for its own account. For purposes of computing the daily amount available to be
drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in
accordance with Section 1.06. Letter of Credit Fees shall be (i) due and payable on the
first Business Day after the end of each March, June, September and December, commencing
with the first such date to occur after the issuance of such Letter of Credit, on the Letter
of Credit Expiration Date and thereafter on demand and (ii) computed on a quarterly basis in
arrears. If there is any change in the Applicable Margin during any quarter, the daily
amount available to be drawn under each Letter of Credit shall be computed and multiplied by
the Applicable Margin separately for each period during such quarter that such Applicable
Margin was in effect. Notwithstanding anything to the contrary contained herein, upon the
request of the Required Lenders, while any Event of Default exists, all Letter of Credit
Fees shall accrue at the Default Rate.




     (i) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. The
Borrower shall, in connection with the issuance or extension (whether or not pursuant to an
automatic extension) of each Letter of Credit, pay directly to the L/C Issuer for its own
account a fronting fee for each Letter of Credit equal to the greater of (i) $1,500 and (ii)
twelve and one-half basis points (0.125%) times the maximum amount available to be drawn
under such Letter of Credit (whether or not such maximum amount is then in effect with
respect to such Letter of Credit). Such fronting fee shall be payable upon issuance or
extension of the applicable Letter of Credit. For the purposes of computing the daily
amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit
shall be determined in accordance with Section 1.06. In addition to the foregoing, the
Borrower shall pay directly to the L/C Issuer for its own account the customary issuance,
presentation, amendment and other processing fees, and other standard costs and charges, of
the L/C Issuer relating to letters of credit as from time to time in effect. Such customary
fees and standard costs and charges are due and payable on demand and are nonrefundable.




     (j) Conflict with Issuer Documents. In the event of any conflict between the terms
hereof and the terms of any Issuer Document, the terms hereof shall control.



     (k) Letters of Credit Issued for Loan Parties Other than the Borrower.
Notwithstanding
that a Letter of Credit issued or outstanding hereunder is in support of any obligations of,
or is for the account of, a Loan Party other than the Borrower, the Borrower shall be
obligated to reimburse the L/C Issuer hereunder for any and all drawings under such Letter
of Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit for the
account of the Loan Parties inures to the benefit of the Borrower, and that the Borrower’s
business derives substantial benefits from the businesses of such Loan Parties.



41









 





     2.04 Swing Line Loans.




     (a) The Swing Line. Subject to the terms and conditions set forth herein, the Swing
Line Lender, in reliance upon the agreements of the other Lenders set forth in this Section
2.04, may in its sole discretion make loans (each such loan, a “Swing Line Loan”) to the
Borrower from time to time on any Business Day during the Availability Period in Dollars in
an aggregate amount not to exceed at any time outstanding the amount of the Swing Line
Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the
Applicable Percentage of the Outstanding Amount of Committed Loans and L/C Obligations of
the Lender acting as Swing Line Lender, may exceed the amount of such Lender’s Commitment;
provided, however, that after giving effect to any Swing Line Loan, (i) the Total
Outstandings shall not exceed the Aggregate Commitments, (ii) the aggregate Outstanding
Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the
Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the
Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and
(iii) the Total Outstandings shall not exceed the Implied Loan Amount, and provided,
further, that the Borrower shall not use the proceeds of any Swing Line Loan to refinance
any outstanding Swing Line Loan. Within the foregoing limits, and subject to the other
terms and conditions hereof, the Borrower may borrow under this Section 2.04, prepay under
Section 2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall be a Base
Rate Loan. Immediately upon the making of a Swing Line Loan, each Lender shall be deemed
to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line
Lender a risk participation in such Swing Line Loan in an amount equal to the product of
such Lender’s Applicable Percentage times the amount of such Swing Line Loan.




     (b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the Borrower’s
irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given
by telephone. Each such notice must be received by the Swing Line Lender and the
Administrative Agent not later than 1:00 p.m. on the requested borrowing date, and shall
specify (i) the amount to be borrowed, which shall be a minimum of $250,000, and (ii) the
requested borrowing date, which shall be a Business Day. Each such telephonic notice must
be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a
written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer
of the Borrower. Promptly after receipt by the Swing Line Lender of any telephonic Swing
Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has also received such Swing Line
Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by
telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received
notice (by telephone or in writing) from the Administrative Agent (including at the request
of any Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A)
directing the Swing Line Lender not to make such Swing Line Loan as a result of the
limitations set forth in the first proviso to the first sentence of Section 2.04(a), or (B)
that one or more of the applicable conditions specified in Section 4 is not then satisfied,
then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than
3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of
its Swing Line Loan available to the Borrower. The Swing Line Lender shall not be required
to fund any Swing Line Loan to the extent any Lender is at such time a Defaulting Lender
hereunder.



42









 






     (c) Refinancing of Swing Line Loans.




     (i) The Swing Line Lender at any time in its sole discretion may request, on
behalf of the Borrower (which hereby irrevocably authorizes the Swing Line Lender to
so request on its behalf), that each Lender make a Base Rate Committed Loan in an
amount equal to such Lender’s Applicable Percentage of the amount of Swing Line
Loans then outstanding. Such request shall be made in writing (which written
request shall be deemed to be a Committed Loan Notice for purposes hereof) and in
accordance with the requirements of Section 2.02, without regard to the minimum and
multiples specified therein for the principal amount of Base Rate Loans, but subject
to the unutilized portion of the Aggregate Commitments and the conditions set forth
in Section 4.02. The Swing Line Lender shall furnish the Borrower with a copy of
the applicable Committed Loan Notice promptly after delivering such notice to the
Administrative Agent. Each Lender shall make an amount equal to its Applicable
Percentage of the amount specified in such Committed Loan Notice available to the
Administrative Agent in immediately available funds (and the Administrative Agent
may apply Cash Collateral available with respect to the applicable Swing Line Loan)
for the account of the Swing Line Lender at the Administrative Agent’s Office not
later than 1:00 p.m. on the day specified in such Committed Loan Notice, whereupon,
subject to Section 2.04(c)(ii), each Lender that so makes funds available shall be
deemed to have made a Base Rate Committed Loan to the Borrower in such amount. The
Administrative Agent shall remit the funds so received to the Swing Line Lender.




     (ii) If for any reason any Swing Line Loan cannot be refinanced by such a
Committed Borrowing in accordance with Section 2.04(c)(i), the request for Base Rate
Committed Loans submitted by the Swing Line Lender as set forth herein shall be
deemed to be a request by the Swing Line Lender that each of the Lenders fund its
risk participation in the relevant Swing Line Loan and each Lender’s payment to the
Administrative Agent for the account of the Swing Line Lender pursuant to Section
2.04(c)(i) shall be deemed payment in respect of such participation.




     (iii) If any Lender fails to make available to the Administrative Agent for the
account of the Swing Line Lender any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.04(c) by the time specified
in Section 2.04(c)(i), the Swing Line Lender shall be entitled to recover from such
Lender (acting through the Administrative Agent), on demand, such amount with
interest thereon for the period from the date such payment is required to the date
on which such payment is immediately available to the Swing Line Lender at a rate
per annum equal to the greater of the Federal Funds Rate and a rate determined by
the Swing Line Lender in accordance with banking industry rules on interbank
compensation, plus any administrative, processing or similar fees customarily
charged by the Swing Line Lender in connection with the foregoing. If such Lender
pays such amount (with interest and fees as aforesaid), the amount so paid shall
constitute such Lender’s Committed Loan included in the relevant Committed Borrowing
or funded participation in the relevant Swing Line Loan, as the case may be. A
certificate of the Swing Line Lender submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this clause (iii)
shall be conclusive absent manifest error.




     (iv) Each Lender’s obligation to make Committed Loans or to purchase and fund
risk participations in Swing Line Loans pursuant to this Section 2.04(c) shall be
absolute and unconditional and shall not be affected by any circumstance, including



43









 







(A) any setoff, counterclaim, recoupment, defense or other right which such Lender
may have against the Swing Line Lender, the Borrower or any other Person for any
reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Lender’s obligation to make Committed Loans pursuant to
this Section 2.04(c) is subject to the conditions set forth in Section 4.02. No
such funding of risk participations shall relieve or otherwise impair the obligation
of the Borrower to repay Swing Line Loans, together with interest as provided
herein.




     (d) Repayment of Participations.




     (i) At any time after any Lender has purchased and funded a risk participation
in a Swing Line Loan, if the Swing Line Lender receives any payment on account of
such Swing Line Loan, the Swing Line Lender will distribute to such Lender its
Applicable Percentage thereof in the same funds as those received by the Swing Line
Lender.




     (ii) If any payment received by the Swing Line Lender in respect of principal
or interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 10.05 (including pursuant
to any settlement entered into by the Swing Line Lender in its discretion), each
Lender shall pay to the Swing Line Lender its Applicable Percentage thereof on
demand of the Administrative Agent, plus interest thereon from the date of such
demand to the date such amount is returned, at a rate per annum equal to the Federal
Funds Rate. The Administrative Agent will make such demand upon the request of the
Swing Line Lender. The obligations of the Lenders under this clause shall survive
the payment in full of the Obligations and the termination of this Agreement.




     (e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be
responsible for invoicing the Borrower for interest on the Swing Line Loans. Until each
Lender funds its Base Rate Committed Loan or risk participation pursuant to this Section
2.04 to refinance such Lender’s Applicable Percentage of any Swing Line Loan, interest in
respect of such Applicable Percentage shall be solely for the account of the Swing Line
Lender.




     (f) Payments Directly to Swing Line Lender. The Borrower shall make all payments of
principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.



     2.05 Prepayments.




     (a) The Borrower may, upon notice to the Administrative Agent, at any time or from time
to time voluntarily prepay Committed Loans in whole or in part without premium or penalty;
provided that (i) such notice must be received by the Administrative Agent not later than
11:00 a.m. (A) three (3) Business Days prior to any date of prepayment of Eurodollar Rate
Loans and (B) on the date of prepayment of Base Rate Committed Loans; (ii) any prepayment of
Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof; and (iii) any prepayment of Base Rate Committed Loans shall be
in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in
each case, if less, the entire principal amount thereof then outstanding. Each such notice
shall specify the date and amount of such prepayment and the Type(s) of Committed Loans to
be prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such
Loans. The Administrative Agent will



44









 







promptly notify each Lender of its receipt of each such notice, and of the amount of
such Lender’s Applicable Percentage of such prepayment. If such notice is given by the
Borrower, the Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein. Any prepayment of a
Eurodollar Rate Loan shall be accompanied by all accrued interest on the amount prepaid,
together with any additional amounts required pursuant to Section 3.05. Subject to Section
2.17, each such prepayment shall be applied to the Committed Loans of the Lenders in
accordance with their respective Applicable Percentages.




     (b) The Borrower may, upon notice to the Swing Line Lender (with a copy to the
Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans
in whole or in part without premium or penalty; provided that (i) such notice must be
received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on
the date of the prepayment, and (ii) any such prepayment shall be in a minimum principal
amount of $100,000. Each such notice shall specify the date and amount of such prepayment.
If such notice is given by the Borrower, the Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date specified
therein.




     (c) If for any reason the Total Outstandings at any time exceed the Implied Loan
Amount, the Borrower shall immediately prepay Loans and/or Cash Collateralize the L/C
Obligations in an aggregate amount equal to such excess; provided, however, that the
Borrower shall not be required to Cash Collateralize the L/C Obligations pursuant to this
Section 2.05(c) unless after the prepayment in full of the Loans the Total Outstandings
exceed the Implied Loan Amount.



     2.06 Termination or Reduction of Commitments.
The Borrower may, upon notice to the Administrative Agent, terminate the Aggregate Commitments,
the Letter of Credit Sublimit or the Swing Line Sublimit, or from time to time permanently reduce
the Aggregate Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit; provided that
(i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. five
(5) Business Days prior to the date of termination or reduction, (ii) any such partial reduction
shall be in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess
thereof, (iii) the Borrower shall not terminate or reduce (A) the Aggregate Commitments if, after
giving effect thereto and to any concurrent prepayments hereunder, the Total Outstandings would
exceed the Aggregate Commitments, (B) the Letter of Credit Sublimit if, after giving effect
thereto, the Outstanding Amount of L/C Obligations not fully Cash Collateralized hereunder would
exceed the Letter of Credit Sublimit, or (C) the Swing Line Sublimit if, after giving effect
thereto and to any concurrent prepayments hereunder, the Outstanding Amount of Swing Line Loans
would exceed the Swing Line Sublimit, and (iv) if, after giving effect to any reduction of the
Aggregate Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit exceeds the amount
of the Aggregate Commitments, such Sublimit shall be automatically reduced by the amount of such
excess. The Administrative Agent will promptly notify the Lenders of any such notice of
termination or reduction of the Aggregate Commitments, the Letter of Credit Sublimit or the Swing
Line Sublimit. Any reduction of the Aggregate Commitments shall be applied to the Commitment of
each Lender according to its Applicable Percentage. All fees accrued until the effective date of
any termination of the Aggregate Commitments shall be paid on the effective date of such
termination.



     2.07 Repayment of Loans.




     (a) The Borrower shall repay to the Lenders on the Maturity Date the aggregate
principal amount of Committed Loans outstanding on such date and all other outstanding
Obligations as of such date.



45









 






     (b) The Borrower shall repay each Swing Line Loan on the earlier to occur of (i) the
date five (5) Business Days after such Loan is made and (ii) the Maturity Date.



     2.08 Interest.




     (a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate Loan
shall bear interest on the outstanding principal amount thereof for each Interest Period at
a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable
Margin; (ii) each Base Rate Committed Loan shall bear interest on the outstanding principal
amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate
plus the Applicable Margin; and (iii) each Swing Line Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a rate per annum
equal to the Base Rate plus the Applicable Margin.




     (b) (i) If any amount of principal of any Loan is not paid when due (without regard to
any applicable grace periods), whether at stated maturity, by acceleration or otherwise,
such amount shall thereafter bear interest at a fluctuating interest rate per annum at all
times equal to the Default Rate to the fullest extent permitted by Applicable Laws.




     (ii) If any amount (other than principal of any Loan) payable by the Borrower
under any Loan Document is not paid when due (without regard to any applicable grace
periods), whether at stated maturity, by acceleration or otherwise, then upon the
request of the Required Lenders, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to the
fullest extent permitted by Applicable Laws.




     (iii) Upon the request of the Required Lenders, while any Event of Default
exists, the Borrower shall pay interest on the principal amount of all outstanding
Obligations hereunder at a fluctuating interest rate per annum at all times equal to
the Default Rate to the fullest extent permitted by Applicable Laws.




     (iv) Accrued and unpaid interest on past due amounts (including interest on
past due interest) shall be due and payable upon demand.




     (c) Interest on each Loan shall be due and payable in arrears on each Interest Payment
Date applicable thereto and at such other times as may be specified herein. Interest
hereunder shall be due and payable in accordance with the terms hereof before and after
judgment, and before and after the commencement of any proceeding under any Debtor Relief
Law.



     2.09 Fees. In addition to certain fees described in subsections (h) and (i) of Section 2.03:




     (a) Unused Fees. The Borrower shall, for each day during the term of this Agreement on
which there exist any Commitments, pay to the Administrative Agent for the account of each
Lender holding a Commitment (in accordance with such Lender’s Applicable Percentage
thereof), an unused fee (the “Unused Fee”) equal to the Unused Rate times the actual daily
amount by which the Aggregate Commitments exceed the Total Outstandings (less the amount of
any outstanding Swing Line Loans) as of such date, subject to adjustment as provided in
Section 2.17. The Unused Fee shall accrue at all times during the term of this Agreement on
which there exist any Commitments, including at any time during which one or more of the
conditions in Section 5 is not met, and shall be due and payable quarterly in arrears on the
fifth



46









 







day of each January, April, July and October (or the next succeeding Business Day if
such day is not a Business Day), commencing on July 5, 2011 (with such initial payment to
include such fees commencing from the Closing Date), and on the Maturity Date. The Unused
Fee shall be calculated quarterly in arrears, based on the applicable daily Unused Rate
during each day of such quarter or portion thereof.




     (b) Other Fees.




     (i) The Borrower shall pay to the Arranger and the Administrative Agent for
their own respective accounts fees in the amounts and at the times specified in the
Fee Letter. Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.




     (ii) The Borrower shall pay to the Administrative Agent, for the account of the
Lenders, such fees (if any) in the amounts and at the times specified in the Fee
Letter. Such fees shall be fully earned when paid and shall not be refundable for
any reason whatsoever.



     2.10 Computation of Interest and Fees; Retroactive Adjustments of Applicable Margin.




     (a) All computations of interest for Base Rate Loans (including Base Rate Loans
determined by reference to the Eurodollar Rate) shall be made on the basis of a year of 365
or 366 days, as the case may be, and actual days elapsed. All other computations of fees
and interest shall be made on the basis of a 360-day year and actual days elapsed (which
results in more fees or interest, as applicable, being paid than if computed on the basis of
a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made,
and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or
such portion is paid, provided that any Loan that is repaid on the same day on which it is
made shall, subject to Section 2.12(a), bear interest for one day. Each determination by
the Administrative Agent of an interest rate or fee hereunder shall be conclusive and
binding for all purposes, absent manifest error.




     (b) If, as a result of any restatement of or other adjustment to the financial
statements of the Borrower or for any other reason, the Borrower or the Lenders determine
that (i) the Consolidated Leverage Ratio as calculated by the Borrower as of any applicable
date was inaccurate and (ii) a proper calculation of the Consolidated Leverage Ratio would
have resulted in higher pricing for such period, the Borrower shall immediately and
retroactively be obligated to pay to the Administrative Agent for the account of the
applicable Lenders or the L/C Issuer, as the case may be, promptly on demand by the
Administrative Agent (or, after the occurrence of an
actual or deemed entry of an order for relief with respect to the Borrower under the
Bankruptcy Code of the United States, automatically and without further action by the
Administrative Agent, any Lender or the L/C Issuer), an amount equal to the excess of the
amount of interest and fees that should have been paid for such period over the amount of
interest and fees actually paid for such period. This paragraph shall not limit the rights
of the Administrative Agent, any Lender or the L/C Issuer, as the case may be, under Section
2.03(c)(iii), 2.03(i) or 2.08(b) or under Section 8. The Borrower’s obligations under this
paragraph shall survive until the date that is one (1) year after the date of the
termination of the Aggregate Commitments and the repayment of all other Obligations
hereunder.



47









 





     2.11 Evidence of Debt.




     (a) The Credit Extensions made by each Lender shall be evidenced by one or more
accounts or records maintained by such Lender and by the Administrative Agent in the
ordinary course of business. The accounts or records maintained by the Administrative Agent
and each Lender shall be conclusive absent manifest error of the amount of the Credit
Extensions made by the Lenders to the Borrower and the interest and payments thereon. Any
failure to so record or any error in doing so shall not, however, limit or otherwise affect
the obligation of the Borrower hereunder to pay any amount owing with respect to the
Obligations. In the event of any conflict between the accounts and records maintained by
any Lender and the accounts and records of the Administrative Agent in respect of such
matters, the accounts and records of the Administrative Agent shall control in the absence
of manifest error. Upon the request of any Lender made through the Administrative Agent,
the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a
Note, which shall evidence such Lender’s Loans in addition to such accounts or records.
Each Lender may attach schedules to its Note and endorse thereon the date, Type (if
applicable), amount and maturity of its Loans and payments with respect thereto.




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



     2.12 Payments Generally; Administrative Agent’s Clawback.




     (a) General. All payments to be made by the Borrower shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise
expressly provided herein, all payments by the Borrower hereunder shall be made to the
Administrative Agent, for the account of the respective Lenders to which such payment is
owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not
later than 2:00 p.m. on the date specified herein. The Administrative Agent will promptly
distribute to each Lender its Applicable Percentage (or other applicable share as provided
herein) of such payment in like funds as received by wire transfer to such Lender’s Lending
Office. All payments received by the Administrative Agent after 2:00 p.m. shall be deemed
received on the next succeeding Business Day and any applicable interest or fee shall
continue to accrue. If any payment to be made by the Borrower shall come due on a day other
than a Business Day, payment shall be made on the next following Business Day, and such
extension of time shall be reflected in computing interest or fees, as the case may be.




     (b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the proposed date of
any Committed Borrowing of Eurodollar Rate Loans (or, in the case of any Committed Borrowing
of Base Rate Loans, prior to 12:00 noon on the date of such Committed Borrowing) that such
Lender will not make available to the Administrative Agent such Lender’s share of such
Committed Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with Section 2.02 (or, in the case of a Committed
Borrowing of Base Rate Loans, that such Lender has made such share available in accordance
with and at the time required by Section 2.02) and may, in reliance upon such assumption,
make



48









 







available to the Borrower a corresponding amount. In such event, if a Lender has not
in fact made its share of the applicable Committed Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount in immediately available
funds with interest thereon, for each day from and including the date such amount is made
available to the Borrower to but excluding the date of payment to the Administrative Agent,
at (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation, plus any administrative, processing or similar fees
customarily charged by the Administrative Agent in connection with the foregoing, and (B) in
the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate
Loans. If the Borrower and such Lender shall pay such interest to the Administrative Agent
for the same or an overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period. If such Lender
pays its share of the applicable Committed Borrowing to the Administrative Agent, then the
amount so paid shall constitute such Lender’s Committed Loan included in such Committed
Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower
may have against a Lender that shall have failed to make such payment to the Administrative
Agent.




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



     A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount
owing under this subsection (b) shall be conclusive absent manifest error.




     (c) Failure to Satisfy Conditions Precedent. If any Lender makes available to the
Administrative Agent funds for any Loan to be made by such Lender as provided in the
foregoing provisions of this Section 2, and such funds are not made available to the
Borrower by the Administrative Agent because the conditions to the applicable Credit
Extension set forth in Section 4 are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from such Lender) to
such Lender, with interest earned thereon at the Federal Funds Rate until returned.




     (d) Obligations of Lenders Several. The obligations of the Lenders hereunder to make
Committed Loans, to fund participations in Letters of Credit and Swing Line Loans and to
make payments pursuant to Section 10.04(c) are several and not joint. The failure of any
Lender to make any Committed Loan, to fund any such participation or to make any payment
under Section 10.04(c) on any date required hereunder shall not relieve any other Lender of
its



49









 







corresponding obligation to do so on such date, and no Lender shall be responsible for
the failure of any other Lender to so make its Committed Loan, to purchase its participation
or to make its payment under Section 10.04(c).




     (e) Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain
the funds for any Loan in any particular place or manner or to constitute a representation
by any Lender that it has obtained or will obtain the funds for any Loan in any particular
place or manner.



     2.13 Sharing of Payments by Lenders.
If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain
payment in respect of any principal of or interest on any of the Committed Loans made by it, or the
participations in L/C Obligations or in Swing Line Loans held by it (excluding any amounts applied
by the Swing Line Lender to outstanding Swing Line Loans and excluding any amounts received by the
L/C Issuer and/or Swing Line Lender to secure the obligations of a Defaulting Lender to fund risk
participations hereunder) resulting in such Lender’s receiving payment of a proportion of the
aggregate amount of such Committed Loans or participations and accrued interest thereon greater
than its pro rata share thereof as provided herein, then the Lender receiving such greater
proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at
face value) participations in the Committed Loans and subparticipations in L/C Obligations and
Swing Line Loans of the other Lenders, or make such other adjustments as shall be equitable, so
that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Committed Loans and other
amounts owing them, provided that:




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




     (ii) the provisions of this Section shall not be construed to apply to (x) any
payment made by or on behalf of the Borrower pursuant to and in accordance with the
express terms of this Agreement (including the application of funds arising from the
existence of a Defaulting Lender), (y) the application of Cash Collateral provided
for in Section 2.16, or (z) any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Committed Loans or
subparticipations in L/C Obligations or Swing Line Loans to any assignee or
participant, other than an assignment to the Borrower or any Affiliate thereof (as
to which the provisions of this Section shall apply).



     2.14 Extension of Maturity Date.




     (a) Initial Maturity Date. Subject to extension pursuant to the terms and conditions
set forth in clause (b) of this Section 2.14 and subject to the provisions of clause (c) of
this Section 2.14, the Borrower shall, on June 3, 2014 (the “Initial Maturity Date”), cause
the Obligations (including, without limitation, all outstanding principal and interest on
the Loans and Swing Line Loans and all fees, costs and expenses due and owing under the Loan
Documents) to be Fully Satisfied.




     (b) Extended Maturity Date Option. Not more than 90 days and not less than 60 days
prior to the Initial Maturity Date, the Borrower may request in writing that the Lenders
extend the term of this Agreement by one (1) additional year to June 3, 2015 (the “Extended
Maturity Date”) so long as no Default exists at the time of such request. Each Lender
agrees that



50









 







the Maturity Date shall be extended following such a request from the Borrower
subject to satisfaction of the following terms and conditions:




     (i) no Default shall exist on the date of such extension and after giving
effect thereto;




     (ii) the Total Outstandings shall not exceed the Implied Loan Amount;




     (iii) the Borrower shall, at the Initial Maturity Date, pay to the
Administrative Agent (for the pro rata benefit of the Lenders based on their
respective Applicable Percentage as of such date) an extension fee equal to (A)
thirty-five basis points (0.35%), multiplied by (B) the Aggregate Commitments as of
such date and shall have paid all other outstanding fees, expenses or other amounts
for which the Loan Parties are responsible hereunder; and




     (iv) each Loan Party shall deliver to the Administrative Agent a certificate
dated as of the Initial Maturity Date signed by a Responsible Officer of such Loan
Party (A) certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such extension and (B) certifying that, before and after
giving effect to such extension, (1) the representations and warranties of such Loan
Party contained in Section 5 and the other Loan Documents are true and correct in
all material respects on and as of the Initial Maturity Date, except to the extent
that such representations and warranties specifically refer to an earlier date, in
which case they are true and correct as of such earlier date, and except that for
purposes of this Section 2.14, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent
statements furnished pursuant to subsections (a) and (b), respectively, of Section
6.01, and (2) no Default exists.




     (c) Notification by Administrative Agent. The Administrative Agent shall notify the
Borrower and each of the Lenders of the effectiveness of any extension pursuant to this
Section 2.14.




     (d) Satisfaction of Obligations Upon Acceleration. Notwithstanding anything contained
herein or in any other Loan Document to the contrary, to the extent any of the Obligations
are accelerated pursuant to the terms hereof (including, without limitation, Section 8.02)
or of any other Loan Document, the Borrower shall, immediately upon the occurrence of such
acceleration, cause such accelerated Obligations to be Fully Satisfied.


     (e) Conflicting Provisions. This Section shall supersede any provisions in Section
2.13 or 10.01 to the contrary.



     2.15 Increase in Commitments.




     (a) Request for Increase. Provided there exists no Default, upon notice to the
Administrative Agent (which shall promptly notify the Lenders), the Borrower may, from time
to time, request an increase in the Aggregate Commitments by an amount (for all such
requests) not exceeding $200,000,000; provided that any such request for an increase shall
be in a minimum amount of $10,000,000 and, if greater than $10,000,000, in whole increments
of $1,000,000 in excess thereof, unless the Administrative Agent and the Borrower agree
otherwise; provided, further, that, after giving effect to such increase, the Aggregate
Commitments shall not exceed $400,000,000. At the time of sending such notice, the Borrower
(in consultation with the



51









 







Administrative Agent) shall specify the time period within which
each Lender is requested to respond (which shall in no event be less than ten Business Days
from the date of delivery of such notice to the Lenders).




     (b) Lender Elections to Increase. Each Lender may decline or elect to participate in
such requested increase in the Aggregate Commitments in its sole discretion, and each Lender
shall notify the Administrative Agent within such time period whether or not it agrees to
increase its Commitment and, if so, whether by an amount equal to, greater than, or less
than its Applicable Percentage of such requested increase. Any Lender not responding within
such time period shall be deemed to have declined to increase its Commitment.




     (c) Notification by Administrative Agent; Additional Lenders. The Administrative Agent
shall notify the Borrower and each Lender of the Lenders’ responses to each request made
hereunder. To achieve the full amount of a requested increase and subject to the approval
of the Administrative Agent, the L/C Issuer and the Swing Line Lender (which approvals shall
not be unreasonably withheld), the Borrower may also invite additional Eligible Assignees to
become Lenders pursuant to a joinder agreement in form and substance reasonably satisfactory
to the Administrative Agent and its counsel.




     (d) Effective Date and Allocations. If the Aggregate Commitments are increased in
accordance with this Section, the Administrative Agent and the Borrower shall determine the
effective date (the “Increase Effective Date”) and the final allocation of such increase.
The Administrative Agent shall promptly notify the Borrower and the Lenders of the final
allocation of such increase and the Increase Effective Date.




     (e) Conditions to Effectiveness of Increase. As a condition precedent to such
increase, the Borrower shall deliver to the Administrative Agent a certificate of each Loan
Party dated as of the Increase Effective Date signed by a Responsible Officer of such Loan
Party (i) certifying and attaching the resolutions adopted by such Loan Party approving or
consenting to such increase, and (ii) in the case of the Borrower, certifying that, before
and after giving effect to such increase, (A) the representations and warranties contained
in Section 5 and the other Loan Documents are true and correct in all material respects on
and as of the Increase Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true and correct in
all material respects as of such earlier date, and except that for purposes of this Section
2.15, the representations and warranties contained in subsections (a) and (b) of Section
5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses
(a) and (b), respectively, of Section 6.01, and (B) no Default exists. The Borrower shall
prepay any Committed Loans outstanding on the Increase Effective Date (and pay any
additional amounts required pursuant to Section 3.05) to the extent necessary to keep
the outstanding Committed Loans ratable with any revised Applicable Percentages arising from
any nonratable increase in the Commitments under this Section, and each Loan Party shall
execute and deliver such documents or instruments as the Administrative Agent may require to
evidence such increase in Commitments and to ratify each such Loan Party’s continuing
obligations hereunder and under the other Loan Documents.




     (f) Conflicting Provisions. This Section shall supersede any provisions in Section
2.13 or 10.01 to the contrary.

52









 








     2.16 Cash Collateral.




     (a) Certain Credit Support Events. Upon the request of the Administrative Agent or the
L/C Issuer (i) if the L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the
Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, the
Borrower shall, in each case, immediately Cash Collateralize the then Outstanding Amount of
all L/C Obligations. At any time that there shall exist a Defaulting Lender, immediately
upon the request of the Administrative Agent, the L/C Issuer or the Swing Line Lender, the
Borrower shall deliver to the Administrative Agent Cash Collateral in an amount sufficient
to cover all Fronting Exposure (after giving effect to Section 2.17(a)(iv) and any Cash
Collateral provided by the Defaulting Lender).




     (b) Grant of Security Interest. All Cash Collateral (other than credit support not
constituting funds subject to deposit) shall be maintained in blocked, non-interest bearing
deposit accounts at Bank of America. The Borrower, and to the extent provided by any
Lender, such Lender, hereby grants to (and subjects to the control of) the Administrative
Agent, for the benefit of the Administrative Agent, the L/C Issuer and the Lenders
(including the Swing Line Lender), and agrees to maintain, a first priority security
interest in all such cash, deposit accounts and all balances therein, and all other property
so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as
security for the obligations to which such Cash Collateral may be applied pursuant to
Section 2.16(c). If at any time the Administrative Agent determines that Cash Collateral is
subject to any right or claim of any Person other than the Administrative Agent as herein
provided, or that the total amount of such Cash Collateral is less than the applicable
Fronting Exposure and other obligations secured thereby, the Borrower or the relevant
Defaulting Lender will, promptly upon demand by the Administrative Agent, pay or provide to
the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate
such deficiency.




     (c) Application. Notwithstanding anything to the contrary contained in this Agreement,
Cash Collateral provided under any of this Section 2.16 or Sections 2.04, 2.05, 2.06, 2.17
or 8.02 in respect of Letters of Credit or Swing Line Loans shall be held and applied to the
satisfaction of the specific L/C Obligations, Swing Line Loans, obligations to fund
participations therein (including, as to Cash Collateral provided by a Defaulting Lender,
any interest accrued on such obligation) and other obligations for which the Cash Collateral
was so provided, prior to any other application of such property as may be provided for
herein.




     (d) Release. Cash Collateral (or the appropriate portion thereof) provided to reduce
Fronting Exposure or other obligations shall be released promptly following (i) the
elimination of the applicable Fronting Exposure or other obligations giving rise thereto
(including by the termination of Defaulting Lender status of the applicable Lender (or, as
appropriate, its assignee following compliance with Section 10.06(b)(vi))) or (ii) the Administrative Agent’s
good faith determination that there exists excess Cash Collateral; provided, however, that
(x) Cash Collateral furnished by or on behalf of a Loan Party shall not be released during
the continuance of a Default (and following application as provided in this Section 2.16 may
be otherwise applied in accordance with Section 8.03), and (y) the Person providing Cash
Collateral and the L/C Issuer or Swing Line Lender, as applicable, may agree that Cash
Collateral shall not be released but instead held to support future anticipated Fronting
Exposure or other obligations.



53









 





     2.17 Defaulting Lenders.




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




     (i) Waivers and Amendments. That Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall be
restricted as set forth in Section 10.01.



     (ii) Reallocation of Payments. Any payment of principal, interest, fees or
other amounts received by the Administrative Agent for the account of that
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section
8 or otherwise, and including any amounts made available to the Administrative Agent
by that Defaulting Lender pursuant to Section 10.08), shall be applied at such time
or times as may be determined by the Administrative Agent as follows: first, to the
payment of any amounts owing by that Defaulting Lender to the Administrative Agent
hereunder; second, to the payment on a pro rata basis of any amounts owing by that
Defaulting Lender to the L/C Issuer or Swing Line Lender hereunder; third, if so
determined by the Administrative Agent or requested by the L/C Issuer or Swing Line
Lender, to be held as Cash Collateral for future funding obligations of that
Defaulting Lender of any participation in any Swing Line Loan or Letter of Credit;
fourth, as the Borrower may request (so long as no Default exists), to the funding
of any Loan in respect of which that Defaulting Lender has failed to fund its
portion thereof as required by this Agreement, as determined by the Administrative
Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be
held in a non-interest bearing deposit account and released in order to satisfy
obligations of that Defaulting Lender to fund Loans under this Agreement; sixth, to
the payment of any amounts owing to the Lenders, the L/C Issuer or Swing Line Lender
as a result of any judgment of a court of competent jurisdiction obtained by any
Lender, the L/C Issuer or Swing Line Lender against that Defaulting Lender as a
result of that Defaulting Lender’s breach of its obligations under this Agreement;
seventh, so long as no Default exists, to the payment of any amounts owing to the
Borrower as a result of any judgment of a court of competent jurisdiction obtained
by the Borrower against that Defaulting Lender as a result of that Defaulting
Lender’s breach of its obligations under this Agreement; and eighth, to that
Defaulting Lender or as otherwise directed by a court of competent jurisdiction;
provided that if (x) such payment is a payment of the principal amount of any Loans
or L/C Borrowings in respect of which that Defaulting Lender has not fully funded
its appropriate share and (y) such Loans or L/C Borrowings were made at a time when
the conditions set forth in Section 4.02 were satisfied or waived, such payment
shall be applied solely to pay the Loans of, and L/C Borrowings owed to, all
non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of
any Loans of, or L/C Borrowings owed to, that Defaulting Lender. Any payments,
prepayments or other amounts paid or payable to a Defaulting Lender that are applied
(or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral
pursuant to this Section 2.17(a)(ii) shall be deemed paid to and redirected by that
Defaulting Lender, and each Lender irrevocably consents hereto.




     (iii) Certain Fees. That Defaulting Lender (x) shall not be entitled to
receive any Unused Fee pursuant to Section 2.10(a) for any period during which that
Lender is a Defaulting Lender (and the Borrower shall not be required to pay any
such Unused Fee that otherwise would have been required to have been paid to that
Defaulting Lender) and



54









 







(y) shall be limited in its right to receive Letter of Credit Fees as provided in Section 2.03(h).




     (iv) Reallocation of Applicable Percentages to Reduce Fronting Exposure.
During any period in which there is a Defaulting Lender, for purposes of computing
the amount of the obligation of each non-Defaulting Lender to acquire, refinance or
fund participations in Letters of Credit or Swing Line Loans pursuant to Sections
2.03 and 2.04, the “Applicable Percentage” of each non-Defaulting Lender shall be
computed without giving effect to the Commitment of that Defaulting Lender; provided
that, (i) each such reallocation shall be given effect only if, at the date the
applicable Lender becomes a Defaulting Lender, no Default exists; and (ii) the
aggregate obligation of each non-Defaulting Lender to acquire, refinance or fund
participations in Letters of Credit and Swing Line Loans shall not exceed the
positive difference, if any, of (1) the Commitment of that non-Defaulting Lender
minus (2) the aggregate Outstanding Amount of the Committed Loans of that Lender.




     (b) Defaulting Lender Cure. If the Borrower, the Administrative Agent, Swing Line
Lender and the L/C Issuer agree in writing in their sole discretion that a Defaulting Lender
should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so
notify the parties hereto, whereupon as of the effective date specified in such notice and
subject to any conditions set forth therein (which may include arrangements with respect to
any Cash Collateral), that Lender will, to the extent applicable, purchase that portion of
outstanding Loans of the other Lenders or take such other actions as the Administrative
Agent may determine to be necessary to cause the Committed Loans and funded and unfunded
participations in Letters of Credit and Swing Line Loans to be held on a pro rata basis by
the Lenders in accordance with their Applicable Percentages (without giving effect to
Section 2.17(a)(iv)), whereupon that Lender will cease to be a Defaulting Lender; provided
that no adjustments will be made retroactively with respect to fees accrued or payments made
by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided,
further, that except to the extent otherwise expressly agreed by the affected parties, no
change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any
claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.



3. TAXES, YIELD PROTECTION AND ILLEGALITY




     3.01 Taxes.




     (a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.




     (i) Any and all payments by or on account of any obligation of the Borrower
hereunder or under any other Loan Document shall to the extent permitted by
Applicable Laws be made free and clear of and without reduction or withholding for
any Taxes. If, however, Applicable Laws require the Borrower or the Administrative Agent to
withhold or deduct any Tax, such Tax shall be withheld or deducted in accordance
with such Applicable Laws as determined by the Borrower or the Administrative Agent,
as the case may be, upon the basis of the information and documentation to be
delivered pursuant to subsection (e) below.




     (ii) If the Borrower or the Administrative Agent shall be required by the Code
to withhold or deduct any Taxes, including both United States Federal backup



55









 







withholding and withholding taxes, from any payment, then (A) the Administrative
Agent shall withhold or make such deductions as are determined by the Administrative
Agent to be required based upon the information and documentation it has received
pursuant to subsection (e) below, (B) the Administrative Agent shall timely pay the
full amount withheld or deducted to the relevant Governmental Authority in
accordance with the Code, and (C) to the extent that the withholding or deduction is
made on account of Indemnified Taxes or Other Taxes, the sum payable by the Borrower
shall be increased as necessary so that after any required withholding or the making
of all required deductions (including deductions applicable to additional sums
payable under this Section) the Administrative Agent, Lender or L/C Issuer, as the
case may be, receives an amount equal to the sum it would have received had no such
withholding or deduction been made; provided, however, that the Borrower shall not
be required to increase the amount payable under this Section or indemnify
Administrative Agent, a Lender or L/C Issuer under Section 3.01(c) to the extent
that the obligation to withhold or indemnify the relevant Tax existed on the date
that such Administrative Agent, Lender or L/C Issuer became a party to this
Agreement in the capacity under which such party makes a claim under this Section.




     (b) Payment of Other Taxes by the Borrower. Without limiting the provisions of
subsection (a) above, the Borrower shall timely pay any Other Taxes to the relevant
Governmental Authority in accordance with Applicable Laws.




     (c) Tax Indemnifications.




     (i) Without limiting the provisions of subsection (a) or (b) above, the
Borrower shall, and does hereby, indemnify the Administrative Agent, each Lender and
the L/C Issuer, and shall make payment in respect thereof within 10 days after
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or attributable
to amounts payable under this Section) withheld or deducted by the Borrower or the
Administrative Agent or paid by the Administrative Agent, such Lender or the L/C
Issuer, as the case may be, and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. The Borrower shall also, and does hereby, indemnify the
Administrative Agent, and shall make payment in respect thereof within 10 days after
demand therefor, for any amount which a Lender or the L/C Issuer for any reason
fails to pay indefeasibly to the Administrative Agent as required by clause (ii) of
this subsection. A certificate as to the amount of any such payment or liability
delivered to the Borrower by a Lender or the L/C Issuer (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on behalf
of a Lender or the L/C Issuer, shall be conclusive absent manifest error.
Notwithstanding the foregoing, where demand for such Indemnified Taxes or Other
Taxes is not made within one (1) year after such Administrative Agent, Lender or L/C
Issuer receives written notice of the assertion of taxes and the Borrower does
not otherwise have notice of such assertion, no indemnification shall be required
for penalties, additions to tax, expenses, and interest accruing on such Indemnified
Taxes or Other Taxes from the date that is one (1) year after the receipt by such
Administrative Agent, Lender or L/C Issuer of written notice of the assertion of
such taxes until thirty (30) days after the date such demand was actually received
by the Borrower.




56











 






     (ii) Without limiting the provisions of subsection (a) or (b) above, each
Lender and the L/C Issuer shall, and does hereby, indemnify the Borrower and the
Administrative Agent, and shall make payment in respect thereof within 10 days after
demand therefor, against any and all Taxes and any and all related losses, claims,
liabilities, penalties, interest and expenses (including the fees, charges and
disbursements of any counsel for the Borrower or the Administrative Agent) incurred
by or asserted against the Borrower or the Administrative Agent by any Governmental
Authority as a result of the failure by such Lender or the L/C Issuer, as the case
may be, to deliver, or as a result of the inaccuracy, inadequacy or deficiency of,
any documentation required to be delivered by such Lender or the L/C Issuer, as the
case may be, to the Borrower or the Administrative Agent pursuant to subsection (e).
Each Lender and the L/C Issuer hereby authorizes the Administrative Agent to set
off and apply any and all amounts at any time owing to such Lender or the L/C
Issuer, as the case may be, under this Agreement or any other Loan Document against
any amount due to the Administrative Agent under this clause (ii). The agreements
in this clause (ii) shall survive the resignation and/or replacement of the
Administrative Agent, any assignment of rights by, or the replacement of, a Lender
or the L/C Issuer, the termination of the Aggregate Commitments and the repayment,
satisfaction or discharge of all other Obligations.




     (d) Evidence of Payments. Upon request by the Borrower or the Administrative Agent, as
the case may be, after any payment of Taxes by the Borrower or the Administrative Agent to a
Governmental Authority as provided in this Section 3.01, the Borrower shall deliver to the
Administrative Agent or the Administrative Agent shall deliver to the Borrower, as the case
may be, the original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of any return required by Applicable Laws to report such
payment or other evidence of such payment reasonably satisfactory to the Borrower or the
Administrative Agent, as the case may be.




     (e) Status of Lenders; Tax Documentation.




     (i) Each Lender shall deliver to the Borrower and to the Administrative Agent,
at the time or times prescribed by Applicable Laws or when reasonably requested by
the Borrower or the Administrative Agent, such properly completed and executed
documentation prescribed by Applicable Laws or by the taxing authorities of any
jurisdiction and such other reasonably requested information as will permit the
Borrower or the Administrative Agent, as the case may be, to determine (A) whether
or not payments made hereunder or under any other Loan Document are subject to
Taxes, (B) if applicable, the required rate of withholding or deduction, and (C)
such Lender’s entitlement to any available exemption from, or reduction of,
applicable Taxes in respect of all payments to be made to such Lender by the
Borrower pursuant to this Agreement or otherwise to establish such Lender’s status
for withholding tax purposes in the applicable jurisdiction.




     (ii) Without limiting the generality of the foregoing, if the Borrower is
resident for tax purposes in the United States,




     (A) any Lender that is a “United States person” within the meaning of
Section 7701(a)(30) of the Code shall deliver to the Borrower and the
Administrative Agent executed originals of Internal Revenue Service Form W-9
or such other documentation or information prescribed by Applicable Laws or
reasonably requested by the Borrower or the Administrative Agent as will
enable



57









 






the Borrower or the Administrative Agent, as the case may be, to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements; and




     (B) each Foreign Lender that is entitled under the Code or any
applicable treaty to an exemption from or reduction of withholding tax with
respect to payments hereunder or under any other Loan Document shall deliver
to the Borrower and the Administrative Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrower or the Administrative Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:




     (iii) executed originals of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States is a
party,




     (iv) executed originals of Internal Revenue Service Form W-8ECI,




     (v) executed originals of Internal Revenue Service Form W-8IMY and all required
supporting documentation,




     (vi) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the effect
that such Foreign Lender is not (A) a “bank” within the meaning of section
881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within the
meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled foreign
corporation” described in section 881(c)(3)(C) of the Code and (y) executed
originals of Internal Revenue Service Form W-8BEN, or




     (vii) executed originals of any other form prescribed by Applicable Laws as a
basis for claiming exemption from or a reduction in United States Federal
withholding tax together with such supplementary documentation as may be prescribed
by Applicable Laws to permit the Borrower or the Administrative Agent to determine
the withholding or deduction required to be made.




     (viii) Each Lender shall promptly (A) notify the Borrower and the
Administrative Agent of any change in circumstances which would modify or render
invalid any claimed exemption or reduction, and (B) take such steps as shall not be
materially disadvantageous to it, in the reasonable judgment of such Lender, and as
may be reasonably necessary (including the re-designation of its Lending Office) to
avoid any requirement of Applicable Laws of any jurisdiction that the Borrower or
the Administrative Agent make any withholding or deduction for taxes from amounts
payable to such Lender.




     (f) Treatment of Certain Refunds. Unless required by Applicable Laws, at no time shall
the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a
Lender or the L/C Issuer, or have any obligation to pay to any Lender or the L/C Issuer, any
refund of Taxes withheld or deducted from funds paid for the account of such Lender or the
L/C Issuer, as the case may be. If the Administrative Agent, any Lender or the L/C Issuer
determines, in its sole discretion, that it has received (or otherwise been credited with) a
refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or
with respect to which the



58









 






Borrower has paid additional amounts pursuant to this Section, it shall pay to the
Borrower an amount equal to such refund (but only to the extent of indemnity payments made,
or additional amounts paid, by the Borrower under this Section with respect to the Taxes or
Other Taxes giving rise to such refund), net of all out-of-pocket expenses incurred by the
Administrative Agent, such Lender or the L/C Issuer, as the case may be, and without
interest (other than any interest paid by the relevant Governmental Authority with respect
to such refund), provided that the Borrower, upon the request of the Administrative Agent,
such Lender or the L/C Issuer, agrees to repay the amount paid over to the Borrower (plus
any penalties, interest or other charges imposed by the relevant Governmental Authority) to
the Administrative Agent, such Lender or the L/C Issuer in the event the Administrative
Agent, such Lender or the L/C Issuer is required to repay such refund to such Governmental
Authority. This subsection shall not be construed to require the Administrative Agent, any
Lender or the L/C Issuer to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to the Borrower or any other Person.



     3.02 Illegality. If any Lender determines that any Applicable Laws have made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending
Office to make, maintain or fund Loans whose interest is determined by reference to the Eurodollar
Rate, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental
Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or
to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender
to the Borrower through the Administrative Agent, (i) any obligation of such Lender to make or
continue Eurodollar Rate Loans or to convert Base Rate Committed Loans to Eurodollar Rate Loans
shall be suspended, and (ii) if such notice asserts the illegality of such Lender making or
maintaining Base Rate Loans the interest rate on which is determined by reference to the Eurodollar
Rate component of the Base Rate, the interest rate on which Base Rate Loans of such Lender shall,
if necessary to avoid such illegality, be determined by the Administrative Agent without reference
to the Eurodollar Rate component of the Base Rate, in each case until such Lender notifies the
Administrative Agent and the Borrower that the circumstances giving rise to such determination no
longer exist. Upon receipt of such notice, (x) the Borrower shall, upon demand from such Lender
(with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate
Loans of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender
shall, if necessary to avoid such illegality, be determined by the Administrative Agent without
reference to the Eurodollar Rate component of the Base Rate), either on the last day of the
Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate
Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such
Eurodollar Rate Loans and (y) if such notice asserts the illegality of such Lender determining or
charging interest rates based upon the Eurodollar Rate, the Administrative Agent shall during the
period of such suspension compute the Base Rate applicable to such Lender without reference to the
Eurodollar Rate component thereof until the Administrative Agent is advised in writing by such
Lender that it is no longer illegal for such Lender to determine or charge interest rates based
upon the Eurodollar Rate. Upon any such prepayment or conversion, the Borrower shall also pay
accrued interest on the amount so prepaid or converted.



     3.03 Inability to Determine Rates. If the Required Lenders determine that for any reason in connection with any request for a
Eurodollar Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits are not
being offered to banks in the London interbank eurodollar market for the applicable amount and
Interest Period of such Eurodollar Rate Loan, (b) adequate and reasonable means do not exist for
determining the Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan or in connection
with an existing or proposed Base Rate Loan, or (c) the Eurodollar Rate for any requested Interest
Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the
cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the
Borrower and each Lender. Thereafter, (x) the obligation of the Lenders to



59









 







make or maintain
Eurodollar Rate Loans shall be suspended, and (y) in the event of a determination described in the
preceding sentence with respect to the Eurodollar Rate component of the Base Rate, the utilization
of the Eurodollar Rate component in determining the Base Rate shall be suspended, in each case
until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice.
Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of,
conversion to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have
converted such request into a request for a Committed Borrowing of Base Rate Loans in the amount
specified therein.



     3.04 Increased Costs; Reserves on Eurodollar Rate Loans.




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




     (i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with or
for the account of, or credit extended or participated in by, any Lender (except any
reserve requirement contemplated by Section 3.04(e)) or the L/C Issuer;




     (ii) subject any Lender or the L/C Issuer to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any participation in a Letter
of Credit or any Eurodollar Rate Loan made by it, or change the basis of taxation of
payments to such Lender or the L/C Issuer in respect thereof (except for Indemnified
Taxes or Other Taxes covered by Section 3.01 and the imposition of, or any change in
the rate of, any Excluded Tax payable by such Lender or the L/C Issuer); or




     (iii) impose on any Lender or the L/C Issuer or the London interbank market any
other condition, cost or expense affecting this Agreement or Eurodollar Rate Loans
made by such Lender or any Letter of Credit or participation therein;




and the result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining any Loan the interest on which is determined by reference to the
Eurodollar Rate (or of maintaining its obligation to make any such Loan), or to increase the
cost to such Lender or the L/C Issuer of participating in, issuing or maintaining any Letter
of Credit (or of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such Lender or the L/C
Issuer hereunder (whether of principal, interest or any other amount) then, upon request of
such Lender or the L/C Issuer, the Borrower will pay to such Lender or the L/C Issuer, as
the case may be, such additional amount or amounts as will compensate such Lender or the L/C
Issuer, as the case may be, for such additional costs incurred or reduction suffered.




     (b) Capital Requirements. If any Lender or the L/C Issuer determines that any Change
in Law affecting such Lender or the L/C Issuer or any Lending Office of such Lender or such
Lender’s or the L/C Issuer’s holding company, if any, regarding capital requirements has or
would have the effect of reducing the rate of return on such Lender’s or the L/C Issuer’s
capital or on the capital of such Lender’s or the L/C Issuer’s holding company, if any, as a
consequence of this Agreement, the Commitments of such Lender or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by
the L/C Issuer, to a level below that which such Lender or the L/C Issuer or such Lender’s
or the L/C Issuer’s holding
company could have achieved but for such Change in Law (taking into consideration such
Lender’s or the L/C Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s
holding company with respect to capital adequacy), then from time to time the Borrower will
pay to such



60









 






Lender or the L/C Issuer, as the case may be, such additional amount or amounts
as will compensate such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s
holding company for any such reduction suffered.




     (c) Certificates for Reimbursement. A certificate of a Lender or the L/C Issuer
setting forth the amount or amounts necessary to compensate such Lender or the L/C Issuer or
its holding company, as the case may be, as specified in subsection (a) or (b) of this
Section and delivered to the Borrower shall be conclusive absent manifest error. The
Borrower shall pay such Lender or the L/C Issuer, as the case may be, the amount shown as
due on any such certificate within 10 days after receipt thereof.




     (d) Delay in Requests. Failure or delay on the part of any Lender or the L/C Issuer to
demand compensation pursuant to the foregoing provisions of this Section shall not
constitute a waiver of such Lender’s or the L/C Issuer’s right to demand such compensation,
provided that the Borrower shall not be required to compensate a Lender or the L/C Issuer
pursuant to the foregoing provisions of this Section for any increased costs incurred or
reductions suffered more than nine (9) months prior to the date that such Lender or the L/C
Issuer, as the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the L/C Issuer’s intention to claim
compensation therefor (except that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the nine-month period referred to above shall be extended
to include the period of retroactive effect thereof).




     (e) Reserves on Eurodollar Rate Loans. The Borrower shall pay to each Lender, as long
as such Lender shall be required to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency
liabilities”), additional interest on the unpaid principal amount of each Eurodollar Rate
Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as
determined by such Lender in good faith, which determination shall be conclusive), which
shall be due and payable on each date on which interest is payable on such Loan, provided
the Borrower shall have received at least 10 days’ prior notice (with a copy to the
Administrative Agent) of such additional interest from such Lender. If a Lender fails to
give notice 10 days prior to the relevant Interest Payment Date, such additional interest
shall be due and payable 10 days from receipt of such notice.



     3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the
Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss,
cost or expense incurred by it as a result of:




     (a) any continuation, conversion, payment or prepayment of any Loan other than a Base
Rate Loan on a day other than the last day of the Interest Period for such Loan (whether
voluntary, mandatory, automatic, by reason of acceleration, or otherwise);




     (b) any failure by the Borrower (for a reason other than the failure of such Lender to
make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on
the date or in the amount notified by the Borrower; or




     (c) any assignment of a Eurodollar Rate Loan on a day other than the last day of the
Interest Period therefor as a result of a request by the Borrower pursuant to Section 10.13;



61









 






including any loss or expense arising from the liquidation or reemployment of funds obtained
by it to maintain such Loan or from fees payable to terminate the deposits from which such
funds were obtained. The Borrower shall also pay any customary administrative fees charged
by such Lender in connection with the foregoing.




For purposes of calculating amounts payable by the Borrower to the Lenders under this
Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by
it at the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the
London interbank eurodollar market for a comparable amount and for a comparable period,
whether or not such Eurodollar Rate Loan was in fact so funded.



     3.06 Mitigation Obligations; Replacement of Lenders.




     (a) Designation of a Different Lending Office. If any Lender requests compensation
under Section 3.04, or the Borrower is required to pay any additional amount to any Lender,
the L/C Issuer or any Governmental Authority for the account of any Lender or the L/C Issuer
pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then
such Lender or the L/C Issuer shall, as applicable, use reasonable efforts to designate a
different Lending Office for funding or booking its Loans hereunder or to assign its rights
and obligations hereunder to another of its offices, branches or affiliates, if, in the
judgment of such Lender or the L/C Issuer, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in
the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable,
and (ii) in each case, would not subject such Lender or the L/C Issuer, as the case may be,
to any unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender or the L/C Issuer, as the case may be. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender or the L/C Issuer in connection with
any such designation or assignment.




     (b) Replacement of Lenders. If any Lender requests compensation under Section 3.04, or
if the Borrower is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.01, the Borrower may replace
such Lender in accordance with Section 10.13.



     3.07 Survival. All of the Borrower’s obligations under this Section 3 shall survive termination of the
Aggregate Commitments, repayment of all other Obligations hereunder and resignation of the
Administrative Agent.



4. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS




     4.01 Conditions of Initial Credit Extension. The obligation of the L/C Issuer and each Lender to make its initial Credit Extension hereunder
is subject to satisfaction of the following conditions precedent:




     (a) The Administrative Agent’s receipt of the following, each of which shall be
originals or telecopies (followed promptly by originals) unless otherwise specified, each
properly executed by a Responsible Officer of the signing Loan Party, each dated the Closing
Date (or, in
the case of certificates of governmental officials, a recent date before the Closing
Date) and each in form and substance satisfactory to the Administrative Agent and each of
the Lenders:




     (i) executed counterparts of this Agreement, sufficient in number for
distribution to the Administrative Agent, each Lender and the Borrower;



62









 






     (ii) a Note executed by the Borrower in favor of each Lender requesting a Note;




     (iii) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may require evidencing the identity, authority and capacity of
each Responsible Officer thereof authorized to act as a Responsible Officer in
connection with this Agreement and the other Loan Documents to which such Loan Party
is a party;




     (iv) copies of the Organization Documents of each Loan Party certified to be
true and complete as of a recent date by the appropriate Governmental Authority of
the state or other jurisdiction of its incorporation or organization, where
applicable, and certified by a secretary or assistant secretary of such Borrower to
be true and correct as of the Closing Date and such other documents and
certifications as the Administrative Agent may reasonably require to evidence that
each Loan Party is duly organized or formed, and that each of the Loan Parties is
validly existing, in good standing and qualified to engage in business in each
jurisdiction where its ownership, lease or operation of properties or the conduct of
its business requires such qualification;




     (v) a favorable opinion of Honigman Miller Schwartz and Cohn LLP, counsel to
the Loan Parties, addressed to the Administrative Agent and each Lender, as to such
matters concerning the Loan Parties and the Loan Documents as the Administrative
Agent may request;




     (vi) a certificate of a Responsible Officer of each Loan Party either (A)
attaching copies of all consents, licenses and approvals required in connection with
the execution, delivery and performance by such Loan Party and the validity against
such Loan Party of the Loan Documents to which it is a party, and such consents,
licenses and approvals shall be in full force and effect, or (B) stating that no
such consents, licenses or approvals are so required;




     (vii) a certificate signed by a Responsible Officer of the Borrower certifying
(A) that the conditions specified in Sections 4.02(a), (b) and (c) have been
satisfied, (B) that there has been no event or circumstance since the date of the
Audited Financial Statements that has had or could be reasonably expected to have,
either individually or in the aggregate, a Material Adverse Effect; and (C) a
calculation of the Consolidated Leverage Ratio as of the last day of the fiscal
quarter of the Borrower most recently ended prior to the Closing Date;




     (viii) a duly completed Compliance Certificate as of the last day of the fiscal
quarter of the Borrower ended on March 31, 2011, signed by a Responsible Officer of
the Borrower;




     (ix) evidence that all insurance required to be maintained pursuant to the Loan
Documents has been obtained and is in effect;




     (x) a certificate executed by a Responsible Officer of the Borrower as of the
Closing Date, in form and substance satisfactory to the Administrative Agent,
regarding the Solvency of (A) the Borrower, (B) each of the other Loan Parties, and
(C) the Consolidated Parties on a consolidated basis; and



63









 






     (xi) such other assurances, certificates, documents, consents or opinions as
the Administrative Agent, the L/C Issuer, the Swing Line Lender or the Required
Lenders reasonably may require.




     (b) The Administrative Agent shall have received executed counterparts of the Fee
Letter, and any fees required to be paid hereunder or under the Fee Letter on or before the
Closing Date shall have been paid (provided such fees may be paid from the proceeds of such
initial Credit Extension).




     (c) Unless waived by the Administrative Agent, the Borrower shall have paid all
reasonable fees, charges and disbursements of counsel to the Administrative Agent (directly
to such counsel if requested by the Administrative Agent) to the extent invoiced prior to or
on the Closing Date, plus such additional amounts of such fees, charges and disbursements as
shall constitute its reasonable estimate of such fees, charges and disbursements incurred or
to be incurred by it through the closing proceedings (provided that such estimate shall not
thereafter preclude a final settling of accounts between the Borrower and the Administrative
Agent).




     (d) The representations and warranties of the Borrower and each other Loan Party
contained in Section 5 or any other Loan Document, or which are contained in any document
furnished at any time under or in connection herewith or therewith, shall be true and
correct on and as of the Closing Date.




     (e) No Default shall exist, or would result from, such proposed Credit Extension or
from the application of the proceeds thereof.




     (f) There shall not have occurred any event or circumstance since the date of the
Audited Financial Statements that has had or could be reasonably expected to have, either
individually or in the aggregate, a Material Adverse Effect.




     (g) The absence of any condition, circumstance, action, suit, investigation or
proceeding pending or, to the knowledge of the Borrower and/or Guarantors, threatened in any
court or before any arbitrator or Governmental Authority that could reasonably be expected
to have a Material Adverse Effect.



     Without limiting the generality of the provisions of the last paragraph of Section 9.03, for
purposes of determining compliance with the conditions specified in this Section 4.01, 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 such Lender prior to the proposed Closing Date specifying its objection thereto.



     4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor any Request for Credit Extension (other than a Committed
Loan Notice requesting only a conversion of Committed Loans to the other Type, or a continuation of
Eurodollar Rate Loans) is subject to the following conditions precedent:




     (a) The representations and warranties of the Borrower and each other Loan Party
contained in Section 5 or any other Loan Document, or which are contained in any document
furnished at any time under or in connection herewith or therewith, shall be true and
correct in all material respects on and as of the date of such Credit Extension, except to
the extent that such representations and warranties specifically refer to an earlier date,
in which case they shall be true



64









 






and correct in all material respects as of such earlier
date, and except that for purposes of this Section 4.02, the representations and warranties
contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01.




     (b) No Default shall exist, or would result from such proposed Credit Extension or from
the application of the proceeds thereof.




     (c) Assuming the effectiveness of the requested Credit Extension, (i) the Total
Outstandings as of such date shall not exceed the Implied Loan Amount; and (ii) the Total
Outstandings shall not exceed the Aggregate Commitments.




     (d) The Borrower shall be in compliance (on a Pro Forma Basis taking into account the
applicable Credit Extension) with the financial covenants set forth in Section 7.11.




     (e) The Administrative Agent and, if applicable, the L/C Issuer or the Swing Line
Lender shall have received a Request for Credit Extension in accordance with the
requirements hereof.




     (f) All of the conditions precedent set forth in Section 4.01 shall have been satisfied
on or prior to date of such requested Credit Extension.



     Each Request for Credit Extension (other than a Committed Loan Notice requesting only a
conversion of Committed Loans to the other Type or a continuation of Eurodollar Rate Loans)
submitted by the Borrower shall be deemed to be a representation and warranty that the conditions
specified in Sections 4.02(a), (b) and (c) have been satisfied on and as of the date of the
applicable Credit Extension.



5. REPRESENTATIONS AND WARRANTIES




     The Borrower represents and warrants to the Administrative Agent and the Lenders that:



     5.01 Existence, Qualification and Power. Each Consolidated Party (a) is duly organized or formed, validly existing and, as applicable, in
good standing under the Applicable Laws of the jurisdiction of its incorporation or organization,
(b) has all requisite power and authority and all requisite governmental licenses, authorizations,
consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute,
deliver and perform its obligations under the Loan Documents to which it is a party, and (c) is
duly qualified and is licensed and, as applicable, in good standing under the Applicable Laws of
each jurisdiction where its ownership, lease or operation of properties or the conduct of its
business requires such qualification or license; except in each case referred to in clause (b)(i)
or (c), to the extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect.



     5.02 Authorization; No Contravention. The execution, delivery and performance by each Loan Party of each Loan Document to which such
Person is party, have been duly authorized by all necessary corporate or other organizational
action, and do not and will not (a) contravene the terms of any of such Person’s Organization
Documents; (b) conflict with or result in any breach or contravention of, or the creation of any
Lien under, or require any payment to be made under (i) any Contractual Obligation to which such
Person is a party or affecting such Person or the properties of such Person or any of its
Subsidiaries, except in each case, to the extent such violation, breach, Lien or payment could not
reasonably be expected to have a Material Adverse Effect, or (ii) any order, injunction, writ or
decree of any Governmental Authority or any arbitral award to which such Person or its property is
subject; or (c) violate any Applicable Laws.



65









 





     5.03 Governmental Authorization; Other Consents. No approval, consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required in connection with
the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement
or any other Loan Document.



     5.04 Binding Effect. This Agreement has been, and each other Loan Document, when delivered hereunder, will have been,
duly executed and delivered by each Loan Party that is party thereto. This Agreement constitutes,
and each other Loan Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party thereto in
accordance with its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’
rights generally and by general equitable principles (whether enforcement is sought by proceedings
in equity or at law).



     5.05 Financial Statements; No Material Adverse Effect.




     (a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise expressly
noted therein; (ii) fairly present the financial condition of the Consolidated Parties, on a
consolidated basis, as of the date thereof and their results of operations for the period
covered thereby in accordance with GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein; and (iii) show all indebtedness and
other liabilities, direct or contingent, of the Consolidated Parties as of the date thereof,
including liabilities for taxes, commitments and Indebtedness, that in each case is material
in relation to the business, operations, properties, assets or condition (financial or
otherwise) of the Consolidated Parties.




     (b) The unaudited consolidated balance sheets of the Consolidated Parties dated March
31, 2011, and the related consolidated statements of income or operations, shareholders’
equity and cash flows for the fiscal quarter ended on that date (i) were prepared in
accordance with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein, and (ii) fairly present the financial condition of the
Consolidated Parties as of the date thereof and their results of operations for the period
covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes
and to normal year-end audit adjustments. Except as otherwise set forth on Schedule 5.05,
such financial statements set forth all indebtedness and other liabilities, direct or
contingent, of the Consolidated Parties as of March 31, 2011, including liabilities for
taxes, commitments and Indebtedness, that in each case is material in relation to the
business, operations, properties, assets or condition (financial or otherwise) of the
Consolidated Parties.




     (c) Since the date of the Audited Financial Statements, there has been no event or
circumstance, either individually or in the aggregate, that has had or could reasonably be
expected to have a Material Adverse Effect.




     (d) The consolidated pro forma balance sheets of the Consolidated Parties as of March
31, 2011, and the related consolidated pro forma statements of income and cash flows of the
Consolidated Parties for the three (3) months then ended, certified by the chief financial
officer or treasurer of the Borrower, copies of which have been furnished to each Lender,
fairly present the consolidated pro forma financial condition of the Consolidated Parties as
at such date and the consolidated pro forma results of operations of the Consolidated
Parties for the period ended on such date, all in accordance with GAAP.



66









 





     5.06 Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of any
Responsible Officer of any Consolidated Party after due and diligent investigation, threatened in
writing, at law, in equity, in arbitration or before any Governmental Authority, by or against any
Consolidated Party or against any of their properties or revenues that (a) purport to affect or
pertain to this Agreement or any other Loan Document, or any of the transactions contemplated
hereby, or (b) except as specifically disclosed in Schedule 5.06, if determined adversely, could
(either individually or in the aggregate) reasonably be expected to have a Material Adverse Effect,
and there has been no material adverse change in the status of, or the financial effect on, any
Consolidated Party with respect to the matters described on Schedule 5.06.



     5.07 No Default. No Consolidated Party is in default under or with respect to any Contractual Obligation that
could, either individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect. No Default exists or would result from the consummation of the transactions contemplated
by this Agreement or any other Loan Document.



     5.08 Ownership of Property; Liens; Investments.




     (a) Each Loan Party has good record and marketable title in fee simple to, or valid
leasehold interests in, each of the Unencumbered Borrowing Base Properties and/or all other
real property necessary or used in the ordinary conduct of its business, except for such
defects in title as could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Each of the Unencumbered Borrowing Base Properties is
either wholly owned in fee by a Loan Party or ground leased by a Loan Party pursuant to a
long term ground lease which has been designated as an Approved Ground Lease, in each case
subject to no Liens other than Permitted Liens of the type described in Section 7.01(b),
(c), (e), (f) and (i). To the extent an Unencumbered Borrowing Base Property is leased by a
Loan Party pursuant to an Approved Ground Lease, (i) such Approved Ground Lease is in full
force and effect and remains unmodified except to the extent expressly permitted by Section
6.14(b)(vii); (ii) except as expressly permitted by Section 6.14(b)(vii), no rights in favor
of the applicable Loan Party lessee have been waived, canceled or surrendered; (iii) except
as expressly permitted by Section 6.14, no election or option under such Approved Ground
Lease has been exercised by the Loan Party lessee (other than options to renew or extend the
term thereof); (iv) all rental and other charges due and payable thereunder have been paid
in full (except to the extent such payment is not yet overdue subject to applicable cure or
grace periods); (v) no Loan Party is in default under such Approved Ground Lease (beyond any
applicable cure or grace periods) which would permit the applicable lessor or other obligor
to terminate or exercise any other remedy
with respect to the applicable Approved Ground Lease, nor has any Loan Party received
any notice of default with respect to such Approved Ground Lease that has not been delivered
to the Administrative Agent pursuant to Section 6.14(b)(viii); (vi) to the knowledge of the
Responsible Officers of the Loan Parties, no lessor under such Approved Ground Lease is in
default with respect to its material obligations thereunder; (vii) a true and correct copy
of such Approved Ground Lease (together with any amendments, modifications, restatements or
supplements thereof) has been delivered to the Administrative Agent; and (viii) there exist
no adverse claims as to the applicable Loan Party’s title or right to possession of the
leasehold premises referenced therein.




     (b) The property of each Loan Party is subject to no Liens, other than Liens set forth
on Schedule 5.08(b) and Liens permitted by Section 7.01.




     (c) Schedule 5.08(c) sets forth a complete and accurate list of all Investments held by
any Consolidated Party on the Closing Date, showing as of the Closing Date the amount,
obligor or issuer and maturity, if any, thereof.



67









 





     5.09 Environmental Compliance.




     (a) The Consolidated Parties conduct in the ordinary course of business a review of the
effect of existing Environmental Laws and claims alleging potential liability or
responsibility for violation of any Environmental Laws on their respective businesses,
operations and Real Properties, and as a result thereof the Consolidated Parties have
reasonably concluded that, except as specifically disclosed in Schedule 5.09, such
Environmental Laws and claims could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.




     (b) Except as otherwise set forth in Schedule 5.09, (i) none of the real properties
currently or to the knowledge of any Responsible Officer of any Consolidated Party, formerly
owned or operated by any Consolidated Party, is listed or, to the knowledge of any
Responsible Officer of any Consolidated Party, proposed for listing on the United States
Environmental Protection Agency’s (EPA) National Priorities List or on the EPA Comprehensive
Environmental Response, Compensation, and Liability Information Sharing database or any
analogous state or local list, nor to the knowledge of any Responsible Officer of any
Consolidated Party is any adjacent property on such list, (ii) no Consolidated Party has
operated and, to the knowledge of any Responsible Officer of any Consolidated Party, there
are no and never have been any underground or above-ground storage tanks or any surface
impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials are being or
have been transported, treated, stored or disposed on any Real Property currently owned or
operated by any Consolidated Party or, to the knowledge of any Responsible Officer of any
Consolidated Party, on any real property formerly owned or operated by any Consolidated
Party, (iii) or to the knowledge of any Responsible Officer of any Consolidated Party, there
is no friable asbestos or asbestos-containing material on any Real Property currently owned
or operated by any Consolidated Party, and (iv) Hazardous Materials have not been
transported, released, discharged or disposed of on any real property currently or formerly
owned or operated by any Consolidated Party except as would not reasonably be expected to
have a Material Adverse Effect.




     (c) Except as otherwise set forth on Schedule 5.09, no Consolidated Party is
undertaking, and has not completed, either individually or together with other potentially
responsible parties, any investigation or assessment or remedial or response action relating
to any actual or threatened release, discharge or disposal of Hazardous Materials at any
site, location or operation, either voluntarily or pursuant to the order of any Governmental
Authority or the requirements of any Environmental Laws; and to the knowledge of the
Responsible Officers of
the Consolidated Parties all Hazardous Materials generated, used, treated, handled or
stored at, or transported to or from, any real property currently or formerly owned or
operated by any Consolidated Party have been disposed of in a manner not reasonably expected
to result in a Material Adverse Effect.




     (d) Except as otherwise set forth on Schedule 5.09, each of the Unencumbered Borrowing
Base Properties and, to the knowledge of the Responsible Officers of the Loan Parties, all
operations at such Unencumbered Borrowing Base Properties are in compliance with all
Environmental Laws in all material respects, there is no material violation of any
Environmental Laws with respect to such Unencumbered Borrowing Base Properties or, to the
knowledge of any Responsible Officer of any Loan Party, the businesses operated thereon, and
there are no conditions relating to such Unencumbered Borrowing Base Properties or the
businesses that could reasonably be expected to result in a Material Adverse Effect.




     (e) Except as otherwise set forth on Schedule 5.09, none of the Unencumbered Borrowing
Base Properties contains, or to the knowledge of any Responsible Officer of any Loan



68









 






Party
has previously contained, any Hazardous Materials at, on or under such Unencumbered
Borrowing Base Properties in amounts or concentrations that constitute or constituted a
violation of Environmental Laws that could have a Material Adverse Effect.




     (f) Except as otherwise set forth on Schedule 5.09, no Loan Party has received any
written or verbal notice of, or inquiry from any Governmental Authority regarding, any
violation, alleged violation, non-compliance, liability or potential liability regarding
Hazardous Materials or compliance with Environmental Laws with regard to any of its
Unencumbered Borrowing Base Properties or the businesses located thereon, nor does any
Responsible Officer of any Loan Party have knowledge or reason to believe that any such
notice will be received or is being threatened.




     (g) No Consolidated Party is subject to any judicial proceeding or governmental or
administrative action and, to the knowledge of the Responsible Officers of the Consolidated
Parties, no such proceeding or action is threatened in writing, under any Environmental Laws
that could reasonably be expected to give rise to a Material Adverse Effect, nor are there
any consent decrees or other decrees, consent orders, administrative orders or other orders,
or other administrative or judicial requirements outstanding under any Environmental Laws
with respect to the Consolidated Parties, the Unencumbered Borrowing Base Properties or, to
the knowledge of any Responsible Officer of any Consolidated Party, the businesses located
thereon that could be reasonably expected to give rise to a Material Adverse Effect.



     5.10 Insurance. The properties of the Consolidated Parties are insured with financially sound and reputable
insurance companies not Affiliates of the Borrower, in such amounts, with such deductibles and
covering such risks as are customarily carried by companies engaged in similar businesses and
owning similar properties in localities where the applicable Consolidated Party operates. The
insurance coverage of the Consolidated Parties with respect to the Unencumbered Borrowing Base
Properties as of the Closing Date is outlined as to carrier, policy number, expiration date, type
and amount on Schedule 5.10.



     5.11 Taxes. The Consolidated Parties have filed all Federal and state income and other material tax returns
and reports required to be filed, and have paid all Federal and state income and other material
taxes, assessments, fees and other governmental charges levied or imposed upon them or their
properties,
income or assets otherwise due and payable, except those which are being contested in good faith by
appropriate proceedings diligently conducted and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against any Consolidated Party that
would, if made, have a Material Adverse Effect. No Consolidated Party nor any Subsidiary thereof
is party to any tax sharing agreement; provided, however, that any tax protection agreement entered
into with a contributor of property to a Consolidated Party (but only to the extent the indemnity
or other obligation to such contributor under such tax protection agreement is limited to any
capital gains tax that would be due upon a sale or other Disposition of such contributed property
and either (i) is limited to an amount that does not exceed one percent (1%) of the total assets of
such Consolidated Party or (ii) exceeds one percent (1%) but less than five percent (5%) of the
total assets of such Consolidated Party but which indemnity is only triggered by a sale or other
Disposition of such contributed property) shall not be considered a tax sharing agreement.



     5.12 ERISA Compliance.




     (a) Each Plan is in compliance in all material respects with the applicable provisions
of ERISA, the Code and other Federal or state laws, except to the extent that the failure to
so comply would result in, or could reasonably be expected to result in, a Material Adverse
Effect. Each Pension Plan that is intended to be a qualified plan under Section 401(a) of
the Code has



69









 






received a favorable determination letter from the Internal Revenue Service to
the effect that the form of such Pension Plan is qualified under Section 401(a) of the Code
and the trust related thereto has been determined by the Internal Revenue Service to be
exempt from federal income tax under Section 501(a) of the Code, or an application for such
a letter is currently being processed by the Internal Revenue Service. To the best
knowledge of each Consolidated Party, nothing has occurred that would prevent or cause the
loss of the tax-qualified status of any such Pension Plan.




     (b) There are no pending or, to the best knowledge of each Consolidated Party,
threatened claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that could reasonably be expected to have a Material Adverse Effect.
There has been no prohibited transaction or violation of the fiduciary responsibility rules
with respect to any Plan that has resulted or could reasonably be expected to result in a
Material Adverse Effect.




     (c) (i) No ERISA Event has occurred, and neither the Consolidated Parties nor any ERISA
Affiliate is aware of any fact, event or circumstance that could reasonably be expected to
constitute or result in an ERISA Event with respect to any Pension Plan; (ii) there has been
no failure to satisfy the minimum funding standard applicable to a Pension Plan under
Section 412 of the Code and Section 302 of ERISA for any plan year, and no waiver of the
minimum funding standards applicable to a Pension Plan under Section 412 of the Code and
Section 302 of ERISA for any plan year has been applied for or obtained; (iii) as of the
most recent valuation date for any Pension Plan, the funding target attainment percentage
(as defined in Section 430(d)(2) of the Code) is sixty percent (60%) or higher and neither
the Consolidated Parties nor any ERISA Affiliate knows of any facts or circumstances that
could reasonably be expected to cause the funding target attainment percentage for any such
Pension Plan to drop below sixty percent (60%) as of the most recent valuation date; (iv)
neither the Consolidated Parties nor any ERISA Affiliate has incurred any liability to the
PBGC other than for the payment of premiums, and there are no premium payments which have
become due that are unpaid; (v) neither the Consolidated Parties nor any ERISA Affiliate has
engaged in a transaction that could be subject to Section 4069 or Section 4212(c) of ERISA;
and (vi) no Pension Plan has been terminated by the plan administrator thereof nor by the
PBGC, and no event or circumstance has occurred or exists that
could reasonably be expected to cause the PBGC to institute proceedings under Title IV
of ERISA to terminate any Pension Plan.




     (d) Neither the Consolidated Parties nor any ERISA Affiliate maintains or contributes
to, or has any unsatisfied obligation to contribute to, or liability under, any active or
terminated Pension Plan other than those listed on Schedule 5.12(d) hereto.



     5.13 Subsidiaries; Equity Interests. The corporate capital and ownership structure of the Consolidated Parties is as described in
Schedule 5.13(a) (as of the most recent update of such schedule in accordance with Section 6.02(h)
hereof). Set forth on Schedule 5.13(b) is a complete and accurate list (as of the most recent
update of such schedule in accordance with Section 6.02(h) hereof) with respect to each
Consolidated Party of (i) jurisdiction of organization, (ii) number of ownership interests (if
expressed in units or shares) of each class of Equity Interests outstanding, (iii) number and
percentage of outstanding ownership interests (if expressed in units or shares) of each class owned
(directly or indirectly) by the Parent REIT, the Borrower and their Subsidiaries, (iv) all
outstanding options, warrants, rights of conversion or purchase and all other similar rights with
respect thereto and (v) an identification of which such Consolidated Parties are Guarantors
hereunder and which Unencumbered Borrowing Base Properties are owned by each such Loan Party. The
outstanding Equity Interests of the Consolidated Parties are, to the extent applicable depending on
the organizational nature of such Person, validly issued, fully paid and non-assessable and are
owned by the Parent REIT, the Borrower or a Subsidiary thereof (as



70









 







applicable), directly or
indirectly, in the manner set forth on Schedule 5.13(b), free and clear of all Liens (other than
Permitted Liens or, in the case of the Equity Interests of the Loan Parties, statutory Liens or
Liens arising under or contemplated in connection with the Loan Documents). Other than as set
forth in Schedule 5.13(b) (as of the most recent update of such schedule in accordance with Section
6.02(h) hereof), no Consolidated Party (other than the Parent REIT) has outstanding any securities
convertible into or exchangeable for its Equity Interests nor does any such Consolidated Party have
outstanding any rights to subscribe for or to purchase or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments or
claims of any character relating to its Equity Interests. The copy of the Organization Documents
of each Loan Party provided pursuant to Section 4.01(a)(iv) is a true and correct copy of each such
document as of the Closing Date, each of which is valid and in full force and effect.



     5.14 Margin Regulations; Investment Company Act.




     (a) The Consolidated Parties are not engaged and will not engage, principally or as one
of their important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for the purpose
of purchasing or carrying margin stock.




     (b) None of the Consolidated Parties nor any Person Controlling such Consolidated
Parties is required to be registered as an “investment company” under the Investment Company
Act of 1940.



     5.15 Disclosure. The Borrower has disclosed to the Administrative Agent and the Lenders all agreements,
instruments and corporate or other restrictions to which it or any other Consolidated Party is
subject, and all other matters known to any Responsible Officer of any Consolidated Party (other
than matters of a general economic nature), that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. No report, financial statement,
certificate or other information furnished
(whether in writing or orally) by or on behalf of any Consolidated Party to the Administrative
Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of
this Agreement or delivered hereunder or under any other Loan Document (in each case, as modified
or supplemented by other information so furnished) contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with respect to projected
financial information, the Consolidated Parties represent only that such information was prepared
in good faith based upon assumptions believed by the Consolidated Parties to be reasonable at the
time (it being recognized by the Lenders that projections as to future events are not to be viewed
as facts and that actual results may differ).



     5.16 Compliance with Laws. Each Consolidated Party thereof is in compliance in all material respects with the requirements
of all Applicable Laws and all orders, writs, injunctions and decrees applicable to it or to its
properties, except in such instances in which (a) such requirement of Applicable Laws or order,
writ, injunction or decree is being contested in good faith by appropriate proceedings diligently
conducted or (b) the failure to comply therewith, either individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.



     5.17 Taxpayer Identification Number. The Borrower’s true and correct U.S. taxpayer identification number is set forth on Schedule
10.02.



     5.18 Intellectual Property; Licenses, Etc. The Borrower and the other Consolidated Parties own, or possess the right to use, all of the
trademarks, service marks, trade names, copyrights, patents,



71









 







patent rights, franchises, licenses
and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary
for the operation of their respective businesses, without conflict with the rights of any other
Person. To the knowledge of any Responsible Officer of any Consolidated Party, no slogan or other
advertising device, product, process, method, substance, part or other material now employed, or
now contemplated to be employed, by the Borrower or any other Consolidated Party infringes upon any
rights held by any other Person, except for such infringements that would not have a Material
Adverse Effect. Except as specifically disclosed in Schedule 5.18, no claim or litigation
regarding any of the foregoing is pending or, to the knowledge of any Responsible Officer of any
Consolidated Party, threatened, which, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.



     5.19 Solvency. (a) As of the Closing Date and immediately prior to the initial Credit Extension, the Borrower
is Solvent, each other Loan Party is Solvent, and the Consolidated Parties, on a consolidated
basis, are Solvent, (b) as of the date and immediately prior to each Subsidiary becoming a
Guarantor pursuant to Section 6.12, such Subsidiary is Solvent, and (c) following the initial
Credit Extension, the Borrower is Solvent, each other Loan Party is Solvent, and the Consolidated
Parties, on a consolidated basis, are Solvent if the contribution rights that each such party will
have against such other parties and the subrogation rights that each such party may have, if any,
against the Borrower are taken into account.



     5.20 Casualty, Etc. None of the Unencumbered Borrowing Base Properties have been affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of
God or of public enemy or other casualty (whether or not covered by insurance) that, either
individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.



     5.21 Labor Matters. As of the Closing Date, there are no collective bargaining agreements or Multiemployer Plans
covering the employees of any Consolidated Party or any of their Subsidiaries. No Consolidated
Party or any of their Subsidiaries has suffered any strikes, walkouts, work stoppages or other
material labor difficulty within the last year, which could (either individually or in the
aggregate) reasonably be expected to have a Material Adverse Effect.



     5.22 REIT Status. The Parent REIT is qualified as a REIT and the Borrower is qualified as a REIT, a partnership or
a disregarded entity (in each case, for federal income tax purposes), a TRS or a QRS, and each of
their Subsidiaries that is a corporation is either a TRS or a QRS. As of the Closing Date, the
Subsidiaries of the Parent REIT and the Borrower that are taxable REIT subsidiaries, as such term
is used in the Code, are identified on Schedule 5.22.



     5.23 Unencumbered Borrowing Base Properties. Schedule 5.23(a) (as adjusted from time to time in accordance with the terms hereof) sets forth
each of the Unencumbered Borrowing Base Properties as of the date of the last adjustment thereof
pursuant to the terms of Section 1.07. Each Real Property listed on Schedule 5.23(a) fully
qualifies as an Unencumbered Borrowing Base Property.



72









 




6. AFFIRMATIVE COVENANTS. So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall not be Fully Satisfied, or any Letter of Credit shall remain outstanding, the
Borrower shall, and shall cause each Consolidated Party (except where expressly limited to the
Borrower or the Loan Parties, as applicable) to:




     6.01 Financial Statements. Deliver to the Administrative Agent, for distribution to the Lenders:




     (a) as soon as available, but in any event within 90 days after the end of each fiscal
year of the Parent REIT (commencing with the fiscal year ended December 31, 2011), a
consolidated balance sheet of the Consolidated Parties as at the end of such fiscal year,
and the related consolidated statements of income or operations, changes in shareholders’
equity, and cash flows for such fiscal year, setting forth in each case in comparative form
the figures for the previous fiscal year, all in reasonable detail and prepared in
accordance with GAAP, such consolidated statements to be (i) certified by the chief
executive officer, chief financial officer, treasurer or controller of the Borrower as
fairly presenting in all material respects the financial condition, results of operations,
shareholders’ equity and cash flows of the Consolidated Parties in accordance with GAAP, and
(ii) audited and accompanied by a report and opinion of an independent certified public
accountant of nationally recognized standing reasonably acceptable to the Required Lenders,
which report and opinion shall be prepared in accordance with generally
accepted auditing standards and shall not be subject to any “going concern” or like
qualification or exception or any qualification or exception as to the scope of such audit;
and




     (b) as soon as available, but in any event within 45 days after the end of each of the
first three (3) fiscal quarters of each fiscal year of the Parent REIT (commencing with the
fiscal quarter ended March 31, 2011), a consolidated balance sheet of the Consolidated
Parties as at the end of such fiscal quarter, the related consolidated statements of income
or operations for such fiscal quarter and for the portion of the Borrower’s fiscal year then
ended, and the related consolidated of changes in shareholders’ equity, and cash flows for
the portion of the Borrower’s fiscal year then ended, in each case setting forth in
comparative form, as applicable, the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year, all in
reasonable detail, such consolidated statements to be certified by the chief executive
officer, chief financial officer, treasurer or controller of the Borrower as fairly
presenting in all material respects the financial condition, results of operations,
shareholders’ equity and cash flows of the Consolidated Parties in accordance with GAAP,
subject only to normal year-end audit adjustments and the absence of footnotes.




As to any information contained in materials furnished pursuant to Section 6.02(c), the
Borrower shall not be separately required to furnish such information under clause (a) or
(b) above, but the foregoing shall not be in derogation of the obligation of the Borrower to
furnish the information and materials described in clauses (a) or (b) above at the times
specified therein.



     6.02 Certificates; Other Information. Deliver to the Administrative Agent (for distribution of the same to each Lender):




     (a) concurrently with the delivery of the financial statements referred to in Sections
6.01(a) and (b), (i) a duly completed Compliance Certificate signed by the chief executive
officer, chief financial officer, treasurer or controller of the Borrower (which delivery
may, unless the Administrative Agent, or a Lender requests executed originals, be by
electronic communication including fax or email and shall be deemed to be an original
authentic counterpart thereof for all purposes), and (ii) a profit and loss summary showing
the operating condition for



73









 






each of the Unencumbered Borrowing Base Properties (in form and
with such detail as is reasonably satisfactory to the Administrative Agent);




     (b) if a Default exists, promptly after any request by the Administrative Agent, copies
of any detailed audit reports, management letters or recommendations submitted to the board
of directors (or the audit committee of the board of directors) of any Consolidated Party by
independent accountants in connection with the accounts or books of any Consolidated Party,
or any audit of any of them, subject to applicable professional guidelines;




     (c) promptly after the same are available, copies of each annual report, proxy or
financial statement or other report or communication sent to the shareholders of the Parent
REIT, and copies of all annual, regular, periodic and special reports and registration
statements which the Borrower or the Parent REIT may file or be required to file with the
SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise
required to be delivered to the Administrative Agent pursuant hereto;




     (d) promptly after the furnishing thereof, copies of any report furnished to any holder
of debt securities of any Loan Party (or any Subsidiary thereof if such debt securities are
recourse (other than customary non-recourse carve outs) to such Loan Party) pursuant to the
terms of any
indenture, loan or credit or similar agreement and not otherwise required to be
furnished to the Lenders pursuant to Section 6.01 or any other clause of this Section 6.02;




     (e) promptly, and in any event within five (5) Business Days after receipt thereof by
any Loan Party or any Subsidiary thereof, copies of each notice or other correspondence
received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction)
concerning any investigation or possible investigation or other inquiry by such agency
regarding financial or other operational results of any Loan Party or any Subsidiary
thereof;




     (f) not later than five (5) Business Days after receipt thereof by any Loan Party,
copies of all notices, requests and other documents (including amendments, waivers and other
modifications) so received under or pursuant to any instrument, indenture, loan or credit or
similar agreement regarding or related to any breach or default by any party thereto or any
other event that could materially impair the value of the interests or the rights of any
Loan Party or otherwise have a Material Adverse Effect and, from time to time upon request
by the Administrative Agent, such information and reports regarding such instruments,
indentures and loan and credit and similar agreements as the Administrative Agent may
request;




     (g) promptly after the assertion or occurrence thereof, notice of any action or
proceeding against or of any noncompliance by any Loan Party with respect to an Unencumbered
Borrowing Base Property with any Environmental Laws that could (i) reasonably be expected to
have a Material Adverse Effect or (ii) cause any Unencumbered Borrowing Base Property to be
subject to any restrictions on ownership, occupancy, use or transferability under any
Environmental Laws;




     (h) concurrently with the delivery of the financial statements referred to in Sections
6.01(a) and (b), an update to Schedules 5.06, 5.09, 5.12(d) or 5.13(a) or (b) to the extent
the information provided by any such schedules has changed since the most recent update
thereto; provided that the Borrower shall, promptly upon the Administrative Agent’s written
request therefor, provide any information or materials requested by the Administrative Agent
to confirm or evidence the matters reflected in such updated schedules;



74









 






     (i) concurrently with the delivery of the financial statements referred to in Sections
6.01(a) and (b), copies of Smith Travel Research (STR Global) summary STAR Reports for each
Unencumbered Borrowing Base Property for the fiscal quarter to which such financial
statements relate; and




     (j) promptly, such additional information regarding the business, financial or
corporate affairs of the Loan Parties or any Subsidiary thereof, or compliance with the
terms of the Loan Documents, as the Administrative Agent or any Lender may from time to time
reasonably request.



     Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(c) (to
the extent any such documents are included in materials otherwise filed with the SEC) may be
delivered electronically and if so delivered, shall be deemed to have been delivered on the date
(i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s
website on the Internet at the website address listed on Schedule 10.02; or (ii) on which such
documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which
each Lender and the Administrative Agent have access (whether a commercial, third-party website or
whether sponsored by the Administrative Agent); provided that: (i) the Borrower shall deliver paper
copies of such documents to the Administrative Agent upon its request (either in its discretion or
at the direction of the Required
Lenders) to the Borrower to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent and (ii) the Borrower shall notify the
Administrative Agent (by telecopier or electronic mail) of the posting of any such documents and
provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of
such documents. The Administrative Agent shall have no obligation to request the delivery of or to
maintain paper copies of the documents referred to above, and in any event shall have no
responsibility to monitor compliance by the Borrower with any such request by a Lender for
delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining
its copies of such documents.



     The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arranger will
make available to the Lenders and the L/C Issuer materials and/or information provided by or on
behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower
Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of
the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material
non-public information with respect to the Borrower or its Affiliates, or the respective securities
of any of the foregoing, and who may be engaged in investment and other market-related activities
with respect to such Persons’ securities. The Borrower hereby agrees that (w) all Borrower
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 Borrower Materials “PUBLIC,” the Borrower shall be deemed to
have authorized the Administrative Agent, the Arranger, the L/C Issuer and the Lenders to treat
such Borrower Materials as not containing any material non-public information with respect to the
Borrower or its securities for purposes of United States Federal and state securities laws
(provided, however, that to the extent such Borrower Materials constitute Information, they shall
be treated as set forth in Section 10.07); (y) all Borrower Materials marked “PUBLIC” are permitted
to be made available through a portion of the Platform designated “Public Side Information;” and
(z) the Administrative Agent and the Arranger shall be entitled to treat any Borrower Materials
that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform that
is not designated “Public Side Information.” Notwithstanding the foregoing, the Borrower shall be
under no obligation to mark any Borrower Materials “PUBLIC.”



75









 





     6.03 Notices. Promptly notify the Administrative Agent (who shall promptly notify each Lender):




     (a) of the occurrence of any Default;




     (b) of (i)(A) any breach or non-performance of, or any default under, a material
Contractual Obligation of any Loan Party; (B) the commencement of, or any material
development in, any litigation or proceeding affecting any Loan Party, including pursuant to
any Environmental Laws; or (C) any other matter, which, in the case of any of clause (A),
(B) or (C), individually or in the aggregate, has resulted in or could reasonably be
expected to result in a Material Adverse Effect; and (ii) any material written dispute or
any material litigation, investigation, proceeding or suspension between the Borrower or any
Loan Party and any Governmental Authority;




     (c) of the occurrence of any ERISA Event;




     (d) of any material change in accounting policies or financial reporting practices by
any Loan Party, including any determination by the Borrower referred to in Section 2.10(b);




     (e) of any voluntary removal or other event or circumstance that results in a Real
Property previously qualifying as an Unencumbered Borrowing Base Property ceasing to qualify
as such; provided that such notification shall be accompanied by an updated Compliance
Certificate with calculations showing the effect of such removal on the financial covenants
contained herein and on any Implied Loan Amount-related restrictions on the Outstanding
Amounts hereunder; and




     (f) of any adverse changes to any insurance policy obtained by any Loan Party with
respect to or in connection with any Unencumbered Borrowing Base Property in accordance with
Section 6.16, including, without limitation, any reduction in the amount or scope of
coverage or any increase in any deductible or other self-retention amount thereunder.



     Each notice pursuant to this Section 6.03 shall be accompanied by a statement of a Responsible
Officer of the Borrower setting forth details of the occurrence referred to therein (including, in
the case of any notice pursuant to Section 6.03(a), a description of any and all provisions of this
Agreement and any other Loan Document that the Responsible Officers of the Borrower believe have
been breached) and stating what action the Borrower has taken and proposes to take with respect
thereto.



     6.04 Payment of Obligations. Pay and discharge as the same shall become due and payable, all of its material obligations and
liabilities, including (a) all material tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are
being maintained by the Consolidated Parties; and (b) all lawful claims which, if unpaid, would by
law become a Lien upon its property, unless the same are being contested in good faith by
appropriate proceedings diligently conducted (the commencement and continuation of which
proceedings shall suspend the collection of any such contested amount from such Consolidated Party,
and suspend the enforcement thereof against, the applicable property), and adequate reserves in
accordance with GAAP are being maintained by such Consolidated Party and, as to any Loan Party,
such claims are bonded (to the extent requested by the Administrative Agent).



     6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and effect its legal existence and good standing
under the Applicable Laws of the jurisdiction of its organization



76









 







except in a transaction permitted
by Section 7.04 or 7.05; (b) take all reasonable action to maintain all rights, privileges,
permits, licenses and franchises necessary or desirable in the normal conduct of its business,
except to the extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect; and (c) preserve or renew all of its registered patents, trademarks, trade names
and service marks, the non-preservation of which could reasonably be expected to have a Material
Adverse Effect.



     6.06 Maintenance of Properties. (a) Maintain, preserve and protect all of its material properties and equipment necessary in the
operation of its business in good working order and condition, ordinary wear and tear and casualty
(as to which insurance satisfying the criteria hereunder was maintained at the time of such
casualty) excepted; (b) make all necessary repairs thereto and renewals and replacements thereof
except where the failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) use the standard of care typical in the industry in the operation and maintenance
of its facilities.



     6.07 Maintenance of Insurance. Maintain with financially sound and reputable insurance companies not Affiliates of any
Consolidated Party, insurance with respect to the properties and business of the Consolidated
Parties against loss or damage of the kinds customarily insured against by Persons engaged in the
same or similar business, of such types and in such amounts as are customarily carried under
similar circumstances by such other Persons and, in the case of insurance maintained by the Loan
Parties, providing for not less than 30 days’ prior notice to the Administrative Agent of
termination, lapse or cancellation of such insurance.



     6.08 Compliance with Laws and Contractual Obligations. Comply in all material respects with the requirements of all Applicable Laws, all Contractual
Obligations and all orders, writs, injunctions and decrees applicable to it or to its business or
property, except in such instances in which (a) such requirement of Applicable Laws, Contractual
Obligation or order, writ, injunction or decree is being contested in good faith by appropriate
proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be
expected to have a Material Adverse Effect.



     6.09 Books and Records. Maintain proper books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied shall be made of all financial transactions and matters
involving the assets and business of each Consolidated Party.



     6.10 Inspection Rights. Permit representatives of the Administrative Agent to visit and inspect any property of any Loan
Party, to examine its corporate, financial and operating records, and make copies thereof or
abstracts therefrom, and to discuss its affairs, finances and accounts with its directors,
officers, and independent public accountants (provided that the Borrower may, if it so chooses, be
present at or may participate in any such discussions), at such reasonable times during normal
business hours and as often as may be reasonably desired, upon reasonable advance notice to such
Loan Party with the costs and expenses of the
Administrative Agent being for its own account if no Event of Default then exists; provided,
however, that when an Event of Default exists the Administrative Agent or any Lender (or any of
their respective representatives or independent contractors) may do any of the foregoing at the
expense of the Borrower at any time during normal business hours and without advance notice.



     6.11 Use of Proceeds. Use the proceeds of the Credit Extensions for working capital, capital expenditures and other
general corporate purposes (including, without limitation, property acquisitions and Restricted
Payments not prohibited under Section 7.06) not in contravention of any Applicable Laws or of any
Loan Document.



77









 





     6.12 Additional Guarantors. Notify the Administrative Agent at the time that any Person becomes a Subsidiary of the
Borrower, another Loan Party or DC Hotel Trust (other than, in each case, a Non-Guarantor
Subsidiary), and promptly thereafter (and in any event within 30 days or such longer period as the
Administrative Agent may agree in writing), cause such Person to (i) become a Guarantor by
executing and delivering to the Administrative Agent a counterpart of this Agreement, a Joinder
Agreement or such other document as the Administrative Agent shall deem appropriate for such
purpose, and (ii) deliver to the Administrative Agent documents of the types referred to in Section
4.01(a)(iii), 4.01(a)(iv), 4.01(a)(vi) and 4.01(a)(vii), together with a favorable opinion of
counsel of such Person, all such documentation and opinion to be in form, content and scope
reasonably satisfactory to the Administrative Agent.



     6.13 Further Assurances. Promptly upon request by the Administrative Agent, or any Lender through the Administrative
Agent, (a) correct any material defect or error that may be discovered in any Loan Document or in
the execution or acknowledgment thereof, and (b) do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register any and all such further acts, deeds,
certificates, assurances and other instruments as the Administrative Agent, or any Lender through
the Administrative Agent, may reasonably require from time to time in order to carry out more
effectively the purposes of the Loan Documents.



     6.14 Compliance with Terms of Approved Ground Leases; Material Easement Agreements.




     (a) Make all payments and otherwise perform in all material respects all obligations in
respect of all Approved Ground Leases related to the Unencumbered Borrowing Base Properties
and keep such Approved Ground Leases in full force and effect and not allow such Approved
Ground Leases to lapse or be terminated or any rights to renew such Approved Ground Leases
to be forfeited or cancelled, notify the Administrative Agent of any default by any party
with respect to such Approved Ground Leases and cooperate with the Administrative Agent in
all respects to cure any such default, except, in any case, where the failure to do so,
either individually or in the aggregate, would not be reasonably likely to have a Material
Adverse Effect.




     (b) Without limiting the foregoing, with respect to each Approved Ground Lease or
material appurtenant easement agreements in favor of such Loan Party and related to any
Unencumbered Borrowing Base Property (as applicable):




     (i) pay when due the rent and other amounts due and payable thereunder (subject
to applicable cure or grace periods);




     (ii) timely perform and observe all of the material terms, covenants and
conditions required to be performed and observed by it as tenant thereunder (subject
to applicable cure or grace periods);




     (iii) do all things necessary to preserve and keep unimpaired such Approved
Ground Lease or easement agreement and its material rights thereunder;




     (iv) not waive, excuse or discharge any of the material obligations of the
lessor or other obligor thereunder;




     (v) diligently and continuously enforce the material obligations of the lessor
or other obligor thereunder;



78









 






     (vi) not do, permit or suffer any act, event or omission which would result in
a default thereunder (or which, with the giving of notice or the passage of time, or
both, would constitute a default thereunder), in each case which would permit the
applicable lessor or other obligor to terminate or exercise any other remedy with
respect to the applicable Approved Ground Lease or easement;




     (vii) cancel, terminate, surrender, modify or amend any of the provisions of
any such Approved Ground Lease or easement or agree to any termination, amendment,
modification or surrender thereof if the effect of such cancellation, termination,
surrender, modification, amendment, easement or agreement is to (A) shorten the term
of such Approved Ground Lease, (B) increase the rent payable under such Approved
Ground Lease, (C) increase the purchase price under any purchase option concerning
the property included in and subject to such Approved Ground Lease, (D) modify the
gross or net leasable area subject to such Approved Ground Lease, (E) transfer to
the ground lessee any costs and/or expenses previously paid by the ground lessor
under such Approved Ground Lease, (F) terminate (or grant the ground lessor
additional rights to unilaterally terminate) such Approved Ground Lease, or (G)
subordinate the rights of any Loan Party or any TRS under such Approved Ground Lease
to an Approved Manager or any other Person, in each case without the prior written
consent of the Administrative Agent;




     (viii) deliver to the Administrative Agent all default and other material
notices received by it or sent by it under the applicable Approved Ground Lease or
easement agreement;




     (ix) upon Administrative Agent’s written request, provide to Administrative
Agent any information or materials relating to such Approved Ground Lease or
easement agreement and evidencing such Loan Party’s due observance and performance
of its material obligations thereunder;




     (x) not permit or consent to the subordination of such Approved Ground Lease or
easement agreement to any mortgage or other leasehold interest of the premises
related thereto;




     (xi) execute and deliver (to the extent permitted to do so under such Approved
Ground Lease or easement agreement), upon the reasonable request of the
Administrative Agent, any documents, instruments or agreements as may be required to
permit the Administrative Agent to cure any default under such Approved Ground
Lease or easement agreement;




     (xii) provide to Administrative Agent written notice of its intention to
exercise any option or renewal or extension rights with respect to such Approved
Ground Lease or easement at least thirty (30) days prior to the expiration of the
time to exercise such right or option and duly exercise any renewal or extension
option with respect to any such Approved Ground Lease or easement (either consistent
with such notice or upon the direction of the Administrative Agent); provided that
each Loan Party further hereby appoints the Administrative Agent its
attorney-in-fact, coupled with an interest, to execute and deliver, for and in the
name of such Person, all instruments, documents or agreements necessary to extend or
renew any such Approved Ground Lease or easement;



79









 






     (xiii) not treat, in connection with the bankruptcy or other insolvency
proceedings of any ground lessor or other obligor, any Approved Ground Lease or
easement agreement as terminated, cancelled or surrendered pursuant to the
Bankruptcy Code without the Administrative Agent’s prior written consent;




     (xiv) in connection with the bankruptcy or other insolvency proceedings of any
ground lessor or other obligor, ratify the legality, binding effect and
enforceability of the applicable Approved Ground Lease or easement agreement as
against the applicable Loan Party within the applicable time period therefore in
such proceedings, notwithstanding any rejection by such ground lessor or obligor or
trustee, custodian or receiver related thereto;




     (xv) provide to the Administrative Agent not less than thirty (30) days prior
written notice of the date on which the applicable Loan Party shall apply to any
court or other governmental authority for authority or permission to reject the
applicable Approved Ground Lease or easement agreement in the event that there shall
be filed by or against any Borrower any petition, action or proceeding under the
Bankruptcy Code or any similar federal or state law; provided that the
Administrative Agent shall have the right, but not the obligation, to serve upon the
applicable Loan Party within such thirty (30) day period a notice stating that (A)
the Administrative Agent demands that such Loan Party assume and the assign the
relevant Approved Ground Lease or easement agreement to the Administrative Agent
subject to an in accordance with the Bankruptcy Code and (B) the Administrative
Agent covenants to cure or provide reasonably adequate assurance thereof with
respect to all defaults susceptible of being cured by the Administrative Agent and
of future performance under the applicable Approved Ground Lease or easement
agreement; provided, further, that if the Administrative Agent serves such notice
upon the applicable Loan Party, such Loan Party shall not seek to reject the
applicable agreement and shall promptly comply with such demand;




     (xvi) permit the Administrative Agent (at its option), during the continuance
of any Event of Default, to (i) perform and comply with all obligations under the
applicable Approved Ground Lease or easement agreement; (ii) do and take such action
as the Administrative Agent deems necessary or desirable to prevent or cure any
default by such Loan Party under such Approved Ground Lease or easement agreement
and (iii) enter in and upon the applicable premises related to such Approved Ground
Lease or easement agreement to the extent and as often as the Administrative Agent
deems necessary or desirable in order to prevent or cure any default under the
applicable Approved Ground Lease or easement agreement;




     (xvii) in the event of any arbitration, court or other adjudicative proceedings
under or with respect to any such Approved Ground Lease or easement agreement,
permit the Administrative Agent (at its option) to exercise all right, title and
interest of the applicable Loan Party in connection with such proceedings; provided
that (i) each Loan Party hereby irrevocably appoint the Administrative Agent as
their attorney-in-fact (which appointment shall be deemed coupled with an interest)
to exercise such right, interest and title and (ii) the Borrower shall bear all
costs, fees and expenses related to such proceedings; provided, further, that each
Loan Party hereby further agrees that the Administrative Agent shall have the right,
but not the obligation, to proceed in respect of any claim, suit, action or
proceeding relating to the rejection of any of the Approved Ground Leases or
easement agreements referenced above by the relevant ground lessor or obligor as a
result of bankruptcy or similar proceedings (including, without limitation, the



80









 






right to file and prosecute all proofs of claims, complaints, notices and other
documents in any such bankruptcy case or similar proceeding); and




     (xviii) deliver to the Administrative Agent (and, if it has the ability
pursuant to the subject Approved Ground Lease or easement agreement, cause the
applicable ground lessor under such Approved Ground Lease or grantor under such
easement agreement to deliver to the Administrative Agent) an estoppel certificate
from the ground lessor or grantor in relation to such Approved Ground Lease or
easement agreement in form and substance acceptable to the Administrative Agent, in
its reasonable discretion, and, in any case, setting forth (A) the name of lessee
and lessor under the Approved Ground Lease (if applicable); (B) that such Approved
Ground Lease or easement agreement is in full force and effect and has not been
modified except to the extent Administrative Agent has received notice of such
modification; (C) that no rental and other payments due thereunder are delinquent as
of the date of such estoppel; and (D) whether such Person knows of any actual or
alleged defaults or events of default under the applicable Approved Ground Lease or
easement agreement;




provided that each Borrower hereby agrees to execute and deliver to Administrative Agent,
within ten (10) Business Days of any request therefor, such documents, instruments,
agreements, assignments or other conveyances reasonably requested by the Administrative
Agent in connection with or in furtherance of any of the provisions set forth above or the
rights granted to the Administrative Agent in connection therewith.



     6.15 Environmental Assessment Report. Upon the written request of the Administrative Agent following the occurrence of any event or
the discovery of any condition which the Administrative Agent or the Required Lenders believe has
caused (or could be reasonably expected to cause) the representations and warranties set forth in
Section 5.09, insofar as they relate to the Unencumbered Borrowing Base Properties, to be untrue in
any material respect, furnish or cause to be furnished to the Administrative Agent, at the
Borrower’s expense, (a) with respect to a material release of Hazardous Materials at any
Unencumbered Borrowing Base Property, a report of an environmental assessment of reasonable scope,
form and depth (including, where appropriate, invasive soil or groundwater sampling) as to the
nature and extent of the presence of any Hazardous Materials released or threatened to be released
and/or (b) with respect to a material violation of Environmental Laws by any Loan Party at any
Unencumbered Borrowing Base Property, a report of such violation by a consultant acceptable to the
Administrative Agent. If the Borrower fails to deliver such environmental reports within sixty
(60) days after receipt of such written request then the Administrative Agent may arrange for same,
and the Loan Parties hereby grant to the Administrative Agent and its representatives access to the
Unencumbered Borrowing Base Properties to reasonably undertake such an
assessment (including, where appropriate, invasive soil or groundwater sampling). The reasonable
cost of any assessment arranged for by the Administrative Agent pursuant to this provision will be
payable by the Borrower on demand and added to the Obligations.



     6.16 Additional Insurance Requirements for Unencumbered Borrowing Base Properties.




     (a) Obtain and maintain, with respect to each Unencumbered Borrowing Base Property (or
cause the applicable TRS that is party to any Lease regarding each such Unencumbered
Borrowing Base Property to obtain and maintain), at its (or their) sole expense the
following:




     (i) property insurance with respect to all insurable property located at or on
or constituting a part of such Unencumbered Borrowing Base Property, against loss or




81












 






damage by fire, lightning, windstorm, explosion, hail, tornado and such
additional hazards as are presently included in “Special Form” (also known as
“all-risk”) coverage and against any and all acts of terrorism (to the extent
commercially available) and such other insurable hazards as the Administrative Agent
may require, in an amount not less than one hundred percent (100%) of the full
replacement cost, including the cost of debris removal, without deduction for
depreciation and sufficient to prevent the applicable Loan Parties and the
Administrative Agent from becoming a coinsurer, such insurance to be in “builder’s
risk” completed value (non reporting) form during and with respect to any
construction on or with respect to such Unencumbered Borrowing Base Property;




     (ii) if and to the extent any portion of any of the improvements are, under the
Flood Disaster Protection Act of 1973 (“FDPA”), as it may be amended from time to
time, in a Special Flood Hazard Area, within a Flood Zone designated A or V in a
participating community, a flood insurance policy in an amount required by the
Administrative Agent, but in no event less than the amount sufficient to meet the
requirements of Applicable Laws and the FDPA, as such requirements may from time to
time be in effect;




     (iii) general liability insurance, on an “occurrence” basis, against claims for
“personal injury” liability, including bodily injury, death or property damage
liability, for the benefit of the applicable Loan Party as named insured and the
Administrative Agent as additional insured;




     (iv) statutory workers’ compensation insurance with respect to any work on or
about such Unencumbered Borrowing Base Property (including employer’s liability
insurance, if required by the Administrative Agent), covering all employees of the
applicable Loan Party and/or its applicable Subsidiaries and any contractor;




     (v) if there is a general contractor, commercial general liability insurance,
including products and completed operations coverage, and in other respects similar
to that described in clause (iv) above, for the benefit of the general contractor as
named insured and the applicable Loan Party and the Administrative Agent as
additional insureds, in addition to statutory workers’ compensation insurance with
respect to any work on or about the premises (including employer’s liability
insurance, if required by the Administrative Agent), covering all employees of the
general contractor and any contractor; and




     (vi) such other insurance (and related endorsements) as may from time to time
be required by the Administrative Agent (including but not limited to soft cost
coverage, automobile liability insurance, business interruption insurance or delayed
rental insurance, boiler and machinery insurance, earthquake insurance (if then
customarily carried by owners of premises similarly situated), wind insurance,
sinkhole coverage, and/or permit to occupy endorsement) and against other insurable
hazards or casualties which at the time are commonly insured against in the case of
premises similarly situated, due regard being given to the height, type,
construction, location, use and occupancy of buildings and improvements.




     (b) All insurance policies obtained by any Loan Party with respect to or in connection
with any Unencumbered Borrowing Base Property shall be issued and maintained by insurers, in
amounts, with deductibles, limits and retentions, and in forms satisfactory to the



82









 







Administrative Agent, and shall require not less than thirty (30) days’ prior written
notice to the Administrative Agent of any cancellation of coverage.




     (c) All insurance companies providing coverage pursuant to clause (a) of this Section
6.16 or any other general coverage required pursuant to any Loan Documents must be licensed
to do business in the state in which the applicable Unencumbered Borrowing Base Property is
located and must have an A.M. Best Company financial and performance ratings of A-:IX or
better.




     (d) All insurance policies maintained, or caused to be maintained, by any Loan Party or
its applicable Subsidiaries with respect to any Unencumbered Borrowing Base Property, except
for general liability insurance, shall provide that each such policy shall be primary
without right of contribution from any other insurance that may be carried by such Loan
Party or its applicable Subsidiaries or the Administrative Agent and that all of the
provisions thereof, except the limits of liability, shall operate in the same manner as if
there were a separate policy covering each insured.




     (e) If any insurer which has issued a policy of title, hazard, liability or other
insurance required pursuant to this Section 6.16 or any other provision of any Loan Document
becomes insolvent or the subject of any petition, case, proceeding or other action pursuant
to any debtor relief law, or if in Administrative Agent’s opinion the financial
responsibility of such insurer is or becomes inadequate, such Loan Party shall, in each
instance promptly upon its discovery thereof or upon the request of the Administrative Agent
therefor, and at the Loan Party’s expense, promptly obtain and deliver (or cause to be
obtained and delivered) to the Administrative Agent a like policy (or, if and to the extent
permitted by the Administrative Agent, acceptable evidence of insurance) issued by another
insurer, which insurer and policy meet the requirements of this Section 6.16 or any other
provision of any Loan Document, as the case may be.




     (f) A copy of the original policy and such evidence of insurance as may be acceptable
to the Administrative Agent shall be delivered to the Administrative Agent with all premiums
fully paid current, and each renewal or substitute policy (or evidence of insurance) shall
be delivered to the Administrative Agent, with all premiums fully paid current, at least ten
(10) Business Days before the termination of the policy it renews or replaces. The
applicable Loan Party shall pay (or cause to be paid) all premiums on policies required
hereunder as they become due and payable and promptly deliver to the Administrative Agent
evidence satisfactory to the Administrative Agent of the timely payment thereof.




     (g) If any loss occurs at any time when the applicable Loan Party has failed to perform
the covenants and agreements set forth in this Section 6.16 with respect to any insurance
payable because of loss sustained to any part of the premises whether or not such insurance
is required by the Administrative Agent, then the Administrative Agent shall nevertheless be
entitled to the benefit of all insurance covering the loss and held by or for the applicable
Loan Party, to the same extent as if it had been made payable to the Administrative Agent.




     (h) Each Loan Party shall at all times comply (and shall cause each applicable TRS to
comply) in all material respects with the requirements of the insurance policies required
hereunder and of the issuers of such policies and of any board of fire underwriters or
similar body as applicable to or affecting any Unencumbered Borrowing Base Property.



83









 




7. NEGATIVE COVENANTS.
So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall not be Fully Satisfied, or any Letter of Credit shall remain outstanding, the Loan
Parties shall not, nor shall they permit any other Consolidated Party (except where expressly
limited to the Borrower or the Loan Parties, as applicable), directly or indirectly, to:




     7.01 Liens.
Create, incur, assume or suffer to exist any Lien upon any property, assets or revenues of any
Consolidated Party, whether now owned or hereafter acquired, other than the following
(collectively, the “Permitted Liens”):




     (a) Liens existing on the date hereof and listed on Schedule 5.08(b) and any renewals
or extensions thereof, provided that (i) the property covered thereby is not changed, (ii)
the amount secured or benefited thereby is not increased except as contemplated by Section
7.03(b), (iii) the direct or any contingent obligor with respect thereto is not changed, and
(iv) any renewal or extension of the obligations secured or benefited thereby is permitted
by Section 7.03(b);




     (b) Liens for taxes not yet due or which are being contested in good faith by
appropriate proceedings diligently conducted, if adequate reserves with respect thereto are
maintained on the books of the applicable Person in accordance with GAAP;




     (c) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like
Liens arising in the ordinary course of business which are not overdue for a period of more
than thirty (30) days or which are being contested in good faith and by appropriate
proceedings diligently conducted, if adequate reserves with respect thereto are maintained
on the books of the applicable Person;




     (d) pledges or deposits in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other social security legislation, other than any
Lien imposed by ERISA;




     (e) deposits to secure the performance of bids, trade contracts and leases (other than
Indebtedness), statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;




     (f) easements, rights-of-way, restrictions and other similar encumbrances affecting any
Real Property owned by any Loan Party which, in the aggregate, are not substantial in
amount, and which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the business of the
applicable Person and which, with respect to Unencumbered Borrowing Base Properties, have
been reviewed and approved by the Administrative Agent (such approval to be in the
reasonable judgment of the Administrative Agent);




     (g) Liens securing judgments for the payment of money not constituting an Event of
Default under Section 8.01(h);




     (h) Liens, if any, in favor of the L/C Issuer and/or Swing Line Lender to Cash
Collateralize or otherwise secure the obligations of a Defaulting Lender to fund risk
participations hereunder;




     (i) the interests of any ground lessor under an Approved Ground Lease and the interests
of any TRS under a lease of any Unencumbered Borrowing Base Property;



84









 






     (j) Liens on any assets (other than any Unencumbered Borrowing Base Property and
related assets) securing Indebtedness permitted by Section 7.03(f), including Liens on such
Real Property existing at the time such Real Property is acquired by the applicable Loan
Party or any Non-Guarantor Subsidiary;




     (k) Liens on the Equity Interests of any Non-Guarantor Subsidiary; provided, no such
Liens shall be permitted with respect to the Equity Interests of Pebblebrook Hotel Lessee,
any entity which is the lessee with respect to an Unencumbered Borrowing Base Property or
the direct or indirect parent thereof;




     (l) other Liens on assets (other than Unencumbered Borrowing Base Properties) securing
claims or other obligations of the Loan Parties and their Subsidiaries (other than
Indebtedness) in amounts not exceeding $5,000,000 in the aggregate; and




     (m) any interest of title of a lessor under, and Liens arising from or evidenced by
protective UCC financing statements (or equivalent filings, registrations or agreements in
foreign jurisdictions) relating to, operating leases permitted hereunder.



     7.02 Investments. Make any Investments, except:




     (a) Investments by the Consolidated Parties (other than by the Parent REIT) in (i)
Unencumbered Borrowing Base Properties, and (ii) other real properties that are
fully-developed, open and operating income-producing “luxury,” “upper upscale” or “upscale”
full or select service hotels, with all material approvals from each Governmental Authority
required in connection with the lawful operation of such hotels, and which real properties
shall, upon the making of such Investments, be wholly owned by such Consolidated Party;




     (b) Investments held by the Borrower or such Loan Party or other Subsidiary in the form
of cash or cash equivalents;




     (c) Investments existing as of the Closing Date and set forth in Schedule 5.08(c);




     (d) Advances to officers, directors and employees of the Borrower, the Loan Parties and
other Subsidiaries in aggregate amounts not to exceed (i) $500,000 at any time outstanding
for employee relocation purposes, and (ii) $100,000 at any time outstanding for travel,
entertainment, and analogous ordinary business purposes;




     (e) Investments of (i) the Borrower in any Guarantor (including (A) Investments by the
Borrower in any private REIT, so long as Borrower owns one hundred percent (100%) of the
“common” Equity Interests in such private REIT and (B) Investments by the Borrower in a
Guarantor in the form of an intercompany loan), (ii) any Guarantor in the Borrower or in
another Guarantor (including Investments by a Guarantor in the Borrower or in another
Guarantor in the form of an intercompany loan), and (iii) the Borrower, any Guarantor or any
Non-Guarantor Subsidiary in Non-Guarantor Subsidiaries (including Investments by the
Borrower, any Guarantor or any Non-Guarantor Subsidiary in a Non-Guarantor Subsidiary in the
form of an intercompany loan) that own, directly or indirectly, and operate Real Properties
that are fully-developed, open and operating income-producing “luxury,” “upper upscale” or “upscale”
full or select service hotels, with all material approvals from each Governmental Authority
required in connection with the lawful operation of such hotels; provided, notwithstanding
the foregoing or any other provision herein or in any other Loan Document to the contrary,
the Parent REIT shall not own any Equity Interests in any Person other than the Borrower;



85









 






     (f) Investments consisting of extensions of credit in the nature of accounts receivable
or notes receivable arising from the grant of trade credit in the ordinary course of
business, and Investments received in satisfaction or partial satisfaction thereof from
financially troubled account debtors to the extent reasonably necessary in order to prevent
or limit loss;




     (g) Guarantees permitted by Section 7.03;




     (h) Other Investments of the Borrower and its Subsidiaries in:




     (i) Real properties consisting of undeveloped or speculative land (valued at
cost for purposes of this clause (h)) with an aggregate value not greater than five
percent (5%) of Consolidated Tangible Assets and which real properties shall, upon
the making of such Investments, be wholly owned by the Borrower or such Subsidiary;




     (ii) Incoming-producing real properties (other than hotels or similar
hospitality properties) (valued at cost for purposes of this clause (h)) with an
aggregate value not greater than ten percent (10%) of Consolidated Tangible Assets
and which real properties shall, upon the making of such Investments, be wholly
owned by the Borrower or such Subsidiary;




     (iii) Real properties with respect to which development activities are being
undertaken by the applicable owner thereof (valued at cost for purposes of this
clause (h); provided that all costs and expenses associated with all existing
development activities (budget to completion) shall be included in determining the
aggregate Investment of the Borrower or such Subsidiary with respect to such
activities) with an aggregate value not greater than fifteen percent (15%) of
Consolidated Tangible Assets and which real properties shall, upon the making of
such Investments, be wholly owned by the Borrower or such Subsidiary and;




     (iv) Unconsolidated Affiliates (valued at cost for purposes of this clause (h))
with an aggregate value not greater than twenty percent (20%) (twenty-five percent
(25%) at any time on or after the date that the Borrower consummates the proposed
Investment in the New York JV through and including June 30, 2012) of Consolidated
Tangible Assets;




     (v) mortgage or real estate-related loan assets (valued at cost for purposes of
this clause (h)) with an aggregate value not greater than fifteen percent (15%) of
Consolidated Tangible Assets; and




     (vi) Equity Interests in any Person (other than any Affiliate of the Borrower)
(valued at cost for purposes of this clause (h)) with an aggregate value not greater
than five percent (5%) of Consolidated Tangible Assets;




provided, however, that the collective aggregate value of the Investments owned pursuant to
items (i) through (vi) of this clause (h) above shall not at any time exceed thirty percent
(30%) of Consolidated Tangible Assets;




     (vii) Investments in fixed or capital assets to the extent not prohibited under
Section 7.12; and



86









 






     (i) Investments in any Person as a result of any merger or consolidation completed in
compliance with Section 7.04.



     7.03 Indebtedness.
Create, incur, assume or suffer to exist any Indebtedness, except:




     (a) Indebtedness under the Loan Documents;




     (b) Indebtedness outstanding on the date hereof and listed on Schedule 7.03 and any
refinancings, refundings, renewals or extensions thereof; provided that the amount of such
Indebtedness is not increased at the time of such refinancing, refunding, renewal or
extension except by an amount equal to a reasonable premium or other reasonable amount paid,
and fees and expenses reasonably incurred, in connection with such refinancing and by an
amount equal to any existing commitments unutilized thereunder;




     (c) Guarantees of (i) the Borrower or any Guarantor in respect of Indebtedness
otherwise permitted hereunder of the Borrower or any other Guarantor, (ii) the Parent REIT
or the Borrower, in respect of Indebtedness otherwise permitted hereunder of any
Non-Guarantor Subsidiary if, in the case of any Guarantee pursuant to this clause (ii), (x)
no Default shall exist immediately before or immediately after the making of such Guarantee,
and (y) there exists no violation of the financial covenants hereunder on a Pro Forma Basis
after the making of such Guarantee, and (iii) Non-Guarantor Subsidiaries made in the
ordinary course of business;




     (d) obligations (contingent or otherwise) of the Borrower or any Subsidiary existing or
arising under any Swap Contract, provided that (i) such obligations are (or were) entered
into by such Person in the ordinary course of business for the purpose of directly
mitigating risks associated with liabilities, commitments, investments, assets, or property
held or reasonably anticipated by such Person, or changes in the value of securities issued
by such Person, and not for purposes of speculation or taking a “market view;” and (ii) such
Swap Contract does not contain any provision exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to the defaulting party;




     (e) unsecured Indebtedness in the form of trade payables incurred in the ordinary
course of business;




     (f) Indebtedness of any Loan Party or Non-Guarantor Subsidiary incurred or assumed
after the date hereof that is either unsecured or is secured by Liens on any assets of such
Loan Party (other than any Unencumbered Borrowing Base Property) or of such Non-Guarantor
Subsidiary; provided, such Indebtedness shall be permitted under this Section 7.03(f) only
if: (i) no Default shall exist immediately before or immediately after the incurrence or
assumption of such Indebtedness, and (ii) there exists no violation of the financial
covenants hereunder on a Pro Forma Basis after the incurrence or assumption of such
Indebtedness; and




     (g) Indebtedness consisting of intercompany loans permitted under Section 7.02(e).



     7.04 Fundamental Changes.
Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in
one transaction or in a series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except for Dispositions permitted under
Section 7.05 (other than under Section 7.05(e)) or except that, so long as no Default exists or
would result therefrom:



87









 






     (a) any Guarantor may merge with the Borrower or any other Guarantor, provided that
when any Guarantor is merging with the Borrower, the Borrower shall be the continuing or
surviving Person;




     (b) any Loan Party may Dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or to another Loan Party; and




     (c) (i) any Non-Guarantor Subsidiary may merge with any other Person or Dispose of all
or substantially all of its assets (upon voluntary liquidation or otherwise) to any other
Person; provided such merger or Disposition shall be permitted under this Section 7.04(c)(i)
only if there exists no violation of the financial covenants hereunder on a Pro Forma Basis
after such merger or Disposition, and (ii) any Non-Guarantor Subsidiary may merge with a
Loan Party; provided that the Loan Party shall be the continuing or surviving Person.



     7.05 Dispositions.
Make any Disposition of any assets or property, except:




     (a) Dispositions in the ordinary course of business (other than those Dispositions
permitted under clause (b) of this Section 7.05), so long as (i) no Default shall exist
immediately before or immediately after such Disposition, and (ii) the Consolidated Parties
will be in compliance, on a Pro Forma Basis following such Disposition, with (x) the
covenants set forth in Sections 7.01, 7.02, 7.03, and 7.11 of this Agreement, (y) all
restrictions on Outstanding Amounts contained herein, and (z) the requirements of Section
1.07 (in the case of any Disposition with respect to an Unencumbered Borrowing Base
Property), in each case as demonstrated by a Compliance Certificate with supporting
calculations delivered to the Administrative Agent on or prior to the date of such
Disposition showing the effect of such Disposition;




     (b) Any of the following:




     (i) Dispositions of obsolete, surplus or worn out property or other property
not necessary for operations, whether now owned or hereafter acquired, in the
ordinary course of business and for no less than fair market value;




     (ii) Dispositions of equipment or real property to the extent that (A) such
property is exchanged for credit against the purchase price of similar replacement
property or (B) the proceeds of such Disposition are reasonably promptly applied to
the purchase price of such replacement property, in each case in the ordinary course
of business and for no less than fair market value;




     (iii) Dispositions of inventory and Investments of the type described in
Section 7.02(b) and (c) in the ordinary course of business;




     (iv) leases of Real Property (other than any Unencumbered Borrowing Base
Property) and personal property assets related thereto to any TRS; and




     (v) in order to resolve disputes that occur in the ordinary course of business,
the Borrower and any Subsidiary of Borrower may discount or otherwise compromise,
for less than the face value thereof, notes or accounts receivable;




     (c) Dispositions of property by any Loan Party to the Borrower or to another Loan
Party;



88









 






     (d) Dispositions permitted by Section 7.04; and




     (e) Any other Disposition approved in writing by the Administrative Agent and the
Required Lenders.




Notwithstanding the foregoing provisions of this Section 7.05, no Loan Party shall sell or
make any other Disposition of assets or property that will have the effect of causing such
Loan Party (or any other Loan Party) to become liable under any tax protection or tax
sharing agreement if the amount of such liability would exceed an amount equal to one
percent (1%) of the total assets of such Loan Party without the prior written consent of the
Administrative Agent.



     7.06 Restricted Payments.




     (a) Declare or make, directly or indirectly, any Restricted Payment, or incur any
obligation (contingent or otherwise) to do so, except:




     (i) so long as no Event of Default shall exist at the time of such Restricted
Payment or would result therefrom, each Subsidiary may make Restricted Payments to
the Borrower, the Guarantors and any other Person that owns an Equity Interest in
such Subsidiary, ratably according to their respective holdings of the type of
Equity Interest in respect of which such Restricted Payment is being made;




     (ii) so long as no Event of Default shall exist at the time of such Restricted
Payment or would result therefrom, the Borrower and each Subsidiary may declare and
make dividend payments or other distributions payable solely in the common stock or
other common Equity Interests of such Person;




     (iii) so long as no Event of Default shall exist at the time of such Restricted
Payment or would result therefrom, the Borrower and each Subsidiary may purchase,
redeem or otherwise acquire Equity Interests issued by it with the proceeds received
from the substantially concurrent issue of new shares of its common stock or other
common Equity Interests; and




     (iv) so long as no Acceleration shall have occurred, each TRS may make
Restricted Payments to its TRS parent entity to the extent necessary to pay any tax
liabilities then due (after taking into account any losses, offsets and credits, as
applicable); provided that any such Restricted Payments by a TRS shall only be made
after it has paid all of its operating expenses currently due or anticipated
within the current month and next following month;




     (b) Notwithstanding the foregoing, the Loan Parties shall be permitted to make
Restricted Payments of the type and to the extent permitted pursuant to Section 7.11(h) of
this Agreement.



     7.07 Change in Nature of Business.
Engage in any material line of business substantially different from those lines of business
conducted by the Borrower and its Subsidiaries on the date hereof or any business substantially
related or incidental thereto.



     7.08 Transactions with Affiliates.
Enter into any transaction of any kind with any Affiliate of the Borrower, whether or not in the
ordinary course of business, other than on fair and reasonable terms substantially as favorable to
the Borrower or such Subsidiary as would be obtainable by the Borrower or



89









 







such Subsidiary at the
time in a comparable arm’s length transaction with a Person other than an Affiliate, provided that
the foregoing restriction shall not apply to transactions between or among the Borrower and any
Guarantor or between and among any Guarantors, or between and among any Loan Party and the TRS or
an Approved Manager (if applicable).



     7.09 Burdensome Agreements.
Enter into any Contractual Obligation (other than this Agreement or any other Loan Document)
that (a) limits the ability (i) of any Subsidiary to make Restricted Payments to the Borrower or
any Guarantor or to otherwise transfer property to the Borrower or any Guarantor, (ii) of any
Subsidiary to Guarantee the Indebtedness of the Borrower or (iii) of the Borrower or any Subsidiary
to create, incur, assume or suffer to exist Liens on property of such Person; provided, however,
that clauses (ii) and (iii) shall not prohibit any negative pledge incurred or provided in favor of
any holder of Indebtedness in respect of (A) capital leases, Synthetic Lease Obligations and
purchase money obligations for fixed or capital assets permitted hereunder , or (B) a
property-specific financing involving only a Non-Guarantor Subsidiary as the borrower, in each case
solely to the extent any such negative pledge relates to the property financed by or the subject of
such Indebtedness; or (b) requires the grant of a Lien to secure an obligation of such Person if a
Lien is granted to secure another obligation of such Person.



     7.10 Use of Proceeds.
Use the proceeds of any Credit Extension, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of
Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying
margin stock or to refund indebtedness originally incurred for such purpose.



     7.11 Financial Covenants.




     (a) Consolidated Leverage Ratio. Permit (i) Consolidated Funded Indebtedness less
Adjusted Unrestricted Cash as of the last day of any fiscal quarter to (ii) EBITDA for the
calculation period ending on such last day, to exceed 6.0 to 1.0 (7.0 to 1.0 at any time on
or after the date that Borrower consummates the proposed Investment in the New York JV
through and including June 30, 2012).




     (b) Consolidated Recourse Secured Indebtedness Limitation. Permit Consolidated
Recourse Secured Indebtedness to, at any time, exceed an amount equal to five percent (5%)
of Consolidated Tangible Assets.




     (c) Consolidated Secured Debt Limitation. Permit, commencing on January 1, 2013 and
continuing on all dates thereafter, Consolidated Secured Debt to, at any time, exceed an
amount equal to fifty percent (50%) of Consolidated Tangible Assets.




     (d) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated Fixed Charge
Coverage Ratio, as of the last day of any fiscal quarter, to be less than (i) 1.40 to 1.0
for the period commencing from the Closing Date and continuing through June 30, 2012 and
(ii) 1.50 to 1.0 for the period commencing July 1, 2012 and continuing on all dates
thereafter.




     (e) Consolidated Unencumbered DSCR. Permit the Consolidated Unencumbered DSCR, as of
the last day of any fiscal quarter, to be less than (i) 1.50 to 1.0 for the period
commencing from the Closing Date and continuing through June 30, 2012 and (ii) 1.60 to 1.0
for the period commencing July 1, 2012 and continuing on all dates thereafter.



90









 






     (f) Consolidated Unsecured Interest Coverage Ratio. Permit the Consolidated Unsecured
Interest Coverage Ratio, as of the last day of any fiscal quarter, to be less than 2.0 to
1.0.




     (g) Consolidated Tangible Net Worth. Permit Consolidated Tangible Net Worth, as of the
last day of any fiscal quarter, to be less than the sum of (i) $580,000,000 plus (ii)
seventy-five percent (75%) of the Net Proceeds of all Equity Issuances by the Consolidated
Parties after the Closing Date.




     (h) Restricted Payments. Permit, for any fiscal year of the Consolidated Parties, the
amount of Restricted Payments (excluding Restricted Payments payable solely in the common
stock or other common Equity Interests of the Parent REIT or the Borrower) made by the
Consolidated Parties to the holders of their Equity Interests (excluding any such holders of
Equity Interests which are Loan Parties) during such period to exceed the FFO Distribution
Allowance for such period; provided that, to the extent no Event of Default then exists or
will result from such Restricted Payments (or if an Event of Default then exists or will
result from such Restricted Payments, then so long as no Acceleration shall have occurred),
each Loan Party and each other Subsidiary (including Pebblebrook Hotel Lessee) shall be
permitted to make Restricted Payments to the Borrower and the Borrower shall be permitted to
make Restricted Payments to Parent REIT, in each case to permit the Parent REIT to make
Restricted Payments to the holders of the Equity Interests in the Parent REIT to the extent
necessary to maintain Parent REIT’s status as a REIT and as necessary to pay any special or
extraordinary tax liabilities then due (after taking into account any losses, offsets and
credits, as applicable) on capital gains attributable to Parent REIT.




     (i) Limitation on Secured Debt on Real Property. Permit, at any time, (i) Secured
Recourse Debt that is secured by a Real Property to exceed sixty-five percent (65%) of the
value (based upon the most-recent appraisal) of such Real Property and (ii) Secured
Non-Recourse Debt that is secured by a Real Property to exceed seventy percent (70%) of the
value (based upon the most-recent appraisal) of such Real Property.




The financial covenants in this Section 7.11 and all calculations related to the Implied
Loan Amount shall be tested (on a Pro Forma Basis) and certified to by the Borrower in
connection with each Credit Extension.



     7.12 Capital Expenditures.
Make or become legally obligated to make any expenditure in respect of the purchase or other
acquisition of any fixed or capital asset other than normal replacements and maintenance which are
properly charged to current operations and other reasonable and customary capital expenditures made
in the ordinary course of the business of the Parent REIT and its Subsidiaries.



     7.13 Accounting Changes.
Make any change in (a) accounting policies or reporting practices, except as required by GAAP,
or (b) fiscal year, except with the written consent of the Administrative Agent.



     7.14 Ownership of Subsidiaries; Certain Real Property Assets.
Notwithstanding any other provisions of this Agreement to the contrary, (a) permit any Person
(other than the Parent REIT, the Borrower, any other Loan Party or a private REIT) to own any
Equity Interests of any Unencumbered Borrowing Base Entity, except to qualify directors where
required by Applicable Laws, (b) permit any Loan Party that owns an Unencumbered Borrowing Base
Property to issue or have outstanding any shares of preferred Equity Interests, (c) permit, create,
incur, assume or suffer to exist any Lien on any Equity Interests owned by the Borrower or any Loan
Party of (i) any Loan Party or (ii) any TRS that leases an



91









 







Unencumbered Borrowing Base Property or
is the direct or indirect parent of any such TRS, (d) permit DC Hotel Trust to directly own or
acquire any Real Property assets; provided that this clause (d) of Section 7.14 shall not prohibit
DC Hotel Trust from owning or acquiring any Equity Interests in any Subsidiary that owns any Real
Property assets, (e) permit the Borrower to own less than ninety-nine percent (99%) of the
outstanding common Equity Interests in Pebblebrook Hotel Lessee, or (f) permit the Parent REIT to
own Equity Interests in any Person other than the Borrower and DC Hotel Trust.



     7.15 Leases.
Permit any Loan Party to enter into, terminate, cancel, amend, restate, supplement or otherwise
modify any Material Lease relating to any Unencumbered Borrowing Base Property; provided that (i)
such Unencumbered Borrowing Base Property may be subject to an Approved Ground Lease entered into
in accordance with and subject to the requirements of this Agreement, (ii) the applicable
Unencumbered Borrowing Base Entity may lease such Unencumbered Borrowing Base Property owned (or
ground leased) by it to a TRS pursuant to a form of Lease acceptable to the Administrative Agent,
in its reasonable discretion, and (iii) the applicable Unencumbered Borrowing Base Entity or the
applicable TRS (if any) may enter into, terminate, cancel, amend, restate, supplement or otherwise
modify any Material Lease relating to such Unencumbered Borrowing Base Property (including any
Lease between such Unencumbered Borrowing Base Entity and such TRS respecting any Unencumbered
Borrowing Base Property) to the extent that the entry into, termination, cancellation, amendment,
restatement, supplement or modification is not reasonably likely to, in the aggregate with any
other then-existing conditions or circumstances, have a Material Adverse Effect.



     7.16 Sale Leasebacks.
Permit any Loan Party to enter into any Sale and Leaseback Transaction with respect to any
Unencumbered Borrowing Base Property.



     7.17 Additional Unencumbered Borrowing Base Property Matters.




     (a) Permit (i) any Unencumbered Borrowing Base Property to cease to be wholly owned by
a Loan Party or ground leased by a Loan Party pursuant to an Approved Ground Lease, except
in connection with a Disposition completed in accordance with Sections 1.07 and 7.05; (ii)
the existence of any material default or any event of default of a Loan Party under any
Approved Ground Lease with respect to any Unencumbered Borrowing Base Property; or (iii) any
Unencumbered Borrowing Base Property to be subject to any Lien other than a Permitted Lien
of the type described in Section 7.01(b), (c), (e), (f), (h) and (i).




     (b) Without limiting the foregoing, neither the Borrower nor any other Loan Party shall
add any Unencumbered Borrowing Base Property to, or remove any Unencumbered Borrowing Base
Property from, the Unencumbered Borrowing Base Properties, except in accordance with the
provisions of Section 1.07.



8. EVENTS OF DEFAULT AND REMEDIES




     8.01 Events of Default.
Any of the following shall constitute an Event of Default:




     (a) Non-Payment. The Borrower or any other Loan Party fails to pay (i) when and as
required to be paid herein, any amount of principal of any Loan or any L/C Obligation, or
(ii) within three (3) days after the same becomes due, any interest on any Loan or on any
L/C Obligation, or any fee due hereunder, or (iii) within five (5) days after the same
becomes due, any other amount payable hereunder or under any other Loan Document; or




     (b) Specific Covenants. The Borrower fails to perform or observe any term, covenant or
agreement contained in any of Section 6.01, 6.02, 6.03, 6.05(a), 6.10, 6.11, 6.12, 6.14



92









 







(to the extent such failure would permit the ground lessor under the applicable Approved Ground
Lease to terminate such Approved Ground Lease), 6.16 or Section 7, or any Guarantor fails to
perform or observe any term, covenant or agreement contained in Section 11 hereof; or




     (c) Other Defaults. Any Loan Party fails to perform or observe any other covenant or
agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on
its part to be performed or observed and such failure continues for thirty (30) days after
the earlier of (i) Borrower’s actual knowledge of such failure or (ii) Borrower’s receipt of
notice as to such failure from the Administrative Agent or any Lender; or




     (d) Representations and Warranties. Any representation, warranty, certification or
statement of fact made or deemed made by or on behalf of the Borrower or any other Loan
Party herein, in any other Loan Document, or in any document delivered in connection
herewith or therewith shall be incorrect or misleading in any material respect when made or
deemed made; or




     (e) Cross-Default. (i) Any Loan Party or any of its Subsidiaries (A) fails to make any
payment when due after giving effect to any applicable grace period (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) in respect of any
Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness under
Swap Contracts) having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than the Threshold Amount, or (B) fails to observe or
perform any other agreement or condition relating to any such Indebtedness or Guarantee or
contained in any instrument or agreement evidencing, securing or relating thereto, or any
other event occurs, the effect of which default or other event is to cause, or to permit the
holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee
(or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries)
to cause, with the giving of notice if required, such Indebtedness to be demanded or to
become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise),
or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to
its stated maturity, or such Guarantee to become payable or cash collateral in respect
thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination
Date (as defined in such Swap Contract) resulting from (A) any event of default under such
Swap Contract as to which any Loan Party or any of its Subsidiaries is the Defaulting Party
(as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such
Swap Contract as to which any Loan Party or any of its Subsidiaries is an Affected Party (as
so defined) and, in either event, the Swap Termination Value owed by such Loan Party or such
Subsidiary as a result thereof is greater than the Threshold Amount; or




     (f) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries institutes
or consents to the institution of any proceeding under any Debtor Relief Law, or makes an
assignment for the benefit of creditors; or applies for or consents to the appointment of
any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer
for it or for all or any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged or unstayed
for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such
Person or to all or any material part of its property is instituted without the consent of
such Person and continues undismissed or unstayed for 60 calendar days, or an order for
relief is entered in any such proceeding; or



93









 






     (g) Inability to Pay Debts; Attachment. (i) Any Loan Party or any of its Subsidiaries
becomes unable or admits in writing its inability or fails generally to pay its debts as
they become due, or (ii) any writ or warrant of attachment or execution or similar process
is issued or levied against all or any material part of the property of any such Person and
is not released, vacated or fully bonded within 30 days after its issue or levy; or




     (h) Judgments. There is entered against any Loan Party or any of its Subsidiaries (i)
one or more final judgments or orders for the payment of money in an aggregate amount (as to
all such judgments or orders) exceeding the Threshold Amount (to the extent not covered by
independent third-party insurance as to which the insurer does not dispute coverage), or
(ii) any one or more non-monetary final judgments that have, or could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or order, or
(B) there is a period of thirty (30) consecutive days during which a stay of enforcement of
such judgment, by reason of a pending appeal or otherwise, is not in effect; or




     (i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer
Plan which has resulted or could reasonably be expected to result in liability of the
Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an
aggregate amount in excess of the Threshold Amount, or (ii) the Borrower or any ERISA
Affiliate fails to pay when due, after the expiration of any applicable grace period,
any installment payment with respect to its withdrawal liability under Section 4201 of ERISA
under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or




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




     (k) Change of Control. There occurs any Change of Control; or




     (l) REIT or QRS Status. The Parent REIT shall, for any reason, lose or fail to
maintain its status as a REIT or the Borrower shall, for any reason, lose or fail to
maintain its status as any of the following: a REIT, a partnership or a disregarded entity
(in each case, for federal income tax purposes), a TRS or a QRS; or




     (m) Management and Franchise Agreements. There occurs a monetary or material default
under a management or franchise agreement with respect to an Unencumbered Borrowing Base
Property (which material default shall include any default which would permit the manager or
franchisor under any such management or franchise agreement to terminate such management or
franchise agreement or would otherwise result in a material increase of the obligations of
the Borrower or such Subsidiary of the Borrower that is a party to such management or
franchise agreement) and such default is not remedied prior to the date which is the later
of (i) the earlier of (A) if no other Default exists, sixty (60) days from the occurrence of
the event or condition which caused, led to, or resulted in such default, or (B) the date
that a Default (other than the subject Default relative to such management or franchise
agreement) occurs and (ii) the last day of the cure period provided in such management or
franchise agreement (as applicable).



94









 





     8.02 Remedies Upon Event of Default.
If any Event of Default exists, the Administrative Agent shall, at the request of, or may, with
the consent of, the Required Lenders, take any or all of the following actions (any such action, an
“Acceleration”):




     (a) declare the commitment of each Lender to make Loans and any obligation of the L/C
Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and
obligation shall be terminated;




     (b) declare the unpaid principal amount of all outstanding Loans, all interest accrued
and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan
Document to be immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrower;




     (c) require that the Borrower Cash Collateralize the L/C Obligations (in an amount
equal to the then Outstanding Amount thereof); and




     (d) exercise on behalf of itself, the Lenders and the L/C Issuer all rights and
remedies available to it, the Lenders and the L/C Issuer under the Loan Documents;



provided, however, that upon the occurrence of an actual or deemed entry of an order for
relief with respect to the Borrower under the Bankruptcy Code of the United States, the
obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C
Credit Extensions shall automatically terminate, the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall automatically become
due and payable, and the obligation of the Borrower to Cash Collateralize the L/C
Obligations as aforesaid shall automatically become effective, in each case without further
act of the Administrative Agent or any Lender.



     8.03 Application of Funds.
After the exercise of remedies provided for in Section 8.02 (or after the Loans have
automatically become immediately due and payable and the L/C Obligations have automatically been
required to be Cash Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall, subject to the provisions of Sections 2.16 and 2.17,
be applied by the Administrative Agent in the following order:



     First, to payment of that portion of the Obligations constituting fees, indemnities, expenses
and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent
and amounts payable under Section 3) payable to the Administrative Agent in its capacity as such;



     Second, to payment of that portion of the Obligations constituting fees, indemnities and other
amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders and the
L/C Issuer (including fees, charges and disbursements of counsel to the respective Lenders and the
L/C Issuer (including fees and time charges for attorneys who may be employees of any Lender or the
L/C Issuer) and amounts payable under Section 3), ratably among them in proportion to the
respective amounts described in this clause Second payable to them;



     Third, to payment of that portion of the Obligations constituting accrued and unpaid Letter of
Credit Fees and interest on the Loans, L/C Borrowings and other Obligations, ratably among the
Lenders and the L/C Issuer in proportion to the respective amounts described in this clause Third
payable to them;



95









 





     Fourth, to payment of that portion of the Obligations constituting unpaid principal of the
Loans and L/C Borrowings, ratably among the Lenders and the L/C Issuer in proportion to the
respective amounts described in this clause Fourth held by them;



     Fifth, to the Administrative Agent for the account of the L/C Issuer, to Cash Collateralize
that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit to
the extent not otherwise Cash Collateralized by the Borrower pursuant to Sections 2.03 and 2.16;
and



     Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full,
to the Borrower or as otherwise required by Applicable Laws.


Subject to Sections 2.03(c) and 2.16, amounts used to Cash Collateralize the aggregate undrawn
amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings
under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral
after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be
applied to the other Obligations, if any, in the order set forth above.




9. ADMINISTRATIVE AGENT



     9.01 Appointment and Authority.
Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act on its
behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto. The provisions of this Section are solely for the
benefit of the Administrative Agent, the Lenders and the L/C Issuer, and neither the Borrower nor
any other Loan Party shall have rights as a third party beneficiary of any of such provisions.



     9.02 Rights as a Lender.
The Person serving as the Administrative Agent hereunder shall have the same rights and powers
in its capacity as a Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated
or unless the context otherwise requires, include the Person serving as the Administrative Agent
hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from,
lend money to, act as the financial advisor or in any other advisory capacity for and generally
engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if
such Person were not the Administrative Agent hereunder and without any duty to account therefor to
the Lenders.



     9.03 Exculpatory Provisions.
The Administrative Agent shall not have any duties or obligations except those expressly set
forth herein and in the other Loan Documents. Without limiting the generality of the foregoing,
the Administrative Agent:




     (a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default then exists;




     (b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly contemplated hereby
or by the other Loan Documents that the Administrative Agent is required to exercise as
directed in writing by the Required Lenders (or such other number or percentage of the
Lenders as shall be expressly provided for herein or in the other Loan Documents), provided
that the Administrative Agent shall not be required to take any action that, in its opinion
or the opinion of its counsel,



96









 







may expose the Administrative Agent to liability or that is
contrary to any Loan Document or Applicable Laws; and




     (c) shall not, except as expressly set forth herein and in the other Loan Documents,
have any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrower or any of its Affiliates that is communicated to or
obtained by the Person serving as the Administrative Agent or any of its Affiliates in any
capacity.



     The Administrative Agent shall not be liable for any action taken or not taken by it (i) with
the consent or at the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be
necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence
of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to
have knowledge of any Default
unless and until notice describing such Default is given to the Administrative Agent by the
Borrower, a Lender or the L/C Issuer.



     The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with this Agreement or
any other Loan Document, (ii) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance
of any of the covenants, agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Section 4 or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent.



     9.04 Reliance by Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated
by the proper Person. The Administrative Agent also may rely upon any statement made to it orally
or by telephone and believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon. In determining compliance with any condition hereunder to the
making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the
satisfaction of a Lender or the L/C Issuer, the Administrative Agent may presume that such
condition is satisfactory to such Lender or the L/C Issuer unless the Administrative Agent shall
have received notice to the contrary from such Lender or the L/C Issuer prior to the making of such
Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal
counsel (who may be counsel for the Borrower), independent accountants and other experts selected
by it, and shall not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.



     9.05 Delegation of Duties.
The Administrative Agent may perform any and all of its duties and exercise its rights and
powers hereunder or under any other Loan Document by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform
any and all of its duties and exercise its rights and powers by or through their respective Related
Parties. The exculpatory provisions of this Section shall apply to any such sub-agent and to the
Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their
respective activities in connection with the syndication of the credit facilities provided for
herein as well as activities as Administrative Agent.



97









 





     9.06 Resignation or Removal of Administrative Agent.
The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C
Issuer and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders
shall appoint a successor, which successor shall be approved by the Borrower with such approval not
to be unreasonably withheld (provided, however, that if a Default shall exist at the time, no
approval of the Borrower shall be required hereunder), and which successor shall be a bank with an
office in the United States, or an Affiliate of any such bank with an office in the United States.
If no such successor shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may
on behalf of the Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting the
qualifications set forth above; provided that if the Administrative Agent shall notify the Borrower
and the Lenders that no qualifying Person has accepted such appointment, then such resignation
shall nonetheless become effective in accordance with such notice and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations hereunder and under the
other Loan Documents (except that in the case of any collateral security held by the Administrative
Agent on behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the retiring
Administrative Agent shall continue to hold such collateral security until such time as a successor
Administrative Agent is appointed) and (2) all payments, communications and determinations provided
to be made by, to or through the Administrative Agent shall instead be made by or to each Lender
and the L/C Issuer directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, such successor shall succeed to and become vested
with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative
Agent, and the retiring Administrative Agent shall be discharged from all of its duties and
obligations hereunder or under the other Loan Documents (if not already discharged therefrom as
provided above in this Section). The fees payable by the Borrower to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and
under the other Loan Documents, the provisions of this Section and Section 10.04 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective
Related Parties in respect of any actions taken or omitted to be taken by any of them while the
retiring Administrative Agent was acting as Administrative Agent.



     The Administrative Agent may be removed by the Required Lenders (excluding the vote of the
Administrative Agent, in its capacity as a Lender, as more particularly set forth in the proviso to
the next sentence) in the case of fraud, misappropriation of funds or the commission of illegal
acts by the Administrative Agent or where the Administrative Agent has been grossly negligent in
performing (or failing to perform) its obligations hereunder or under any other Loan Document in
any material respect. Any such removal shall be effective upon the acceptance of appointment of a
successor Administrative Agent in accordance with the provisions of the first paragraph of this
Section 9.06; provided, however, that to the extent the Administrative Agent being replaced
pursuant to this Section 9.06 is also a Lender, such Person shall not be permitted to vote in
connection with the removal of the Administrative Agent and appointment of a successor
Administrative Agent pursuant to this paragraph of Section 9.06. Such successor Administrative
Agent shall be approved by the Borrower with such approval not to be unreasonably withheld
(provided, however, that if a Default shall exist at the time, no approval of the Borrower shall be
required hereunder).



     Any resignation by (or removal of) Bank of America as Administrative Agent pursuant to this
Section shall also constitute its resignation (or removal) as L/C Issuer and Swing Line Lender.
Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (a) such
successor shall succeed to and become vested with all of the rights, powers, privileges and duties
of the retiring (or removed) L/C Issuer and Swing Line Lender, (b) the retiring (or removed) L/C
Issuer and Swing Line Lender shall be discharged from all of their respective duties and
obligations hereunder or under the other



98









 







Loan Documents, and (c) the successor L/C Issuer shall
issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time
of such succession or make other arrangements satisfactory to the retiring (or removed) L/C Issuer
to effectively assume the obligations of the retiring (or removed) L/C Issuer with respect to such
Letters of Credit.



     9.07 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender and the L/C Issuer acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender or any of their Related Parties and based on such
documents and information as it has deemed appropriate, made its own credit analysis and decision
to enter into this Agreement. Each Lender and the L/C Issuer also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other Lender or any of
their Related Parties and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.



     9.08 No Other Duties, Etc.
Anything herein to the contrary notwithstanding, neither the Sole Lead Arranger nor the Sole
Book Runner listed on the cover page hereof shall have any powers, duties or responsibilities under
this Agreement or any of the other Loan Documents.



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




     (a) to file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing
and unpaid and to file such other documents as may be necessary or advisable in order to
have the claims of the Lenders, the L/C Issuer and the Administrative Agent (including any
claim for the reasonable compensation, expenses, disbursements and advances of the Lenders,
the L/C Issuer and the Administrative Agent and their respective agents and counsel and all
other amounts due the Lenders, the L/C Issuer and the Administrative Agent under Sections
2.03(i) and (j), 2.09 and 10.04) allowed in such judicial proceeding; and




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




and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar
official in any such judicial proceeding is hereby authorized by each Lender and the L/C
Issuer to make such payments to the Administrative Agent and, in the event that the
Administrative Agent shall consent to the making of such payments directly to the Lenders
and the L/C Issuer, to pay to the Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of the Administrative Agent and its
agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09
and 10.04.



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



99









 





     9.10 Guaranty Matters.
Each of the Lenders (including each Lender in its capacity as a potential Hedge Bank) and the
L/C Issuer irrevocably authorize the Administrative Agent, at its option and in its discretion, to
release any Guarantor from its obligations under Section 11 hereof if such Person ceases to be
required to be a Guarantor pursuant to the terms hereof.



     Upon request by the Administrative Agent at any time, the Required Lenders will confirm in
writing the Administrative Agent’s authority to release any Guarantor from its obligations under
Section 11 hereof pursuant to this Section 9.10. In each case as specified in this Section 9.10,
the Administrative Agent will, at the Borrower’s expense, execute and deliver to the applicable
Loan Party such documents as Borrower may reasonably request to evidence the release of such
Guarantor from its obligations hereunder, in each case in accordance with the terms of the Loan
Documents and this Section 9.10.



10. MISCELLANEOUS




     10.01 Amendments, Etc.
No amendment or waiver of any provision of this Agreement or any other Loan Document, and no
consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective
unless in writing signed by the Required Lenders and the Borrower or the applicable Loan Party, as
the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent
shall be effective only in the specific instance and for the specific purpose for which given;
provided, however, that no such amendment, waiver or consent shall:




     (a) waive any condition set forth in Section 4.01(a) without the written consent of
each Lender;




     (b) extend or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written consent of such Lender;




     (c) postpone any date fixed by this Agreement or any other Loan Document for any
payment of principal, interest, fees or other amounts due to the Lenders (or any of them)
hereunder or under any other Loan Document without the written consent of each Lender
directly affected thereby;




     (d) reduce the principal of, or the rate of interest specified herein on, any Loan or
L/C Borrowing, or (subject to clause (iv) of the second proviso to this Section 10.01) any
fees or other amounts payable hereunder or under any other Loan Document, or change the
manner of computation of any financial ratio (including any change in any applicable defined
term) used in determining the Applicable Margin that would result in a reduction of any
interest rate on any Loan or any fee payable hereunder without the written consent of each
Lender directly affected thereby; provided, however, that only the consent of the Required
Lenders shall be necessary to amend the definition of “Default Rate” or to waive any
obligation of the Borrower to pay interest or Letter of Credit Fees at the Default Rate;




     (e) change Section 8.03 in a manner that would alter the pro rata sharing of payments
required thereby without the written consent of each Lender;




     (f) change any provision of this Section 10.01 or the definition of “Required Lenders”
or any other provision hereof specifying the number or percentage of Lenders required
to amend, waive or otherwise modify any rights hereunder or make any determination or
grant any consent hereunder without the written consent of each Lender; or



100









 






     (g) release, without the written consent of each Lender, all or substantially all of
the value of the guaranty under Section 11 hereof, except to the extent the release of any
Guarantor is permitted pursuant to Section 9.10 (in which case such release may be made by
the Administrative Agent acting alone);




and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and
signed by the L/C Issuer in addition to the Lenders required above, affect the rights or
duties of the L/C Issuer under this Agreement or any Issuer Document relating to any Letter
of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless
in writing and signed by the Swing Line Lender in addition to the Lenders required above,
affect the rights or duties of the Swing Line Lender under this Agreement; (iii) no
amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent
in addition to the Lenders required above, affect the rights or duties of the Administrative
Agent under this Agreement or any other Loan Document; and (iv) the Fee Letter may be
amended, or rights or privileges thereunder waived, in a writing executed only by the
parties thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent hereunder
(and any amendment, waiver or consent which by its terms requires the consent of all Lenders
or each affected Lender may be effected with the consent of the applicable Lenders other
than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not be
increased or extended without the consent of such Lender and (y) any waiver, amendment or
modification requiring the consent of all Lenders or each affected Lender that by its terms
affects any Defaulting Lender more adversely than other affected Lenders shall require the
consent of such Defaulting Lender.




If any Lender does not consent to a proposed amendment, waiver, consent or release with
respect to any Loan Document that requires the consent of each Lender and that has been
approved by all Lenders other than such one (1) non-consenting Lender, the Borrower may
replace such non-consenting Lender in accordance with Section 10.13.



     10.02 Notices; Effectiveness; Electronic Communication.




     (a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in subsection (b)
below), all notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or registered
mail or sent by telecopier (in a manner that provides for electronic confirmation of
delivery) as follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as follows:




     (i) if to any Loan Party, the Administrative Agent, the L/C Issuer or the Swing
Line Lender, to the address, telecopier number, electronic mail address or telephone
number specified for such Person on Schedule 10.02; and




     (ii) if to any other Lender, to the address(es), telecopier number(s),
electronic mail address(es) or telephone number(s) specified in its Administrative
Questionnaire (including, as appropriate, notices delivered solely to the Person
designated by a Lender on its Administrative Questionnaire then in effect for the
delivery of notices that may contain material non-public information relating to the
Borrower).




Notices and other communications sent by hand or overnight courier service, or mailed by
certified or registered mail, shall be deemed to have been given when received; notices and
other



101









 







communications sent by telecopier shall be deemed to have been given upon obtaining
electronic confirmation of delivery to the recipient telecopier (except that, if not given
during normal business hours for the recipient, shall be deemed to have been given at the
opening of business on the next Business Day for the recipient). Notices and other
communications delivered through electronic communications to the extent provided in
subsection (b) below, shall be effective as provided in such subsection (b).




     (b) Electronic Communications. Notices and other communications to the Lenders and the
L/C Issuer hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, provided that the foregoing shall not apply to notices to any Lender
or the L/C Issuer pursuant to Section 2 if such Lender or the L/C Issuer, as applicable, has
notified the Administrative Agent that it is incapable of receiving notices under such
Section by electronic communication. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of such
procedures may be limited to particular notices or communications.



     Unless the Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement), provided that if such notice or other
communication is not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on the next business day
for the recipient, and (ii) notices or communications posted to an Internet or intranet website
shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as
described in the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.




     (c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER
MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR
OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS
MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no
event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent
Parties”) have any liability to the Borrower, any Lender, the L/C Issuer or any other Person
for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract
or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of
Borrower Materials through the Internet, except to the extent that such losses, claims,
damages, liabilities or expenses are determined by a court of competent jurisdiction by a
final and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Agent Party; provided, however, that in no event shall any Agent Party
have any liability to the Borrower, any Lender, the L/C Issuer or any other Person for
indirect, special, incidental, consequential or punitive damages (as opposed to direct or
actual damages).




     (d) Change of Address, Etc. Each of the Borrower, the Administrative Agent, the L/C
Issuer and the Swing Line Lender may change its address, telecopier or telephone number for



102









 







notices and other communications hereunder by notice to the other parties hereto. Each
other Lender may change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the Borrower, the Administrative Agent, the L/C Issuer
and the Swing Line Lender. In addition, each Lender agrees to notify the Administrative
Agent from time to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, telecopier number and electronic mail
address to which notices and other communications may be sent and (ii) accurate wire
instructions for such Lender. Furthermore, each Public Lender agrees to cause at least one
individual at or on behalf of such Public Lender to at all times have selected the “Private
Side Information” or similar designation on the content declaration screen of the Platform
in order to enable such Public Lender or its delegate, in accordance with such Public
Lender’s compliance procedures and Applicable Laws, including United States Federal and
state securities laws, to make reference to Borrower Materials that are not made available
through the “Public Side Information” portion of the Platform and that may contain material
non-public information with respect to the Borrower or its securities for purposes of United
States Federal or state securities laws.




     (e) Reliance by Administrative Agent, L/C Issuer and Lenders. The Administrative
Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Committed Loan Notices and Swing Line Loan Notices) purportedly given
by or on behalf of the Borrower even if (i) such notices were not made in a manner specified
herein, were incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. The Borrower shall indemnify the Administrative Agent, the L/C
Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses
and liabilities resulting from the reliance by such Person on each notice purportedly given
by or on behalf of the Borrower. All telephonic notices to and other telephonic
communications with the Administrative Agent may be recorded by the Administrative Agent,
and each of the parties hereto hereby consents to such recording.



     10.03 No Waiver; Cumulative Remedies; Enforcement.
No failure by any Lender, the L/C Issuer or the Administrative Agent to exercise, and no delay
by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges provided by Applicable
Laws.



     Notwithstanding anything to the contrary contained herein or in any other Loan Document, the
authority to enforce rights and remedies hereunder and under the other Loan Documents against the
Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law
in connection with such enforcement shall be instituted and maintained exclusively by, the
Administrative Agent in accordance with Section 8.02 for the benefit of the Credit Parties;
provided, however, that the foregoing shall not prohibit (a) the Administrative Agent from
exercising on its own behalf the rights and remedies that inure to its benefit (solely in its
capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) the L/C Issuer
or the Swing Line Lender from exercising the rights and remedies that inure to its benefit (solely
in its capacity as L/C Issuer or Swing Line Lender, as the case may be) hereunder and under the
other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 10.08
(subject to the terms of Section 2.13), or (d) any Lender from filing proofs
of claim or appearing and filing pleadings on its own behalf during the pendency of a
proceeding relative to any Loan Party under any Debtor Relief Law; and provided, further, that if
at any time there is no Person acting as Administrative Agent hereunder and under the other Loan
Documents, then (i) the



103









 







Required Lenders shall have the rights otherwise ascribed to the
Administrative Agent pursuant to Section 8.02 and (ii) in addition to the matters set forth in
clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.13, any Lender may, with
the consent of the Required Lenders, enforce any rights and remedies available to it and as
authorized by the Required Lenders.



     10.04 Expenses; Indemnity; Damage Waiver.




     (a) Costs and Expenses. The Borrower shall pay, on the Closing Date and thereafter
within five (5) Business Days after written demand, (i) all reasonable and documented
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including
the reasonable fees, charges and disbursements of counsel for the Administrative Agent), in
connection with the syndication of the credit facilities provided for herein, the
preparation, negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the provisions hereof or
thereof (whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable and documented out-of-pocket expenses incurred by the L/C
Issuer in connection with the issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by
the Administrative Agent, any Lender or the L/C Issuer (including the fees, charges and
disbursements of any counsel for the Administrative Agent, any Lender or the L/C Issuer),
and shall pay all fees and time charges for attorneys who may be employees of the
Administrative Agent, any Lender or the L/C Issuer, in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the other Loan Documents,
including its rights under this Section, or (B) in connection with the Loans made or Letters
of Credit issued hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of Credit. For
the avoidance of doubt, this Section shall not provide any right to payment with respect to
increases in taxes or costs and expenses related solely to such increases in taxes.




     (b) Indemnification by the Borrower. The Borrower shall indemnify the Administrative
Agent (and any sub-agent thereof), each Lender and the L/C Issuer, and each Related Party of
any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and
hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses (including the fees, charges and disbursements of any counsel for any
Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees and time
charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by
any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or
any other Loan Party arising out of, in connection with, or as a result of (i) the execution
or delivery of this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder, the consummation of the transactions contemplated
hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof)
and its Related Parties only, the administration of this Agreement and the other Loan
Documents (including in respect of any matters addressed in Section 3.01), (ii) any Loan or
Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal
by the L/C Issuer to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms of such
Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on
or from any property owned or operated by the Borrower or
any of its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on contract,
tort or any other theory, whether



104









 







brought by a third party or by the Borrower or any other
Loan Party, and regardless of whether any Indemnitee is a party thereto, IN ALL CASES,
WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE,
CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE; provided that such indemnity shall not,
as to any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee or (y) result from a claim brought by the Borrower or any
other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Loan Document, if the Borrower or such other Loan
Party has obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction. For the avoidance of doubt, this Section
shall not provide any right to payment with respect to increases in taxes or costs and
expenses related solely to such increases in taxes.




     (c) Reimbursement by Lenders. To the extent that the Borrower for any reason fails to
indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid
by it to the Administrative Agent (or any sub-agent thereof), the L/C Issuer or any Related
Party of any of the foregoing, each Lender severally agrees to pay to the Administrative
Agent (or any such sub-agent), the L/C Issuer or such Related Party, as the case may be,
such Lender’s Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that
the unreimbursed expense or indemnified loss, claim, damage, liability or related expense,
as the case may be, was incurred by or asserted against the Administrative Agent (or any
such sub-agent) or the L/C Issuer in its capacity as such, or against any Related Party of
any of the foregoing acting for the Administrative Agent (or any such sub-agent) or L/C
Issuer in connection with such capacity; provided, further, that the Administrative Agent
(or any such sub-agent), the L/C Issuer or such Related Party, as the case may be, shall
reimburse each Lender for any indemnity amount actually paid by such Lender to the
Administrative Agent (or any such sub-agent), the L/C Issuer or such Related Party, as the
case may be, pursuant to this Section 10.04(c) to the extent such underlying indemnity
obligation arose in connection with any claim by such Lender against the Administrative
Agent (or any such sub-agent) or the L/C Issuer in its capacity as such, or against such
Related Party, as the case may be, if such Lender has obtained a final, non-appealable
judgment in favor of such Lender on such claim as determined by a court of competent
jurisdiction. The obligations of the Lenders under this subsection (c) are subject to the
provisions of Section 2.12(d).




     (d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
Applicable Laws, the Borrower shall not assert, and hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof. No Indemnitee referred to in subsection (b)
above shall be liable for any damages arising from the use by unintended recipients of any
information or other materials distributed to such unintended recipients by such Indemnitee
through telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions contemplated
hereby or thereby other than for direct or
actual damages resulting from the gross negligence or willful misconduct of such
Indemnitee as determined by a final and nonappealable judgment of a court of competent
jurisdiction.



105









 






     (e) Payments. All amounts due under this Section shall be payable not later than ten
(10) Business Days after demand therefor.




     (f) Survival. The agreements in this Section shall survive the resignation of the
Administrative Agent, the L/C Issuer and the Swing Line Lender, the replacement of any
Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.



     10.05 Payments Set Aside.
To the extent that any payment by or on behalf of the Borrower is made to the
Administrative Agent, the L/C Issuer or any Lender, or the Administrative Agent, the L/C Issuer or
any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any
part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or
required (including pursuant to any settlement entered into by the Administrative Agent, the L/C
Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or such setoff had not
occurred, and (b) each Lender and the L/C Issuer severally agrees to pay to the Administrative
Agent upon demand its applicable share (without duplication) of any amount so recovered from or
repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date
such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in
effect. The obligations of the Lenders and the L/C Issuer under clause (b) of the preceding
sentence shall survive the payment in full of the Obligations and the termination of this
Agreement.



     10.06 Successors and Assigns.




     (a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors
and assigns permitted hereby, except that neither the Borrower nor any other Loan Party may
assign or otherwise transfer any of its rights or obligations hereunder without the prior
written consent of the Administrative Agent and each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in
accordance with the provisions of subsection (b) of this Section, (ii) by way of
participation in accordance with the provisions of subsection (d) of this Section, or (iii)
by way of pledge or assignment of a security interest subject to the restrictions of
subsection (f) of this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in subsection
(d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of
each of the Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.




     (b) Assignments by Lenders. Any Lender may at any time assign to one or more assignees
all or a portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans (including for purposes of this subsection (b),
participations in L/C Obligations and in Swing Line Loans) at the time owing to it);
provided that any such assignment shall be subject to the following conditions:



106









 






     (i) Minimum Amounts.




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




     (B) in any case not described in subsection (b)(i)(A) of this Section,
the aggregate amount of the Commitment (which for this purpose includes
Loans outstanding thereunder) or, if the Commitment is not then in effect,
the principal outstanding balance of the Loans of the assigning Lender
subject to each such assignment, determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than $5,000,000, unless
each of the Administrative Agent and, so long as no Event of Default then
exists, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed); provided, however, that concurrent
assignments to members of an Assignee Group and concurrent assignments from
members of an Assignee Group to a single Eligible Assignee (or to an
Eligible Assignee and members of its Assignee Group) will be treated as a
single assignment for purposes of determining whether such minimum amount
has been met.




     (ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned, except that this clause (ii) shall not apply to the Swing Line Lender’s
rights and obligations in respect of Swing Line Loans;




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




     (A) the consent of the Borrower (such consent not to be unreasonably
withheld) shall be required unless (1) an Event of Default exists at the
time of such assignment or (2) such assignment is to a Lender, an Affiliate
of a Lender or an Approved Fund; provided that the Borrower shall be deemed
to have consented to any such assignment unless it shall object thereto by
written notice to the Administrative Agent within ten (10) Business Days
after having received notice thereof;




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




     (C) the consent of the L/C Issuer (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more
Letters of Credit (whether or not then outstanding); and



107









 






     (D) the consent of the Swing Line Lender (such consent not to be
unreasonably withheld or delayed) shall be required for any assignment.




     (iv) Assignment and Assumption. The parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee in the amount of $3,500; provided, however, that
the Administrative Agent may, in its sole discretion, elect to waive such processing
and recordation fee in the case of any assignment. The assignee, if it is not a
Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.




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




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




Subject to acceptance and recording thereof by the Administrative Agent pursuant to
subsection (c) of this Section, from and after the effective date specified in each
Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and,
to the extent of the interest assigned by such Assignment and Assumption, have the rights
and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall,
to the extent of the interest assigned by such Assignment and Assumption, be released from
its obligations under this Agreement (and, in the case of an Assignment and Assumption
covering all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits
of Sections 3.01, 3.04, 3.05, and 10.04 with respect to facts and circumstances occurring
prior to the effective date of such assignment. Upon request, the Borrower (at its expense)
shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with subsection (d) of this
Section.



108









 






     (c) Register. The Administrative Agent, acting solely for this purpose as an agent of
the Borrower (and such agency being solely for tax purposes), shall maintain at the
Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders (existing and
future), and the Commitments of, and principal amounts of the Loans and L/C Obligations
owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The
entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. In addition, the Administrative Agent shall maintain on the
Register information regarding the designation, and revocation of designation, of any Lender
as a Defaulting Lender. The Register shall be available for inspection by the Borrower and
any Lender, at any reasonable time and from time to time upon reasonable prior notice.




     (d) Participations. Any Lender may at any time, without the consent of, or notice to,
the Borrower or the Administrative Agent, sell participations to any Person (other than a
natural person, a Defaulting Lender or the Borrower or any of the Borrower’s Affiliates or
Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or
obligations under this Agreement (including all or a portion of its Commitment and/or the
Loans (including such Lender’s participations in L/C Obligations and/or Swing Line Loans)
owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations and (iii) the Borrower, the Administrative Agent, the
Lenders and the L/C Issuer shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.



     Any agreement or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided that such agreement
or instrument may provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to Section 10.01 that
affects such Participant. Subject to subsection (e) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this
Section. To the extent permitted by Applicable Laws, each Participant also shall be entitled to
the benefits of Section 10.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.13 as though it were a Lender.




     (e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower’s prior written
consent. A Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 3.01 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 3.01(e) as though it were a Lender.




     (f) Certain Pledges. Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement (including under its Note, if any)
to secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall
release such Lender



109









 







from any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.




     (g) Resignation as L/C Issuer or Swing Line Lender after Assignment. Notwithstanding
anything to the contrary contained herein, if at any time Bank of America assigns all of its
Commitment and Loans pursuant to subsection (b) above, Bank of America may, (i) upon 30
days’ notice to the Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon 30 days’
notice to the Borrower, resign as Swing Line Lender. In the event of any such resignation
as L/C Issuer or Swing Line Lender, the Borrower shall be entitled to appoint from among the
Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided, however, that no
failure by the Borrower to appoint any such successor shall affect the resignation of Bank
of America as L/C Issuer or Swing Line Lender, as the case may be; provided, further, that
no Lender shall have any obligation to accept such an appointment as successor L/C Issuer or
Swing Line Lender unless such Lender accepts such appointment in writing. If Bank of
America resigns as L/C Issuer, it shall retain all the rights, powers, privileges and duties
of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the
effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Committed Loans or fund risk
participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If Bank of America
resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender
provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the Lenders to make Base
Rate Committed Loans or fund risk participations in outstanding Swing Line Loans pursuant to
Section 2.04(c). Upon the appointment of a successor L/C Issuer and/or Swing Line Lender,
(a) such successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the case may be,
and (b) the successor L/C Issuer shall issue letters of credit in substitution for the
Letters of Credit, if any, outstanding at the time of such succession or make other
arrangements satisfactory to Bank of America to effectively assume the obligations of Bank
of America with respect to such Letters of Credit.



     10.07 Treatment of Certain Information; Confidentiality.
Each of the Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the
confidentiality of the Information (as defined below), except that Information may be disclosed (a)
to its Affiliates and to its and its Affiliates’ respective partners, directors, officers,
employees, agents, trustees, advisors and representatives (it being understood that the Persons to
whom such disclosure is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory authority, such as
the National Association of Insurance Commissioners), (c) to the extent required by Applicable Laws
or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in
connection with the exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this Agreement or any
Eligible Assignee invited to be a Lender pursuant to Section 2.15(c) or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction relating to the
Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such
Information (x) becomes publicly available other than as a result of a breach by the Person
disclosing such Information of this Section (or, to the knowledge of such Person, as a result of a
breach by another Person bound by this Section 10.07) or (y) becomes available to the
Administrative Agent, any Lender, the L/C Issuer or any of their respective
Affiliates on a nonconfidential basis from a source other than the Borrower. For purposes of this
Section, “Information” means all information



110









 







received from the Borrower or any Subsidiary relating
to the Borrower or any Subsidiary or any of their respective businesses, other than any such
information that is available to the Administrative Agent, any Lender or the L/C Issuer on a
nonconfidential basis prior to disclosure by the Borrower or any Subsidiary, provided that, in the
case of written information received from the Borrower or any Subsidiary after the date hereof,
such information is clearly identified at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such Person would accord to
its own confidential information.



     Each of the Administrative Agent, the Lenders and the L/C Issuer acknowledges that (a) the
Information may include material non-public information concerning the Borrower or a Subsidiary, as
the case may be, (b) it has developed compliance procedures regarding the use of material
non-public information and (c) it will handle such material non-public information in accordance
with Applicable Laws, including United States Federal and state securities laws.



     10.08 Right of Setoff.
If an Event of Default exists, each Lender, the L/C Issuer and each of their respective
Affiliates is hereby authorized at any time and from time to time, after written notice to the
Administrative Agent, to the fullest extent permitted by Applicable Laws, to set off and apply any
and all deposits (general or special, time or demand, provisional or final, in whatever currency)
at any time held and other obligations (in whatever currency) at any time owing by such Lender, the
L/C Issuer or any such Affiliate to or for the credit or the account of the Borrower or any other
Loan Party against any and all of the obligations of the Borrower or such Loan Party now or
hereafter existing under this Agreement or any other Loan Document to such Lender or the L/C
Issuer, irrespective of whether or not such Lender or the L/C Issuer shall have made any demand
under this Agreement or any other Loan Document and although such obligations of the Borrower or
such Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender or
the L/C Issuer different from the branch or office holding such deposit or obligated on such
indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right
of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent
for further application in accordance with the provisions of Section 2.17 and, pending such
payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in
trust for the benefit of the Administrative Agent and the Lenders, and (y) the Defaulting Lender
shall provide promptly to the Administrative Agent a statement describing in reasonable detail the
Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The
rights of each Lender, the L/C Issuer and their respective Affiliates under this Section are in
addition to other rights and remedies (including other rights of setoff) that such Lender, the L/C
Issuer or their respective Affiliates may have. Each Lender and the L/C Issuer agrees to notify
the Borrower and the Administrative Agent promptly after any such setoff and application, provided
that the failure to give such notice shall not affect the validity of such setoff and application.



     10.09 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or
agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by Applicable Laws (the “Maximum Rate”). If the Administrative Agent or any
Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall
be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the
Borrower. In determining whether the interest contracted for, charged, or received by the
Administrative Agent or a Lender exceeds
the Maximum Rate, such Person may, to the extent permitted by Applicable Laws, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated term of the
Obligations hereunder.




111











 





     10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Loan Documents constitute the
entire contract among the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject matter hereof.
Except as provided in Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of the other parties
hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or
other electronic imaging means shall be effective as delivery of a manually executed counterpart of
this Agreement.



     10.11 Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document or other
document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive
the execution and delivery hereof and thereof. Such representations and warranties have been or
will be relied upon by the Administrative Agent and each Lender, regardless of any investigation
made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the
Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of
any Credit Extension, and shall continue in full force and effect as long as any Loan or any other
Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain
outstanding.



     10.12 Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or
unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to that of
the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Without limiting the foregoing provisions of this Section 10.12, if and to the extent that the
enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited
by Debtor Relief Laws, as determined in good faith by the Administrative Agent, the L/C Issuer or
the Swing Line Lender, as applicable, then such provisions shall be deemed to be in effect only to
the extent not so limited.



     10.13 Replacement of Lenders. If any Lender requests compensation under Section 3.04, if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 3.01, if any Lender is a Defaulting Lender or if any other circumstance exists
hereunder that, pursuant to the express terms hereof, gives the Borrower the right to replace a
Lender as a party hereto (including such circumstances described in Section 10.01), then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in, and consents required by, Section 10.06), all of its interests,
rights and obligations under this Agreement and the related Loan Documents to an Eligible Assignee
arranged by the Borrower and the Administrative Agent that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided that:




     (a) the Borrower shall have paid to the Administrative Agent the assignment fee
specified in Section 10.06(b);




     (b) such Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and L/C Advances, accrued interest thereon, accrued fees and all
other



112









 






amounts payable to it hereunder and under the other Loan Documents (including any
amounts under Section 3.05) from the assignee (to the extent of such outstanding principal
and accrued interest and fees) or the Borrower (in the case of all other amounts);




     (c) in the case of any such assignment resulting from a claim for compensation under
Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will
result in a reduction in such compensation or payments thereafter; and




     (d) such assignment does not conflict with Applicable Laws.



     A Lender shall not be required to make any such assignment or delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.



     10.14 Governing Law; Jurisdiction; Etc.




     (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 AND SECTION 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).




     (b) SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF
ANY NEW YORK STATE OR FEDERAL COURT SITTING IN THE CITY OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE
HEARD AND DETERMINED IN SUCH COURTS. EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY APPLICABLE LAWS.
NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ANY
OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.




     (c) WAIVER OF VENUE. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS, ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN
PARAGRAPH (b) OF
THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAWS, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.



113









 






     (d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT
THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE
LAWS.



     10.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.



     10.16 No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection
with any amendment, waiver or other modification hereof or of any other Loan Document), the
Borrower and each other Loan Party acknowledges and agrees, and acknowledges its Affiliates’
understanding, that: (i)(A) the arranging and other services regarding this Agreement provided by
the Administrative Agent and the Arranger, are arm’s-length commercial transactions between the
Borrower , each other Loan Party and their respective Affiliates, on the one hand, and the
Administrative Agent and the Arranger, on the other hand, (B) each of the Borrower and the other
Loan Parties has consulted its own legal, accounting, regulatory and tax advisors to the extent it
has deemed appropriate, and (C) the Borrower and each other Loan Party is capable of evaluating,
and understands and accepts, the terms, risks and conditions of the transactions contemplated
hereby and by the other Loan Documents; (ii)(A) the Administrative Agent and the Arranger each is
and has been acting solely as a principal and, except as expressly agreed in writing by the
relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary
for the Borrower, any other Loan Party or any of their respective Affiliates, or any other Person
and (B) neither the Administrative Agent nor the Arranger has any obligation to the Borrower, any
other Loan Party or any of their respective Affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth herein and in the other Loan
Documents; and (iii) the Administrative Agent and the Arranger and their respective Affiliates may
be engaged in a broad range of transactions that involve interests that differ from those of the
Borrower, the other Loan Parties and their respective Affiliates, and neither the Administrative
Agent nor the Arranger has any obligation to disclose any of such interests to the Borrower, any
other Loan Party or any of their respective Affiliates. To the fullest extent permitted by
Applicable Laws, each of the Borrower and the other Loan Parties hereby waives and releases any
claims that it may have against the Administrative Agent and the Arranger with respect to
any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any
transaction contemplated hereby.



     10.17 Electronic Execution of Assignments and Certain Other Documents. The words “execution,” “signed,” “signature” and words of like import in any Assignment and
Assumption or in any amendment or other modification hereof (including waivers and consents) shall
be deemed to include electronic signatures or the keeping of records in electronic form, each of
which shall be of the same legal effect, validity or enforceability as a manually executed
signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and
as provided for in any Applicable Laws,



114









 




including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act, or any other
similar state laws based on the Uniform Electronic Transactions Act.




     10.18 USA PATRIOT Act. Each Lender that is subject to the Act (as hereinafter defined) 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. The Borrower shall, promptly following a request by the Administrative
Agent or any Lender, provide all documentation and other information that the Administrative Agent
or such Lender requests in order to comply with its ongoing obligations under applicable “know your
customer” and anti-money laundering rules and regulations, including the Act.



     10.19 Entire Agreement. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.



     10.20 Restatement of Original Credit Agreement. The parties hereto agree that as of the Closing Date: (a) the Obligations hereunder represent
the amendment, restatement, extension, and consolidation of the “Obligations” under the Original
Credit Agreement; (b) this Agreement amends, restates, supersedes, and replaces the Original Credit
Agreement in its entirety; and (c) any Guaranty executed pursuant to this Agreement amends,
restates, supersedes, and replaces the “Guaranty” executed pursuant to the Original Credit
Agreement. On the Closing Date, (i) the commitment of any “Lender” under the Original Credit
Agreement that is not continuing as a Lender hereunder shall terminate and (ii) the Administrative
Agent shall reallocate the Commitments hereunder to reflect the terms hereof.



11. GUARANTY




     11.01 The Guaranty.




     (a) Each of the Guarantors hereby jointly and severally guarantees to the
Administrative Agent and each of the holders of the Obligations, as hereinafter provided, as
primary obligor and not as surety, the prompt payment of the Obligations (the
“Guaranteed Obligations”) in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly in
accordance with the terms thereof. The Guarantors hereby further agree that if any of the
Guaranteed Obligations are not paid in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise),
the Guarantors will, jointly and severally, promptly pay the same, without any demand or
notice whatsoever, and that in the case of any extension of time of payment or renewal of
any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether
at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) in accordance with the terms of such extension or renewal.




     (b) Notwithstanding any provision to the contrary contained herein, in any other of the
Loan Documents or other documents relating to the Obligations, the obligations of each
Guarantor under this Agreement and the other Loan Documents shall be limited to an aggregate




115









 






amount equal to the largest amount that would not render such obligations subject to
avoidance under the Debtor Relief Laws or any comparable provisions of any applicable state
law.



     11.02 Obligations Unconditional. The obligations of the Guarantors under Section 11.01 are joint and several, absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of
any of the Loan Documents or other documents relating to the Obligations, or any substitution,
compromise, release, impairment or exchange of any other guarantee of or security for any of the
Guaranteed Obligations, and, to the fullest extent permitted by Applicable Laws, irrespective of
any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor, it being the intent of this Section 11.02 that the obligations of
the Guarantors hereunder shall be absolute and unconditional under any and all circumstances. Each
Guarantor agrees that such Guarantor shall have no right of subrogation, indemnity, reimbursement
or contribution against the Borrower or any other Guarantor for amounts paid under this Section 11
until such time as the Obligations have been irrevocably paid in full and the commitments relating
thereto have expired or been terminated. Without limiting the generality of the foregoing, it is
agreed that, to the fullest extent permitted by Applicable Laws, the occurrence of any one or more
of the following shall not alter or impair the liability of any Guarantor hereunder, which shall
remain absolute and unconditional as described above:




     (a) at any time or from time to time, without notice to any Guarantor, the time for any
performance of or compliance with any of the Guaranteed Obligations shall be extended, or
such performance or compliance shall be waived;




     (b) any of the acts mentioned in any of the provisions of any of the Loan Documents, or
other documents relating to the Guaranteed Obligations or any other agreement or instrument
referred to therein shall be done or omitted;




     (c) the maturity of any of the Guaranteed Obligations shall be accelerated, or any of
the Obligations shall be modified, supplemented or amended in any respect, or any right
under any of the Loan Documents or other documents relating to the Guaranteed Obligations,
or any other agreement or instrument referred to therein shall be waived or any other
guarantee of any of the Guaranteed Obligations or any security therefor shall be released,
impaired or exchanged in whole or in part or otherwise dealt with;




     (d) any Lien granted to, or in favor of, the Administrative Agent or any of the holders
of the Guaranteed Obligations as security for any of the Guaranteed Obligations shall fail
to attach or be perfected; or




     (e) any of the Guaranteed Obligations shall be determined to be void or voidable
(including, without limitation, for the benefit of any creditor of any Guarantor) or shall
be subordinated to the claims of any Person (including, without limitation, any creditor of
any Guarantor).



     With respect to its obligations hereunder, each Guarantor hereby expressly waives diligence,
presentment, demand of payment, protest notice of acceptance of the guaranty given hereby and of
Credit Extensions that may constitute obligations guaranteed hereby, notices of amendments, waivers
and supplements to the Loan Documents and other documents relating to the Guaranteed Obligations,
or the compromise, release or exchange of collateral or security, and all notices whatsoever, and
any requirement that the Administrative Agent or any holder of the Guaranteed Obligations exhaust
any right, power or remedy or proceed against any Person under any of the Loan Documents or any
other



116









 





documents relating to the Guaranteed Obligations or any other agreement or instrument
referred to therein, or against any other Person under any other guarantee of, or security for, any
of the Obligations.



     11.03 Reinstatement. Neither the Guarantors’ obligations hereunder nor any remedy for the enforcement thereof shall
be impaired, modified, changed or released in any manner whatsoever by an impairment, modification,
change, release or limitation of the liability of the Borrower, by reason of the Borrower’s
bankruptcy or insolvency or by reason of the invalidity or unenforceability of all or any portion
of the Guaranteed Obligations. The obligations of the Guarantors under this Section 11 shall be
automatically reinstated if and to the extent that for any reason any payment by or on behalf of
any Person in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by
any holder of any of the Obligations, whether as a result of any proceedings pursuant to any Debtor
Relief Law or otherwise, and each Guarantor agrees that it will indemnify the Administrative Agent
and each holder of Guaranteed Obligations on demand for all reasonable out-of-pocket costs and
expenses (including all reasonable fees, expenses and disbursements of any law firm or other
outside counsel incurred by the Administrative Agent) incurred by the Administrative Agent or such
holder of Guaranteed Obligations in connection with such rescission or restoration, including any
such costs and expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any Debtor Relief Law.



     11.04 Certain Waivers. Each Guarantor acknowledges and agrees that (a) the guaranty given hereby may be enforced
without the necessity of resorting to or otherwise exhausting remedies in respect of any other
security or collateral interests, and without the necessity at any time of having to take recourse
against the Borrower hereunder or against any collateral securing the Guaranteed Obligations or
otherwise, (b) it will not assert any right to require the action first be taken against the
Borrower or any other Person (including any co-guarantor) or pursuit of any other remedy or
enforcement any other right and (c) nothing contained herein shall prevent or limit action being
taken against the Borrower hereunder, under the other Loan Documents or the other documents and
agreements relating to the Guaranteed Obligations or from foreclosing on any security or collateral
interests relating hereto or thereto, or from exercising any other rights or remedies available in
respect thereof, if neither the Borrower nor the Guarantors shall timely perform their obligations,
and the exercise of any such rights and completion of any such foreclosure proceedings shall not
constitute a discharge of the Guarantors’ obligations hereunder unless as a result thereof, the
Guaranteed Obligations shall have been paid in full and the commitments relating thereto shall have
expired or been terminated, it being the purpose and intent that the Guarantors’ obligations
hereunder be absolute, irrevocable, independent and unconditional under all circumstances.



     11.05 Remedies. The Guarantors agree that, to the fullest extent permitted by Applicable Laws, as between the
Guarantors, on the one hand, and the Administrative Agent and the holders of the Guaranteed
Obligations, on the other hand, the Guaranteed Obligations may be declared to be forthwith due and
payable as provided in Section 8.02 (and shall be deemed to have become automatically due and
payable in the circumstances provided in Section 8.02) for purposes of Section 11.01,
notwithstanding any stay, injunction or other prohibition preventing such declaration (or
preventing the Guaranteed Obligations from becoming automatically due and payable) as against any
other Person and that, in the event of such declaration (or the Guaranteed Obligations being deemed
to have become automatically due and payable), the Guaranteed Obligations (whether or not due and
payable by any other Person) shall forthwith become due and payable by the Guarantors for purposes
of Section 11.01.



     11.06 Rights of Contribution. The Guarantors hereby agree as among themselves that, in connection with payments made
hereunder, each Guarantor shall have a right of contribution from each other Guarantor in
accordance with Applicable Laws. Such contribution rights shall be subordinate and subject in
right of payment to the Guaranteed Obligations until such time as the Guaranteed Obligations have
been irrevocably paid in full and the commitments relating thereto shall have expired or been
terminated, and none of the Guarantors shall exercise any such contribution rights until the
Guaranteed



117









 




Obligations have been irrevocably paid in full and the commitments relating thereto
shall have expired or been terminated.




     11.07 Guaranty of Payment; Continuing Guaranty. The guarantee in this Section 11 is a guaranty of payment and performance, and not merely of
collection, and is a continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.



Remainder of Page Intentionally Left Blank.

Signature Pages Follow.









118









 








     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date first above written.



	 	 	 	 	 
	BORROWER:                           	PEBBLEBROOK HOTEL, L.P., a Delaware limited partnership

 	 
	 	By:  	PEBBLEBROOK HOTEL TRUST, a Maryland Real
Estate Investment Trust, its general partner 
 	 
	 
	 	 	 
	 	By:  	                                                             /s/ Raymond Martz
 	 
	 	 	Name:  	Raymond Martz 	 
	 	 	Title:  	Executive Vice
President and Chief Financial
Officer 	 
	 



	 	 	 	 	 
	GUARANTORS:  	PEBBLEBROOK HOTEL TRUST, a
Maryland Real Estate Investment Trust

 	 
	 	By:  	/s/ Raymond Martz
 	 
	 	 	Name:  	Raymond Martz 	 
	 	 	Title:  	Executive Vice President and
Chief Financial Officer 	 
	 
	 	HUSKIES OWNER LLC, a Delaware limited

liability company

 	 
	 	By:  	/s/ Raymond Martz
 	 
	 	 	Name:  	Raymond Martz 	 
	 	 	Title:  	Executive Vice President and
Chief Financial Officer 	 
	 
	 	GATOR OWNER LLC, a Delaware limited liability

company

 	 
	 	By:  	/s/ Raymond Martz
 	 
	 	 	Name:  	Raymond Martz 	 
	 	 	Title:  	Executive Vice President and
Chief Financial Officer 	 



119









 






	 	 	 	 	 



	 	 	 	 	 
	 	BLUE DEVILS OWNER LLC, a Delaware limited

liability company

 	 
	 	By:  	/s/ Raymond Martz
 	 
	 	 	Name:  	Raymond Martz 	 
	 	 	Title:  	Executive Vice President and
Chief Financial Officer 	 
	 



	 	 	 	 	 
	 	BRUINS OWNER LLC, a Delaware limited liability

company

 	 
	 	By:  	/s/ Raymond Martz
 	 
	 	 	Name:  	Raymond Martz 	 
	 	 	Title:  	Executive Vice President and
Chief Financial Officer 	 
	 



	 	 	 	 	 
	 	RUNNING REBELS OWNER LLC, a Delaware limited

liability company

 	 
	 	By:  	/s/ Raymond Martz
 	 
	 	 	Name:  	Raymond Martz 	 
	 	 	Title:  	Executive Vice President and
Chief Financial Officer 	 
	 



	 	 	 	 	 
	 	WOLVERINES OWNER LLC, a Delaware limited

liability company

 	 
	 	By:  	/s/ Raymond Martz
 	 
	 	 	Name:  	Raymond Martz 	 
	 	 	Title:  	Executive Vice President and
Chief Financial Officer 	 
	 



	 	 	 	 	 
	 	HOOSIERS OWNER LLC, a Delaware limited

liability company

 	 
	 	By:  	/s/ Raymond Martz
 	 
	 	 	Name:  	Raymond Martz 	 
	 	 	Title:  	Executive Vice President and
Chief Financial Officer 	 



120









 






	 	 	 	 	 



	 	 	 	 	 
	 	RAZORBACKS OWNER LLC, a Delaware limited

liability company

 	 
	 	By:  	/s/ Raymond Martz
 	 
	 	 	Name:  	Raymond Martz 	 
	 	 	Title:  	Executive Vice President and
Chief Financial Officer 	 



121









 






	 	 	 	 	 



	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as Administrative

Agent, L/C Issuer, Swing Line Lender and a

Lender

 	 
	 	By:  	/s/ Roger C. Davis
 	 
	 	 	Name:  	Roger D. Davis  	 
	 	 	Title:  	Senior Vice President 	 



122









 






	 	 	 	 	 



	 	 	 	 	 
	 	WELLS FARGO BANK, NATIONAL
ASSOCIATION, as a Lender

 	 
	 	By:  	/s/ Mark Monahan
 	 
	 	 	Name:  	Mark Monahan  	 
	 	 	Title:  	Senior Vice President 	 



123









 






	 	 	 	 	 



	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, as a Lender

 	 
	 	By:  	/s/ Lori Y. Jensen
 	 
	 	 	Name:  	Lori Y. Jensen 	 
	 	 	Title:  	Vice President 	 



124









 






	 	 	 	 	 



	 	 	 	 	 
	 	CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,

as a Lender

 	 
	 	By:  	/s/ Joseph Asciolla
 	 
	 	 	Name:  	Joseph Asciolla  	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	                                                     /s/ Jason Chrein
 	 
	 	 	Name:  	Jason Chrein  	 
	 	 	Title:  	Director 	 



125









 






	 	 	 	 	 



	 	 	 	 	 
	 	RAYMOND JAMES BANK, FSB, as a Lender

 	 
	 	By:  	/s/ James Armstrong
 	 
	 	 	Name:  	James Armstrong  	 
	 	 	Title:  	Vice President 	 



126









 






	 	 	 	 	 



	 	 	 	 	 
	 	CAPITAL ONE, N.A. (Successor by merger to

Chevy Chase Bank, F.S.B.), as a Lender

 	 
	 	By:  	/s/ Frederick H. Denecke
 	 
	 	 	Name:  	Frederick H. Denecke  	 
	 	 	Title:  	Vice President 	 



127









 






	 	 	 	 	 



	 	 	 	 	 
	 	CITIBANK, N.A., as a Lender

 	 
	 	By:  	/s/ John C. Rowland
 	 
	 	 	Name:  	John Rowland  	 
	 	 	Title:  	Director 	 



128









 






	 	 	 	 	 



	 	 	 	 	 
	 	PNC BANK, NATIONAL ASSOCIATION, as a Lender

 	 
	 	By:  	/s/ Casey Brill
 	 
	 	 	Name:  	Casey Brill  	 
	 	 	Title:  	VP 	 



129









 






	 	 	 	 	 



	 	 	 	 	 
	 	ROYAL BANK OF CANADA, as a Lender

 	 
	 	By:  	/s/ Dan LePage
 	 
	 	 	Name:  	Dan LePage  	 
	 	 	Title:  	Authorized Signatory 	 



130









 






	 	 	 	 	 



	 	 	 	 	 
	 	REGIONS BANK, as a Lender

 	 
	 	By:  	/s/ Lee Surtees
 	 
	 	 	Name:  	Lee Surtees  	 
	 	 	Title:  	Vice President 	 
	 




131