Document:

Exhibit 10.1

Liberty Expedia Holdings, Inc.

12300 Liberty Boulevard

Englewood, CO  80112

 

Barry Diller

c/o Arrow Investments, Inc.

555 West 18th Street

New York, NY 10011

 

John C. Malone

c/o Liberty Media Corporation

12300 Liberty Boulevard

Englewood, CO  80112

 

Liberty Interactive Corporation

12300 Liberty Boulevard

Englewood, CO  80112

 

Attention:  Richard N. Baer

 

Re:                             Extension of Transaction Agreement

 

March 6, 2018

 

Dear Sirs:

 

Reference is made to the Amended and Restated Transaction Agreement, dated as of September 22, 2016 (the “Transaction Agreement”), by and among Liberty Interactive Corporation (“Liberty”), Liberty Expedia Holdings, Inc. (“Splitco”), John C. Malone (“Malone”) and Leslie Malone (“Mrs. Malone,” and together with Malone, the “Malone Group”), and Mr. Barry Diller (“Diller”).  Capitalized terms used and not defined herein shall have the meanings ascribed to such terms in the Transaction Agreement.

 

1.             Amendment to Transaction Agreement.  The parties have determined to amend the term “Proxy Swap Termination Date,” as defined in the Transaction Agreement, by amending clause (i) of Section 15(b) of the Transaction Agreement to read in its entirety as follows:

 

“(i)          May 4, 2019;”

 

The parties acknowledge and agree that the term “Proxy Swap Termination Date,” as so amended, will be applicable for each Transaction Instrument executed, entered into, filed or made effective in connection with the transactions contemplated by the Transaction Agreement.

 

 

2.             Further Assurances.  At any time or from time to time after the date hereof, the parties agree to cooperate with each other, and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effectuate the intent of the parties hereunder.

 

3.             Amendment and Waiver.  This letter agreement may not be amended, modified, or waived except in a written instrument executed by the parties.  The failure of any party to enforce any of the provisions of this letter agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision of this letter agreement in accordance with its terms.

 

4.             Counterparts.  This letter agreement may be executed in separate counterparts each of which shall be an original and all of which taken together shall constitute one and the same agreement.

 

5.             Transaction Agreement in Effect.  Other then as specified in this letter agreement, the terms of the Transaction Agreement are unmodified and remain in full force and effect and will continue to govern the relationship among Liberty, Splitco, Diller and the Malone Group as to the other matters contained therein.  This letter agreement, together with the Transaction Agreement shall constitute one and the same agreement.

 

2

 

If the foregoing is consistent with your understanding, please so indicate by your signature below, which will constitute the agreement of the parties hereto.

 

	
 
    	
LIBERTY   EXPEDIA HOLDINGS, INC.
    
	
 
    	
/s/ Craig Troyer
    
	
 
    	
Name:
    	
Craig Troyer
    
	
 
    	
Title:
    	
Senior Vice President,   Deputy General Counsel and Assistant Secretary
    

 

	
Accepted   and Agreed:
    	
 
    
	
LIBERTY   INTERACTIVE CORPORATION
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Craig Troyer
    	
 
    
	
Name:
    	
Craig   Troyer
    	
 
    
	
Title:
    	
Senior Vice President,   Deputy General Counsel and Assistant Secretary
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Barry Diller
    	
 
    
	
Barry   Diller
    	
 
    
	
 
    	
 
    
	
/s/   John C. Malone
    	
 
    
	
John   C. Malone
    	
 
    
	
 
    	
 
    
	
/s/ Leslie Malone
    	
 
    
	
Leslie   Malone
    	
 
    
				

 

	
cc:
    	
Andrew   J. Nussbaum
    	
 
    
	
 
    	
Wachtell   Lipton Rosen & Katz
    	
 
    
	
 
    	
 
    
	
 
    	
Steven   D. Miller
    	
 
    
	
 
    	
Sherman &   Howard LLC
    	
 
    

 

3Exhibit 10.1

	
 
    

 

CREDIT AGREEMENT

 

Dated as of March 1, 2018

 

among

 

ASHFORD HOSPITALITY HOLDINGS LLC,
 as the Borrower,

 

ASHFORD INC.,
 as the Parent,

 

BANK OF AMERICA, N.A.,
 as Administrative Agent and
 L/C Issuer,

 

and

 

The Other Lenders Party Hereto

 

MERRILL LYNCH, PIERCE, FENNER & SMITH, INCORPORATED,
 as Sole Lead Arranger and Sole Bookrunner

	
 
    

 

 

TABLE OF CONTENTS

 

	
Section
    	
 
    	
Page
    
	
 
    	
 
    
	
Article I.   Definitions and Accounting Terms
    	
1
    
	
1.01
    	
Defined Terms
    	
1
    
	
1.02
    	
Other Interpretive   Provisions
    	
25
    
	
1.03
    	
Accounting Terms
    	
25
    
	
1.04
    	
Rounding
    	
26
    
	
1.05
    	
Times of Day; Rates
    	
26
    
	
1.06
    	
Letter of Credit   Amounts
    	
27
    
	
 
    	
 
    	
 
    
	
Article II.   The Commitments and Credit Extensions
    	
27
    
	
2.01
    	
The Revolving Credit   Loans
    	
27
    
	
2.02
    	
Borrowings, Conversions   and Continuations of Loans
    	
27
    
	
2.03
    	
Letters of Credit
    	
28
    
	
2.04
    	
Prepayments
    	
37
    
	
2.05
    	
Termination or   Reduction of Commitments
    	
37
    
	
2.06
    	
Repayment of Loans
    	
38
    
	
2.07
    	
Interest
    	
38
    
	
2.08
    	
Fees
    	
39
    
	
2.09
    	
Computation of Interest   and Fees; Retroactive Adjustments of Applicable Margin
    	
39
    
	
2.10
    	
Evidence of Debt
    	
40
    
	
2.11
    	
Payments Generally;   Administrative Agent’s Clawback
    	
40
    
	
2.12
    	
Sharing of Payments by   Lenders
    	
42
    
	
2.13
    	
Extension of Maturity   Date
    	
43
    
	
2.14
    	
Increase in Commitments
    	
43
    
	
2.15
    	
Cash Collateral
    	
44
    
	
2.16
    	
Defaulting Lenders
    	
46
    
	
 
    	
 
    
	
Article III.   Taxes, Yield Protection and Illegality
    	
48
    
	
3.01
    	
Taxes
    	
48
    
	
3.02
    	
Illegality
    	
52
    
	
3.03
    	
Inability to Determine   Rates
    	
53
    
	
3.04
    	
Increased Costs;   Reserves on Eurodollar Rate Loans
    	
53
    
	
3.05
    	
Compensation for Losses
    	
55
    
	
3.06
    	
Mitigation Obligations;   Replacement of Lenders
    	
55
    
	
3.07
    	
Survival
    	
56
    
	
 
    	
 
    
	
Article IV.   Conditions Precedent To Credit Extensions
    	
56
    
	
4.01
    	
Conditions of Initial Credit   Extension
    	
56
    
	
4.02
    	
Conditions to All   Credit Extensions
    	
58
    
	
 
    	
 
    
	
Article V.   Representations and Warranties
    	
59
    
	
5.01
    	
Existence,   Qualification and Power
    	
59
    
	
5.02
    	
Authorization; No   Contravention
    	
59
    
	
5.03
    	
Governmental   Authorization; Other Consents
    	
59
    
	
5.04
    	
Binding Effect
    	
60
    
	
5.05
    	
Financial Statements;   No Material Adverse Effect
    	
60
    
	
5.06
    	
Litigation
    	
60
    
	
5.07
    	
No Default
    	
61
    

 

i

 

	
5.08
    	
Ownership of Property;   Liens; Investments
    	
61
    
	
5.09
    	
Environmental   Compliance
    	
61
    
	
5.10
    	
Insurance
    	
62
    
	
5.11
    	
Taxes
    	
62
    
	
5.12
    	
ERISA Compliance
    	
62
    
	
5.13
    	
Subsidiaries; Equity   Interests; Loan Parties
    	
63
    
	
5.14
    	
Margin Regulations;   Investment Company Act
    	
64
    
	
5.15
    	
Disclosure
    	
64
    
	
5.16
    	
Compliance with Laws
    	
64
    
	
5.17
    	
Taxpayer Identification   Number
    	
64
    
	
5.18
    	
Intellectual Property;   Licenses, Etc.
    	
64
    
	
5.19
    	
Solvency
    	
64
    
	
5.20
    	
Casualty, Etc.
    	
65
    
	
5.21
    	
Labor Matters
    	
65
    
	
5.22
    	
Collateral Documents
    	
65
    
	
5.23
    	
OFAC
    	
65
    
	
5.24
    	
Nature of Business
    	
65
    
	
5.25
    	
Anti-Corruption Laws
    	
65
    
	
5.26
    	
EEA Financial   Institutions
    	
65
    
	
5.27
    	
Advisory Agreements
    	
65
    
	
 
    	
 
    	
 
    
	
Article VI.   Affirmative Covenants
    	
66
    
	
6.01
    	
Financial Statements
    	
66
    
	
6.02
    	
Certificates; Other   Information
    	
67
    
	
6.03
    	
Notices
    	
69
    
	
6.04
    	
Payment of Obligations
    	
69
    
	
6.05
    	
Preservation of   Existence, Etc.
    	
69
    
	
6.06
    	
Maintenance of   Properties
    	
69
    
	
6.07
    	
Maintenance of   Insurance
    	
70
    
	
6.08
    	
Compliance with Laws
    	
70
    
	
6.09
    	
Books and Records
    	
70
    
	
6.10
    	
Inspection Rights
    	
70
    
	
6.11
    	
Use of Proceeds
    	
70
    
	
6.12
    	
Covenant to Guarantee   Obligations and Give Security
    	
70
    
	
6.13
    	
Compliance with   Environmental Laws
    	
71
    
	
6.14
    	
Further Assurances
    	
71
    
	
6.15
    	
Compliance with Terms   of Leaseholds
    	
72
    
	
6.16
    	
Lien Searches
    	
72
    
	
6.17
    	
Material Contracts
    	
72
    
	
6.18
    	
Cash Collateral   Accounts
    	
72
    
	
6.19
    	
Maintenance of Listing
    	
72
    
	
6.20
    	
Anti-Corruption Laws
    	
72
    
	
6.21
    	
Inter-Company Debt   Documents
    	
72
    
	
6.22
    	
Advisory Agreements
    	
73
    
	
6.23
    	
Deposit Accounts
    	
73
    
	
 
    	
 
    
	
Article VII.   Negative Covenants
    	
73
    
	
7.01
    	
Liens
    	
73
    
	
7.02
    	
Indebtedness
    	
74
    
	
7.03
    	
Investments
    	
75
    
	
7.04
    	
Fundamental Changes
    	
76
    

 

ii

 

	
7.05
    	
Dispositions
    	
76
    
	
7.06
    	
Restricted Payments
    	
77
    
	
7.07
    	
Change in Nature of   Business
    	
77
    
	
7.08
    	
Transactions with   Affiliates
    	
77
    
	
7.09
    	
Burdensome Agreements
    	
77
    
	
7.10
    	
Use of Proceeds
    	
77
    
	
7.11
    	
Financial Covenants
    	
78
    
	
7.12
    	
Amendments of   Organization Documents
    	
78
    
	
7.13
    	
Accounting Changes
    	
78
    
	
7.14
    	
Sanctions
    	
78
    
	
7.15
    	
Anti-Corruption Laws
    	
78
    
	
7.16
    	
Advisory Agreements
    	
78
    
	
 
    	
 
    
	
Article VIII.   Events of Default and Remedies
    	
78
    
	
8.01
    	
Events of Default
    	
78
    
	
8.02
    	
Remedies Upon Event of   Default
    	
81
    
	
8.03
    	
Application of Funds
    	
81
    
	
 
    	
 
    
	
Article IX.   Administrative Agent
    	
82
    
	
9.01
    	
Appointment and   Authority
    	
82
    
	
9.02
    	
Rights as a Lender
    	
83
    
	
9.03
    	
Exculpatory Provisions
    	
83
    
	
9.04
    	
Reliance by   Administrative Agent
    	
84
    
	
9.05
    	
Delegation of Duties
    	
84
    
	
9.06
    	
Resignation of   Administrative Agent
    	
85
    
	
9.07
    	
Non-Reliance on   Administrative Agent and Other Lenders
    	
86
    
	
9.08
    	
No Other Duties, Etc.
    	
86
    
	
9.09
    	
Administrative Agent   May File Proofs of Claim
    	
86
    
	
9.10
    	
Collateral and Guaranty   Matters
    	
87
    
	
9.11
    	
Releases
    	
88
    
	
9.12
    	
Secured Hedge   Agreements
    	
89
    
	
9.13
    	
ERISA
    	
89
    
	
 
    	
 
    
	
Article X.   Continuing Guaranty
    	
91
    
	
10.01
    	
Guaranty
    	
91
    
	
10.02
    	
Rights of Lenders
    	
91
    
	
10.03
    	
Certain Waivers
    	
91
    
	
10.04
    	
Obligations Independent
    	
92
    
	
10.05
    	
Subrogation
    	
92
    
	
10.06
    	
Termination;   Reinstatement
    	
92
    
	
10.07
    	
Subordination
    	
92
    
	
10.08
    	
Stay of Acceleration
    	
92
    
	
10.09
    	
Condition of Borrower
    	
92
    
	
 
    	
 
    
	
Article XI.   Miscellaneous
    	
93
    
	
11.01
    	
Amendments, Etc.
    	
93
    
	
11.02
    	
Notices; Effectiveness;   Electronic Communication
    	
94
    
	
11.03
    	
No Waiver; Cumulative   Remedies; Enforcement
    	
96
    
	
11.04
    	
Expenses; Indemnity;   Damage Waiver
    	
97
    
	
11.05
    	
Payments Set Aside
    	
99
    
	
11.06
    	
Successors and Assigns
    	
99
    

 

iii

 

	
11.07
    	
Treatment of Certain   Information; Confidentiality
    	
103
    
	
11.08
    	
Right of Setoff
    	
104
    
	
11.09
    	
Interest Rate   Limitation
    	
105
    
	
11.10
    	
Counterparts;   Integration; Effectiveness
    	
105
    
	
11.11
    	
Survival of   Representations and Warranties
    	
105
    
	
11.12
    	
Severability
    	
105
    
	
11.13
    	
Replacement of Lenders
    	
106
    
	
11.14
    	
Governing Law;   Jurisdiction; Etc.
    	
106
    
	
11.15
    	
Waiver of Jury Trial
    	
107
    
	
11.16
    	
No Advisory or   Fiduciary Responsibility
    	
108
    
	
11.17
    	
Electronic Execution of   Assignments and Certain Other Documents
    	
108
    
	
11.18
    	
USA PATRIOT Act
    	
108
    
	
11.19
    	
Time of the Essence
    	
109
    
	
11.20
    	
Acknowledgement and   Consent to Bail-In of EEA Financial Institutions
    	
109
    
	
11.21
    	
ENTIRE AGREEMENT
    	
109
    

 

SCHEDULES

 

	
2.01
    	
Commitments and Applicable Percentage
    
	
5.06
    	
Litigation
    
	
5.08(b)
    	
Existing Liens
    
	
5.08(c)
    	
Owned and Ground Leased Real Property
    
	
5.08(d)
    	
Existing Investments
    
	
5.09
    	
Environmental Matters
    
	
5.12(d)
    	
ERISA Matters
    
	
5.13
    	
Subsidiaries and Other Equity Investments; Loan   Parties
    
	
5.18
    	
Intellectual Property Matters
    
	
7.02
    	
Existing Indebtedness
    
	
7.09
    	
Burdensome Agreements
    
	
11.02
    	
Administrative Agent’s Office, Certain Addresses for   Notices
    

 

EXHIBITS

 

	
Form of
    	
 
    
	
 
    	
 
    
	
A
    	
Committed Loan Notice
    
	
B
    	
Note
    
	
C
    	
Compliance Certificate
    
	
D-1
    	
Assignment and Assumption
    
	
D-2
    	
Administrative Questionnaire
    
	
E
    	
Guaranty
    
	
F
    	
Pledge and Security Agreement
    
	
G
    	
Opinion Matters — Counsel to Loan Parties
    
	
H
    	
U.S. Tax Compliance Certificates
    
	
I
    	
Solvency Certificate
    

 

iv

 

CREDIT AGREEMENT

 

This CREDIT AGREEMENT (“Agreement”) is entered into as of March 1, 2018, among ASHFORD HOSPITALITY HOLDINGS LLC, a Delaware limited liability company (the “Borrower”), ASHFORD INC., a Maryland corporation (the “Parent”), each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), and BANK OF AMERICA, N.A., as Administrative Agent and L/C Issuer.

 

PRELIMINARY STATEMENTS

 

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

 

Article I.
 Definitions and Accounting Terms

 

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

 

“Administrative Agent” means Bank of America (as hereafter defined) 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 11.02, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

 

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

 

“Advisor” means Ashford Hospitality Advisors LLC, a Delaware limited liability company, and its successors and assigns.

 

“Advisory Agreements” means, collectively, the Hospitality Prime Advisory Agreement, the Hospitality Trust Advisory Agreement, and any similar agreements for advisory services executed by Parent or any of its Subsidiaries, and “Advisory Agreement” means any one of the Advisory Agreements.

 

“Advisory EBITDA” means Consolidated EBITDA, excluding any Consolidated EBITDA derived from, or attributable to, any Ancillary Service Business.

 

“Advisory Leverage Ratio” means, without duplication, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness that is recourse to Parent or any other Loan Party less Unrestricted Cash held by Parent or any other Loan Party, each as of such date to (b) Advisory EBITDA for the period of the four (4) fiscal quarters most recently ended.  For the avoidance of doubt, the Inter-Company Debt shall not be included in the calculation of the Advisory Leverage Ratio.

 

“Advisory Subsidiary” means any Subsidiary of Parent that is not an Ancillary Service Subsidiary and, for the avoidance of doubt, shall always include Advisor and each other Subsidiary of Parent that is party to an Advisory Agreement.

 

 

“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, which on the Closing Date equal $35,000,000.

 

“Agreement” means this Credit Agreement.

 

“AHT” means Ashford Hospitality Trust, Inc., a Maryland corporation.

 

“Ancillary Service Business” means any Investment or business held by Ashford Hospitality Services, LLC or any Person that is, or is expected to be, a Subsidiary of Ashford Hospitality Services, LLC.

 

“Ancillary Service Subsidiary” means any of Ashford Hospitality Services, LLC, any of its Subsidiaries, or any other Subsidiary that provides or is expected to provide services, as an independent contractor, to a Person qualifying for treatment as a “real estate investment trust” under the Code (or any of its Subsidiaries, including any taxable REIT subsidiary of such Person).

 

“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, as any such Applicable Percentage may be adjusted as provided in Section 2.16.  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.

 

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

 

	
Applicable Margin
    	
 
    
	
Pricing
   Level
    	
 
    	
Advisory Leverage
   Ratio
    	
 
    	
Eurodollar
   Rate /
   Letters of
   Credit
    	
 
    	
Base Rate
    	
 
    
	
1
    	
 
    	
< 1.50x
    	
 
    	
3.00
    	
%
    	
2.00
    	
%
    
	
2
    	
 
    	
>1.50   but <2.0x
    	
 
    	
3.25
    	
%
    	
2.25
    	
%
    
	
3
    	
 
    	
>2.0x
    	
 
    	
3.50
    	
%
    	
2.50
    	
%
    

 

Any increase or decrease in the Applicable Margin resulting from a change in the Advisory Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is 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 3 shall apply as of the first Business Day after the date on which such

 

2

 

Compliance Certificate was required to have been delivered and in each case shall remain in effect until the date on which such Compliance Certificate is delivered.  The Applicable Margin in effect from the Closing Date until adjusted as set forth above shall be set at Pricing Level 1.

 

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 2.09(b).

 

“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.

 

“Arranger” means Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any other registered broker-dealer wholly-owned by Bank of America Corporation to which all or substantially all of Bank of America Corporation’s or any of its subsidiaries’ investment banking, commercial lending services or related businesses may be transferred following the date of this Agreement), in its capacity as sole lead arranger and sole bookrunner.

 

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

 

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit D-1 or any other form (including electronic documentation generated by use of an electronic platform) approved by the Administrative Agent.

 

“Attributable Indebtedness” means, on any date, (a) in respect of any Capitalized 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 or similar payments under the relevant lease or other applicable agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease or other agreement or instrument were accounted for as a Capitalized Lease.

 

“Audited Financial Statements” means the audited consolidated balance sheet of the Parent and its Subsidiaries for the fiscal year ended December 31, 2016, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Parent and its Subsidiaries, including the notes thereto.

 

“Availability Period” means the period from and including the Closing Date to the earliest of (i) the Maturity Date, (ii) the date of termination of the Aggregate Commitments pursuant to Section 2.05, and (iii) 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.

 

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

 

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

3

 

“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 1⁄2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” and (c) the Eurodollar Rate plus 1.00%.   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 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 Loan” means a Loan that bears interest based on the Base Rate.

 

“Base Rate Revolving Loan” means a Revolving Credit Loan that is a Base Rate Loan.

 

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

 

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

 

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

 

“Borrowing” means a Revolving Credit Borrowing.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and, if such day relates to any Eurodollar Rate Loan, means any such day that is also a London Banking Day.

 

“Capitalized Leases” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases.

 

“Cash Collateral Account” means a blocked, non-interest bearing deposit account for Cash Collateral of one or more of the Loan Parties at Bank of America (or another commercial bank satisfying the requirements of Section 6.18) in the name of the Administrative Agent and under the sole dominion and control of the Administrative Agent, and otherwise established in a manner satisfactory to the Administrative Agent.

 

“Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for L/C Obligations, or obligations of the Lenders to fund participations in respect thereof, cash or deposit account balances or, if the Administrative Agent or the L/C Issuer shall agree in their 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.  “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

 

“Cash Equivalents” means any of the following types of Investments, to the extent owned by the Borrower or any of its Subsidiaries:

 

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(a)           readily marketable obligations issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof having maturities of not more than 360 days from the date of acquisition thereof; provided that the full faith and credit of the United States is pledged in support thereof;

 

(b)           time deposits with, or insured certificates of deposit or bankers’ acceptances of, any commercial bank that (i)(A) is a Lender or (B) is organized under the laws of the United States, any state thereof or the District of Columbia or is the principal banking subsidiary of a bank holding company organized under the laws of the United States, any state thereof or the District of Columbia, and is a member of the Federal Reserve System, (ii) issues (or the parent of which issues) commercial paper rated as described in clause (c) of this definition and (iii) has combined capital and surplus of at least $1,000,000,000, in each case with maturities of not more than 180 days from the date of acquisition thereof;

 

(c)           commercial paper issued by any Person organized under the laws of any state of the United States and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or at least “A-1” (or the then equivalent grade) by S&P, in each case with maturities of not more than 180 days from the date of acquisition thereof; and

 

(d)           Investments, classified in accordance with GAAP as current assets of the Borrower or any of its Subsidiaries, in money market investment programs registered under the Investment Company Act of 1940, which are administered by financial institutions that have the highest rating obtainable from either Moody’s or S&P, and the portfolios of which are limited solely to Investments of the character, quality and maturity described in clauses (a), (b) and (c) of this definition.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980.

 

“CERCLIS” means the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the U.S. Environmental Protection Agency.

 

“CFC” means a Person that is a controlled foreign corporation under Section 957 of the Code.

 

“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, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (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, 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

 

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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”)), other than Monty Bennett or Archie Bennett or a trust limited partnership, limited liability company or other similar entity established or owned by Monty Bennett or Archie Bennett to hold equity securities of the Parent (so long as, in each case and after giving effect to any such transaction, at least one (1) class of common shares of Parent are publically traded on a national exchange described in Section 6.19) directly or indirectly, of 35% or more of the equity securities of the Parent entitled to vote for members of the board of directors or equivalent governing body of the Parent 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 twelve (12) consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Parent 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 Parent shall cease, directly or indirectly, to Control the Borrower.

 

“Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 11.01.

 

“Code” means the Internal Revenue Code of 1986.

 

“Collateral” means all of the “Collateral” referred to in the Collateral Documents and all of the other property that is or is intended under the terms of the Collateral Documents to be subject to Liens in favor of the Administrative Agent for the benefit of the Secured Parties.

 

“Collateral Documents” means, collectively, the Security Agreement, the Inter-Company Assignment, each of the collateral assignments, security agreements, pledge agreements, any amendments or supplements thereto or other similar agreements delivered to the Administrative Agent pursuant to Section 6.12, and each of the other agreements, instruments or documents that relates to any of the foregoing or creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties.

 

“Commitment” means, as to each Lender, its obligation to (a) make Revolving Credit Loans to the Borrower pursuant to Section 2.01 and (b) purchase participations in L/C Obligations, 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 Assumption pursuant to which such Lender becomes a party hereto or obtains additional Commitments from another Lender, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

 

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

 

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approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

 

“Compliance Certificate” means a certificate substantially in the form of Exhibit C or in such other form as may be agreed by Borrower and Administrative Agent.

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

 

“Consolidated EBITDA” means, with respect to the Consolidated Parties on a consolidated basis for any period (without duplication), Consolidated Net Income (loss) for such period determined on a consolidated basis, in accordance with GAAP, exclusive of the following (but only to the extent included in the determination of such Consolidated Net Income (loss)): (a) depreciation and amortization (but as to Capitalized Leases included as an asset, only depreciation in accordance with GAAP in effect as of the Closing Date); (b) Consolidated Interest Charges; (c) income tax expense; (d) extraordinary or non-recurring gains and losses and unrealized gains and losses; and (e) other non-cash items, including without limitation, non-cash impairment charges, any changes in the fair market value of any Swap Contracts and deferred compensation expense for officers and employees, severance, and amortization of equity-based compensation.

 

“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 (other than trade debt incurred in the ordinary course of business not past due for more than ninety (90) days), 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), in each case evidenced by a binding agreement, (e) Attributable Indebtedness of the Consolidated Parties on a consolidated basis in respect of Capitalized Leases and Synthetic Lease Obligations (the amount of a Capitalized Lease is the capitalized amount of such obligation as would be required to be reflected on a balance sheet prepared in accordance with GAAP, as GAAP is in effect as of the Closing Date), (f) obligations (which will increase Consolidated Funded Indebtedness) and assets (which will decrease Consolidated Funded Indebtedness) under any Swap Contract or foreign currency hedge, in an amount equal to the Swap Termination Value thereof (net of any cash or Cash Equivalents posted as collateral for such Swap Contracts), (g) without duplication, all Guarantees of the Consolidated Parties on a consolidated basis with respect to outstanding Consolidated Funded Indebtedness of the types specified in clauses (a) through (f) above of Persons other than the Parent or any Subsidiary (or Subsidiary thereof), and (h) all Indebtedness of the types referred to in clauses (a) through (g) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which the Parent or a Subsidiary is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to the Parent or such Subsidiary.  For the avoidance of doubt, Consolidated Funded Indebtedness shall not include any Indebtedness owed by any Consolidated Party to another Consolidated Party (including the Inter-Company Debt).

 

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“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, 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 with respect to such period under Capitalized Leases that is treated as interest in accordance with GAAP, as GAAP is in effect as of the Closing Date.  For the avoidance of doubt, no interest attributable to the Inter-Company Debt shall be included in the calculation of Consolidated Interest Charges.

 

“Consolidated Leverage Ratio” means, without duplication, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA for the period of the four (4) fiscal quarters most recently ended.  For the avoidance of doubt, the Inter-Company Debt shall not be included in the calculation of the Consolidated Leverage Ratio.

 

“Consolidated Net Income” means, for any period, the net income of the Consolidated Parties on a consolidated basis (excluding extraordinary gains and extraordinary losses and excluding gains and losses from the sale of assets and any net income derived from the Inter-Company Debt) for such period, calculated in accordance with GAAP.

 

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

 

“Consolidated Tangible Net Worth” means, as of any date of determination, for the Consolidated Parties on a consolidated basis, Shareholders’ Equity on that date, minus the amount of Intangible Assets, plus the amount of accumulated depreciation; provided, however, that there shall be excluded from the calculation of “Consolidated Tangible Net Worth” (i) any effects resulting from the application of FASB ASC No. 715: Compensation — Retirement Benefits, (ii) the effects of any offsetting liability to contingent consideration obligations arising out of an acquisition and (iii) the effects of any Indebtedness owed by any Consolidated Party to another Consolidated Party (including the Inter-Company Debt) to the extent not otherwise eliminated in the consolidated financial statements of the Consolidated Parties.  Consolidated Tangible Net Worth shall be adjusted to remove any impact from straight line rent leveling adjustments required under GAAP and amortization of intangibles pursuant to Statement of Financial Accounting Standards number 141.

 

“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.  Advisor shall not Control or be deemed to Control AHT or Hospitality Prime by reason of the Advisory Agreements.

 

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

 

“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.

 

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“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.

 

“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) 2% 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 2% per annum and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Margin plus 2% per annum.

 

“Defaulting Lender” means, subject to Section 2.16(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two (2) Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, the L/C Issuer, or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit) within two (2) Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent, the L/C Issuer in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-in Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.16(b)) as of the date established therefor by the Administrative Agent in a written notice of such determination, which shall be delivered by the Administrative Agent to the Borrower, the L/C Issuer, and each other Lender promptly following such determination.

 

“Designated Jurisdiction” means any country or territory to the extent that such country or territory itself is the subject of any Sanction.

 

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person (or the granting of any option or other

 

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right to do any of the foregoing), 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.

 

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a Subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

 

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Sections 11.06(b)(iii) and (v) (subject to such consents, if any, as may be required under Section 11.06(b)(iii)).

 

“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental 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 Law, (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.

 

“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

 

“Equity Interests” means, with respect to any Person, all of the shares of capital stock (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 (or other ownership or profit interests) in such Person, all of the securities convertible into or exchangeable for shares of capital stock (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.

 

“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).

 

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“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, 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 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; (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; or (i) a failure by the Borrower or any ERISA Affiliate to meet all applicable requirements under the Pension Funding Rules in respect of a Pension Plan, whether or not waived, or the failure by the Borrower or any ERISA Affiliate to make any required contribution to a Multiemployer Plan.

 

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

 

“Eurodollar Rate” means:

 

(a)           for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the London Interbank Offered Rate (“LIBOR”) or a comparable or successor rate, which rate is approved by the Administrative Agent, as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first (1st) day of such Interest Period) with a term equivalent to such Interest Period;

 

(b)           for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to LIBOR, at or about 11:00 a.m., London time determined two (2) Business Days prior to such date for U.S. Dollar deposits with a term of one (1) month commencing that day; and

 

(c)           if the Eurodollar Rate shall be less than zero (0), such rate shall be deemed zero (0) for purposes of this Agreement;

 

provided that to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied in a manner consistent with market practice; provided, further that to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agent.

 

“Eurodollar Rate Loan” means a Revolving Credit 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.

 

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“Excluded Subsidiary” means any Subsidiary of Parent that (a) holds title to or beneficially owns assets which have an aggregate fair market value of less than $10,000, (b) is an Ancillary Service Subsidiary, (c) is, or is expected to be, prohibited from guaranteeing the Indebtedness of any other Person, or prohibited from having its Equity Interests pledged, as applicable, pursuant to any document, instrument, or agreement of such Subsidiary, or its organizational documents, solely in connection with any Key Money Investment or pursuant to the terms of any Indebtedness of such Subsidiary, or (d) is a Subsidiary of any of the foregoing.  A Subsidiary shall no longer be considered an Excluded Subsidiary when it ceases to be subject to the circumstances or restrictions which caused it to be an Excluded Subsidiary. Notwithstanding anything in this definition to the contrary, in no event will Borrower, Advisor, or any Advisory Subsidiary that is party to an Advisory Agreement ever be considered an Excluded Subsidiary.

 

“Excluded Swap Obligation” means, with respect to any Guarantor (other than the Parent), any Swap Obligation if, and to the extent that, all or a portion of the Subsidiary Guaranty of such Guarantor of, or the grant by such Guarantor of a security interest or lien to secure, such Swap Obligation (or any Guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act (determined after giving effect to Sections 22 and 24 of the Subsidiary Guaranty, as applicable, and any other “keepwell, support or other agreement” for the benefit of such Guarantor and any and all guarantees of such Guarantor’s Swap Obligations by other Loan Parties) at the time the Subsidiary Guaranty, or a grant by such Guarantor of a security interest or lien, becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guaranty, security interest, or lien is or becomes excluded in accordance with the first sentence of this definition.  A Swap Obligation that is an Excluded Swap Obligation with respect to a particular Guarantor shall not be an Excluded Swap Obligation with respect to any other Loan Party unless that Swap Obligation is an Excluded Swap Obligation with respect to such other Loan Party pursuant to the first sentence of this definition.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to any Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a Law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 11.13), or (ii) such Lender changes its Lending Office, except in each case to the extent that, pursuant to Section 3.01(a)(ii), (a)(iii) or (c), amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Office, (c) Taxes attributable to such Recipient’s failure to comply with Section 3.01(e) and (d) any U.S. federal withholding Taxes imposed pursuant to FATCA.

 

“Existing Advisory Agreements” means, collectively, the Hospitality Prime Advisory Agreement and the Hospitality Trust Advisory Agreement, and “Existing Advisory Agreement” means any one of the Existing Advisory Agreements.

 

“Extended Maturity Date” means March 1, 2022.

 

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

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

 

“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, 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 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

 

“Fee Letter” means that certain Arrangement and Agency Fee Letter, dated the date hereof, among the Borrower, the Administrative Agent, and the Arranger.

 

“Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.  For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

 

“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, 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.

 

“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.

 

“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 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).

 

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“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, or (iv) 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 other Person, 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.  The term “Guarantee” as a verb has a corresponding meaning.

 

“Guarantors” means, collectively, (a) the Parent, (b) all Subsidiaries of the Parent that have executed the Subsidiary Guaranty (or an addendum thereto in the form attached to the Subsidiary Guaranty) or any Collateral Document; provided that “Guarantors” shall not include (i) all Subsidiaries of the Borrower that have been released from the Subsidiary Guaranty or that are not required to execute a Guaranty pursuant to the terms of this Agreement, (ii) Excluded Subsidiaries, and (iii) any CFC or a Subsidiary that is held directly or indirectly by a CFC.

 

“Guaranties” means, collectively, (a) the Subsidiary Guaranty, (b) the Guarantee provided by the Parent pursuant to Article X, and (c) each other guaranty and guaranty supplement delivered pursuant to Section 6.12; and “Guaranty” means any one of the Guaranties.

 

“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 Law.

 

“Hedge Bank” means any Person that, at the time it enters into a Swap Contract with any Loan Party permitted under Article VI and Article VII, is a Lender or an Affiliate of a Lender, in its capacity as a party to such Swap Contract.

 

“Hospitality Prime” means Ashford Hospitality Prime, Inc., a Maryland corporation.

 

“Hospitality Prime Advisory Agreement” means that certain Fourth Amended and Restated Advisory Agreement dated as of January 24, 2017, by and among Advisor and Hospitality Prime, as amended, modified, renewed, extended, restated, or replaced from time to time.

 

“Hospitality Trust Advisory Agreement” means that certain Amended and Restated Advisory Agreement dated as of June 10, 2015, by and among Advisor and AHT, as amended, modified, renewed, extended, restated, or replaced from time to time.

 

“Impacted Loans” has the meaning specified in Section 3.03.

 

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“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)                                 the maximum amount of 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;

 

(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 in the ordinary course of business and not past due for more than ninety (90) days);

 

(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)                                   all Attributable Indebtedness in respect of Capitalized Leases and Synthetic Lease Obligations of such Person;

 

(g)                                  all obligations of such Person to purchase, redeem, retire, defease or otherwise make any return of capital 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, but excluding any such obligations (i) to the extent the obligation may be satisfied by the issuance of any Equity Interests in such Person or any other Person or (ii) constituting an Investment, including any purchase agreement to acquire a new Subsidiary; and

 

(h)                                 all Guarantees of such Person in respect of any of the foregoing (other than Guarantees limited to customary non-recourse carve-outs, environmental related indemnities, and completion of capital replacements or repairs).

 

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person.  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 (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

 

“Indemnitees” has the meaning specified in Section 11.04(b).

 

“Information” has the meaning specified in Section 11.07.

 

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“Initial Maturity Date” means March 1, 2021.

 

“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.

 

“Inter-Company Assignment” means the Assignment of Note and Liens dated the date hereof, executed by Borrower, Advisor, and Administrative Agent.

 

“Inter-Company Loan Agreement” means the Credit Agreement dated the date hereof, by and between Advisor, as borrower, and Borrower, as lender.

 

“Inter-Company Debt” means the obligations, indebtedness, and liabilities of Advisor as evidenced by the Inter-Company Debt Documents.

 

“Inter-Company Debt Documents” means the Inter-Company Loan Agreement and all other “Loan Documents” as defined in the Inter-Company Loan Agreement.

 

“Inter-Company Note” means the Note dated the date hereof, executed by Advisor, as borrower, and payable to the order of Borrower, as lender, in the original principal amount of $35,000,000 (as may be increased pursuant to the terms thereof, but in no event to exceed $75,000,000).

 

“Interest Coverage Ratio” means, without duplication, as of any date of determination, the ratio of (a) Advisory EBITDA for the previous four (4) consecutive fiscal quarters ending on such date to (b) Consolidated Interest Charges attributable to Consolidated Funded Indebtedness that is recourse to Parent or any other Loan Party for such period.

 

“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 months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate 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 one, two, three or six months thereafter (in each case, subject to availability), as selected by the Borrower in its Committed Loan Notice or as automatically continued pursuant to the provisions of Section 2.02(a) hereof; 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.

 

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“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 of equity 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.

 

“IRS” means the United States Internal Revenue Service.

 

“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.

 

“Key Money Investment” means (a) with respect to AHT and its Subsidiaries, a “Key Money Investment” as defined in the Hospitality Trust Advisory Agreement, (b) with respect to Hospitality Prime and its Subsidiaries, a “Key Money Investment” as defined in the Hospitality Prime Advisory Agreement, and (c) with respect to any other Person for which Advisor or its Affiliate externally advises pursuant to an Advisory Agreement executed after the date hereof, a “Key Money Investment” as defined substantially similar to the definition of “Key Money Investment” in the Existing Advisory Agreements as of the date hereof.

 

“Laws” means, collectively, all 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 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.

 

“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 Revolving Credit 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.

 

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“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.

 

“Lender” has the meaning specified in the introductory paragraph hereto.

 

“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, which office may include any Affiliate of such Lender or any domestic or foreign branch of such Lender or such Affiliate.  Unless the context otherwise requires each reference to a Lender shall include its applicable Lending Office.

 

“Letter of Credit” means any standby letter of credit issued hereunder providing for the payment of cash upon the honoring of a presentation thereunder.

 

“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(h).

 

“Letter of Credit Sublimit” means an amount equal to $5,000,000.  The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.

 

“LIBOR” has the meaning specified in the definition of Eurodollar Rate.

 

“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 Article II in the form of a Revolving Credit Loan.

 

“Loan Documents” means, collectively, (a) this Agreement, (b) the Notes, (c) the Guaranties, (d) the Collateral Documents, (e) the Fee Letter, (f) each Issuer Document, and (g) any agreement creating or perfecting rights in Cash Collateral pursuant to the provisions of Section 2.15.

 

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

 

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

 

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

 

“Material Contract” means, with respect to any Person, each contract to which such Person is a party as to which the breach, nonperformance, cancellation or failure to renew by any party thereto could reasonably be expected to have a Material Adverse Effect.

 

“Maturity Date” means (a) if the Initial Maturity Date is not extended to the Extended Maturity Date pursuant to Section 2.13, then the Initial Maturity Date, and (b) if the Initial Maturity Date is extended to the Extended Maturity Date pursuant to Section 2.13, then the Extended Maturity Date; provided, however, that, in each case, if such date is not a Business Day, then the Maturity Date shall be the next succeeding Business Day, unless such Business Day falls in another calendar month, in which case the Maturity Date shall be the next preceding Business Day.

 

“Minimum Collateral Amount” means, at any time, (i) with respect to Cash Collateral consisting of cash or deposit account balances provided to reduce or eliminate Fronting Exposure during the existence of a Defaulting Lender, an amount equal to 102% of the Fronting Exposure of the L/C Issuer with respect to Letters of Credit issued and outstanding at such time, (ii) with respect to Cash Collateral consisting of cash or deposit account balances provided in accordance with the provisions of Section 2.15(a)(i), (a)(ii) or (a)(iii), an amount equal to 102% of the Outstanding Amount of all L/C Obligations, and (iii) otherwise, an amount determined by the Administrative Agent and the L/C Issuer in their sole discretion.

 

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

 

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

 

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

 

“Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of all Lenders or all affected Lenders in accordance with the terms of Section 11.01 and (b) has been approved by the Required Lenders.

 

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

 

“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 B.

 

“NPL” means the National Priorities List under CERCLA.

 

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“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, Letter of Credit, or Secured Hedge Agreement, in each case 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 Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding; provided that the “Obligations” shall exclude any Excluded Swap Obligations.

 

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

 

“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.

 

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.06).

 

“Outstanding Amount” means (a) with respect to Revolving Credit Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Revolving Credit Loans 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” has the meaning specified in the introductory paragraph hereto.

 

“Participant” has the meaning specified in Section 11.06(d).

 

“Participant Register” has the meaning specified in Section 11.06(d).

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

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“Pension Act” means the Pension Protection Act of 2006.

 

“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effective date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each as in effect prior to the Pension Act and, thereafter, Sections 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.

 

“Pension Plan” means any employee pension benefit plan (including a Multiple Employer Plan or a Multiemployer Plan) that is maintained or is contributed to by the Borrower and any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code.

 

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

 

“Plan” means any “employee benefit plan” within the meaning of Section 3(3) of ERISA (including a Pension Plan), maintained for employees of the Parent, the Borrower or any ERISA Affiliate or any such Plan to which the Parent, the Borrower or any ERISA Affiliate is required to contribute on behalf of any of its employees.

 

“Platform” has the meaning specified in Section 6.02.

 

“Pledged Equity” means the Pledged Equity as defined in Section 1 of the Security Agreement.

 

“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

 

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

 

“Recipient” means 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 any Loan Party hereunder.

 

“Register” has the meaning specified in Section 11.06(c).

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives 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 thirty (30) day notice period has been waived.

 

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

 

“Required Lenders” means, at any time, Lenders having Total Credit Exposures representing more than fifty percent (50%) of the Total Credit Exposures of all Lenders.  The Total Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders at any time; provided that, the amount of any participation in any Unreimbursed Amounts that such Defaulting Lender has failed to

 

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fund that have not been reallocated to and funded by another Lender shall be deemed to be held by the Lender that is the L/C Issuer in making such determination.

 

“Responsible Officer” means the chief executive officer, president, chief financial officer, treasurer, assistant treasurer, controller or other executive officer of a Loan Party, solely for purposes of the delivery of incumbency certificates pursuant to Section 4.01, the secretary or any assistant secretary of a Loan Party and, solely for purposes of notices given pursuant to Article II, any other officer or employee of the applicable Loan Party so designated by any of the foregoing officers in a notice to the Administrative Agent or any other officer or employee of the applicable Loan Party designated in or pursuant to an agreement between the applicable Loan Party and the Administrative Agent.  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, but excluding dividends and distributions payable in equity interests) with respect to any capital stock or other Equity Interest of the Parent, 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’s shareholders, partners or members (or the equivalent Person thereof).

 

“Revolving Credit Borrowing” means a borrowing consisting of simultaneous Revolving Credit 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.

 

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

 

“Revolving Credit Loan” has the meaning specified in Section 2.01.

 

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc. and any successor thereto.

 

“Sanction(s)” means any international economic sanction administered or enforced by the United States Government (including without limitation, OFAC), the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority.

 

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

 

“Secured Hedge Agreement” means any Swap Contract permitted under Article VI and Article VII that is entered into by and between any Loan Party and any Hedge Bank that expressly provides that it is secured by the Collateral.

 

“Secured Parties” means, collectively, the Administrative Agent, the Lenders, the L/C Issuer, the Hedge Banks under any Secured Hedge Agreement, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 9.05, and the other Persons the Obligations

 

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owing to which are or are purported to be secured by the Collateral under the terms of the Collateral Documents.

 

“Security Agreement” has the meaning specified in Section 4.01(a)(iii).

 

“Shareholders’ Equity” means, as of any date of determination, the consolidated shareholders’ equity of the Consolidated Parties as of that date determined in accordance with GAAP.

 

“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 intermediaries, or both, by such Person.  As used in this Agreement, the Borrower shall be deemed a Subsidiary of Parent.  Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

 

“Subsidiary Guaranty” means the Guaranty made by the Guarantors (other than the Parent) in favor of the Secured Parties, substantially in the form of Exhibit E.

 

“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 netting or master agreement (any such netting or master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

 

“Swap Obligations” means with respect to any Guarantor any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

 

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“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).

 

“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 (including sale and leaseback transactions), in each case, 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.

 

“Threshold Amount” means $5,000,000.

 

“Total Credit Exposure” means, as to any Lender at any time, the unused Commitments and Revolving Credit Exposure of such Lender at such time.

 

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

 

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

 

“UCC” means the Uniform Commercial Code as in effect in the State of New York or any other applicable jurisdiction.

 

“UCP” means, with respect to any Letter of Credit, the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce (“ICC”) Publication No. 600 (or such later version thereof as may be in effect at the time of issuance).

 

“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, without duplication, all “cash and cash equivalents”, but specifically excluding any amounts representing “restricted cash”, each as set forth on the consolidated balance sheet of the Parent.

 

“Unused Rate” means a percentage rate per annum equal to 0.40%.

 

“U.S. Loan Party” means any Loan Party that is organized under the laws of one of the states of the United States and that is not a CFC.

 

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“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

 

“U.S. Tax Compliance Certificate” has the meaning specified in Section 3.01(e)(ii)(B)(3) or (4).

 

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

 

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 “hereto,” “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 Articles, Sections, Preliminary Statements, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Preliminary Statements, 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.  Notwithstanding the foregoing, for purposes of determining compliance with any covenant

 

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(including the computation of any financial covenant) contained herein, Indebtedness of the Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 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 intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders except as otherwise provided in Section 11.01(d)); 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)                                  Effects of Inter-Company Debt.  Notwithstanding anything to the contrary contained herein, the parties hereto acknowledge and agree that the Inter-Company Debt (and all effects thereof) shall be excluded for purposes of all financial calculations made under this Agreement or any other Loan Document.

 

(d)                                 Consolidated Leverage Ratio 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(b) and (d), (i) after consummation of any Disposition (A) income statement items (whether income or expense) 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 Investment or acquisition (A) income statement items (whether positive or negative) attributable to the Investment 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 Administrative Agent’s reasonable judgment).

 

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; Rates.  Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).  The Administrative Agent does

 

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not warrant, nor accept responsibility, nor shall the Administrative Agent have any liability with respect to the administration, submission or any other matter related to the rates in the definition of “Eurodollar Rate” or with respect to any comparable or successor rate thereto.

 

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 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.

 

Article II.
 The Commitments and Credit Extensions

 

2.01                        The Revolving Credit Loans.  Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans (each such loan, a “Revolving Credit 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 Revolving Credit Borrowing, (i) the Total Outstandings shall not exceed the Aggregate Commitments, and (ii) the Revolving Credit Exposure of any Lender shall not exceed such Lender’s Commitment.  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 2.04, and reborrow under this Section 2.01.  Revolving Credit Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

 

2.02                        Borrowings, Conversions and Continuations of Loans.

 

(a)                                 Each Revolving Credit Borrowing, each conversion of Revolving Credit 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 (A) telephone, or (B) a Committed Loan Notice; provided that any telephonic notice must be confirmed promptly by delivery to Administrative Agent of a Committed Loan Notice.  Each such Committed Loan 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 Revolving Loans, and (ii) on the requested date of any Borrowing of Base Rate Revolving Loans.  Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof.  Except as provided in Section 2.03(c), each Borrowing of or conversion to Base Rate Revolving Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.  Each Committed Loan Notice shall specify (i) whether the Borrower is requesting a Revolving Credit Borrowing, a conversion of Revolving Credit 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 Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Revolving Credit 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 Loan in a Committed Loan Notice for a Revolving Credit Borrowing, then the applicable Revolving Credit Loans shall be made as a Base Rate Loan.  Notwithstanding anything contained herein to the contrary, if the Borrower fails to give a timely notice requesting a conversion or continuation of a Eurodollar

 

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Rate Loan, then the Eurodollar Rate Loan shall be automatically continued as a Eurodollar Rate Loan with an Interest Period of one month.  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.

 

(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 Revolving Credit Loans.  In the case of a Revolving Credit Borrowing, each Lender shall make the amount of its Revolving Credit 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 a Committed Loan Notice with respect to a Revolving Credit Borrowing is given by the Borrower, there are L/C Borrowings outstanding, then the proceeds of such Revolving Credit 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, 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 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 Revolving Credit Borrowings, all conversions of Revolving Credit Loans from one Type to the other, and all continuations of Revolving Credit Loans as the same Type, there shall not be more than five Interest Periods in effect with respect to Revolving Credit Loans.

 

(f)                                   Notwithstanding anything to the contrary in this Agreement, any Lender may exchange, continue or rollover all of the portion of its Loans in connection with any refinancing, extension, loan modification or similar transaction permitted by the terms of this Agreement, pursuant to a cashless settlement mechanism approved by the Borrower, the Administrative Agent, and such Lender.

 

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

 

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the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.03(b), 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 its Subsidiaries and any drawings thereunder; provided that after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the Revolving Credit Exposure of any Lender 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 or last extension, unless the Required Lenders have approved such expiry date; or

 

(B)                               the expiry date of the requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless the Administrative Agent, the L/C Issuer, and the Lenders have approved such expiry date.

 

(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 Law 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)                               the Letter of Credit is to be denominated in a currency other than Dollars;

 

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(E)                                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 2.16(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

 

(F)                                 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 the Letter of Credit.

 

(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 Article IX 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 Article IX 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 may be sent by facsimile, by United States mail, by overnight courier, by electronic transmission using the system provided by the L/C Issuer, by personal delivery or by any other means acceptable to the L/C Issuer.  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

 

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other matters as the L/C Issuer may 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 (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as the L/C Issuer may 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 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 (1) 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 Article IV 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 Subsidiary) 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 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.

 

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(iv)                              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 permits the automatic reinstatement of all or a portion of the stated amount thereof after any drawing thereunder (each, an “Auto-Reinstatement Letter of Credit”).  Unless otherwise directed by the L/C Issuer, the Borrower shall not be required to make a specific request to the L/C Issuer to permit such reinstatement.  Once an Auto-Reinstatement Letter of Credit has been issued, except as provided in the following sentence, the Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to reinstate all or a portion of the stated amount thereof in accordance with the provisions of such Letter of Credit.  Notwithstanding the foregoing, if such Auto-Reinstatement Letter of Credit permits the L/C Issuer to decline to reinstate all or any portion of the stated amount thereof after a drawing thereunder by giving notice of such non-reinstatement within a specified number of days after such drawing (the “Non-Reinstatement Deadline”), the L/C Issuer shall not permit such reinstatement if it has received a notice (which may be by telephone or in writing) on or before the day that is seven (7) Business Days before the Non-Reinstatement Deadline (A) from the Administrative Agent that the Required Lenders have elected not to permit such reinstatement or (B) 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 (treating such reinstatement as an L/C Credit Extension for purposes of this clause) and, in each case, directing the L/C Issuer not to permit such reinstatement.

 

(v)                                 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 Revolving Credit 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; 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 this purpose) for the account of the L/C Issuer at the Administrative Agent’s Office in an

 

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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 Revolving 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 Revolving Credit 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 Revolving Credit 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 Revolving Credit 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 Revolving Credit 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 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 Revolving Credit Loan included in the relevant Revolving Credit 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

 

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any Lender (through the Administrative Agent) with respect to any amounts owing under this Section 2.03(c)(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 11.05 (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;

 

(iv)                              waiver by the L/C Issuer of any requirement that exists for the L/C Issuer’s protection and not the protection of the Borrower or any waiver by the L/C Issuer which does not in fact materially prejudice the Borrower;

 

(v)                                 honor of a demand for payment presented electronically even if such Letter of Credit requires that demand be in the form of a draft;

 

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(vi)                              any payment made by the L/C Issuer in respect of an otherwise complying item presented after the date specified as the expiration date of, or the date by which documents must be received under such Letter of Credit if presentation after such date is authorized by the UCC, the ISP or the UCP, as applicable;

 

(vii)                           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

 

(viii)                        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 of its Subsidiaries.

 

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 immediately notify the L/C Issuer.  The Borrower shall be conclusively deemed to have waived any such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid.

 

(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 (viii) of Section 2.03(e); provided, however, that anything in such clauses 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

 

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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.  The L/C Issuer may send a Letter of Credit or conduct any communication to or from the beneficiary via the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) message or overnight courier, or any other commercially reasonable means of communicating with a beneficiary.

 

(g)                                  Applicability of ISP and UCP; Limitation of Liability.  Unless otherwise expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is issued, each Letter of Credit shall provide that the rules of the ISP shall apply to each standby Letter of Credit.  Notwithstanding the foregoing, the L/C Issuer shall not be responsible to the Borrower for, and the L/C Issuer’s rights and remedies against the Borrower shall not be impaired by, any action or inaction of the L/C Issuer required or permitted under any law, order, or practice that is required or permitted to be applied to any Letter of Credit or this Agreement, including the Law or any order of a jurisdiction where the L/C Issuer or the beneficiary is located, the practice stated in the ISP or UCP, as applicable, or in the decisions, opinions, practice statements, or official commentary of the ICC Banking Commission, the Bankers Association for Finance and Trade — International Financial Services Association (BAFT-IFSA), or the Institute of International Banking Law & Practice, whether or not any Letter of Credit chooses such law or practice.

 

(h)                                 Letter of Credit Fees.  The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance, subject to Section 2.16, 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.  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) payable 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 pay directly to the L/C Issuer for its own account a fronting fee with respect to each Letter of Credit, equal to the greater of (i) $1,250 and (ii) 0.125% computed on the daily amount available to be drawn under such Letter of Credit on a quarterly basis in arrears.  Such fronting fee shall be due and payable on the tenth (10th) Business Day after the end of each March, June, September and December in respect of the most recently-ended quarterly period (or portion thereof, in the case of the first payment), 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.  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.  In addition, 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.

 

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(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 Subsidiaries.  Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, 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 Subsidiaries inures to the benefit of the Borrower, and that the Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.

 

2.04                        Prepayments.

 

(a)                                 The Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Revolving Credit 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) one (1) Business Day prior to any date of prepayment of Eurodollar Rate Loans and (B) on the date of prepayment of Base Rate Revolving Loans; (ii) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof; and (iii) any prepayment of Base Rate Revolving 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 Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Loans.  The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the 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.  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 2.16, each such prepayment shall be applied to the Loans of the Lenders in accordance with their respective Applicable Percentages.

 

(b)                                 If for any reason the Total Outstandings at any time exceed the Aggregate Commitments then in effect, 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 2.04(c) unless after the prepayment in full of the Revolving Credit Loans the Total Outstandings exceed the Aggregate Commitments then in effect.

 

(c)                                  If at any time there is any default under the terms of any Advisory Agreement, after giving effect to any applicable cure or grace periods, or any termination of any Advisory Agreement, by its terms or otherwise, the Borrower shall immediately prepay the unpaid principal amount of all outstanding Loans and all interest thereon in full.

 

(d)                                 If the Borrower shall receive any payment of principal with respect to the Inter-Company Debt, the Borrower shall immediately prepay the unpaid principal amount of the Loans in the same amount, together with all outstanding interest thereon.

 

2.05                        Termination or Reduction of Commitments.

 

(a)                                 The Borrower may, upon notice to the Administrative Agent, terminate the Aggregate Commitments, or from time to time permanently reduce the Aggregate Commitments;

 

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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 $2,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not terminate or reduce the Aggregate Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Outstandings would exceed the Aggregate Commitments and (iv) if, after giving effect to any reduction of the Aggregate Commitments, the Letter of Credit 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.  Any reduction of the Aggregate Commitments shall be applied to the Commitment of each Lender according to its Applicable Percentage.

 

(b)                                 If at any time, there is any default under the terms of any Advisory Agreement, after giving effect to any applicable cure or grace periods, or a termination of any Advisory Agreement, by its terms or otherwise, 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 shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.

 

(c)                                  All fees accrued until the effective date of any termination of the Aggregate Commitments shall be paid on the effective date of such termination.

 

2.06                        Repayment of Loans.  The Borrower shall repay to the Lenders on the Maturity Date the aggregate principal amount of all Revolving Credit Loans outstanding on such date.

 

2.07                        Interest.

 

(a)                                 Subject to the provisions of Section 2.07(b), (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, each Base Rate Revolving 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 (other than as set forth in clauses (b)(i) and (b)(ii) above), the Borrower shall pay

 

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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.

 

2.08                        Fees.  In addition to certain fees described in Sections 2.03(h) and (i):

 

(a)                                 Unused Fee.  The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Applicable Percentage, an unused fee equal to the Unused Rate times the actual daily amount by which the Aggregate Commitments exceed the sum of (i) the Outstanding Amount of Loans and (ii) the Outstanding Amount of L/C Obligations, subject to adjustment as provided in Section 2.16.  The unused fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the last day of the Availability Period.  The unused fee shall be calculated quarterly in arrears, and if there is any change in the Unused Rate during any quarter, the actual daily amount shall be computed and multiplied by the Unused Rate separately for each period during such quarter that such Unused Rate was in effect.

 

(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 and such other fees in the amounts and at the times agreed between the Borrower, Arranger, and Administrative Agent.  Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

 

(ii)                                  The Borrower shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified.  Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

 

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

 

(a)                                 All computations of interest for Base Rate Loans 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 2.11(a), bear interest for one day.  Each determination by the Administrative Agent of an

 

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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 Parent or for any other reason, the Borrower, the Parent or the Lenders determine that (i) the Advisory Leverage Ratio as calculated by the Parent as of any applicable date was inaccurate and (ii) a proper calculation of the Advisory 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(h) or 2.07(b) or under Article VIII.  The Borrower’s obligations under this paragraph shall survive the termination of the Aggregate Commitments and the repayment of all other Obligations hereunder.

 

2.10                        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 Section 2.10(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.  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.

 

2.11                        Payments Generally; Administrative Agent’s Clawback.

 

(a)                                 General.  All payments to be made by the Borrower shall be made free and clear of and 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

 

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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 Borrowing of Eurodollar Rate Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such 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 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 available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable 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 Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such 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.

 

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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 Article II, 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 Article IV 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, without interest.

 

(d)                                 Obligations of Lenders Several.  The obligations of the Lenders hereunder to make Revolving Credit Loans, to fund participations in Letters of Credit and to make payments pursuant to Section 11.04(c) are several and not joint.  The failure of any Lender to make any Loan, to fund any such participation or to make any payment under Section 11.04(c) on any date required hereunder shall not relieve any other Lender of its 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 Loan, to purchase its participation or to make its payment under Section 11.04(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.

 

(f)                                   Insufficient Funds.  If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, L/C Borrowings, interest and fees then due hereunder, such funds shall be applied (i) first, toward payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, toward payment of principal and L/C Borrowings then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and L/C Borrowings then due to such parties.

 

2.12                        Sharing of Payments by Lenders.  Subject to Section 2.14(e), 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 Revolving Credit Loans made by it, or the participations in L/C Obligations held by it resulting in such Lender’s receiving payment of a proportion of the aggregate amount of such Revolving Credit 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 Revolving Credit Loans and subparticipations in L/C Obligations 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 Revolving Credit 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 (A) any payment made by or on behalf of the Borrower pursuant to and in accordance with the

 

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express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (B) the application of Cash Collateral provided for in Section 2.15, or (C) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or subparticipations in L/C Obligations to any assignee or participant, other than an assignment to the Parent, the Borrower or any Subsidiary thereof (as to which the provisions of this Section shall apply).

 

Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation.

 

2.13                        Extension of Maturity Date.

 

(a)                                 Notice of Extension.  The Borrower may, on one occasion, by notice to the Administrative Agent (who shall promptly notify the Lenders) not earlier than one hundred twenty (120) days and not later than thirty (30) days prior to the Initial Maturity Date, extend the Initial Maturity Date to the Extended Maturity Date.

 

(b)                                 Conditions to Effectiveness of Extensions.  As a condition precedent to such extension, the Borrower shall deliver to the Administrative Agent a certificate of Borrower dated as of the Initial Maturity Date signed by a Responsible Officer of Borrower (i) certifying and attaching the resolutions adopted by the Borrower approving or consenting to such extension and (ii)  certifying that, before and after giving effect to such extension, (A) the representations and warranties contained in Article V and the other Loan Documents are true and correct 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 2.13, 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 (B) no Default exists.  In addition, on or before the Initial Maturity Date, Borrower shall pay to Administrative Agent, for the pro rata account of each Lender in accordance with their respective Applicable Percentages, an extension fee equal to 0.25% of the Aggregate Commitments as of such date, which fee shall, when paid, be fully earned and non-refundable under any circumstances.

 

(c)                                  Conflicting Provisions.  This Section shall supersede any provisions in Section 11.01 to the contrary.

 

2.14                        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 $40,000,000; provided that any such request for an increase shall be in a minimum amount of $$5,000,000, unless the Administrative Agent and the Borrower agree otherwise.  At the time of sending such notice, the Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten (10) Business Days from the date of delivery of such notice to the Lenders).

 

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(b)                                 Lender Elections to Increase.  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 (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 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 Borrower dated as of the Increase Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of Borrower (x) certifying and attaching the resolutions adopted by the applicable Loan Party approving or consenting to such increase, and (y) in the case of the Borrower, certifying that, before and after giving effect to such increase, (A) the representations and warranties contained in Article V and the other Loan Documents are true and correct 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 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 clauses (a) and (b), respectively, of Section 6.01, and (B) no Default exists.  The Borrower shall prepay any Revolving Credit 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 Revolving Credit Loans ratable with any revised Applicable Percentages arising from any nonratable increase in the Commitments under this Section.

 

(f)                                   Conflicting Provisions.  This Section shall supersede any provisions in Section 2.12 or 11.01 to the contrary.

 

2.15                        Cash Collateral.

 

(a)                                 Certain Credit Support Events.  If (i) 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, (ii) as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, (iii) the Borrower shall be required to provide Cash Collateral pursuant to Section 8.02(c), or (iv) there shall exist a Defaulting Lender, the Borrower shall immediately (in the case of clause (iii) above) or within one (1) Business Day (in all other cases) following any request by the Administrative Agent or the L/C Issuer, provide Cash Collateral in an amount not less than the applicable Minimum Collateral Amount (determined in the case of Cash Collateral provided pursuant to clause (iv) above, after giving effect to Section 2.16(a)(iv) and any Cash

 

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Collateral provided by the Defaulting Lender).  If at any time the Administrative Agent determines that any funds held as Cash Collateral are subject to any right or claim of any Person other than the Administrative Agent or that the total amount of such funds is less than the aggregate Outstanding Amount of all L/C Obligations, the Borrower will, forthwith upon demand by the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited as Cash Collateral, an amount equal to the excess of (x) such aggregate Outstanding Amount over (y) the total amount of funds, if any, then held as Cash Collateral that the Administrative Agent determines to be free and clear of any such right and claim.  Upon the drawing of any Letter of Credit for which funds are on deposit as Cash Collateral, such funds shall be applied, to the extent permitted under applicable Laws, to reimburse the L/C Issuer.

 

(b)                                 Grant of Security Interest.  The Borrower, and to the extent provided by any Defaulting Lender, such Defaulting 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, 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 2.15(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 or the L/C Issuer as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency. 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 shall pay on demand therefor from time to time all customary account opening, activity and other administrative fees and charges in connection with the maintenance and disbursement of Cash Collateral.

 

(c)                                  Application.  Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this Section 2.15 or Sections 2.03, 2.04, 2.05, 2.16, or 8.02 in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Obligations, 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 to secure 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 11.06(b)(vi))) or (ii) the determination by the Administrative Agent and the L/C Issuer that there exists excess Cash Collateral; provided, however, (x) any such release shall be without prejudice to, and any disbursement or other transfer of Cash Collateral shall be and remain subject to, any other Lien conferred under the Loan Documents and the other applicable provisions of the Loan Documents, and (y) the Person providing Cash Collateral and the L/C Issuer may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.

 

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2.16                        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 Law:

 

(i)                                     Waivers and Amendments.  Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Required Lenders” and in Section 11.01.

 

(ii)                                  Defaulting Lender Waterfall.  Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 11.08, 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 such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the L/C Issuer hereunder; third, to Cash Collateralize the L/C Issuer’s Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.15; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the L/C Issuer’s future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.15; sixth, to the payment of any amounts owing to the Lenders or the L/C Issuer as a result of any judgment of a court of competent jurisdiction obtained by any Lender or the L/C Issuer against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Borrowings in respect of which such Defaulting Lender has not fully funded its appropriate share and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations 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 Obligations owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations are held by the Lenders pro rata in accordance with their Commitments hereunder without giving effect to Section 2.16(a)(iv).  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 2.16(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

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(iii)                               Certain Fees.

 

(A)                               No Defaulting Lender shall be entitled to receive any fee payable under Section 2.08(a) for any period during which such Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to such Defaulting Lender).

 

(B)                               Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which such Lender is a Defaulting Lender only to the extent allocable to its Applicable Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.15.

 

(C)                               With respect to any fee payable under Section 2.08(a) or any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to clause (A) or (B) above, the Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to the L/C Issuer the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such L/C Issuer’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.

 

(iv)                              Reallocation of Applicable Percentages to Reduce Fronting Exposure.  All or any part of such Defaulting Lender’s participation in L/C Obligations shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Commitment.  Subject to Section 11.20, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

 

(v)                                 Cash Collateral.  If the reallocation described in clause (a)(iv) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under applicable Law, Cash Collateralize the L/C Issuers’ Fronting Exposure in accordance with the procedures set forth in Section 2.15.

 

(b)                                 Defaulting Lender Cure.  If the Borrower, the Administrative Agent, and the L/C Issuer agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Revolving Credit Loans and funded and unfunded participations in Letters of Credit to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages (without giving effect to Section 2.16(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower

 

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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.

 

Article III.
 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 any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable Laws.  If any applicable Laws (as determined in the good faith discretion of the Administrative Agent) require the deduction or withholding of any Tax from any such payment by the Administrative Agent or a Loan Party, then the Administrative Agent or such Loan Party shall be entitled to make such deduction or withholding, upon the basis of the information and documentation to be delivered pursuant to subsection (e) below.

 

(ii)                                  If any Loan Party or the Administrative Agent shall be required by the Code to withhold or deduct any Taxes, including both United States Federal backup 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, the sum payable by the applicable Loan Party 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 3.01) the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

 

(iii)                               If any Loan Party or the Administrative Agent shall be required by any applicable Laws other than the Code to withhold or deduct any Taxes from any payment, then (A) such Loan Party or the Administrative Agent, as required by such Laws, shall withhold or make such deductions as are determined by it to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) such Loan Party or the Administrative Agent, to the extent required by such Laws, shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with such Laws, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Loan Party 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 3.01) the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

 

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(b)                                 Payment of Other Taxes by the Borrower.  Without limiting the provisions of subsection (a) above, the Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

 

(c)                                  Tax Indemnifications.

 

(i)                                     Each of the Loan Parties shall, and does hereby, jointly and severally indemnify each Recipient, and shall make payment in respect thereof within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 3.01) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to 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.  Each of the Loan Parties shall, and does hereby, jointly and severally indemnify the Administrative Agent, and shall make payment in respect thereof within ten (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 pursuant to Section 3.01(c)(ii) below.

 

(ii)                                  Each Lender and the L/C Issuer shall, and does hereby, severally indemnify, and shall make payment in respect thereof within ten (10) days after demand therefor, (x) the Administrative Agent against any Indemnified Taxes attributable to such Lender or the L/C Issuer (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (y) the Administrative Agent and the Loan Parties, as applicable, against any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.06(d) relating to the maintenance of a Participant Register and (z) the Administrative Agent and the Loan Parties, as applicable, against any Excluded Taxes attributable to such Lender or the L/C Issuer, in each case, that are payable or paid by the Administrative Agent or a Loan Party in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender 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).

 

(d)                                 Evidence of Payments.  Upon request by any Loan Party or the Administrative Agent, as the case may be, after any payment of Taxes by such Loan Party or by the Administrative Agent to a Governmental Authority as provided in this Section 3.01, such Loan Party shall deliver to the Administrative Agent or the Administrative Agent shall deliver to such Loan Party, 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 Laws to

 

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report such payment or other evidence of such payment reasonably satisfactory to such Loan Party or the Administrative Agent, as the case may be.

 

(e)                                  Status of Lenders; Tax Documentation.

 

(i)                                     Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.01(e)(ii)(A), 3.01(e)(ii)(B) and 3.01(e)(ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

 

(ii)                                  Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person,

 

(A)                               any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

 

(B)                               any Foreign Lender shall, to the extent it is legally entitled to do so, 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 reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:

 

(1)                                 in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BENE (or W-8BEN, as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” Article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BENE (or W-8BEN, as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” Article of such tax treaty;

 

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(2)                                 executed copies of IRS Form W-8ECI;

 

(3)                                 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 substantially in the form of Exhibit H-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BENE (or W-8BEN, as applicable); or

 

(4)                                 to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BENE (or W-8BEN, as applicable), a U.S. Tax Compliance Certificate substantially in the form of Exhibit H-2 or Exhibit H-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit H-4 on behalf of each such direct and indirect partner;

 

(C)                               any Foreign Lender shall, to the extent it is legally entitled to do so, 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 reasonable request of the Borrower or the Administrative Agent), executed copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

 

(D)                               if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

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(iii)                               Each Lender agrees that if any form or certification it previously delivered pursuant to this Section 3.01 expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

 

(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 any Recipient determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified by any Loan Party or with respect to which any Loan Party has paid additional amounts pursuant to this Section 3.01, it shall pay to the Loan Party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by a Loan Party under this Section 3.01 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) incurred by such Recipient, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Loan Party, upon the request of the Recipient, agrees to repay the amount paid over to the Loan Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Recipient in the event the Recipient is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this subsection, in no event will the applicable Recipient be required to pay any amount to the Loan Party pursuant to this subsection the payment of which would place the Recipient in a less favorable net after-Tax position than such Recipient would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.  This subsection shall not be construed to require any Recipient to make available its tax returns (or any other information relating to its taxes that it deems confidential) to any Loan Party or any other Person.

 

(g)                                  Survival.  Each party’s obligations under this Section 3.01 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender or the L/C Issuer, the termination of the Commitments and the repayment, satisfaction or discharge of all other Obligations.

 

3.02                        Illegality.  If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its Lending Office to perform any of its obligations hereunder or make, maintain or fund or charge interest with respect to any Credit Extension 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, any obligation of such Lender to issue, make, maintain, fund or charge interest with respect to any such Credit Extension or continue Eurodollar Rate Loans or to convert Base Rate Revolving Loans to Eurodollar Rate Loans shall be suspended 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, 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, 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.  Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.

 

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3.03                        Inability to Determine Rates.  If in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof, (a) the Administrative Agent determines that (i) Dollar deposits are not being offered to banks in the applicable offshore interbank market for such currency for the applicable amount and Interest Period of such Eurodollar Rate Loan, or (ii) 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 (in each case with respect to clause (a) above, “Impacted Loans”), or (b) the Administrative Agent or the Required Lenders determine that for any reason 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 Eurodollar Rate Loan, the Administrative Agent will promptly so notify the Borrower and each Lender.  Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended (to the extent of the affected Eurodollar Rate Loans or Interest Periods) 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 (to the extent of the affected Eurodollar Rate Loans or Interest Periods), or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.

 

Notwithstanding the foregoing, if the Administrative Agent has made the determination described in clause (a) of the first sentence of this section, the Administrative Agent, in consultation with the Borrower and the affected Lenders, may establish an alternative interest rate for the Impacted Loans, in which case, such alternative rate of interest shall apply with respect to the Impacted Loans until (1) the Administrative Agent revokes the notice delivered with respect to the Impacted Loans under clause (a) of the first sentence of this section, (2) the Administrative Agent or the Required Lenders notify the Administrative Agent and the Borrower that such alternative interest rate does not adequately and fairly reflect the cost to such Lenders of funding the Impacted Loans, or (3) any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for such Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to such alternative rate of interest or to determine or charge interest rates based upon such rate or any Governmental Authority has imposed material restrictions on the authority of such Lender to do any of the foregoing and provides the Administrative Agent and the Borrower written notice thereof.

 

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 Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; 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;

 

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and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any Loan (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 or liquidity  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 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 in reasonable detail the calculation of 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 ten (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 3.04 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 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

 

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payable on each date on which interest is payable on such Loan, provided the Borrower shall have received at least ten (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 ten (10) days prior to the relevant Interest Payment Date, such additional interest shall be due and payable ten (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 11.13;

 

including any loss of anticipated profits and 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.  Each Lender may make any Credit Extension to the Borrower through any Lending Office, provided that the exercise of this option shall not affect the obligation of the Borrower to repay the Credit Extension in accordance with the terms of this Agreement.  If any Lender requests compensation under Section 3.04, or requires the Borrower to pay any Indemnified Taxes or additional amounts 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 at the request of the Borrower 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.

 

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(b)                                 Replacement of Lenders.  If any Lender requests compensation under Section 3.04, or if the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with Section 3.06(a), the Borrower may replace such Lender in accordance with Section 11.13.

 

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

 

Article IV.

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 either prior to or substantially contemporaneously with such initial Credit Extension:

 

(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 and the Subsidiary Guaranty, in each case sufficient in number for distribution to the Administrative Agent, each Lender, and the Borrower;

 

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

 

(iii)                               a security and pledge agreement, in substantially the form of Exhibit F (together with each other security agreement and supplement delivered pursuant to Section 6.12, in each case as amended, the “Security Agreement”), and the Inter-Company Assignment, in each case duly executed by each applicable Loan Party, together with:

 

(A)                               the certificates, if any, representing the Pledged Equity referred to therein that is represented by a certificate (within the meaning of Section 8-102(4) of the UCC) accompanied by undated stock powers executed in blank;

 

(B)                               proper Financing Statements in form appropriate for filing under the Uniform Commercial Code of all jurisdictions that the Administrative Agent may deem necessary or desirable in order to perfect the Liens created under the Collateral Documents, covering the Collateral described in the Collateral Documents;

 

(C)                               evidence of the completion of all other actions, recordings and filings of or with respect to the Collateral Documents that the Administrative Agent may deem necessary or desirable in order to perfect the Liens created thereby;

 

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(D)                               the deposit account control agreements and the securities account control agreements, if any, in each case as referred to in the Security Agreement and duly executed by the appropriate parties; and

 

(E)                                evidence that all other actions, recordings, and filings that the Administrative Agent may deem necessary or desirable in order to create a perfected first-priority Lien (subject to Liens permitted by Section 7.01) in the Collateral has been taken (including receipt of duly executed payoff letters, UCC-3 termination statements and landlords’ and bailees’ waiver and consent agreements);

 

(iv)                              lien searches in the name of each Loan Party, and any other name(s) as Administrative Agent may deem appropriate in such Loan Party’s jurisdiction of formation and each state or jurisdiction where such Loan Party maintains an office or has real property, showing no financing statements or other Lien instruments of record except for Liens created or permitted by the Loan Documents or Liens being released on the Closing Date;

 

(v)                                 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;

 

(vi)                              such documents and certifications as the Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and that each Loan Party is validly existing, in good standing and qualified to engage in business in its jurisdiction of formation and each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

 

(vii)                           certificates attesting to the Solvency of each Loan Party before and after giving effect to this Agreement, from its chief financial officer substantially in the form of Exhibit I;

 

(viii)                        a favorable opinion of Winston & Strawn LLP, counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, as to the matters set forth in Exhibit G and such other matters concerning the Loan Parties and the Loan Documents as the Required Lenders may reasonably request;

 

(ix)                              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;

 

(x)                                 a certificate signed by a Responsible Officer of the Borrower certifying (A) that the conditions specified in Sections 4.02(a) and (b) have been satisfied, (B) that there has been no event or circumstance since the date of the Audited Financial

 

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Statements that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect, and (C) a pro forma calculation of the Advisory Leverage Ratio and the Consolidated Leverage Ratio as of the Closing Date;

 

(xi)                              a duly completed Compliance Certificate prepared on a pro forma basis as of the last day of the fiscal quarter of the Borrower ended September 30, 2017, signed by a Responsible Officer of the Parent and the Borrower;

 

(xii)                           fully executed originals of the Inter-Company Debt Documents together with an allonge endorsing the Inter-Company Note to Administrative Agent;

 

(xiii)                        estoppel agreements dated the date hereof, executed by AHT with respect to the Hospitality Trust Advisory Agreement and Hospitality Prime with respect to the Hospitality Prime Advisory Agreement, each for the benefit of Administrative Agent and form and substance reasonably acceptable to Administrative Agent; and

 

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

 

(b)                                 (i) All fees required to be paid to the Administrative Agent and the Arranger on or before the Closing Date shall have been paid and (ii) all fees required to be paid to the Lenders on or before the Closing Date shall have been paid.

 

(c)                                  The Administrative Agent and each Lender shall have received all documentation and other information that the Administrative Agent and such Lender require in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Act (as hereafter defined).

 

(d)                                 Unless waived by the Administrative Agent, the Borrower shall have paid all 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).

 

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 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 Article V or any other Loan Document, or which are contained in any document

 

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furnished at any time under or in connection herewith or therewith, shall be true and correct 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 and correct as of such earlier date, and except for changes in factual circumstances not prohibited under the Loan Documents, and except that for purposes of this Section 4.02, the representations and warranties contained in Sections 5.05(a) and (b) shall be deemed to refer to the most recent statements furnished pursuant to Sections 6.01(a) and (b), respectively.

 

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

 

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

 

Each Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of 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) and (b) have been satisfied on and as of the date of the applicable Credit Extension.

 

Article V.

Representations and Warranties

 

Each of the Parent and the Borrower represents and warrants to the Administrative Agent and the Lenders that:

 

5.01                        Existence, Qualification and Power.  Each Loan Party and each of its Subsidiaries (a) is duly organized or formed, validly existing and, as applicable, in good standing under the 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 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 Material Contract 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 Law.

 

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 (a) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document, (b) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, (c) the perfection or maintenance of the Liens created under the Collateral Documents (including the first priority (or second priority, if applicable) nature thereof) or (d) the exercise by the Administrative Agent or any Lender of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral

 

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Documents, except as may be required by securities laws generally or as may be provided in any “transfer” or “change of control” provision or other similar change in ownership provision in any Advisory Agreement or in the organizational documents of the Subsidiaries, Equity Interests in which are included in the Pledged Equity, that would apply to the exercise by Administrative Agent or any Lender of any rights or remedies with respect to such Pledged Equity and, in each case referred to in clauses (a) through (d) above, except for such approvals, consents, exemptions, authorizations or other actions, notices or filings that have been duly obtained, taken or made.

 

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, subject to Debtor Relief Laws and principles of equity, whether applied in a court of law or equity.

 

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 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 material indebtedness and other liabilities, direct or contingent, of the Consolidated Parties as of the date thereof, including liabilities for taxes, material commitments and Indebtedness.

 

(b)                                 The unaudited consolidated balance sheet of the Consolidated Parties dated September 30, 2017, 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, cash flows and changes in shareholders’ equity 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.

 

(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.

 

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

 

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5.07                        No Default.  Neither any Loan Party nor any Subsidiary thereof is in default under or with respect to any Material Contract.  No Default has occurred and is continuing 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 and each of its Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, all 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.

 

(b)                                 As of the date hereof, Schedule 5.08(b) sets forth a complete and accurate list of all Liens on the property or assets of each Loan Party and each of its Advisory Subsidiaries securing Indebtedness in excess of $1,000,000 in outstanding principal amount, showing as of the date hereof the lienholder thereof, the principal amount of the obligations secured thereby and the property or assets of such Loan Party or such Advisory Subsidiary subject thereto.  The property of each Loan Party and each of its Advisory Subsidiaries is subject to no Liens, other than Liens set forth on Schedule 5.08(b), or as otherwise permitted by Section 7.01.

 

(c)                                  As of the date hereof, Schedule 5.08(c) sets forth a complete and accurate list of all real property owned or ground leased by each Loan Party and each of its Advisory Subsidiaries, showing as of the date hereof the street address, county or other relevant jurisdiction, state, and record owner.  Each Loan Party and each of its Advisory Subsidiaries has good, marketable and insurable fee simple or ground leasehold title to the real property owned by such Loan Party or such Advisory Subsidiary, free and clear of all Liens, other than Liens created or permitted by the Loan Documents.

 

(d)                                 As of the date hereof, Schedule 5.08(d) sets forth a complete and accurate list of all Investments constituting loans held by any Loan Party or any Advisory Subsidiary on the date hereof (other than the Inter-Company Debt), showing as of the date hereof the amount, obligor or issuer and maturity, if any, thereof.

 

5.09                        Environmental Compliance.

 

(a)                                 The Loan Parties and their respective Subsidiaries conducted 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 Law on their respective businesses, operations and properties, and as a result thereof the Parent and the Borrower 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, none of the properties currently or formerly owned or operated by any Loan Party or any of its Subsidiaries is listed or proposed for listing on the NPL or on the CERCLIS or any analogous foreign, state or local list or is adjacent to any such property; there are no underground or above-ground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials are being treated, stored or disposed in violation of any Environmental Law on any property currently owned or operated by any Loan Party or any of its Subsidiaries; there is no asbestos or asbestos-containing material on any property currently owned or operated by any Loan Party or any of its Subsidiaries in violation of any Environmental Law; and Hazardous Materials have not been

 

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released, discharged or disposed of in violation of any Environmental Law on any property currently owned or operated by any Loan Party or any of its Subsidiaries.

 

(c)                                  Except as otherwise set forth on Schedule 5.09, neither any Loan Party nor any of its Subsidiaries 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 Law; and all Hazardous Materials generated, used, treated, handled or stored at, or transported to or from, any property currently or formerly owned or operated by any Loan Party or any of its Subsidiaries have been disposed of in a manner not reasonably expected to result in material liability to any Loan Party or any of its Subsidiaries.

 

5.10                        Insurance.  The properties of the Loan Parties and their respective Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of any Loan Party, 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 Loan Party or the applicable Subsidiary operates.

 

5.11                        Taxes.  The Loan Parties and their respective Subsidiaries have filed all Federal, state and other material tax returns and reports required to be filed, and have paid all Federal, state 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 disputed or 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 Loan Party or any Subsidiary that would, if made, have a Material Adverse Effect.  Neither any Loan Party nor any Subsidiary thereof is party to any 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.  Each Pension Plan that is intended to be a qualified plan under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service to the effect that the form of such 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 the Parent and the Borrower, nothing has occurred that would prevent, or cause the loss of, such tax-qualified status.  The Parent, the Borrower and each ERISA Affiliate have made all required contributions to each Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.

 

(b)                                 There are no pending or, to the best knowledge of the Parent and the Borrower, 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.

 

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(c)                                  Except as could not reasonably be expected to result in a Material Adverse Effect, (i) No ERISA Event has occurred and neither the Parent, nor Borrower 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)  the Parent, the Borrower and each ERISA Affiliate has met all applicable requirements under the Pension Funding Rules in respect of each Pension Plan, and no waiver of the minimum funding standards under the Pension Funding Rules 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 60% or higher, and neither the Parent, nor the Borrower 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 plan to drop below 60% as of the most recent valuation date; (iv) neither the Parent, nor Borrower 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 Parent, nor the Borrower nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 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 Parent, nor the Borrower 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 (A) on the Closing Date, those listed on Schedule 5.12(d) hereto and (B) thereafter, Pension Plans not otherwise prohibited by this Agreement.

 

(e)                                  As of the Closing Date, the Borrower is not and will not be using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans in connection with the Loans, the Letters of Credit or the Commitments.

 

5.13                        Subsidiaries; Equity Interests; Loan Parties.  As of the date hereof, no Loan Party has any Subsidiaries other than those specifically disclosed in Part (a) of Schedule 5.13.  All of the outstanding Equity Interests in such Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by a Loan Party (or a Subsidiary thereof) in the amounts specified on Part (a) of Schedule 5.13 and, with respect to any Equity Interests pledged under this Agreement, free and clear of all Liens except those created under the Collateral Documents, and with respect to all other Equity Interests owned by any Loan Party or any Advisory Subsidiary, free and clear of all Liens except those permitted under this Agreement.  As of the date hereof, no Loan Party has any equity investments in any other corporation or entity other than those specifically disclosed in Part (b) of Schedule 5.13.  All of the outstanding Equity Interests in each Loan Party have been validly issued, are fully paid and non-assessable and are owned in the amounts specified on Part (c) of Schedule 5.13 and, with respect to any Equity Interests pledged under this Agreement, free and clear of all Liens except those created under the Collateral Documents, and with respect to all other Equity Interests, free and clear of all Liens except those permitted under this Agreement.  Set forth on Part (d) of Schedule 5.13 is a complete and accurate list of all Loan Parties as of the date hereof, showing as of the Closing Date (as to each Loan Party) the jurisdiction of its incorporation, the address of its principal place of business and its U.S. taxpayer identification number or, in the case of any non-U.S. Loan Party that does not have a U.S. taxpayer identification number, its unique identification number issued to it by the jurisdiction of its incorporation.

 

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5.14                        Margin Regulations; Investment Company Act.

 

(a)                                 The Borrower is not engaged and will not engage, principally or as one of its 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 Borrower, any Person Controlling the Borrower, or any Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940, other than AIM Investment Management, LLC.

 

5.15                        Disclosure.  The Parent and the Borrower have disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries or any other Loan Party is subject, and all other matters known to it, 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 by or on behalf of any Loan 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 Parent and the Borrower represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

 

5.16                        Compliance with Laws.  Each Loan Party and each Subsidiary thereof is in compliance in all material respects with the requirements of all 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 Law or order, writ, injunction or decree is being disputed or 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 11.02.

 

5.18                        Intellectual Property; Licenses, Etc..  Each Loan Party and each of its Subsidiaries own, or possess the right to use, all of the trademarks, service marks, trade names, copyrights, patents, 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 except to the extent the absence of any such IP Rights could not reasonably be expected to have a Material Adverse Effect.  To the best knowledge of the Parent and the Borrower, no slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by any Loan Party or any of its Subsidiaries infringes upon any rights held by any other Person.  Except as specifically disclosed in Schedule 5.18, no claim or litigation regarding any of the foregoing is pending or, to the best knowledge of the Parent and the Borrower, threatened, which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

5.19                        Solvency.  Each Loan Party is, individually and together with its Subsidiaries on a consolidated basis, Solvent.

 

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5.20                        Casualty, Etc.  Neither the businesses nor the properties of any Loan Party or any of its Subsidiaries are affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (whether or not covered by insurance), condemnation or eminent domain proceeding that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

5.21                        Labor Matters.  There are no collective bargaining agreements or Multiemployer Plans covering the employees of the Parent, the Borrower or any of their respective Subsidiaries as of the Closing Date and neither the Parent, nor the Borrower nor any of their respective Subsidiaries has suffered any strikes, walkouts, work stoppages or other material labor difficulty within the last five years.

 

5.22                        Collateral Documents.  The provisions of the Collateral Documents are effective to create in favor of the Administrative Agent for the benefit of the Secured Parties a legal, valid and enforceable first priority Lien on all right, title and interest of the respective Loan Parties in the Collateral described therein.  Except for filings completed prior to the Closing Date and as contemplated hereby and by the Collateral Documents, no filing or other action will be necessary to perfect or protect such Liens.

 

5.23                        OFAC.  Neither the Parent, the Borrower or any of their respective Subsidiaries, nor, to the knowledge of the Parent, the Borrower and their respective Subsidiaries, any director, officer, employee, agent, affiliate or representative thereof, is an individual or entity that is, or is owned or controlled by any individual or entity that is (i) currently the subject or target of any Sanctions, (ii) included on OFAC’s List of specially Designated Nationals, Her Majesty’s Treasury’s Consolidated List of Financial Sanctions Targets and the Investment Ban List, or any similar list enforced by any other relevant sanctions authority or (iii) located, organized or resident in a Designated Jurisdiction.

 

5.24                        Nature of Business.  As of the Closing Date, the Consolidated Parties are engaged in the business of providing advisory and other services to hotel properties, together with other business activities incidental thereto.

 

5.25                        Anti-Corruption Laws.  The Parent, the Borrower or each of their respective Subsidiaries have conducted their businesses in compliance with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption legislation in other jurisdictions, and have instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.

 

5.26                        EEA Financial Institutions.  No Loan Party is an EEA Financial Institution

 

5.27                        Advisory Agreements.

 

(a)                                 Each Advisory Agreement contains the entire agreements of the parties thereto with respect to the subject matter thereof.

 

(b)                                 Each Advisory Agreement is in full force and effect, and is scheduled to expire as described in each Advisory Agreement.  There are no options to extend any Advisory Agreement except as described in such Advisory Agreement.  Except as expressly set forth in each Advisory Agreement, there are no rights to terminate such Advisory Agreement.

 

(c)                                  To the Parent’s, the Borrower’s and Advisor’s knowledge, no breach or default or event that with the giving of notice or passage of time would constitute a breach or default of or under any provision of any Advisory Agreement (an “Advisory Default”) exists or has occurred as to any obligations under any Advisory Agreement.  Neither the Borrower nor Advisor

 

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has received any written notice under any Advisory Agreement alleging that an Advisory Default has occurred or exists.

 

(d)                                 Advisor has not assigned, transferred, or encumbered its interest in, to, or under any Advisory Agreement, except in favor of Administrative Agent pursuant to the Loan Documents or pursuant to the Inter-Company Debt Documents.

 

Article VI.

Affirmative Covenants

 

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied (other than contingent indemnification and reimbursement obligations for which no claim has been asserted), or any Letter of Credit shall remain outstanding, each of the Parent and the Borrower shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02 and 6.03) cause each other Loan Party and each Advisory Subsidiary to:

 

6.01                        Financial Statements.  Deliver to the Administrative Agent (who will deliver same to each Lender), in form and detail satisfactory to the Administrative Agent:

 

(a)                                 as soon as available, but in any event within ninety (90) days after the end of each fiscal year of the Parent (or, if earlier, fifteen (15) days from the date required to be filed with the SEC (without giving effect to any extension permitted by the SEC)) (commencing with the fiscal year ended December 31, 2017), a consolidated balance sheet of the Consolidated Parties as of the end of such fiscal year, the related consolidated statements of income or operations of the Parent for such fiscal year, and the related consolidated statements of changes in shareholders’ equity and cash flows of the Parent for such fiscal year, setting forth in each case in comparative form, as applicable, the figures for the previous fiscal year, together with unaudited proforma versions of each such statement revised to show the entity specific results used to calculate the financial covenants as set forth in the Compliance Certificate delivered together with such statements as required in Section 6.02(a), all in reasonable detail and prepared in accordance with GAAP, 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 forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year of the Parent (or, if earlier, fifteen (15) days after the date required to be filed with the SEC (without giving effect to any extension permitted by the SEC)) (commencing with the fiscal quarter ended March 1, 2018), 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 quarter and for the portion of the Parent’s fiscal year then ended, and the related statements of changes in shareholders’ equity and cash flows of the Parent for such fiscal quarter and for the portion of the Parent’s fiscal year then ended, setting forth in each case 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, together with proforma versions of each such statement revised to show the entity specific results used to calculate the financial covenants as set forth in the Compliance Certificate delivered together with such statements as required in Section 6.02(a), all in reasonable detail, certified by the chief executive officer, chief financial officer, treasurer or controller of the Parent as fairly presenting the financial condition, results of operations,

 

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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 Parent and the Borrower shall not be separately required to furnish such information under Section 6.01(a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Parent and the Borrower to furnish the information and materials described in Sections 6.01(a) and (b) above at the times specified therein.

 

6.02                        Certificates; Other Information.  Deliver to the Administrative Agent (who will deliver same to each Lender), in form and detail satisfactory to the Administrative Agent:

 

(a)                                 concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by the chief executive officer, chief financial officer, treasurer or controller of the Parent (which delivery may, unless the Administrative Agent 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);

 

(b)                                 promptly after any request by the Administrative Agent or any Lender, 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 Loan Party by independent accountants in connection with the accounts or books of any Loan Party or any of its Advisory Subsidiaries, or any audit of any of them;

 

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

 

(d)                                 promptly after the furnishing thereof, copies of any statement or report furnished to any holder of debt securities of any Loan Party or of any of its Advisory Subsidiaries 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)                                  as soon as available, and after any request by the Administrative Agent or any Lender within thirty (30) days after the end of each fiscal year of the Parent, a report summarizing the insurance coverage (specifying type, amount and carrier) in effect for each Loan Party and its Advisory Subsidiaries and containing such additional information as the Administrative Agent, or any Lender through the Administrative Agent, may reasonably specify;

 

(f)                                   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;

 

(g)                                  not later than five (5) Business Days after receipt thereof by any Loan Party or any Advisory Subsidiary thereof, copies of all notices, requests and other documents (including amendments, waivers and other modifications) so received under or pursuant to any instrument,

 

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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 reasonably request;

 

(h)                                 promptly after the assertion or occurrence thereof, notice of any action or proceeding against or of any noncompliance by any Loan Party or any of its Subsidiaries with any Environmental Law or Environmental Permit that could reasonably be expected to have a Material Adverse Effect; and

 

(i)                                     promptly, such additional information regarding the business, financial, legal or corporate affairs of any Loan Party or any Advisory 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 Parent or the Borrower posts such documents, or provides a link thereto on the Parent’s or the Borrower’s website on the Internet at the website address listed on Schedule 11.02; or (ii) on which such documents are posted on the Parent’s or 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).  Notwithstanding anything contained herein, in every instance the Parent and the Borrower shall be required to provide paper or emailed copies of the Compliance Certificates required by Section 6.02(a) to the Administrative Agent.  Except for such Compliance Certificate, 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 Parent and 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 Parent and the Borrower hereby acknowledge that (a) the Administrative Agent and/or the Arranger may, but shall not be obligated to, make available to the Lenders and the L/C Issuer materials and/or information provided by or on behalf of the Parent or the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks, Syndtrak, ClearPar, or a substantially similar electronic transmission 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 Parent, the Borrower or their respective 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 Parent and the Borrower hereby agree 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 Parent and 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 Parent, the Borrower or their respective 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 11.07); (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

 

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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 not designated “Public Side Information.”

 

6.03                        Notices.  Promptly notify the Administrative Agent:

 

(a)                                 of the occurrence of any Default;

 

(b)                                 of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including as a result of (i) any breach or non-performance of, or any default under, a Material Contract of the Parent, the Borrower or any of their respective Subsidiaries; (ii) any dispute, litigation, investigation, proceeding or suspension between the Parent, the Borrower or any of their respective Subsidiaries and any Governmental Authority; or (iii) the commencement of, or any material development in, any litigation or proceeding affecting the Parent, the Borrower or any of their respective Subsidiaries, including pursuant to any applicable Environmental Laws;

 

(c)                                  of the occurrence of any ERISA Event; and

 

(d)                                 of any material change in accounting policies or financial reporting practices by any Loan Party or any Advisory Subsidiary thereof, including any determination by the Parent or the Borrower referred to in Section 2.09(b).

 

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

 

6.04                        Payment of Obligations.  Pay and discharge (or bond or insure against) as the same shall become due and payable, all obligations and liabilities of any Loan Party or Advisory Subsidiary, including (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being disputed or contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Parent, the Borrower or such Advisory Subsidiary; and (b) all lawful claims of materialmen and mechanics, for labor, materials and supplies which, if unpaid, would by law become a Lien upon its property, unless the same are being disputed or contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Parent, the Borrower or such Advisory Subsidiary.

 

6.05                        Preservation of Existence, Etc.  (a) Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 7.04 or 7.05 or to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; (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 excepted; (b) make all necessary repairs thereto and renewals and replacements

 

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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 the Parent or the Borrower, insurance with respect to its properties and business 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 (and including deductibles and exclusions) as are customarily carried under similar circumstances by such other Persons.

 

6.08                        Compliance with Laws.  Comply in all material respects with the requirements of all Laws 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 Law or order, writ, injunction or decree is being disputed or 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.  (a) 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 the Parent, the Borrower or such Subsidiary, as the case may be; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Parent, the Borrower or such Subsidiary, as the case may be.

 

6.10                        Inspection Rights.  Permit representatives and independent contractors of the Administrative Agent and each Lender to visit and inspect any of its properties, 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, all at the expense of the Parent and the Borrower and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Parent and the Borrower; 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 Parent and 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) not in contravention of any Law or of any Loan Document; provided, however, that no proceeds of the Credit Extensions shall be used for Investments in Ancillary Service Subsidiaries.

 

6.12                        Covenant to Guarantee Obligations and Give Security.

 

(a)                                 Upon the formation or acquisition of any new direct or indirect Subsidiary (other than an Excluded Subsidiary, any CFC or a Subsidiary that is held directly or indirectly by a CFC) by any Loan Party, or, should any Subsidiary no longer qualify as an Excluded Subsidiary, then the Borrower shall, within thirty (30) days after such formation, acquisition, or change to non-Excluded Subsidiary (unless the Administrative Agent grants additional time therefor in Administrative Agent’s sole discretion), at the Borrower’s expense:

 

(i)                                     cause such Subsidiary, and cause each direct and indirect parent of such Subsidiary (if it has not already done so), to duly execute and deliver to the Administrative Agent a guaranty or guaranty supplement, in form and substance satisfactory to the Administrative Agent, guaranteeing the Obligations;

 

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(ii)                                  cause such Subsidiary and each direct and indirect parent of such Subsidiary (if it has not already done so) to duly execute and deliver to the Administrative Agent supplements to the Security Agreement and other security and pledge agreements, as specified by and in form and substance satisfactory to the Administrative Agent (including delivery of all instruments specified in Section 4.01(a)(iii)); provided, that no Loan Party shall be required to pledge any Equity Interests issued by an Excluded Subsidiary, and no such supplements to the Security Agreement or other pledge agreements shall be required with respect to any Equity Interests issued by an Excluded Subsidiary;

 

(iii)                               cause such Subsidiary and each direct and indirect parent of such Subsidiary (if it has not already done so) to take whatever action (including the filing of Uniform Commercial Code financing statements, the giving of notices and the endorsement of notices on title documents) may be necessary or advisable in the opinion of the Administrative Agent to vest in the Administrative Agent (or in any representative of the Administrative Agent designated by it) valid and subsisting Liens on the properties purported to be subject to supplements to the Security Agreement and security and pledge agreements delivered pursuant to this Section 6.12, enforceable against all third parties in accordance with their terms; and

 

(iv)                              deliver to the Administrative Agent, upon the request of the Administrative Agent in its sole discretion, a signed copy of a favorable opinion, addressed to the Administrative Agent and the other Secured Parties, of counsel for the Loan Parties acceptable to the Administrative Agent as to the matters contained in clauses (i), (ii) and (iii) above, and as to such other matters as the Administrative Agent may reasonably request.

 

(b)                                 At any time upon request of the Administrative Agent, promptly execute and deliver any and all further instruments and documents and take all such other action as the Administrative Agent may deem necessary or desirable in obtaining the full benefits of, or (as applicable) in perfecting and preserving the Liens of, such guaranties, supplements to the Security Agreement, and other security and pledge agreements.

 

6.13                        Compliance with Environmental Laws.  Comply, and cause all lessees and other Persons operating or occupying its properties to comply, in all material respects, with all applicable Environmental Laws and Environmental Permits; obtain and renew all Environmental Permits necessary for its operations and properties; and conduct any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Materials from any of its properties, in accordance with the requirements of all Environmental Laws; provided, however, that neither the Parent, nor the Borrower nor any of their respective Subsidiaries shall be required to undertake any such cleanup, removal, remedial or other action to the extent that its obligation to do so is being disputed or contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances in accordance with GAAP.

 

6.14                        Further Assurances.  Promptly upon the reasonable 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, acknowledgment, filing or recordation 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 (i) carry out more effectively the purposes of the Loan Documents, (ii) to the fullest extent permitted by

 

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applicable law, subject any Loan Party’s or any of its Advisory Subsidiaries’ properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (iii) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (iv) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured Parties under any Loan Document or under any other instrument executed in connection with any Loan Document to which any Loan Party or any of its Advisory Subsidiaries is or is to be a party, and cause each of its Advisory Subsidiaries to do so.

 

6.15                        Compliance with Terms of Leaseholds.  Make all payments and otherwise perform all obligations in respect of all leases of real property to which the Parent, the Borrower or any of their respective Advisory Subsidiaries is a party, keep such leases in full force and effect and not allow such leases to lapse or be terminated or any rights to renew such leases to be forfeited or cancelled, notify the Administrative Agent of any default by any party with respect to such leases and cooperate with the Administrative Agent in all respects to cure any such default, and cause each of its Advisory Subsidiaries to do so, except, in any case, where the failure to do so, either individually or in the aggregate, could not be reasonably likely to have a Material Adverse Effect.

 

6.16                        Lien Searches.  Promptly following receipt of the acknowledgment copy of any financing statements filed under the Uniform Commercial Code in any jurisdiction by or on behalf of the Secured Parties, deliver to the Administrative Agent completed requests for information listing such financing statement and all other effective financing statements filed in such jurisdiction that name any Loan Party as debtor, together with copies of such other financing statements.

 

6.17                        Material Contracts.  Perform and observe all the material terms and provisions of each Material Contract to be performed or observed by it and, except where either a replacement for such Material Contract has been or is being obtained or such Material Contract is being terminated in connection with a breach or reasonable uncertainty concerning ongoing performance by the counterparty thereunder, maintain each such Material Contract in full force and effect.

 

6.18                        Cash Collateral Accounts.  Maintain, and cause each of the other Loan Parties to maintain, any Cash Collateral Accounts with Bank of America or another commercial bank located in the United States, which has accepted the assignment of such accounts to the Administrative Agent for the benefit of the Secured Parties pursuant to the terms of the Security Agreement.

 

6.19                        Maintenance of Listing.  Maintain at least one class of common shares of the Parent having trading privileges on the New York Stock Exchange, NYSE American or which is the subject of price quotations in the over-the-counter market as reported by the National Association of Securities Dealers Automated Quotation System.

 

6.20                        Anti-Corruption Laws.  Conduct its businesses in compliance with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption legislation in other jurisdictions, and maintain policies and procedures designed to promote and achieve compliance with such laws

 

6.21                        Inter-Company Debt Documents.  The Parent and the Borrower shall enforce the Inter-Company Debt Documents in accordance with their terms and shall not waive any default thereunder or forebear from the exercise of any remedies thereunder without the prior written consent of Administrative Agent.  The Parent and the Borrower shall cause the Inter-Company Debt Document to not be amended, modified, terminated, canceled, renewed, extended, cancelled, or surrendered without the prior written consent of Administrative Agent.  The Borrower shall record in its books and records each loan or

 

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advance made under the Inter-Company Loan Agreement and shall furnish evidence thereof to Administrative Agent upon request.

 

6.22                        Advisory Agreements.

 

(a)                                 Observe and perform, or cause Advisor to observe and perform, as and when due, in all material respects, each and all of their obligations under each Advisory Agreement in accordance with the terms of each Advisory Agreement.

 

(b)                                 Promptly notify, or cause Advisor to promptly notify, Administrative Agent of the giving of any notice of any default under any Advisory Agreement and deliver to Administrative Agent a true copy of each such notice.

 

6.23                        Deposit Accounts.  The Parent and the Borrower shall, and shall cause each of the other Loan Parties to, (a) use Administrative Agent as its principal depository bank, (b) maintain Administrative Agent as its principal depository bank, including for the maintenance of business, cash management, operating and administrative deposit accounts, and (c) move all such accounts to Administrative Agent within ninety (90) days of the date hereof (or such later date as Administrative Agent may approve in its sole discretion).

 

Article VII.
 Negative Covenants

 

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied (other than contingent indemnification and reimbursement obligations for which no claim has been asserted), or any Letter of Credit shall remain outstanding, each of the Parent and the Borrower shall not, nor shall it permit any Loan Party or any Advisory Subsidiary to (except that Section 7.04 shall only apply to the Parent, the Borrower, Advisor and Ashford Advisors, Inc.), directly or indirectly:

 

7.01                        Liens.  Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, or sign or file or suffer to exist under the Uniform Commercial Code of any jurisdiction a financing statement that names the Parent, the Borrower or any of their respective Advisory Subsidiaries as debtor, or assign any accounts or other right to receive income, other than the following:

 

(a)                                 Liens pursuant to any Loan Document;

 

(b)                                 Liens existing on the date hereof and listed on Schedule 5.08(b) and any renewals, amendments, modifications or extensions thereof;

 

(c)                                  Liens for taxes not yet due or which are being disputed or 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 in accordance with GAAP;

 

(d)                                 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 disputed or 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, or which are otherwise subject to a bond or insured against;

 

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(e)                                  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;

 

(f)                                   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;

 

(g)                                  easements, leases, rights-of-way, restrictions and other encumbrances affecting real property which could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;

 

(h)                                 Liens securing the Inter-Company Debt;

 

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

 

(j)                                    Liens (i) of a collecting bank arising under Section 4-210 of the UCC on items in the course of collection, and (ii) in favor of a banking institution arising as a matter of law encumbering deposits (including the right of setoff) that are customary in the banking industry;

 

(k)                                 any interest or title of a lessor, sublessor, licensor or sublicensor under leases or licenses permitted by this Agreement that are entered into in the ordinary course of business;

 

(l)                                     leases, licenses, subleases or sublicenses granted to others in the ordinary course of business that do not (i) interfere in any material respect with the ordinary conduct of the business of the Borrower and its Advisory Subsidiaries, or (ii) secure any Indebtedness;

 

(m)                             Liens solely with respect to assets leased to the counterparty of a Key Money Investment transaction and granted in connection therewith; and

 

(n)                                 Liens granted by an Excluded Subsidiary to secure Indebtedness permitted under Section 7.02(g) below.

 

7.02                        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 7.02 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 the Borrower or any other Loan Party in respect of Indebtedness otherwise permitted hereunder of the Borrower or any other Loan Party;

 

(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

 

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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)                                  the Inter-Company Debt;

 

(f)                                   Indebtedness that is recourse to Borrower or Parent in an aggregate principal amount not to exceed $5,000,000 at any time outstanding; and

 

(g)                                  Indebtedness of any Excluded Subsidiary, subject to Section 7.02(f) above if any such Indebtedness is recourse to Borrower or Parent.

 

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person.  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.

 

7.03                        Investments.  Make any Investments, except:

 

(a)                                 Investments held by the Parent, the Borrower or such Advisory Subsidiary in the form of cash equivalents;

 

(b)                                 the Inter-Company Debt;

 

(c)                                  advances to officers, directors and employees of the Parent, the Borrower and Advisory Subsidiaries in an aggregate amount not to exceed $100,000 at any time outstanding, for travel, entertainment, relocation and analogous ordinary business purposes;

 

(d)                                 Investments of the Parent, the Borrower or any Subsidiary in any Subsidiary that is not an Excluded Subsidiary and Investments of any Subsidiary in the Parent, the Borrower or in another Subsidiary;

 

(e)                                  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;

 

(f)                                   Guarantees permitted by Section 7.02; and

 

(g)                                  Investments of the Parent, the Borrower or any Subsidiary in Excluded Subsidiaries (or in any other Person with respect to equity Investments that do not result in the Control of such Person), so long as immediately prior to making such Investment, and immediately thereafter and after giving effect thereto, no Default or Event of Default has occurred and is continuing or would result therefrom.

 

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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 that, so long as no Default exists or would result therefrom:

 

(a)                                 any Advisory Subsidiary or Loan Party may merge with (i) the Borrower, provided that the Borrower shall be the continuing or surviving Person, or (ii) any one or more other Advisory Subsidiaries or Loan Party;

 

(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 (other than the Parent);

 

(c)                                  any Subsidiary that is not a Loan Party may Dispose of all or substantially all its assets (including any Disposition that is in the nature of a liquidation) to any other Person;

 

(d)                                 the Parent, the Borrower and any Advisory Subsidiary may make Dispositions not prohibited by Section 7.05;

 

(e)                                  the Parent, Borrower or any other Loan Party or Advisory Subsidiary may merge or consolidate with any other Person, so long as the Parent, the Borrower, or such other Loan Party or Advisory Subsidiary, as the case may be, shall be the surviving entity and no Change of Control shall have occurred; and

 

(f)                                   any Subsidiary of Borrower may dissolve, liquidate or wind up its affairs if it owns no material assets, engages in no business and otherwise has no activities other than activities related to the maintenance of its existence and good standing;

 

provided, however, that (x) in the case of any such merger or consolidation in which the Parent or the Borrower is a party, the Parent or Borrower, as the case may be, shall be the surviving entity, and (y) in no event shall Parent or Borrower dissolve or liquidate or Dispose of all or substantially all of its assets.

 

7.05                        Dispositions.  Make any Disposition or enter into any agreement to make any Disposition, except:

 

(a)                                 Dispositions of obsolete or worn out property or property determined by Borrower to no longer be necessary in the business or operations of Borrower or its Subsidiaries, whether now owned or hereafter acquired, in the ordinary course of business;

 

(b)                                 Dispositions of inventory and Investments in the ordinary course of business;

 

(c)                                  Dispositions of equipment or personal property to the extent that (i) such property is replaced with similar replacement property or exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property;

 

(d)                                 Dispositions not prohibited by Section 7.04 or 7.06;

 

(e)                                  leases, licenses, subleases or sublicenses (including the provision of open source software under an open source license) granted in the ordinary course of business and on ordinary

 

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commercial terms that do not interfere in any material respect with the business of the Borrower and its Subsidiaries;

 

(f)                                   Dispositions with respect to a Key Money Investment; and

 

(g)                                  Dispositions of property for no less than the fair market value of such property at the time of such Disposition; provided that as to any Dispositions by a Loan Party, the amount of any non-cash or non-cash equivalent proceeds received shall not exceed in value $10,000,000 in any twelve (12) month period for all such Dispositions by Loan Parties; provided, further that at the time of any such Disposition no Default shall exist or would result from such Disposition.

 

7.06                        Restricted Payments.  Declare or make any Restricted Payment, provided, that so long as no Default or Event of Default has occurred and is continuing or would result therefrom, the Parent may (a) declare or pay cash dividends to its stockholders and (b) repurchase its Equity Interests, in each case, solely out of cash available for distribution of the Parent and its Subsidiaries.

 

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 as would be obtainable by the Borrower or 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 (a) transactions between or among the Loan Parties or between or among Subsidiaries that are not Loan Parties, (b) Restricted Payments permitted by Section 7.06, or (c) transactions associated with Key Money Investments.

 

7.09                        Burdensome Agreements.  With respect to Borrower or any Guarantor, enter into or permit to exist any Contractual Obligation (other than this Agreement, any other Loan Document, or the Inter-Company Debt Documents, or any document relating to a Key Money Investment) that (a) limits the ability (i) of such Person to make Restricted Payments to the Borrower or any Guarantor or to otherwise transfer property to or invest in the Borrower or any Guarantor, except for any agreement in effect (A) on the date hereof and set forth on Schedule 7.09 or (B) at the time any such Person becomes a Subsidiary of the Borrower, so long as such agreement was not entered into solely in contemplation of such Person becoming a Subsidiary of the Borrower, (ii) of such Person to Guarantee the Indebtedness of the Borrower or (iii) of the Borrower or any Guarantor to create, incur, assume or suffer to exist Liens on property of such Person; provided, however, that this clause (iii) shall not prohibit any negative pledge incurred or provided in favor of any holder of Indebtedness permitted hereunder 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.

 

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7.11                        Financial Covenants.

 

(a)                                 Consolidated Tangible Net Worth.  Permit Consolidated Tangible Net Worth, at any time, to be less than the sum of (i) $25,795,000, and (ii) an amount equal to seventy five percent (75%) of the net equity proceeds received by the Parent after September 30, 2017 by reason of the issuance and sale of Equity Interests in the Parent.

 

(b)                                 Advisory Leverage Ratio.  Permit the Advisory Leverage Ratio as of the end of any fiscal quarter of the Parent, for the period of four fiscal quarters of the Parent ending on such date, to be greater than 2.75 to 1.0.

 

(c)                                  Interest Coverage Ratio.  Permit the Interest Coverage Ratio as of the end of any fiscal quarter of the Parent to be less than 5.00 to 1.0.

 

(d)                                 Consolidated Leverage Ratio.  Permit the Consolidated Leverage Ratio as of the end of any fiscal quarter of the Parent, for the period of four fiscal quarters of the Parent ending on such date, to be greater than 4.50 to 1.0.

 

7.12                        Amendments of Organization Documents.  Amend any of its Organization Documents in any manner that would adversely affect any Loan Party’s ability to pay its Obligations hereunder or materially and adversely impairs any rights or remedies of Administrative Agent or any Lender under the Loan Documents or applicable Laws.

 

7.13                        Accounting Changes.  Make any change in (a) accounting policies or reporting practices, except as required by GAAP, or (b) fiscal year.

 

7.14                        Sanctions.  Directly or indirectly, use the proceeds of any Credit Extension, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other individual or entity, to fund any activities of or business with any individual or entity, or in any Designated Jurisdiction, that, at the time of such funding, is the subject of Sanctions, or in any other manner that will result in a violation by any individual or entity (including any individual or entity participating in the transaction, whether as Lender, Arranger, Administrative Agent, L/C Issuer, or otherwise) of Sanctions.

 

7.15                        Anti-Corruption Laws.  Directly or indirectly use the proceeds of any Credit Extension for any purpose which would breach the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption legislation in other jurisdictions.

 

7.16                        Advisory Agreements.  Cause, join in, or suffer to occur any material modification, or amendment to, or assignment or surrender of any Advisory Agreement, and shall not materially modify, or amend, or assign or surrender any Advisory Agreement, in each case without the prior written consent of Administrative Agent.

 

Article VIII.
 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 (i) pay when and as required to be paid herein, any amount of principal of any Loan or any L/C Borrowing or deposit any funds as Cash Collateral in respect of L/C Obligations, or (ii) pay within three (3)

 

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Business Days after the same becomes due, any interest on any Loan or on any L/C Obligation, or any fee due hereunder, or (iii) pay within five (5) Business Days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or

 

(b)                                 Specific Covenants.  The Borrower fails in any material respect to perform or observe any term, covenant or agreement contained in any of Section  6.05, 6.10, 6.11, 6.16, 6.18, 6.21, or Article VII; or

 

(c)                                  Other Defaults.  (i) The Borrower fails in any material respect to perform or observe any term, covenant or agreement contained in any of Sections 6.01, 6.02, and 6.03 and such failure continues for thirty (30) days, or (ii) any Loan Party fails to perform or observe any other covenant or agreement (not specified in Section 8.01(a), (b), or (c)(i) above) contained in any Loan Document on its part to be performed or observed and such failure continues for thirty (30) days or such longer period, which longer period shall not exceed sixty (60) days (and the aggregate period shall not exceed ninety (90) days), as shall be reasonably necessary to effectuate a cure of such failure so long as Borrower acts with diligence and in good faith to cure such failure; 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 Advisory Subsidiary thereof (A) fails to make any payment when due, after giving effect to any applicable cure or grace periods, (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 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 contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, after giving effect to any applicable cure or grace periods, 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 a Loan Party or any Advisory Subsidiary thereof 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 a Loan Party or any Advisory Subsidiary thereof is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by such Loan Party or such Advisory Subsidiary, as a result thereof is greater than the Threshold Amount; or

 

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(f)                                   Insolvency Proceedings, Etc.  Any Loan Party or any Advisory Subsidiary thereof 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 sixty (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 sixty (60) calendar days, or an order for relief is entered in any such proceeding; or

 

(g)                                  Inability to Pay Debts; Attachment.  (i) Any Loan Party 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 thirty (30) days after its issue or levy; or

 

(h)                                 Judgments.  There is entered against any Loan Party(i) one or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments and orders) exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer is rated at least “A” by A.M. Best Company, has been notified of the potential claim and does not dispute coverage) that remains unpaid, stayed or dismissed for more than sixty (60) days, 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 ten (10) 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 disputes or contests in any manner the validity or enforceability of any provision of any Loan Document; or any Loan Party denies that it has any or further liability or obligation under any provision of any Loan Document, or purports to revoke, terminate or rescind any provision of any Loan Document; or

 

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

 

(l)                                     Collateral Documents.  Any Collateral Document after delivery thereof pursuant to Section 4.01 or 6.12 shall for any reason (other than pursuant to the terms thereof) cease to create a valid and perfected first priority Lien (subject to Liens permitted by Section 7.01) on the Collateral purported to be covered thereby; or

 

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(m)                             Failure to Pre-Pay upon Default Under or Termination of Advisory Agreement.  Any default under the terms of any Advisory Agreement shall occur and be continuing, after giving effect to any applicable cure or grace periods, or any Advisory Agreement shall be terminated by its terms or otherwise and, in any such case, Borrower shall have failed to prepay the unpaid principal amount of all outstanding Loans and all interest thereon in full, as required by Section 2.04(c); or

 

(n)                                 Default Under Inter-Company Loan.  Any “Event of Default” under and as defined in the Inter-Company Loan Agreement shall occur and be continuing.

 

8.02                        Remedies Upon Event of Default.  If any Event of Default occurs and is continuing, 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:

 

(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 Minimum Collateral Amount with respect thereto); 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, at law, in equity, or otherwise;

 

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 become immediately due and payable and the L/C Obligations have 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 2.15 and 2.16 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 (other than principal, interest and Letter of Credit Fees, but including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) 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

 

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Issuer (including fees, charges and disbursements of counsel to the respective Lenders and the L/C Issuer and fees and time charges for attorneys who may be employees of any Lender or the L/C Issuer) arising under the Loan Documents and amounts payable under Article III, 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 arising under the Loan Documents, ratably among the Lenders and the L/C Issuer in proportion to the respective amounts described in this clause Third payable to them;

 

Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans, L/C Borrowings and Obligations then owing under Secured Hedge Agreements, ratably among the Lenders, the L/C Issuer and the Hedge Banks 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 2.15; 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 Law.

 

Subject to Sections 2.03(c) and 2.15, 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.

 

Notwithstanding the foregoing, Obligations arising under Secured Hedge Agreements shall be excluded from the application described above if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may request, from the applicable Hedge Bank.  Each Hedge Bank not a party to the Credit Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of Article IX hereof for itself and its Affiliates as if a “Lender” party hereto.

 

Excluded Swap Obligations with respect to any Guarantor shall not be paid with amounts received from such Guarantor or its assets, and, to the extent possible, appropriate adjustments shall be made with respect to payments from other Loan Parties to preserve the allocation to Obligations otherwise set forth above in this Section.

 

Article IX.
 Administrative Agent

 

9.01                        Appointment and Authority.

 

(a)                                 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

 

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Article 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.  It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law.  Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

 

(b)                                 The Administrative Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders (including in its capacities as a potential Hedge Bank) and the L/C Issuer hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender and the L/C Issuer for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto.  In this connection, the Administrative Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.05 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent, shall be entitled to the benefits of all provisions of this Article IX and Article X (including Section 11.04(c), as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.

 

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, own securities of, 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, and its duties hereunder shall be administrative in nature.  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 has occurred and is continuing;

 

(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, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and

 

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(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 11.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by a final and non-appealable judgment.  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given in writing 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 the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (v) the value or the sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in Article IV 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, extension, renewal or increase 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 Article 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.  The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction

 

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determines in a final and non-appealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

 

9.06                        Resignation of Administrative Agent.

 

(a)                                 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 have the right, in consultation with the Borrower (unless an Event of Default has occurred and is continuing), to appoint a successor, which shall be a bank with an office in the United States that has capital, surplus and undivided profits aggregating at least $100,000,000 (as of the date of such bank’s most recent financial reports), 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 thirty (30) days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to) on behalf of the Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that in no event shall any such successor Administrative Agent be a Defaulting Lender.  Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

 

(b)                                 If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, the Required Lenders may, to the extent permitted by applicable law, by notice in writing to the Borrower and such Person remove such Person as Administrative Agent and, in consultation with the Borrower, appoint a successor.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days (or such earlier day as shall be agreed by the Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.

 

(c)                                  With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (i) the retiring or removed 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 held by the Administrative Agent on behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such Collateral until such time as a successor Administrative Agent is appointed) and (ii) except for any indemnity payments or other amounts then owed to the retiring or removed Administrative Agent, 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, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above.  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 removed) Administrative Agent (other than as provided in Section 3.01(g) and other than any rights to indemnity payments or other amounts owed to the retiring or removed Administrative Agent as of the Resignation Effective Date or the Removal Effective Date, as applicable), and the retiring or removed 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 or removed Administrative Agent’s resignation or removal hereunder and under the other

 

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Loan Documents, the provisions of this Article and Section 11.04 shall continue in effect for the benefit of such retiring or removed 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 (i) while the retiring or removed Administrative Agent was acting as Administrative Agent and (ii) after such resignation or removal for as long as any of them continues to act in any capacity hereunder or under the other Loan Documents, including (a) acting as collateral agent or otherwise holding any Collateral on behalf of any of the Lenders and (b) in respect of any actions taken in connection with transferring the agency to any successor Administrative Agent

 

(d)                                 Any resignation or removal by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation as L/C Issuer.  If Bank of America resigns as an 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 Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c).  Upon the appointment by the Borrower of a successor L/C Issuer hereunder (which successor shall in all cases be a Lender other than a Defaulting Lender), (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer, (ii) the retiring L/C Issuer shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (iii) 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.

 

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, none of the Bookrunners or Arrangers listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the L/C Issuer hereunder.

 

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

 

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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(h), 2.03(i), 2.08 and 11.04) 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 2.08 and 11.04.

 

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 or in any such proceeding.

 

9.10                        Collateral and Guaranty Matters.  Without limiting the provisions of Section 9.09, each of the Lenders (including in its capacities as a potential Hedge Bank) and the L/C Issuer irrevocably authorize the Administrative Agent, at its option and in its discretion,

 

(a)                                 to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon termination of the Aggregate Commitments and payment in full of all Obligations (other than (A) contingent indemnification obligations and (B) obligations and liabilities under Secured Hedge Agreements as to which arrangements satisfactory to the applicable Hedge Bank shall have been made to the extent not expressly provided in the Secured Hedge Agreements) and the expiration or termination of all Letters of Credit (other than Letters of Credit as to which other arrangements satisfactory to the Administrative Agent and the L/C Issuer shall have been made), (ii) pursuant to Section 9.11, or (iii) subject to Section 11.01, if approved, authorized or ratified in writing by the Required Lenders;

 

(b)                                 to release any Guarantor (other than the Parent) from its obligations under the Subsidiary Guaranty and the Collateral Documents pursuant to Section 9.11; and

 

(c)                                  to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted hereunder.

 

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor (other than the Parent) from its obligations under the Subsidiary Guaranty and the Collateral Documents 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 such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the

 

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Collateral Documents or to subordinate its interest in such item, or to release such Guarantor from its obligations under the Subsidiary Guaranty and the Collateral Documents, in each case in accordance with the terms of the Loan Documents and this Section 9.10.

 

The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent’s Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.

 

9.11                        Releases.

 

(a)                                 The Borrower may request in writing that the Administrative Agent release, and upon receipt of such request the Administrative Agent shall release, any Person (other than the Parent) from any of the Subsidiary Guaranty and the Collateral Documents so long as: (i) such Person qualifies, or will qualify at the time of its release from the Subsidiary Guaranty and the Collateral Documents, as an Excluded Subsidiary; (ii) no Default shall then be in existence or would occur as a result of such release, (iii) such Person is not a party to any Swap Contract by virtue of which any other Person is a Hedge Bank and (iv) the Administrative Agent shall have received such written request at least seven (7) Business Days prior to the requested date of release.  Delivery by the Borrower to the Administrative Agent of any such request shall constitute a representation by the Borrower that the matters set forth in the preceding sentence (both as of the date of the giving of such request and as of the date of the effectiveness of such request) are true and correct with respect to such request.

 

(b)                                 The Borrower may request in writing that the Administrative Agent release, and upon receipt of such request the Administrative Agent shall release, the Equity Interests in a Person from the Lien of the Security Agreement so long as: (i) such Person qualifies, or will qualify at the time of the release of its Equity Interests, as an Excluded Subsidiary; (ii) no Default shall then be in existence or would occur as a result of such release; and (iii) the Administrative Agent shall have received such written request at least seven (7) Business Days prior to the requested date of release. Delivery by the Borrower to the Administrative Agent of any such request shall constitute a representation by the Borrower that the matters set forth in the preceding sentence (both as of the date of the giving of such request and as of the date of the effectiveness of such request) are true and correct with respect to such request.

 

(c)                                  Promptly after written request from Borrower and receipt of such supporting documentation as Administrative Agent may request, Administrative Agent will confirm (subject to the terms hereof) in writing that a specified Person is as of the date of such confirmation an Excluded Subsidiary so long as such Person qualifies as an Excluded Subsidiary, but subject to such Person thereafter being subject to the lien of the Collateral Documents if it is no longer an Excluded Subsidiary.  Delivery by the Borrower to the Administrative Agent of any such request shall constitute a representation by the Borrower that the matters set forth in the preceding sentence (both as of the date of the giving of such request and as of the date of the effectiveness of such request) are true and correct with respect to such request.  Administrative Agent may rely solely on the representations of Borrower.  Notwithstanding the foregoing, if such representations of Borrower are not true and correct, then to the full extent possible under applicable law, such confirmation by Administrative Agent shall not release, diminish or impair any Lien pursuant to the Collateral Documents or other rights under the Loan Documents.

 

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9.12                        Secured Hedge Agreements.  Except as otherwise expressly set forth herein or in any Guaranty or any Collateral Document, no Hedge Bank that obtains the benefits of Section 8.03, any Guaranty or any Collateral by virtue of the provisions hereof or of any Guaranty or any Collateral Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents.  Notwithstanding any other provision of this Article IX to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under Secured Hedge Agreements unless the Administrative Agent has received written notice of such Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Hedge Bank

 

9.13                        ERISA.

 

(a)                                 Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, Administrative Agent and its Affiliates, and not, for the avoidance of doubt, to or for the benefit of Borrower, Operating Lessee, or any other Loan Party, that at least one of the following is and will be true:

 

(i)                                     such Lender is not using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans in connection with the Loans, the Letters of Credit or the Commitments;

 

(ii)                                  the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement;

 

(iii)                               (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement; or

 

(iv)                              such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

 

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(b)                                 In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has not provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, Administrative Agent and its Affiliates, and not, for the avoidance of doubt, to or for the benefit of Borrower, Operating Lessee, or any other Loan Party, that:

 

(i)                                     none of the Administrative Agent or its Affiliates is a fiduciary with respect to the assets of such Lender (including in connection with the reservation or exercise of any rights by Administrative Agent under this Agreement, any Loan Document or any documents related to hereto or thereto);

 

(ii)                                  the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is independent (within the meaning of 29 CFR § 2510.3-21) and is a bank, an insurance carrier, an investment adviser, a broker-dealer or other person that holds, or has under management or control, total assets of at least $50 million, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E);

 

(iii)                               the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies (including in respect of the Obligations);

 

(iv)                              the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is a fiduciary under ERISA or the Code, or both, with respect to the Loans, the Letters of Credit, the Commitments and this Agreement and is responsible for exercising independent judgment in evaluating the transactions hereunder; and

 

(v)                                 no fee or other compensation is being paid directly to Administrative Agent or any of its Affiliates for investment advice (as opposed to other services) in connection with the Loans, the Letters of Credit, the Commitments or this Agreement.

 

(c)                                  Administrative Agent and its Affiliates hereby informs the Lenders that each such Person is not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Letters of Credit, the Commitments and this Agreement, (ii) may recognize a gain if it extended the Loans, the Letters of Credit or the Commitments for an amount less than the amount being paid for an interest in the Loans, the Letters of Credit or the Commitments by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or

 

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alternate transaction fees, amendment fees, processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing.

 

Article X.
 Continuing Guaranty

 

10.01                 Guaranty.  The Parent hereby absolutely and unconditionally guarantees, as a guaranty of payment and performance and not merely as a guaranty of collection, prompt payment when due, whether at stated maturity, by required prepayment, upon acceleration, demand or otherwise, and at all times thereafter, of any and all of the Obligations, whether for principal, interest, premiums, fees, indemnities, damages, costs, expenses or otherwise, of the Borrower to the Secured Parties, and whether arising hereunder or under any other Loan Document, or any Secured Hedge Agreement (including all renewals, extensions, amendments, refinancings and other modifications thereof and all costs, attorneys’ fees and expenses incurred by the Secured Parties in connection with the collection or enforcement thereof) and hereby consents to any extension of the Maturity Date pursuant to Section 2.13 hereof or otherwise.  The Administrative Agent’s books and records showing the amount of the Obligations shall be admissible in evidence in any action or proceeding, and shall be binding upon the Parent, and conclusive for the purpose of establishing the amount of the Obligations.  This Guaranty shall not be affected by the genuineness, validity, regularity or enforceability of the Obligations or any instrument or agreement evidencing any Obligations, or by the existence, validity, enforceability, perfection, non-perfection or extent of any collateral therefor, or by any fact or circumstance relating to the Obligations which might otherwise constitute a defense to the obligations of the Parent under this Guaranty, and the Parent hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to any or all of the foregoing.

 

10.02                 Rights of Lenders.  The Parent consents and agrees that the Secured Parties may, at any time and from time to time, without notice or demand, and without affecting the enforceability or continuing effectiveness hereof:  (a) amend, extend, renew, compromise, discharge, accelerate or otherwise change the time for payment or the terms of the Obligations or any part thereof; (b) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any security for the payment of this Guaranty or any Obligations; (c) apply such security and direct the order or manner of sale thereof as the Administrative Agent, the L/C Issuer and the Lenders in their sole discretion may determine; and (d) release or substitute one or more of any endorsers or other guarantors of any of the Obligations.  Without limiting the generality of the foregoing, the Parent consents to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of the Parent under this Guaranty or which, but for this provision, might operate as a discharge of the Parent.

 

10.03                 Certain Waivers.  The Parent waives (a) any defense arising by reason of any disability or other defense of the Borrower or any other guarantor, or the cessation from any cause whatsoever (including any act or omission of any Secured Party) of the liability of the Borrower; (b) any defense based on any claim that the Parent’s obligations exceed or are more burdensome than those of the Borrower; (c) the benefit of any statute of limitations affecting the Parent’s liability hereunder; (d) any right to proceed against the Borrower, proceed against or exhaust any security for the Obligations, or pursue any other remedy in the power of any Secured Party whatsoever; (e) any benefit of and any right to participate in any security now or hereafter held by any Secured Party; and (f) to the fullest extent permitted by law, any and all other defenses or benefits that may be derived from or afforded by applicable law limiting the liability of or exonerating guarantors or sureties.  The Parent expressly waives all setoffs and counterclaims and all presentments, demands for payment or performance, notices of nonpayment or nonperformance, protests, notices of protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever with respect to the Obligations, and all notices of acceptance of this Guaranty or of the existence, creation or incurrence of new or additional Obligations.

 

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10.04                 Obligations Independent.  The obligations of the Parent hereunder are those of primary obligor, and not merely as surety, and are independent of the Obligations and the obligations of any other guarantor, and a separate action may be brought against the Parent to enforce this Guaranty whether or not the Borrower or any other person or entity is joined as a party.

 

10.05                 Subrogation.  The Parent shall not exercise any right of subrogation, contribution, indemnity, reimbursement or similar rights with respect to any payments it makes under this Guaranty until all of the Obligations and any amounts payable under this Guaranty have been indefeasibly paid and performed in full and the Commitments are terminated.  If any amounts are paid to the Parent in violation of the foregoing limitation, then such amounts shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Secured Parties to reduce the amount of the Obligations, whether matured or unmatured.

 

10.06                 Termination; Reinstatement.  This Guaranty is a continuing and irrevocable guaranty of all Obligations now or hereafter existing and shall remain in full force and effect until all Obligations and any other amounts payable under this Guaranty are indefeasibly paid in full in cash (other than contingent indemnification and reimbursement obligations for which no claim has been asserted) and the Commitments with respect to the Obligations are terminated.  Notwithstanding the foregoing, this Guaranty shall continue in full force and effect or be revived, as the case may be, if any payment by or on behalf of the Borrower or the Parent is made, or any of the Secured Parties exercises its right of setoff, in respect of the Obligations 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 any of the Secured Parties in their discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Laws or otherwise, all as if such payment had not been made or such setoff had not occurred and whether or not the Secured Parties are in possession of or have released this Guaranty and regardless of any prior revocation, rescission, termination or reduction.  The obligations of the Parent under this paragraph shall survive termination of this Guaranty.

 

10.07                 Subordination.  The Parent hereby subordinates the payment of all obligations and indebtedness of the Borrower owing to the Parent, whether now existing or hereafter arising, including but not limited to any obligation of the Borrower to the Parent as subrogee of the Secured Parties or resulting from the Parent’s performance under this Guaranty, to the indefeasible payment in full in cash of all Obligations.  If the Secured Parties so request, any such obligation or indebtedness of the Borrower to the Parent shall be enforced and performance received by the Parent as trustee for the Secured Parties and the proceeds thereof shall be paid over to the Secured Parties on account of the Obligations, but without reducing or affecting in any manner the liability of the Parent under this Guaranty.

 

10.08                 Stay of Acceleration.  If acceleration of the time for payment of any of the Obligations is stayed, in connection with any case commenced by or against the Parent or the Borrower under any Debtor Relief Laws, or otherwise, all such amounts shall nonetheless be payable by the Parent immediately upon demand by the Secured Parties.

 

10.09                 Condition of Borrower.  The Parent acknowledges and agrees that it has the sole responsibility for, and has adequate means of, obtaining from the Borrower and any other guarantor such information concerning the financial condition, business and operations of the Borrower and any such other guarantor as the Parent requires, and that none of the Secured Parties has any duty, and the Parent is not relying on the Secured Parties at any time, to disclose to the Parent any information relating to the business, operations or financial condition of the Borrower or any other guarantor (the Parent waiving any duty on the part of the Secured Parties to disclose such information and any defense relating to the failure to provide the same).

 

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Article XI.
 Miscellaneous

 

11.01                 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 (other than Section 4.01(b)(i)), or, in the case of the initial Credit Extension, Section 4.02, 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 11.01) 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 the definition of “Applicable Percentage” or Sections 8.03, 2.11(a), or 2.12 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 11.01 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;

 

(g)                                  release all or substantially all of the Collateral in any transaction or series of related transactions other than releases as permitted by Section 9.11 hereof, without the written consent of each Lender; or

 

(h)                                 release all or substantially all of the value of any Guaranty, without the written consent of each Lender, except to the extent the release of any Subsidiary from the Subsidiary Guaranty is permitted pursuant to Section 9.10 (in which case such release may be made by the Administrative Agent acting alone);

 

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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 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 (iii) 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 disproportionately adversely relative to other affected Lenders shall require the consent of such Defaulting Lender.

 

Notwithstanding any provision herein to the contrary, this Agreement may be amended with the written consent of the Required Lenders, the Administrative Agent and the Borrower (i) to add one or more additional revolving credit or term loan facilities to this Agreement, in each case subject to the limitations in Section 2.14, and to permit the extensions of credit and all related obligations and liabilities arising in connection therewith from time to time outstanding to share ratably (or on a basis subordinated to the existing facilities hereunder) in the benefits of this Agreement and the other Loan Documents with the obligations and liabilities from time to time outstanding in respect of the existing facilities hereunder, and (ii) in connection with the foregoing, to permit, as deemed appropriate by the Administrative Agent and approved by the Required Lenders, the Lenders providing such additional credit facilities to participate in any required vote or action required to be approved by the Required Lenders or by any other number, percentage or class of Lenders hereunder.

 

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 the Required Lenders, the Borrower may replace such non-consenting Lender in accordance with Section 11.13; provided that such amendment, waiver, consent or release can be effected as a result of the assignment contemplated by such Section (together with all other such assignments required by the Borrower to be made pursuant to this paragraph).

 

11.02                 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 facsimile or electronic mail 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 the Borrower or any other Loan Party, the Administrative Agent, or the L/C Issuer, to the address, facsimile number, electronic mail address or telephone number specified for such Person on Schedule 11.02; and

 

(ii)                                  if to any other Lender, to the address, facsimile number, electronic mail address or telephone number specified in its Administrative Questionnaire (including, as appropriate, notices delivered solely to the Person designated by a Lender on its

 

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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 communications sent by facsimile shall be deemed to have been given when sent (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, FpML messaging, 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 Article II if such Lender or the L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication.  The Administrative Agent, the L/C Issuer or the Borrower may each, 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), 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; provided that, for both clauses (i) and (ii), if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

 

(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 other Loan Party, 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, any Loan Party’s or the Administrative Agent’s transmission of Borrower Materials or notices through the Platform, any other electronic platform or electronic messaging service, or through the Internet.

 

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(d)                                 Change of Address, Etc.  Each of the Borrower, any other Loan Party, the Administrative Agent and the L/C Issuer may change its address, facsimile or telephone number for notices and other communications hereunder by notice to the other parties hereto.  Each other Lender may change its address, facsimile or telephone number for notices and other communications hereunder by notice to the Borrower, the Administrative Agent and the L/C Issuer.  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, facsimile 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 Law, 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 notices, Committed Loan Notices, and Letter of Credit Applications) 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.

 

11.03                 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 or under any other Loan Document 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, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

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 all the Lenders and the L/C Issuer; 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 from exercising the rights and remedies that inure to its benefit (solely in its capacity as L/C Issuer) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 11.08 (subject to the terms of Section 2.12), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own

 

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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 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 2.12, 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.

 

11.04                 Expenses; Indemnity; Damage Waiver.

 

(a)                                 Costs and Expenses.  The Borrower shall pay (i) all reasonable 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 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 reasonable 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.

 

(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 reasonable fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all reasonable 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 Person (including 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 brought by a third party or by the Borrower or any

 

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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 non-appealable 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 Loan Party has obtained a final and non-appealable judgment in its favor on such claim as determined by a court of competent jurisdiction.  Without limiting the provisions of Section 3.01(c), this Section 11.04(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

 

(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 (and without limiting its obligation to do so), 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 pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each Lender’s share of the Total Credit Exposure at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender), 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 the L/C Issuer in connection with such capacity.  The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.11(d).

 

(d)                                 Waiver of Consequential Damages, Etc.  To the fullest extent permitted by applicable law, the Borrower shall not assert, and hereby waive, and acknowledge that no other Person shall have, 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.

 

(e)                                  Payments.  All amounts due under this Section shall be payable not later than ten (10) Business Days after demand therefor accompanied by an invoice setting forth in reasonable detail the calculation of the amount of such demand.

 

(f)                                   Survival.  The agreements in this Section and the indemnity provisions of Section 11.02(e) shall survive the resignation of the Administrative Agent and the L/C Issuer, the

 

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replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.

 

11.05                 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.

 

11.06                 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(s) and the Loans (including for purposes of this Section 11.06(b), participations in L/C Obligations) at the time owing to it); provided that any such assignment shall be subject to the following conditions:

 

(i)                                     Minimum Amounts.

 

(A)                               in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and/or the Loans at the time owing to it or contemporaneous assignments to related Approved Funds (determined after giving effect to such Assignments) that equal at least the amount specified in paragraph (b)(i)(B) of this Section in the aggregate or in the case of an

 

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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 has occurred and is continuing, 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 prohibit any Lender from assigning all or a portion of its rights and obligations among any separate revolving credit or term loan facilities provided pursuant to the second to last paragraph of Section 11.01 on a non-pro rata basis;

 

(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 or delayed; provided that it is understood that it shall be reasonable for the Borrower to withhold consent to a new assignee Lender if such new assignee Lender is a hedge fund, private equity fund or any entity that is a direct competitor of the Borrower and is in the hotel business or provides advisory services to the hotel business) shall be required unless (1) an Event of Default has occurred and is continuing 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; and

 

(C)                               the consent of the L/C Issuer 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

 

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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 its 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 (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of 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, the L/C Issuer 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 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 Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

 

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 11.04 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.  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 Section 11.06(d).

 

(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

 

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Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it (or the equivalent thereof in electronic form) and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) 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 absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

(d)                                 Participations.  Any Lender may at any time, with the consent of the Borrower (such consent not to be unreasonably withheld or delayed; provided that it is understood that it shall be reasonable for the Borrower to withhold consent to a new participant if such new participant is a hedge fund, private equity fund or any entity that is a direct competitor of the Borrower and is in the hotel business or provides advisory services to the hotel business) and the Administrative Agent (such consent not to be unreasonably withheld or delayed), sell participations to any Person (other than a natural Person, or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of 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) 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, (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, (iv) the consent of the Borrower and the Administrative Agent shall not be required if such participation is sold to a Lender, an Affiliate of a Lender or an Approved Fund, (v) the consent of the Borrower shall not be required if an Event of Default has occurred and is continuing at the time of such sale of a participation, and (vi) the Borrower shall be deemed to have consented to any such sale of a participation unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof.  For the avoidance of doubt, each Lender shall be responsible for the indemnity under Sections 11.04(c) without regard to the existence of any participation.

 

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 11.01 that affects such Participant.  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 (it being understood that the documentation required under Section 3.01(e) shall be delivered to the Lender who sells the participation) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 3.06 and 11.13 as if it were an assignee under paragraph (b) of this Section and (B) shall not be entitled to receive any greater payment under Sections 3.01 or 3.04, with respect to any participation, than the Lender from whom it acquired the applicable participation would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.  Each Lender that sells a participation agrees, at the Borrower’s request, to use

 

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reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 3.06 with respect to any Participant.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.08 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.12 as though it were a Lender.  Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

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

 

(f)                                   Resignation as L/C Issuer after Assignment.  Notwithstanding anything to the contrary contained herein, if at any time Bank of America assigns all of its Commitment and Revolving Credit Loans pursuant to Section 11.06(b), Bank of America may, upon thirty (30) days’ notice to the Borrower and the Lenders, resign as L/C Issuer.  In the event of any such resignation as L/C Issuer, the Borrower shall be entitled to appoint from among the Lenders a successor L/C Issuer 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.  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 Revolving Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)).  Upon the appointment of a successor L/C Issuer, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer, 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.

 

11.07                 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, its auditors and to Related Parties (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 required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (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

 

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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 and obligations under this Agreement or any Eligible Assignee invited to be a Lender pursuant to Section 2.14(c) or Section 11.01 or (ii) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder, (g) on a confidential basis to (i) any rating agency in connection with rating the Borrower or its Subsidiaries or the credit facilities provided hereunder or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers or other market identifiers with respect to the credit facilities provided hereunder, (h) with the consent of the Borrower or (i) to the extent such Information (A) becomes publicly available other than as a result of a breach of this Section or (B) 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.  In addition, the Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry and service providers to the Agents and the Lenders in connection with the administration of this Agreement, the other Loan Documents, and the Commitments.

 

For purposes of this Section, “Information” means all information received from any Loan Party or any Subsidiary thereof relating to any Loan Party or any Subsidiary thereof or 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 any Loan Party or any Subsidiary thereof, provided that, in the case of information received from a Loan Party or any such 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 Law, including United States Federal and state securities Laws.

 

11.08                 Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, the L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, 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 or their respective Affiliates, irrespective of whether or not such Lender, L/C Issuer or Affiliate 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, office or Affiliate of such Lender or the L/C Issuer different from the branch, office or Affiliate 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 2.16 and, pending such payment, shall be segregated by such

 

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Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the L/C Issuer 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.

 

11.09                 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 Law (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 Law, (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.

 

11.10                 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, the other Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent or the L/C Issuer, 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 facsimile or other electronic imaging means (e.g., “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Agreement.

 

11.11                 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.

 

11.12                 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

 

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not invalidate or render unenforceable such provision in any other jurisdiction.  Without limiting the foregoing provisions of this Section 11.12, 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 or the L/C Issuer, as applicable, then such provisions shall be deemed to be in effect only to the extent not so limited.

 

11.13                 Replacement of Lenders.  If the Borrower is entitled to replace a Lender pursuant to the provisions of Section 3.06, if any Lender is a Defaulting Lender or a Non-Consenting Lender or if any other circumstance exists hereunder that gives the Borrower the right to replace a Lender as a party hereto, 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 11.06), all of its interests, rights (other than its existing rights to payments pursuant to Sections 3.01 and 3.04) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee 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 (if any) specified in Section 11.06(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 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;

 

(d)                                 such assignment does not conflict with applicable Laws; and

 

(e)                                  in the case of an assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

 

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.

 

11.14                 Governing Law; Jurisdiction; Etc.

 

(a)                                 GOVERNING LAW.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (EXCEPT, AS TO ANY OTHER LOAN DOCUMENT, AS EXPRESSLY SET FORTH THEREIN) AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

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(b)                                 SUBMISSION TO JURISDICTION.  THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER, THE L/C ISSUER, OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT 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 LAW, 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 LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d)                                 SERVICE OF PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

11.15                 Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, 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

 

107

 

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.

 

11.16                 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), each of 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, and the Lenders 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, and the Lenders, on the other hand, (B) each of the Borrower and each other Loan Party has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) each of 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 and each Lender 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 nor any Lender 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, the Arranger and the Lenders 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 nor any Lender 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 law, each of the Borrower and each other Loan Party hereby waives and releases any claims that it may have against the Administrative Agent and the Arranger or any Lender with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

 

11.17                 Electronic Execution of Assignments and Certain Other Documents.  The words “execute,” “execution,” “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby (including without limitation Assignment and Assumptions, amendments or other modifications, Committed Loan Notices, waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, 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 law, 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; provided that notwithstanding anything contained herein to the contrary the Administrative Agent is under no obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures approved by it.

 

11.18                 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 each

 

108

 

Loan Party, which information includes the name and address of each Loan Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify each Loan Party 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.

 

11.19                 Time of the Essence.  Time is of the essence of the Loan Documents.

 

11.20                 Acknowledgement and Consent to Bail-In of EEA Financial Institutions.  Solely to the extent any Lender or L/C Issuer that is an EEA Financial Institution is a party to this Agreement and notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender or L/C Issuer that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

 

(a)                                 the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender or L/C Issuer that is an EEA Financial Institution; and

 

(b)                                 the effects of any Bail-In Action on any such liability, including, if applicable:

 

(i)                                     a reduction in full or in part or cancellation of any such liability;

 

(ii)                                  a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

 

(iii)                               the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.

 

11.21                 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.

 

[Signature Pages Follow]

 

109

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

	
 
    	
ASHFORD HOSPITALITY HOLDINGS   LLC, a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
Ashford Inc., its   manager
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David A. Brooks
    
	
 
    	
 
    	
Name:
    	
David A. Brooks
    
	
 
    	
 
    	
Title:
    	
General Counsel
    
	
 
    	
 
    

Signature Page to Credit Agreement

 

 

	
 
    	
ASHFORD INC.,   a Maryland corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David A. Brooks
    
	
 
    	
 
    	
Name:
    	
David A. Brooks
    
	
 
    	
 
    	
Title:
    	
General Counsel
    
	
 
    	
 
    

 

Signature Page to Credit Agreement

 

 

	
 
    	
BANK OF AMERICA, N.A.,   as Administrative Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Suzanne E. Pickett
    
	
 
    	
 
    	
Name:
    	
Suzanne E. Pickett
    
	
 
    	
 
    	
Title:
    	
Vice President
    
	
 
    	
 
    

Signature Page to Credit Agreement

 

 

	
 
    	
BANK OF AMERICA, N.A.,   as a Lender and L/C Issuer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Suzanne E. Pickett
    
	
 
    	
 
    	
Name:
    	
Suzanne E. Pickett
    
	
 
    	
 
    	
Title:
    	
Vice President
    
	
 
    	
 
    

Signature Page to Credit Agreement

 

 

SCHEDULE 2.01

 

COMMITMENTS

AND APPLICABLE PERCENTAGES

 

	
Lender
    	
 
    	
Commitment
    	
 
    	
Applicable Percentage
    	
 
    
	
BANK OF AMERICA,   N.A.
    	
 
    	
$
    	
35,000,000.00
    	
 
    	
100.000000000
    	
%
    
	
Total
    	
 
    	
$
    	
35,000,000.00
    	
 
    	
100.000000000
    	
%
    

 

 

SCHEDULE 5.06

 

LITIGATION

 

None.

 

 

SCHEDULE 5.08(b)

 

EXISTING LIENS

 

LOAN PARTIES AND ADVISORY SUBSIDIARIES

 

	
Liens securing Indebtedness in
   excess of $1MM and Lien holder
    	
 
    	
Date
    	
 
    	
Borrower
    	
 
    	
Original
   Principal
   Amount
    
	
Lien holders:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SM Southern Hotels Loan   Owner
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
LLC
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Reliance Standard Life   Insurance
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Mortgage:
    
	
Company
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$30 million
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Property:   all FF&E subject to that
    	
 
    	
February, 22,
    	
 
    	
Ashford Pav   Leasing LLC
    	
 
    	
 
    
	
certain Personal   Property Lease dated February 22, 2017, by and between Ashford Pav   Leasing LLC and Ashford TRS Le Pavillon LLC
    	
 
    	
2017
    	
 
    	
 
    	
 
    	
Mezzanine:
   $13,750,000
    
	
(“Pavillon FF&E   Lease”)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

SCHEDULE 5.08(c)

 

OWNED OR GROUND LEASED REAL PROPERTY

 

None.

 

 

SCHEDULE 5.08(d)

 

EXISTING INVESTMENTS

 

None.

 

 

SCHEDULE 5.09

 

ENVIRONMENTAL MATTERS

 

None.

 

 

SCHEDULE 5.12(d)

 

ERISA MATTERS

 

None.

 

 

SCHEDULE 5.13

 

SUBSIDIARIES AND OTHER EQUITY INVESTMENTS; 

LOAN PARTIES

 

Part (a) - Subsidiaries:

 

	
Entity Name
    	
 
    	
State
    	
 
    	
Entity
   Designation
    	
 
    	
Equity Interests Owned
   By
    	
 
    	
Equity
   % of
   Owner
    	
 
    	
Equity
   Entity
   Type
    	
 
    
	
AIM General Partner, LLC
    	
 
    	
DE:
    	
 
    	
Excluded
    	
 
    	
Ashford Hospitality
    	
 
    	
100
    	
%
    	
Member
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Subsidiary
    	
 
    	
Advisors LLC
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AIM Management Holdco, LLC
    	
 
    	
DE:
    	
 
    	
Excluded
    	
 
    	
Ashford Hospitality
    	
 
    	
100
    	
%
    	
Member
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Subsidiary
    	
 
    	
Advisors LLC
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AIM Performance Holdco, LP
    	
 
    	
DE:
    	
 
    	
Excluded Subsidiary
    	
 
    	
AIM General Partner, LLC
    	
 
    	
0.01
    	
%
    	
GP
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Ashford Hospitality
    	
 
    	
59.99
    	
%
    	
LP
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Advisors LLC
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Monty Bennett
    	
 
    	
25
    	
%
    	
LP
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Rob Hays
    	
 
    	
15
    	
%
    	
LP
    	
 
    
	
AIM REHE Funds GP, LP
    	
 
    	
DE:
    	
 
    	
Excluded Subsidiary
    	
 
    	
AIM General Partner, LLC
    	
 
    	
0.01
    	
%
    	
GP
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
AIM Performance
    	
 
    	
99.99
    	
%
    	
LP
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Holdco, LP
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AINC Kalibri Holdco LLC
    	
 
    	
DE
    	
 
    	
Loan Party
    	
 
    	
Ashford Hospitality
    	
 
    	
100
    	
%
    	
Member
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Advisors LLC
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ashford Advisors, Inc.
    	
 
    	
DE
    	
 
    	
Loan Party
    	
 
    	
Ashford Hospitality
    	
 
    	
100
    	
%
    	
Stockholder
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Holdings LLC
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ashford Hospitality Advisors LLC
    	
 
    	
DE:
    	
 
    	
Loan Party
    	
 
    	
Ashford Advisors, Inc.
    	
 
    	
100
    	
%
    	
Member
    	
 
    
	
Ashford Hospitality Holdings LLC
    	
 
    	
DE:
    	
 
    	
Loan Party
    	
 
    	
Ashford Inc.
    	
 
    	
99.8
    	
%
    	
Member 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Convertible Unitholders
    	
 
    	
0.2
    	
%
    	
Member
    	
 
    
	
Ashford Hospitality Select Limited Partnership
    	
 
    	
DE
    	
 
    	
Excluded
    	
 
    	
Ashford Select OP
    	
 
    	
0
    	
%
    	
GP
    	
 
    
	
 
    	
 
    	
 
    	
Subsidiary
    	
 
    	
General Partner LLC
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Ashford Select OP
    	
 
    	
100
    	
%
    	
LP
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Limited Partner LLC
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ashford Hospitality Select, Inc.
    	
 
    	
MD
    	
 
    	
Excluded
    	
 
    	
Ashford Hospitality
    	
 
    	
100
    	
%
    	
Shareholder
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Subsidiary
    	
 
    	
Advisors LLC
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ashford Investment Management, LLC
    	
 
    	
DE:
    	
 
    	
Excluded Subsidiary
    	
 
    	
AIM Management Holdco, LLC
    	
 
    	
100
    	
%
    	
Member
    	
 
    

 

 

	
Entity Name
    	
 
    	
State
    	
 
    	
Entity
   Designation
    	
 
    	
Equity Interests Owned
   By
    	
 
    	
Equity
   % of
   Owner
    	
 
    	
Equity
   Entity
   Type
    	
 
    
	
Ashford Lending Corporation
    	
 
    	
DE:
    	
 
    	
Loan Party
    	
 
    	
Ashford Hospitality Advisors LLC
    	
 
    	
100
    	
%
    	
Stockholder
    	
 
    
	
Ashford Pav Leasing LLC
    	
 
    	
DE:
    	
 
    	
Excluded Subsidiary
    	
 
    	
Ashford Hospitality Advisors LLC
    	
 
    	
100
    	
%
    	
Member
    	
 
    
	
Ashford Select OP Limited Partner LLC
    	
 
    	
DE:
    	
 
    	
Excluded Subsidiary
    	
 
    	
Ashford Hospitality Select, Inc.
    	
 
    	
100
    	
%
    	
Member
    	
 
    
	
Ashford Select OP General Partner LLC
    	
 
    	
DE:
    	
 
    	
Excluded Subsidiary
    	
 
    	
Ashford Hospitality Select, Inc.
    	
 
    	
100
    	
%
    	
Member
    	
 
    
	
Ashford Select TRS Corporation
    	
 
    	
DE:
    	
 
    	
Excluded Subsidiary
    	
 
    	
Ashford Hospitality Select Limited Partnership
    	
 
    	
100
    	
%
    	
Stockholder
    	
 
    
	
Lismore Capital LLC
    	
 
    	
DE:
    	
 
    	
Loan Party
    	
 
    	
Ashford Hospitality Advisors LLC
    	
 
    	
100
    	
%
    	
Member
    	
 
    
	
Ancillary Service Subsidiaries as of the Closing   Date:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ashford Hospitality Services LLC
    	
 
    	
DE
    	
 
    	
Excluded Subsidiary
    	
 
    	
Ashford Advisors, Inc.
    	
 
    	
100
    	
%
    	
Member
    	
 
    
	
Red Hospitality & Leisure, LLC
    	
 
    	
DE
    	
 
    	
Excluded Subsidiary
    	
 
    	
Ashford Hospitality Services LLC
    	
 
    	
85
    	
%
    	
Member
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Chris Batchelor
    	
 
    	
15
    	
%
    	
Member
    	
 
    
	
Island Time Watersports (Caribbean) LLC
    	
 
    	
DE
    	
 
    	
Excluded Subsidiary
    	
 
    	
Red Hospitality & Leisure, LLC 
    	
 
    	
95
    	
%
    	
Member
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Troy Neill
    	
 
    	
5
    	
%
    	
Member
    	
 
    
	
Red Island Time Soul Vessel, LLC
    	
 
    	
DE
    	
 
    	
Excluded Subsidiary
    	
 
    	
Island Time Watersports (Caribbean) LLC
    	
 
    	
100
    	
%
    	
Member
    	
 
    
	
Red Island Time Vessel, LLC
    	
 
    	
DE
    	
 
    	
Excluded Subsidiary
    	
 
    	
Island Time Watersports (Caribbean) LLC
    	
 
    	
100
    	
%
    	
Member
    	
 
    
	
Red Island Time Dinghy Vessel, LLC
    	
 
    	
DE
    	
 
    	
Excluded Subsidiary
    	
 
    	
Island Time Watersports (Caribbean) LLC
    	
 
    	
100
    	
%
    	
Member
    	
 
    
	
PT Holdco, LLC
    	
 
    	
DE
    	
 
    	
Excluded Subsidiary
    	
 
    	
Ashford Hospitality Services LLC
    	
 
    	
100
    	
%
    	
Member
    	
 
    
	
PRE Opco, LLC
    	
 
    	
DE
    	
 
    	
Excluded Subsidiary
    	
 
    	
Ashford Hospitality Services LLC 
    	
 
    	
70
    	
%
    	
Member
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Brault Enterprises, LLC 
    	
 
    	
20
    	
%
    	
Member
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
PAFR, LLC
    	
 
    	
10
    	
%
    	
Member
    	
 
    

 

 

	
Entity Name
    	
 
    	
State
    	
 
    	
Entity
   Designation
    	
 
    	
Equity Interests Owned
   By
    	
 
    	
Equity
   % of
   Owner
    	
 
    	
Equity
   Entity
   Type
    
	
Presentation Technologies, LLC
    	
 
    	
DE
    	
 
    	
Excluded
    	
 
    	
PT Holdco, LLC
    	
 
    	
85
    	
%
    	
Member
    
	
 
    	
 
    	
 
    	
 
    	
Subsidiary
    	
 
    	
PT Intermediate, LLC
    	
 
    	
15
    	
%
    	
Member
    
	
J&S Audio Visual Communications, LLC
    	
 
    	
—
    	
 
    	
Excluded
    	
 
    	
Presentation
    	
 
    	
100
    	
%
    	
Member
    
	
 
    	
 
    	
 
    	
 
    	
Subsidiary
    	
 
    	
Technologies, LLC
    	
 
    	
 
    	
 
    	
 
    
	
J&S Audio Visual Mexico S. De R.L
    	
 
    	
—
    	
 
    	
Excluded
    	
 
    	
J&S Audio Visual
    	
 
    	
97.05
    	
%
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Subsidiary
    	
 
    	
Communications, LLC
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Presentation
    	
 
    	
2.95
    	
%
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Technologies, LLC
    	
 
    	
 
    	
 
    	
 
    
	
J&S DR GP, LLC
    	
 
    	
DE
    	
 
    	
Excluded
    	
 
    	
Presentation
    	
 
    	
100
    	
%
    	
Member
    
	
 
    	
 
    	
 
    	
 
    	
Subsidiary
    	
 
    	
Technologies, LLC
    	
 
    	
 
    	
 
    	
 
    
	
J&S Audio Visual Dominican Republic, L.P.
    	
 
    	
—
    	
 
    	
Excluded
    	
 
    	
J&S DR GP, LLC
    	
 
    	
1
    	
%
    	
GP
    
	
 
    	
 
    	
 
    	
 
    	
Subsidiary
    	
 
    	
PT DR Holdings, LLC
    	
 
    	
99
    	
%
    	
LP
    
	
PT DR Holdings, LLC
    	
 
    	
—
    	
 
    	
Excluded
    	
 
    	
Presentation
    	
 
    	
100
    	
%
    	
Member
    
	
 
    	
 
    	
 
    	
 
    	
Subsidiary
    	
 
    	
Technologies, LLC
    	
 
    	
 
    	
 
    	
 
    

 

Part (b) — Other Equity Investments of Loan Parties:

 

1.              AINC Kalibri Holdco LLC owns an approximately 2.3085% equity interest in Kalibri Labs, LLC.

2.              Ashford Lending Corporation owns 49.72% of the Voting Preferred Stock of OpenKey, Inc.

 

Part (c) — Equity Interests in Loan Parties:

 

	
Loan Party
    	
 
    	
Equity Interests Owned By
    	
 
    	
Equity %
   of Owner
    	
 
    	
Equity Interest
   Type
    	
 
    
	
AINC Kalibri   Holdco LLC
    	
 
    	
Ashford Hospitality Advisors LLC
    	
 
    	
100
    	
%
    	
Member
    	
 
    
	
Ashford   Advisors, Inc.
    	
 
    	
Ashford Hospitality Holdings LLC
    	
 
    	
100
    	
%
    	
Stock
    	
 
    
	
Ashford   Hospitality Advisors LLC
    	
 
    	
Ashford Advisors, Inc.
    	
 
    	
100
    	
%
    	
Member
    	
 
    
	
Ashford   Hospitality Holdings LLC
    	
 
    	
Ashford Inc. 
    	
 
    	
99.8
    	
%
    	
Member
    	
 
    
	
 
    	
 
    	
Convertible Unitholders
    	
 
    	
0.2
    	
%
    	
Member
    	
 
    
	
Ashford Lending   Corporation
    	
 
    	
Ashford Hospitality Advisors LLC
    	
 
    	
100
    	
%
    	
Stock
    	
 
    
	
Ashford Inc.
    	
 
    	
Public shareholders 
    	
 
    	
70
    	
%
    	
Stock
    	
 
    
	
 
    	
 
    	
Ashford Hospitality Trust, Inc.
    	
 
    	
30
    	
%
    	
Stock
    	
 
    
	
Lismore Capital   LLC
    	
 
    	
Ashford Hospitality Advisors LLC
    	
 
    	
100
    	
%
    	
Member
    	
 
    

 

 

Part (d) — Loan Party Information:

 

	
Loan Party
    	
 
    	
Jurisdiction of
   Organization
    	
 
    	
Tax ID #.
    	
 
    	
Chief Executive Office/
   Sole Place of Business
    
	
AINC Kalibri Holdco LLC
    	
 
    	
DE
    	
 
    	
47-4115100
    	
 
    	
14185 Dallas Parkway, STE 1100 Dallas, TX 75254
    
	
Ashford Advisors, Inc.
    	
 
    	
DE
    	
 
    	
47-5064999
    	
 
    	
14185 Dallas Parkway, STE 1100 Dallas, TX 75254
    
	
Ashford Hospitality Advisors LLC
    	
 
    	
DE:
    	
 
    	
46-2496748
    	
 
    	
14185 Dallas Parkway, STE 1100 Dallas, TX 75254
    
	
Ashford Hospitality Holdings LLC
    	
 
    	
DE:
    	
 
    	
82-1144434
    	
 
    	
14185 Dallas Parkway, STE 1100 Dallas, TX 75254
    
	
Ashford Lending Corporation
    	
 
    	
DE:
    	
 
    	
47-1296460
    	
 
    	
14185 Dallas Parkway, STE 1100 Dallas, TX 75254
    
	
Ashford Inc.
    	
 
    	
DE:
    	
 
    	
46-5292553
    	
 
    	
14185 Dallas Parkway, STE 1100 Dallas, TX 75254
    
	
Lismore Capital LLC
    	
 
    	
DE:
    	
 
    	
82-1927994
    	
 
    	
14185 Dallas Parkway, STE 1100 Dallas, TX 75254
    

 

 

SCHEDULE 5.18

 

INTELLECTUAL PROPERTY MATTERS

 

None.

 

 

SCHEDULE 7.02

 

INDEBTEDNESS 

 

INDEBTEDNESS

 

	
Liens securing Indebtedness in   
   excess of $1MM and Lien holder
    	
 
    	
Date
    	
 
    	
Borrower
    	
 
    	
Original 
   Principal 
   Amount
    
	
Lien holders:

SM Southern Hotels Loan Owner LLC

 

Reliance Standard Life Insurance Company

 

Property: all FF&E subject to   that certain Personal Property Lease dated February 22, 2017, by and   between Ashford Pav Leasing LLC and Ashford TRS Le Pavillon LLC (“Pavillon   FF&E Lease”)
    	
 
    	
February, 22, 2017
    	
 
    	
Ashford Pav Leasing LLC
    	
 
    	
Mortgage: 
   $30 million

 

Mezzanine: 
   $13,750,000
    

 

 

SCHEDULE 7.09

 

BURDENSOME AGREEMENTS

 

None.

 

 

SCHEDULE 11.02   ADMINISTRATIVE AGENT’S OFFICE, CERTAIN ADDRESSES FOR NOTICES BORROWER:   Ashford Hospitality Holdings LLC 14185 Dallas Parkway, Suite 1100 Dallas, TX   75254 Attention: Deric Eubanks Telephone: 972-778-9451 Telecopier:   972-490-9605 Electronic Mail: deubanks@ashfordinc.com Website Address:   http://www.ashfordinc.com/ U.S. Taxpayer Identification Number: 82-1144434   PARENT: Ashford Inc. 14185 Dallas Parkway, Suite 1100 Dallas, TX 75254   Attention: Deric Eubanks Telephone: 972-778-9451 Telecopier: 972-490-9605   Electronic Mail: deubanks@ashfordinc.com Website Address:   http://www.ashfordinc.com/ U.S. Taxpayer Identification Number: 46-5292553 In   each case, with a copy to: Winston & Strawn LLP 2501 N. Harwood St., 17th   Floor Dallas, TX 75201 Attention: Jordan Klein; Brian Jansen Telephone:   214-453-6426 Electronic Mail: jmklein@winston.com ADMINISTRATIVE AGENT:   Administrative Agent’s Office (for payments): Bank of America, N.A. 2380   Performance Drive, Building C Mail Code: TX2-984-03-23 Richardson, TX 75082 Attention:   Kesha Martinez Telephone: 469-201-8836 Telecopier: 214-290-9416 Electronic   Mail: kesha.martinez@bankofamerica.com 4838-5535-0609 v.6 Schedule 11.02 –   Page 1 

    

 

Account No.:   1366072250600 Ref: Wire Clearing Acct for Syn Loans - LIQ ABA# 026009593   Other Notices as Administrative Agent: (for Credit Extensions) Bank of   America, N.A. 901 Main Street Mail Code: TX1-492-64-01 Dallas, TX 75202   Attention: Suzanne Pickett Telephone: 214-209-0936 Telecopier: Electronic   Mail: Suzanne.eaddy@baml.com L/C Issuer: Bank of America, N.A. Attn: Trade   Operations One Fleet Way Mailcode: PA6-580-02-30 Scranton, PA 18507-1999   Phone: 1-800-370-7519 scranton_standby_lc@bankofamerica.com 4838-5535-0609   v.6 Schedule 11.02 – Page 2 

    

 

EXHIBIT A FORM   OF COMMITTED LOAN NOTICE Date: , To: Bank of America, N.A., as Administrative   Agent Ladies and Gentlemen: Reference is made to that certain Credit   Agreement, dated as of March 1, 2018 (as amended, restated, extended,   supplemented or otherwise modified in writing from time to time, the   “Agreement;” the terms defined therein being used herein as therein defined),   among Ashford Hospitality Holdings LLC, a Delaware limited liability company   (the “Borrower”), Ashford Inc., a Maryland corporation (the “Parent”), the   Lenders from time to time party thereto, and Bank of America, N.A., as   Administrative Agent and L/C Issuer. The undersigned hereby requests (select   one): A Borrowing of Revolving Credit Loans A conversion or continuation of   Revolving Credit Loans 1. On (a Business Day). 2. In the amount of $ 3.   Comprised of [Type of Loan requested] 4. For Eurodollar Rate Loans: with an   Interest Period of months. The Revolving Credit Borrowing, if any, requested   herein complies with the proviso to the first sentence of Section 2.01 of the   Agreement. 4838-5535-0609 v.6 Exhibit A – Page 1 

    

 

The Borrower   hereby represents and warrants that the conditions specified in Sections   4.02(a) and (b) shall be satisfied on and as of the date of the Borrowing.   ASHFORD HOSPITALITY HOLDINGS LLC By: Name: Title: 4838-5535-0609 v.6 Exhibit   A – Page 2 

    

 

EXHIBIT B FORM   OF NOTE , FOR VALUE RECEIVED, the undersigned (the “Borrower”), hereby   promises to pay to or registered assigns (the “Lender”), in accordance with   the provisions of the Agreement (as hereinafter defined), the principal   amount of each Loan from time to time made by the Lender to the Borrower   under that certain Credit Agreement, dated as of March 1, 2018 (as amended,   restated, extended, supplemented or otherwise modified in writing from time   to time, the “Agreement;” the terms defined therein being used herein as   therein defined), among the Borrower, Ashford, Inc., a Maryland corporation   (the “Parent”), the Lenders from time to time party thereto, and Bank of   America, N.A., as Administrative Agent and L/C Issuer. The Borrower promises   to pay interest on the unpaid principal amount of each Loan from the date of   such Loan until such principal amount is paid in full, at such interest rates   and at such times as provided in the Agreement. All payments of principal and   interest shall be made to the Administrative Agent for the account of the   Lender in Dollars in immediately available funds at the Administrative   Agent’s Office. If any amount is not paid in full when due hereunder, such   unpaid amount shall bear interest, to be paid upon demand, from the due date   thereof until the date of actual payment (and before as well as after   judgment) computed at the per annum rate set forth in the Agreement. This   Note is one of the Notes referred to in the Agreement, is entitled to the   benefits thereof and may be prepaid in whole or in part subject to the terms   and conditions provided therein. This Note is also entitled to the benefits   of the Guaranty and is secured by the Collateral. Upon the occurrence and   continuation of one or more of the Events of Default specified in the   Agreement, all amounts then remaining unpaid on this Note shall become, or   may be declared to be, immediately due and payable all as provided in the   Agreement. Loans made by the Lender shall be evidenced by one or more loan   accounts or records maintained by the Lender in the ordinary course of   business. The Lender may also attach schedules to this Note and endorse   thereon the date, amount and maturity of its Loans and payments with respect   thereto. The Borrower, for itself, its successors and assigns, hereby waives   diligence, presentment, protest and demand and notice of protest, demand,   dishonor and non-payment of this Note. 4838-5535-0609 v.6 Exhibit B – Page 1 

    

 

THIS NOTE SHALL   BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW   YORK. ASHFORD HOSPITALITY HOLDINGS LLC By: Name: Title: Signature Page to   Form of Note 4838-5535-0609 v.6 

    

 

LOANS AND   PAYMENTS WITH RESPECT THERETO Amount of Principal or Interest Paid This Date   Outstanding Principal Balance This Date End of Interest Period Type of Loan   Made Amount of Loan Made Notation Made By Date 416853586-5550355_-50609 v.6 

    

 

EXHIBIT C FORM   OF COMPLIANCE CERTIFICATE Financial Statement Date: _, To: Bank of America,   N.A., as Administrative Agent Ladies and Gentlemen: Reference is made to that   certain Credit Agreement, dated as of March 1, 2018 (as amended, restated,   extended, supplemented or otherwise modified in writing from time to time,   the “Agreement;” the terms defined therein being used herein as therein   defined), among Ashford Hospitality Holdings LLC, a Delaware limited   liability company (the “Borrower”), Ashford, Inc., a Maryland corporation   (the “Parent”), the Lenders from time to time party thereto, and Bank of   America, N.A., as Administrative Agent and L/C Issuer. The undersigned   Responsible Officer hereby certifies as of the date hereof that he/she is the   of the Parent, and that, as such, he/she is authorized to execute and deliver   this Certificate to the Administrative Agent on the behalf of the Parent, for   itself and on behalf of Borrower, and that: [Use following paragraph 1 for   fiscal year-end financial statements] 1. The Parent has delivered the   year-end audited financial statements required by Section 6.01(a) of the   Agreement for the fiscal year of the Parent ended as of the above date,   together with the report and opinion of an independent certified public   accountant required by such section. [Use following paragraph 1 for fiscal   quarter-end financial statements] 1. The Parent has delivered the unaudited   financial statements required by Section 6.01(b) of the Agreement for the   fiscal quarter of the Parent ended as of the above date. Such consolidated   financial statements fairly present the financial condition, results of   operations and cash flows of the Consolidated Parties in accordance with GAAP   as at such date and for such period, subject only to normal year-end audit   adjustments and the absence of footnotes. 2. The undersigned has reviewed and   is familiar with the terms of the Agreement and has made, or has caused to be   made under his/her supervision, a detailed review of the transactions and   condition (financial or otherwise) of the Consolidated during the accounting   period covered by such financial statements. 3. A review of the activities of   the Consolidated Parties during such fiscal period has been made under the   supervision of the undersigned with a view to determining whether during such   fiscal period the Consolidated Parties performed and observed all its   Obligations under the Loan Documents, and [select one:] [to the best   knowledge of the undersigned, during such fiscal period the Consolidated   Parties performed and observed each covenant and condition of the Loan   Documents applicable to it, and no Default has occurred and is continuing.]   4838-5535-0609 v.6 Exhibit C – Page 1 

    

 

--or--[to the   best knowledge of the undersigned, during such fiscal period the following   covenants or conditions have not been performed or observed and the following   is a list of each such Default and its nature and status:] 4. The   representations and warranties of the Borrower and the Parent contained in   Article V of the Agreement and all representations and warranties of any Loan   Party that are contained in any document furnished at any time under or in   connection with the Loan Documents, are true and correct on and as of the   date hereof, 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   Compliance Certificate, the representations and warranties contained in   subsections (a) and (b) of Section 5.05 of the Agreement shall be deemed to   refer to the most recent statements furnished pursuant to clauses (a) and   (b), respectively, of Section 6.01 of the Agreement, including the statements   in connection with which this Compliance Certificate is delivered. 5. The   financial covenant analyses and information set forth on Schedules 1 attached   hereto are true and accurate on and as of the date of this Certificate. IN WITNESS   WHEREOF, the undersigned has executed this Certificate as of , . PARENT:   ASHFORD, INC. By: Name: Title: BORROWER: ASHFORD HOSPITALITY HOLDINGS LLC By:   Name: Title: 4838-5535-0609 v.6 Exhibit C – Page 2 

    

 

For the   Quarter/Year ended , (“Statement Date”) SCHEDULE 1 to the Compliance   Certificate ($ in 000’s) I. Section 7.11(a) – Consolidated Tangible Net   Worth. A. Actual Consolidated Tangible Net Worth at Statement Date: 1.   Shareholders’ Equity: $ 2. Intangible Assets: $ 3. Accumulated depreciation $ 4. Reversal of (i) any effects of the application of FASB ASC No. 715:   Compensation—Retirement Benefits, (ii) any effects of any offsetting   liability to contingent consideration obligations arising out of an   acquisition and (iii) the effects of any Indebtedness effects of any   Indebtedness owed by any Consolidated Party to another Consolidated Party   (including the Inter-Company Debt) to the extent not otherwise eliminated in   the consolidated financial statements of the Consolidated Parties $ 5.   Reversal of impact from (i) straight line rent leveling adjustments required   under GAAP and (ii) amortization of intangibles pursuant to FASB Statement   No. 141 $ 6. Consolidated Tangible Net Worth (Line I.A1 minus Line I.A.2 plus   Line I.A.3, plus or minus, as applicable, Line I.A.4, plus or minus, as   applicable, Line I.A.5): $ B. $25,795,000 C. 75% of net equity proceeds   received by the Parent after September 30, 2017 from issuance and sale of   Equity Interests of the Parent: $ D. Minimum required Consolidated Tangible   Net Worth (Lines I.B plus I.C): $ E. [Excess][Deficiency] for covenant   compliance (Line I.A.6 minus I.D): $ II. Section 7.11 (b) – Advisory Leverage   Ratio. A. Consolidated Funded Indebtedness that is recourse to Parent or any   other Loan Party at Statement Date: $ B. Unrestricted Cash held by Parent or   any other Loan Party: $ Schedule 1 to Compliance Certificate 4838-5535-0609   v.6 

    

 

C. Advisory   EBITDA for the four (4) fiscal quarters ending on the Statement Date (the   “Calculation Period”): $ D. Advisory Leverage Ratio ((Line II.A minus Line   II.B) divided by Line II.C): to 1 Maximum permitted Advisory Leverage Ratio   at any time during any period of four fiscal quarters of the Borrower: 2.75   to 1.0 III. Section 7.11(c) - Interest Coverage Ratio. A. Advisory EBITDA for   Calculation Period: $ B. Consolidated Interest Charges attributable to   Consolidated Funded Indebtedness that is recourse to Parent or any other Loan   Party for Calculation Period: $ C. Interest Coverage Ratio (Line III.A   divided by Line III.B): to 1 Minimum required Consolidated Fixed Charge   Coverage Ratio as of the end of any fiscal quarter of the Borrower: 5.00 to   1.0 IV. Section 7.11 (d) – Consolidated Leverage Ratio. A. Consolidated   Funded Indebtedness at Statement Date: $ B. Consolidated EBITDA for the   Calculation Period: $ C. Consolidated Leverage Ratio (Line IV.A divided by   Line IV.B): to 1 Maximum permitted Consolidated Leverage Ratio at any time   during any period of four fiscal quarters of the Borrower: 4.5 to 1.0   Schedule 1 to Compliance Certificate 4838-5535-0609 v.6 

    

 

EXHIBIT D-1   ASSIGNMENT AND ASSUMPTION This Assignment and Assumption (this “Assignment   and Assumption”) is dated as of the Effective Date set forth below and is   entered into by and between [the][each]1 Assignor identified in item 1 below   ([the][each, an] “Assignor”) and [the][each]2 Assignee identified in item 2   below ([the][each, an] “Assignee”). [It is understood and agreed that the   rights and obligations of [the Assignors][the Assignees]3 hereunder are   several and not joint.]4 Capitalized terms used but not defined herein shall   have the meanings given to them in the Credit Agreement identified below (as   amended, the “Credit Agreement”), receipt of a copy of which is hereby   acknowledged by the Assignee. The Standard Terms and Conditions set forth in   Annex 1 attached hereto are hereby agreed to and incorporated herein by   reference and made a part of this Assignment and Assumption as if set forth   herein in full. For an agreed consideration, [the][each] Assignor hereby   irrevocably sells and assigns to [the Assignee][the respective Assignees],   and [the][each] Assignee hereby irrevocably purchases and assumes from [the   Assignor][the respective Assignors], subject to and in accordance with the   Standard Terms and Conditions and the Credit Agreement, as of the Effective   Date inserted by the Administrative Agent as contemplated below (i) all of   [the Assignor’s][the respective Assignors’] rights and obligations in [its   capacity as a Lender][their respective capacities as Lenders] under the   Credit Agreement and any other documents or instruments delivered pursuant   thereto to the extent related to the amount and percentage interest   identified below of all of such outstanding rights and obligations of [the   Assignor][the respective Assignors] under the respective facilities   identified below (including, without limitation, the Letters of Credit   included in such facilities5) and (ii) to the extent permitted to be assigned   under applicable law, all claims, suits, causes of action and any other right   of [the Assignor (in its capacity as a Lender)][the respective Assignors (in   their respective capacities as Lenders)] against any Person, whether known or   unknown, arising under or in connection with the Credit Agreement, any other   documents or instruments delivered pursuant thereto or the loan transactions   governed thereby or in any way based on or related to any of the foregoing,   including, but not limited to, contract claims, tort claims, malpractice   claims, statutory claims and all other claims at law or in equity related to   the rights and obligations sold and assigned pursuant to clause (i) above   (the rights and obligations sold and assigned by [the][any] Assignor to   [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to   herein collectively as [the][an] “Assigned Interest”). Each such sale and   assignment is without recourse to [the][any] Assignor and, except as   expressly provided in this Assignment and Assumption, without representation   or warranty by [the][any] Assignor. 1. Assignor[s]: [Assignor [is] [is not] a   Defaulting Lender] 1 For bracketed language here and elsewhere in this form   relating to the Assignor(s), if the assignment is from a single Assignor,   choose the first bracketed language. If the assignment is from multiple   Assignors, choose the second bracketed language. For bracketed language here   and elsewhere in this form relating to the Assignee(s), if the assignment is   to a single Assignee, choose the first bracketed language. If the assignment   is to multiple Assignees, choose the second bracketed language. Select as   appropriate. Include bracketed language if there are either multiple   Assignors or multiple Assignees. Include all applicable subfacilities. 2 3 4   5 4838-5535-0609 v.6 Exhibit D-1 – Page 1 

    

 

2. Assignee[s]:   [for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]]   3. Borrower: Ashford Hospitality Holdings LLC, a Delaware limited liability   company 4. Administrative Agent: Bank of America, N.A., as the administrative   agent under the Credit Agreement 5. Credit Agreement: Credit Agreement, dated   as of March 1, 2018, among the Borrower, Ashford, Inc., a Maryland   corporation (the “Parent”), the Lenders from time to time party thereto, and   Bank of America, N.A., as Administrative Agent and L/C Issuer 6. Assigned   Interest[s]: s9 ]10 [7. Trade Date: Effective Date: , 20__ [TO BE INSERTED BY   ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF   TRANSFER IN THE REGISTER THEREFOR.] 6 7 8 List each Assignor, as appropriate.   List each Assignee, as appropriate. Amounts in this column and in the column   immediately to the right to be adjusted by the counterparties to take into   account any payments or prepayments made between the Trade Date and the   Effective Date. Set forth, to at least 9 decimals, as a percentage of the   Commitment/Loans of all Lenders thereunder. To be completed if the Assignor   and the Assignee intend that the minimum assignment amount is to be   determined as of the Trade Date. 9 10 4838-5535-0609 v.6 Exhibit D-1 – Page 2   Assignor[s]6 Assignee[s]7 Aggregate Amount of Commitment/Loans for all   Lenders8 Amount of Commitment/Loans Assigned Percentage Assigned of   Commitment/Loan CUSIP Number $ $ % $ $ % $ $ % 

    

 

The terms set   forth in this Assignment and Assumption are hereby agreed to: ASSIGNOR[S]   [NAME OF ASSIGNOR] By: Title: ASSIGNEE[S] [NAME OF ASSIGNEE] By: Title:   Signature Page to Form of Assignment and Assumption 4838-5535-0609 v.6 

    

 

[Consented to   and]11 Accepted: BANK OF AMERICA, N.A., as Administrative Agent By: Title:   [Consented to:]12 ASHFORD HOSPITALITY HOLDINGS LLC By: Name: Title: 11 To be   added only if the consent of the Administrative Agent is required by the   terms of the Credit Agreement. To be added only if the consent of the   Borrower and/or other parties (e.g., L/C Issuer) is required by the terms of   the Credit Agreement. 12 Signature Page to Form of Assignment and Assumption   4838-5535-0609 v.6 

    

 

ANNEX 1 TO   ASSIGNMENT AND ASSUMPTION STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND   ASSUMPTION 1. Representations and Warranties. 1.1. Assignor. (a) [The][Each]   Assignor (a) represents and warrants that (i) it is the legal and beneficial   owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned   Interest is free and clear of any lien, encumbrance or other adverse claim,   (iii) it has full power and authority, and has taken all action necessary, to   execute and deliver this Assignment and Assumption and to consummate the   transactions contemplated hereby and (iv) it is [not] a Defaulting Lender;   and (b) assumes no responsibility with respect to (i) any statements,   warranties or representations made in or in connection with the Credit   Agreement or any other Loan Document, (ii) the execution, legality, validity,   enforceability, genuineness, sufficiency or value of the Loan Documents or   any collateral thereunder, (iii) the financial condition of the Borrower, any   of its Subsidiaries or Affiliates or any other Person obligated in respect of   any Loan Document or (iv) the performance or observance by the Borrower, any   of its Subsidiaries or Affiliates or any other Person of any of their   respective obligations under any Loan Document. (b) Each of Assignor and Administrative   Agent hereby informs Assignee that each such Person is not undertaking to   provide impartial investment advice, or to give advice in a fiduciary   capacity, in connection with the transactions contemplated hereby or by the   Credit Agreement, and that such Person has a financial interest in the   transactions contemplated hereby or by the Credit Agreement in that such   Person or an Affiliate thereof (i) may receive interest or other payments   with respect to the Loans, the Letter of Credit, the Commitments and the   Credit Agreement, (ii) may recognize a gain if it extended the Loans, the   Letter of Credit, or the Commitments for an amount less than the amount being   paid for an interest in the Loans, the Letter of Credit, or the Commitments   by Assignee or (iii) may receive fees or other payments in connection with   the transactions contemplated hereby, the Loan Documents or otherwise,   including structuring fees, commitment fees, arrangement fees, facility fees,   upfront fees, underwriting fees, ticking fees, agency fees, administrative   agent or collateral agent fees, utilization fees, minimum usage fees, letter   of credit fees, fronting fees, deal-away or alternate transaction fees,   amendment fees, processing fees, term out premiums, banker’s acceptance fees,   breakage or other early termination fees or fees similar to the foregoing.   1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it   has full power and authority, and has taken all action necessary, to execute   and deliver this Assignment and Assumption and to consummate the transactions   contemplated hereby and to become a Lender under the Credit Agreement, (ii)   it meets all the requirements to be an assignee under Sections 11.06(b)(iii)   and (v) of the Credit Agreement (subject to such consents, if any, as may be   required under Section 11.06(b)(iii) of the Credit Agreement), (iii) from and   after the Effective Date, it shall be bound by the provisions of the Credit   Agreement as a Lender thereunder and, to the extent of [the][the relevant]   Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it   is sophisticated with respect to decisions to acquire assets of the type   represented by [the][such] Assigned Interest and either it, or the Person   exercising discretion in making its decision to acquire [the][such] Assigned   Interest, is experienced in acquiring assets of such type, (v) it has   received a copy of the Credit Agreement, and has received or has been   accorded the opportunity to receive copies of the most recent financial statements   delivered pursuant to Section 6.01 thereof, as applicable, and such other   documents and information as it deems appropriate to make its own credit   analysis and decision to enter into this Assignment and Assumption and to   purchase [the][such] Assigned Interest, (vi) it has, independently and   without reliance upon the Administrative Agent or any other Lender and based   on such documents and information as it has deemed appropriate, Annex 1 to   Assignment and Assumption 4838-5535-0609 v.6 

    

 

made its own   credit analysis and decision to enter into this Assignment and Assumption and   to purchase [the][such] Assigned Interest, and (vii) if it is a Foreign   Lender, attached hereto is any documentation required to be delivered by it   pursuant to the terms of the Credit Agreement, duly completed and executed by   [the][such] Assignee; (b) agrees that (i) it will, independently and without   reliance upon the Administrative Agent, [the][any] Assignor or any other   Lender, and based on such documents and information as it shall deem   appropriate at the time, continue to make its own credit decisions in taking   or not taking action under the Loan Documents, and (ii) it will perform in   accordance with their terms all of the obligations which by the terms of the   Loan Documents are required to be performed by it as a Lender; (c) (x)   represents and warrants, as of the Effective Date, to, and (y) covenants,   from the Effective Date to the date such Person ceases being a Lender party   to the Credit Agreement, for the benefit of, Assignor, the Administrative   Agent and their respective Affiliates, and not, for the avoidance of doubt,   to or for the benefit of Borrower or any Guarantor, that at least one of the   following is and will be true: (i) Assignee is not using “plan assets”   (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of   ERISA) of one or more Benefit Plans in connection with the Loans, the Letters   of Credit, or the Commitments; (ii) the transaction exemption set forth in one   or more PTEs, such as PTE 84-14 (a class exemption for certain transactions   determined by independent qualified professional asset managers), PTE 95-60   (a class exemption for certain transactions involving insurance company   general accounts), PTE 90-1 (a class exemption for certain transactions   involving insurance company pooled separate accounts), PTE 91-38 (a class   exemption for certain transactions involving bank collective investment   funds) or PTE 96-23 (a class exemption for certain transactions determined by   in-house asset managers), is applicable with respect to Assignee’s entrance   into, participation in, administration of and performance of the Loans, the   Letters of Credit, the Commitments and the Credit Agreement and acquisition   and holding of the Assigned Interest; (iii) (A) Assignee is an investment   fund managed by a “Qualified Professional Asset Manager” (within the meaning   of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made   the investment decision on behalf of [the][such] Assignee to enter into,   participate in, administer and perform the Loans, the Letters of Credit, the   Commitments and the Credit Agreement and acquire and hold the Assigned   Interest, (C) the entrance into, participation in, administration of and   performance of the Loans, the Letters of Credit, the Commitments and the   Credit Agreement and the acquisition and holding of the Assigned Interest   satisfies the requirements of sub-sections (b) through (g) of Part I of PTE   84-14 and (D) to the best knowledge of Assignee, the requirements of   subsection (a) of Part I of PTE 84-14 are satisfied with respect to   Assignee’s entrance into, participation in, administration of and performance   of the Loans, the Letters of Credit, the Commitments and the Credit Agreement   and acquisition and holding of the Assigned Interest, or (iv) such other   representation, warranty and covenant as may be agreed in writing between the   Assignor, in its sole discretion, the Administrative Agent, in its sole   discretion, and Assignee; and (d) unless sub-clause (i) in the immediately   preceding clause (c) is true with respect to Assignee or Assignee has not   provided another representation, warranty and covenant as provided in   sub-clause (v) in the immediately preceding clause (a), Assignee further (x)   represents and warrants, as of the Effective Date, to, and (y) covenants,   from the Effective Date to the date such Person ceases being a Lender party   to the Credit Agreement, for the benefit of, Assignor, the Administrative   Agent and their respective Affiliates, and not, for the avoidance of doubt,   to or for the benefit of Borrower or any Guarantor, that: (i) none of   Assignor, the Administrative Agent or any of their respective Affiliates is a   fiduciary with respect to the assets of [Assignee (including in connection   with the reservation or exercise of any rights by the Administrative Agent   under the Credit Agreement, any Loan Document or any documents related to   thereto); (ii) the Person making the investment decision on behalf of   Assignee with respect to the entrance into, participation in, administration   of and performance of the Loans, the Letters of Credit, the Commitments and   the Credit Agreement and the acquisition and holding of the Assigned Interest   is independent (within the meaning of 29 CFR § 2510.3-21) and is a bank, an   insurance carrier, an investment adviser, a broker-dealer or other person   that holds, or has under management or control, total assets of at least $50   million, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E); (iii)   the Person making the investment decision on behalf of Assignee with respect   to the entrance into, participation in, administration of and Annex 1 to   Assignment and Assumption 4838-5535-0609 v.6 

    

 

performance of   the Loans, the Letters of Credit, the Commitments and the Credit Agreement   and the acquisition and holding of the Assigned Interest is capable of   evaluating investment risks independently, both in general and with regard to   particular transactions and investment strategies (including in respect of   the Obligations); (iv) the Person making the investment decision on behalf of   Assignee with respect to the entrance into, participation in, administration   of and performance of the Loans, the Letters of Credit, the Commitments and   the Credit Agreement and the acquisition and holding of the Assigned Interest   is a fiduciary under ERISA or the Code, or both, with respect to the Assigned   Interest, the Loans, the Letters of Credit, the Commitments and the Credit   Agreement and is responsible for exercising independent judgment in   evaluating the transactions hereunder and thereunder; and (v) no fee or other   compensation is being paid directly to Assignor, the Administrative Agent or   any their respective Affiliates for investment advice (as opposed to other   services) in connection with the Assigned Interest, the Loans, the Letters of   Credit, the Commitments or the Credit Agreement. 2. Payments. From and after   the Effective Date, the Administrative Agent shall make all payments in   respect of [the][each] Assigned Interest (including payments of principal,   interest, fees and other amounts) to [the][the relevant] Assignor for amounts   which have accrued to but excluding the Effective Date and to [the][the   relevant] Assignee for amounts which have accrued from and after the   Effective Date. Notwithstanding the foregoing, the Administrative Agent shall   make all payments of interest, fees or other amounts paid or payable in kind   from and after the Effective Date to [the] [the relevant] Assignee. 3.   General Provisions. This Assignment and Assumption shall be binding upon, and   inure to the benefit of, the parties hereto and their respective successors   and assigns. This Assignment and Assumption may be executed in any number of   counterparts, which together shall constitute one instrument. Delivery of an   executed counterpart of a signature page of this Assignment and Assumption by   telecopy shall be effective as delivery of a manually executed counterpart of   this Assignment and Assumption. This Assignment and Assumption shall be   governed by, and construed in accordance with, the law of the State of New   York. Annex 1 to Assignment and Assumption 4838-5535-0609 v.6 

    

 

EXHIBIT D-2   FORM OF ADMINISTRATIVE QUESTIONNAIRE (see attached) 4838-5535-0609 v.6   Exhibit D-2 – Page 1 

    

 

 BorrowerDetailForm US only INSTRUCTIONS:   Please complete a Borrower Detail Form for each respective Borrower unless   contact information, loan disbursement and payment instructions are the same   for each Borrower. Any questions or completed form(s) may be sent to the   following Agency Management Officer: Name: Title: Office Telephone #:   Facsimile #: Email Address: Thank you, Bank of America, NA, as Administrative   Agent 

    

 

 

BORROWER DETAIL   FORM C O N F ID ENT I AL 1. Contact Information and Loan Disbursement &   Payment Instructions same for all Borrowers? YES NO Not Applicable If NO,   please complete a separate Borrower Detail Form for each respective Borrower.   2. Legal name of Borrower(s) in loan documentation Borrower Name(s): 3.   Borrower Contact Information for Administration of Credit Facility Name:   Title: Street Address: Suite/Mail Code: City: Country: Office Telephone #:   Facsimile #: Work E-Mail Address: State: Postal Code: 4. Loan Disbursement   Instructions Please check and complete one of the following options: Deposit   to Bank of America Account Bank of America Account Number: Account Holder   Name: State Account Opened: Wire the Funds – Fed Wire Instructions Bank Name:   Bank Address: (City) (State) ABA #: Account #: Account Name: Attention: REV   August 2016 CONFIDENTIAL INFORMATION 

    

 

BORROWER DETAIL   FORM C O N F ID ENT I AL 5. Loan Payment Instructions (principal, interest   & fees) Please check and complete one of the following options: Debit   Account Use Bank of America Account in Loan Disbursement Instructions in   Section 4 If NO, complete section with other payment instructions below: YES   NO Bank of America Account Number: Account Holder Name: State Account Opened:   Will pay by wire - BANK OF AMERICA, N.A. Wire Payment Instructions: Bank of America,   N.A. New York, NY ABA #: 026009593 Acct. #: 1366072250600 Credit Services   Attn: Ref: 6. Execution of Borrower Details Form Please have signature block   below signed by Authorized Signer as listed on Incumbency Certificate and/or   Secretary Certificate. By: Name: Title: Date: REV August 2016 CONFIDENTIAL   INFORMATION 

    

 

EXHIBIT E FORM   OF GUARANTY AGREEMENT (see attached) 4838-5535-0609 v.6 Exhibit E – Page 1 

    

 

GUARANTY   AGREEMENT THIS GUARANTY AGREEMENT (this “Guaranty”) is executed as of March   1, 2018, by EACH OF THE ENTITIES LISTED ON SCHEDULE 1 ATTACHED HERETO or who   becomes a party hereto pursuant to Section 22 below (each a “Guarantor” and   collectively, the “Guarantors”), in favor of Bank of America, N.A. as administrative   agent (in such capacity, together with its successors and assigns,   “Administrative Agent”), for the benefit of the Credit Parties (hereinafter   defined). RECITALS: A. Ashford Hospitality Holdings LLC, a Delaware limited   liability company (“Borrower”) may, from time to time, be indebted to the   Credit Parties (hereinafter defined) pursuant to that certain Credit   Agreement dated as of March 1, 2018 (as amended, modified, supplemented, or   restated from time to time, the “Credit Agreement), among Borrower, Ashford,   Inc., a Maryland corporation (“Parent”), the Lenders now or hereafter party   to the Credit Agreement (the “Lenders”), Administrative Agent, and L/C Issuer   (Administrative Agent, L/C Issuer, the Lenders, and each Hedge Bank, together   with their respective successors and assigns are each a “Credit Party,” and   collectively the “Credit Parties”). Capitalized terms used herein shall,   unless otherwise indicated, have the respective meanings set forth in the   Credit Agreement. B. Each Guarantor is a direct or indirect Subsidiary of   Parent and will, directly or indirectly, benefit from (i) the Credit Parties’   extensions of credit to Borrower and the other applicable Loan Parties   pursuant to the Loan Documents and (ii) the Hedge Banks’ extensions of credit   to the applicable Loan Parties pursuant to any Secured Hedge Agreement. C.   This Guaranty is integral to the transactions contemplated by the Loan   Documents, and the execution and delivery hereof is a condition precedent to   the Credit Parties’ obligations to extend credit under the Loan Documents.   NOW, THEREFORE, as an inducement to (i) the Credit Parties to enter into the   Credit Agreement and to make Loans and issue Letters of Credit thereunder and   (ii) the Hedge Bank party to any Secured Hedge Agreement to enter into such   Secured Hedge Agreement, and for other good and valuable consideration, the   receipt and legal sufficiency of which are hereby acknowledged, the   Guarantors hereby jointly and severally guarantee payment of the Guaranteed   Obligations (hereinafter defined) and hereby agree as follows: Section 1.   NATURE OF GUARANTY. Each Guarantor hereby absolutely and unconditionally   guarantees, jointly and severally, as a guarantee of payment and not merely   as a guarantee of collection, prompt payment when due, whether at stated   maturity, upon acceleration or otherwise, and at all times thereafter, of any   and all existing and future Obligations including, without limitation, all   indebtedness and liabilities of every kind, nature and character, direct or indirect,   absolute or contingent, liquidated or unliquidated, voluntary or involuntary,   of Borrower to the Credit Parties arising under the Credit Agreement, the   other Loan Documents, and the Secured Hedge Agreements (including all   renewals, extensions, modifications, amendments, and restatements thereof and   all costs, attorneys’ fees and expenses incurred by any Credit Party in   connection with the collection or enforcement thereof) (collectively, the   “Guaranteed Obligations”) and hereby consents to any extension of the   Maturity Date pursuant to Section 2.13 of the Credit Agreement or otherwise.   Administrative Agent’s books and records showing the amount of the Guaranteed   Obligations under the Loan Documents shall, absent manifest error, be   admissible in evidence in any action or proceeding, and shall be binding upon   each Guarantor and conclusive for the purpose of establishing the amount of   such Guaranteed Obligations. The amount of any Guaranteed Obligations under   any Secured Hedge Agreement shall be determined in 4830-1970-1073.4 Page 1 

    

 

accordance with   the terms of such Secured Hedge Agreement. This Guaranty shall not be   affected by the genuineness, validity, regularity, or enforceability of the   Guaranteed Obligations or any instrument or agreement evidencing any   Guaranteed Obligations, or by the existence, validity, enforceability,   perfection, or extent of any collateral therefor, or by any fact or   circumstance relating to the Guaranteed Obligations which might otherwise   constitute a defense to the obligations of any Guarantor under this Guaranty.   The obligations of each Guarantor hereunder shall be limited to an aggregate   amount equal to the largest amount that would not render its obligations   hereunder subject to avoidance under Section 548 of the Bankruptcy Code   (Title 11, United States Code) or any comparable provisions of any applicable   state law. Section 2. REPRESENTATIONS; PAYMENTS. Each Guarantor represents   and warrants that it is a limited liability company, limited partnership, or   corporation duly formed, validly existing and in good standing under the laws   of the State of Delaware and that it is located in the State of Delaware   within the meaning of such term under Section 9-307 of the UCC. All payments   by any Guarantor hereunder shall be made to the Administrative Agent, for the   account of the Credit Party to whom such payment is owed, at the   Administrative Agent’s Office in Dollars and in immediately available funds   and in accordance with (a) Section 2.11(a) of the Credit Agreement, in all   circumstances, (b) and Section 3.01 of the Credit Agreement, in the case of   payments under the Loan Documents, and (c) Section 2(d) of any applicable   Secured Hedge Agreement on the form of the 1992 ISDA Master Agreement or the   2002 ISDA Master Agreement (or the corresponding provision of any successor   master agreement), in the case of payments under any Secured Hedge Agreement.   Section 3. RIGHTS OF CREDIT PARTIES. Each Guarantor consents and agrees that   the Credit Parties may, at any time and from time to time, without notice or   demand, and without affecting the enforceability or continuing effectiveness   hereof: (a) amend, extend, renew, compromise, discharge, accelerate or   otherwise change the time for payment or the terms of the Guaranteed   Obligations or any part thereof; (b) take, hold, exchange, enforce, waive,   release, fail to perfect, sell, or otherwise dispose of any security for the   payment of this Guaranty or any Guaranteed Obligations; (c) as between the   Guarantors and the Credit Parties, apply such security and direct the order   or manner of sale thereof as any Credit Party in its sole discretion may   determine; and (d) release or substitute one or more of any endorsers or   other guarantors of any of the Guaranteed Obligations. Without limiting the   generality of the foregoing, each Guarantor consents to the taking of, or   failure to take, any action which might in any manner or to any extent vary   the risks of such Guarantor under this Guaranty or which, but for this   provision, might operate as a discharge of such Guarantor. Section 4. CERTAIN   WAIVERS. Each Guarantor waives (a) any defense arising by reason of any   disability or other defense of the Borrower, Parent, or any other guarantor,   or the cessation from any cause whatsoever (including any act or omission of   any Credit Party) of the liability of the Borrower (other than the defense   that the Guaranteed Obligations have been performed and indefeasibly paid in   cash, to the extent of any such payment); (b) any defense based on any claim   that any Guarantor’s obligations exceed or are more burdensome than those of   the Borrower; (c) the benefit of any statute of limitations affecting any   Guarantor’s liability hereunder; (d) any right to require the Credit Parties   to proceed against the Borrower, proceed against or exhaust any security for   the Indebtedness, or pursue any other remedy in the Credit Parties’ power   whatsoever; (e) any benefit of and any right to participate in any security   now or hereafter held by the Credit Parties; and (f) to the fullest extent   permitted by law, any and all other defenses or benefits that may be derived   from or afforded by applicable law limiting the liability of or exonerating   guarantors or sureties. Each Guarantor expressly waives all setoffs and   counterclaims and all presentments, demands for payment or performance,   notices of nonpayment or nonperformance, protests, notices of protest,   notices of dishonor or default, notice of intent to accelerate, notice of   acceleration, and all other notices or demands of any kind or nature   whatsoever with respect to 4830-1970-1073.4 Page 2 

    

 

the Guaranteed   Obligations, and all notices of acceptance of this Guaranty or of the   existence, creation or incurrence of new or additional Guaranteed   Obligations. Section 5. OBLIGATIONS INDEPENDENT. The obligations of each   Guarantor hereunder are those of primary obligor, and not merely as surety,   and are independent of the Guaranteed Obligations and the obligations of any   other guarantor, and a separate action may be brought against each Guarantor   to enforce this Guaranty whether or not the Borrower or any other person or   entity is joined as a party. Section 6. TERMINATION; REINSTATEMENT. This   Guaranty is a continuing and irrevocable guaranty of all Guaranteed   Obligations now or hereafter existing and shall remain in full force and   effect until all Guaranteed Obligations and any other amounts payable under   this Guaranty are indefeasibly paid in full in cash (other than contingent   liabilities that survive termination of the Loan Documents and the Secured   Hedge Agreements) and any commitments of the Credit Parties or facilities   provided by the Credit Parties with respect to the Guaranteed Obligations are   terminated. Notwithstanding the foregoing, this Guaranty shall continue in   full force and effect or be revived, as the case may be, if any payment by or   on behalf of the Borrower or any Guarantor is made, or the Credit Parties   exercise their right of setoff, in respect of the Guaranteed Obligations 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 Credit Parties in   their discretion) to be repaid to a trustee, receiver or any other party, in   connection with any proceeding under any Debtor Relief Laws or otherwise, all   as if such payment had not been made or such setoff had not occurred and   whether or not the Credit Parties are in possession of or have released this   Guaranty and regardless of any prior revocation, rescission, termination or   reduction. The obligations of each Guarantor under this paragraph shall   survive termination of this Guaranty. Section 7. NO SUBROGRATION. No   Guarantor shall exercise any right of subrogation, contribution, or similar   rights with respect to any payments it makes under this Guaranty until all of   the Guaranteed Obligations and any amounts payable under this Guaranty are   paid and performed in full (other than contingent liabilities that survive   termination of the Loan Documents and the Secured Hedge Agreements) and any   commitments of the Credit Parties or facilities provided by the Credit   Parties with respect to the Guaranteed Obligations are terminated. If any   amounts are paid to any Guarantor in violation of the foregoing limitation,   then such amounts shall be held in trust for the benefit of the Credit   Parties and shall forthwith be paid to Administrative Agent, for the benefit   of the Credit Parties, to reduce the amount of the Guaranteed Obligations,   whether matured or unmatured. Section 8. WAIVER OF SURETYSHIP DEFENSES.Each   Guarantor agrees that the Credit Parties may, at any time and from time to   time, and without notice to Guarantors under this Guaranty, make any   agreement with Borrower or with any other person or entity liable on any of   the Guaranteed Obligations or providing collateral as security for the   Guaranteed Obligations, for the extension, renewal, payment, compromise,   discharge, or release of the Guaranteed Obligations or any collateral (in   whole or in part), or for any modification or amendment of the terms thereof   or of any instrument or agreement evidencing the Guaranteed Obligations or   the provision of collateral, all without in any way impairing, releasing,   discharging, or otherwise affecting the obligations of any Guarantor under   this Guaranty. Each Guarantor waives any defense arising by reason of any   disability or other defense of Borrower or any other guarantor, other than   payment in full of all Guaranteed Obligations, or the cessation from any   cause whatsoever of the liability of Borrower, or any claim that any   Guarantor’s obligations exceed or are more burdensome than those of Borrower   and waives the benefit of any statute of limitations affecting the liability   of any Guarantor hereunder. Each Guarantor waives any right to enforce any   remedy which such Guarantor now has or may hereafter have against Borrower   and waives any benefit of and any right to participate in any security now or   hereafter held by Administrative Agent for the benefit of the Credit Parties.   Further, to the fullest extent permitted by law, each Guarantor consents to   the taking of, or failure 4830-1970-1073.4 Page 3 

    

 

to take, any   action which might in any manner or to any extent vary the risks of such   Guarantor under this Guaranty or which, but for this provision, might operate   as a discharge of such Guarantor. Section 9. EXHAUSTION OF OTHER REMEDIES NOT   REQUIRED. Each Guarantor waives diligence by any of the Credit Parties and   action on delinquency in respect of the Guaranteed Obligations or any part   thereof, including, without limitation any provisions of law requiring any   Credit Party to exhaust any right or remedy or to take any action against   Borrower, any other guarantor, or any other person, entity, or property   before enforcing this Guaranty against any Guarantor. Section 10.   SUBORDINATION. Each Guarantor hereby expressly subordinates the payment of   all obligations and indebtedness of Borrower owing to such Guarantor, whether   now existing or hereafter arising and whether those obligations are (a)   direct, indirect, fixed, contingent, liquidated, unliquidated, joint,   several, or joint and several, (b) due or to become due to such Guarantor,   (c) held by or are to be held by such Guarantor, (d) created directly or   acquired by assignment or otherwise, or (e) evidenced in writing (the   “Subordinated Debt”) to the payment in full of all Guaranteed Obligations   (other than contingent obligation that survive termination of the Loan   Documents and the Secured Hedge Agreements). If any Guarantor receives any   payment of any Subordinated Debt in violation of the foregoing after an Event   of Default has occurred and is continuing, then such Guarantor shall hold   that payment in trust for the Credit Parties and promptly turn it over to   Administrative Agent, for the benefit of the Credit Parties, in the form   received (with any necessary endorsements), to be applied in accordance with   the Credit Agreement, but without reducing or affecting in any manner the   liability of any Guarantor under this Guaranty. Section 11. STAY OF   ACCELERATION. In the event that acceleration of the time for payment of any   of the Guaranteed Obligations is stayed, upon the insolvency, bankruptcy, or   reorganization of Borrower or any other person or entity, or otherwise, all   such amounts shall nonetheless be payable by Guarantors immediately upon   demand by Administrative Agent. Section 12. EXPENSES.Each Guarantor shall pay   to Administrative Agent upon demand the amount of any and all out-of-pocket   costs and expenses, including the reasonable fees and expenses of its counsel   and of any experts and agents, that Administrative Agent may incur in   connection with the preservation, protection, or enforcement of any rights of   any Credit Party under this Guaranty including in any case commenced by or   against any Guarantor under the Bankruptcy Code (Title 11, United States   Code) or any similar or successor statute. The obligations of Guarantors   under the preceding sentence shall survive termination of this Guaranty.   Section 13. AMENDMENTS. No amendment, modification, termination, or waiver of   any provision of this Guaranty, and no consent to any departure by any   Guarantor from the terms and conditions hereof, shall in any event be   effective unless the same shall be in writing and signed by the party or   parties against whom enforcement of such amendment, modification,   termination, or waiver is sought. Any such waiver or consent shall be   effective only in the specific instance and for the specific purpose for   which it was given. Section 14. NOTICES. Any notice or other communication   herein required or permitted to be given shall be sent in writing to the   addresses set forth on the signature pages hereof or such other address, if   any, as to which the relevant Guarantor may have given notice to the   Administrative Agent in accordance with this Section 14 and shall be given   and deemed effective in accordance with the provisions of Section 11.02 of   the Credit Agreement. Section 15. NO WAIVER; ENFORCEABILITY. No failure by   any Credit Party to exercise, and no delay in exercising, any right, remedy   or power hereunder shall operate as a waiver thereof, nor shall   4830-1970-1073.4 Page 4 

    

 

any single or   partial exercise of any right, remedy or power hereunder preclude any other   or further exercise thereof or the exercise of any other right. The remedies   herein provided are cumulative and not exclusive of any remedies provided by   law or in equity. The unenforceability or invalidity of any provision of this   Guaranty shall not affect the enforceability or validity of any other   provision herein. Section 16. ASSIGNMENT. This Guaranty shall: (a) bind each   Guarantor and its successors and assigns, provided that no Guarantor may   assign its rights or obligations under this Guaranty without the prior   written consent of Administrative Agent (and any attempted assignment without   such consent shall be void); and (b) inure to the benefit of each of the   Credit Parties and their respective successors and assigns and the Credit   Parties may, without notice to any Guarantor and without affecting any   Guarantor’s obligations hereunder, assign or sell participations in the   Guaranteed Obligations and this Guaranty, in whole or in part in accordance   with the Credit Agreement or the relevant Secured Hedge Agreement, as   applicable. Each Guarantor agrees that the Credit Parties may disclose to any   prospective purchaser and any purchaser of all or part of the Guaranteed   Obligations any and all information in the Credit Parties’ possession   concerning any Guarantor, this Guaranty, and any security for this Guaranty   in accordance with Section 11.07 of the Credit Agreement. Section 17.   CONDITION OF BORROWER. Each Guarantor acknowledges and agrees that it has the   sole responsibility for, and has adequate means of, obtaining from Borrower   such information concerning the financial condition, business, and operations   of Borrower as Guarantors require, and that no Credit Party shall have any   duty, and Guarantors are not relying on any Credit Party at any time, to   disclose to Guarantors any information relating to the business, operations,   or financial condition of Borrower. Section 18. RIGHTS OF SETOFF.If and to   the extent any payment is not made when due hereunder, then Administrative   Agent and each other Credit Party (with the prior consent of Administrative   Agent) may setoff and charge from time to time any amount so due against any   or all of Guarantors’ accounts or deposits with Administrative Agent or such   other Credit Party. Section 19. OTHER GUARANTIES. Unless otherwise agreed by   Administrative Agent and Guarantors in writing, this Guaranty is not intended   to supersede or otherwise affect any other guaranty now or hereafter given by   Guarantors for the benefit of the Credit Parties or any term or provision   thereof. Section 20. BENEFIT OF GUARANTORS. Each Guarantor represents and   warrants that, by virtue of its relationship with Borrower, the execution,   delivery and performance of this Guaranty is for the direct benefit of   Guarantor and it has received adequate consideration for this Guaranty.   Section 21. LOAN DOCUMENTS. By execution hereof, each Guarantor covenants and   agrees that certain representations, warranties, terms, covenants, and   conditions set forth in the Loan Documents, including Section 9.11 of the   Credit Agreement, are applicable to such Guarantor and shall be imposed upon   such Guarantor, and each Guarantor reaffirms that each such representation   and warranty relating to such Guarantor is true and correct in all material   respects and covenants and agrees to promptly and properly perform, observe,   and comply with each such term, covenant, or condition relating to such   Guarantor. Moreover, each Guarantor acknowledges and agrees that this   Guaranty is subject to the offset provisions of the Loan Documents in favor of   the Credit Parties. In the event the Credit Agreement or any other Loan   Document shall cease to remain in effect for any reason whatsoever during any   period when any part of the Guaranteed Obligations remains unpaid, the terms,   covenants, and agreements of the Credit Agreement or such other Loan Document   incorporated herein by reference shall nevertheless continue in full force   and effect as obligations of each Guarantor under this Guaranty. For the sake   of clarity, the agreements of a Guarantor in this Section 21 shall, subject   to Section 9.10 of the Credit Agreement, terminate upon the release of such   Guarantor in accordance with Section 23 hereof. 4830-1970-1073.4 Page 5 

    

 

Section 22.   ADDITIONAL GUARANTORS. The initial Guarantors hereunder shall be the   signatories hereto and that are listed on Schedule 1 attached hereto. From   time to time subsequent to the time hereof, in accordance with Section   6.12(a)(i) of the Credit Agreement, additional Persons may become parties   hereto as additional Guarantors (each an “Additional Guarantor”) by executing   a counterpart of this Guaranty in the form of Exhibit A attached hereto. Upon   delivery of any such counterpart to Administrative Agent, as well as delivery   of all other documents set forth in Section 6.12 of the Credit Agreement,   notice of which is hereby waived by Guarantors, each such Additional   Guarantor shall be a Guarantor and shall be a party hereto as if such   Additional Guarantor were an original signatory hereof. Each Guarantor   expressly agrees that its obligations arising hereunder shall not be affected   or diminished by the addition or release of any other Guarantor hereunder, or   by any election by Administrative Agent not to cause any Subsidiary of Parent   to become an Additional Guarantor hereunder. This Guaranty shall be fully   effective as to any Guarantor that is or becomes a party hereto regardless of   whether any such person becomes or fails to become or ceases to be a Guarantor   hereunder. Section 23. RELEASE OF GUARANTORS. Subject to Section 9.10 of the   Credit Agreement, a Guarantor may be released from its obligations under this   Guaranty by Administrative Agent’s execution of a Release of Guaranty in the   form of Exhibit B attached hereto. Each Guarantor expressly agrees that its   obligations arising hereunder shall not be affected or diminished by the   release of any other Guarantor hereunder. Section 24. KEEPWELL. Each   Guarantor that is a Qualified ECP Guarantor at the time the Guaranty or the   grant of the security interest or lien under any Loan Document, in each case,   by any Specified Loan Party, becomes effective with respect to any Swap   Obligation, hereby jointly and severally, absolutely, unconditionally and   irrevocably undertakes to provide such funds or other support to each   Specified Loan Party with respect to such Swap Obligation as may be needed by   such Specified Loan Party from time to time to honor all of its obligations   under this Guaranty and the other Loan Documents in respect of such Swap   Obligation (but, in each case, only up to the maximum amount of such   liability that can be hereby incurred without rendering such Qualified ECP   Guarantor’s obligations and undertakings under this Section 24 voidable under   applicable law relating to fraudulent conveyance or fraudulent transfer, and   not for any greater amount). The obligations and undertakings of each   Qualified ECP Guarantor under this Section shall remain in full force and   effect until the Obligations have been indefeasibly paid and performed in   full. Each Qualified ECP Guarantor intends this Section to constitute, and   this Section shall be deemed to constitute, a guarantee of the obligations   of, and a “keepwell, support, or other agreement” for the benefit of, each   Specified Loan Party for all purposes of the Commodity Exchange Act. For   purposes of this Section 24, (a) “Qualified ECP Guarantor” shall mean, at any   time, each Loan Party that qualifies at such time as an “eligible contract   participant” under the Commodity Exchange Act and can cause another person to   qualify as an “eligible contract participant” at such time under   §1a(18)(A)(v)(II) of the Commodity Exchange Act and (b) “Specified Loan   Party” means any Loan Party that is not an “eligible contract participant”   under the Commodity Exchange Act (determined prior to giving effect to this   Section 24). Section 25. GOVERNING LAW; JURISDICTION; ETC. (a) GOVERNING LAW.   THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW   OF THE STATE OF NEW YORK. (b) SUBMISSION TO JURISDICTION. EACH GUARANTOR   IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE   NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN   NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN   DISTRICT OF 4830-1970-1073.4 Page 6 

    

 

NEW YORK, AND   ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT   OF OR RELATING TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT, OR FOR   RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO   IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH   ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT   OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.   EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR   PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY   SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS   GUARANTY OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT ANY CREDIT   PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS   GUARANTY OR ANY OTHER LOAN DOCUMENT AGAINST ANY GUARANTOR OR ITS PROPERTIES   IN THE COURTS OF ANY JURISDICTION. (c) WAIVER OF VENUE. EACHGUARANTOR   IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY   APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING   OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS   GUARANTY OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN SECTION   25(b). EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST   EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO   THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT. (d) SERVICE   OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN   THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02 OF THE CREDIT AGREEMENT.   NOTHING IN THIS GUARANTY WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE   PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW. (e) WAIVER OF JURY   TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT   PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY   LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS   GUARANTY 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 OR 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 GUARANTY AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS,   THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 25. Section 26.   COUNTERPARTS. This Guaranty 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. Section 27. FINALAGREEMENT. THISGUARANTYANDTHEOTHERLOAN DOCUMENTS   CONSTITUTE THE ENTIRE CONTRACT AMONG THE PARTIES RELATING TO THE SUBJECT   MATTER HEREOF AND SUPERSEDE ANY AND ALL PREVIOUS AGREEMENTS 4830-1970-1073.4   Page 7 

    

 

AND   UNDERSTANDINGS, ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF. THERE   ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. 4830-1970-1073.4 Page 8   

    

 

IN WITNESS   WHEREOF, each of the undersigned has caused this Guaranty Agreement to be   duly executed and delivered as of the date first written above. GUARANTORS:   ASHFORD ADVISORS, INC., a Delaware corporation By: Name: David A. Brooks   Title: Chief Operating Officer, General Counsel, and Secretary ASHFORD   HOSPITALITY ADVISORS LLC, a Delaware limited liability company c£?? By: Name:   David A. Brooks Title: Vice President and Secretary ASHFORD LENDING   CORPORATION, a Delaware corporation By: Name: Deric S. Eubanks   Title:President and Secretary Signature Page to Guaranty Agreement 

    

 

IN WITNESS   WHEREOF, each of the undersigned has caused this Guaranty Agreement to be duly   executed and delivered as of the date first written above. GUARANTORS:   ASHFORD ADVISORS, INC., a Delaware corporation By: Name: David A. Brooks   Title: Chief Operating Officer, General Counsel, and Secretary ASHFORD   HOSPITALITY ADVISORS LLC, a Delaware limited liability company By: Name:   David A. Brooks Title: Vice President and Secretary ASHFORD LENDING   CORPORATION, a Delaware corporation By: Name: Title: Deric S. Eubanks   President and Secretary Signature Page to Guaranty Agreement 

    

 

LISMORE CAPITAL   LLC, a Delaware limited liability company By: Title: Chief Operating Officer   and Secretary AINC KALIBRI HOLDCO LLC, a Delaware limited liability company   By: Name: David A. Brooks Title: Vice President and Secretary Address for   each of the foregoing Guarantors: 14185 Dallas Parkway, Suite 1100 Dallas, TX   75254 Attention: Chief Executive Officer Attention: General Counsel Signature   Page to Guaranty Agreement 

    

 

SCHEDULE 1   INITIAL GUARANTORS Ashford Advisors, Inc., a Delaware corporation Ashford   Hospitality Advisors LLC, a Delaware limited liability company Lismore   Capital LLC, a Delaware limited liability company AINC Kalibri Holdco LLC, a   Delaware limited liability company Ashford Lending Corporation, a Delaware   corporation Schedule 1 

    

 

EXHIBIT A   JOINDER TO GUARANTY AGREEMENT THIS JOINDER TO GUARANTY AGREEMENT dated as of   , 20 (this “Joinder”), executed and delivered by , a (the “Additional   Guarantor”), in favor of BANK OF AMERICA, N.A., in its capacity as   Administrative Agent (the “Administrative Agent”) for the Credit Parties   under that certain Guaranty Agreement dated as of March 1, 2018 (as amended,   supplemented, restated or otherwise modified from time to time, the   “Guaranty”), relating to, among other things, that certain Credit Agreement   dated as of March 1, 2018 (as amended, restated, supplemented or otherwise   modified from time to time, the “Credit Agreement”), by and among ASHFORD   HOSPITALITY HOLDINGS LLC, a Delaware limited liability company (“Borrower”),   ASHFORD, INC., a Maryland corporation (“Parent”), each lender from time to   time party thereto, BANK OF AMERICA, N.A., as Administrative Agent and L/C   Issuer, and the other parties thereto. WHEREAS, pursuant to the Credit   Agreement, the Administrative Agent and the other Credit Parties have agreed   to make available to the Borrower certain financial accommodations on the   terms and conditions set forth in the Credit Agreement; WHEREAS, pursuant to   any Secured Hedge Agreement the Hedge Bank party to such Secured Hedge   Agreement will have agreed to make certain financial accommodations to the   Loan Party a party thereto on the terms and conditions set forth in such   Secured Hedge Agreement; WHEREAS, the Additional Guarantor is a direct or   indirect Subsidiary of Parent and will, directly or indirectly, benefit from   (i) the Credit Parties’ extensions of credit to Borrower and the other   applicable Loan Parties pursuant to the Loan Documents and (ii) the Hedge   Banks’ extensions of credit to the applicable Loan Parties pursuant to any   Secured Hedge Agreement and, accordingly, the Additional Guarantor is willing   to guarantee the Borrower’s obligations to the Administrative Agent and the   other Credit Parties on the terms and conditions contained herein; and WHEREAS,   the Additional Guarantor’s execution and delivery of this Joinder is a   condition to the Administrative Agent and the other Credit Parties continuing   to make such financial accommodations to the Borrower. NOW, THEREFORE, for   good and valuable consideration, the receipt and sufficiency of which are   hereby acknowledged by the Additional Guarantor, the Additional Guarantor   agrees as follows: Section 1.Accession to Guaranty.The Additional Guarantor   hereby (i) agrees that it is a “Guarantor” under the Guaranty and (ii)   assumes all obligations of a “Guarantor” thereunder and agrees to be bound   thereby, all as if the Additional Guarantor had been an original signatory to   the Guaranty. Without limiting the generality of the foregoing, the   Additional Guarantor hereby: (a) irrevocably and unconditionally guarantees   the due and punctual payment and performance when due, whether at stated   maturity, by acceleration or otherwise, of all the Guarantied Obligations (as   defined in the Guaranty); (b) makes to the Administrative Agent and the other   Credit Parties as of the date hereof each of the representations and   warranties contained in the Guaranty and agrees to be bound by each of the   covenants contained in the Guaranty; and Exhibit A 

    

 

(c) consents   and agrees to each provision set forth in the Guaranty. Section 2.   Definitions. Capitalized terms used herein and not otherwise defined herein   shall have their respective defined meanings given them in the Guaranty.   [Signatures on Next Page] Exhibit A 

    

 

In witness   whereof, the undersigned Additional Guarantor has caused this Joinder to be   executed and delivered by its officer thereunto duly authorized as of the   date first written above. [NAME OF ADDITIONAL GUARANTOR] By: Name: Title: [Address   of Additional Guarantor: Attention: Telephone: Facsimile: Electronic Mail: ]   Exhibit A 

    

 

EXHIBIT B FORM   OF RELEASE OF GUARANTOR Reference is made to that certain that certain   Guaranty Agreement dated as of March 1, 2018 (as amended, supplemented,   restated or otherwise modified from time to time, the “Guaranty”) in favor of   BANK OF AMERICA, N.A., in its capacity as Administrative Agent (the   “Administrative Agent”) for the Credit Parties, as defined in the Guaranty,   relating to, among other things, that certain Credit Agreement dated as of   March 1, 2018 (as amended, restated, supplemented or otherwise modified from   time to time), by and among ASHFORD HOSPITALITY HOLDINGS LLC, a Delaware   limited liability company, as “Borrower”, ASHFORD, INC., a Maryland   corporation, as “Parent”, each lender from time to time party thereto, BANK   OF AMERICA, N.A., as Administrative Agent and L/C Issuer, and the other   parties thereto. In witness whereof, the undersigned Administrative Agent, on   behalf of the Credit Parties, hereby releases and discharges from any and all   obligations and liabilities of to the Credit Parties under the Guaranty. BANK   OF AMERICA, N.A., as Administrative Agent By: Name: Title: Exhibit B 

    

 

EXHIBIT F FORM   OF SECURITY AND PLEDGE AGREEMENT (see attached) 4838-5535-0609 v.6 Exhibit F   – Page 1 

    

 

 

SECURITY AND   PLEDGE AGREEMENT THIS SECURITY AND PLEDGE AGREEMENT (this “Agreement”) is   entered into as of March 1, 2018 among Ashford Hospitality Holdings LLC, a   Delaware limited liability company (the “Borrower”), Ashford Inc., a Maryland   corporation (the “Parent”), the other parties identified as “Grantors” on the   signature pages hereto and such other parties that may become Grantors   hereunder after the date hereof (together with the Borrower and Parent, each   individually a “Grantor”, and collectively, the “Grantors”) and BANK OF   AMERICA, N.A., in its capacity as administrative agent (in such capacity, the   “Administrative Agent”) for the Secured Parties. RECITALS WHEREAS, pursuant   to that certain Credit Agreement, dated as of the date hereof (as amended, modified,   extended, restated, renewed, replaced, or supplemented from time to time, the   “Credit Agreement”) among the Borrower, the Parent, the Lenders party   thereto, the Administrative Agent, and the L/C Issuer, the Lenders have   agreed to make Loans and the L/C Issuer has agreed to issue Letters of Credit   upon the terms and subject to the conditions set forth therein; and WHEREAS,   this Agreement is required by the terms of the Credit Agreement. NOW,   THEREFORE, in consideration of these premises and other good and valuable   consideration, the receipt and sufficiency of which are hereby acknowledged,   the parties hereto agree as follows: 1. Definitions. (a) Capitalized terms   used and not otherwise defined herein shall have the meanings ascribed to   such terms in the Credit Agreement. With reference to this Agreement, unless   otherwise specified herein: (i) the definitions of terms herein shall apply   equally to the singular and plural forms of the terms defined, (ii) whenever   the context may require, any pronoun shall include the corresponding   masculine, feminine and neuter forms, (iii) the words “include”, “includes”   and “including” shall be deemed to be followed by the phrase “without   limitation”, (iv) the word “will” shall be construed to have the same meaning   and effect as the word “shall”, (v) any definition of, or reference to, any   agreement, instrument or other document herein 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), (vi) any   reference herein to any Person shall be construed to include such Person’s   permitted successors and assigns, (vii) the words “herein”, “hereof” and   “hereunder”, and words of similar import, shall be construed to refer to this   Agreement in its entirety and not to any particular provision hereof, (viii)   all references herein to Sections, Exhibits and Schedules shall be construed   to refer to Sections of, and Exhibits and Schedules to, this Agreement, (ix)   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, (x) the   term “documents” includes any and all instruments, documents, agreements,   certificates, notices, reports, financial statements and other writings,   however evidenced, whether in physical or electronic form, (xi) 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”, (xii)   Section headings herein are included for convenience of reference only and   shall not affect the interpretation of this Agreement and (xiii) where the   context requires, terms relating to the Collateral or any part thereof, when   used in relation to a Grantor, shall refer to such Grantor’s Collateral or   the relevant part thereof. 4828-1542-5361_6 

    

 

(b) The   following terms shall have the meanings set forth in the UCC (defined below):   Accession, Account, Account Debtor, Adverse Claim, As-Extracted Collateral,   Certificated Security, Chattel Paper, Commercial Tort Claim, Consumer Goods,   Deposit Account, Document, Electronic Chattel Paper, Equipment, Farm   Products, Financial Asset, Fixtures, General Intangible, Goods, Instrument,   Inventory, Investment Company Security, Investment Property, Letter-of-Credit   Right, Manufactured Home, Payment Intangible, Proceeds, Securities Account,   Securities Intermediary, Security, Software, Supporting Obligation and   Tangible Chattel Paper. (c) In addition, the following terms shall have the   meanings set forth below: “Assignment of Claims Act” means the Assignment of   Claims Act of 1940 (41 U.S.C. Section 15, 31 U.S.C. Section 3737, and 31   U.S.C. Section 3727), including all amendments thereto and regulations   promulgated thereunder. “Collateral” has the meaning provided in Section 2   hereof. “Control” means the manner in which “control” is achieved under the   UCC with respect to any Collateral for which the UCC specifies a method of   achieving “control”. “Copyright License” means any agreement now or hereafter   in existence, providing for the grant by, or to, any rights (including,   without limitation, the grant of rights for a party to be designated as an   author or owner and/or to enforce, defend, use, display, copy, manufacture,   distribute, exploit and sell, make derivative works, and require joinder in   suit and/or receive assistance from another party) covered in whole or in   part by a Copyright. “Copyrights” means, collectively, all of the following   of any Grantor: (i) all copyrights, works protectable by copyright, copyright   registrations and copyright applications anywhere in the world, (ii) all   derivative works, counterparts, extensions and renewals of any of the   foregoing, (iii) all income, royalties, damages and payments now or hereafter   due and/or payable under any of the foregoing or with respect to any of the   foregoing, including, without limitation, damages or payments for past,   present and future infringements, violations or misappropriations of any of   the foregoing, (iv) the right to sue for past, present and future   infringements, violations or misappropriations of any of the foregoing and   (v) all rights corresponding to any of the foregoing throughout the world.   “Excluded Accounts” means, (i) any Deposit Account or Securities Account established,   maintained and used solely to hold cash collateral securing Indebtedness or   other obligations, to the extent permitted by the Credit Agreement or (ii)   any Deposit Account (A) established, maintained and used solely for the   purpose of serving as an escrow account, custodial account or as a fiduciary   or trust account in favor of a third party, and if the contract or other   agreement establishing or otherwise relating to such account prohibits the   valid grant of a Lien therein to the Administrative Agent (or if the grant of   such a Lien would violate such contract or agreement) and such prohibition or   violation has not been or is not waived or the consent of the other party to   such contract or other agreement has not been or is not otherwise obtained or   (B) with an average monthly balance of less than $5,000 with respect to any   single Deposit Account, not to exceed $25,000 in the aggregate at any time   for all Deposit Accounts that are Excluded Accounts pursuant to this clause   (B). “Excluded Property” has the meaning provided in Section 2 hereof.   “Government Contract” means a contract between any Grantor and an agency,   department or instrumentality of the United States or any state, municipal or   local Governmental Authority located in the United States or all obligations   of any such Governmental Authority arising under any 2 4828-1542-5361_6 

    

 

Account now or   hereafter owing by any such Governmental Authority, as Account Debtor, to any   Grantor. “Intellectual Property” means, collectively, all of the following of   any Grantor: (i) all systems software and applications software (including   source code and object code), all documentation for such software, including,   without limitation, user manuals, flowcharts, functional specifications, operations   manuals, and all formulas, processes, ideas and know-how embodied in any of   the foregoing, (ii) concepts, discoveries, improvements and ideas, know-how,   technology, reports, design information, trade secrets, practices,   specifications, test procedures, maintenance manuals, research and   development, inventions (whether or not patentable), blueprints, drawings,   data, customer lists, catalogs, and all physical embodiments of any of the   foregoing, (iii) Patents and Patent Licenses, Copyrights and Copyright   Licenses, Trademarks and Trademark Licenses and (iv) other agreements with   respect to any rights in any of the items described in the foregoing clauses   (i), (ii), and (iii). “Issuer” means the issuer of any Pledged Equity,   provided, that, in no event shall any Excluded Subsidiary be considered an   “Issuer”. “Material Agreements” means: (a) all of each Grantor’s rights,   titles, and interests in, to, and under those contracts listed on Schedule 1,   including all rights of each Grantor to receive moneys due and to become due   under or pursuant to any Material Agreement; (b) all rights of each Grantor   to receive Proceeds of any insurance, indemnity, warranty, or guaranty with   respect to any Material Agreement; (c) all claims of each Grantor for damages   arising out of or for breach of, default under, or termination of any   Material Agreement; and (d) all rights of each Grantor to compel performance   and otherwise exercise all rights and remedies under any Material Agreement.   “Patent License” means any agreement, now or hereafter in existence,   providing for the grant by, or to, any Grantor of any rights (including,   without limitation, the right for a party to be designated as an owner and/or   to enforce, defend, make, have made, make improvements, manufacture, use, sell,   import, export, and require joinder in suit and/or receive assistance from   another party) covered in whole or in part by a Patent. “Patents” means   collectively, all of the following of any Grantor: (i) all patents, all   inventions and patent applications anywhere in the world, (ii) all   improvements, counterparts, reissues, divisional, re-examinations,   extensions, continuations (in whole or in part) and renewals of any of the   foregoing and improvements thereon, (iii) all income, royalties, damages or payments   now or hereafter due and/or payable under any of the foregoing or with   respect to any of the foregoing, including, without limitation, damages or   payments for past, present or future infringements, violations or   misappropriations of any of the foregoing, (iv) the right to sue for past,   present and future infringements, violations or misappropriations of any of   the foregoing and (v) all rights corresponding to any of the foregoing   throughout the world. “Permitted Liens” means any liens permitted pursuant to   Section 7.01 of the Credit Agreement. “Pledged Equity” means, with respect to   each Grantor, (i) 100% of the issued and outstanding Equity Interests of each   Subsidiary of such Grantor that is not an Excluded Subsidiary, including the   Equity Interests of the Subsidiaries owned by such Grantor as set forth on   Schedule 1 attached hereto (as updated from time to time in accordance with   Section 6.12 of the Credit Agreement), in each case together with the   certificates (or other agreements or 3 4828-1542-5361_6 

    

 

instruments),   if any, representing such shares, and all options and other rights,   contractual or otherwise, with respect thereto, including, but not limited   to, the following: (1) all Equity Interests representing a dividend thereon,   or representing a distribution or return of capital upon or in respect   thereof, or resulting from a stock split, revision, reclassification or other   exchange therefor, and any subscriptions, warrants, rights or options issued   to the holder thereof, or otherwise in respect thereof; and (2) in the event   of any consolidation or merger involving any Issuer and in which such Issuer   is not the surviving Person, all shares of each class of the Equity Interests   of the successor Person formed by or resulting from such consolidation or   merger, to the extent that such successor Person is a direct Subsidiary of a   Grantor and such Person is not an Excluded Subsidiary. “Secured Obligations”   means any and all existing and future Obligations including, without limitation,   all indebtedness and liabilities of every kind, nature and character, direct   or indirect, absolute or contingent, liquidated or unliquidated, voluntary or   involuntary, of Borrower and any other Grantor to the Secured Parties arising   under the Credit Agreement, the other Loan Documents, and the Secured Hedge   Agreements (including all renewals, extensions, modifications, amendments,   and restatements thereof and all costs, attorneys’ fees and expenses incurred   by any Secured Party in connection with the collection or enforcement   thereof). “Trademark License” means any agreement, now or hereafter in   existence, providing for the grant by, or to, any Grantor of any rights in   (including, without limitation, the right for a party to be designated as an   owner and/or to enforce, defend, use, mark, police, and require joinder in   suit and/or receive assistance from another party) covered in whole, or in   part, by a Trademark. “Trademarks” means, collectively, all of the following   of any Grantor: (i) all trademarks, trade names, corporate names, company   names, business names, fictitious business names, internet domain names,   trade styles, service marks, logos, other business identifiers, whether   registered or unregistered, all registrations and recordings thereof, and all   applications in connection therewith (other than each United States   application to register any trademark or service mark prior to the filing   under applicable Law of a verified statement of use for such trademark or   service mark) anywhere in the world, (ii) all counterparts, extensions and   renewals of any of the foregoing, (iii) all income, royalties, damages and   payments now or hereafter due and/or payable under any of the foregoing or   with respect to any of the foregoing, including, without limitation, damages   or payments for past, present or future infringements, violations, dilutions   or misappropriations of any of the foregoing, (iv) the right to sue for past,   present or future infringements, violations, dilutions or misappropriations   of any of the foregoing and (v) all rights corresponding to any of the   foregoing (including the goodwill) throughout the world. “UCC” means the   Uniform Commercial Code as in effect from time to time in the state of New   York except as such term may be used in connection with the perfection of the   Collateral and then the applicable jurisdiction with respect to such affected   Collateral shall apply. “USPTO” means the United States Patent and Trademark   Office. “Vehicles” means all cars, trucks, trailers, construction and earth   moving equipment and other vehicles covered by a certificate of title under   the laws of any state, all tires and all other appurtenances to any of the   foregoing. 4 4828-1542-5361_6 

    

 

“Vessel” means   any watercraft or other artificial contrivance used, or capable of being   used, as a means of transportation on water (including, without limitation,   those whose primary purpose is the maritime transportation of cargo or which   are otherwise engaged, used or useful in any business activities of the   Grantors) which are owned by and registered (or to be owned and registered)   in the name of any of the Grantors, including, without limitation, any Vessel   leased or otherwise registered in the foregoing parties’ names, pursuant to a   lease or other operating agreement constituting a capital lease obligation,   in each case together with all related spares, equipment and any additional   improvements, vessel owned, bareboat chartered or operated by a Grantor other   than Vessels owned by an entity other than a Grantor and which are managed   under Vessel management agreements. “Work” means any work that is subject to   copyright protection pursuant to Title 17 of the United States Code. 2. Grant   of Security Interest in the Collateral. To secure the prompt payment and   performance in full when due, whether by lapse of time, acceleration,   mandatory prepayment or otherwise, of the Secured Obligations, each Grantor   hereby grants to the Administrative Agent, for the benefit of the Secured   Parties, a continuing security interest in, and a right to set off against,   any and all right, title and interest of such Grantor in and to all of the   following, whether now owned or existing or owned, acquired, or arising   hereafter (collectively, the “Collateral”): (a) all Accounts; (b) all cash,   currency and Cash Equivalents; (c) all Chattel Paper (including Electronic   Chattel Paper and Tangible Chattel Paper); (d) all Commercial Tort Claims set   forth on Schedule 1 attached hereto (as updated from time to time); (e) all   Deposit Accounts; (f) all Documents; (g) all Equipment; (h) all Fixtures; (i)   all General Intangibles; (j) all Goods; (k) all Instruments; (l) all   Intellectual Property; (m) all Inventory; (n) all Investment Property; (o) all   Letter-of-Credit Rights; (p) all Material Agreements; (q) all Payment   Intangibles; (r) all Pledged Equity; (s) all Securities Accounts; (t) all   Software; (u) all Supporting Obligations; (v) all Vehicles; (w) all books and   records pertaining to the Collateral; (x) all Accessions and all Proceeds and   products of any and all of the foregoing; and (y) all other personal property   of any kind or type whatsoever now or hereafter owned by such Grantor or as   to which such Grantor now or hereafter has the power to transfer interest   therein. Notwithstanding anything to the contrary contained herein, the   security interests granted under this Agreement shall not extend to any of   the following (collectively, “Excluded Property”): (a) any General   Intangible, permit, lease, license, contract or other Instrument of a Grantor   to the extent the grant of a security interest in such General Intangible,   permit, lease, license, contract or other Instrument in the manner   contemplated by this Agreement, under the terms thereof or under applicable   Law, is prohibited, or would result in the termination thereof or give the   other parties thereto the right to terminate, accelerate or otherwise alter   such Grantor’s rights, titles and interests thereunder (including upon the   giving of notice or the lapse of time or both); (b) any assets now or   hereafter leased to a Person pursuant to a Key Money Investment and that is   pledged or becomes pledged to secure any Indebtedness of such Person or is   otherwise subject to any restriction on being pledged by the holder of such   Indebtedness, including as of the date hereof, all assets owned by Ashford   Pav Leasing LLC; (c) the Equity Interests issued by any Excluded Subsidiary;   (d) the Hospitality Prime Advisory Agreement and the Hospitality Trust Advisory   Agreement; (e) any United States intent-to-use trademark applications to the   extent that, and solely during the period in which the grant of a security   interest therein would impair the validity or enforceability of or render   void or result in the cancellation of, any registration issued as a result of   such intent-to-use trademark applications under applicable Law; provided that   upon submission and acceptance by the USPTO of an amendment to allege   pursuant to 15 U.S.C. Section 1060(a) (or any successor provision), such   intent-to-use trademark application shall be considered Collateral; (f) any   Excluded Accounts; (g) any property that is subject to a Permitted Lien   securing purchase money indebtedness or capital lease obligations, in each   case, if the contract or other agreement providing for such Indebtedness or   capital lease obligation prohibits the valid grant of a Lien therein or in   such assets to the Administrative Agent and such prohibition has not been or   is not waived or the consent of the other party to such contract or other   agreement has not been or is not otherwise obtained; or 5 4828-1542-5361_6 

    

 

(h) any other   assets or property as to which the Administrative Agent determines in its   sole discretion that the costs of obtaining or perfecting a security interest   in such assets exceeds the practical benefit to the Secured Parties afforded   thereby; provided, however, that (i) any such limitation described in this   paragraph on the security interests granted hereunder shall only apply to the   extent that any such prohibition or right to terminate or accelerate or alter   the Grantor’s rights could not be rendered ineffective pursuant to the UCC   (including Sections 9-406, 9-407 and 9-408 thereof) or any other applicable   Law (including Debtor Relief Laws) or principles of equity, (ii) in the event   of the termination or elimination of any such prohibition or right or the   requirement for any consent contained in any applicable Law, General   Intangible, permit, lease, license, contract or other Instrument, to the   extent sufficient to permit any such item to become Collateral hereunder, or   upon the granting of any such consent, or waiving or terminating any   requirement for such consent, a security interest in such General Intangible,   permit, lease, license, contract or other Instrument shall be automatically   and simultaneously granted hereunder and shall be included as Collateral   hereunder, (iii) the foregoing exclusions shall in no way be construed to   limit, impair, or otherwise affect the Administrative Agent’s continuing   security interests in and Liens upon any rights or interests of any Grantor   in or to (1) monies due or to become due under or in connection with any   described contract, lease, permit, license, license agreement, agreement (including   each of the Hospitality Prime Advisory Agreement and the Hospitality Trust   Advisory Agreement), assets, or equity interests (including any Accounts or   other receivables and general intangibles), or (2) any proceeds from the   collection, sale, license, lease, or other dispositions of any such contract,   lease, permit, license, license agreement, agreement, assets, or equity   interests, and (iv) to the extent severable, “Collateral” will include any   portion of such contract, lease, permit, license, license agreement,   agreement, assets, or equity interests subject thereto that does not result   in such prohibition. The Grantors and the Administrative Agent, on behalf of   the Secured Parties, hereby acknowledge and agree that the security interest   created hereby in the Collateral (a) constitutes continuing collateral   security for all of the Secured Obligations, whether now existing or   hereafter arising and (b) is not to be construed as an assignment of any   Intellectual Property. Notwithstanding anything to the contrary, the Grantors   and the Administrative Agent, on behalf of the Secured Parties, hereby   acknowledge and agree that (i) no representation, warranty or covenant   contained in this Agreement shall apply to any Excluded Property and (ii)   references herein to any asset or definition included in the Collateral shall   be deemed to exclude any Excluded Property. 3. Representations and   Warranties. Each Grantor hereby represents and warrants to the Administrative   Agent, for the benefit of the Secured Parties that: (a) Ownership. Each   Grantor is the legal and beneficial owner of its Collateral and has the right   to pledge, sell, assign or transfer the same. There exists no Adverse Claim   with respect to the Pledged Equity of such Grantor. (b) Security Interest/Priority.   This Agreement creates a valid security interest in favor of the   Administrative Agent, for the benefit of the Secured Parties, in the   Collateral of such Grantor and, when properly perfected by filing, shall   constitute a valid and perfected, first priority security interest in such   Collateral (including all uncertificated Pledged Equity consisting of   partnership or limited liability company interests that do not constitute   Securities), to the extent such security interest can be perfected by filing   under the UCC, free and clear of all Liens except for Permitted Liens. No   Grantor has authenticated any agreement authorizing any secured party   thereunder to file a financing statement, except to perfect Permitted Liens.   The taking possession by the Administrative Agent of the certificated   securities (if any) evidencing the Pledged Equity and all other Instruments   constituting Collateral will perfect and establish the first priority of the   Administrative Agent’s security interest in all the Pledged Equity evidenced   by such certificated 6 4828-1542-5361_6 

    

 

securities and   such Instruments. With respect to any Collateral consisting of a Deposit   Account, Securities Entitlement or held in a Securities Account, upon   execution and delivery by the applicable Grantor, the applicable Securities   Intermediary and the Administrative Agent of an agreement granting control to   the Administrative Agent over such Collateral, the Administrative Agent shall   have a valid and perfected, first priority security interest in such   Collateral. (c) Types of Collateral. None of the Collateral consists of, or   is the Proceeds of, (i) As-Extracted Collateral, (ii) Consumer Goods, (iii)   Farm Products, (iv) Manufactured Homes, (v) standing timber, (vi) an   aircraft, airframe, aircraft engine or related property, (vii) an aircraft   leasehold interest, (viii) a Vessel or (ix) any other interest in or to any   of the foregoing. (d) Accounts. (i) Each Account of the Grantors and the   papers and documents relating thereto are genuine and in all material   respects what they purport to be, (ii) each Account arises out of (A) a bona   fide sale of goods sold and delivered by such Grantor (or is in the process   of being delivered) or (B) services theretofore actually rendered by such   Grantor to, the account debtor named therein, (iii) no Account of a Grantor   is evidenced by any Instrument or Chattel Paper unless such Instrument or   Chattel Paper, to the extent requested by the Administrative Agent, has been   endorsed over and delivered to, or submitted to the control of, the   Administrative Agent, (iv) no surety bond was required or given in connection   with any Account of a Grantor or the contracts or purchase orders out of   which they arose, (v) the right to receive payment under each Account is assignable   and (vi) no Account Debtor has any defense, set-off, claim or counterclaim   against any Grantor that can be asserted against the Administrative Agent,   whether in any proceeding to enforce the Administrative Agent’s rights in the   Collateral otherwise, except defenses, setoffs, claims or counterclaims that   are not, in the aggregate, material to the value of the Accounts. (e)   Equipment and Inventory. With respect to any Equipment and/or Inventory of a   Grantor, each such Grantor has exclusive possession and control of such   Equipment and Inventory of such Grantor except for (i) Equipment leased by   such Grantor as a lessee, (ii) Equipment or Inventory in transit with common   carriers or (iii) Equipment and/or Inventory in the possession or control of   a warehouseman, bailee or any agent or processor of such Grantor to the   extent such Grantor has complied with Section 4(e). No Inventory of a Grantor   is held by a Person other than a Grantor pursuant to consignment, sale or   return, sale on approval or similar arrangement. Collateral consisting of   Inventory is of good and merchantable quality, free from defects. None of   such Inventory is subject to any licensing, Patent, Trademark, trade name or   Copyright with any Person that restricts any Grantor’s ability to use, manufacture,   lease, sell or otherwise dispose of such Inventory. The completion of the   manufacturing process of such Inventory by a Person other than the applicable   Grantor would be permitted under any contract to which such Grantor is a   party or to which the Inventory is subject. (f) Authorization of Pledged   Equity. All Pledged Equity (i) is duly authorized and validly issued, (ii) is   fully paid and, to the extent applicable, nonassessable and is not subject to   the preemptive rights of any Person, (iii) is beneficially owned as of record   by a Grantor and (iv) constitute all the issued and outstanding shares of all   classes of the equity of such Issuer issued to such Grantor. (g) No Other   Equity Interests, Instruments, Etc. As of the Closing Date, (i) no Grantor   owns any certificated Equity Interests in any Subsidiary that are required to   be pledged and delivered to the Administrative Agent hereunder except as set   forth on Schedule 1 hereto (as updated from time to time), and (ii) no   Grantor holds any Instruments, Documents or Tangible Chattel Paper required   to be pledged and delivered to the Administrative Agent pursuant to Section   4(c)(i) of this Agreement other than as set forth on Schedule 1 hereto (as   updated from 7 4828-1542-5361_6 

    

 

time to time).   All such certificated securities, Instruments, Documents and Tangible Chattel   Paper have been delivered to the Administrative Agent to the extent (A)   requested by the Administrative Agent or (B) as required by the terms of this   Agreement and the other Loan Documents. (h)Partnership and Limited Liability   Company Interests. Except as previously disclosed to the Administrative   Agent, none of the Collateral consisting of an interest in a partnership or a   limited liability company (i) is dealt in or traded on a securities exchange   or in a securities market, (ii) by its terms expressly provides that it is a   Security governed by Article 8 of the UCC, (iii) is an Investment Company   Security, (iv) is held in a Securities Account or (v) constitutes a Security   or a Financial Asset. (i) Contracts; Agreements; Licenses. Except as set   forth on Schedule 3(i), no Grantor has any Material Agreements which are   non-assignable by their terms, or as a matter of law, or which prevent the   granting of a security interest therein. (j) notice to, or Consents; Etc. No   approval, consent, exemption, authorization or other action by, filing with,   any Governmental Authority or any other Person (including, without   limitation, any stockholder, member or creditor of such Grantor), is   necessary or required for (i) the grant by such Grantor of the security   interest in the Collateral granted hereby or for the execution, delivery or   performance of this Agreement by such Grantor, (ii) the perfection of such   security interest (to the extent such security interest can be perfected by   filing under the UCC, the granting of control (to the extent required under   Section 4(c) hereof) or by filing an appropriate notice with the USPTO or the   United States Copyright Office) or (iii) the exercise by the Administrative   Agent or the Secured Parties of the rights and remedies provided for in this   Agreement (including, without limitation, as against any Issuer), except for   (A) the filing or recording of UCC financing statements or other filings under   the Assignment of Claims Act, (B) the filing of appropriate notices with the   USPTO and the United States Copyright Office, (C) obtaining control to   perfect the Liens created by this Agreement (to the extent required under   Section 4(c) hereof), (D) such actions as may be required by Laws affecting   the offering and sale of securities or, with respect to clause (iii) above,   such consents or other actions as may be required in any “transfer” or   “change of control” provision or similar change in ownership provision in any   Advisory Agreement or in the organizational documents of any Issuer, (E)   consents, authorizations, filings or other actions which have been obtained   or made, and (F) as may be required with respect to Vehicles registered under   a certificate of title. (k) Commercial Tort Claims. As of the Closing Date,   no Grantor has any Commercial Tort Claims other than as set forth on Schedule   2 attached hereto. (l) Copyrights, Patents and Trademarks. (i) All   Intellectual Property of such Grantor that is reasonably necessary for the   operation of such Grantor’s business is valid, subsisting, unexpired,   enforceable and has not been abandoned. (ii) No holding, decision or judgment   has been rendered by any Governmental Authority that would limit, cancel or   question the validity of any Intellectual Property of any Grantor that is   reasonably necessary for the operation of such Grantor’s business. 8   4828-1542-5361_6 

    

 

(iii) All   applications pertaining to the Copyrights, Patents and Trademarks of each   Grantor have been duly and properly filed, and all registrations or letters   pertaining to such Copyrights, Patents and Trademarks have been duly and   properly filed and issued. (iv) No Grantor has made any assignment or   agreement in conflict with the security interest in the Intellectual Property   of any Grantor hereunder. (v) Each Grantor owns or possesses the right to   use, all of the Intellectual Property that is reasonably necessary for the   operation of their respective businesses, without conflict with the rights of   any other Person except to the extent the absence of any such rights could   not reasonably be expected to have a Material Adverse Effect. (vi) To the   best knowledge of each Grantor, no slogan or other advertising device,   product, process, method, substance, part or other material now employed, or   now contemplated to be employed by any Grantor or any of its Subsidiaries   infringes upon any rights held by any other Person. (vii) No proceeding,   claim or litigation regarding any of the foregoing is pending or, to the best   knowledge of such Grantor, threatened, which, either individually or in the   aggregate, could reasonably be expected to have a Material Adverse Effect.   (m)Material Agreements. All Material Agreements to which each Grantor is a   party are set forth on Schedule 1. True and correct copies of all such   Material Agreements have been furnished to Administrative Agent. Each   Material Agreement is in full force and effect; there have been no   amendments, modifications, or supplements to any Material Agreement of which   Administrative Agent has not been advised in writing; and no Grantor is in   default under or with respect to any Material Agreement, and to the Parent’s,   the Borrower’s and Advisor’s knowledge, no breach or default or event that   with the giving of notice or passage of time would constitute a breach or   default has occurred and is continuing under any Material Agreement. Except   as set forth on Schedule 3(i), to Material Agreement prohibits assignment   (except any such prohibition where the counter-party has provided its   consent) or requires consent of or notice to any person in connection with   the assignment to Administrative Agent hereunder, except such as has been   given or made. 4. Covenants. Each Grantor covenants that such Grantor shall:   (a) Maintenance of Perfected Security Interest; Further Information.   (i)Maintain the security interest created by this Agreement as a first   priority perfected security interest (subject only to Permitted Liens) and   shall defend such security interest against the claims and demands of all   Persons whomsoever (other than the holders of Permitted Liens). (ii) From   time to time furnish to the Administrative Agent upon the Administrative   Agent’s or any Lender’s reasonable request, statements and schedules further   identifying and describing the assets and property of such Grantor and such   other reports in connection therewith as the Administrative Agent or such   Lender may reasonably request, all in reasonable detail. (b) Required   Notifications.Each Grantor shall promptly notify the Administrative Agent, in   writing, of: (i) any Lien (other than Permitted Liens) on any of the   Collateral which would adversely affect the ability of the Administrative   Agent to exercise any of its remedies hereunder and 9 4828-1542-5361_6 

    

 

(ii) the   occurrence of any other event which could reasonably be expected to have a   material impairment on the aggregate value of the Collateral or on the   security interests created hereby. (c) Perfection through Possession and   Control. (i) If any amount payable under or in connection with any of the   Collateral shall be or become evidenced by any Instrument or Tangible Chattel   Paper or Supporting Obligation, or if any property constituting Collateral   shall be stored or shipped subject to a Document, ensure that such   Instrument, Tangible Chattel Paper, Supporting Obligation or Document is   either in the possession of such Grantor at all times or, if requested by the   Administrative Agent to perfect its security interest in such Collateral, is   delivered to the Administrative Agent duly endorsed in a manner satisfactory   to the Administrative Agent. Such Grantor shall, if reasonably requested by   the Administrative Agent, ensure that any Collateral consisting of Tangible   Chattel Paper is marked with a legend acceptable to the Administrative Agent   indicating the Administrative Agent’s security interest in such Tangible   Chattel Paper. To the extent the value of all certificated securities,   Instruments, Documents, Supporting Obligation and Tangible Chattel Paper not   in the possession of the Administrative Agent exceeds $150,000, the Grantors   shall deliver such certificated securities, Instruments, Documents, Supporting   Obligations and Tangible Chattel Paper to the Administrative Agent so that   the value of all certificated securities, Instruments, Documents, Supporting   Obligations and Tangible Chattel Paper not in the possession of the   Administrative Agent does not exceed $150,000. (ii) Deliver to the   Administrative Agent promptly upon the receipt thereof by or on behalf of a   Grantor, all certificates and instruments constituting Certificated   Securities or Pledged Equity. Prior to delivery to the Administrative Agent,   all such certificates constituting Pledged Equity shall be held in trust by   such Grantor for the benefit of the Administrative Agent pursuant hereto. All   such certificates representing Pledged Equity shall be delivered in suitable   form for transfer by delivery or shall be accompanied by duly executed   instruments of transfer or assignment in blank, substantially in the form   provided in Exhibit A hereto or other form acceptable to the Administrative   Agent. (iii) If any Collateral shall consist of Deposit Accounts, Electronic   Chattel Paper, Letter-of-Credit Rights, Securities Accounts or uncertificated   Investment Property, execute and deliver (and, with respect to any Collateral   consisting of a Securities Account or uncertificated Investment Property,   cause the Securities Intermediary or the Issuer, as applicable, with respect   to such Investment Property to execute and deliver) to the Administrative   Agent all control agreements, assignments, instruments or other documents as   reasonably requested by the Administrative Agent for the purposes of   obtaining and maintaining Control of such Collateral; provided, however, no   such control agreements, assignments, instruments or other documents shall be   required with respect to Excluded Accounts. (d) Filing of Financing Statements,   Notices, etc. Each Grantor shall execute and deliver to the Administrative   Agent and/or file such agreements, assignments or instruments (including   affidavits, notices, reaffirmations and amendments and restatements of   existing documents, as the Administrative Agent may reasonably request) and   do all such other things as the Administrative Agent may reasonably deem   necessary or appropriate (i) to assure to the Administrative Agent its   security interests hereunder, including (A) such instruments as the   Administrative Agent may from time to time reasonably request in order to   perfect and maintain the security interests granted hereunder in accordance   with the UCC, including, without limitation, financing statements 10   4828-1542-5361_6 

    

 

(including   continuation statements), (B) with regard to Copyrights, a Notice of Grant of   Security Interest in Copyrights substantially in the form of Exhibit B or   other form acceptable to the Administrative Agent, (C) with regard to Patents,   a Notice of Grant of Security Interest in Patents for filing with the USPTO   substantially in the form of Exhibit C or other form acceptable to the   Administrative Agent and (D) with regard to Trademarks, a Notice of Grant of   Security Interest in Trademarks for filing with the USPTO substantially in   the form of Exhibit D or other form acceptable to the Administrative Agent,   (ii) to consummate the transactions contemplated hereby and (iii) to   otherwise protect and assure the Administrative Agent of its rights and   interests hereunder. Furthermore, each Grantor also hereby irrevocably makes,   constitutes and appoints the Administrative Agent, its nominee or any other   person whom the Administrative Agent may designate, as such Grantor’s   attorney in fact with full power and for the limited purpose to prepare and   file (and, to the extent applicable, sign) in the name of such Grantor any   financing statements, or amendments and supplements to financing statements,   renewal financing statements, notices or any similar documents which in the   Administrative Agent’s reasonable discretion would be necessary or   appropriate in order to perfect and maintain perfection of the security   interests granted hereunder, such power, being coupled with an interest,   being and remaining irrevocable until the termination of all Commitments and   repayment in full of all Obligations. Each Grantor hereby agrees that a   carbon, photographic or other reproduction of this Agreement or any such   financing statement is sufficient for filing as a financing statement by the   Administrative Agent without notice thereof to such Grantor wherever the   Administrative Agent may in its sole discretion desire to file the same. (e)   Collateral Held by Warehouseman, Bailee, etc. (i) If any Collateral with a   value in excess of $10,000 at any single location (not to exceed $50,000 in   the aggregate) is at any time in the possession or control of a warehouseman,   bailee or any agent or processor of such Grantor, such Grantor shall notify   the Administrative Agent of such possession, and, if requested by   Administrative Agent, such Grantor shall (A) notify such Person in writing of   the Administrative Agent’s security interest for the benefit of the Secured   Parties in such Collateral, (B) instruct such Person to hold all such   Collateral for the Administrative Agent’s account and subject to the   Administrative Agent’s instructions and (C) unless otherwise consented to in   writing by the Administrative Agent, obtain (1) a written acknowledgment from   such Person that it is holding such Collateral for the benefit of the   Administrative Agent and (2) such other documentation required by the   Administrative Agent (including, without limitation, subordination and access   agreements). (ii)Perfect and protect such Grantor’s ownership interests in   all Inventory stored with a consignee against creditors of the consignee by   filing and maintaining financing statements against the consignee reflecting   the consignment arrangement filed in all appropriate filing offices,   providing any written notices required by the UCC to notify any prior   creditors of the consignee of the consignment arrangement, and taking such   other actions as may be appropriate to perfect and protect such Grantor’s   interests in such inventory under Section 2-326, Section 9-103, Section 9-324   and Section 9-505 of the UCC or otherwise, which such financing statements   filed pursuant to this Section shall be assigned to the Administrative Agent,   for the benefit of the Secured Parties. (f) Treatment of Accounts. Not grant   or extend the time for payment of any Account, or compromise or settle any   Account for less than the full amount thereof, or release any person or   property, in whole or in part, from payment thereof, or amend, supplement or   modify any Account in any manner that could reasonably be likely to adversely   affect the value thereof, or allow any credit or discount thereon, other than   as normal and customary in the ordinary course of a Grantor’s 11   4828-1542-5361_6 

    

 

business. Each   Grantor will deliver to the Administrative Agent a copy of each material   demand, notice or document received by it that questions or calls into doubt   the validity or enforceability of any Account with a face value in excess of   $10,000. (g)Commercial Tort Claims. Execute and deliver such statements,   documents and notices and do and cause to be done all such things as may be   reasonably required by the Administrative Agent, or required by Law to   create, preserve, perfect and maintain the Administrative Agent’s security   interest in any Commercial Tort Claims initiated by or in favor of any   Grantor. (h) Inventory. With respect to the Inventory of each Grantor: (i) At   all times maintain inventory records reasonably satisfactory to the   Administrative Agent, keeping correct and accurate records itemizing and   describing the kind, type, quality and quantity of Inventory and such   Grantor’s cost therefore in a manner consistent with past practice.   (ii)Produce, use, store and maintain the Inventory with all reasonable care   and caution and in accordance with applicable standards of any insurance and   in conformity with applicable Laws (including the requirements of the Federal   Fair Labor Standards Act of 1938, as amended and all rules, regulations and   orders related thereto). (i) Books and Records. If reasonably requested by   the Administrative Agent, mark its books and records (and shall cause the   Issuer of the Pledged Equity to mark its books and records) to reflect the   security interest granted pursuant to this Agreement. (j) Nature of Collateral.   At all times maintain the Collateral as personal property and not affix any   of the Collateral to any real property in a manner which would change its   nature from personal property to real property or a Fixture to real property,   unless the Administrative Agent shall have a perfected Lien on such Fixture   or real property. (k) Companies. Issuance or Acquisition of Equity Interests   in Partnerships or Limited Liability (i) Not without promptly executing and   delivering, or causing to be executed and delivered, to the Administrative   Agent such agreements, documents and instruments as the Administrative Agent   may reasonably require, issue or acquire any Pledged Equity consisting of an   interest in a partnership or a limited liability company that (A) is dealt in   or traded on a securities exchange or in a securities market, (B) by its   terms expressly provides that it is a Security governed by Article 8 of the   UCC, (C) is an investment company security, (D) is held in a Securities   Account or (E) constitutes a Security or a Financial Asset. (ii) Without the   prior written consent of the Administrative Agent, no Grantor will (A) vote   to enable, or take any other action to permit, any applicable Issuer to issue   any Investment Property or Equity Interests constituting partnership or   limited liability company interests, except for those additional Investment   Property or Equity Interests constituting partnership or limited liability   company interests that will be subject to the security interest granted   herein in favor of the Secured Parties, or (B) enter into any agreement or   undertaking, except in connection with a Disposition permitted under Section   7.05 of the Credit Agreement, restricting the right or ability of such   Grantor or 12 4828-1542-5361_6 

    

 

the   Administrative Agent to sell, assign or transfer any Investment Property or   Pledged Equity or Proceeds thereof. The Grantors will defend the right, title   and interest of the Administrative Agent in and to any Investment Property   and Pledged Equity against the claims and demands of all Persons whomsoever.   (iii) If any Grantor shall become entitled to receive or shall receive (A)   any Certificated Securities (including, without limitation, any certificate   representing a stock dividend or a distribution in connection with any   reclassification, increase or reduction of capital or any certificate issued   in connection with any reorganization), option or rights in respect of the   ownership interests of any Issuer, whether in addition to, in substitution   of, as a conversion of, or in exchange for, any Investment Property, or   otherwise in respect thereof, or (B) any sums paid upon or in respect of any   Investment Property upon the liquidation or dissolution of any Issuer, such   Grantor shall accept the same as the agent of the Secured Parties, hold the   same in trust for the Secured Parties, segregated from other funds of such   Grantor, and promptly deliver the same to the Administrative Agent, on behalf   of the Secured Parties, in accordance with the terms hereof. (l) Intellectual   Property. (i) Not do any act or omit to do any act whereby any material   Copyright may become invalidated and (A) not do any act, or omit to do any   act, whereby any material Copyright may become injected into the public   domain; (B) notify the Administrative Agent immediately if it knows that any   material Copyright may become injected into the public domain or of any   materially adverse determination or development (including, without   limitation, the institution of, or any such determination or development in,   any court or tribunal in the United States or any other country) regarding a   Grantor’s ownership of any such Copyright or its validity; (C) take all   necessary steps as it shall deem appropriate under the circumstances, to   maintain and pursue each application (and to obtain the relevant   registration) of each material Copyright owned by a Grantor and to maintain   each registration of each material Copyright owned by a Grantor including,   without limitation, filing of applications for renewal where necessary; and   (D) promptly notify the Administrative Agent of any material infringement,   misappropriation, dilution or impairment of any Copyright of a Grantor of   which it becomes aware and take such actions as it shall reasonably deem   appropriate under the circumstances to protect such Copyright, including,   where appropriate, the bringing of suit for infringement, dilution or   impairment or seeking injunctive relief and seeking to recover any and all   damages for such infringement, misappropriation, dilution or impairment. (ii)   Not make any assignment or agreement in conflict with the security interest   in the Copyrights of each Grantor hereunder, except as otherwise permitted by   the Credit Agreement. (iii) (A) Continue to use each material Trademark on   each and every trademark class of goods applicable to its current line as   reflected in its current catalogs, brochures and price lists in order to   maintain such material Trademark in full force free from any claim of   abandonment for non-use, (B) maintain as in the past the quality of products   and services offered under such Trademark, (C) employ such Trademark with the   appropriate notice of registration, if applicable, (D) not adopt or use any   mark that is confusingly similar or a colorable imitation of such Trademark   unless the Administrative Agent, for the benefit of the Secured Parties,   shall obtain a perfected security interest in such mark pursuant to this 13   4828-1542-5361_6 

    

 

Agreement, and   (E) not (and not permit any licensee or sublicensee thereof to) do any act or   omit to do any act whereby any such material Trademark may become   invalidated. (iv) Not do any act, or omit to do any act, whereby any material   Patent may become abandoned or dedicated, except as otherwise permitted by   the Credit Agreement. (v) Notify the Administrative Agent and the Secured   Parties promptly if it knows that any application or registration relating to   any material Patent or Trademark has become abandoned or dedicated, or of any   materially adverse determination or development (including, without   limitation, the institution of, or any such determination or development in,   any proceeding in the USPTO or any court or tribunal in any country)   regarding such Grantor ownership of any Patent or Trademark or its right to   register the same or to keep and maintain the same. (vi) Take all reasonable   and necessary steps, including, without limitation, in any proceeding before   the USPTO, or any similar office or agency in any other country or any   political subdivision thereof, to maintain and pursue each application (and   to obtain the relevant registration) and to maintain each registration of   each material Patent and Trademark, including, without limitation, filing of   applications for renewal, affidavits of use and affidavits of   incontestability. (vii) Promptly notify the Administrative Agent and the   Secured Parties after it learns that any material Patent or Trademark   included in the Collateral is infringed, misappropriated, diluted or impaired   by a third party and promptly sue for infringement, misappropriation,   dilution or impairment, to seek injunctive relief where appropriate and to   recover any and all damages for such infringement, misappropriation, dilution   or impairment, or to take such other actions as it shall reasonably deem   appropriate under the circumstances to protect such Patent or Trademark.   (viii) Not make any assignment or agreement in conflict with the security   interest in the Patents or Trademarks of each Grantor hereunder (except as   permitted by the Credit Agreement). (ix) Grants to the Administrative Agent a   royalty free license to use such Grantor’s Intellectual Property in   connection with the enforcement of the Administrative Agent’s rights hereunder,   but only to the extent any license or agreement granting such Grantor rights   in such Intellectual Property do not prohibit such use by the Administrative   Agent. Notwithstanding the foregoing, the Grantors may, in their reasonable   business judgment, fail to maintain, pursue, preserve or protect any   Copyright, Patent or Trademark which is not material to their businesses. For   purposes of this Section, a “material” Copyright, Patent or Trademark shall   mean a Copyright, Patent or Trademark that is reasonably necessary for the   operation of such Grantor’s business. (m) Equipment. Maintain each item of   Equipment in good working order and condition (reasonable wear and tear and   obsolescence excepted). (n)Government Contracts. Promptly notify the   Administrative Agent, in writing, if it enters into any contract with a   Governmental Authority under which such Governmental 14 4828-1542-5361_6 

    

 

Authority, as   account debtor, owes a monetary obligation to any Grantor under any Account   in an amount greater than $200,000. (o) Vehicles. Upon the request of the   Administrative Agent upon the occurrence and during the continuance of an   Event of Default, file or cause to be filed in each office in each   jurisdiction which the Administrative Agent shall deem reasonably advisable   to perfect its Liens on the Vehicles, all applications for certificates of   title or ownership (and any other necessary documentation) indicating the   Administrative Agent’s first priority Lien on the Vehicle (subject to any   Permitted Liens) covered by such certificate. (p) Internet Property Rights.   With respect to its rights, titles and interests in and to any internet   domain names or registration rights relating thereto, and any internet   websites or the content thereof (collectively, “Internet Property Rights”)   whether now existing or hereafter created or acquired and wheresoever   located, each Grantor shall cause to be delivered to the Administrative Agent   an undated transfer document with respect to each of its internet domain names,   duly executed in blank by such Grantor and in the form required by the   applicable internet domain name registrar, sufficient to effect the transfer   of each internet domain name to the transferee thereof named in such transfer   form upon delivery to such registrar. (q) Further Assurances. (i)Promptly   upon the request of the Administrative Agent and at the sole expense of the   Grantors, duly execute and deliver, and have recorded, such further   instruments and documents and take such further actions as the Administrative   Agent may reasonably request for the purpose of obtaining or preserving the   full benefits of this Agreement and of the rights and powers herein granted,   including, without limitation, (A) the assignment of any Material Agreement   which constitutes Collateral, (B) with respect to Government Contracts which   constitute Collateral, assignment agreements and notices of assignment, in   form and substance satisfactory to the Administrative Agent, duly executed by   any Grantors party to such Government Contract in compliance with the   Assignment of Claims Act (or analogous state applicable Law), and (C) all   applications, certificates, instruments, registration statements, and all   other documents and papers the Administrative Agent may reasonably request   and as may be required by law in connection with the obtaining of any   consent, approval, registration, qualification, or authorization of any   Person deemed necessary or appropriate for the effective exercise of any   rights under this Agreement; provided that no Grantor shall be required to   take any action to perfect a security interest in any Collateral that the   Administrative Agent reasonably determines in its sole discretion that the   costs and burdens to the Grantors of perfecting a security interest in such Collateral   (including any applicable stamp, intangibles or other taxes) are excessive in   relation to value to the Lenders afforded thereby. (ii) From time to time,   promptly furnish such updates to the information disclosed pursuant to this   Agreement and the Credit Agreement, including any Schedules hereto or   thereto, if any information therein shall become inaccurate or incomplete. 5.   Authorization to File Financing Statements. Each Grantor hereby authorizes   the Administrative Agent to prepare and file such financing statements   (including continuation statements) or amendments thereof or supplements   thereto or other instruments as the Administrative Agent may from time to   time deem necessary or appropriate in order to perfect and maintain the   security interests granted hereunder in accordance with the UCC, which such   financing statements may describe the Collateral in the 15 4828-1542-5361_6 

    

 

same manner as   described herein or may contain an indication or description of Collateral   that describes such property in any other manner as the Administrative Agent   may determine, in its sole discretion, is necessary, advisable or prudent to   ensure the perfection of the security interest in the Collateral granted   herein, including, without limitation, describing such property as “all   assets, whether now owned or hereafter acquired” or “all personal property,   whether now owned or hereafter acquired.” 6. Advances. On failure of any   Grantor to perform any of the covenants and agreements contained herein or in   any other Loan Document, the Administrative Agent may, at its sole option and   in its sole discretion, perform the same and in so doing may expend such sums   as the Administrative Agent may reasonably deem advisable in the performance   thereof, including, without limitation, the payment of any insurance   premiums, the payment of any taxes, a payment to obtain a release of a Lien   or potential Lien, expenditures made in defending against any adverse claim   and all other expenditures which the Administrative Agent may make for the   protection of the security hereof or which may be compelled to make by   operation of Law. All such sums and amounts so expended shall be repayable by   the Grantors on a joint and several basis promptly upon timely notice thereof   and demand therefor, shall constitute additional Secured Obligations and   shall bear interest from the date said amounts are expended at the Default   Rate. No such performance of any covenant or agreement by the Administrative   Agent on behalf of any Grantor, and no such advance or expenditure therefor,   shall relieve the Grantors of any Default or Event of Default. The   Administrative Agent may make any payment hereby authorized in accordance   with any bill, statement or estimate procured from the appropriate public office   or holder of the claim to be discharged without inquiry into the accuracy of   such bill, statement or estimate or into the validity of any tax assessment,   sale, forfeiture, tax lien, title or claim except to the extent such payment   is being contested in good faith by a Grantor in appropriate proceedings and   against which adequate reserves are being maintained in accordance with GAAP.   7. Remedies. (a)General Remedies.Upon the occurrence of an Event of Default   and during continuation thereof, the Administrative Agent on behalf of the   Secured Parties shall have, in addition to the rights and remedies provided   herein, in the Loan Documents, in any other documents relating to the Secured   Obligations, or by any applicable Law (including, but not limited to, levy of   attachment, garnishment and the rights and remedies set forth in the UCC of   the jurisdiction applicable to the affected Collateral), the rights and   remedies of a secured party under the UCC (regardless of whether the UCC is   the law of the jurisdiction where the rights and remedies are asserted and   regardless of whether the UCC applies to the affected Collateral), and   further, the Administrative Agent may, with or without judicial process or   the aid and assistance of others, (i) enter on any premises on which any of   the Collateral may be located and, without resistance or interference by the   Grantors, take possession of the Collateral, (ii) dispose of any Collateral   on any such premises, (iii) require the Grantors to assemble and make   available to the Administrative Agent at the expense of the Grantors any   Collateral at any place and time designated by the Administrative Agent which   is reasonably convenient to both parties, (iv) remove any Collateral from any   such premises for the purpose of effecting sale or other disposition thereof,   (v) without demand and without advertisement, notice, hearing or process of   law, all of which each of the Grantors hereby waives to the fullest extent   permitted by Law, at any place and time or times, sell, lease, assign, give   option or options to purchase, or otherwise dispose of and deliver the   Collateral or any part thereof (or contract to do any of the foregoing), in   one or more parcels any or all Collateral held by or for it at public or   private sale (which in the case of a private sale of Pledged Equity, shall be   to a restricted group of purchasers who will be obligated to agree, among   other things, to acquire such securities for their own account, for   investment and not with a view to the distribution or resale thereof), at any   exchange or broker’s board or elsewhere, by one or more contracts, in one or   more 16 4828-1542-5361_6 

    

 

parcels, for   money, upon credit or otherwise, at such prices and upon such terms as the   Administrative Agent deems advisable, in its sole discretion (subject to any   and all mandatory legal requirements) and/or (vi) complete and tender each   internet domain name transfer document in its own name, place and stead of   the Grantor in order to effect the transfer of any internet domain name   registration, either to the Administrative Agent or to another transferee, as   the case may be and maintain, obtain access to, and continue to operate, in   its own name or in the name, place and stead of such Grantor, such Grantor’s   internet website and the contents thereof, and all related advertising,   linking and technology licensing and other contractual relationships, in each   case in connection with the maintenance, preservation, operation, sale or   other disposition of the Collateral or for any other purpose permitted under   the Loan Documents or by applicable Law. Each Grantor acknowledges that any   such private sale may be at prices and on terms less favorable to the seller   than the prices and other terms which might have been obtained at a public   sale and, notwithstanding the foregoing, agrees that such private sale shall   be deemed to have been made in a commercially reasonable manner and, in the   case of a sale of Pledged Equity, that the Administrative Agent shall have no   obligation to delay sale of any such securities for the period of time   necessary to permit the Issuer of such securities to register such securities   for public sale under the Securities Act of 1933. The Administrative Agent or   any other Secured Party shall have the right upon any such public sale or   sales, and, to the extent permitted by applicable Law, upon any such private   sale or sales, to purchase the whole or any part of the Collateral so sold.   Neither the Administrative Agent’s compliance with applicable Law nor its   disclaimer of warranties relating to the Collateral shall be considered to   adversely affect the commercial reasonableness of any sale. To the extent the   rights of notice cannot be legally waived hereunder, each Grantor agrees that   any requirement of reasonable notice shall be met if such notice, specifying   the place of any public sale or the time after which any private sale is to   be made, is personally served on or mailed, postage prepaid, to the Borrower   in accordance with the notice provisions of Section 11.02 of the Credit   Agreement at least 10 days before the time of sale or other event giving rise   to the requirement of such notice. Each Grantor further acknowledges and   agrees that any offer to sell any Pledged Equity which has been (A) publicly   advertised on a bona fide basis in a newspaper or other publication of   general circulation in the financial community of New York, New York (to the   extent that such offer may be advertised without prior registration under the   Securities Act of 1933), or (B) made privately in the manner described above   shall be deemed to involve a “public sale” under the UCC, notwithstanding   that such sale may not constitute a “public offering” under the Securities   Act of 1933, and the Administrative Agent may, in such event, bid for the   purchase of such securities. The Administrative Agent shall not be obligated   to make any sale or other disposition of the Collateral regardless of notice   having been given. To the extent permitted by applicable Law, any Secured   Party may be a purchaser at any such sale. To the extent permitted by   applicable Law, each of the Grantors hereby waives all of its rights of   redemption with respect to any such sale. Subject to the provisions of   applicable Law, the Administrative Agent may postpone or cause the postponement   of the sale of all or any portion of the Collateral by announcement at the   time and place of such sale, and such sale may, without further notice, to   the extent permitted by Law, be made at the time and place to which the sale   was postponed, or the Administrative Agent may further postpone such sale by   announcement made at such time and place. To the extent permitted by   applicable Law, each Grantor waives all claims, damages and demands it may   acquire against the Administrative Agent or any Secured Party arising out of   the exercise by them of any rights hereunder except to the extent any such   claims, damages or demands result solely from the gross negligence or willful   misconduct of the Administrative Agent or any other Secured Party as   determined by a final non-appealable judgment of a court of competent   jurisdiction, in each case against whom such claim is asserted. Each Grantor   agrees that the internet shall constitute a “place” for purposes of Section   9-610(b) of the UCC and that any sale of Collateral to a licensor pursuant to   the terms of a license agreement between such licensor and a Grantor is   sufficient to constitute a 17 4828-1542-5361_6 

    

 

commercially   reasonable sale (including as to method, terms, manner, and time) within the   meaning of Section 9-610 of the UCC. (b) Remedies Relating to Accounts. (i)   During the continuation of an Event of Default, whether or not the   Administrative Agent has exercised any or all of its rights and remedies   hereunder, (A) each Grantor shall notify (such notice to be in form and   substance satisfactory to the Administrative Agent) its Account Debtors and   parties to the Material Contracts subject to a security interest hereunder   that such Accounts and the Material Contracts have been assigned to the   Administrative Agent, for the benefit of the Secured Parties (to the extent   provided hereunder), and promptly upon request of the Administrative Agent,   instruct all account debtors to remit all payments in respect of Accounts to   a mailing location selected by the Administrative Agent and (B) the   Administrative Agent shall have the right to enforce any Grantor’s rights   against its customers and account debtors, and the Administrative Agent or   its designee may notify any Grantor’s customers and account debtors that the   Accounts of such Grantor have been assigned to the Administrative Agent or of   the Administrative Agent’s security interest therein, and may (either in its   own name or in the name of a Grantor or both) demand, collect (including   without limitation by way of a lockbox arrangement), receive, take receipt   for, sell, sue for, compound, settle, compromise and give acquittance for any   and all amounts due or to become due on any Account, and, in the   Administrative Agent’s discretion, file any claim or take any other action or   proceeding to protect and realize upon the security interest of the   Administrative Agent in the Accounts. (ii) Each Grantor acknowledges and agrees   that the Proceeds of its Accounts remitted to or on behalf of the   Administrative Agent in accordance with the provisions hereof shall be solely   for the Administrative Agent’s own convenience and that such Grantor shall   not have any right, title or interest in such Accounts or in any such other   amounts except as expressly provided herein. Neither the Administrative Agent   nor the Secured Parties shall have any liability or responsibility to any   Grantor for acceptance of a check, draft or other order for payment of money   bearing the legend “payment in full” or words of similar import or any other   restrictive legend or endorsement or be responsible for determining the   correctness of any remittance. (iii) During the continuation of an Event of   Default, (A) the Administrative Agent shall have the right, but not the   obligation, to make test verifications of the Accounts in any manner and   through any medium that it reasonably considers advisable, and the Grantors   shall furnish all such assistance and information as the Administrative Agent   may require in connection with such test verifications, (B) upon the   Administrative Agent’s request and at the expense of the Grantors, the   Grantors shall cause independent public accountants or others satisfactory to   the Administrative Agent to furnish to the Administrative Agent reports   showing reconciliations, aging and test verifications of, and trial balances   for, the Accounts and (C) the Administrative Agent in its own name or in the   name of others may communicate with account debtors on the Accounts to verify   with them to the Administrative Agent’s satisfaction the existence, amount   and terms of any Accounts. (iv) Upon the occurrence of an Event of Default   and during continuation thereof, and upon the request of the Administrative   Agent, each Grantor shall forward to the Administrative Agent, on the last   Business Day of each week, deposit slips related to all cash, money, checks   or any other similar items of payment received by the Grantor during such   week, and, if requested by the Administrative Agent, copies of such checks or   any 18 4828-1542-5361_6 

    

 

other similar   items of payment, together with a statement showing the application of all   payments on the Collateral during such week and a collection report with   regard thereto, in form and substance satisfactory to the Administrative   Agent. (c)Deposit Accounts/Securities Accounts. Upon the occurrence of an   Event of Default and during continuation thereof, the Administrative Agent   may prevent withdrawals or other dispositions of funds in Deposit Accounts   and Securities Accounts subject to control agreements or held with any   Secured Party. (d) Investment Property/Pledged Equity. Upon the occurrence of   an Event of Default and during the continuation thereof: the Administrative   Agent shall have the right to receive any and all cash dividends, payments or   distributions made in respect of any Investment Property or Pledged Equity or   other Proceeds paid in respect of any Investment Property or Pledged Equity,   and any or all of any Investment Property or Pledged Equity may, at the   option of the Administrative Agent, be registered in the name of the   Administrative Agent or its nominee, and the Administrative Agent or its   nominee may thereafter exercise (i) all voting, corporate and other rights   pertaining to such Investment Property, or any such Pledged Equity at any   meeting of shareholders, partners or members of the relevant Issuers or   otherwise and (ii) any and all rights of conversion, exchange and   subscription and any other rights, privileges or options pertaining to such   Investment Property or Pledged Equity as if it were the absolute owner   thereof (including, without limitation, the right to exchange at its   discretion any and all of the Investment Property or Pledged Equity upon the   merger, consolidation, reorganization, recapitalization or other fundamental   change in the corporate, partnership or limited liability company structure   of any Issuer or upon the exercise by any Grantor or the Administrative Agent   of any right, privilege or option pertaining to such Investment Property or   Pledged Equity, and in connection therewith, the right to deposit and deliver   any and all of the Investment Property or Pledged Equity with any committee,   depositary, transfer agent, registrar or other designated agency upon such   terms and conditions as the Administrative Agent may determine), all without   liability except to account for property actually received by it; but the   Administrative Agent shall have no duty to any Grantor to exercise any such   right, privilege or option and the Administrative Agent and the other Secured   Parties shall not be responsible for any failure to do so or delay in so   doing. In furtherance thereof, each Grantor hereby authorizes and instructs   each Issuer with respect to any Collateral consisting of Investment Property   and/or Pledged Equity to (A) comply with any instruction received by it from   the Administrative Agent in writing that (1) states that an Event of Default   has occurred and is continuing and (2) is otherwise in accordance with the   terms of this Agreement, without any other or further instructions from such   Grantor, and each Grantor agrees that each Issuer shall be fully protected in   so complying following receipt of such notice and prior to notice that such   Event of Default is no longer continuing, and (B) except as otherwise   expressly permitted hereby, pay any dividends, distributions or other   payments with respect to any Investment Property or Pledged Equity directly   to the Administrative Agent. Unless an Event of Default shall have occurred   and be continuing and the Administrative Agent shall have given notice to the   relevant Grantor of the Administrative Agent’s intent to exercise its   corresponding rights pursuant to this Section 7, each Grantor shall be   permitted to receive all cash dividends, payments or other distributions made   in respect of any Investment Property and any Pledged Equity, in each case   paid in the normal course of business of the relevant Issuer and consistent   with past practice, to the extent permitted in the Credit Agreement, and to   exercise all voting and other corporate, company and partnership rights with   respect to any Investment Property and Pledged Equity to the extent not   inconsistent with the terms of this Agreement and the other Loan Documents.   (e) Material Contracts. Upon the occurrence of an Event of Default and during   the continuation thereof, the Administrative Agent shall be entitled to (but   shall not be required to): 19 4828-1542-5361_6 

    

 

(i) proceed to   perform any and all obligations of the applicable Grantor under any Material   Agreement and exercise all rights of such Grantor thereunder as fully as such   Grantor itself could, (ii) do all other acts which the Administrative Agent   may deem necessary or proper to protect its security interest granted   hereunder, provided such acts are not inconsistent with or in violation of   the terms of any of the Credit Agreement, of the other Loan Documents or   applicable Law, and (iii) sell, assign or otherwise transfer any Material   Agreement in accordance with the Credit Agreement, the other Loan Documents   and applicable Law, subject, however, to the prior approval of each other   party to such Material Agreement, to the extent required under such Material   Agreement. (f) Access. In addition to the rights and remedies hereunder, upon   the occurrence of an Event of Default and during the continuance thereof, the   Administrative Agent shall have the right to enter and remain upon the   various premises of the Grantors without cost or charge to the Administrative   Agent, and use the same, together with materials, supplies, books and records   of the Grantors for the purpose of collecting and liquidating the Collateral,   or for preparing for sale and conducting the sale of the Collateral, whether   by foreclosure, auction or otherwise. In addition, the Administrative Agent   may remove Collateral, or any part thereof, from such premises and/or any   records with respect thereto, in order to effectively collect or liquidate   such Collateral. If the Administrative Agent exercises its right to take   possession of the Collateral, each Grantor shall also at its expense perform   any and all other steps reasonably requested by the Administrative Agent to   preserve and protect the security interest hereby granted in the Collateral,   such as placing and maintaining signs indicating the security interest of the   Administrative Agent, appointing overseers for the Collateral and maintaining   inventory records. (g) Nonexclusive Nature of Remedies. Failure by the   Administrative Agent or the Secured Parties to exercise any right, remedy or   option under this Agreement, any other Loan Document, any other document   relating to the Secured Obligations, or as provided by Law, or any delay by   the Administrative Agent or the Secured Parties in exercising the same, shall   not operate as a waiver of any such right, remedy or option. No waiver   hereunder shall be effective unless it is in writing, signed by the party   against whom such waiver is sought to be enforced and then only to the extent   specifically stated, which in the case of the Administrative Agent or the   Secured Parties shall only be granted as provided herein. To the extent   permitted by Law, neither the Administrative Agent, the Secured Parties, nor   any party acting as attorney for the Administrative Agent or the Secured   Parties, shall be liable hereunder for any acts or omissions or for any error   of judgment or mistake of fact or law other than their gross negligence or   willful misconduct hereunder as determined by a final non-appealable judgment   of a court of competent jurisdiction. The rights and remedies of the   Administrative Agent and the Secured Parties under this Agreement shall be   cumulative and not exclusive of any other right or remedy which the Administrative   Agent or the Secured Parties may have. (h) Retention of Collateral.In   addition to the rights and remedies hereunder, the Administrative Agent may,   in compliance with Sections 9-620 and 9-621 of the UCC or otherwise complying   with the requirements of applicable Law of the relevant jurisdiction, accept   or retain the Collateral in satisfaction of the Secured Obligations. Unless   and until the Administrative Agent shall have provided such notices, however,   the Administrative Agent shall not be deemed to have retained any Collateral   in satisfaction of any Secured Obligations for any reason. (i) Waiver;   Deficiency.Each Grantor hereby waives, to the extent permitted by applicable   Laws, all rights of redemption, appraisement, valuation, stay, extension or moratorium   now or hereafter in force under any applicable Laws in order to prevent or   delay the enforcement of this Agreement or the absolute sale of the   Collateral or any portion thereof. In the event that the proceeds of any   sale, collection or realization are insufficient to pay all amounts to which   the 20 4828-1542-5361_6 

    

 

 

Administrative   Agent or the Secured Parties are legally entitled, the Grantors shall be   jointly and severally liable for the deficiency, together with interest   thereon at the Default Rate, together with the costs of collection and the   fees, charges and disbursements of counsel. Any surplus remaining after the   full payment and satisfaction of the Secured Obligations shall be returned to   the Grantors or to whomsoever a court of competent jurisdiction shall   determine to be entitled thereto. (j) Registration Rights. (i) If the   Administrative Agent shall determine that in order to exercise its right to   sell any or all of the Collateral it is necessary or advisable to have such   Collateral registered under the provisions of the Securities Act (any such   Collateral, the “Restricted Securities Collateral”), the relevant Grantor   will cause each applicable Issuer (and the officers and directors thereof)   that is a Grantor or a Subsidiary of a Grantor to (A) execute and deliver all   such instruments and documents, and do or cause to be done all such other   acts as may be, in the opinion of the Administrative Agent, necessary or   advisable to register such Restricted Securities Collateral, or that portion   thereof to be sold, under the provisions of the Securities Act, (B) use its   commercially reasonable efforts to cause the registration statement relating   thereto to become effective and to remain effective for a period of one year   from the date of the first public offering of such Restricted Securities   Collateral, or that portion thereof to be sold, and (C) make all amendments   thereto and/or to the related prospectus which, in the opinion of the   Administrative Agent, are necessary or advisable, all in conformity with the   requirements of the Securities Act and the rules and regulations of the   Securities and Exchange Commission applicable thereto. Each Grantor agrees to   cause each applicable Issuer (and the officers and directors thereof) to   comply with the provisions of the securities or “Blue Sky” laws of any and   all jurisdictions which the Administrative Agent shall designate and to make   available to its security holders, as soon as practicable, an earnings   statement (which need not be audited) which will satisfy the provisions of   the Securities Act. (ii) Each Grantor agrees to use its commercially   reasonable efforts to do or cause to be done all such other acts as may be   necessary to make such sale or sales of all or any portion of the Restricted   Securities Collateral valid and binding and in compliance with any and all   other applicable Laws. Each Grantor further agrees that a breach of any of   the covenants contained in this Section 7 will cause irreparable injury to   the Administrative Agent and the other Secured Parties, that the   Administrative Agent and the other Secured Parties have no adequate remedy at   law in respect of such breach and, as a consequence, that each and every   covenant contained in this Section 7 shall be specifically enforceable   against such Grantor, and such Grantor hereby waives and agrees not to assert   any defenses against an action for specific performance of such covenants   except for a defense that no Event of Default has occurred under the Credit   Agreement. 8. Rights of the Administrative Agent. (a) Power of Attorney. In   addition to other powers of attorney contained herein, each Grantor hereby   designates and appoints the Administrative Agent, on behalf of the Secured   Parties, and each of its designees or agents, as attorney-in-fact of such   Grantor, irrevocably and with power of substitution, with authority to take   any or all of the following actions upon the occurrence and during the   continuance of an Event of Default: (i) to demand, collect, settle,   compromise, adjust, give discharges and releases, all as the Administrative   Agent may reasonably determine; 21 4828-1542-5361_6 

    

 

(ii) to   commence and prosecute any actions at any court for the purposes of   collecting any Collateral and enforcing any other right in respect thereof;   (iii) to defend, settle or compromise any action brought and, in connection   therewith, give such discharge or release as the Administrative Agent may   deem reasonably appropriate; (iv) to receive, open and dispose of mail   addressed to a Grantor and endorse checks, notes, drafts, acceptances, money   orders, bills of lading, warehouse receipts or other instruments or documents   evidencing payment, shipment or storage of the goods giving rise to the   Collateral of such Grantor on behalf of and in the name of such Grantor, or   securing, or relating to such Collateral; (v) to sell, assign, transfer, make   any agreement in respect of, or otherwise deal with or exercise rights in   respect of, any Collateral or the goods or services which have given rise   thereto, as fully and completely as though the Administrative Agent were the   absolute owner thereof for all purposes; (vi) to adjust and settle claims   under any insurance policy relating thereto; (vii) to execute and deliver all   assignments, conveyances, statements, financing statements, continuation   financing statements, security agreements, affidavits, notices and other   agreements, instruments and documents that the Administrative Agent may   determine necessary in order to perfect and maintain the security interests   and liens granted in this Agreement and in order to fully consummate all of   the transactions contemplated herein; (viii) to institute any foreclosure   proceedings that the Administrative Agent may deem appropriate; (ix) to sign   and endorse any drafts, assignments, proxies, stock powers, verifications,   notices and other documents relating to the Collateral; (x) to exchange any   of the Pledged Equity or other property upon any merger, consolidation,   reorganization, recapitalization or other readjustment of the Issuer thereof   and, in connection therewith, deposit any of the Pledged Equity with any   committee, depository, transfer agent, registrar or other designated agency   upon such terms as the Administrative Agent may reasonably deem appropriate;   (xi) to vote for a shareholder resolution, or to sign an instrument in   writing, sanctioning the transfer of any or all of the Pledged Equity into   the name of the Administrative Agent or one or more of the Secured Parties or   into the name of any transferee to whom the Pledged Equity or any part   thereof may be sold pursuant to Section 7 hereof; (xii) to pay or discharge   taxes, liens, security interests or other encumbrances levied or placed on or   threatened against the Collateral; (xiii) to direct any parties liable for   any payment in connection with any of the Collateral to make payment of any   and all monies due and to become due thereunder directly to the   Administrative Agent or as the Administrative Agent shall direct; 22   4828-1542-5361_6 

    

 

(xiv) to   receive payment of and receipt for any and all monies, claims, and other   amounts due and to become due at any time in respect of or arising out of any   Collateral; (xv) in the case of any Intellectual Property, execute and   deliver, and have recorded, any and all agreements, instruments, documents   and papers as the Administrative Agent may request to evidence the security   interests created hereby in such Intellectual Property and the goodwill and   General Intangibles of such Grantor relating thereto or represented thereby;   and (xvi) do and perform all such other acts and things as the Administrative   Agent may reasonably deem to be necessary, proper or convenient in connection   with the Collateral. This power of attorney is a power coupled with an   interest and shall be irrevocable until the termination of all Commitments   and repayment in full of all Obligations (other than contingent   indemnification and reimbursement obligations for which no claim has been   asserted). The Administrative Agent shall be under no duty to exercise or   withhold the exercise of any of the rights, powers, privileges and options   expressly or implicitly granted to the Administrative Agent in this   Agreement, and shall not be liable for any failure to do so or any delay in   doing so. The Administrative Agent shall not be liable for any act or   omission or for any error of judgment or any mistake of fact or law in its   individual capacity or its capacity as attorney-in-fact except acts or   omissions resulting from its gross negligence or willful misconduct as   determined by a final non-appealable judgment of a court of competent   jurisdiction. This power of attorney is conferred on the Administrative Agent   solely to protect, preserve and realize upon its security interest in the   Collateral and shall not impose any duty upon the Administrative Agent or any   other Secured Party to exercise any such powers. (b) Assignment by the   Administrative Agent. The Administrative Agent may from time to time assign   the Secured Obligations to a successor Administrative Agent appointed in   accordance with the Credit Agreement, and such successor shall be entitled to   all of the rights and remedies of the Administrative Agent under this   Agreement in relation thereto. (c) The Administrative Agent’s Duty of Care.   Other than the exercise of reasonable care to assure the safe custody of the   Collateral while being held by the Administrative Agent hereunder, the   Administrative Agent shall have no duty or liability to preserve rights   pertaining thereto, it being understood and agreed that the Grantors shall be   responsible for preservation of all rights in the Collateral, and the   Administrative Agent shall be relieved of all responsibility for the   Collateral upon surrendering it or tendering the surrender of it to the   Grantors. The Administrative Agent shall be deemed to have exercised   reasonable care in the custody and preservation of the Collateral in its   possession if the Collateral is accorded treatment substantially equal to   that which the Administrative Agent accords its own property, which shall be   no less than the treatment employed by a reasonable and prudent agent in the   industry, it being understood that the Administrative Agent shall not have   responsibility for taking any necessary steps to preserve rights against any   parties with respect to any of the Collateral. In the event of a public or private   sale of Collateral pursuant to Section 7 hereof, the Administrative Agent   shall have no responsibility for (i) ascertaining or taking action with   respect to calls, conversions, exchanges, maturities, tenders or other   matters relating to any Collateral, whether or not the Administrative Agent   has or is deemed to have knowledge of such matters, or (ii) taking any steps   to clean, repair or otherwise prepare the Collateral for sale. (d) Liability   with Respect to Accounts. Anything herein to the contrary notwithstanding,   each of the Grantors shall remain liable under each of the Accounts to   observe and 23 4828-1542-5361_6 

    

 

perform all the   conditions and obligations to be observed and performed by it thereunder, all   in accordance with the terms of any agreement giving rise to each such   Account. Neither the Administrative Agent nor any Secured Party shall have   any obligation or liability under any Account (or any agreement giving rise   thereto) by reason of or arising out of this Agreement or the receipt by the   Administrative Agent or any Secured Party of any payment relating to such   Account pursuant hereto, nor shall the Administrative Agent or any Secured   Party be obligated in any manner to perform any of the obligations of a   Grantor under or pursuant to any Account (or any agreement giving rise   thereto), to make any payment, to make any inquiry as to the nature or the   sufficiency of any payment received by it or as to the sufficiency of any   performance by any party under any Account (or any agreement giving rise   thereto), to present or file any claim, to take any action to enforce any   performance or to collect the payment of any amounts which may have been   assigned to it or to which it may be entitled at any time or times. (e)   Releases of Collateral. (i) If any Collateral shall be sold, transferred or   otherwise disposed of by any Grantor in a transaction permitted by the Credit   Agreement, then the Administrative Agent, at the request and sole expense of   such Grantor, shall promptly execute and deliver to such Grantor all releases   and other documents, and take such other action, reasonably necessary for the   release of the Liens created hereby or by any other Collateral Document on   such Collateral. (ii) The Administrative Agent may release any of the Pledged   Equity from this Agreement or may substitute any of the Pledged Equity for   other Pledged Equity without altering, varying or diminishing in any way the   force, effect, lien, pledge or security interest of this Agreement as to any   Pledged Equity not expressly released or substituted, and this Agreement   shall continue as a first priority lien on all Pledged Equity not expressly   released or substituted. 9. Application of Proceeds. After the exercise of   remedies provided for in Section 8.02 of the Credit Agreement (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 Section 8.02 of the Credit Agreement) any payments in respect of the   Secured Obligations and any proceeds of the Collateral, when received by the   Administrative Agent or any Secured Party in cash or Cash Equivalents will be   applied in reduction of the Secured Obligations in the order set forth in the   Credit Agreement. 10. Continuing Agreement. (a) This Agreement shall remain   in full force and effect until the termination of all Commitments and   repayment in full of all Obligations (other than contingent indemnification   and reimbursement obligations for which no claim has been asserted), at which   time this Agreement shall be automatically terminated (other than obligations   under this Agreement and the Credit Agreement which expressly survive such   termination) and the Administrative Agent shall, upon the request and at the   expense of the Grantors, forthwith release all of its liens and security   interests hereunder and shall execute and deliver all UCC termination   statements and/or other documents reasonably requested by the Grantors   evidencing such termination. (b) This Agreement shall continue to be   effective or be automatically reinstated, as the case may be, if at any time   payment, in whole or in part, of any of the Secured Obligations is rescinded   or must otherwise be restored or returned by the Administrative Agent or any   Secured Party as a preference, fraudulent conveyance or otherwise under any   Debtor Relief Law, all as 24 4828-1542-5361_6 

    

 

though such   payment had not been made; provided that in the event payment of all or any   part of the Secured Obligations is rescinded or must be restored or returned,   all reasonable costs and expenses (including without limitation any   reasonable legal fees and disbursements) incurred by the Administrative Agent   or any Secured Party in defending and enforcing such reinstatement shall be   deemed to be included as a part of the Secured Obligations. 11. Amendments;   Waivers; Modifications, etc. This Agreement and the provisions hereof may not   be amended, waived, modified, changed, discharged or terminated except as set   forth in Section 11.01 of the Credit Agreement. 12. Successors in Interest.   This Agreement shall be binding upon each Grantor, its successors and assigns   and shall inure, together with the rights and remedies of the Administrative   Agent and the Secured Parties hereunder, to the benefit of the Administrative   Agent and the Secured Parties and their successors and permitted assigns. 13.   Notices. All notices required or permitted to be given under this Agreement   shall be in conformance with Section 11.02 of the Credit Agreement; provided   that notices and communications to the Grantors shall be directed to the   Grantors, at the address of the Borrower set forth in Schedule 11.02 of the   Credit Agreement. 14. Counterparts. This Agreement may be executed in any   number of counterparts, each of which where so executed and delivered shall   be an original, but all of which shall constitute one and the same instrument.   It shall not be necessary in making proof of this Agreement to produce or   account for more than one such counterpart. Delivery of an executed   counterpart of a signature page of this Agreement by fax transmission or   other electronic mail transmission (e.g. “pdf” or “tif”) shall be effective   as delivery of a manually executed counterpart of this Agreement. Without   limiting the foregoing, to the extent a manually executed counterpart is not   specifically required to be delivered, upon the request of any party, such   fax transmission or electronic mail transmission shall be promptly followed   by such manually executed counterpart. 15. Headings. The headings of the   sections hereof are provided for convenience only and shall not in any way   affect the meaning or construction of any provision of this Agreement. 16.   Governing Law; Submission to Jurisdiction; Venue; WAIVER OF JURY TRIAL. The   terms of Sections 11.14 and 11.15 of the Credit Agreement with respect to   governing law, submission to jurisdiction, venue and waiver of jury trial are   incorporated herein by reference, mutatis mutandis, and the parties hereto   agree to such terms. 17. Severability. If any provision of this Agreement is   determined to be illegal, invalid or unenforceable, such provision shall be   fully severable and the remaining provisions shall remain in full force and   effect and shall be construed without giving effect to the illegal, invalid   or unenforceable provisions. 18. Entirety. This Agreement, the other Loan   Documents and the other documents relating to the Secured Obligations   represent the entire agreement of the parties hereto and thereto, and   supersede all prior agreements and understandings, oral or written, if any,   including any commitment letters or correspondence relating to the Loan Documents,   any other documents relating to the Secured Obligations, or the transactions   contemplated herein and therein. 19. Other Security. To the extent that any   of the Secured Obligations are now or hereafter secured by property other   than the Collateral (including, without limitation, real property and   securities owned by a Grantor), or by a guarantee, endorsement or property of   any other Person, then the 25 4828-1542-5361_6 

    

 

Administrative   Agent shall have the right to proceed against such other property, guarantee   or endorsement upon the occurrence of any Event of Default, and the   Administrative Agent shall have the right, in its sole discretion, to   determine which rights, security, liens, security interests or remedies the   Administrative Agent shall at any time pursue, relinquish, subordinate,   modify or take with respect thereto, without in any way modifying or   affecting any of them or the Secured Obligations or any of the rights of the   Administrative Agent or the Secured Parties under this Agreement, under any   other of the Loan Documents or under any other document relating to the   Secured Obligations. 20. Joinder. At any time after the date of this   Agreement, one or more additional Persons may become party hereto by   executing and delivering to the Administrative Agent a Joinder Agreement in   the form of Exhibit D to the Credit Agreement or such other form acceptable   to the Administrative Agent. Immediately upon such execution and delivery of   such Joinder Agreement (and without any further action), each such additional   Person will become a party to this Agreement as an “Grantor” and have all of   the rights and obligations of a Grantor hereunder and this Agreement and the   schedules hereto shall be deemed amended by such Joinder Agreement. 21.   Consent of Issuers of Pledged Equity. Any Loan Party that is an Issuer hereby   acknowledges, consents and agrees to the grant of the security interests in   such Pledged Equity by the applicable Grantors pursuant to this Agreement,   together with all rights accompanying such security interest as provided by   this Agreement and applicable Law, notwithstanding any anti-assignment   provisions in any operating agreement, limited partnership agreement or   similar organizational or governance documents of such Issuer. 22. Joint and   Several Obligations of Grantors. (a) Each of the Grantors is accepting joint   and several liability hereunder in consideration of the financial   accommodations to be provided by the Lenders under the Credit Agreement, for   the mutual benefit, directly and indirectly, of each of the Grantors and in   consideration of the undertakings of each of the Grantors to accept joint and   several liability for the obligations of each of them. (b) Each of the   Grantors jointly and severally hereby irrevocably and unconditionally   accepts, not merely as a surety but also as a primary obligor, joint and   several liability with the other Grantors with respect to the payment and   performance of all of the Secured Obligations, it being the intention of the   parties hereto that (i) all the Secured Obligations shall be the joint and   several obligations of each of the Grantors without preferences or   distinction among them and (ii) a separate action may be brought against each   Grantor to enforce this Agreement whether or not the Borrower, any other   Grantor or any other person or entity is joined as a party. (c)   Notwithstanding any provision to the contrary contained herein, in any other   of the Loan Documents, to the extent the obligations of a Grantor shall be   adjudicated to be invalid or unenforceable for any reason (including, without   limitation, because of any applicable state or federal law relating to   fraudulent conveyances or transfers) then the obligations of such Grantor   hereunder shall be limited to the maximum amount that is permissible under   applicable law (whether federal or state and including, without limitation,   Debtor Relief Laws). 23. Marshaling. The Administrative Agent shall not be   required to marshal any present or future collateral security (including but not   limited to the Collateral) for, or other assurances of payment of, the   Secured Obligations or any of them or to resort to such collateral security   or other assurances of payment in any particular order, and all of its rights   and remedies hereunder and in respect of such collateral security and other   assurances of payment shall be cumulative and in addition to all other rights   and remedies, however 26 4828-1542-5361_6 

    

 

existing or   arising. To the extent that it lawfully may, each Grantor hereby agrees that   it will not invoke any law relating to the marshaling of collateral which   might cause delay in or impede the enforcement of the Administrative Agent’s   rights and remedies under this Agreement or under any other instrument   creating or evidencing any of the Secured Obligations or under which any of   the Secured Obligations is outstanding or by which any of the Secured   Obligations is secured or payment thereof is otherwise assured, and, to the   extent that it lawfully may, each Grantor hereby irrevocably waives the   benefits of all such laws. 24. Injunctive Relief. (a) Each Grantor recognizes   that, in the event such Grantor fails to perform, observe or discharge any of   its obligations or liabilities under this Agreement or any other Loan Document,   any remedy of law may prove to be inadequate relief to the Administrative   Agent and the other Secured Parties. Therefore, each Grantor agrees that the   Administrative Agent and the other Secured Parties, at the option of the   Administrative Agent and the other Secured Parties, shall be entitled to   temporary and permanent injunctive relief in any such case without the   necessity of proving actual damages. (b) The Administrative Agent, the other   Secured Parties and each Grantor hereby agree that no such Person shall have   a remedy of punitive or exemplary damages against any other party to a Loan   Document and each such Person hereby waives any right or claim to punitive or   exemplary damages that they may now have or may arise in the future in   connection with any dispute under this Agreement or any other Loan Document,   whether such dispute is resolved through arbitration or judicially. 25.   Secured Parties. Each Secured Party that is not a party to the Credit   Agreement who obtains the benefit of this Agreement shall be deemed to have   acknowledged and accepted the appointment of the Administrative Agent   pursuant to the terms of the Credit Agreement, and with respect to the   actions and omissions of the Administrative Agent hereunder or otherwise   relating hereto that do or may affect such Secured Party, the Administrative   Agent and each of its Affiliates shall be entitled to all of the rights,   benefits and immunities conferred under Article IX of the Credit Agreement.   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 27 4828-1542-5361_6 

    

 

Each of the   parties hereto has caused a counterpart of this Agreement to be duly executed   and delivered as of the date first above written. GRANTORS: PARENT: ASHFORD   INC. By: Name: David A. Brooks I g 0 M Title: If I I I j IGeneral Counsel   BORROWER: ASHFORD HOSPITALITY HOLDINGS LLC By: Ashford Inc., its manager By:   Name: David A. Brooks Title: Of I f Op t' g Off d General Counsel OTHER   GRANTORS: ASHFORD ADVISORS, INC. By: Title: Chief Operating Officer, General   Counsel, and Secretary ASHFORD HOSPITALITY ADVISORS LLC By: Name: David A.   Brooks Title: Vice President and Secretary ASHFORD LENDING CORPORATION By:   Name: Deric S. Eubanks Title: President and Secretary Signature Page to   Security and Pledge Agreement 

    

 

Each of the   parties hereto has caused a counterpart of this Agreement to be duly executed   and delivered as of the date first above written. GRANTORS: PARENT: ASHFORD   INC. By: Name: David A. Brooks Title: .tlils I; I Q.IM ,. 4 General Counsel   BORROWER: ASHFORD HOSPITALITY HOLDINGS LLC By: Ashford Inc., its manager By:   Name: David A. Brooks Title: ·.1.1 . IpI g U I OTHER GRANTORS: .J General   Counsel ASHFORD ADVISORS, INC. By: Name: David A. Brooks Title: Chief   Operating Officer, General Counsel, and Secretary ASHFORD HOSPITALITY   ADVISORS LLC By: Name: David A. Brooks Title: Vice President and Secretary   ASHFORD LENDING CORPORATION By: Name: Deric S. Eubanks Title: President and   Secretary Signature Page to Security and Pledge Agreement 

    

 

LISMORE CAPITAL   LLC By: Name: David A. Brooks Title: Chief Operating Officer and Secretary   AINC KALIBRI HOLDCO LLC By: Name: Title: David A. Brooks Vice President and   Secretary Signature Page to Security and Pledge Agreement 

    

 

Accepted and   agreed to as of the date first above written. BANK OF AMERICA, N.A., as   Administrative Agent s AAP--c .b..ctit By: Su nE. Pickett Vice resident   Signature Page to Security and Pledge Agreement 

    

 

SCHEDULE 1 1.   Pledged Equity: Type 2. Commercial Tort Claims: None. 3. Certificated Equity   Interests: Type 4. Instruments, Documents and Tangible Chattel Paper: • Stock   Certificate Number A-02 issued by Ashford Advisors, Inc. to Ashford   Hospitality Holdings LLC. • Stock Certificate Number 01 issued by Ashford   Lending Corporation to Ashford Hospitality Advisors LLC. • the Inter-Company   Note (as defined in the Credit Agreement) 4828-1542-5361_6 Issuer Grantor   Number of Shares Equity Interest Ashford Advisors, Inc. Ashford Hospitality   Holdings LLC 100 shares of Series A Voting Common Stock Certificated Stock   Ashford Lending Corporation Ashford Hospitality Advisors LLC 100 shares of   Common Stock Certificated Stock Issuer Grantor Equity % of Owner Equity   Interest AINC Kalibri Holdco LLC Ashford Hospitality Advisors LLC 100%   Membership Interest Ashford Advisors, Inc. Ashford Hospitality Holdings LLC   100% Stock Ashford Hospitality Advisors LLC Ashford Advisors, Inc. 100%   Membership Interest Ashford Hospitality Holdings LLC Ashford Inc. 99.8%   Membership Interest Ashford Lending Corporation Ashford Hospitality Advisors   LLC 100% Stock Lismore Capital LLC Ashford Hospitality Advisors LLC 100%   Membership Interest 

    

 

5. Material   Agreements: Subject to the second paragraph of Section 2 of this Agreement: •   Fourth Amended and Restated Advisory Agreement dated as of January 24, 2017,   by and among Advisors, Ashford Hospitality Prime, Inc., a Maryland   corporation, and the other parties thereto.; and • Amended and Restated   Advisory Agreement dated as of June 10, 2015, by and among Advisors, Ashford   Hospitality Trust, Inc., a Maryland corporation, and the other parties   thereto. Signature Page to Security and Pledge Agreement 

    

 

SCHEDULE 3(i)   NON-ASSIGNABLE AGREEMENTS Fourth Amended and Restated Advisory Agreement   dated as of January 24, 2017, by and among Advisors, Ashford Hospitality   Prime, Inc., a Maryland corporation, and the other parties thereto. Amended   and Restated Advisory Agreement dated as of June 10, 2015, by and among   Advisors, Ashford Hospitality Trust, Inc., a Maryland corporation, and the   other parties thereto. Signature Page to Security and Pledge Agreement 

    

 

EXHIBIT A [FORM   OF] IRREVOCABLE STOCK POWER FORVALUERECEIVED,the   undersignedherebysells,assigns andtransfersto _] [corporation] the following   Equity Interests of [ _], a [ [limited liability company]: No. of Shares   Certificate No. and irrevocably appoints its agent and attorney-in-fact to transfer   all or any part of such Equity Interests and to take all necessary and   appropriate action to effect any such transfer. for him. The agent and   attorney-in-fact may substitute and appoint one or more persons to act By:   Name: Title: 4828-1542-5361_6 

    

 

EXHIBIT B [FORM   OF] NOTICE OF GRANT OF SECURITY INTEREST IN COPYRIGHTS [United States   Copyright Office] [Canadian Intellectual Property Office] Ladies and   Gentlemen: Please be advised that pursuant to the Security and Pledge   Agreement dated as of March 1, 2018 (as amended, modified, extended,   restated, renewed, replaced, or supplemented from time to time, the   “Agreement”) by and among the Grantors party thereto (each an “Grantor” and   collectively, the “Grantors”) and Bank of America, N.A., as administrative   agent (the “Administrative Agent”) for the Secured Parties referenced   therein, the undersigned Grantor has granted a continuing security interest   in and continuing lien upon the copyrights and copyright applications shown   on Schedule 1 attached hereto to the Administrative Agent for the ratable   benefit of the Secured Parties. The undersigned Grantor and the   Administrative Agent, on behalf of the Secured Parties, hereby acknowledge   and agree that the security interest in the foregoing copyrights and   copyright applications (a) may only be terminated in accordance with the   terms of the Agreement and (b) is not to be construed as an assignment of any   copyright or copyright application. Very truly yours, [GRANTOR] By: Name:   Title: Acknowledged and Accepted: BANK OF AMERICA, N.A., as Administrative   Agent By: Name: Title: 4828-1542-5361_6 

    

 

EXHIBIT C [FORM   OF] NOTICE OF GRANT OF SECURITY INTEREST IN PATENTS [United States Patent and   Trademark Office] [Canadian Intellectual Property Office] Ladies and   Gentlemen: Please be advised that pursuant to the Security and Pledge   Agreement dated as of March 1, 2018 (as amended, modified, extended,   restated, renewed, replaced, or supplemented from time to time, the   “Agreement”) by and among the Grantors party thereto (each an “Grantor” and   collectively, the “Grantors”) and Bank of America, N.A., as administrative   agent (the “Administrative Agent”) for the Secured Parties referenced   therein, the undersigned Grantor has granted a continuing security interest   in and continuing lien upon the patents and patent applications shown on   Schedule 1 attached hereto to the Administrative Agent for the ratable   benefit of the Secured Parties. The undersigned Grantor and the   Administrative Agent, on behalf of the Secured Parties, hereby acknowledge   and agree that the security interest in the foregoing patents and patent   applications (a) may only be terminated in accordance with the terms of the   Agreement and (b) is not to be construed as an assignment of any patent or   patent application. Very truly yours, [GRANTOR] By: Name: Title: Acknowledged   and Accepted: BANK OF AMERICA, N.A., as Administrative Agent By: Name: Title:   4828-1542-5361_6 

    

 

EXHIBIT D [FORM   OF] NOTICE OF GRANT OF SECURITY INTEREST IN TRADEMARKS [United States Patent   and Trademark Office] [Canadian Intellectual Property Office] Ladies and   Gentlemen: Please be advised that pursuant to the Security and Pledge   Agreement dated as of March 1, 2018 (as amended, modified, extended,   restated, renewed, replaced, or supplemented from time to time, the   “Agreement”) and among the Grantors party thereto (each an “Grantor” and   collectively, the “Grantors”) and Bank of America, N.A., as administrative   agent (the “Administrative Agent”) for the Secured Parties referenced   therein, the undersigned Grantor has granted a continuing security interest   in and continuing lien upon the trademarks and trademark applications shown   on Schedule 1 attached hereto to the Administrative Agent for the ratable   benefit of the Secured Parties. The undersigned Grantor and the   Administrative Agent, on behalf of the Secured Parties, hereby acknowledge   and agree that the security interest in the foregoing trademarks and   trademark applications (a) may only be terminated in accordance with the   terms of the Agreement and (b) is not to be construed as an assignment of any   trademark or trademark application. Very truly yours, [GRANTOR] By: Name:   Title: Acknowledged and Accepted: BANK OF AMERICA, N.A., as Administrative   Agent By: Name: Title: 4828-1542-5361_6 

    

 

EXHIBIT G   OPINION MATTERS COUNSEL TO LOAN PARTIES The matters contained in the   following Sections of the Credit Agreement should be covered by the legal   opinion: Sections 5.01(a), (b)(ii) and (c) (as to identified jurisdictions   only) Section 5.02 (in the case of Section 5.02(b), as to identified Material   Contracts and orders only) Section 5.03 Section 5.04 Section 5.14(b)   4838-5535-0609 v.6 Exhibit G – Page 1 

    

 

EXHIBIT H-1   FORM OF U.S. TAX COMPLIANCE CERTIFICATE (For Foreign Lenders That Are Not   Partnerships For U.S. Federal Income Tax Purposes) Reference is hereby made   to the Credit Agreement dated as of March 1, 2018 (as amended, supplemented   or otherwise modified from time to time, the “Credit Agreement”), among   Ashford Hospitality Holdings LLC, a Delaware limited liability company (the   “Borrower”), Ashford Inc., a Maryland corporation (the “Parent”), Bank of   America, N.A., as Administrative Agent and L/C Issuer, and each lender from   time to time party thereto. Pursuant to the provisions of Section 3.01(e) of   the Credit Agreement, the undersigned hereby certifies that (i) it is the   sole record and beneficial owner of the Loan(s) (as well as any Note(s)   evidencing such Loan(s)) in respect of which it is providing this   certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A)   of the Code, (iii) it is not a ten percent shareholder of the Borrower within   the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a   controlled foreign corporation related to the Borrower as described in   Section 881(c)(3)(C) of the Code. The undersigned has furnished the   Administrative Agent and the Borrower with a certificate of its non-U.S.   Person status on IRS Form W-8BEN-E (or W-8BEN, as applicable). By executing   this certificate, the undersigned agrees that (1) if the information provided   on this certificate changes, the undersigned shall promptly so inform the   Borrower and the Administrative Agent, and (2) the undersigned shall have at   all times furnished the Borrower and the Administrative Agent with a properly   completed and currently effective certificate in either the calendar year in   which each payment is to be made to the undersigned, or in either of the two   calendar years preceding such payments. Unless otherwise defined herein,   terms defined in the Credit Agreement and used herein shall have the meanings   given to them in the Credit Agreement. [NAME OF LENDER] By: Name: Title:   Date: , 20[ ] 4838-5535-0609 v.6 Exhibit H-1 

    

 

 

EXHIBIT H-2   FORM OF U.S. TAX COMPLIANCE CERTIFICATE (For Foreign Participants That Are   Not Partnerships For U.S. Federal Income Tax Purposes) Reference is hereby   made to the Credit Agreement dated as of March 1, 2018 (as amended,   supplemented or otherwise modified from time to time, the “Credit   Agreement”), among Ashford Hospitality Holdings LLC, a Delaware limited   liability company (the “Borrower”), Ashford Inc., a Maryland corporation (the   “Parent”), Bank of America, N.A., as Administrative Agent and L/C Issuer, and   each lender from time to time party thereto. Pursuant to the provisions of   Section 3.01(e) of the Credit Agreement, the undersigned hereby certifies   that (i) it is the sole record and beneficial owner of the participation in   respect of which it is providing this certificate, (ii) it is not a bank   within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten   percent shareholder of the Borrower within the meaning of Section   871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation   related to the Borrower as described in Section 881(c)(3)(C) of the Code. The   undersigned has furnished its participating Lender with a certificate of its   non-U.S. Person status on IRS Form W-8BEN-E (or W-8BEN, as applicable). By   executing this certificate, the undersigned agrees that (1) if the   information provided on this certificate changes, the undersigned shall   promptly so inform such Lender in writing, and (2) the undersigned shall have   at all times furnished such Lender with a properly completed and currently   effective certificate in either the calendar year in which each payment is to   be made to the undersigned, or in either of the two calendar years preceding   such payments. Unless otherwise defined herein, terms defined in the Credit   Agreement and used herein shall have the meanings given to them in the Credit   Agreement. [NAME OF PARTICIPANT] By: Name: Title: Date: , 20[ ]   4838-5535-0609 v.6 Exhibit H-2 

    

 

EXHIBIT H-3   FORM OF U.S. TAX COMPLIANCE CERTIFICATE (For Foreign Participants That Are   Partnerships For U.S. Federal Income Tax Purposes) Reference is hereby made   to the Credit Agreement dated as of March 1, 2018 (as amended, supplemented   or otherwise modified from time to time, the “Credit Agreement”), among Ashford   Hospitality Holdings LLC, a Delaware limited liability company (the   “Borrower”), Ashford Inc., a Maryland corporation (the “Parent”), Bank of   America, N.A., as Administrative Agent and L/C Issuer, and each lender from   time to time party thereto. Pursuant to the provisions of Section 3.01(e) of   the Credit Agreement, the undersigned hereby certifies that (i) it is the   sole record owner of the participation in respect of which it is providing   this certificate, (ii) its direct or indirect partners/members are the sole   beneficial owners of such participation, (iii) with respect to such   participation, neither the undersigned nor any of its direct or indirect   partners/members is a bank extending credit pursuant to a loan agreement   entered into in the ordinary course of its trade or business within the   meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or   indirect partners/members is a ten percent shareholder of the Borrower within   the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or   indirect partners/members is a controlled foreign corporation related to the   Borrower as described in Section 881(c)(3)(C) of the Code. The undersigned   has furnished its participating Lender with IRS Form W-8IMY accompanied by   one of the following forms from each of its partners/members that is claiming   the portfolio interest exemption: (i) an IRS Form W-8BEN-E (or W-8BEN, as   applicable) or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN-E   (or W-8BEN, as applicable) from each of such partner’s/member’s beneficial   owners that is claiming the portfolio interest exemption. By executing this   certificate, the undersigned agrees that (1) if the information provided on   this certificate changes, the undersigned shall promptly so inform such   Lender and (2) the undersigned shall have at all times furnished such Lender   with a properly completed and currently effective certificate in either the   calendar year in which each payment is to be made to the undersigned, or in   either of the two calendar years preceding such payments. Unless otherwise   defined herein, terms defined in the Credit Agreement and used herein shall   have the meanings given to them in the Credit Agreement. [NAME OF   PARTICIPANT] By: Name: Title: Date: , 20[ ] 4838-5535-0609 v.6 Exhibit H-3 

    

 

EXHIBIT H-4   FORM OF U.S. TAX COMPLIANCE CERTIFICATE (For Foreign Lenders That Are   Partnerships For U.S. Federal Income Tax Purposes) Reference is hereby made   to the Credit Agreement dated as of March 1, 2018 (as amended, supplemented   or otherwise modified from time to time, the “Credit Agreement”), among   Ashford Hospitality Holdings LLC, a Delaware limited liability company (the   “Borrower”), Ashford Inc., a Maryland corporation (the “Parent”), Bank of   America, N.A., as Administrative Agent and L/C Issuer, and each lender from   time to time party thereto. Pursuant to the provisions of Section 3.01(e) of   the Credit Agreement, the undersigned hereby certifies that (i) it is the   sole record owner of the Loan(s) (as well as any Note(s) evidencing such   Loan(s)) in respect of which it is providing this certificate, (ii) its   direct or indirect partners/members are the sole beneficial owners of such   Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect   to the extension of credit pursuant to this Credit Agreement or any other   Loan Document, neither the undersigned nor any of its direct or indirect   partners/members is a bank extending credit pursuant to a loan agreement   entered into in the ordinary course of its trade or business within the   meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or   indirect partners/members is a ten percent shareholder of the Borrower within   the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or   indirect partners/members is a controlled foreign corporation related to the   Borrower as described in Section 881(c)(3)(C) of the Code. The undersigned   has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY   accompanied by one of the following forms from each of its partners/members   that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN-E   (or W-8BEN, as applicable) or (ii) an IRS Form W-8IMY accompanied by an IRS   Form W-8BEN-E (or W-8BEN, as applicable) from each of such partner’s/member’s   beneficial owners that is claiming the portfolio interest exemption. By   executing this certificate, the undersigned agrees that (1) if the   information provided on this certificate changes, the undersigned shall   promptly so inform the Borrower and the Administrative Agent, and (2) the   undersigned shall have at all times furnished the Borrower and the   Administrative Agent with a properly completed and currently effective   certificate in either the calendar year in which each payment is to be made   to the undersigned, or in either of the two calendar years preceding such   payments. Unless otherwise defined herein, terms defined in the Credit   Agreement and used herein shall have the meanings given to them in the Credit   Agreement. [NAME OF LENDER] By: Name: Title: Date: , 20[ ] 4838-5535-0609 v.6   Exhibit H-4 

    

 

EXHIBIT I FORM   OF SOLVENCY CERTIFICATE ASHFORD INC. ASHFORD HOSPITALITY HOLDINGS LLC ASHFORD   ADVISORS, INC. ASHFORD HOSPITALITY ADVISORS LLC LISMORE CAPITAL LLC AINC KALIBRI   HOLDCO LLC ASHFORD LENDING CORPORATION March 1, 2018 THE UNDERSIGNED HEREBY   CERTIFIES AS FOLLOWS: 1. I am the Chief Financial Officer of Ashford Inc., a   Maryland corporation (“Parent”), which is the member Ashford Hospitality   Holdings LLC, a Delaware limited liability company (“Borrower”). Borrower is   the sole stockholder of Ashford Advisors, Inc., a Delaware corporation   (“Advisors”). Advisors is the sole member of Ashford Hospitality Advisors   LLC, a Delaware limited liability company (“Hospitality Advisors”).   Hospitality Advisors is the sole member of Ashford Lending Corporation, a   Delaware corporation (“Lending”), Lismore Capital LLC, a Delaware limited   liability company (“Lismore”), and AINC Kalibri Holdco LLC, a Delaware   limited liability company (together with the Parent, Borrower, Advisors,   Hospitality Advisors, Lending, and Lismore, the “Loan Parties”). 2. This   Solvency Certificate (this “Certificate”) is delivered in connection with   that certain Credit Agreement dated as of March 1, 2018 (as amended,   modified, supplemented, renewed or extended, and all restatements thereof and   any agreement that refinances the indebtedness thereunder, the “Credit   Agreement”), among Borrower, Parent, the Lenders then or thereafter party   thereto, and Bank of America, N.A., as Administrative Agent and L/C Issuer.   3. I have reviewed the terms of Sections 4.01(a)(vii) of the Credit Agreement   and the term “Solvent” as defined in the Credit Agreement and the other   definitions and provisions contained in the Credit Agreement and the other   Loan Documents relating thereto and, in my opinion, I have made, or have   caused to be made under my supervision, such examination or investigation as   is necessary to enable me to express an informed opinion as to the matters   referred to herein. 4. I, solely in my capacity as Chief Financial Officer of   the Parent, and not in my individual capacity, hereby certify that each of   the Loan Parties is Solvent on the date hereof and will be Solvent   immediately after giving effect to the Credit Agreement. 5. Agreement. Terms   not otherwise defined herein have the meanings assigned to them in the Credit   [Signature page follows.] 4838-5535-0609 v.6 Exhibit I 

    

 

IN WITNESS   WHEREOF, the undersigned has executed this Solvency Certificate as of the   date first above written. ASHFORD INC. By: Name: Title: 4838-5535-0609 v.6   Exhibit I

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