Document:

exv10w1

Exhibit 10.1

EXECUTION VERSION

LOAN AGREEMENT

Dated as of December 10, 2010

between

ORANGEMEN OWNER LLC,

as Borrower,

and

GOLDMAN SACHS COMMERCIAL MORTGAGE CAPITAL, L.P.,

as Lender

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 

	 
	 	 	 	 	 	 
	 

	 	 	 	Page

	 
	 	 	 	 	 	 
	 

	 	ARTICLE I

GENERAL TERMS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 1.1.

	 	The Loan
	 	 	25	 
	Section 1.2.

	 	Interest and Principal
	 	 	26	 
	Section 1.3.

	 	Method and Place of Payment
	 	 	27	 
	Section 1.4.

	 	Taxes; Regulatory Change
	 	 	27	 
	Section 1.5.

	 	Release
	 	 	29	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE II

DEFEASANCE AND ASSUMPTION	 	 	 	 
	 
	 	 	 	 	 	 
	Section 2.1.

	 	Defeasance
	 	 	29	 
	Section 2.2.

	 	Assumption
	 	 	31	 
	Section 2.3.

	 	Transfers of Equity Interests in Borrower
	 	 	32	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE III

ACCOUNTS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 3.1.

	 	Cash Management Account
	 	 	33	 
	Section 3.2.

	 	Distributions from Cash Management Account
	 	 	34	 
	Section 3.3.

	 	Loss Proceeds Account
	 	 	35	 
	Section 3.4.

	 	Basic Carrying Costs Escrow Account
	 	 	36	 
	Section 3.5.

	 	[Intentionally Omitted]
	 	 	37	 
	Section 3.6.

	 	FF&E Reserve Account
	 	 	37	 
	Section 3.7.

	 	Deferred Maintenance and Environmental Escrow Account
	 	 	38	 
	Section 3.8.

	 	Unfunded Obligations Account
	 	 	39	 
	Section 3.9.

	 	Account Collateral
	 	 	40	 
	Section 3.10.

	 	Bankruptcy
	 	 	41	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE IV

REPRESENTATIONS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 4.1.

	 	Organization
	 	 	41	 
	Section 4.2.

	 	Authorization
	 	 	42	 
	Section 4.3.

	 	No Conflicts
	 	 	42	 
	Section 4.4.

	 	Consents
	 	 	42	 
	Section 4.5.

	 	Enforceable Obligations
	 	 	42	 
	Section 4.6.

	 	No Default
	 	 	42	 
	Section 4.7.

	 	Payment of Taxes
	 	 	42	 
	Section 4.8.

	 	Compliance with Law
	 	 	42	 
	Section 4.9.

	 	ERISA
	 	 	43	 
	Section 4.10.

	 	Investment Company Act
	 	 	43	 
	Section 4.11.

	 	No Bankruptcy Filing
	 	 	43	 
	Section 4.12.

	 	Other Debt
	 	 	43	 
	Section 4.13.

	 	Litigation
	 	 	43	 

i 

 

	 	 	 	 	 	 	 

	 

	 	 	 	Page

	 
	Section 4.14.

	 	Leases; Material Agreements
	 	 	44	 
	Section 4.15.

	 	Full and Accurate Disclosure
	 	 	45	 
	Section 4.16.

	 	Financial Condition
	 	 	45	 
	Section 4.17.

	 	Single-Purpose Requirements
	 	 	45	 
	Section 4.18.

	 	Use of Loan Proceeds
	 	 	45	 
	Section 4.19.

	 	Not Foreign Person
	 	 	45	 
	Section 4.20.

	 	Labor Matters
	 	 	45	 
	Section 4.21.

	 	Title
	 	 	46	 
	Section 4.22.

	 	No Encroachments
	 	 	46	 
	Section 4.23.

	 	Physical Condition
	 	 	46	 
	Section 4.24.

	 	Fraudulent Conveyance
	 	 	46	 
	Section 4.25.

	 	Management
	 	 	47	 
	Section 4.26.

	 	Condemnation
	 	 	47	 
	Section 4.27.

	 	Utilities and Public Access
	 	 	47	 
	Section 4.28.

	 	Environmental Matters
	 	 	47	 
	Section 4.29.

	 	Assessments
	 	 	48	 
	Section 4.30.

	 	No Joint Assessment
	 	 	48	 
	Section 4.31.

	 	Separate Lots
	 	 	48	 
	Section 4.32.

	 	Permits; Certificate of Occupancy
	 	 	48	 
	Section 4.33.

	 	Flood Zone
	 	 	48	 
	Section 4.34.

	 	Security Deposits
	 	 	48	 
	Section 4.35.

	 	Acquisition Documents
	 	 	49	 
	Section 4.36.

	 	Insurance
	 	 	49	 
	Section 4.37.

	 	No Dealings
	 	 	49	 
	Section 4.38.

	 	Estoppel Certificates
	 	 	49	 
	Section 4.39.

	 	Compliance with Anti-Terrorism, Embargo, Sanctions and
Anti-Money Laundering Laws
	 	 	49	 
	Section 4.40.

	 	IDA Lease
	 	 	50	 
	Section 4.41.

	 	Survival
	 	 	50	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE V

AFFIRMATIVE COVENANTS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 5.1.

	 	Existence
	 	 	51	 
	Section 5.2.

	 	Maintenance of Property
	 	 	51	 
	Section 5.3.

	 	Compliance with Legal Requirements
	 	 	51	 
	Section 5.4.

	 	Impositions and Other Claims
	 	 	52	 
	Section 5.5.

	 	Access to Property
	 	 	52	 
	Section 5.6.

	 	Cooperate in Legal Proceedings
	 	 	52	 
	Section 5.7.

	 	Leases
	 	 	53	 
	Section 5.8.

	 	Plan Assets, etc.
	 	 	54	 
	Section 5.9.

	 	Further Assurances
	 	 	54	 
	Section 5.10.

	 	Management of Collateral
	 	 	55	 
	Section 5.11.

	 	Notice of Material Event
	 	 	56	 
	Section 5.12.

	 	Annual Financial Statements
	 	 	56	 
	Section 5.13.

	 	Quarterly Financial Statements
	 	 	56	 
	Section 5.14.

	 	Monthly Financial Statements; Non-Delivery of Financial Statements
	 	 	57	 

ii 

 

	 	 	 	 	 	 	 

	 

	 	 	 	Page

	 
	Section 5.15.

	 	Insurance
	 	 	58	 
	Section 5.16.

	 	Casualty and Condemnation
	 	 	63	 
	Section 5.17.

	 	Annual Budget
	 	 	65	 
	Section 5.18.

	 	Nonbinding Consultation
	 	 	66	 
	Section 5.19.

	 	Compliance with Encumbrances and Material Agreements
	 	 	66	 
	Section 5.20.

	 	Prohibited Persons
	 	 	66	 
	Section 5.21.

	 	Operating Lease
	 	 	67	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE VI

NEGATIVE COVENANTS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 6.1.

	 	Liens on the Collateral
	 	 	67	 
	Section 6.2.

	 	Ownership
	 	 	67	 
	Section 6.3.

	 	Transfer; Change of Control
	 	 	67	 
	Section 6.4.

	 	Debt
	 	 	67	 
	Section 6.5.

	 	Dissolution; Merger or Consolidation
	 	 	67	 
	Section 6.6.

	 	Change in Business
	 	 	68	 
	Section 6.7.

	 	Debt Cancellation
	 	 	68	 
	Section 6.8.

	 	Affiliate Transactions
	 	 	68	 
	Section 6.9.

	 	Misapplication of Funds
	 	 	68	 
	Section 6.10.

	 	Jurisdiction of Formation; Name
	 	 	68	 
	Section 6.11.

	 	Modifications and Waivers
	 	 	68	 
	Section 6.12.

	 	ERISA
	 	 	69	 
	Section 6.13.

	 	Alterations and Expansions
	 	 	69	 
	Section 6.14.

	 	Advances and Investments
	 	 	69	 
	Section 6.15.

	 	Single-Purpose Entity
	 	 	69	 
	Section 6.16.

	 	Zoning and Uses
	 	 	69	 
	Section 6.17.

	 	Waste
	 	 	70	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE VII

DEFAULTS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 7.1.

	 	Event of Default
	 	 	70	 
	Section 7.2.

	 	Remedies
	 	 	73	 
	Section 7.3.

	 	No Waiver
	 	 	74	 
	Section 7.4.

	 	Application of Payments after an Event of Default
	 	 	74	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE VIII

CONDITIONS PRECEDENT	 	 	 	 
	 
	 	 	 	 	 	 
	Section 8.1.

	 	Conditions Precedent to Closing
	 	 	74	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE IX

MISCELLANEOUS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 9.1.

	 	Successors
	 	 	77	 
	Section 9.2.

	 	GOVERNING LAW
	 	 	77	 
	Section 9.3.

	 	Modification, Waiver in Writing
	 	 	78	 
	Section 9.4.

	 	Notices
	 	 	78	 
	Section 9.5.

	 	TRIAL BY JURY
	 	 	79	 
	Section 9.6.

	 	Headings
	 	 	79	 

iii 

 

	 	 	 	 	 	 	 

	 

	 	 	 	Page

	 
	Section 9.7.

	 	Assignment and Participation
	 	 	79	 
	Section 9.8.

	 	Severability
	 	 	80	 
	Section 9.9.

	 	Preferences; Waiver of Marshalling of Assets
	 	 	81	 
	Section 9.10.

	 	Remedies of Borrower
	 	 	81	 
	Section 9.11.

	 	Offsets, Counterclaims and Defenses
	 	 	82	 
	Section 9.12.

	 	No Joint Venture
	 	 	82	 
	Section 9.13.

	 	Conflict; Construction of Documents
	 	 	82	 
	Section 9.14.

	 	Brokers and Financial Advisors
	 	 	82	 
	Section 9.15.

	 	Counterparts
	 	 	82	 
	Section 9.16.

	 	Estoppel Certificates
	 	 	82	 
	Section 9.17.

	 	General Indemnity; Payment of Expenses; Mortgage Recording Taxes
	 	 	83	 
	Section 9.18.

	 	No Third-Party Beneficiaries
	 	 	85	 
	Section 9.19.

	 	Recourse
	 	 	85	 
	Section 9.20.

	 	Right of Set-Off
	 	 	88	 
	Section 9.21.

	 	Exculpation of Lender
	 	 	88	 
	Section 9.22.

	 	Servicer
	 	 	88	 
	Section 9.23.

	 	No Fiduciary Duty
	 	 	88	 
	Section 9.24.

	 	Borrower Information
	 	 	90	 
	Section 9.25.

	 	PATRIOT Act Records
	 	 	90	 
	Section 9.26.

	 	Prior Agreements
	 	 	90	 
	Section 9.27.

	 	Publicity
	 	 	91	 
	Section 9.28.

	 	Delay Not a Waiver
	 	 	91	 
	Section 9.29.

	 	Schedules and Exhibits Incorporated
	 	 	91	 
	Section 9.30.

	 	Independence of Covenants
	 	 	91	 

iv 

 

	 	 	 

	Exhibits
	 
	 	 
	A

	 	Organizational Chart
	B

	 	Form of Tenant Notice
	C

	 	Form of Uniform System of Accounts
	 
	 	 
	Schedules
	 
	 	 
	A

	 	Property
	B

	 	Exception Report
	C

	 	Deferred Maintenance Conditions
	D

	 	Unfunded Obligations
	E

	 	Material Agreements
	F

	 	Capital Plan
	G

	 	Leases

v 

 

LOAN AGREEMENT

          This Loan Agreement (this “Agreement”) is dated December __, 2010 and is between
GOLDMAN SACHS COMMERCIAL MORTGAGE CAPITAL, L.P., a Delaware limited partnership, as lender
(together with its successors and assigns, including any lawful holder of any portion of the
Indebtedness, as hereinafter defined, “Lender”), and ORANGEMEN OWNER LLC, a Delaware
limited liability company, as borrower (together with its permitted successors and assigns,
“Borrower”).

RECITALS

          Borrower desires to obtain from Lender the Loan (as hereinafter defined) in connection with
the financing of the property known as the InterContinental Hotel Buckhead.

          Lender is willing to make the Loan on the terms and conditions set forth in this Agreement if
Borrower joins in the execution and delivery of this Agreement, issues the Note and executes and
delivers the other Loan Documents.

          In consideration of the premises and the agreements, provisions and covenants contained
herein, and for other good and valuable consideration, the sufficiency of which is hereby
acknowledged, Lender and Borrower agree as follows:

DEFINITIONS

          (a) When used in this Agreement, the following capitalized terms have the following meanings:

          “Account Collateral” means, collectively, the Collateral Accounts and all sums at any
time held, deposited or invested therein, together with any interest or other earnings thereon, and
all securities and investment property credited thereto and all proceeds thereof (including
proceeds of sales and other dispositions), whether accounts, general intangibles, chattel paper,
deposit accounts, instruments, documents or securities.

          “Agreement” means this Loan Agreement, as the same may from time to time hereafter be
amended, restated, replaced, supplemented or otherwise modified.

          “ALTA” means the American Land Title Association, or any successor thereto.

          “Alteration” means any demolition, alteration, installation, improvement or expansion
of or to the Property or any portion thereof.

          “Annual Budget” means the Yearly Budget, as defined in the Approved Management
Agreement, which budget shall include, without limitation, a general business plan, a capital
replacement budget and such other items required under Section 6.02(a) of the Approved Management
Agreement.

 

 

          “Appraisal” means an as-is appraisal of the Property that is prepared by a member of
the Appraisal Institute selected by Lender, meets the minimum appraisal standards for national
banks promulgated by the Comptroller of the Currency pursuant to Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989, as amended (FIRREA) and complies with
the Uniform Standards of Professional Appraisal Practice (USPAP).

          “Approved Annual Budget” means (i) so long as no Event of Default or Trigger Period
shall be continuing, the Annual Budget and (ii) during the continuance of an Event of Default
and/or Trigger Period, the Annual Budget, as approved by Lender in accordance with Section
5.17.

          “Approved Management Agreement” means that certain Management Agreement, dated as of
July 1, 2010, between Operating Lessee and the initial Approved Property Manager, as the same may
be amended, restated, replaced, supplemented or otherwise modified in accordance herewith with the
consent of Lender, and any other management agreement that is approved by Lender and with respect
to which the Rating Condition is satisfied, as the same may be amended, restated, replaced,
supplemented or otherwise modified in accordance herewith with the consent of Lender.

          “Approved Property Manager” means InterContinental Hotels Group and, so long as it is
an affiliate of InterContinental Hotels Group, IHC Buckhead, LLC, or any other management company
approved by Lender and with respect to which the Rating Condition is satisfied, in each case unless
and until Lender requests the termination of that management company pursuant to Section
5.10(d).

          “Assignment” has the meaning set forth in Section 9.7(b).

          “Assumption” has the meaning set forth in Section 2.2.

          “Bankruptcy Code” has the meaning set forth in Section 7.1(d).

          “Basic Carrying Costs Escrow Account” has the meaning set forth in Section 3.4(a).

          “Blocked Account” has the meaning set forth in Section 3.1(b).

          “Blocked Account Agreement” has the meaning set forth in Section 3.1(b).

          “Blocked Account Bank” means an Eligible Institution at which a Blocked Account is
maintained.

          “Borrower” has the meaning set forth in the first paragraph of this Agreement.

          “Borrower FF&E Account” has the meaning set forth in Section 3.6(d).

          “Borrower FF&E Account Control Agreement” means an account control agreement
satisfactory to Lender which shall permit Borrower to have free access to the amounts contained
therein for the purposes permitted under the Approved Management Agreement and

2

 

the Loan Documents, provided that, during the continuance of a Trigger Period or Event of
Default all amounts contained therein shall be remitted to the FF&E Reserve Account and shall be
administered in accordance with Section 3.6.

          “Budgeted Operating Expenses” means, with respect to any calendar month, (i) an amount
equal to the Operating Expenses for such calendar month in the then-applicable Approved Annual
Budget, or (ii) such greater amount as shall equal Borrower’s and/or Operating Lessee’s actual
Operating Expenses for such month, except that during the continuance of a Trigger Period
such greater amount may in no event exceed 105% of the amount specified in clause (i), with no
individual budget line item exceeding 110% of the amount set forth in the then-applicable Approved
Annual Budget with respect to such line item for such month, in each case without the prior written
consent of Lender, not to be unreasonably withheld or delayed.

          “Business Day” means any day other than (i) a Saturday and a Sunday and (ii) a day on
which federally insured depository institutions in the State of New York or the state in which the
offices of Lender, its trustee, its Servicer or its Servicer’s collection account are located are
authorized or obligated by law, governmental decree or executive order to be closed.

          “Capital Expenditure” means hard and soft costs incurred by Borrower (or Operating
Lessee) with respect to replacements and capital repairs made to the Property (including repairs
to, and replacements of, structural components, roofs, building systems, parking garages and
parking lots, but excluding expenditures on FF&E), in each case to the extent capitalized in
accordance with GAAP.

          “Capital Plan” means the Capital Plan attached hereto as Schedule F.

          “Cash Management Account” has the meaning set forth in Section 3.1(a).

          “Cash Management Agreement” has the meaning set forth in Section 3.1(a).

          “Cash Management Bank” means a depository institution selected by Borrower and
reasonably approved by Lender in which Eligible Accounts may be maintained. The initial Cash
Management Bank shall be U.S. Bank, National Association.

          “Casualty” means a fire, explosion, flood, collapse, earthquake or other casualty
affecting all or any portion of the Property.

          “Cause” means, with respect to an Independent Director, (i) acts or omissions by such
Independent Director that constitute systematic and persistent or willful disregard of such
Independent Director’s duties, (ii) such Independent Director has been indicted or convicted for
any crime or crimes of moral turpitude or dishonesty or for any violation of any Legal
Requirements, (iii) such Independent Director no longer satisfies the requirements set forth in the
definition of “Independent Director”, (iv) the fees charged for the services of such Independent
Director are materially in excess of the fees charged by the other providers of Independent
Directors listed in the definition of “Independent Director “ or (v) any other reason for which the
prior written consent of Lender shall have been obtained .

3

 

          “Certificates” means, collectively, any senior and/or subordinate notes, debentures or
pass-through certificates, or other evidence of indebtedness, or debt or equity securities, or any
combination of the foregoing, representing a direct or beneficial interest, in whole or in part, in
the Loan.

          “Change of Control” means the occurrence of any of the following: (i) the failure of
Borrower to be Controlled by one or more Qualified Equityholders (individually or collectively),
(ii) the failure of Operating Lessee to be Controlled by the same Qualified Equityholders that
Control Borrower or (iii) the failure of the Single-Purpose Equityholder (if any) to be Controlled
by the same Qualified Equityholders that Control Borrower.

          “Closing Date” means the date of this Agreement.

          “Closing Date NOI” means $7,477,428.

          “Code” means the Internal Revenue Code of 1986, as amended, and as it may be further
amended from time to time, any successor statutes thereto, and applicable U.S. Department of
Treasury regulations issued pursuant thereto in temporary or final form.

          “Collateral” means (i) all assets owned from time to time by Borrower and/or Operating
Lessee including the Property, the FF&E, the Revenues, the IDA Bonds and all other tangible and
intangible property (including any Defeasance Collateral and all of Borrower’s and Operating
Lessee’s respective right, title and interest in and to the Operating Lease and the Approved
Management Agreement) in respect of which Lender is granted a Lien under the Loan Documents, and
all proceeds thereof, (ii) the Operating Lessee Pledged Collateral and (iii) the IDA Collateral.

          “Collateral Accounts” means, collectively, the Cash Management Account, any Blocked
Account, the Loss Proceeds Account, the Basic Carrying Costs Escrow Account, the FF&E Reserve
Account, the Borrower FF&E Account, the Qualified Operating Expense Account, the Excess Cash Flow
Reserve Account, the Unfunded Obligations Account (if any) and the Deferred Maintenance and
Environmental Escrow Account (if any).

          “Completion Guaranty” means that certain Completion Guaranty dated as of the Closing
Date, executed by Borrower and Sponsor for the benefit of Lender, as the same may be amended,
restated, replaced, supplemented or otherwise modified in accordance herewith.

          “Condemnation” means a taking or voluntary conveyance of all or part of the Property
or any interest therein or right accruing thereto or use thereof, as the result of, or in
settlement of, any condemnation or other eminent domain proceeding by any Governmental Authority.

          “Contingent Obligation” means, with respect to any Person, any obligation of such
Person directly or indirectly guaranteeing any Debt of any other Person in any manner and any
contingent obligation to purchase, to provide funds for payment, to supply funds to invest in any
other Person or otherwise to assure a creditor against loss.

4

 

          “Control” of any entity means the ownership, directly or indirectly, of at least 51%
of the equity interests in, and the right to at least 51% of the distributions from, such entity
and the possession, directly or indirectly, of the power to direct or cause the direction of the
management or policies of such entity, whether through the ability to exercise voting power, by
contract or otherwise (“Controlled” and “Controlling” each have the meanings
correlative thereto).

          “Cooperation Agreement” means that certain Mortgage Loan Cooperation Agreement, dated
as of the Closing Date, among Borrower, Lender and Sponsor, as the same may from time to time be
amended, restated, replaced, supplemented or otherwise modified in accordance herewith.

          “Damages” to a party means any and all liabilities, obligations, losses, demands,
damages, penalties, assessments, actions, causes of action, judgments, proceedings, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including reasonable attorneys’
fees and other costs of defense and/or enforcement whether or not suit is brought), fines, charges,
fees, settlement costs and disbursements imposed on, incurred by or asserted against such party,
whether based on any federal, state or foreign laws, statutes, rules or regulations (including
securities and commercial laws, statutes, rules or regulations and Environmental Laws), on common
law or equitable cause or on contract or otherwise.

          “DBRS” means DBRS, Inc. or its applicable affiliate.

          “Debt” means, with respect to any Person, without duplication:

     (i) all indebtedness of such Person to any other party (regardless of whether such
indebtedness is evidenced by a written instrument such as a note, bond or debenture),
including indebtedness for borrowed money or for the deferred purchase price of property or
services;

     (ii) all letters of credit issued for the account of such Person and all unreimbursed
amounts drawn thereunder;

     (iii) all indebtedness secured by a Lien on any property owned by such Person (whether
or not such indebtedness has been assumed) except obligations for impositions that are not
yet due and payable;

     (iv) all Contingent Obligations of such Person;

     (v) all payment obligations of such Person under any interest rate protection agreement
(including any interest rate swaps, floors, collars or similar agreements) and similar
agreements;

     (vi) all contractual indemnity obligations of such Person; and

     (vii) any material actual or contingent liability to any Person or Governmental
Authority with respect to any employee benefit plan (within the meaning of Section 3(3)

5

 

of ERISA) subject to Title IV of ERISA, Section 302 of ERISA or Section 412 of the
Code.

          “Default” means the occurrence of any event that, but for the giving of notice or the
passage of time, or both, would be an Event of Default.

          “Default Interest” means, during the continuance of an Event of Default, the amount by
which interest accrued on the Notes at their respective Default Rates exceeds the amount of
interest that would have accrued on the Notes at their respective Interest Rates.

          “Default Rate” means, with respect to any Note, the greater of (x) 4% per annum in
excess of the interest rate then applicable to such Note hereunder and (y) 1% per annum in excess
of the Prime Rate from time to time; provided that, if the foregoing would result in an interest
rate in excess of the maximum rate permitted by applicable law, the Default Rate shall be limited
to the maximum rate permitted by applicable law.

          “Defeasance Borrower” has the meaning set forth in Section 2.1(b).

          “Defeasance Collateral” means direct, non-callable obligations that are either the
direct obligations of, or are fully guaranteed by the full faith and credit of, the United States
of America.

          “Defeasance Pledge Agreement” has the meaning set forth in Section 2.1(a)(iii).

          “Defease” means to deliver Defeasance Collateral as substitute Collateral for the Loan
in accordance with Section 2.1 and to cause the Defeased Note to be assumed by a Defeasance
Borrower in accordance herewith; and the terms “Defeased” and “Defeasance” have
meanings correlative to the foregoing.

          “Deferred Maintenance Amount” means $0.

          “Deferred Maintenance Conditions” means those items described in Schedule C.

          “Deferred Maintenance and Environmental Escrow Account” has the meaning set forth in
Section 3.7(a).

          “Eligible Account” means (i) a segregated account maintained with a federal or
state-chartered depository institution or trust company that complies with the definition of
Eligible Institution, or (ii) a segregated trust account or accounts maintained with the corporate
trust department of a federal depository institution or state-chartered depository institution that
has an investment-grade rating and is subject to regulations regarding fiduciary funds on deposit
under, or similar to, Title 12 of the Code of Federal Regulations Section 9.10(b) that, in either
case, has corporate trust powers, acting in its fiduciary capacity.

          “Eligible Institution” means an institution (i) whose commercial paper, short-term
debt obligations or other short-term deposits are rated at least A-1 by S&P, Prime-1 by Moody’s
and/or F-1 by Fitch, and whose long-term senior unsecured debt obligations are rated at least A-

6

 

by S&P, A by Fitch, and A2 by Moody’s and whose deposits are insured by the FDIC or (ii) with
respect to which the Rating Condition is satisfied.

          “Embargoed Person” has the meaning set forth in Section 4.40.

          “Engineering Report” means a structural and seismic engineering report or reports
(including a “probable maximum loss” calculation, if applicable) with respect to the Property
prepared by an independent engineer approved by Lender and delivered to Lender in connection with
the Loan, and any amendments or supplements thereto delivered to Lender.

          “Environmental Claim” means any written notice, claim, proceeding, notice of
proceeding, investigation, demand, abatement order or other order or directive by any Person or
Governmental Authority alleging or asserting liability with respect to Borrower, Operating Lessee
or the Property arising out of, based on, in connection with, or resulting from (i) the actual or
alleged presence, Use or Release of any Hazardous Substance, (ii) any actual or alleged violation
of any Environmental Law, or (iii) any actual or alleged injury or threat of injury to property,
health or safety, natural resources or to the environment caused by Hazardous Substances.

          “Environmental Indemnity” means that certain environmental indemnity agreement
executed by Borrower and the Sponsor as of the Closing Date, as the same may from time to time be
amended, restated, replaced, supplemented or otherwise modified in accordance herewith.

          “Environmental Laws” means any and all present and future federal, state and local
laws, statutes, ordinances, orders, rules, regulations and the like, as well as common law, any
judicial or administrative orders, decrees or judgments thereunder, and any permits, approvals,
licenses, registrations, filings and authorizations, in each case as now or hereafter in effect,
relating to (i) the pollution, protection or cleanup of the environment, (ii) the impact of
Hazardous Substances on property, health or safety, (iii) the Use or Release of Hazardous
Substances, (iv) occupational safety and health, industrial hygiene or the protection of human,
plant or animal health or welfare or (v) the liability for or costs of other actual or threatened
danger to health or the environment. The term “Environmental Law” includes, but is not
limited to, the following statutes, as amended, any successors thereto, and any regulations
promulgated pursuant thereto, and any state or local statutes, ordinances, rules, regulations and
the like addressing similar issues: the Comprehensive Environmental Response, Compensation and
Liability Act; the Emergency Planning and Community Right-to-Know Act; the Hazardous Materials
Transportation Act; the Resource Conservation and Recovery Act (including Subtitle I relating to
underground storage tanks); the Clean Water Act; the Clean Air Act; the Toxic Substances Control
Act; the Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal Water
Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Endangered
Species Act; the National Environmental Policy Act; and the River and Harbors Appropriation Act.
The term “Environmental Law” also includes, but is not limited to, any present and future
federal state and local laws, statutes ordinances, rules, regulations and the like, as well as
common law, conditioning transfer of property upon a negative declaration or other approval of a
Governmental Authority of the environmental condition of a property; or requiring notification or
disclosure of Releases of Hazardous Substances or other environmental conditions

7

 

of a property to any Governmental Authority or other Person, whether or not in connection with
transfer of title to or interest in property.

          “Environmental Reports” means “Phase I Environmental Site Assessments” as referred to
in the ASTM Standards on Environmental Site Assessments for Commercial Real Estate, E 1527-05 (and,
if necessary, “Phase II Environmental Site Assessments”), prepared by an independent environmental
auditor approved by Lender and delivered to Lender in connection with the Loan and any amendments
or supplements thereto delivered to Lender, and shall also include any other environmental reports
delivered to Lender pursuant to this Agreement and the Environmental Indemnity.

          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time, and the regulations promulgated thereunder.

          “ERISA Affiliate,” at any time, means each trade or business (whether or not
incorporated) that would, at the time, be treated together with Borrower or Operating Lessee as a
single employer under Title IV or Section 302 of ERISA or Section 412 of the Code.

          “Event of Default” has the meaning set forth in Section 7.1.

          “Excess Cash Flow Reserve Account” has the meaning set forth in Section 3.9(a).

          “Exception Report” means the report prepared by Borrower and attached to this
Agreement as Schedule B, setting forth any exceptions to the representations set forth in
Article IV.

          “FF&E” means furniture, fixtures and equipment located in the Property.

          “Fiscal Quarter” means the three-month period ending on March 31, June 30, September
30 and December 31 of each year, or such other fiscal quarter of Borrower as Borrower may select
from time to time with the prior consent of Lender, such consent not to be unreasonably withheld.

          “Fiscal Year” means the 12-month period ending on December 31 of each year, or such
other fiscal year of Borrower as Borrower may select from time to time with the prior consent of
Lender, not to be unreasonably withheld.

          “Fitch” means Fitch, Inc. and its successors.

          “Force Majeure” means a delay due to acts of God, governmental restrictions, stays,
judgments, orders, decrees, enemy actions, civil commotion, fire, casualty, strikes, work stoppage,
shortages of labor or materials or similar causes beyond the reasonable control of Borrower;
provided that, with respect to any of such circumstances, for the purposes of this Agreement, (1)
any period of Force Majeure shall apply only to performance of the obligations necessarily affected
by such circumstance and shall continue only so long as Borrower is continuously and diligently
using all reasonable efforts to minimize the effect and duration thereof; and (2) Force Majeure
shall not include the unavailability or insufficiency of funds.

8

 

          “Form W-8BEN” means Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for
United States Tax Withholding) of the Department of Treasury of the United States of America, and
any successor form.

          “Form W-8ECI” means Form W-8ECI (Certificate of Foreign Person’s Claim for Exemption
from Withholding of Tax on Income Effectively Connected with the Conduct of a Trade or Business in
the United States) of the Department of the Treasury of the United States of America, and any
successor form.

          “GAAP” means generally accepted accounting principles in the United States of America,
consistently applied.

          “Governmental Authority” means any federal, state, county, regional, local or
municipal government, any bureau, department, agency or political subdivision thereof and any
Person with jurisdiction exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government (including any court).

          “Guaranty” means that certain guaranty, dated as of the Closing Date, executed by
Sponsor for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or
otherwise modified in accordance herewith.

          “Hazardous Substances” means any and all substances (whether solid, liquid or gas)
defined, listed, or otherwise classified as pollutants, hazardous wastes, hazardous substances,
hazardous materials, extremely hazardous wastes, toxic substances, toxic pollutants, contaminants,
pollutants or words of similar meaning or regulatory effect under any present or future
Environmental Laws or that may have a negative impact on human health or the indoor or outdoor
environment or the presence of which on, in or under the Property is prohibited or requires
investigation or remediation under Environmental Law, including petroleum and petroleum
by-products, asbestos and asbestos-containing materials, toxic mold, polychlorinated biphenyls,
lead and radon, and compounds containing them (including gasoline, diesel fuel, oil and lead-based
paint), pesticides and radioactive materials, flammables and explosives and compounds containing
them.

          “IDA” means the Development Authority of Fulton County.

          “IDA Bond R-2” means the R-2 Development Authority of Fulton County Taxable Economic
Development Revenue Bond (IHC Buckhead LLC Project), Series 2002.

          “IDA Bond Pledge Agreement” means the Pledge and Security Agreement (IDA Bonds) dated
the date hereof, by Borrower for the benefit of Lender.

          “IDA Bonds” means IDA Bond R-2 and any other Development Authority of Fulton County
Taxable Economic Development Revenue Bond (IHC Buckhead LLC Project), Series 2002, owned by
Borrower at any time while any portion of the Indebtedness remains outstanding.

          “IDA Collateral” means the fee interest of the IDA in the Property, which shall be
encumbered by the Mortgage.

9

 

          “IDA Estoppel” means an estoppel certificate reasonably satisfactory to Lender,
executed and delivered by the IDA.

          “IDA Rent” means any and all rent and other amounts payable by Borrower to the IDA
under the IDA Lease.

          “IDA Lease” means that certain Lease Agreement dated as of December 1, 2002 by and
between the IDA, as landlord and IHC Buckhead, LLC, as tenant, as tenant’s interest was assigned to
Borrower pursuant to that certain Assignment and Assumption of Lease dated July 1, 2010.

          “Increased Costs” has the meaning set forth in Section 1.4(d).

          “Indebtedness” means the Principal Indebtedness, together with interest and all other
obligations and liabilities of Borrower under the Loan Documents, including all transaction costs,
Yield Maintenance Premiums and other amounts due or to become due to Lender pursuant to this
Agreement, under the Notes or in accordance with any of the other Loan Documents, and all other
amounts, sums and expenses reimbursable by Borrower to Lender hereunder or pursuant to the Notes or
any of the other Loan Documents.

          “Indemnified Liabilities” has the meaning set forth in Section 9.19(b).

          “Indemnified Parties” has the meaning set forth in Section 9.17.

          “Independent Director” of any corporation or limited liability company means an
individual who is provided by CT Corporation, Corporation Service Company, National Registered
Agents, Inc., Wilmington Trust Company, Stewart Management Company, Lord Securities Corporation or,
if none of those companies is then providing professional independent directors, another
nationally-recognized company reasonably approved by Lender, in each case that is not an affiliate
of Borrower and that provides professional independent directors and other corporate services in
the ordinary course of its business, and which individual is duly appointed as a member of the
board of directors or board of managers of such corporation or limited liability company and is
not, and has never been, and will not while serving as Independent Director be, any of the
following:

     (i) a member (other than an independent, non-economic “springing” member), partner,
equityholder, manager, director, officer or employee of such corporation or limited
liability company or any of its equityholders or affiliates (other than as an independent
director or manager of an affiliate of such corporation or limited liability company that is
not in the direct chain of ownership of such corporation or limited liability company and
that is required by a creditor to be a single purpose bankruptcy remote entity, provided
that such independent director or manager is employed by a company that routinely provides
professional independent directors or managers);

     (ii) a creditor, supplier or service provider (including provider of professional
services) to such corporation or limited liability company or any of its equityholders or
affiliates (other than a nationally recognized company that routinely provides

10

 

professional independent managers or directors and that also provides lien search and
other similar services to such corporation or limited liability company or any of its
equityholders or affiliates in the ordinary course of business);

     (iii) a family member of any such member, partner, equityholder, manager, director,
officer, employee, creditor, supplier or service provider; or

     (iv) a Person that controls (whether directly, indirectly or otherwise) any of (i),
(ii) or (iii) above.

A natural person who otherwise satisfies the foregoing definition other than subparagraph (i) by
reason of being the Independent Director of a Single-Purpose Entity affiliated with the corporation
or limited liability company in question shall not be disqualified from serving as an Independent
Director of such corporation or limited liability company, provided that the fees that such natural
person earns from serving as Independent Director of affiliates of such the corporation or limited
liability company in any given year constitute in the aggregate less than five percent of such
natural person’s annual income for that year. The same natural persons may not serve as
Independent Directors of a corporation or limited liability company and, at the same time, serve as
Independent Directors of an equityholder or member of such corporation or limited liability
company.

          “Initial Interest Rate” means 4.883% per annum.

          “Insurance Requirements” means, collectively, (i) all material terms of any insurance
policy required pursuant to this Agreement and (ii) all material regulations and then-current
standards applicable to or affecting the Property or any portion thereof or any use or condition
thereof, which may, at any time, be recommended by the board of fire underwriters, if any, having
jurisdiction over the Property, or any other body exercising similar functions.

          “Insurance Reserve Exemption Period” has the meaning set forth in Section
3.4(d)(iii).

          “Interest Accrual Period” means each period from and including the sixth day of a
calendar month through and including the fifth day of the immediately succeeding calendar month;
provided, that, prior to a Securitization, Lender shall have the right, in connection with
a change in the Payment Date in accordance with the definition thereof, to make a corresponding
change to the Interest Accrual Period. Notwithstanding the foregoing, the first Interest Accrual
Period shall commence on and include the Closing Date.

          “Interest Rate” means (i) with respect to the initial Note, the Initial Interest Rate,
and (ii) with respect to each Note resulting from the bifurcation of the initial Note into multiple
Notes pursuant to Section 1.1(c), the per annum interest rate of such Note as determined by
Lender in accordance with such Section.

          “Lease” means any lease (except the Operating Lease), license, letting, concession,
occupancy agreement or sublease to which Borrower and/or Operating Lessee is a party or has a
consent right, or other agreement (whether written or oral and whether now or hereafter in effect)
under which Borrower and/or Operating Lessee is a lessor, sublessor, licensor

11

 

or other grantor existing as of the Closing Date or thereafter entered into by Borrower and/or
Operating Lessee, in each case pursuant to which any Person is granted a possessory interest in, or
right to use or occupy all or any portion of any space in the Property, and every modification or
amendment thereof, and every guarantee of the performance and observance of the covenants,
conditions and agreements to be performed and observed by the other party thereto, excluding
short-term agreements in the ordinary course of business pursuant to which hotel rooms and
facilities are made available to individual hotel guests.

          “Leasing Commissions” means leasing commissions required to be paid by Borrower or
Operating Lessee in connection with the leasing of space to Tenants at the Property pursuant to
Leases entered into by Borrower or Operating Lessee in accordance herewith and payable in
accordance with third-party/arm’s-length written brokerage agreements, provided that the
commissions payable pursuant thereto are commercially reasonable based upon the then current
brokerage market for property of a similar type and quality to the Property in the geographic
market in which the Property is located.

          “Legal Requirements” means all governmental statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities (including
Environmental Laws) affecting Borrower, Sponsor, Operating Lessee, the Property or any other
Collateral or any portion thereof or the construction, ownership, use, alteration or operation
thereof, or any portion thereof (whether now or hereafter enacted and in force), and all permits,
licenses and authorizations and regulations relating thereto.

          “Lender” has the meaning set forth in the first paragraph of this Agreement and in
Section 9.7.

          “Lender 80% Determination” means a reasonable determination by Lender that, based on a
current or updated appraisal by HVS (or such other appraiser satisfactory to Lender should HVS no
longer be actively engaged in the business of real estate valuation), a broker’s price opinion by
Jones Lang LaSalle or Eastdil Secured (or such other broker satisfactory to Lender should neither
Jones Lang LaSalle or Eastdil Secured be actively engaged in the business of real estate valuation)
or other written determination of value using a commercially reasonable valuation method
satisfactory to Lender, the fair market value of the Property securing the Indebtedness at the time
of such determination (but excluding any value attributable to property that is not an interest in
real property within the meaning of section 860G(a)(3)(A) of the Code) is at least 80% of the
amount of the Indebtedness (including any accrued and unpaid interest) at the time of such
determination.

          “Lien” means any mortgage, lien (statutory or other), pledge, hypothecation,
assignment, preference, priority, security interest, or any other encumbrance or charge on or
affecting any Collateral or any portion thereof, or any interest therein (including any conditional
sale or other title retention agreement, any sale-leaseback, any financing lease or similar
transaction having substantially the same economic effect as any of the foregoing, the filing of
any financing statement or similar instrument under the Uniform Commercial Code or comparable law
of any other jurisdiction, domestic or foreign, and mechanics’, materialmen’s and other similar
liens and encumbrances, as well as any option to purchase, right of first refusal, right of first
offer or similar right).

12

 

          “Loan” has the meaning set forth in Section 1.1(a).

          “Loan Amount” means $52,500,000.

          “Loan Documents” means this Agreement, the Note, the Mortgage (and related financing
statements), the Environmental Indemnity, the Subordination of Property Management Agreement, the
Subordination of Operating Lease, the Pledge and Security Agreement (Equity), the Cash Management
Agreement, any Blocked Account Agreement, the Cooperation Agreement, the Guaranty, the Completion
Guaranty, any Defeasance Pledge Agreement, the Qualified Operating Expense Account Agreement, the
Borrower FF&E Account Control Agreement (if any, the IDA Bond Pledge Agreement and all other
agreements, instruments, certificates and documents necessary to effectuate the granting to Lender
of first-priority Liens on the Collateral or otherwise in satisfaction of the requirements of this
Agreement or the other documents listed above, as all of the aforesaid may be amended, restated,
replaced, supplemented or otherwise modified from time to time in accordance herewith.

          “Lockout Period” means the period from the Closing Date to but excluding the first
Payment Date following the earlier to occur of (i) the third anniversary of the Closing Date and
(ii) the second anniversary of the date on which the entire Loan (including any subordinated
interest therein) has been Securitized pursuant to a Securitization or series of Securitizations.

          “Loss Proceeds” means amounts, awards or payments payable to Borrower, Operating
Lessee or Lender in respect of all or any portion of the Property in connection with a Casualty or
Condemnation thereof (after the deduction therefrom and payment to Borrower, Operating Lessee and
Lender, respectively, of any and all reasonable expenses incurred by Borrower, Operating Lessee and
Lender in the recovery thereof, including all attorneys’ fees and disbursements, the fees of
insurance experts and adjusters and the costs incurred in any litigation or arbitration with
respect to such Casualty or Condemnation).

          “Loss Proceeds Account” has the meaning set forth in Section 3.3(a).

          “Major Lease” means any Lease that (i) when aggregated with all other Leases at the
Property with the same Tenant (or affiliated Tenants), and assuming the exercise of all expansion
rights and all preferential rights to lease additional space contained in such Lease, is expected
to cover more than 7,500 rentable square feet, (ii) contains an option or preferential right to
purchase all or any portion of the Property, (iii) is with an affiliate of Borrower as Tenant or
(iv) is entered into during the continuance of an Event of Default.

          “Material Adverse Effect” means a material adverse effect upon (i) the ability of
Borrower or Sponsor to perform, or of Lender to enforce, any material provision of any Loan
Document, (ii) the enforceability of any material provision of any Loan Document, or (iii) the
value, Net Operating Income, use or enjoyment of the Property or the operation or occupancy
thereof.

          “Material Agreements” means (x) each contract and agreement (other than Leases)
relating to the Property, or otherwise imposing obligations on Borrower or Operating Lessee, under
which Borrower or Operating Lessee would have the obligation to pay more than

13

 

$250,000 per annum or that cannot be terminated by Borrower or Operating Lessee without cause
upon 60 days’ notice or less without payment of a termination fee in excess of $10,000, or that is
with an affiliate of Borrower or Operating Lessee, (y) any material reciprocal easement agreement,
declaration of covenants, condominium documents, ground lease, material parking agreement or other
material Permitted Encumbrance and (z) the Operating Lease.

          “Material Alteration” means any Alteration to be performed by or on behalf of Borrower
or Operating Lessee at the Property that (a) is reasonably expected to result in a Material Adverse
Effect, (b) is reasonably expected to cost in excess of $2,600,000, as determined by an independent
architect, or (c) is reasonably expected to permit (or is reasonably likely to induce) any Tenant
under a Major Lease to terminate its Lease or abate rent.

          “Maturity Date” means the Payment Date in January, 2016, or such earlier date as may
result from acceleration of the Loan in accordance with this Agreement.

          “Minimum Balance” has the meaning set forth in Section 3.2(a).

          “Monthly FF&E Amount” means, with respect to any calendar month, an amount equal to 4%
of Operating Income for the immediately preceding calendar month.

          “Moody’s” means Moody’s Investors Service, Inc. and its successors.

          “Mortgage” means that certain deed to secure debt, assignment of rents and leases,
security agreement and fixture filing encumbering the Property executed by Borrower and the IDA as
of the Closing Date, as the same may from time to time be amended, restated, replaced, supplemented
or otherwise modified in accordance herewith.

          “Net Operating Income” means, with respect to any Test Period, the excess of (i)
Operating Income for such Test Period, minus (ii) Operating Expenses for such Test Period.

          “Nonconsolidation Opinion” means the opinion letter, dated the Closing Date, delivered
by Borrower’s counsel to Lender and addressing issues relating to substantive consolidation in
bankruptcy.

          “Note(s)” means that certain promissory note, dated as of the Closing Date, made by
Borrower to the order of Lender to evidence the Loan, as such note may be replaced by multiple
Notes in accordance with Section 1.1(c) and as otherwise assigned (in whole or in part),
amended, restated, replaced, supplemented or otherwise modified in accordance herewith.

          “OFAC List” means the list of specially designated nationals and blocked persons
subject to financial sanctions that is maintained by the U.S. Treasury Department, Office of
Foreign Assets Control and any other similar list maintained by the U.S. Treasury Department,
Office of Foreign Assets Control pursuant to any applicable governmental statutes, laws, rules,
orders, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities,
including trade embargo, economic sanctions, or other prohibitions imposed by Executive Order of
the President of the United States. The OFAC List currently is accessible through the internet
website at www.treas.gov/ofac/t11sdn.pdf.

14

 

          “Officer’s Certificate” means a certificate delivered to Lender that is signed by an
authorized officer of Borrower and certifies the information therein to the best of such officer’s
knowledge.

          “Operating Expenses” means, for any period, all operating, renting, administrative,
management, legal and other ordinary expenses of Borrower and, without duplication, Operating
Lessee and Approved Property Manager, during such period, determined in accordance with GAAP and
the Uniform System of Accounts (excluding reserves for or expenditures on FF&E), plus a deemed
expenditure in respect of FF&E in an amount equal to four percent (4%) of Operating Income during
such period; provided, however, that such expenses shall not include (i)
depreciation, amortization or other non-cash items (other than expenses that are due and payable
but not yet paid), (ii) interest, principal or any other sums due and owing with respect to the
Loan, (iii) income taxes or other taxes in the nature of income taxes, (iv) Capital Expenditures,
or (v) equity distributions.

          “Operating Income” means, for any period, all operating income of Borrower and,
without duplication, Operating Lessee and Approved Property Manager, from the Property during such
period, determined in accordance with GAAP and the Uniform System of Accounts (but without
straight-lining of rents), including without limitation: (i) all income and proceeds received from
any lease, Operating Lease and rental of rooms, exhibit, sales, commercial, meeting, conference or
banquet space within such Property, including net parking revenue, and net income from vending
machines, health club fees and service charges; (ii) all income and proceeds received from food and
beverage operations and from catering services conducted from such Property even though rendered
outside of such Property; (iii) all income and proceeds from business interruption, rental
interruption and use and occupancy insurance with respect to the operation of such Property (after
deducting therefrom all necessary costs and expenses incurred in the adjustment or collection
thereof and solely to the extent that such income and/or proceeds are allocable to such period);
(iv) all awards for temporary use (after deducting therefrom all costs incurred in the adjustment
or collection thereof and in restoration of such Property and solely to the extent that such award
is allocable to such period); (v) all income and proceeds from judgments, settlements and other
resolutions of disputes with respect to matters which would be includable in this definition of
“Operating Income” if received in the ordinary course of such Property’s operation (after
deducting therefrom all necessary costs and expenses incurred in the adjustment or collection
thereof); and (vi) interest on credit accounts, rent concessions or credits, and other required
pass-throughs; but excluding, (1) gross receipts received by lessees, licensees or concessionaires
of such Property; (2) consideration received at such Property for hotel accommodations, goods and
services to be provided at other hotels, although arranged by, for or on behalf of the Borrower,
Operating Lessee or Approved Property Manager; (3) income and proceeds from the sale or other
disposition of goods, capital assets and other items not in the ordinary course of such Property’s
operation; (4) federal, state and municipal excise, sales and use taxes collected directly from
patrons or guests of such Property as a part of or based on the sales price of any goods, services
or other items, such as gross receipts, room, admission, cabaret or equivalent taxes; (5) awards
(except to the extent provided in clause (iv) above); (6) refunds of amounts not included in
Operating Expenses at any time and uncollectible accounts; (7) gratuities collected by employees at
such Property; (8) the proceeds of any financing; (9) other income or proceeds resulting other than
from the use or occupancy of such Property, or any part thereof, or other than from the sale of
goods, services or other items sold on or provided

15

 

from such Property in the ordinary course of business; (10) any credits or refunds made to
customers, guests or patrons in the form of allowances or adjustments to previously recorded
revenues; (11) any revenue attributable to a Lease that is not a Qualifying Lease; (12) any revenue
attributable to a Lease to the extent it is paid more than 30 days prior to the due date, (13) any
interest income from any source (except to the extent provided in clause (vi) above); (14) any
repayments received from any third party of principal loaned or advanced to such third party by
Borrower or Operating Lessee; (15) any proceeds resulting from the Transfer of all or any portion
of such Property, (16) Loss Proceeds (except to the extent provided in clause (iii) above); and
(17) any other extraordinary or non-recurring items.

          “Operating Lease” means that certain Agreement of Lease dated July 1, 2010 by and
between Borrower and Operating Lessee.

          “Operating Lease Monthly Rent” means the greater of (x) the monthly rent payable to
Operating Lessee pursuant to the Operating Lease and (y) the sum, without duplication, of (i) the
Minimum Balance and (ii) Budgeted Operating Expenses for such month.

          “Operating Lessee” means Orangemen Lessee, LLC.

          “Operating Lessee Pledged Collateral” means one hundred percent of the equity
interests in Operating Lessee, which shall be pledged by Pebblebrook Hotel Lessee, Inc. to Lender
as additional collateral for the Loan pursuant to the Pledge and Security Agreement (Equity).

          “Participation” has the meaning set forth in Section 9.7(b).

          “PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001), as amended from time to time.

          “Payment Date” means, with respect to each Interest Accrual Period, the sixth day of
the calendar month in which such Interest Accrual Period ends (or, if such day is not a Business
Day, the first preceding Business Day); provided, that prior to a Securitization, Lender
shall have the right to change the Payment Date so long as a corresponding change to the Interest
Accrual Period is also made.

          “Permits” means all licenses, permits, variances and certificates used in connection
with the ownership, operation, use or occupancy of the Property (including certificates of
occupancy, business licenses, state health department licenses, licenses to conduct business and
all such other permits, licenses and rights, obtained from any Governmental Authority or private
Person concerning ownership, operation, use or occupancy of the Property).

          “Permitted Debt” means:

          (i) the Indebtedness;

          (ii) Taxes that are not yet due and payable;

16

 

     (iii) tenant allowances and Capital Expenditure and product improvement plan costs
required under the Approved Management Agreement or any Leases or otherwise permitted to be
incurred under the Loan Documents that are paid on or prior to the date when due; and

     (iv) Trade Payables not represented by a note, customarily paid by Borrower or
Operating Lessee within 60 days of incurrence and in fact not more than 60 days outstanding,
which are incurred in the ordinary course of Borrower’s or Operating Lessee’s business with
respect to the Property, in amounts reasonable and customary for similar properties and not
exceeding 3.0% of the Loan Amount in the aggregate.

          “Permitted Encumbrances” means:

     (i) the Liens created by the Loan Documents;

     (ii) all Liens and other matters specifically disclosed on Schedule B of the Qualified
Title Insurance Policy;

     (iii) Liens, if any, for Taxes not yet delinquent;

     (iv) mechanics’, materialmen’s or similar Liens, if any, and Liens for delinquent taxes
or impositions, in each case only if being diligently contested in good faith and by
appropriate proceedings, provided that no such Lien is in imminent danger of
foreclosure and provided further that either (a) each such Lien is released
or discharged of record or fully insured over by the title insurance company issuing the
Qualified Title Insurance Policy within 30 days of its creation, or (b) Borrower deposits
with Lender, by the expiration of such 30-day period, an amount equal to 150% of the dollar
amount of such Lien or a bond in the aforementioned amount from such surety, and upon such
terms and conditions, as is reasonably satisfactory to Lender, as security for the payment
or release of such Lien;

     (v) rights of existing and future Tenants as tenants only pursuant to written Leases
entered into in conformity with the provisions of this Agreement; and

     (vi) easements and other encroachments placed on the Property with the prior written
consent of Lender.

          “Permitted Investments” means the following, subject to the qualifications hereinafter
set forth:

     (i) direct obligations of, or obligations fully and unconditionally guaranteed as to
principal and interest by, the U.S. government or any agency or instrumentality thereof,
when such obligations are backed by the full faith and credit of the United States of
America and have maturities not in excess of one year;

     (ii) federal funds, unsecured certificates of deposit, time deposits, banker’s
acceptances, and repurchase agreements, each having maturities of not more than 90 days, of
any commercial bank organized under the laws of the United States of America

17

 

or any state thereof or the District of Columbia, the short-term debt obligations of
which are rated A-1+ by S&P, F1+ by Fitch and P-1 by Moody’s (and if the term is between one
and three months A1 by Moody’s) and, if it has a term in excess of three months, the
long-term debt obligations of which are rated AAA (or the equivalent) by each of the Rating
Agencies, and that (a) is at least “adequately capitalized” (as defined in the regulations
of its primary Federal banking regulator) and (b) has Tier 1 capital (as defined in such
regulations) of not less than $1,000,000,000;

     (iii) deposits that are fully insured by the Federal Deposit Insurance Corp. (FDIC);

     (iv)
commercial paper rated A-1+ by S&P, F1+ by Fitch and P-1 Moody’s (and if the term
is between one and three months A1 by Moody’s) by each of the Rating Agencies and having a
maturity of not more than 90 days;

     (v) any money market funds that (a) has substantially all of its assets invested
continuously in the types of investments referred to in clause (i) above, (b) has net assets
of not less than $5,000,000,000, and (c) has a rating of AAAm or AAAm-G from S&P, Aaa by
Moody’s and the highest rating obtainable from Fitch; and

     (vi) such other investments as to which the Rating Condition has been satisfied.

Notwithstanding the foregoing, “Permitted Investments” (i) shall exclude any security with the
Standard & Poor’s “r” symbol (or any other Rating Agency’s corresponding symbol) attached to the
rating (indicating high volatility or dramatic fluctuations in their expected returns because of
market risk), as well as any mortgage-backed securities and any security of the type commonly known
as “strips”; (ii) shall not have maturities in excess of one year; (iii) shall be limited to those
instruments that have a predetermined fixed dollar of principal due at maturity that cannot vary or
change; and (iv) shall exclude any investment where the right to receive principal and interest
derived from the underlying investment provides a yield to maturity in excess of 120% of the yield
to maturity at par of such underlying investment. Interest on Permitted Investments may either be
fixed or variable, and any variable interest must be tied to a single interest rate index plus a
single fixed spread (if any), and move proportionately with that index. No Permitted Investments
shall require a payment above par for an obligation if the obligation may be prepaid at the option
of the issuer thereof prior to its maturity. All Permitted Investments shall mature or be
redeemable upon the option of the holder thereof on or prior to the earlier of (x) three months
from the date of their purchase or (y) the Business Day preceding the day before the date such
amounts are required to be applied hereunder.

          “Person” means any natural person, corporation, limited liability company,
partnership, joint venture, estate, trust, unincorporated association or Governmental Authority and
any fiduciary acting in such capacity on behalf of any of the foregoing.

          “Plan Assets” means assets of any (i) employee benefit plan (as defined in Section
3(3) of ERISA) subject to Title I of ERISA, (ii) plan (as defined in Section 4975(e)(1) of the
Code) subject to Section 4975 of the Code, or (iii) governmental plan (as defined in Section

18

 

3(32) of ERISA) subject to federal, state or local laws, rules or regulations substantially
similar to Title I of ERISA or Section 4975 of the Code.

          “Pledge and Security Agreement (Equity)” means that certain Pledge and Security
Agreement (Equity) dated the date hereof, by Pebblebrook Hotel Lessee, Inc. in favor of Lender.

          “Policies” has the meaning set forth in Section 5.15(b).

          “Prepayment Period” means the final three Interest Accrual Periods prior to the
Maturity Date.

          “Prime Rate” means the “prime rate” published in the “Money Rates” section of The
Wall Street Journal. If The Wall Street Journal ceases to publish the “prime rate,”
then Lender shall select an equivalent publication that publishes such “prime rate,” and if such
“prime rate” is no longer generally published or is limited, regulated or administered by a
governmental or quasi-governmental body, then Lender shall reasonably select a comparable interest
rate index.

          “Principal Indebtedness” means the principal balance of the Loan outstanding from time
to time.

          “Prohibited Pledge” has the meaning set forth in Section 7.1(f).

          “Property” means the real property described on Schedule A, together with all
buildings and other improvements thereon and all personal property encumbered by the Mortgage,
together with all rights pertaining to such property.

          “Qualified Equityholder” means (i) Sponsor (ii) any Person approved by Lender with
respect to which the Rating Condition is satisfied, (iii) a bank, saving and loan association,
investment bank, insurance company, trust company, commercial credit corporation, pension plan,
pension fund or pension advisory firm, mutual fund, government entity or plan, real estate company,
investment fund or an institution substantially similar to any of the foregoing, provided in each
case under this clause (iii) that such Person (x) has total assets (in name or under management) in
excess of $500,000,000 and (except with respect to a pension advisory firm or similar fiduciary)
capital/statutory surplus or shareholder’s equity in excess of $200,000,000 (in both cases,
exclusive of the Property), and (y) is regularly engaged in the business of owning and operating
comparable properties in major metropolitan areas or (iv) any Person Controlled by a Person
satisfying the requirements of clause (iii), but only during such time period as such Person is so
Controlled.

          “Qualified Operating Expense Account” means an Eligible Account maintained by Operating
Lessee at an Eligible Institution, which account (i) shall only contain amounts in respect of
Operating Expenses for the Property (and no amounts unrelated to the Property shall be deposited
therein or otherwise commingled with the amounts on deposit in such account) and (ii) is subject to
a Qualified Operating Expense Account Agreement.

19

 

          “Qualified Operating Expense Account Agreement” means an agreement relating to
the Qualified Operating Expense Account, dated as of the date hereof, among Lender, Operating
Lessee and the Eligible Institution at which such account is maintained, pursuant to which such
account is pledged to the Lender and Operating Lessee is given full access to the funds on deposit
therein but provides for the discontinuance of such access upon receipt by such Eligible
Institution of written notice from Lender of the occurrence of an Event of Default, as such
agreement may be amended, restated, replaced, supplemented or otherwise modified in accordance
herewith.

          “Qualified Successor Borrower” means a Single-Purpose Entity that is Controlled by one
or more Qualified Equityholders.

          “Qualified Successor Operating Lessee” means a Single-Purpose Entity that is
Controlled by the same Qualified Equityholders that Control Qualified Successor Borrower and is a
successor to the Operating Lessee under the Operating Lease.

          “Qualified Survey” means that certain ALTA land title survey of the Property dated
June 8, 2010, prepared by Armstrong Land Surveying, Inc. and certified to Borrower, the title
company issuing the Qualified Title Insurance Policy and Lender and their respective successors and
assigns, in form and substance reasonably satisfactory to Lender.

          “Qualified Title Insurance Policy” means an ALTA extended coverage mortgagee’s title
insurance policy in form and substance reasonably satisfactory to Lender.

          “Qualifying Lease” means all Leases other than (i) Leases to a Tenant that is not in
occupancy at the Property and open for business at the Property and (ii) Leases to a Tenant that is
in default under its Lease or is the subject of bankruptcy or similar insolvency proceedings (to
the extent that such Tenant has not assumed such Lease in bankruptcy).

          “Rating Agency” shall mean, prior to the final Securitization of the Loan, each of
S&P, Moody’s, DBRS and Fitch, or any other nationally-recognized statistical rating agency that has
been designated by Lender and, after the final Securitization of the Loan, shall mean any of the
foregoing that have rated and continue to rate any of the Certificates.

          “Rating Condition” means, with respect to any proposed action, the receipt by Lender of
confirmation in writing from each of the Rating Agencies that such action shall not result, in and
of itself, in a downgrade, withdrawal, or qualification of any rating then assigned to any
outstanding Certificates; except that if all or any portion of the Loan has not been Securitized
pursuant to a Securitization rated by the Rating Agencies, then “Rating Condition” shall instead
mean the receipt of prior written approval of both (x) the applicable Rating Agencies (if and to
the extent that any portion of the Loan has been Securitized pursuant to a Securitization or series
of Securitizations rated by such Rating Agencies (excluding shadow ratings)), and (y) Lender in its
sole discretion. No Rating Condition shall be regarded as having been satisfied unless and until
any conditions imposed on the effectiveness of any confirmation from any Rating Agency shall have
been satisfied. Lender shall have the right in its sole discretion to waive a Rating Condition
requirement with respect to any Rating Agency that Lender determines has declined to review the
applicable proposal.

20

 

          “Regulatory Change” means any change after the Closing Date in federal, state or
foreign laws or regulations or the adoption or the making, after such date, of any interpretations,
directives or requests applying to a class of banks or companies controlling banks, including
Lender, of or under any federal, state or foreign laws or regulations (whether or not having the
force of law) by any court or governmental or monetary authority charged with the interpretation or
administration thereof.

          “Release” with respect to any Hazardous Substance means any release, deposit,
discharge, emission, leaking, leaching, spilling, seeping, migrating, injecting, pumping, pouring,
emptying, escaping, dumping, disposing or other movement of Hazardous Substances into the indoor or
outdoor environment (including the movement of Hazardous Substances through ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata).

          “Rent Roll” has the meaning set forth in Section 4.14(a).

          “Revenues” means all rents (including percentage rent), rent equivalents, moneys
payable as damages pursuant to a Lease or in lieu of rent or rent equivalents, royalties (including
all oil and gas or other mineral royalties and bonuses), income and (without duplication) Operating
Income, receivables, receipts, revenues, deposits (including security, utility and other deposits),
accounts, cash, issues, profits, charges for services rendered, and other consideration of whatever
form or nature received by or paid to or for the account of or benefit of Borrower or (without
duplication) Operating Lessee or Approved Property Manager (only with respect to the Property) from
any and all sources including any obligations now existing or hereafter arising or created out of
the sale, lease, sublease, license, concession or other grant of the right of the use and occupancy
of property or rendering of services by Borrower or Operating Lessee and proceeds, if any, from
business interruption or other loss of income insurance.

          “S&P” means Standard & Poor’s Ratings Services, a division of the McGraw-Hill
Companies, Inc., and its successors.

          “Securitization” means a transaction in which all or any portion of the Loan is
deposited into one or more trusts or entities that issue Certificates to investors, or a similar
transaction; and the term “Securitize” and “Securitized” have meanings correlative
to the foregoing.

          “Securitization Vehicle” means the issuer of Certificates in a Securitization of the
Loan.

          “Service” means the Internal Revenue Service or any successor agency thereto.

          “Servicer” means the entity or entities appointed by Lender from time to time to serve
as servicer and/or special servicer of the Loan. If at any time no entity is so appointed, the
term “Servicer” shall be deemed to refer to Lender.

          “Single Member LLC” means a limited liability company that either (x) has only one
member, or (y) has multiple members, none of which is a Single-Purpose Equityholder.

21

 

          “Single-Purpose Entity” means a Person that (a) was formed under the laws of the State
of Delaware solely for the purpose of acquiring and holding (i) an ownership or leasehold interest
in the Property (or, if applicable, Defeasance Collateral), or (ii) in the case of a Single-Purpose
Equityholder, an ownership interest in the Borrower (or, if applicable, Defeasance Collateral), (b)
does not engage in any business unrelated to (i) the Property (or, if applicable, Defeasance
Collateral), or (ii) in the case of a Single-Purpose Equityholder, its ownership interest in the
Borrower (or, if applicable, Defeasance Collateral), (c) does not have any assets other than those
related to (i) the Property (or, if applicable, Defeasance Collateral), or (ii) in the case of a
Single-Purpose Equityholder, its ownership interest in the Borrower (or, if applicable, Defeasance
Collateral), (d) does not have any Debt other than Permitted Debt, (e) maintains books, accounts,
records, financial statements, stationery, invoices and checks that are separate and apart from
those of any other Person (except that such Person’s financial position, assets, results of
operations and cash flows may be included in the consolidated financial statements of an affiliate
of such Person in accordance with GAAP, provided that any such consolidated financial
statements shall contain a note indicating that such Person and its affiliates are separate legal
entities and maintain records, books of account separate and apart from any other Person), (f) is
subject to and complies with all of the limitations on powers and separateness requirements set
forth in the organizational documentation of such Person as of the Closing Date, (g) holds itself
out as being a Person separate and apart from each other Person and not as a division or part of
another Person, (h) conducts its business in its own name (except for services rendered under a
management agreement with an affiliate, so long as the manager, or equivalent thereof, under such
management agreement holds itself out as an agent of such Person), (i) exercises reasonable efforts
to correct any known misunderstanding actually known to it regarding its separate identity, and
maintains an arm’s-length relationship with its affiliates, (j) pays its own liabilities out of its
own funds (including the salaries of its own employees) and reasonably allocates any overhead that
is shared with an affiliate, including paying for shared office space and services performed by any
officer or employee of an affiliate, (k) maintains a sufficient number of employees in light of its
contemplated business operations, (l) conducts its business so that the assumptions made with
respect to it that are contained in the Nonconsolidation Opinion shall at all times be true and
correct in all material respects, (m) maintains its assets in such a manner that it will not be
costly or difficult to segregate, ascertain or identify its individual assets from those of any
other Person, (n) observes all applicable entity-level formalities in all material respects, (o)
does not commingle its assets with those of any other Person and holds such assets in its own name,
(p) does not assume, guarantee or become obligated for the debts of any other Person, and does not
hold out its credit as being available to satisfy the obligations or securities of others, (q) does
not acquire obligations or securities of its shareholders, members or partners, (r) does not pledge
its assets for the benefit of any other Person (except, in the case of Operating Lessee, a pledge
of its assets for the benefit of Borrower pursuant to any Loan Document) and does not make any
loans or advances to any Person, (s) intends to maintain adequate capital in light of its
contemplated business operations, (t) has two Independent Directors on its board of directors or
board of managers, or, in the case of a limited partnership, has a Single-Purpose Equityholder with
two Independent Directors on such Single-Purpose Equityholder’s board of directors or board of
managers, and has organizational documents that prohibit replacing any Independent Director without
Cause and without giving at least two Business Days’ prior written notice to Lender (except in the
case of the death, legal incapacity, or voluntary non-collusive resignation of an Independent
Director, in which case no prior notice to Lender or the Rating

22

 

Agencies shall be required in connection with the replacement of such Independent Director
with a new Independent Director that is provided by any of the companies listed in the definition
of “Independent Director”), (u) has by-laws or an operating agreement, or, in the case of a limited
partnership, has a Single-Purpose Equityholder with by-laws or an operating agreement, which
provides that, for so long as the Loan is outstanding, such Person shall not take or consent to any
of the following actions except to the extent expressly permitted in this Agreement and the other
Loan Documents:

     (i) the dissolution, liquidation, consolidation, merger or sale of all or substantially
all of its assets (and, in the case of a Single-Purpose Equityholder, the assets of the
Borrower);

     (ii) the engagement by such Person (and, in the case of a Single-Purpose Equityholder,
the engagement by the Borrower) in any business other than the acquisition, development,
management, leasing, ownership, maintenance and operation of the Property and activities
incidental thereto (and, in the case of a Single-Purpose Equityholder, activities incidental
to the acquisition and ownership of its interest in the Borrower);

     (iii) the filing, or consent to the filing, of a bankruptcy or insolvency petition, any
general assignment for the benefit of creditors or the institution of any other insolvency
proceeding, or the seeking or consenting to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator, custodian or any similar official in respect of such Person
without the affirmative vote of both of its Independent Directors (and, in the case of a
Single-Purpose Equityholder, in respect of the Borrower without the affirmative vote of both
of such Single-Purpose Equityholder’s Independent Directors); and

     (iv) any amendment or modification of any provision of its (and, in the case of a
Single-Purpose Equityholder, the Borrower’s) organizational documents relating to
qualification as a “Single-Purpose Entity”,

and (v) if such entity is a Single Member LLC, has organizational documents that provide that upon
the occurrence of any event (other than a permitted equity transfer) that causes its sole member to
cease to be a member while the Loan is outstanding, at least one of its Independent Directors shall
automatically be admitted as the sole member of the Single Member LLC and shall preserve and
continue the existence of the Single Member LLC without dissolution. For the avoidance of doubt,
(i) the IDA Bonds shall be considered assets related to the Property and (ii) ownership of the IDA
Bonds shall be considered and activity incidental to the ownership of the Property.

          “Single-Purpose Equityholder” means a Single-Purpose Entity that (x) is a limited
liability company or corporation formed under the laws of the State of Delaware, (y) owns at least
a 1% direct equity interest in Borrower (or a lessor amount, providing that Lender receives
appropriate legal opinions with respect thereto), and (z) serves as the general partner or managing
member of Borrower.

23

 

          “Smith Travel Reports” means a “STAR Program Report” with respect to the Property
prepared by Smith Travel Research, Inc, or its successors and assigns.

          “Sponsor” means Pebblebrook Hotel Trust.

          “Subordination of Operating Lease” means that certain consent and agreement of
Operating Lessee and subordination of Operating Lease executed by Operating Lessee and Borrower as
of the Closing Date, as the same may from time to time be amended, restated, replaced, supplemented
or otherwise modified in accordance herewith.

          “Subordination of Property Management Agreement” means that certain consent and
agreement of manager and subordination and non-disturbance of management agreement executed by
Operating Lessee and the Approved Property Manager as of the Closing Date, as the same may from
time to time be amended, restated, replaced, supplemented or otherwise modified in accordance
herewith.

          “Taxes” means all real estate and personal property taxes, assessments, fees, taxes on
rents or rentals, water rates or sewer rents, facilities and other governmental, municipal and
utility district charges or other similar taxes or assessments now or hereafter levied or assessed
or imposed against the Property, Borrower or Operating Lessee with respect to the Property or rents
therefrom, or the Operating Lessee Pledged Collateral or that may become Liens upon the Property,
without deduction for any amounts reimbursable to Borrower or Operating Lessee by third parties.

          “Tax Reserve Exemption Period” has the meaning set forth in Section 3.4(d)(i).

          “Tenant” means any Person liable by contract or otherwise to pay monies (including a
percentage of gross income, revenue or profits) pursuant to a Lease.

          “Tenant Improvements” means, collectively, (i) tenant improvements to be undertaken
for any Tenant that are required to be completed by or on behalf of Borrower or Operating Lessee
pursuant to the terms of such Tenant’s Lease, and (ii) tenant improvements paid or reimbursed
through allowances to a Tenant pursuant to such Tenant’s Lease.

          “Tenant Notice” has the meaning set forth in Section 3.1(b).

          “Test Period” means each 12-month period ending on the last day of a Fiscal Quarter.

          “Trade Payables” means unsecured amounts payable by or on behalf of Borrower or
Operating Lessee for or in respect of the operation of the Property in the ordinary course and that
would under GAAP and the Uniform System of Accounts be regarded as ordinary expenses, including
amounts payable to suppliers, vendors, contractors, mechanics, materialmen or other Persons
providing property or services to the Property, Borrower or Operating Lessee and the capitalized
amount of any ordinary-course financing leases.

          “Transaction” means, collectively, the transactions contemplated and/or financed by
the Loan Documents.

24

 

          “Transfer” means the sale or other whole or partial conveyance of all or any portion
of the Property or any direct or indirect interest therein to a third party, including granting of
any purchase options, rights of first refusal, rights of first offer or similar rights in respect
of any portion of the Property or the subjecting of any portion of the Property to restrictions on
transfer; except that the conveyance of a space lease at the Property in accordance herewith shall
not constitute a Transfer.

          “Treasury Constant Yield” means the arithmetic mean of the rates published as
“Treasury Constant Maturities” as of 5:00 p.m., New York time, for the five Business Days preceding
the date on which acceleration has been declared or, as applicable, the date on which the Casualty
or Condemnation occurred, as shown on the USD screen of Reuters (or such other page as may replace
that page on that service, or such other page or replacement therefor on any successor service), or
if such service is not available, the Bloomberg Service (or any successor service), or if neither
Reuters nor the Bloomberg Service is available, under Section 504 in the weekly statistical release
designated H.15(519) (or any successor publication) published by the Board of Governors of the
Federal Reserve System, for “On the Run” U.S. Treasury obligations corresponding to the third
Payment Date prior to the scheduled Maturity Date. If no such maturity shall so exactly
correspond, yields for the two most closely corresponding published maturities shall be calculated
pursuant to the foregoing sentence and the Treasury Constant Yield shall be interpolated or
extrapolated (as applicable) from such yields on a straight-line basis (rounding, in the case of
relevant periods, to the nearest month).

          “Trigger Level” means Closing Date NOI times 85%.

          “Trigger Period” means any period (i) from (a) the conclusion of any Test Period
during which Net Operating Income is less than the Trigger Level, to (b) the conclusion of any Test
Period thereafter during which Net Operating Income is equal to or greater than the Trigger Level
or (ii) from (a) the date on which Lender determines, by written notice to Borrower, that Borrower
has failed to meet any deadline specified in the Capital Plan or that Borrower has failed to
certify that such deadline has been met pursuant to Section 5.13(iv), to (b) the date on
which the Capital Plan is completed, as determined by Lender in its reasonable discretion. If any
of the reports required under Sections 5.12, 5.13 or 5.14 are not
delivered to Lender as and when required hereunder, a Trigger Period shall (after notice and
expiration of the cure periods as described in Section 5.14(b)) be deemed to have commenced
and be ongoing, unless and until such reports are delivered and they indicate that, in fact, no
Trigger Period is ongoing.

          “Unfunded Obligations” means the items described in Schedule D.

          “Unfunded Obligations Account” has the meaning set forth in Section 3.8(a).

          “Unfunded Obligations Amount” means $0.

          “Uniform System of Accounts” means the “Uniform System of Accounts for the Lodging
Industry” (tenth edition) published by The American Hotel & Lodging Association Educational
Institute.

25

 

          “Use” means, with respect to any Hazardous Substance, the generation, manufacture,
processing, distribution, handling, possession, use, discharge, placement, treatment, disposal,
disposition, removal, abatement, recycling or storage of such Hazardous Substance or transportation
of such Hazardous Substance.

          “U.S. Person” means a United States person within the meaning of Section 7701(a)(30)
of the Code.

          “U.S. Tax” means any present or future tax, assessment or other charge or levy imposed
by or on behalf of the United States of America or any taxing authority thereof.

          “Waste” means any material abuse or destructive use (whether by action or inaction) of
the Property.

          “Yield Maintenance Premium” shall mean, with respect to any payment of principal (or
any portion thereof) during the continuance of an Event of Default or, pursuant to Section
5.16(f), following any Casualty or Condemnation, the product of:

     (A) a fraction whose numerator is the amount so paid and whose denominator is the
outstanding principal balance of the Loan before giving effect to such payment,
times

     (B) the excess of (1) the sum of the respective present values, computed as of the date
of such prepayment, of the remaining scheduled payments of principal and interest with
respect to the Loan (assuming no prepayments or acceleration of the Loan), determined by
discounting such payments to the date on which such payments are made at the Treasury
Constant Yield, over (2) the outstanding principal balance of the Loan on such date
immediately prior to such payment;

provided that, except in the case of a prepayment of principal (or any portion thereof) pursuant to
Section 5.16(f), the Yield Maintenance Premium shall not be less than 3% of the amount
prepaid.

          The calculation of the Yield Maintenance Premium shall be made by Lender and shall, absent
manifest error, be final, conclusive and binding upon all parties.

          (b) Rules of Construction. All references to sections, schedules and exhibits are to
sections, schedules and exhibits in or to this Agreement unless otherwise specified. Unless
otherwise specified: (i) all meanings attributed to defined terms in this Agreement shall be
equally applicable to both the singular and plural forms of the terms so defined, (ii) “including”
means “including, but not limited to”, (iii) “mortgage” means a mortgage, deed of trust, deed to
secure debt or similar instrument, as applicable, and “mortgagee” means the secured party under a
mortgage, deed of trust, deed to secure debt or similar instrument and (iv) the words “hereof,”
“herein,” “hereby,” “hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision, article, section or other
subdivision of this Agreement. All accounting terms not specifically defined in this Agreement
shall be construed in accordance with GAAP, as the same may be modified in this Agreement. Each
covenant of Borrower contained herein with respect to the operation and maintenance of or otherwise
relating to the Property shall be construed to mean that Borrower shall comply or use commercially
reasonable efforts to cause the Operating Lessee to comply with such covenant;

26

 

and any failure by the Operating Lessee to comply therewith shall constitute a Default
hereunder even though Operating Lessee is not a party to this Agreement.

ARTICLE I

GENERAL TERMS

          Section 1.1. The Loan.

          (a) On the Closing Date, subject to the terms and conditions of this Agreement, Lender shall
make a loan to Borrower (the “Loan”) in an amount equal to the Loan Amount. The Loan shall
initially be represented by a single Note that shall bear interest as described in this Agreement
at a per annum rate equal to the Initial Interest Rate.

          (b) The Loan shall be secured by the Collateral pursuant to the Mortgage and the other Loan
Documents.

          (c) Lender shall have the right at any time, at Lender’s sole discretion, to replace the
initial Note with two or more replacement Notes, and the holder of each replacement Note shall
similarly have the right at any time, at such holder’s sole discretion, to replace its Note with
two or more replacement Notes. Each replacement Note shall be in the form of the Note so replaced,
but for its principal amount and Interest Rate. The principal amount of each Note shall be
determined by the applicable holder in its sole discretion, provided that the initial sum
of the principal amounts of the replacement Notes shall equal the then-outstanding principal
balance of the Notes that are so replaced. The Interest Rate of each replacement Note shall be
determined by the applicable holder in its sole discretion, provided that the initial
weighted average of such Interest Rates, weighted on the basis of the principal balances of the
respective Notes, shall initially equal the Interest Rate of the Note so replaced. Borrower shall
execute and return to Lender each such Note within two Business Days after Borrower’s receipt of an
execution copy thereof, and Borrower’s failure to do so within such time period shall, at Lender’s
election, constitute an immediate Event of Default hereunder. Borrower hereby authorizes and
appoints Lender as its attorney-in-fact to execute such replacement Notes on Borrower’s behalf
should Borrower fail to do so. The foregoing grant of authority is a power of attorney coupled
with an interest and such appointment shall be irrevocable for the term of this Agreement.
Borrower hereby ratifies all actions that such attorney shall lawfully take or cause to be taken in
accordance with this Section 1.1(c). If requested by Lender, Borrower shall deliver to
Lender, together with such replacement Notes, an opinion of counsel with respect to the due
authorization and enforceability of such replacement Notes and confirming that the delivery of such
replacement Notes does not alter the conclusions reached in the legal opinions delivered to Lender
at Closing.

          Section 1.2. Interest and Principal.

          (a) On each Payment Date Borrower shall pay to Lender a constant monthly payment of
$278,089.31, which amount shall be applied first toward the payment of interest on each Note for the applicable Interest Accrual Period at the applicable Interest Rate (except
that in each case, interest shall be payable on the Indebtedness, including due but unpaid
interest, at the

27

 

Default Rate with respect to any portion of such Interest Accrual Period falling
during the continuance of an Event of Default, in which case the monthly payment shall be increased
by the amount of Default Interest accrued on the Notes during the applicable Interest Accrual
Period), and the balance shall be applied toward the reduction of the outstanding principal
balances of the Notes pro rata in accordance with their then outstanding principal
balances. On the Closing Date, Borrower shall pay interest from and including the Closing Date
through the end of the first Interest Accrual Period. Interest payable hereunder shall be computed
on the basis of a 360-day year and the actual number of days elapsed in the related Interest
Accrual Period.

          (b) No prepayments of the Loan shall be permitted except for (i) prepayments resulting from
Casualty or Condemnation as described in Section 5.16(f), and (ii) a prepayment of the Loan
in whole (but not in part) during the Prepayment Period on not less than 15 days prior written
notice; provided that any prepayment hereunder shall be accompanied by all interest accrued
on the amount prepaid, plus the amount of interest that would have accrued thereon if the Loan had
remained outstanding through the end of the Interest Accrual Period in which such prepayment
occurs, plus all other amounts then due under the Loan Documents. Borrower’s notice of prepayment
shall create an obligation of Borrower to prepay the Loan as set forth therein, but may be
rescinded with five days’ written notice to Lender (subject to payment of any out-of-pocket costs
and expenses resulting from such rescission). In addition, Defeasance shall be permitted after the
expiration of the Lockout Period as described in Section 2.1. The entire outstanding
principal balance of the Loan, together with interest through the end of the applicable Interest
Accrual Period and all other amounts then due under the Loan Documents, shall be due and payable by
Borrower to Lender on the Maturity Date.

          (c) If all or any portion of the Principal Indebtedness is paid to Lender following
acceleration of the Loan or as a result of a Casualty or Condemnation, Borrower shall pay to Lender
an amount equal to the applicable Yield Maintenance Premium. Amounts received in respect of the
Indebtedness during the continuance of an Event of Default shall be applied toward interest,
principal and other components of the Indebtedness (in such order as Lender shall determine) before
any such amounts are applied toward payment of Yield Maintenance Premiums, with the result that
Yield Maintenance Premiums shall accrue as the Principal Indebtedness is repaid but no amount
received from Borrower shall constitute payment of a Yield Maintenance Premium until the remainder
of the Indebtedness shall have been paid in full. Borrower acknowledges that (i) a prepayment will
cause damage to Lender; (ii) the Yield Maintenance Premium is intended to compensate Lender for the
loss of its investment and the expense incurred and time and effort associated with making the
Loan, which will not be fully repaid if the Loan is prepaid; (iii) it will be extremely difficult
and impractical to ascertain the extent of Lender’s damages caused by a prepayment after an
acceleration or any other prepayment not permitted by the Loan Documents; and (iv) the Yield
Maintenance Premium represents Lender’s and Borrower’s reasonable estimate of Lender’s damages from
the prepayment and is not a penalty.

          (d) Any payments of interest and/or principal not paid when due hereunder shall bear interest
at the applicable Default Rate and, in the case of all payments due hereunder other than the
repayment of the Principal Indebtedness on the Maturity Date or on any other earlier date as a result of an acceleration of the Loan, when paid, shall be accompanied by a
late fee in an amount equal to the lesser of three percent of such unpaid sum and the maximum

28

 

amount permitted by applicable law in order to defray a portion of the expense incurred by Lender
in handling and processing such delinquent payment and to compensate Lender for the loss of the use
of such delinquent payment.

          Section 1.3. Method and Place of Payment. Except as otherwise specifically provided
in this Agreement, all payments and prepayments under this Agreement and the Notes (including any
deposit into the Cash Management Account pursuant to Section 3.2(c)) shall be made to
Lender not later than 1:00 p.m., New York City time, on the date when due (except in the case of
the payment made on the Maturity Date, which shall be made not later than 2:00 p.m., New York City
time) and shall be made in lawful money of the United States of America by wire transfer in federal
or other immediately available funds to the account specified from time to time by Lender. Any
funds received by Lender after such time shall be deemed to have been paid on the next succeeding
Business Day. Lender shall notify Borrower in writing of any changes in the account to which
payments are to be made. If the amount received from Borrower (or from the Cash Management Account
pursuant to Section 3.2(b)) is less than the sum of all amounts then due and payable
hereunder, such amount shall be applied, at Lender’s sole discretion, either toward the components
of the Indebtedness (e.g., interest, principal and other amounts payable hereunder) and the
Notes, in such sequence as Lender shall elect in its sole discretion, or toward the payment of
Property expenses.

          Section 1.4. Taxes; Regulatory Change.

          (a) Borrower agrees to indemnify Lender against any present or future stamp, documentary or
other similar or related taxes or other similar or related charges now or hereafter imposed,
levied, collected, withheld or assessed by any United States Governmental Authority by reason of
the execution and delivery of the Loan Documents and any consents, waivers, amendments and
enforcement of rights under the Loan Documents.

          (b) If Borrower is required by law to withhold or deduct any amount from any payment hereunder
in respect of any U.S. Tax, Borrower shall withhold or deduct the appropriate amount, remit such
amount to the appropriate Governmental Authority and pay to each Person to whom there has been an
Assignment or Participation of a Loan and who is not a U.S. Person such additional amounts as are
necessary in order that the net payment of any amount due to such non-U.S. Person hereunder after
deduction for or withholding in respect of any U.S. Tax imposed with respect to such payment (or in
lieu thereof, payment of such U.S. Tax by such non-U.S. Person), will not be less than the amount
stated in this Agreement to be then due and payable; except that the foregoing obligation to pay
such additional amounts shall not apply (i) to any assignee that has not complied with the
obligations contained in Section 9.7(c), (ii) to any U.S. Taxes imposed solely by reason of
the failure by such Person (or, if such Person is not the beneficial owner of the relevant Loan,
such beneficial owner) to comply with applicable certification, information, documentation or other
reporting requirements concerning the nationality, residence, identity or connections with the
United States of America of such Person (or beneficial owner, as the case may be) if such
compliance is required by statute or regulation of the United States of America as a precondition to relief or exemption from such U.S. Taxes;
or (iii) with respect to any Person who is a fiduciary or partnership or other than the sole
beneficial owner of such payment, to any U.S. Tax imposed with respect to payments made under any
Note to a fiduciary or partnership to the extent that the beneficial owner or member of

29

 

the partnership would not have been entitled to the additional amounts if such beneficial owner or
member of the partnership had been the holder of the Note.

          (c) Within 30 days after paying any amount from which it is required by law to make any
deduction or withholding, and within 30 days after it is required by law to remit such deduction or
withholding to any relevant taxing or other authority, Borrower shall deliver to such non-U.S.
Person satisfactory evidence of such deduction, withholding or payment (as the case may be).

          (d) If, as a result of any Regulatory Change, any reserve, special deposit or similar
requirements relating to any extensions of credit or other assets of, or any deposits with, Lender
or any holder of all or a portion of the Loan is imposed, modified or deemed applicable and the
result is to increase the cost to such Lender or such holder of making or holding the Loan, or to
reduce the amount receivable by Lender or such holder hereunder in respect of any portion of the
Loan by an amount deemed by Lender or such holder to be material (such increases in cost and
reductions in amounts receivable, “Increased Costs”), then Borrower agrees that it will pay
to Lender or such holder upon Lender’s or such holder’s request such additional amount or amounts
as will compensate Lender and/or such holder for such Increased Costs to the extent that such
Increased Costs are reasonably allocable to the Loan. Lender will notify Borrower in writing of
any event occurring after the Closing Date that will entitle Lender or any holder of the Loan to
compensation pursuant to this Section 1.4(d) as promptly as practicable after it obtains
knowledge thereof and determines to request such compensation and will designate a different
lending office if such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the reasonable judgment of such Lender, be otherwise disadvantageous
to such Lender. If such Lender shall fail to notify Borrower of any such event within 90 days
following the end of the month during which such event occurred, then Borrower’s liability for any
amounts described in this Section incurred by such Lender as a result of such event shall be
limited to those attributable to the period occurring subsequent to the 90th day prior to the date
upon which such Lender actually notified Borrower of the occurrence of such event. Notwithstanding
the foregoing, in no event shall Borrower be required to compensate Lender or any holder of the
Loan for any portion of the income or franchise taxes of Lender or such holder, whether or not
attributable to payments made by Borrower. If a Lender requests compensation under this
Section 1.4(d), Borrower may, by notice to Lender, require that such Lender furnish to
Borrower a statement setting forth in reasonable detail the basis for requesting such compensation
and the method for determining the amount thereof.

          Section 1.5. Release. Upon payment of the Indebtedness in full when permitted or
required hereunder, Lender shall execute instruments prepared by Borrower and reasonably
satisfactory to Lender, which, at Borrower’s election and at Borrower’s sole cost and expense: (a)
release and discharge all Liens on all Collateral securing payment of the Indebtedness (subject to
Borrower’s obligation to pay any associated fees and expenses), including all balances in the
Collateral Accounts; or (b) assign such Liens (and the Loan Documents) to a new lender designated
by Borrower. Any release or assignment provided by Lender pursuant to this Section 1.5 shall be without recourse,
representation or warranty of any kind.

30

 

ARTICLE II

DEFEASANCE AND ASSUMPTION

          Section 2.1. Defeasance.

          (a) On any date after the expiration of the Lockout Period, provided no Event of Default is
then continuing and subject to the notice requirement described in Section 2.1(c), Borrower
may obtain the release of the Collateral (other than the Defeasance Collateral) from the Liens of
the Loan Documents upon the payment to Lender of all sums then due under the Loan Documents and the
delivery of the following to Lender:

     (i) Defeasance Collateral sufficient to provide payments on or prior to, and in any
event as close as possible to, all successive Payment Dates in an amount sufficient to make
all payments of interest and principal due hereunder, including the then outstanding
Principal Indebtedness, on the first Payment Date in the Prepayment Period or such other
Payment Date in the Prepayment Period as Borrower shall elect;

     (ii) written confirmation from an independent certified public accounting firm
reasonably satisfactory to Lender that such Defeasance Collateral is sufficient to provide
the payments described in clause (i) above;

     (iii) a security agreement, in form and substance reasonably satisfactory to Lender,
creating in favor of Lender a first priority perfected security interest in such Defeasance
Collateral (a “Defeasance Pledge Agreement”);

     (iv) an opinion of counsel for Borrower, in form and substance reasonably satisfactory
to Lender and delivered by counsel reasonably satisfactory to Lender, opining that (1) the
Defeasance Pledge Agreement has been duly authorized and is enforceable against Borrower in
accordance with its terms and that Lender has a perfected first priority security interest
in such Defeasance Collateral; and (2) if the Loan has been Securitized, the Defeasance,
including any assumption under Section2.1(b), does not cause a tax to be imposed on
the Securitization Vehicle or, if the Securitization Vehicle is a REMIC, does not cause any
portion of the Loan to cease to be a “qualified mortgage” within the meaning of section
860G(a)(3) of the Code, and (3) that the Defeasance does not constitute a “significant
modification” of the Loan under Section 1001 of the Code;

     (v) if the Loan has been Securitized, the Rating Condition with respect to such
Defeasance shall have been satisfied;

     (vi) instruments reasonably satisfactory to Lender releasing and discharging or
assigning to a third party Lender’s Liens on the Collateral (other than the Defeasance
Collateral);

     (vii) such other customary certificates, opinions, documents or instruments as Lender
and the Rating Agencies may reasonably request; and

31

 

     (viii) reimbursement for any costs and expenses incurred in connection with this
Section 2.1 (including Rating Agency and Servicer fees and expenses, reasonable fees
and expenses of legal counsel and any revenue, documentary stamp or intangible taxes or any
other tax or charge due in connection herewith).

Lender shall reasonably cooperate with Borrower to avoid the incurrence of mortgage recording taxes
in connection with a Defeasance at Borrower’s sole cost and expense.

          (b) At the time of the Defeasance, the Loan shall be assumed by a bankruptcy-remote entity
established or designated by the initial Lender hereunder or its designee, to which Borrower shall
transfer all of the Defeasance Collateral (a “Defeasance Borrower”). The right of the
initial Lender hereunder or its designee to establish or designate a Defeasance Borrower shall be
retained by the initial Lender notwithstanding the sale or transfer of the Loan unless such
obligation is specifically assigned to and assumed by the transferee. Such Defeasance Borrower
shall execute and deliver to Lender an assumption agreement in form and substance reasonably
satisfactory to Lender, such Uniform Commercial Code financing statements as may be reasonably
requested by Lender and legal opinions of counsel reasonably acceptable to Lender that are
substantially equivalent to the opinions delivered to Lender on the Closing Date, including new
nonconsolidation opinions reasonably satisfactory to Lender and satisfactory to the Rating
Agencies; and Borrower and the Defeasance Borrower shall deliver such other documents, certificates
and legal opinions as Lender shall reasonably request.

          (c) Borrower must give Lender and each Rating Agency at least 30 days’ (and not more than 90
days’) prior written notice of any Defeasance under this Section 2.1, specifying the date
on which the Defeasance is to occur. If such Defeasance is not made on such date (x) Borrower’s
notice of Defeasance will be deemed rescinded, and (y) Borrower shall on such date pay to Lender
all reasonable losses, costs and expenses suffered by Lender as a consequence of such rescission.

          (d) Upon satisfaction of the requirements contained in this Section 2.1, Lender will
execute and deliver to Borrower such instruments, prepared by Borrower and approved by Lender, as
shall be necessary to release the Property from the Liens of the Loan Documents.

          Section 2.2. Assumption. The initial Borrower shall have the right to Transfer all of
the Collateral to a Qualified Successor Borrower that will, contemporaneously with such Transfer,
assume all of the obligations of Borrower hereunder and under the other Loan Documents (an
“Assumption”), provided no Event of Default or material monetary Default is then continuing
or would result therefrom and the following conditions are met to the reasonable satisfaction of
Lender:

     (i) such Qualified Successor Borrower shall have executed and delivered to Lender an
assumption agreement (including an assumption of the Mortgage in recordable form, if
requested by Lender), in form and substance reasonably acceptable to Lender, evidencing its
agreement to abide and be bound by the terms of the Loan Documents and containing representations substantially equivalent to those contained in Article
IV (recast, as necessary, such that representations that specifically relate to Closing
Date are

32

 

remade as of the date of such assumption), and such other representations (and
evidence of the accuracy of such representations) as the Servicer shall reasonably request;

     (ii) the obligations of Operating Lessee under the Operating Lease shall have been
assumed by a Qualified Successor Operating Lessee pursuant to an assumption agreement, in
form and substance reasonably acceptable to Lender, and such Qualified Successor Operating
Lessee shall have delivered to Lender all documents reasonably requested by Lender relating
to the existence of such Qualified Successor Operating Lessee and the due authorization of
such Qualified Operating Lessee to assume the obligations under the Operating Lease, each in
form and substance reasonably satisfactory to Lender, including a certified copy of the
applicable resolutions from all appropriate persons, certified copies of the organizational
documents of the Qualified Successor Operating Lessee, together with all amendments thereto,
and certificates of good standing or existence for the Qualified Successor Operating Lessee
issued as of a recent date by its state of organization and each other state where such
entity, by the nature of its business, is required to qualify or register;

     (iii) such Uniform Commercial Code financing statements as may be reasonably requested
by Lender shall be filed;

     (iv) a party satisfactory to Lender in its sole discretion assumes all obligations,
liabilities, guarantees and indemnities of Sponsor and any other guarantor under the Loan
Documents pursuant to documentation satisfactory to Lender (and upon such assumption by such
party, Sponsor and any other such guarantor shall be released from such obligations,
liabilities, guarantees and indemnities);

     (v) such Qualified Successor Borrower shall have delivered to Lender legal opinions of
counsel reasonably acceptable to Lender that are equivalent to the opinions delivered to
Lender on the Closing Date, including new nonconsolidation opinions that are reasonably
satisfactory to Lender and satisfactory to each of the Rating Agencies; and Borrower and the
Qualified Successor Borrower shall have delivered such other documents, certificates and
legal opinions, including relating to REMIC matters, as Lender shall reasonably request;

     (vi) such Qualified Successor Borrower shall have delivered to Lender all documents
reasonably requested by it relating to the existence of such Qualified Successor Borrower
and the due authorization of the Qualified Successor Borrower to assume the Loan and to
execute and deliver the documents described in this Section 2.2, each in form and
substance reasonably satisfactory to Lender, including a certified copy of the applicable
resolutions from all appropriate persons, certified copies of the organizational documents
of the Qualified Successor Borrower, together with all amendments thereto, and certificates
of good standing or existence for the Qualified Successor Borrower issued as of a recent
date by its state of organization and each other state where such entity, by the nature of
its business, is required to qualify or register;

     (vii) the Qualified Title Insurance Policy shall have been properly endorsed to reflect
the Transfer of the Property to the Qualified Successor Borrower;

33

 

     (viii) the Rating Condition shall have been satisfied with respect to the legal
structure of the Qualified Successor Borrower, the documentation of the Assumption and the
related legal opinions; and

     (ix) Borrower shall have paid to Lender a nonrefundable assumption fee in an amount
equal to 1.0% of the Principal Indebtedness, and Borrower shall have reimbursed Lender for
its reasonable out-of-pocket costs and expenses incurred in connection with such assumption.

          Section 2.3. Transfers of Equity Interests in Borrower.

          (a) No direct or indirect equity interests in Borrower shall be conveyed or otherwise
transferred to any Person prior to the first anniversary of the Closing Date. From and after the
first anniversary of the Closing Date, provided that no Event of Default is continuing, transfers
(but not pledges, except as permitted under Section 7.1(f)) of direct and indirect equity
interests in Borrower shall be permitted upon 10 days advance written notice thereof to Lender,
provided that:

     (i) no such transfer shall result in a Change of Control;

     (ii) as a condition to any such transfer that results in Borrower ceasing to be
Controlled by Sponsor, and each subsequent transfer that again changes the identity of the
Qualified Equityholder that Controls Borrower, shall be conditioned upon payment to Lender
of a transfer fee in an amount equal to 1.0% of the Principal Indebtedness at the time of
such transfer;

     (iii) as a condition to any such transfer that results in any Person acquiring more
than 49% of the direct or indirect equity interest in Borrower or a Single-Purpose
Equityholder (even if not constituting a Change of Control), Borrower shall deliver to
Lender with respect to such Person a new non-consolidation opinion satisfactory to (A) prior
to the occurrence of any Securitization of the Loan, Lender (Lender’s approval of any such
non-consolidation opinion that is in substantially the form of the Nonconsolidation Opinion
not to be unreasonably withheld), and (B) at any time following any Securitization or series
of Securitizations of the Loan, each of the Rating Agencies rating such Securitization or
Securitizations; and

     (iv) Borrower shall have reimbursed Lender for its reasonable out-of-pocket costs and
expenses actually incurred in connection with any such transfer.

          (b) Notwithstanding Section 2.3(a) above, the following transactions shall not be
deemed prohibited transfers under this Agreement and shall not require the consent of Lender:

     (i) the issuance of additional shares or the transfer of existing shares of Sponsor on
any public exchange or the issuance of new units or transfers of existing units
in Pebblebrook Hotel, L.P. (the “Operating Partnership”), provided that it
shall continue to be Controlled by Sponsor; and

34

 

     (ii) any merger of Sponsor or the Operating Partnership or a sale of all or
substantially all of the assets of Sponsor or the Operating Partnership, provided that the
new direct or indirect owner of Borrower resulting from such transaction assumes all
obligations of Sponsor under the Loan Documents.

ARTICLE III

ACCOUNTS

          Section 3.1. Cash Management Account.

          (a) On or prior to the Closing Date, Borrower shall establish and thereafter maintain with the
Cash Management Bank a cash management account into which income from the Property payable to
Borrower or Operating Lessee will be deposited (the “Cash Management Account”), which
account shall be owned by Borrower but remain under the sole and exclusive control (as defined in
the New York Uniform Commercial Code) of Lender. As a condition precedent to the closing of the
Loan, Borrower shall cause the Cash Management Bank to execute and deliver an agreement (as
amended, restated, replaced, supplemented or otherwise modified in accordance herewith, a “Cash
Management Agreement”) that provides, inter alia, that no party other than
Lender and Servicer shall have the right to withdraw funds from the Cash Management Account and
that the Cash Management Bank shall comply with all instructions and entitlement orders of Lender
relating to the Cash Management Account and the other Collateral Accounts, in each case, without
the consent of Borrower, Operating Lessee or any other Person. Notwithstanding any term herein or
in the Cash Management Agreement, at any time that (i) a Tax Reserve Exemption Period shall be
continuing, to the extent provided in Section 3.4(c), the amount remitted to the Cash
Management Account shall be net of any amounts needed to pay Taxes as and when due and (ii) an
Insurance Reserve Exemption Period shall be continuing, to the extent provided in Section
3.4(c), the amount remitted to the Cash Management Account shall be net of any amounts needed
to pay insurance premiums as and when due. The fees and expenses of the Cash Management Bank shall
be paid by Borrower.

          (b) Borrower shall cause Approved Property Manager to remit all amounts payable to Borrower or
Operating Lessee (other than tenant security deposits required to be held in escrow accounts) to
the Cash Management Account or a Blocked Account immediately at such times as Borrower or Operating
Lessee are entitled to receive such funds pursuant to the Approved Management Agreement.
Notwithstanding the foregoing, so long as no Trigger Period or Event of Default is continuing, the
amount remitted each month into the Cash Management Account shall not be required to exceed the
Operating Lease Monthly Rent. “Blocked Account” means an Eligible Account maintained with a
financial institution satisfactory to Lender that enters into a blocked account agreement in form
and substance satisfactory to Lender (as amended, restated, replaced, supplemented or otherwise
modified in accordance herewith, the “Blocked Account Agreement”) satisfactory to Lender
pursuant to which such financial institution will remit, at the end of each Business Day, all amounts contained therein to an
account specified by Lender (Lender hereby agreeing to specify the Cash Management Account so long
as no Event of Default has occurred and is then continuing).

35

 

          (c) Lender shall have the right at any time, upon not less than 30 days’ prior written notice
to Borrower, to replace the Cash Management Bank with any Eligible Institution at which Eligible
Accounts may be maintained that will promptly execute and deliver to Lender a Cash Management
Agreement substantially identical to the Cash Management Agreement executed at Closing. In
addition, during the continuance of an Event of Default or if the Blocked Account Bank fails to
comply with the Blocked Account Agreement or ceases to be an Eligible Institution, Lender shall
have the right at any time, upon not less than 30 days’ prior written notice to Borrower, to
replace the Blocked Account Bank with any Eligible Institution at which Eligible Accounts may be
maintained that will promptly execute and deliver to Lender a Blocked Account Agreement
satisfactory to Lender.

          (d) Borrower shall cause Operating Lessee to maintain at all times a Qualified Operating
Expense Account. Borrower shall not permit any amounts unrelated to the Property to be commingled
with amounts on deposit in the Qualified Operating Expense Account and shall cause all amounts
payable with respect to Operating Expenses for the Property (to the extent such Operating Expenses
have not previously been paid by Approved Property Manager in accordance with the Approved
Management Agreement) to be paid from the Qualified Operating Expense Account or the Cash
Management Account (to the extent required or permitted hereunder) and no other account. Borrower
shall, or shall cause Operating Lessee to, deliver to Lender each month the monthly bank statement
related to such Qualified Operating Expense Account. Unless and until an Event of Default shall
occur, Operating Lessee shall have direct access to, and shall be permitted to make withdrawals
and, except during the continuance of a Trigger Period, equity distributions from, the Qualified
Operating Expense Account, without the consent of Lender. During the continuance of an Event of
Default, all amounts contained in the Qualified Operating Expense Account shall be remitted to the
Cash Management Account.

          Section 3.2. Distributions from Cash Management Account.

          (a) The Cash Management Agreement shall provide that the Cash Management Bank shall remit to
the Qualified Operating Expense Account, at the end of each Business Day (or, at Borrower’s
election, on a less frequent basis), the amount, if any, by which amounts then contained in the
Cash Management Account exceed the aggregate amount required to be paid to or reserved with Lender
on the next Payment Date pursuant hereto (the “Minimum Balance”); provided,
however, that Lender shall terminate such remittances during the continuance of an Event of
Default or Trigger Period upon notice to the Cash Management Bank. Lender may notify the Cash
Management Bank at any time of any change in the Minimum Balance.

          (b) On each Payment Date, provided no Event of Default is continuing, Lender shall transfer
amounts from the Cash Management Account, to the extent available therein, to make the following
payments in the following order of priority:

     (i) to the Basic Carrying Costs Escrow Account, the amounts then required to be
deposited therein pursuant to Section 3.4;

36

 

     (ii) to Lender, the amount of all scheduled or delinquent interest and principal on the
Loan and all other amounts then due and payable under the Loan Documents (with any amounts
in respect of principal paid last);

     (iii) during the continuance of a Trigger Period, to the Qualified Operating Expense
Account, an amount equal to the Budgeted Operating Expenses for the month in which such
Payment Date occurs, to the extent such Budgeted Operating Expenses have not previously been
paid by Approved Property Manager in accordance with the Approved Management Agreement, as
certified by Borrower in an Officer’s Certificate delivered to Lender at least five Business
Days prior to such payment date, provided that the amounts disbursed to such account
pursuant to this clause (iii) shall be used solely to pay Budgeted Operating Expenses for
such month (Borrower agreeing that, in the event that such Budgeted Operating Expenses
exceed the actual operating expenses for such month, such excess amounts shall be remitted
to the Cash Management Account prior to the next succeeding Payment Date);

     (iv) to the FF&E Reserve Account, the amounts, if any, required to be deposited
therein pursuant to Section 3.6;

     (v) during the continuance of a Trigger Period, all remaining amounts to the Excess
Cash Flow Reserve Account; and

     (vi) if no Trigger Period is continuing, all remaining amounts to the Qualified
Operating Expense Account.

          (c) If on any Payment Date the amount in the Cash Management Account shall be insufficient to
make all of the transfers described in Section 3.2(b)(i) through (iv), Borrower
shall deposit into the Cash Management Account on such Payment Date the amount of such deficiency.
If Borrower shall fail to make such deposit, the same shall constitute an Event of Default and, in
addition to all other rights and remedies provided for under the Loan Documents, Lender may
disburse and apply the amounts in the Collateral Accounts in accordance with Section
3.10(c).

          Section 3.3. Loss Proceeds Account.

          (a) On or prior to the Closing Date, Borrower shall establish and thereafter maintain with the
Cash Management Bank an account for the purpose of depositing any Loss Proceeds (the “Loss
Proceeds Account”).

          (b) Provided no Event of Default is continuing, funds in the Loss Proceeds account shall be
applied in accordance with Section 5.16.

          Section 3.4. Basic Carrying Costs Escrow Account.

          (a) On or prior to the Closing Date, Borrower shall establish and thereafter maintain with the
Cash Management Bank an account for the purpose of reserving amounts payable by Borrower in respect
of Taxes, IDA Rent and insurance premiums (the “Basic Carrying Costs Escrow Account”).

37

 

          (b) On the Closing Date, the Basic Carrying Costs Escrow Account shall be funded in an amount
equal to the sum of (i) an amount sufficient to pay all Taxes by the 30th day prior to
the date they come due, assuming subsequent monthly fundings on Payment Dates of 1/12 of projected
annual Taxes, plus (ii) an amount sufficient to pay all IDA Rent by the 30th day
prior to the date they come due, assuming subsequent monthly fundings on Payment Dates of 1/12 of
projected annual IDA Rent, plus (iii) an amount sufficient to pay all insurance premiums by the
30th day prior to the date they come due, assuming subsequent monthly fundings on
Payment Dates of 1/12 of projected annual insurance premiums.

          (c) On each subsequent Payment Date, an additional deposit shall be made therein in an amount
equal to the sum of:

     (A) 1/12 of the Taxes that Lender reasonably estimates, based on information provided
by Borrower, will be payable during the next ensuing 12 months, plus

     (B) 1/12 of the IDA Rent that Lender reasonably estimates, based on information
provided by Borrower, will be payable during the next ensuing 12 months, plus

     (C) 1/12 of the insurance premiums that Lender reasonably estimates, based on
information provided by Borrower, will be payable during the next ensuing 12 months;

provided, however, that if at any time Lender reasonably determines that the amount
in the Basic Carrying Costs Escrow Account will not be sufficient to accumulate (upon payment of
subsequent monthly amounts in accordance with the provisions of this Agreement) the full amount of
all installments of Taxes, IDA Rent and insurance premiums by the date on which such amounts come
due, then Lender shall notify Borrower of such determination and Borrower shall increase its
monthly payments to the Basic Carrying Costs Escrow Account by the amount that Lender reasonably
estimates is sufficient to achieve such accumulation.

          (d) Notwithstanding the terms and provisions of the foregoing paragraphs of this Section
3.4:

     (i) Borrower shall have no obligation to comply with subclause (i) of Section
3.4(b) and Section 3.4(c)(A) for so long as (i) no Event of Default or Trigger
Period shall be continuing, (ii) no Taxes that are currently due and payable remain unpaid;
and (iii) Borrower shall maintain in the Basic Carrying Costs Escrow Account funds
sufficient to pay all of the Taxes that Lender reasonably estimates, based on information
provided by Borrower, will accrue or be payable during the next ensuing six months (such
estimate not to be reduced to the extent of any actual or proposed tax appeal) (any such
period, a “Tax Reserve Exemption Period”);

     (ii) Borrower shall have no obligation to comply with subclause (ii) of Section
3.4(b) and Section 3.4(c)(B) for so long as the IDA Rent under the IDA Lease is
fully offset by payments made to Borrower as holder of the IDA Bonds; provided that all IDA

38

 

Bonds have been delivered to Lender and Lender shall have been granted a perfected pledge
thereof pursuant to the IDA Bond Pledge Agreement; and

     (iii) Borrower shall have no obligation to comply with subclause (iii) of Section
3.4(b) and Section 3.4(c)(C) for so long as (i) no Event of Default or Trigger
Period shall be continuing, (ii) no insurance premiums that are currently due and payable
remain unpaid; and (iii) Borrower shall maintain in the Basic Carrying Costs Escrow Account
funds sufficient to pay all of the insurance premiums that Lender reasonably estimates,
based on information provided by Borrower, will accrue or be payable during the next ensuing
six months (such estimate not to be reduced to the extent of any actual or proposed tax
appeal) (any such period, a “Insurance Reserve Exemption Period”).

          (e) Borrower shall provide Lender with copies of all tax, IDA Rent and insurance bills
relating to the Property promptly after Borrower’s receipt thereof. During any Tax Reserve
Exemption Period, Borrower shall make all Tax payments on or before the date due. During any
Insurance Reserve Exemption Period, Borrower shall make all insurance premium payments on or before
the date due. At all other times, Lender will apply amounts in the Basic Carrying Costs Escrow
Account toward the purposes for which such amounts are deposited therein, including, for the
avoidance of doubt, Taxes due and payable. In connection with the making of any payment from the
Basic Carrying Costs Escrow Account, Lender may cause such payment to be made according to any
bill, statement or estimate procured from, as applicable, the IDA or the appropriate public office
or insurance carrier, without inquiry into the accuracy of such bill, statement or estimate or into
the validity of any tax, assessment, sale, forfeiture, tax lien or title or claim thereof unless
given written advance notice by Borrower of such inaccuracy, invalidity or other contest

          Section 3.5. [Intentionally Omitted].

          Section 3.6. FF&E Reserve Account.

          (a) On or prior to the Closing Date, Borrower shall establish and thereafter maintain with the
Cash Management Bank an account for the purpose of reserving amounts in respect of FF&E
expenditures (the “FF&E Reserve Account”).

          (b) On each Payment Date there shall be deposited into the FF&E Reserve Account an amount
equal to the Monthly FF&E Amount.

          (c) Upon the request of Borrower at any time that no Event of Default is continuing (but not
more often than once per calendar month), Lender shall cause disbursements to Borrower from the
FF&E Reserve Account to reimburse Borrower for FF&E expenditures that are consistent with the
Approved Annual Budget; provided that:

     (i) Borrower shall deliver to Lender invoices evidencing that the costs for which such
disbursements are requested are due and payable;

39

 

     (ii) Borrower shall deliver to Lender an Officer’s Certificate confirming that all such
costs have been previously paid by Borrower or will be paid from the proceeds of the
requested disbursement and that all conditions precedent to such disbursement required by
the Loan Documents have been satisfied;

     (iii) Lender may condition the making of a requested disbursement on (1) reasonable
evidence establishing that Borrower has applied any amounts previously received by it in
accordance with this Section for the expenses to which specific draws made hereunder relate,
(2) a reasonably satisfactory site inspection, and (3) receipt of lien releases and waivers
from any contractors, subcontractors and others with respect to such amounts; and

     (iv) No amounts reserved in the FF&E Reserve Account shall be used to pay expenses in
respect of the Capital Plan unless and until Borrower shall first have fulfilled its
obligation under Section 5.07(e) of the Approved Management Agreement to fund the
first $5,500,000 in Capital Plan expenses.

          (d) Notwithstanding the foregoing, Borrower shall have no obligation to comply with subclause
(b) of this Section 3.6 for so long as (i) no Event of Default or Trigger Period is
continuing, (ii) Borrower maintains with an Eligible Institution a separate account (the
“Borrower FF&E Account”) owned by Borrower but subject to a Borrower FF&E Account Control
Agreement, into which Borrower shall deposit, on a monthly basis, an amount equal to the Monthly
FF&E Amount and (iii) Borrower’s chief financial officer shall deliver to Lender within ten
Business Days of the end of each Fiscal Quarter, an Officer’s Certificate certifying as to the
amount contained in the Borrower FF&E Account on the last day of such Fiscal Quarter and, upon
Lender’s request, further certifying that; (1) no amount has been remitted from the Borrower FF&E
Account for any purpose other than the payment of FF&E expenditures pursuant to the Approved Annual
Budget and (2) no amounts reserved in the FF&E Reserve Account have been used to pay expenses in
respect of the Capital Plan unless Borrower shall have fulfilled its obligation under Section
5.07(e) of the Approved Management Agreement to fund the first $5,500,000 in Capital Plan
expenses. Upon the occurrence of a Trigger Period or an Event of Default all amounts contained in
the Borrower FF&E Account shall be remitted into the FF&E Reserve Account.

          Section 3.7. Deferred Maintenance and Environmental Escrow Account.

          (a) On or prior to the Closing Date, if the Deferred Maintenance Amount is greater than zero,
Borrower shall establish and thereafter maintain with the Cash Management Bank an account for the
purpose of reserving amounts anticipated to be required to correct Deferred Maintenance Conditions
(the “Deferred Maintenance and Environmental Escrow Account”).

          (b) On the Closing Date, Borrower shall deposit into the Deferred Maintenance and
Environmental Escrow Account, from the proceeds of the Loan, an amount equal to the Deferred
Maintenance Amount.

40

 

          (c) Upon the request of Borrower at any time that no Event of Default is continuing (but
not more often than once per calendar month), Lender shall cause disbursements to Borrower from the
Deferred Maintenance and Environmental Escrow Account to reimburse Borrower for reasonable costs
and expenses incurred in order to correct Deferred Maintenance Conditions, provided that

     (i) Borrower shall deliver to Lender invoices evidencing that the costs for which such
disbursements are requested are due and payable;

     (ii) Borrower shall deliver to Lender an Officer’s Certificate confirming that all such
costs have been previously paid by Borrower or will be paid from the proceeds of the
requested disbursement and that all conditions precedent to such disbursement required by
the Loan Documents have been satisfied; and

     (iii) Lender may condition the making of a requested disbursement on (1) reasonable
evidence establishing that Borrower has applied any amounts previously received by it in
accordance with this Section for the expenses to which specific draws made hereunder relate,
(2) a reasonably satisfactory site inspection, and (3) receipt of lien releases and waivers
from any contractors, subcontractors and others with respect to such amounts.

     (iv) No amounts reserved in the Deferred Maintenance and Environmental Escrow Account
shall be used to pay expenses in respect of the Capital Plan, except for any maintenance
requirements called for in the Capital Plan which, absent the Capital Plan, would ordinarily
be funded from the Deferred Maintenance and Environmental Escrow Account.

          (d) Upon substantial completion (as reasonably determined by Lender) of the portion of the
Deferred Maintenance Conditions identified on any line on Schedule C, and provided no Event
of Default is then continuing, the remainder of the portion of the Deferred Maintenance Reserve
Account held for such line item (as shown adjacent to such line item on Schedule C) shall
promptly be remitted to Borrower. Upon the correcting of all Deferred Maintenance Conditions,
provided no Event of Default or Trigger Period is then continuing, any amounts then remaining in
the Deferred Maintenance Reserve Account shall promptly be remitted to Borrower and the Deferred
Maintenance Account will no longer be maintained.

          Section 3.8. Unfunded Obligations Account.

          (a) On or prior to the Closing Date, if the Unfunded Obligations Amount is greater than zero,
Borrower shall establish and thereafter maintain with the Cash Management Bank an account for the
purpose of reserving for Unfunded Obligations required to be funded by Borrower (the “Unfunded
Obligations Account”).

          (b) On the Closing Date, Borrower shall deposit into the Unfunded Obligations Account, from
the proceeds of the Loan, an amount equal to the Unfunded Obligations Amount.

41

 

          (c) Borrower shall perform its obligations in respect of the Unfunded Obligations when and as
due under the respective Leases or other applicable agreements. Upon the request of Borrower at
any time that no Event of Default is continuing (but not more often than once per calendar month),
Lender shall cause disbursements to Borrower from the Unfunded Obligations Account to reimburse
Borrower for reasonable costs and expenses incurred in the performance of Unfunded Obligations,
provided that

     (i) Borrower shall deliver to Lender invoices evidencing that the costs for which such
disbursements are requested are due and payable;

     (ii) Borrower shall deliver to Lender an Officer’s Certificate confirming that all such
costs have been previously paid by Borrower or will be paid from the proceeds of the
requested disbursement and that all conditions precedent to such disbursement required by
the Loan Documents have been satisfied; and

     (iii) Lender may condition the making of a requested disbursement on (1) reasonable
evidence establishing that Borrower has applied any amounts previously received by it in
accordance with this Section for the expenses to which specific draws made hereunder relate,
(2) a reasonably satisfactory site inspection, and (3) receipt of lien releases and waivers
from any contractors, subcontractors and others with respect to such amounts.

          (d) Upon payment or performance, as applicable, of the Unfunded Obligations identified on any
line on Schedule D, and provided no Event of Default is then continuing, the remainder of
the portion of the Unfunded Obligations Account held for such line item (as shown adjacent to such
line item on Schedule D) shall promptly be remitted to Borrower, except that any amounts in
respect of free rent shall be remitted to the Cash Management Account. Upon the payment or
performance in full of all Unfunded Obligations, provided no Event of Default or Trigger Period is
then continuing, any amounts then remaining in the Unfunded Obligations Account shall promptly be
remitted to Borrower and the Unfunded Obligations Account will no longer be maintained.

          Section 3.9. Excess Cash Flow Reserve Account.

          (a) On or prior to the Closing Date, Borrower shall establish and thereafter maintain with the
Cash Management Bank an account for the deposit of amounts required to be deposited therein in
accordance with Section 3.2(b)(v) (the “Excess Cash Flow Reserve Account”).

          (b) Provided that no Event of Default is then continuing, Lender shall release to the Cash
Management Account all amounts then contained in the Excess Cash Flow Reserve Account on the first
Payment Date after Borrower delivers to Lender evidence reasonably satisfactory to Lender
establishing that no Trigger Period is then continuing. Such a release shall not preclude the
subsequent commencement of a Trigger Period and the deposit of amounts into the Excess Cash Flow
Reserve Account as set forth in Section 3.2(b)(v).

          Section 3.10. Account Collateral.

42

 

          (a) Borrower hereby grants a perfected first-priority security interest in favor of Lender in
and to the Account Collateral as security for the Indebtedness, together with all rights of a
secured party with respect thereto. Each Collateral Account shall be an Eligible Account under the
sole dominion and control of Lender and shall be in the name of Borrower, as pledgor, and Lender,
as pledgee. Borrower shall have no right to make withdrawals from any of the Collateral Accounts.
Funds in the Collateral Accounts shall not be commingled with any other monies at any time.
Borrower shall execute any additional documents that Lender in its reasonable discretion may
require and shall provide all other evidence reasonably requested by Lender to evidence or perfect
its first-priority security interest in the Account Collateral. Funds in the Collateral Account
shall be invested at Lender’s discretion only in Permitted Investments, which Permitted Investments
shall be credited to the related Collateral Account. All income and gains from the investment of
funds in the Collateral Accounts other than the Basic Carrying Costs Escrow Account shall be
retained in the Collateral Accounts from which they were derived. Unless otherwise required by
applicable law, all income and gains from the investment of funds in the Basic Carrying Costs
Escrow Account shall be for the account of Lender in consideration of its administration of such
Collateral Account, and Lender shall have the right at any time to cause the Cash Management Bank
to remit such amounts to Lender. After the Loan and all other Indebtedness have been paid in full,
the Collateral Accounts shall be closed and the balances therein, if any, shall be paid to
Borrower.

          (b) The insufficiency of amounts contained in the Collateral Accounts shall not relieve
Borrower from its obligation to fulfill all covenants contained in the Loan Documents.

          (c) During the continuance of an Event of Default, Lender may, in its sole discretion, apply
funds in the Collateral Accounts, and funds resulting from the liquidation of Permitted Investments
contained in the Collateral Accounts, either toward the components of the Indebtedness
(e.g., interest, principal and other amounts payable hereunder), the Loan and the Notes in
such sequence as Lender shall elect in its sole discretion, and/or toward the payment of Property
expenses.

          Section 3.11. Bankruptcy. Borrower and Lender acknowledge and agree that upon the
filing of a bankruptcy petition by or against Borrower under the Bankruptcy Code, the Account
Collateral and the Revenues (whether then already in the Collateral Accounts, or then due or
becoming due thereafter) shall be deemed not to be property of Borrower’s bankruptcy estate within
the meaning of Section 541 of the Bankruptcy Code. If, however, a court of competent jurisdiction
determines that, notwithstanding the foregoing characterization of the Account Collateral and the
Revenues by Borrower and Lender, the Account Collateral and/or the Revenues do constitute property
of Borrower’s bankruptcy estate, then Borrower and Lender further acknowledge and agree that all
such Revenues, whether due and payable before or after the filing of the petition, are and shall be
cash collateral of Lender. Borrower acknowledges that Lender does not consent to Borrower’s use of
such cash collateral and that, in the event Lender elects (in its sole discretion) to give such
consent, such consent shall only be effective if given in writing signed by Lender. Except as
provided in the immediately preceding sentence, Borrower shall not have the right to use or
apply or require the use or application of such cash collateral (i) unless Borrower shall have
received a court order authorizing the use of the same, and (ii)

43

 

Borrower shall have provided such
adequate protection to Lender as shall be required by the bankruptcy court in accordance with the
Bankruptcy Code.

ARTICLE IV

REPRESENTATIONS

          Borrower represents to Lender that, as of the Closing Date, except as set forth in the
Exception Report:

          Section 4.1. Organization.

          (a) Borrower and Operating Lessee each are duly organized, validly existing and in good
standing under the laws of the State of Delaware, and is in good standing in each other
jurisdiction where ownership of its properties or the conduct of its business requires it to be so,
and each has all power and authority under such laws and its organizational documents and all
material governmental licenses, authorizations, consents and approvals required to carry on its
business as now conducted.

          (b) Borrower and Operating Lessee each have no subsidiaries and do not own any equity interest
in any other Person.

          (c) The organizational chart contained in Exhibit A is true and correct as of the date
hereof.

          (d) The limited liability company interests of Borrower and Operating Lessee are not
represented by any limited liability company certificates, other certificates or other instruments
of any kind.

          Section 4.2. Authorization. Borrower has the power and authority to enter into this
Agreement and the other Loan Documents, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated by the Loan Documents and has by proper action duly
authorized the execution and delivery of the Loan Documents.

          Section 4.3. No Conflicts. Neither the execution and delivery of the Loan Documents,
nor the consummation of the transactions contemplated therein, nor performance of and compliance
with the terms and provisions thereof will (i) violate or conflict with any provision of its
formation and governance documents, (ii) violate any Legal Requirement, regulation (including
Regulation U, Regulation X or Regulation T), order, writ, judgment, injunction, decree or permit
applicable to it, (iii) violate or conflict with contractual provisions of, or cause an event of
default under, any indenture, loan agreement, mortgage, contract or other Material Agreement to
which Borrower,
Operating Lessee or Sponsor is a party or by which Borrower, Operating Lessee or Sponsor may
be bound, or (iv) result in or require the creation of any Lien or other charge or encumbrance upon
or with respect to the Collateral in favor of any party other than Lender.

44

 

          Section 4.4. Consents. No consent, approval, authorization or order of, or
qualification with, any court or Governmental Authority is required in connection with the
execution, delivery or performance by Borrower of this Agreement or the other Loan Documents,
except for any of the foregoing that have already been obtained.

          Section 4.5. Enforceable Obligations. This Agreement and the other Loan Documents
have been duly executed and delivered by Borrower and constitute Borrower’s legal, valid and
binding obligations, enforceable in accordance with their respective terms, subject to bankruptcy,
insolvency and similar laws of general applicability relating to or affecting creditors’ rights and
to general equity principles. The Loan Documents are not subject to any right of rescission,
set-off, counterclaim or defense by Borrower, including the defense of usury.

          Section 4.6. No Default. No Default or Event of Default will exist immediately
following the making of the Loan.

          Section 4.7. Payment of Taxes. Borrower and Operating Lessee each have filed, or
caused to be filed, all tax returns (federal, state, local and foreign) required to be filed and
paid all amounts of taxes due (including interest and penalties) except for taxes that are not yet
delinquent and has paid all other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangible taxes) owing by it
necessary to preserve the Liens in favor of Lender.

          Section 4.8. Compliance with Law. Borrower, Operating Lessee, the Property and the
use thereof comply in all material respects with all applicable Insurance Requirements and Legal
Requirements, including building and zoning ordinances and codes. The Property conforms to current
zoning requirements (including requirements relating to parking) and is neither an illegal nor a
legal nonconforming use. Neither Borrower nor Operating Lessee is in default or violation of any
order, writ, injunction, decree or demand of any Governmental Authority the violation of which
could adversely affect the Property or the condition (financial or otherwise) or business of
Borrower or Operating Lessee. There has not been committed by or on behalf of Borrower, Operating
Lessee or, to the best of Borrower’s knowledge, any other person in occupancy of or involved with
the operation or use of the Property, any act or omission affording any federal Governmental
Authority or any state or local Governmental Authority the right of forfeiture as against the
Property or any portion thereof or any monies paid in performance of its obligations under any of
the Loan Documents. None of Borrower, Operating Lessee or Sponsor has purchased any portion of the
Property with proceeds of any illegal activity.

          Section 4.9. ERISA. None of Borrower, Operating Lessee, or any ERISA Affiliate of
Borrower or Operating Lessee has incurred or could be subjected to any liability under Title IV or
Section 302 of ERISA or Section
412 of the Code or maintains or contributes to, or is or has been required to maintain or
contribute to, any employee benefit plan (as defined in Section 3(3) of ERISA) subject to Title IV
or Section 302 of ERISA or Section 412 of the Code. The consummation of the transactions
contemplated by this Agreement will not constitute or result in any non-exempt prohibited
transaction under Section 406 of ERISA, Section 4975 of the Code or substantially similar
provisions under federal, state or local laws, rules or regulations.

45

 

          Section 4.10. Investment Company Act. Neither Borrower nor Operating Lessee is an
“investment company”, or a company “controlled” by an “investment company”, registered or required
to be registered under the Investment Company Act of 1940, as amended.

          Section 4.11. No Bankruptcy Filing. Neither Borrower nor Operating Lessee is
contemplating either the filing of a petition by it under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of its assets or property. Neither
Borrower nor Operating Lessee has knowledge of any Person contemplating the filing of any such
petition against it. During the ten year period preceding the Closing Date, no petition in
bankruptcy has been filed by or against Borrower, Operating Lessee, any Single-Purpose Equityholder
or Sponsor, or any affiliate of any of the aforementioned Persons, or any person who owns or
controls, directly or indirectly, ten percent or more of the beneficial ownership interests of any
such Person.

          Section 4.12. Other Debt. Neither Borrower nor Operating Lessee has outstanding any
Debt other than Permitted Debt.

          Section 4.13. Litigation. There are no actions, suits, proceedings, arbitrations or
governmental investigations by or before any Governmental Authority or other court or agency now
pending, and to the best of Borrower’s knowledge there are no such actions, suits, proceedings,
arbitrations or governmental investigations threatened against or affecting Borrower, Operating
Lessee or the Collateral, in each case, except as listed in the Exception Report (and none of the
matters listed in the Exception Report, even if determined against Borrower, Operating Lessee or
the Collateral, could reasonably be expected to result in a Material Adverse Effect).

          Section 4.14. Leases; Material Agreements.

          (a) Except as set forth in Schedule G, there are no Leases and neither Borrower nor Operating
Lessee is currently engaged in negotiations with any prospective tenant to enter into a Major
Lease.

          (b) There are no Material Agreements except as described in Schedule E. Borrower has
made available to Lender true and complete copies of all Material Agreements. Each Material
Agreement has been entered into at arm’s length in the ordinary course of business by or on behalf
of Borrower or Operating Lessee. The Material Agreements are in full force and effect and there
are no defaults thereunder by Borrower, Operating Lessee, or to Borrower’s knowledge, any other
party thereto. Neither Borrower nor Operating Lessee is in
default in any material respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Permitted Encumbrance or any other agreement
or instrument to which it is a party or by which it or the Property is bound (including, for the
avoidance of doubt, the Operating Lease).

          (c) Other than as disclosed on Schedule E, Operating Lessee is not a party to any
Material Agreements related to the Property.

46

 

          Section 4.15. Full and Accurate Disclosure. No statement of fact heretofore delivered
by Borrower, Sponsor or Operating Lessee to Lender in writing in respect of the Property or
Borrower, Sponsor or Operating Lessee contains any untrue statement of a material fact or omits to
state any material fact necessary to make statements contained therein not misleading unless
subsequently corrected. There is no fact, event or circumstance presently known to Borrower,
Sponsor or Operating Lessee that has not been disclosed to Lender that has had or could reasonably
be expected to result in a Material Adverse Effect.

          Section 4.16. Financial Condition. All financial data concerning Borrower, Operating
Lessee and the Property heretofore provided to Lender fairly presents in accordance with GAAP the
financial position of Borrower and Operating Lessee in all material respects, as of the date on
which it was made, and does not omit to state any fact necessary to make statements contained
herein or therein not misleading. Since the delivery of such data, except as otherwise disclosed
in writing to Lender, there have occurred no changes or circumstances that have had or are
reasonably expected to result in a Material Adverse Effect.

          Section 4.17. Single-Purpose Requirements.

          (a) Each of Borrower and Operating Lessee is now, and has always been since its formation, a
Single-Purpose Entity and has conducted its business in substantial compliance with the provisions
of its organizational documents. Neither Borrower nor Operating Lessee has ever (i) owned any
property other than the Property and/or related personal property and, in the case of Borrower, the
IDA Bonds, (ii) engaged in any business, except the ownership and/or operation of the Property and,
in the case of Borrower, the IDA Bonds or (iii) had any material contingent or actual obligations
or liabilities unrelated to the Property.

          (b) Borrower has provided Lender with true, correct and complete copies of (i) Borrower’s and
Operating Lessee’s current financial statements; and (ii) Borrower’s and Operating Lessee’s
respective current operating agreements, together with all amendments and modifications thereto.

          Section 4.18. Use of Loan Proceeds. No part of the proceeds of the Loan will be used
for the purpose of purchasing or acquiring any “margin stock” within the meaning of Regulations T,
U or X of the Board of Governors of the Federal Reserve System or for any other purpose that would
be inconsistent with such Regulations T, U or X or any other Regulations of such Board of
Governors, or for any purpose prohibited by Legal Requirements or by the terms and conditions
of the Loan Documents. The Loan is solely for the business purpose of Borrower or for distribution
to Borrower’s equityholders in accordance with Legal Requirements.

          Section 4.19. Not Foreign Person. Neither Borrower nor Operating Lessee is a “foreign
person” within the meaning of Section 1445(f)(3) of the Code.

          Section 4.20. Labor Matters. Neither Borrower nor Operating Lessee is a party to any
collective bargaining agreements.

          Section 4.21. Title. Borrower owns good, marketable and insurable leasehold title to
the Property. Borrower owns good and marketable title to the FF&E and the IDA Bonds.

47

 

Borrower
and/or Operating Lessee own good and marketable title to all personal property related to the
Property (other than the FF&E, which is owned solely by Borrower), to the Collateral Accounts and
to any other Collateral (other than the IDA Collateral), in each case free and clear of all Liens
whatsoever except the Permitted Encumbrances. The IDA owns good, marketable and insurable fee title
to the Property. The Mortgage, when properly recorded in the appropriate records, together with any
Uniform Commercial Code financing statements required to be filed in connection therewith, will
create (i) a valid, perfected first priority Lien on the Property and the rents therefrom,
enforceable as such against creditors of and purchasers from Borrower or Operating Lessee and
subject only to Permitted Encumbrances, and (ii) perfected Liens (pursuant to the Uniform
Commercial Code of the State of New York) in and to all personalty, all in accordance with the
terms thereof, in each case subject only to any applicable Permitted Encumbrances. The Permitted
Encumbrances do not and will not materially and adversely affect or interfere with the value, or
current or contemplated use or operation, of the Property, or the security intended to be provided
by the Mortgage or Borrower’s ability to repay the Indebtedness in accordance with the terms of the
Loan Documents. Except as insured over by a Qualified Title Insurance Policy, there are no claims
for payment for work, labor or materials affecting the Property that are or may become a Lien prior
to, or of equal priority with, the Liens created by the Loan Documents. No creditor of Borrower
(other than Lender) or Operating Lessee has in its possession any goods that constitute or evidence
the Collateral.

          Section 4.22. No Encroachments. Except as shown on the Qualified Survey, all of the
improvements on the Property lie wholly within the boundaries and building restriction lines of the
Property, and no improvements on adjoining property encroach upon the Property, and no easements or
other encumbrances upon the Property encroach upon any of the improvements, so as, in either case,
to adversely affect the value or marketability of the Property, except those that are insured
against by a Qualified Title Insurance Policy.

          Section 4.23. Physical Condition.

          (a) Except for matters set forth in the Engineering Reports, the Property (including
sidewalks, storm drainage system, roof, plumbing system, HVAC system, fire
protection system, electrical system, equipment, elevators, exterior sidings and doors,
irrigation system and all structural components) is in good condition, order and repair in all
respects material to its use, operation or value.

          (b) Borrower is not aware of any material structural or other material defect or damages in
the Property, whether latent or otherwise.

          (c) Borrower has not received and is not aware of any other party’s receipt of notice from any
insurance company or bonding company of any defects or inadequacies in the Property that would,
alone or in the aggregate, adversely affect in any material respect the insurability of the same or
cause the imposition of extraordinary premiums or charges thereon or of any termination or
threatened termination of any policy of insurance or bond.

          Section 4.24. Fraudulent Conveyance. Borrower has not entered into the Transaction or
any of the Loan Documents with the actual intent to hinder, delay or defraud any creditor.
Borrower has received reasonably equivalent value in exchange for its obligations

48

 

under the Loan
Documents. On the Closing Date, the fair salable value of Borrower’s aggregate assets is and will,
immediately following the making of the Loan and the use and disbursement of the proceeds thereof,
be greater than Borrower’s probable aggregate liabilities (including subordinated, unliquidated,
disputed and Contingent Obligations). Borrower’s aggregate assets do not and, immediately
following the making of the Loan and the use and disbursement of the proceeds thereof will not,
constitute unreasonably small capital to carry out its business as conducted or as proposed to be
conducted. Borrower does not intend to, and does not believe that it will, incur debts and
liabilities (including Contingent Obligations and other commitments) beyond its ability to pay such
debts as they mature (taking into account the timing and amounts to be payable on or in respect of
obligations of Borrower).

          Section 4.25. Management. Except for any Approved Management Agreement, no property
management agreements are in effect with respect to the Property. The Approved Management
Agreement is in full force and effect and there is no event of default thereunder by any party
thereto and no event has occurred that, with the passage of time and/or the giving of notice would
constitute a default thereunder.

          Section 4.26. Condemnation. No Condemnation has been commenced or, to Borrower’s
knowledge, is contemplated with respect to all or any portion of the Property or for the relocation
of roadways providing access to the Property.

          Section 4.27. Utilities and Public Access. The Property has adequate rights of access
to dedicated public ways (and makes no material use of any means of access or egress that is not
pursuant to such dedicated public ways or recorded, irrevocable rights-of-way or easements) and is
adequately served by all public utilities necessary to the continued use and enjoyment of the
Property as presently used and enjoyed.

          Section 4.28. Environmental Matters. Except as disclosed in the Environmental
Reports:

     (i) The Property is in compliance in all material respects with all Environmental Laws
applicable to the Property (which compliance includes, but is not limited to, the possession
of, and compliance with, all environmental, health and safety permits, approvals, licenses,
registrations and other governmental authorizations required in connection with the
ownership and operation of the Property under all Environmental Laws).

     (ii) No Environmental Claim is pending with respect to the Property, nor, to Borrower’s
knowledge, is any threatened, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to Borrower, Operating
Lessee or the Property.

     (iii) Without limiting the generality of the foregoing, there is not present at, on, in
or under the Property, any Hazardous Substances, PCB-containing equipment, asbestos or
asbestos containing materials, underground storage tanks or surface impoundments for

49

 

any
Hazardous Substance, lead in drinking water (except in concentrations that comply with all
Environmental Laws), or lead-based paint.

     (iv) There have not been and are no past, present or threatened Releases of any
Hazardous Substance from or at the Property that are reasonably likely to form the basis of
any Environmental Claim, and, to Borrower’s knowledge, there is no threat of any Release of
any Hazardous Substance migrating to the Property.

     (v) No Liens are presently recorded with the appropriate land records under or pursuant
to any Environmental Law with respect to the Property and, to Borrower’s knowledge, no
Governmental Authority has been taking any action to subject the Property to Liens under any
Environmental Law.

     (vi) There have been no material environmental investigations, studies, audits, reviews
or other analyses conducted by or that are in the possession of Borrower or Operating Lessee
in relation to the Property that have not been made available to Lender.

          Section 4.29. Assessments. There are no pending or, to Borrower’s knowledge, proposed
special or other assessments for public improvements or otherwise affecting the Property, nor are
there any contemplated improvements to the Property that may result in such special or other
assessments. No extension of time for assessment or payment of Taxes is in effect.

          Section 4.30. No Joint Assessment. Borrower has not suffered, permitted or initiated
the joint assessment of the Property (i) with any other real property constituting a separate tax
lot, or (ii) with any personal property, or any other procedure whereby the Lien of any Taxes that
may be levied against such
other real property or personal property shall be assessed or levied or charged to the
Property as a single Lien.

          Section 4.31. Separate Lots. No portion of the Property is part of a tax lot that
also includes any real property that is not Collateral.

          Section 4.32. Permits; Certificate of Occupancy. Borrower, Operating Lessee and/or
Approved Property Manager have obtained all Permits necessary for the present and contemplated use
and operation of the Property. The uses being made of the Property are in conformity in all
material respects with the certificate of occupancy and/or Permits for the Property and any other
restrictions, covenants or conditions affecting the Property.

          Section 4.33. Flood Zone. None of the improvements on the Property is located in an
area identified by the Federal Emergency Management Agency or the Federal Insurance Administration
as a “100 year flood plain” or as having special flood hazards (including Zones A and V), or, to
the extent that any portion of the Property is located in such an area, the Property is covered by
flood insurance meeting the requirements set forth in Section 5.15(a)(ii).

          Section 4.34. Security Deposits. Borrower and Operating Lessee are in compliance in
all material respects with all Legal Requirements relating to security deposits.

50

 

          Section 4.35. Acquisition Documents. Borrower has delivered to Lender true and
complete copies of all material agreements and instruments under which Borrower, Operating Lessee
or any of their affiliates or the seller of the Property have remaining rights or obligations in
respect of Borrower’s acquisition of the Property.

          Section 4.36. Insurance. Borrower or Operating Lessee has obtained, or caused to be
obtained, insurance policies reflecting the insurance coverages, amounts and other requirements set
forth in this Agreement. All premiums on such insurance policies required to be paid as of the
Closing Date have been paid for the current policy period. No Person, including Borrower and
Operating Lessee, has done, by act or omission, anything that would impair the coverage of any such
policy.

          Section 4.37. No Dealings. Borrower, Operating Lessee and the Sponsor are not aware
of any unlawful influence on the assessed value of the Property.

          Section 4.38. Estoppel Certificates. Borrower has delivered to Lender true and
complete copies of (a) the form(s) of estoppel certificate heretofore sent by Borrower, Operating
Lessee or any of their affiliates to every Tenant at the Property, and (b) each estoppel
certificate received back from any such Tenant prior to the Closing Date.

          Section 4.39. Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering
Laws. (a) None of the funds or other assets of any of Borrower, Operating Lessee, any
Single-Purpose Equityholder or Sponsor constitute property of, or are beneficially owned, directly
or indirectly, by any person, entity or government subject to trade restrictions under federal law,
including the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The
Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any executive orders or
regulations promulgated thereunder, with the result that (i) the investment in any of Borrower,
Operating Lessee, any Single-Purpose Equityholder or Sponsor, as applicable (whether directly or
indirectly), is prohibited by law or (ii) the Loan is in violation of law (any such person, entity
or government, an “Embargoed Person”); (b) no Embargoed Person has any interest of any
nature whatsoever in any of Borrower, Operating Lessee, any Single-Purpose Equityholder or Sponsor,
as applicable (whether directly or indirectly), with the result that (i) the investment in any of
Borrower, Operating Lessee, any Single-Purpose Equityholder or Sponsor, as applicable (whether
directly or indirectly) is prohibited by law or (ii) the Loan is in violation of law, (c) none of
the funds of any of Borrower, Operating Lessee, any Single-Purpose Equityholder or Sponsor, as
applicable, have been derived from any unlawful activity with the result that (i) the investment in
any of Borrower, Operating Lessee, any Single-Purpose Equityholder or Sponsor, as applicable
(whether directly or indirectly) is prohibited by law or (ii) the Loan is in violation of law, (d)
to the best of Borrower’s knowledge, no Tenant at the Property is identified on the OFAC List and
(e) Borrower, Operating Lessee, any Single-Purpose Equityholder and Sponsor are in material
compliance with the PATRIOT Act. Borrower has implemented procedures, and will consistently apply
those procedures throughout the term of the Loan, to ensure the foregoing representations and
warranties remain true and correct during the term of the Loan. Notwithstanding Section
4.41 to the contrary, the representations and warranties contained in this Section 4.39
shall survive in perpetuity.

51

 

          Section 4.40. IDA Lease. Each of the following is true with respect to the IDA Lease:

     (i) the IDA Estoppel and a true and complete copy of the IDA Lease (including all
amendments and modifications thereto) have been delivered to Lender, and the IDA Lease or a
memorandum thereof has been duly recorded;

     (ii) the IDA Lease is part of a standard payment-in-lieu-of-taxes structure;

     (iii) IDA Rent payable under the IDA Lease is fully offset by payments made to Borrower
as holder of the IDA Bonds;

     (iv) the IDA Lease is in full force and effect and no default has occurred thereunder
nor, to Borrower’s knowledge, is there any existing condition that, but for the passage of
time or the giving of notice or both, would result in a default under the terms of the IDA
Lease;

     (v) Borrower is the current tenant under the IDA Lease, and the IDA Lease permits
Borrower to be the tenant thereunder and permits Borrower’s interest thereunder to be
encumbered by the Mortgage;

     (vi) the IDA Lease is assignable by a holder of a mortgage encumbering the lessee’s
interest therein upon a foreclosure of mortgage without the consent of the lessor
thereunder;

     (vii) the IDA Lease does not restrict the use of the Property by Borrower, its
successors or assigns in a manner that would adversely affect in a material respect the
security provided to Lender by the Mortgage;

     (viii) upon the expiration or other termination of the IDA Lease and payments of any
amounts owed under the IDA Lease, Borrower shall receive a deed conveying fee title in the
applicable premises covered thereby; and

     (ix) the fee interest in the real property leased to Borrower pursuant to the IDA Lease
is encumbered by the Mortgage.

          Section 4.41. IDA Bonds.

     (i) IDA Bond R-2 is the only IDA Bond currently valid and outstanding;

     (ii) the IDA Bonds have been delivered to Lender and Lender has been granted a
perfected pledge thereof pursuant to the IDA Bond Pledge Agreement;

     (iii) Borrower is the sole owner of the IDA Bonds and the same have not been
transferred, assigned or pledged to any party other than Lender;

52

 

     (iv) The R-1 Development Authority of Fulton County Taxable Economic Development
Revenue Bond (IHC Buckhead LLC Project), Series 2002, is no longer valid and has been
destroyed.

          Section 4.42. Survival. Borrower agrees that all of the representations of Borrower
set forth in this Agreement and in the other Loan Documents shall survive for so long as any
portion of the Indebtedness is outstanding. All representations, covenants and agreements made by
Borrower in this Agreement or in the other Loan Documents shall be deemed to have been relied upon
by Lender notwithstanding any investigation heretofore or hereafter made by Lender or on its
behalf. On the date of any Securitization, on not less than three days’ prior written notice,
Borrower shall deliver to Lender a certification (x) confirming that all of the representations
contained in this Agreement are true and correct as of the date of such Securitization, or (y)
otherwise specifying any changes in or qualifications to such representations as of such date as
may be necessary to make such representations consistent with the facts as they exist on such date.

ARTICLE V

AFFIRMATIVE COVENANTS

          Section 5.1. Existence. Borrower, Operating Lessee and if applicable, any
Single-Purpose Equityholder shall do or cause to be
done all things necessary to preserve, renew and keep in full force and effect its existence
and all rights, licenses, Permits, franchises and other agreements necessary for the continued use
and operation of its business. Borrower, Operating Lessee and, if applicable, each Single-Purpose
Equityholder shall deliver to Lender a copy of each amendment or other modification to any of its
organizational documents promptly after the execution thereof.

          Section 5.2. Maintenance of Property.

          (a) Borrower shall cause the Property to be maintained in good and safe working order and
repair, reasonable wear and tear excepted, and in keeping with the condition and repair of
properties of a similar use, value, age, nature and construction. Borrower shall not, and shall
not cause or permit Operating Lessee or Approved Property Manager to, use, maintain or operate the
Property in any manner that constitutes a public or private nuisance or that makes void, voidable,
or cancelable, or increases the premium of, any insurance then in force with respect thereto.
Subject to Section 6.13, without the prior written consent of Lender, no improvements or
equipment located at or on the Property shall be removed, demolished or materially altered (except
for replacement of equipment in the ordinary course of Borrower’s or Operating Lessee’s business
with items of the same utility and of equal or greater value and sales of obsolete equipment no
longer needed for the operation of the Property). Subject to Section 6.13, Borrower shall
from time to time make, or cause to be made, all reasonably necessary and desirable repairs,
renewals, replacements, betterments and improvements to the Property. Borrower shall not, and
shall not cause or permit Operating Lessee or Approved Property Manager to, make any change in the
use of the Property that would materially increase the risk of fire or other hazard arising out of
the operation of the Property, or do or permit to be done thereon anything that may in any way
impair the value of the Property in any material respect or

53

 

the Lien of the Mortgage or otherwise
cause or reasonably be expected to result in a Material Adverse Effect. Borrower shall not install
or permit to be installed on the Property any underground storage tank. Borrower shall not,
without the prior written consent of Lender, permit any drilling or exploration for or extraction,
removal, or production of any minerals from the surface or the subsurface of the Property,
regardless of the depth thereof or the method of mining or extraction thereof.

          (b) Borrower shall remediate the Deferred Maintenance Conditions within 12 months following
the Closing Date, subject to Force Majeure, and upon request from Lender after the expiration of
such period shall deliver to Lender an Officer’s Certificate confirming that such remediation has
been completed and that all associated expenses have been paid.

          Section 5.3. Compliance with Legal Requirements. Borrower shall, and shall cause
Operating Lessee to, comply with, and shall cause the Property to comply with and be operated,
maintained, repaired and improved in compliance with, all Legal Requirements, Insurance
Requirements and all material contractual obligations by which Borrower is legally bound.

          Section 5.4. Impositions and Other Claims. Borrower shall pay and discharge all
taxes, assessments and
governmental charges levied upon it, its income and its assets as and when such taxes,
assessments and charges are due and payable, as well as all lawful claims for labor, materials and
supplies or otherwise, subject to any rights to contest contained in the definition of Permitted
Encumbrances. Borrower shall file all federal, state and local tax returns and other reports that
it is required by law to file. If any law or regulation applicable to Lender, any Note, any of the
Collateral or the Mortgage is enacted that deducts from the value of property for the purpose of
taxation any Lien thereon, or imposes upon Lender the payment of the whole or any portion of the
taxes or assessments or charges or Liens required by this Agreement to be paid by Borrower, or
changes in any way the laws or regulations relating to the taxation of mortgages or security
agreements or debts secured by mortgages or security agreements or the interest of the mortgagee or
secured party in the property covered thereby, or the manner of collection of such taxes, so as to
affect the Mortgage, the Indebtedness or Lender, then Borrower, upon demand by Lender, shall pay
such taxes, assessments, charges or Liens, or reimburse Lender for any amounts paid by Lender. If
in the opinion of Lender’s counsel it might be unlawful to require Borrower to make such payment or
the making of such payment might result in the imposition of interest beyond the maximum amount
permitted by applicable Law, Lender may elect to declare all of the Indebtedness to be due and
payable 90 days from the giving of written notice by Lender to Borrower.

          Section 5.5. Access to Property. Borrower shall, and shall cause Operating Lessee and
Approved Property Manager to permit agents, representatives and employees of Lender and the
Servicer to enter and inspect the Property or any portion thereof, and/or inspect, examine, audit
and copy the books and records of Borrower, Operating Lessee and Approved Property Manager
(including all recorded data of any kind or nature, regardless of the medium of recording), at such
reasonable times as may be requested by Lender upon reasonable advance notice ( all subject to the
terms and conditions of the Approved Management Agreement). If Lender shall determine that an
Event of Default exists, the cost of such inspections, examinations, copying or audits shall be
borne by Borrower, including the cost of all follow up

54

 

or additional investigations, audits or
inquiries deemed reasonably necessary by Lender. The cost of such inspections, examinations,
audits and copying, if not paid for by Borrower following demand, may be added to the Indebtedness
and shall bear interest thereafter until paid at the Default Rate. If Borrower prohibits, bars or
fails to permit agents, representatives and employees of Lender and Servicer from entering and
inspecting the Property or from inspecting, examining, auditing and copying the books and records
of Borrower, Operating Lessee and Approved Property Manager, as required by this Section, for more
than five days after a written request is made by Lender to do so, Borrower agrees to pay Lender on
demand the sum of $1,000.00 for each day after such five-day period that Borrower so prohibits or
bars such inspection, and such sum or sums shall be part of the Indebtedness. Notwithstanding any
of Lender’s or Servicer’s rights in this Section, in no event shall Lender or Servicer have any
right to enter or inspect the Property or inspect, examine, audit or copy the books and records of
Approved Property Manager that is greater than or inconsistent with the access afforded to Borrower
under the terms of the Approved Management Agreement.

          Section 5.6. Cooperate in Legal Proceedings. Except with respect to any claim by
Borrower against Lender, Borrower shall, and shall cause Operating Lessee to, cooperate fully with
Lender with respect to any proceedings before any Governmental Authority that may in any way affect
the rights of
Lender hereunder or under any of the Loan Documents and, in connection therewith, Lender may,
at its election, participate or designate a representative to participate in any such proceedings.

          Section 5.7. Leases.

          (a) Borrower shall furnish Lender with executed copies of all Leases, together with a detailed
breakdown of income and cost associated therewith. All new Leases and renewals or amendments of
Leases must (i) be entered into on an arms-length basis with Tenants that are not affiliates of
Borrower and whose identity and creditworthiness is appropriate for tenancy in property of
comparable quality, (ii) provide for rental rates and other economic terms that, taken as a whole,
are at least equivalent to then-existing market rates, based on the applicable market, and
otherwise contain terms and conditions that are commercially reasonable, (iii) have an initial term
of not more than 10 years, (iv) not have or reasonably be expected to result in a Material Adverse
Effect, (v) be expressly subject and subordinate to the Mortgage and contain provisions for the
agreement by the Tenant thereunder to attorn to Lender and any purchaser at a foreclosure sale,
such attornment to be self-executing and effective upon acquisition of title to the Property by any
purchaser at a foreclosure sale and (vi) require the Tenant thereunder to execute and deliver to
Borrower an estoppel certificate addressing the issues set forth in Section 9.16(b) of this
Agreement (in each case, unless Lender consents to such Lease in its sole discretion).

          (b) All new Leases that are Major Leases, and all terminations, renewals and amendments of
Major Leases, and any surrender of rights under any Major Lease, shall be subject to the prior
written consent of Lender. If Lender shall fail to respond to Borrower’s request for such consent
within five Business Days of Lender’s receipt thereof, Borrower may deliver to Lender a second
request for consent stating in bold and capitalized type that “LENDER’S FAILURE TO RESPOND TO THE
ENCLOSED REQUEST WITHIN TEN BUSINESS DAYS SHALL BE DEEMED LENDER’S APPROVAL.” In the event Lender
fails

55

 

to approve or disapprove such request within ten Business Days of Lender’s receipt of such
second request, such request shall be deemed approved.

          (c) Borrower shall, and shall cause Operating Lessee to, (i) observe and punctually perform
all the material obligations imposed upon the lessor under the Leases; (ii) enforce all of the
material terms, covenants and conditions contained in the Leases on the part of the lessee
thereunder to be observed or performed, short of termination thereof, except that the lessor may
terminate any Lease following a material default thereunder by the respective Tenant; (iii) not
collect any of the rents thereunder more than one month in advance; (iv) not execute any assignment
of lessor’s interest in the Leases or associated rents other than the assignment of rents and
leases under the Mortgage; (v) not cancel or terminate any guarantee of any of the Major Leases
without the prior written consent of Lender; and (vi) not permit any subletting of any space
covered by a Lease or an assignment of the Tenant’s rights under a Lease, except in strict
accordance with the terms of such Lease. Borrower shall, or shall cause Operating Lessee to,
deliver to each new Tenant a Tenant Notice upon execution of such Tenant’s Lease, and promptly
thereafter deliver to Lender a copy thereof and evidence of such Tenant’s receipt thereof.

          (d) Security deposits of Tenants under all Leases, whether held in cash or any other form,
shall not be commingled with any other funds of Borrower or Operating Lessee and, if cash, shall be
deposited by Borrower or Operating Lessee in an account at such commercial or savings bank as may
be reasonably satisfactory to Lender, which account shall be pledged to Lender. Borrower shall, or
shall cause Operating Lessee to, maintain books and records of sufficient detail to identify all
security deposits of Tenants separate and apart from any other payments received from Tenants. Any
bond or other instrument that Borrower or Operating Lessee is permitted to hold in lieu of cash
security deposits under any applicable Legal Requirements shall be maintained in full force and
effect unless replaced by cash deposits as described above, shall be issued by an institution
reasonably satisfactory to Lender, shall (if not prohibited by any Legal Requirements) name Lender
as payee or mortgagee thereunder (or at Lender’s option, be fully assignable to Lender) or may name
Borrower or Operating Lessee as payee thereunder so long as such bond or other instrument is
pledged to Lender as security for the Indebtedness and shall, in all respects, comply with any
applicable Legal Requirements and otherwise be reasonably satisfactory to Lender. Borrower shall,
upon Lender’s request, provide Lender with evidence reasonably satisfactory to Lender of Borrower’s
and Operating Lessee’s compliance with the foregoing. During the continuance of any Trigger Period
or Event of Default, Borrower shall, upon Lender’s request, cause to be deposited with Lender in an
Eligible Account pledged to Lender an amount equal to the aggregate security deposits of the
Tenants (and any interest theretofore earned on such security deposits and actually received by
Borrower or Operating Lessee) that Borrower and Operating Lessee had not returned to the applicable
Tenants or applied in accordance with the terms of the applicable Lease.

          (e) Borrower shall cause to be promptly delivered to Lender a copy of each written notice from
a Tenant under any Major Lease claiming that Borrower or Operating Lessee is in default in the
performance or observance of any of the material terms, covenants or conditions thereof. Borrower
shall cause each Major Lease executed after the Closing Date to which Borrower or Operating Lessee
is a party to provide that any Tenant delivering any such notice shall send a copy of such notice
directly to Lender.

56

 

          Section 5.8. Plan Assets, etc. Borrower will do, or cause to be done, all things
necessary to ensure that neither Borrower nor Operating Lessee will be deemed to hold Plan Assets
at any time.

          Section 5.9. Further Assurances. Borrower shall (and, as applicable, shall cause
Operating Lessee to), at Borrower’s sole cost and expense, from time to time as reasonably
requested by Lender, execute, acknowledge, record, register, file and/or deliver to Lender such
other instruments, agreements, certificates and documents (including Uniform Commercial Code
financing statements and amended or replacement mortgages) as Lender may reasonably request to
evidence, confirm, perfect and maintain the Liens securing or intended to secure the obligations of
Borrower and the rights of Lender under the Loan Documents or to facilitate a replacement of the
Cash Management Bank pursuant to Section 3.1(c) or a bifurcation of the Notes pursuant to
Sections 1.1(c) and/or 9.7(b) or a restructuring of the Loan pursuant to the
Cooperation Agreement, in each case if requested by Lender, and do and execute all such further
lawful and reasonable acts, conveyances and assurances for the better and more effective carrying
out of the intents and purposes of this Agreement and the other Loan Documents as Lender shall
reasonably request
from time to time. Upon foreclosure, the appointment of a receiver or any other relevant
action, Borrower shall (and, as applicable, shall cause Operating Lessee or Approved Property
Manager to), at Borrower’s sole cost and expense, cooperate fully and completely to effect the
assignment or transfer of any license, permit, agreement or any other right necessary or useful to
the operation of the Collateral. Borrower hereby authorizes and appoints Lender as its
attorney-in-fact to execute, acknowledge, record, register and/or file such instruments,
agreements, certificates and documents, and to do and execute such acts, conveyances and
assurances, should Borrower fail to do so itself in violation of this Agreement or the other Loan
Documents following written request from Lender, in each case without the signature of Borrower.
The foregoing grant of authority is a power of attorney coupled with an interest and such
appointment shall be irrevocable for the term of this Agreement. Borrower hereby ratifies all
actions that such attorney shall lawfully take or cause to be taken in accordance with this
Section 5.9.

          Section 5.10. Management of Collateral.

          (a) The Property shall be managed at all times by an Approved Property Manager pursuant to an
Approved Management Agreement. Pursuant to the Subordination of Property Management Agreement,
Approved Property Manager shall agree that the Approved Management Agreement and the incentive fee
payable thereunder are subject and subordinate to the Indebtedness. Borrower may from time to time
appoint an Approved Property Manager to manage the Property pursuant to an Approved Management
Agreement, and such successor manager shall execute for Lender’s benefit a Subordination of
Property Management Agreement in form and substance reasonably satisfactory to Lender. The per
annum fees of the Approved Property Manager (including any incentive fees) shall not exceed the
fees specified in the Approved Management Agreement.

          (b) Borrower shall cause each Approved Property Manager (including any successor Approved
Property Manager) to maintain at all times worker’s compensation insurance as required by
Governmental Authorities.

57

 

          (c) Borrower shall notify Lender in writing of any default of Borrower, Operating Lessee or
the Approved Property Manager under the Approved Management Agreement, after the expiration of any
applicable cure periods, of which Borrower has actual knowledge. Lender shall have the right,
after reasonable notice to Borrower and in accordance with the Subordination of Management
Agreement, to cure defaults of Borrower or Operating Lessee under the Approved Management
Agreement. Any out-of-pocket expenses incurred by Lender to cure any such default shall constitute
a part of the Indebtedness and shall be due from Borrower upon demand by Lender.

          (d) During the continuance of an Event of Default and, simultaneously, a material default by
the Approved Property Manager under the Approved Management Agreement after the expiration of any
applicable cure period or upon the filing of a bankruptcy petition or the occurrence of a similar
event with respect to the Approved Property Manager, Lender may, in its sole discretion, require
Borrower to cause the termination of the Approved Management Agreement and the engagement of an
Approved Property Manager selected by
Lender to serve as replacement Approved Property Manager pursuant to an Approved Management
Agreement.

          Section 5.11. Notice of Material Event.

     (i) Borrower shall give Lender prompt notice (containing reasonable detail) of (i) any
material change in the financial or physical condition of the Property, as reasonably
determined by Borrower, including the termination or cancellation of any Major Lease and the
termination or cancellation of terrorism or other insurance required by this Agreement, (ii)
any notice from the Approved Property Manager, to the extent such notice relates to a matter
that is reasonably expected to result in a Material Adverse Effect, (iii) any litigation or
governmental proceedings pending or threatened in writing against Borrower, Operating Lessee
or the Property that is reasonably expected to result in a Material Adverse Effect, (iv) the
insolvency or bankruptcy filing of Borrower, Operating Lessee, any Single-Purpose
Equityholder, Sponsor or an affiliate of any of the foregoing and (v) any other circumstance
or event reasonably expected to result in a Material Adverse Effect.

     (ii) Borrower shall deliver to Lender, within three Business Days of receipt thereof,
the periodic reports regarding the Property, if any, delivered to Borrower and/or Operating
Lessee by Approved Property Manager.

          Section 5.12. Annual Financial Statements. As soon as available, and in any event
within 90 days after the close of each Fiscal Year, Borrower shall furnish to Lender, in an Excel
spreadsheet file in electronic format (which may be via an intralinks site at Borrower’s sole cost
and expense), or, in the case of predominantly text documents, in Adobe pdf format, a balance sheet
of Borrower as of the end of such year, together with related statements of income and
equityholders’ capital for such Fiscal Year, in each case either audited or reviewed by a certified
public accounting firm reasonably satisfactory to Lender. Together with Borrower’s annual
financial statements, Borrower shall furnish to Lender, in an Excel spreadsheet file in electronic
format (which may be via an intralinks site at Borrower’s sole cost and expense), or, in the case
of predominantly text documents, in Adobe pdf format:

58

 

     (i) a statement of cash flows and income and expenses in the format set forth in the
most recent Uniform System of Accounts (as shown on Exhibit C);

     (ii) average daily room rates, sales reports, Smith Travel Reports (to the extent
available) and occupancy reports;

     (iii) an annual report for the most recently completed fiscal year, describing Capital
Expenditures (stated separately with respect to any project costing in excess of $100,000);
and

     (iv) such other information as Lender shall reasonably request.

          Section 5.13. Quarterly Financial Statements. As soon as available, and in any event
within 45 days after the end of each Fiscal Quarter (including year-end), Borrower shall furnish to
Lender, in an Excel spreadsheet file in electronic format (which may be via an intralinks site at
Borrower’s sole cost and expense), or, in the case of predominantly text documents, in Adobe pdf
format, quarterly and year-to-date unaudited financial statements prepared for such fiscal quarter
with respect to Borrower, including a balance sheet and operating statement as of the end of such
Fiscal Quarter, together with related statements of income, equityholders’ capital and cash flows
for such Fiscal Quarter and for the portion of the Fiscal Year ending with such Fiscal Quarter,
which statements shall include income and expenses in the format set forth in the most recent
Uniform System of Accounts (as shown on Exhibit C) and be accompanied by an Officer’s
Certificate certifying that the same are true, correct and complete and were prepared in accordance
with GAAP applied on a consistent basis, subject to changes resulting from audit and normal
year-end audit adjustments. Each such quarterly report shall be accompanied by the following, in
an Excel spreadsheet file in electronic format (which may be via an intralinks site at Borrower’s
sole cost and expense), or, in the case of predominantly text documents, in Adobe pdf format:

     (i) a statement in reasonable detail that calculates Net Operating Income for each of
the Fiscal Quarters in the Test Period ending in such Fiscal Quarter, in the case of each
such Fiscal Quarter, ending at the end thereof;

     (ii) copies of each of the Leases signed during such quarter, together with a summary
thereof that shall include the Tenant’s name, lease term, base rent, Tenant Improvements,
leasing commissions paid, free rent and other material tenant concessions;

     (iii) average daily room rates, sales reports, Smith Travel Reports (to the extent
available) and occupancy reports; and

     (iv) a reasonably detailed report of Borrower’s progress on the Capital Plan, including
information regarding whether the deadlines set forth therein have been met.

     (v) such other information as Lender shall reasonably request.

          Section 5.14. Monthly Financial Statements; Non-Delivery of Financial Statements.

59

 

          (a) Until the occurrence of a Securitization and during the continuance of a Trigger Period or
an Event of Default (or, in the case of item (iii) below, at all times), Borrower shall furnish
within 30 days after the end of each calendar month (other than the calendar month immediately
following the final calendar month of any Fiscal Year or Fiscal Quarter), in an Excel spreadsheet
file in electronic format (which may be via an intralinks site at Borrower’s sole cost and
expense), or, in the case of predominantly text documents, in Adobe pdf format, monthly and
year-to-date unaudited financial statements prepared for the applicable month with respect to
Borrower, including a balance sheet and operating statement as of the end of such month, together
with related statements of income, equityholders’ capital and cash flows for such month and for the
portion of the Fiscal Year ending with such month , which statements shall include income and
expenses in the format set forth in the most recent Uniform System of Accounts (as shown on
Exhibit C) and be accompanied by an Officer’s Certificate certifying that the same are
true, correct and complete and were prepared in accordance with GAAP applied on a consistent basis,
subject to changes resulting from audit and normal year-end audit adjustments. Each such monthly
report shall be accompanied by the following:

     (i) a summary of Leases signed during such month, which summary shall include the
Tenant’s name, lease term, base rent, escalations, Tenant Improvements, leasing commissions
paid, free rent and other concessions;

     (ii) then current rent roll, average daily room rates, sales reports, Smith Travel
Reports (to the extent available) and occupancy reports; and

     (iii) such other information as Lender shall reasonably request.

          (b) If Borrower fails to provide to Lender any of the financial statements and other
information specified in Sections 5.12, 5.13 or this Section 5.14 within
the respective time period specified in such Sections, Lender shall deliver to Borrower written
notice of such failure. If Borrower fails to provide such financial statements and other
information within ten Business Days after receipt of such notice such failure shall constitute a
Trigger Period.

          Section 5.15. Insurance.

          (a) Borrower shall cause to be obtained and maintained with respect to the Property, for the
mutual benefit of Borrower and Lender at all times, the following policies of insurance:

     (i) insurance against loss or damage by standard perils included within the
classification “All Risks Special Form Cause of Loss” (including coverage for damage caused
by windstorm and hail). Such insurance shall (A) be in an amount equal to the full
replacement cost of the Property and fixtures (without deduction for physical depreciation);
(B) have deductibles acceptable to Lender (but in any event not in excess of $50,000, except
in the case of windstorm and earthquake coverage, which shall have deductibles not in excess
of 5% of the total insurable value of the Property); (C) be paid annually in advance; (D) contain a “Replacement Cost Endorsement” with a waiver of
depreciation and an “Agreed Upon Amount Endorsement” waiving all coinsurance provisions; (E)
include an ordinance or law coverage endorsement containing Coverage

60

 

A: “Loss Due to Operation of Law” (with a limit equal to replacement cost, provided, that,
the limit under the coverage in effect as of the Closing Date may be maintained so long as
the Property remains legal and conforming under all applicable zoning requirements),
Coverage B: “Demolition Cost” and Coverage C: “Increased Cost of Construction” coverages
each with limits of no less than 10% of replacement cost or such lesser amounts as Lender
may require in its sole discretion; (F) permit that the improvements and other property
covered by such insurance be rebuilt at another location in the event that such improvements
and other property cannot be rebuilt at the location on which they are situated as of the
date hereof. If such insurance excludes mold, Borrower shall implement a mold prevention
program satisfactory to Lender;

     (ii) flood insurance if the Property is located in a “100 Year Flood Plain”, “special
hazard area” (Zones A and V) in an amount equal to the maximum limit of coverage available
from FEMA/FIA, plus such excess limits requested by Lender, with a deductible not in excess
of $25,000;

     (iii) commercial general liability insurance, including broad form coverage of property
damage, blanket contractual liability and personal injury (including death resulting
therefrom), to be on the so-called “occurrence” form containing minimum limits per
occurrence of not less than $1,000,000 with not less than a $2,000,000 general aggregate for
any policy year (with a per location aggregate if the Property is on a blanket policy). In
addition, at least $50,000,000 excess and/or umbrella liability insurance shall be obtained
and maintained for any and all claims, including all legal liability imposed upon Borrower
and all related court costs and attorneys’ fees and disbursements;

     (iv) rental loss and/or business interruption insurance covering all risks required to
be covered by the insurance provided for herein, including but not limited to, clauses
(i), (ii), (v), (vii), (viii) and (ix) of this Section 5.15(a), and covering the
18month period commencing on the date of any Casualty or Condemnation, and containing an
extended period of indemnity endorsement covering the 12 month period commencing on the date
on which the Property has been restored, as reasonably determined by the applicable insurer
(even if the policy will expire prior to the end of such period). The amount of such
insurance shall be increased from time to time as and when the gross revenues from the
Property increase;

     (v) insurance against loss or damage from (A) leakage of sprinkler systems, if not
provided by the policy required by Section 5.15(a)(i), and (B) explosion of steam
boilers, air conditioning equipment, high pressure piping, machinery and equipment, pressure
vessels or similar apparatus now or hereafter installed in any of the improvements (without
exclusion for explosions) and insurance against loss of occupancy or use arising from any
breakdown, in such amounts as are generally available and are generally required by
institutional lenders for properties comparable to the Property;

     (vi) worker’s compensation insurance with respect to all employees of Borrower as and
to the extent required by any Governmental Authority or Legal Requirement and employer’s
liability coverage of at least $1,000,000 (if applicable);

61

 

     (vii) during any period of repair or restoration, and only if the property and
liability coverage forms do not otherwise apply, owner’s contingent or protective liability
insurance covering claims not covered by or under the terms or provisions of the insurance
provided for in Section 5.15(a)(iii). The insurance provided for in Section
5.15(a) shall (1) be written in a so-called builder’s risk completed value form or
equivalent coverage, including coverage for 100% of the total costs of construction on a
non-reporting basis and against all risks insured against pursuant to clauses (i), (ii),
(iv), (v), (viii) and (ix) of Section 5.15(a), (2) shall include
permission to occupy the Property, and (3) shall contain an agreed amount endorsement
waiving co-insurance provisions;

     (viii) if required by Lender, earthquake insurance (A) with minimum coverage equivalent
to the greater of 1.0x SUL (scenario upper loss) and 1.5x SEL (scenario expected loss)
multiplied by the full replacement cost of the building plus business income, (B) having a
deductible approved by Lender (but in any event not be in excess of 5% of the total
insurable value of the Property), and (C) if the Property is legally nonconforming under
applicable zoning ordinances and codes, containing ordinance of law coverage in amounts as
required by Lender;

     (ix) so long as the Terrorism Risk Insurance Program Reauthorization Act of 2007
(“TRIPRA”) or a similar statute is in effect, terrorism insurance for Certified and
Non-Certified acts (as such terms are defined in TRIPRA or similar statute) in an amount
equal to the full replacement cost of the Property (plus twelve months of business
interruption coverage). If TRIPRA or a similar statute is not in effect, then provided that
terrorism insurance is commercially available, Borrower shall be required to carry terrorism
insurance throughout the term of the Loan as required by the preceding sentence, but in such
event Borrower shall not be required to spend on terrorism insurance coverage more than two
times the amount of the insurance premium that is payable at such time in respect of the
casualty and business interruption/rental loss insurance required hereunder (without giving
effect to the cost of terrorism and earthquake components of such casualty and business
interruption/rental loss insurance), and if the cost of terrorism insurance exceeds such
amount, Borrower shall purchase the maximum amount of terrorism insurance available with
funds equal to such amount;

     (x) liquor liability insurance in an amount of at least $10,000,000 or in such greater
amount as may be required by applicable Legal Requirements against claims or liability
arising directly or indirectly to persons or property on account of the sale or dispensing
of alcoholic beverages at the Property and public liability insurance in an amount of at
least $10,000,000 or in such greater amount as may be required by applicable Legal
Requirements providing coverage against such claims or liability;

     (xi) crime coverage in an amount not less than $2,000,000 to protect against employee
dishonesty and related incidents, containing minimum limits per occurrence of $1,000,000;

     (xii) motor vehicle liability coverage for all owned and non owned vehicles, including
rented and leased vehicles containing minimum limits per occurrence of $1,000,000.00 (if
applicable); and

62

 

     (xiii) such other insurance as may from time to time be requested by Lender.

          (b) All policies of insurance (the “Policies”) required pursuant to this Section
5.15 shall be issued by one or more primary insurers having a claims-paying ability of at least
“A” or “A2” by each of the Rating Agencies, or by a syndicate of insurers through which at least
75% of the coverage (if there are 4 or fewer members of the syndicate) or at least 60% of the
coverage (if there are 5 or more members of the syndicate) is with carriers having such
claims-paying ability ratings (provided that the first layers of coverage are from carriers rated
at least “A” or “A2” and all such carriers shall have claims-paying ability ratings of not less
than “BBB+” or “Baa1”). Notwithstanding anything to the contrary herein, for purposes of
determining whether the insurer ratings requirements set forth above have been satisfied, (1) any
insurer that is not rated by Fitch will be regarded as having a Fitch rating that is the equivalent
of the rating given to such insurer by any of Moody’s and S&P that does rate such insurer (or, if
both such rating agencies rate such insurer, the lower of the two ratings), (2) any insurer that is
not rated by Moody’s will be regarded as having a Moody’s rating of “Baa1” or better if it is rated
“A-” or better by S&P and will be regarded as having a Moody’s rating of “A2” or better if it is
rated “A+” or better by S&P, (3) RSUI Indemnity Company shall be deemed to have satisfied such
insurer ratings requirements with respect to insurance coverage provided by it as of the Closing
Date so long as it maintains a Moody’s rating of A3 and (4) Ironshore Inc. shall be deemed to have
satisfied such insurer ratings requirements with respect to insurance coverage provided by it as of
the Closing Date so long as it maintains a Moody’s rating of Baa1.

          (c) All Policies required pursuant to this Section 5.15:

     (i) shall contain deductibles that, in addition to complying with any other
requirements expressly set forth in Section 5.15(a), are approved by Lender (such
approval not to be unreasonably withheld, delayed or conditioned, but subject to the
requirements of each Rating Agency) and are no larger than is customary for similar policies
covering similar properties in the geographic market in which the Property is located, but
in any event are not in excess of $50,000 (except in the case of windstorm and earthquake
coverage, which shall have deductibles not in excess of 5% of the total insurable value of
the Property);

     (ii) shall be maintained throughout the term of the Loan without cost to Lender and
shall name Borrower as the named insured;

     (iii) with respect to casualty policies, shall contain a standard noncontributory
mortgagee clause naming Lender and its successors and assigns as their interests may appear
as first mortgagee and loss payee;

     (iv) with respect to liability policies, shall name Lender and its successors and
assigns as their interests may appear as additional insureds;

     (v) with respect to rental or business interruption insurance policies, shall name
Lender and its successors and/or assigns as their interests may appear as loss payee;

63

 

     (vi) shall contain an endorsement providing that neither Borrower nor Lender nor any
other party shall be a co-insurer under said Policies;

     (vii) shall contain an endorsement providing that Lender shall receive at least 30
days’ prior written notice of any modification, reduction or cancellation thereof;

     (viii) shall contain an endorsement providing that no act or negligence of Borrower or
of a Tenant or other occupant or any foreclosure or other proceeding or notice of sale
relating to the Property shall affect the validity or enforceability of the insurance
insofar as a mortgagee is concerned;

     (ix) shall provide that Lender shall not be liable for any insurance premiums thereon
or subject to any assessments thereunder;

     (x) shall contain a waiver of subrogation against Lender;

     (xi) may be in the form of a blanket policy, provided that Borrower shall
provide evidence satisfactory to Lender that the insurance premiums for the Property are
separately allocated under such Policy to the Property and that (i) payment of such
allocated amount shall maintain the effectiveness of such Policy as to the Property
notwithstanding the failure of payment of any other portion of premiums, and (ii) overall
insurance limits will under no circumstance limit the amount that will be paid in respect of
the Property, and provided further that any such blanket policy shall specifically
allocate to the Property the amount of coverage from time to time required hereunder or
shall otherwise provide the same protection as would a separate Policy in Lender’s
discretion, subject to review and approval by Lender based on the schedule of locations and
values; and

     (xii) shall otherwise be reasonably satisfactory in form and substance to Lender and
shall contain such other provisions as Lender deems reasonably necessary or desirable to
protect its interests.

          (d) Borrower shall pay the premiums for all Policies as the same become due and payable.
Copies of such Policies, certified as true and correct by Borrower, shall be delivered to Lender
promptly upon request. Not later than 30 days prior to the expiration date of each Policy,
Borrower shall deliver to Lender evidence, reasonably satisfactory to Lender, of its renewal.
Borrower shall promptly forward to Lender a copy of each written notice received by Borrower of any
modification, reduction or cancellation of any of the Policies or of any of the coverages afforded
under any of the Policies. Within 30 days after request by Lender, Borrower shall obtain such
increases in the amounts of coverage required hereunder as may be reasonably requested by Lender,
taking into consideration changes in the value of money over time, changes in liability laws,
changes in prudent customs and practices, and the like.

          (e) Borrower shall not procure any other insurance coverage that would be on the same level of
payment as the Policies or would adversely impact in any way the ability of Lender or Borrower to collect any proceeds under any of the Policies. If at any time Lender
is not in receipt of written evidence that all Policies are in full force and effect when and as

64

 

required hereunder, Lender shall have the right to take such action as Lender deems necessary to
protect its interest in the Property, including the obtaining of such insurance coverage as Lender
in its sole discretion deems appropriate (but limited to the coverages and amounts required
hereunder). All premiums incurred by Lender in connection with such action or in obtaining such
insurance and keeping it in effect shall be paid by Borrower to Lender upon demand and, until paid,
and shall bear interest at the Default Rate.

          (f) In the event of foreclosure of the Mortgage or other transfer of title to the Property in
extinguishment in whole or in part of the Indebtedness, all right, title and interest of Borrower
in and to the Policies then in force with respect to the Property and all proceeds payable
thereunder shall thereupon vest in the purchaser at such foreclosure or in Lender or other
transferee in the event of such other transfer of title.

          Section 5.16. Casualty and Condemnation.

          (a) Borrower shall give prompt notice to Lender of any Casualty or Condemnation or of the
actual or threatened commencement of proceedings that would result in a Condemnation

          (b) Lender may participate in any proceedings for any taking by any public or quasi-public
authority accomplished through a Condemnation or any transfer made in lieu of or in anticipation of
a Condemnation, to the extent permitted by law. Upon Lender’s request, Borrower shall deliver to
Lender all instruments reasonably requested by it to permit such participation. Borrower shall, at
its sole cost and expense, diligently prosecute any such proceedings, and shall consult with
Lender, its attorneys and experts, and cooperate with them in the carrying on or defense of any
such proceedings. Borrower shall not consent or agree to a Condemnation or action in lieu thereof
without the prior written consent of Lender in each instance, which consent shall not be
unreasonably withheld or delayed in the case of a taking of an immaterial portion of the Property.

          (c) Lender may (x) jointly with Borrower settle and adjust any claims, (y) during the
continuance of an Event of Default, settle and adjust any claims without the consent or cooperation
of Borrower, or (z) allow Borrower to settle and adjust any claims; except that if no Event of
Default is continuing, Borrower may settle and adjust claims aggregating not in excess of $500,000
if such settlement or adjustment is carried out in a competent and timely manner, but Lender shall
be entitled to collect and receive (as set forth below) any and all Loss Proceeds. The reasonable
expenses incurred by Lender in the adjustment and collection of Loss Proceeds shall become part of
the Indebtedness and shall be reimbursed by Borrower to Lender upon demand therefor.

          (d) All Loss Proceeds from any Casualty or Condemnation shall be immediately deposited into
the Loss Proceeds Account (monthly rental loss/business interruption proceeds to be initially
deposited into the Loss Proceeds Account and subsequently deposited into the Cash Management
Account in installments as and when the lost rental income covered by such proceeds would have been payable). Following the occurrence of a Casualty, Borrower,
regardless of whether proceeds are available, shall in a reasonably prompt manner proceed to
restore, repair, replace or rebuild the Property to be of at least equal value and of substantially

65

 

the same character as prior to the Casualty, all in accordance with the terms hereof applicable to
Alterations. If any Condemnation or Casualty occurs as to which, in the reasonable judgment of
Lender:

     (i) in the case of a Casualty, the cost of restoration would not exceed 25% of the Loan
Amount and the Casualty does not render untenantable, or result in the cancellation of
Leases covering, more than 25% of the gross rentable area of the Property, or result in
cancellation of Leases covering more than 25% of the base contractual rental revenue of the
Property;

     (ii) in the case of a Condemnation, the Condemnation does not render untenantable, or
result in the cancellation of Leases covering, more than 15% of the gross rentable area of
the Property;

     (iii) restoration of the Property is reasonably expected to be completed prior to the
expiration of rental interruption insurance and at least six months prior to the Maturity
Date;

     (iv) after such restoration, the fair market value of the Property is reasonably
expected to equal at least the fair market value of the Property immediately prior to such
Condemnation or Casualty; and

     (v) all necessary approvals and consents from Governmental Authorities will be obtained
to allow the rebuilding and re-occupancy of the Property;

or if Lender otherwise elects to allow Borrower to restore the Property, then, provided no Event of
Default is continuing, the Loss Proceeds after receipt thereof by Lender and reimbursement of any
reasonable expenses incurred by Lender in connection therewith shall be applied to the cost of
restoring, repairing, replacing or rebuilding the Property or part thereof subject to the Casualty
or Condemnation, in the manner set forth below (and Borrower shall commence, as promptly and
diligently as practicable, to prosecute such restoring, repairing, replacing or rebuilding of the
Property in a workmanlike fashion and in accordance with applicable law to a status at least
equivalent to the quality and character of the Property immediately prior to the Condemnation or
Casualty). Provided that no Event of Default shall have occurred and be then continuing, Lender
shall disburse such Loss Proceeds to Borrower upon Lender’s being furnished with (i) evidence
reasonably satisfactory to it of the estimated cost of completion of the restoration, (ii) funds,
or assurances reasonably satisfactory to Lender that such funds are available and sufficient in
addition to any remaining Loss Proceeds, to complete the proposed restoration (including for any
reasonable costs and expenses of Lender to be incurred in administering such restoration) and for
payment of the Indebtedness as it becomes due and payable during the restoration, and (iii) such
architect’s certificates, waivers of lien, contractor’s sworn statements, title insurance
endorsements, bonds, plats of survey and such other evidences of cost, payment and performance as
Lender may reasonably request; and Lender may, in any event, require that all plans and
specifications for restoration reasonably estimated by Lender to exceed $500,000 be submitted to
and approved by Lender prior to commencement of work (which approval shall not be unreasonably
withheld). If Lender reasonably estimates that the cost to restore will exceed $500,000, Lender
may retain a local construction consultant to inspect such work and review

66

 

Borrower’s request for payments and Borrower shall, on demand by Lender, reimburse Lender for the reasonable fees and
expenses of such consultant (which fees and expenses shall constitute Indebtedness). No payment
shall exceed 90% of the value of the work performed from time to time until such time as 50% of the
restoration (calculated based on the anticipated aggregate cost of the work) has been completed,
and amounts retained prior to completion of 50% of the restoration shall not be paid prior to the
final completion of the restoration. Funds other than Loss Proceeds shall be disbursed prior to
disbursement of such Loss Proceeds, and at all times the undisbursed balance of such proceeds
remaining in the Loss Proceeds Account, together with any additional funds irrevocably and
unconditionally deposited therein or irrevocably and unconditionally committed for that purpose,
shall be at least sufficient in the reasonable judgment of Lender to pay for the cost of completion
of the restoration free and clear of all Liens or claims for Lien.

          (e) Borrower shall cooperate with Lender in obtaining for Lender the benefits of any Loss
Proceeds lawfully or equitably payable to Lender in connection with the Property. Lender shall be
reimbursed for any expenses reasonably incurred in connection therewith (including reasonable
attorneys’ fees and disbursements, and, if reasonably necessary to collect such proceeds, the
expense of an Appraisal on behalf of Lender) out of such Loss Proceeds or, if insufficient for such
purpose, by Borrower. Borrower hereby irrevocably constitutes and appoints Lender as the
attorney-in-fact of Borrower for matters in excess of $500,000.00 with respect to the Property,
with full power of substitution, subject to the terms of this Section 5.16, to settle for,
collect and receive all Loss Proceeds and any other awards, damages, insurance proceeds, payments
or other compensation from the parties or authorities making the same, to appear in and prosecute
any proceedings therefor and to give receipts and acquittance therefor (which power of attorney
shall be irrevocable so long as any of the Indebtedness is outstanding, shall be deemed coupled
with an interest, and shall survive the voluntary or involuntary dissolution of Borrower).

          (f) If Borrower is not entitled to apply Loss Proceeds toward the restoration of the Property
pursuant to Section 5.16(d) and Lender elects not to permit such Loss Proceeds to be so
applied, such Loss Proceeds shall be applied on the first Payment Date following such election to
the prepayment of the principal of the Loan and shall be accompanied by interest through the end of
the applicable Interest Accrual Period (calculated as if the amount prepaid were outstanding for
the entire Interest Accrual Period). If the Note has been bifurcated into multiple Notes pursuant
to Section 1.1(c), all prepayments of the Loan made by Borrower in accordance with this
Section 5.16(f) shall be applied to the Notes in ascending order of interest rate
(i.e., first to the Note with the lowest interest rate until its outstanding principal
balance has been reduced to zero, then to the Note with the second lowest interest rate until its
outstanding principal balance has been reduced to zero, and so on) or in such other order as Lender
shall determine.

          (g) Notwithstanding the foregoing provisions of this Section 5.16, if the Loan is
included in a REMIC and immediately following a release of any portion of the applicable Property
from the Lien of the Loan Documents in connection with a Casualty or Condemnation the Loan would fail to satisfy a Lender 80% Determination, then the principal of the Loan
shall be prepaid in accordance with Section 5.16(f) in an amount equal to either (i) so
much of the Loss Proceeds as are necessary to cause the Lender 80% Determination to be satisfied,
or if the

67

 

aggregate Loss Proceeds are insufficient for such purpose, then the amount realized by
Borrower from the Casualty or Condemnation for purposes of computing gain or loss under section
1001 of the Code, or (ii) a lesser amount provided the Borrower delivers to Lender an opinion of
counsel for Borrower, in form and substance reasonably satisfactory to Lender and delivered by
counsel reasonably satisfactory to Lender, opining that such release of Property from the Lien does
not cause any portion of the Loan to cease to be a “qualified mortgage” within the meaning of
section 860G(a)(3) of the Code.

          Section 5.17. Annual Budget. Each calendar year during the term of the Loan, as soon
as made available to Borrower and/or Operating Lessee in accordance with the terms of Sections
6.02 and 6.03 of the Approved Management Agreement, Borrower or Operating Lessee shall
deliver or shall cause Approved Property Manager to deliver to Lender, for informational purposes
only, the Annual Budget and, promptly after preparation thereof, any subsequent revisions to the
Annual Budget. If the budget approval process under the Approved Management Agreement shall be
ongoing during the continuance of a Trigger Period or an Event of Default, neither Borrower nor
Operating Lessee shall exercise any budget approval right they may have under the Approved
Management Agreement without the approval of Lender, such approval not to be unreasonably
conditioned, withheld or delayed. For so long as Lender shall withhold its consent to any Annual
Budget or any revisions thereto, the Annual Budget in effect prior to any such request for approval
shall remain in effect. Without the prior written consent of Lender, which consent shall not be
unreasonably withheld or delayed, during the continuance of a Trigger Period neither Borrower nor
Operating Lessee shall make or approve any expenditures that are either not provided for in the
Approved Annual Budget or that would, in the aggregate, cause any line item in the Approved Annual
Budget to be exceeded by 5% or more measured on an annual basis, other than expenditures for
non-discretionary items and expenditures required to be made by reason of the occurrence of any
emergency (i.e., an unexpected event that threatens imminent harm to persons or property at
the Property) and with respect to which it would be impracticable, under the circumstances, to
obtain Lender’s prior consent thereto. For the avoidance of doubt, decreases made or approved to
any line item in the Approved Annual Budget shall not require Lender’s consent. Borrower and/or
Operating Lessee shall deliver, or cause to be delivered, the 2011 Annual Budget as soon as is
practical.

          Section 5.18. Nonbinding Consultation. Lender shall have the right to consult with
and advise Borrower regarding significant business activities and business and financial
developments of Borrower and Operating Lessee, provided that any such advice or consultation or the
result thereof shall be completely nonbinding on Borrower.

          Section 5.19. Compliance with Encumbrances and Material Agreements. Borrower
covenants and agrees as follows:

     (i) Borrower shall, and shall cause Operating Lessee to, comply with all material
terms, conditions and covenants of each Material Agreement and each material Permitted
Encumbrance, including any reciprocal easement agreement, any declaration of covenants,
conditions and restrictions, and any condominium arrangements.

     (ii) Borrower shall, and shall cause Operating Lessee to, promptly deliver to Lender a
true, correct and complete copy of each and every notice of default received by

68

 

Borrower or Operating Lessee with respect to any obligation of such Borrower or Operating Lessee under
the provisions of any Material Agreement and/or Permitted Encumbrance.

     (iii) Borrower shall, and shall cause Operating Lessee to, deliver to Lender copies of
any written notices of default or event of default relating to any Material Agreement and/or
Permitted Encumbrance served by Borrower or Operating Lessee.

     (iv) After the occurrence of an Event of Default, so long as the Loan is outstanding,
Borrower shall not, and shall not cause Operating Lessee to, grant or withhold any material
consent, approval or waiver under any Material Agreement or Permitted Encumbrance without
the prior written consent of Lender.

     (v) Borrower shall, and shall cause Operating Lessee to, deliver to each other party to
any Permitted Encumbrance and any Material Agreement notice of the identity of Lender and
each assignee of Lender of which Borrower is aware if such notice is required in order to
protect Lender’s interest thereunder.

     (vi) Borrower shall, and shall cause Operating Lessee to, enforce, short of termination
thereof, the performance and observance of each and every material term, covenant and
provision of each Material Agreements to be performed or observed, if any.

          Section 5.20. Prohibited Persons. None of Borrower, Operating Lessee, Sponsor or any
Person owning a direct or indirect beneficial interest in Borrower, Operating Lessee, or Sponsor
shall (i) knowingly conduct any business, or engage in any transaction or dealing, with any
Embargoed Person, including, but not limited to, the making or receiving of any contribution of
funds, goods, or services, to or for the benefit of a Embargoed Person, or (ii) knowingly engage in
or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in Executive Order 13224.
Borrower shall deliver to Lender from time to time written certification or other evidence as may
be reasonably requested by Lender, confirming that (x) none of Borrower, Operating Lessee, Sponsor
or, to Borrower’s knowledge, any Person owning a direct or indirect beneficial interest in
Borrower, Operating Lessee, or Sponsor is an Embargoed Person and (y) none of Borrower, Operating
Lessee, Sponsor or, to Borrower’s knowledge, any Person owning a direct or indirect beneficial
interest in Borrower, Operating Lessee, or Sponsor has knowingly engaged in any business,
transaction or dealings with a Embargoed Person, including, but not limited to, the making or
receiving of any contribution of funds, goods, or services, to or for the benefit of a Embargoed
Person.

          Section 5.21. Operating Lease.

     (i) Borrower shall cause Operating Lessee to comply with the affirmative and negative
covenants contained in this Agreement as if Operating Lessee were the Borrower hereunder and
no Default hereunder shall be excused by virtue of the fact that such Default was caused by
Operating Lessee.

69

 

     (ii) Borrower shall use best efforts to cause the Operating Lease to remain in effect
so long as any portion of the Indebtedness is outstanding.

     (iii) Notwithstanding anything to the contrary herein or in any other Loan Documents or
in the Operating Lease, during the continuance of an Event of Default (but only after Lender
shall have exercised its rights and remedies under the Mortgage), Lender may, at its sole
option and regardless of whether Operating Lessee is in default or compliance with the terms
of the Operating Lease, terminate the Operating Lease without payment of any termination
fee, penalty or other amount (the parties hereto agreeing that any such fee, penalty or
other amount shall be solely the obligation of Sponsor and shall be paid by Sponsor or an
affiliate of Sponsor other than Borrower or Operating Lessee).

          Section 5.22. Capital Plan. Borrower shall do or cause to be done all things
necessary to cause the timely completion of the Capital Plan.

ARTICLE VI

NEGATIVE COVENANTS

          Section 6.1. Liens on the Collateral. None of Borrower, Operating Lessee or, if
applicable, any Single-Purpose Equityholder shall permit or suffer the existence of any Lien on any
of its assets, other than Permitted Encumbrances.

          Section 6.2. Ownership. Neither Borrower nor Operating Lessee shall hold any interest
in any assets other than the Property and related personal property and fixtures located therein or
used in connection therewith, and, in the case of Borrower, the IDA Bonds.

          Section 6.3. Transfer; Change of Control. Neither Borrower nor Operating Lessee shall
Transfer any Collateral other than in compliance with Article II and other than the
replacement or other disposition of obsolete or non-useful personal property and fixtures in the
ordinary course of business, and neither Borrower nor Operating Lessee shall hereafter file a
declaration of condominium with respect to the Property. No Change of Control or Prohibited Pledge
shall occur.

          Section 6.4. Debt. Neither Borrower nor Operating Lessee shall have any Debt, other
than Permitted Debt.

          Section 6.5. Dissolution; Merger or Consolidation. None of Borrower, Operating Lessee
or, if applicable, any Single-Purpose Equityholder shall dissolve, terminate, liquidate, merge
with or consolidate into another Person without first causing the Loan to be assumed by a Qualified
Successor Borrower pursuant to Section 2.2.

          Section 6.6. Change in Business. Neither Borrower nor Operating Lessee shall make any
material change in the scope or nature of its business objectives, purposes or operations or
undertake or participate in activities other than the continuance of its present business.

70

 

          Section 6.7. Debt Cancellation. Neither Borrower nor Operating Lessee shall cancel or
otherwise forgive or release any material claim or Debt owed to it by any Person, except for
adequate consideration or in the ordinary course of its business.

          Section 6.8. Affiliate Transactions. Neither Borrower nor Operating Lessee shall
enter into, or be a party to, any transaction with any affiliate of Borrower and/or Operating
Lessee, except on terms that are no less favorable to Borrower or Operating Lessee than would be
obtained in a comparable arm’s length transaction with an unrelated third party.

          Section 6.9. Misapplication of Funds. Neither Borrower nor Operating Lessee shall (a)
distribute any Revenue or Loss Proceeds in violation of the provisions of this Agreement (and shall
promptly cause the reversal of any such distributions made in error of which Borrower becomes
aware), (b) fail to remit amounts to the Cash Management Account as required by Section
3.1, or (c) misappropriate any security deposit or portion thereof.

          Section 6.10. Jurisdiction of Formation; Name. Neither Borrower nor Operating Lessee
shall change its jurisdiction of formation or name without receiving Lender’s prior written consent
and promptly providing Lender such information and replacement Uniform Commercial Code financing
statements and legal opinions as Lender may reasonably request in connection therewith.

          Section 6.11. Modifications and Waivers. Unless otherwise consented to in writing by
Lender, none of Borrower, Operating Lessee or, in the case of clause (ii) below, any Single-Purpose
Equityholder (if applicable) shall:

     (i) amend, modify, terminate, renew, or surrender any rights or remedies under any
Lease, or enter into any Lease, except in compliance with Section 5.7;

     (ii) terminate, amend or modify its organizational documents (including any operating
agreement, limited partnership agreement, by-laws, certificate of formation, certificate of
limited partnership or certificate of incorporation);

     (iii) terminate, amend or modify the Approved Management Agreement, except immaterial
amendments and modifications that have no adverse effect on Lender and do not alter any
economic term of the Approved Management Agreement;

     (iv) amend, modify, surrender or waive any material rights or remedies under, or enter
into or terminate, or default in its obligations under, any Material Agreement; and

     (v) amend, modify, surrender or waive any material rights or remedies under, or
terminate, the IDA Lease.

          Section 6.12. ERISA.

          (a) Neither Borrower nor Operating Lessee shall maintain or contribute to, or agree to
maintain or contribute to, or permit any ERISA Affiliate to maintain or contribute to or

71

 

agree to maintain or contribute to, any employee benefit plan (as defined in Section 3(3) of ERISA) subject
to Title IV or Section 302 of ERISA or Section 412 of the Code.

          (b) Neither Borrower nor Operating Lessee shall engage in a non-exempt prohibited transaction
under Section 406 of ERISA, Section 4975 of the Code, or substantially similar provisions under
federal, state or local laws, rules or regulations or in any transaction that would cause any
obligation or action taken or to be taken hereunder (or the exercise by Lender of any of its rights
under the Notes, this Agreement, the Mortgage or any other Loan Document) to be a non-exempt
prohibited transaction under such provisions.

          Section 6.13. Alterations and Expansions. During the continuance of any Trigger
Period or Event of Default, Borrower shall not, and shall not permit Operating Lessee to, perform
or contract to perform any capital improvements requiring Capital Expenditures that are not
consistent with the Approved Annual Budget. Borrower shall not, and shall not permit Operating
Lessee to, perform, undertake, contract to perform or consent to any Material Alteration without
the prior written consent of Lender, which consent (in the absence of an Event of Default) shall
not be unreasonably withheld, but such consent may be conditioned on the delivery of additional
collateral acceptable to Lender in respect of the unpaid cost of any such Material Alteration. If
Lender’s consent is requested hereunder with respect to a Material Alteration, Lender may retain a
construction consultant to review such request and, if such request is granted, Lender may retain a
construction consultant to inspect the work from time to time. Borrower shall, on demand by
Lender, reimburse Lender for the reasonable fees and disbursements of such consultant.

          Section 6.14. Advances and Investments. Neither Borrower nor Operating Lessee shall
lend money or make advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to, any Person, except
for Permitted Investments.

          Section 6.15. Single-Purpose Entity. Neither Borrower nor Operating Lessee shall
cease to be a Single-Purpose Entity. Neither Borrower nor Operating Lessee shall remove or replace
any Independent Director without Cause and without providing at least two Business Days’ advance
written notice thereof to Lender and the Rating Agencies.

          Section 6.16. Zoning and Uses. Neither Borrower nor Operating Lessee shall do any of
the following:

     (i) initiate or support any limiting change in the permitted uses of the Property (or
to the extent applicable, zoning reclassification of the Property) or any portion thereof,
seek any variance under existing land use restrictions, laws, rules or regulations (or, to
the extent applicable, zoning ordinances) applicable to the Property, or use or permit the
use of the Property in a manner that would result in the use of the Property becoming a
nonconforming use under applicable land-use restrictions or zoning ordinances or that would
violate the terms of any Lease, Material Agreement or Legal Requirement (and if under
applicable zoning ordinances the use of all or any portion of the Property is a
nonconforming use, Borrower shall not cause or permit such

72

 

nonconforming use to be
discontinued or abandoned without the express written consent of Lender);

     (ii) consent to any modification, amendment or supplement to any of the terms of, or
materially default in its obligations under, any Permitted Encumbrance;

     (iii) impose or consent to the imposition of any restrictive covenants, easements or
encumbrances upon the Property in any manner that adversely affects in any material respect
its value, utility or transferability;

     (iv) execute or file any subdivision plat affecting the Property, or institute, or
permit the institution of, proceedings to alter any tax lot comprising the Property;

     (v) amend or cause to be amended any Material Agreement in any manner that might (x)
diminish the value of the Property, (y) diminish the rights of Borrower or Lender thereunder
or (z) or otherwise cause or reasonably be expected to result in a Material Adverse Effect,
or terminate the same for any reason or purpose whatsoever, in each case, without the prior
written consent of Lender; or

     (vi) permit or consent to the Property’s being used by the public or any Person in
such manner as might make possible a claim of adverse usage or possession or of any implied
dedication or easement.

          Section 6.17. Waste. Neither Borrower nor Operating Lessee shall commit or permit any
Waste on the Property, nor take any actions that might invalidate any insurance carried on the
Property (and Borrower shall promptly correct any such actions of which Borrower becomes aware).

          Section 6.18. IDA Bonds. Borrower shall not, without the express written consent of
Lender, sell, transfer or redeem any of the IDA Bonds.

ARTICLE VII

DEFAULTS

          Section 7.1. Event of Default. The occurrence of any one or more of the following
events shall be, and shall constitute the commencement of, an “Event of Default” hereunder
(any Event of Default that has occurred shall continue unless and until waived by Lender in writing
in its sole discretion):

          (a) Payment.

     (i) Borrower shall default in the payment when due of any principal or interest owing
hereunder or under the Notes (including any mandatory prepayment required hereunder)
provided that the Default Rate shall not apply to any amount owing hereunder or under the
Notes unless and until Borrower and Borrower’s counsel shall have received email
notification at the email addresses provided in Section 9.4, or any

73

 

other form of notice permitted under this Agreement, setting forth the payment amount and the due date
thereof; or

     (ii) Borrower shall default, and such default shall continue for at least five Business
Days after notice to Borrower that such amounts are owing, in the payment when due of fees,
expenses or other amounts owing hereunder, under the Notes or under any of the other Loan
Documents (other than principal and interest owing hereunder or under the Note).

          (b) Representations. Any representation made by Borrower, Sponsor or Operating Lessee
in any of the Loan Documents, or in any report, certificate, financial statement or other
instrument, agreement or document furnished to Lender proves to be untrue in any material respect
(or, with respect to any representation that itself contains a materiality qualifier, in any
respect) as of the date such representation was made.

          (c) Other Loan Documents. Any Loan Document shall fail to be in full force and effect
or to convey the material Liens, rights, powers and privileges purported to be created thereby; or
a default shall occur under any of the other Loan Documents or Material Agreements, or a default by
Borrower or Operating Lessee, as applicable, shall occur under the Approved Management Agreement,
the Operating Lease or the IDA Lease, in each case, beyond the expiration of any applicable cure
period.

          (d) Bankruptcy; Reorganization; Receivership; and Insolvency.

     (i) Borrower, Operating Lessee or, if applicable, any Single-Purpose Equityholder shall
commence a voluntary case concerning itself under Title 11 of the United States Code (as
amended, modified, succeeded or replaced, from time to time, the “Bankruptcy Code”);

     (ii) Borrower, Operating Lessee or, if applicable, any Single-Purpose Equityholder
shall commence any other proceeding under any reorganization, arrangement, adjustment of debt, relief of creditors, dissolution, insolvency or
similar law of any jurisdiction whether now or hereafter in effect relating to Borrower,
Operating Lessee or such Single-Purpose Equityholder, or shall dissolve or otherwise cease
to exist;

     (iii) there is commenced against Borrower, Operating Lessee or, if applicable, any
Single-Purpose Equityholder an involuntary case under the Bankruptcy Code, or any such other
proceeding, which remains undismissed for a period of 60 days after commencement;

     (iv) Borrower, Operating Lessee or, if applicable, any Single-Purpose Equityholder is
adjudicated insolvent or bankrupt;

     (v) Borrower, Operating Lessee or, if applicable, any Single-Purpose Equityholder
suffers appointment of any custodian or the like for it or for any substantial portion of
its property and such appointment continues unchanged or unstayed for a period of 60 days
after commencement of such appointment;

74

 

     (vi) Borrower, Operating Lessee or, if applicable, any Single-Purpose Equityholder
makes a general assignment for the benefit of creditors; or

     (vii) any action is taken by Borrower, Operating Lessee or, if applicable, any
Single-Purpose Equityholder for the purpose of effecting any of the foregoing.

     (e) Change of Control.

     (i) A Change of Control shall occur; or

     (ii) the failure to deliver any Nonconsolidation Opinion required pursuant to
Section 2.3.

          (f) Equity Pledge; Preferred Equity. Any direct or indirect equity interest in or
right to distributions from Borrower or Operating Lessee shall be subject to a Lien in favor of any
Person, or Borrower, Operating Lessee or any holder of a direct or indirect interest in Borrower or
Operating Lessee shall issue preferred equity (or debt granting the holder thereof rights
substantially similar to those generally associated with preferred equity); except that the
following shall be permitted:

     (i) any pledge of direct and indirect equity interests in and rights to distributions
from a Qualified Equityholder meeting the requirements of subclauses (i), (ii) or (iii) of
the definition of Qualified Equityholder; and

     (ii) the issuance of preferred equity interests in a Qualified Equityholder meeting the
requirements of subclauses (i), (ii) or (iii) of the definition of Qualified Equityholder.

Any act, action or state of affairs that would result in an Event of Default pursuant to this
Section 7.1(f) shall be referred to in this Agreement as a “Prohibited Pledge”.

          (g) Insurance. Any of the Policies required hereunder shall not be maintained in full
force and effect.

          (h) ERISA; Negative Covenants. A default shall occur in the due performance or
observance by Borrower or Operating Lessee of any term, covenant or agreement contained in
Section 5.8 or in Article VI.

          (i) Legal Requirements. If Borrower fails to cure or cause the cure of any violations
of Legal Requirements affecting all or any portion of the Property within 30 days after Borrower
first receives written notice of any such violations; provided, however, if any
such violation is reasonably susceptible of cure, but not within such 30 day period, then Borrower
shall be permitted up to an additional 30 days to cure such violation provided that cure is
commenced within such initial 30 day period and thereafter diligently and continuously pursued.

          (j) Other Covenants. A default shall occur in the due performance or observance by
Borrower of any term, covenant or agreement (other than those referred to in any other subsection
of this Section 7.1) contained in this Agreement or in any of the other Loan

75

 

Documents, except that in the case of a default that can be cured by the payment of money, such default shall
not constitute an Event of Default unless and until it shall remain uncured for 10 days after
Borrower receives written notice thereof; and in the case of a default that cannot be cured by the
payment of money but is susceptible of being cured within 30 days, such default shall not
constitute an Event of Default unless and until it remains uncured for 30 days after Borrower
receives written notice thereof, provided that within 5 days of its receipt of such written notice,
Borrower delivers written notice to Lender of its intention and ability to effect such cure within
such 30 day period; and if such non-monetary default is not cured within such 30 day period despite
Borrower’s diligent efforts but is susceptible of being cured within 90 days of Borrower’s receipt
of Lender’s original notice, then Borrower shall have such additional time as is reasonably
necessary to effect such cure, but in no event in excess of 90 days from Borrower’s receipt of
Lender’s original notice, provided that prior to the expiration of the initial 30 day period,
Borrower delivers written notice to Lender of its intention and ability to effect such cure prior
to the expiration of such 90 day period.

          (k) IDA Lease. Any termination of the IDA Lease due to the expiration thereof or a
default by Borrower thereunder if such termination does not occur simultaneously with the
reconveyance of the fee interest in the Property to Borrower.

          (l) Operating Lease. The Operating Lease shall no longer be in effect for any reason
whatsoever, including, without limitation, expiration of the Operating Lease by its terms absent
renewal or extension of the Operating Lease.

          Section 7.2. Remedies.

          (a) During the continuance of an Event of Default, Lender may by written notice to Borrower,
in addition to any other rights or remedies available pursuant to this Agreement, the Notes, the
Mortgage and the other Loan Documents, at law or in equity, declare by written notice to Borrower
all or any portion of the Indebtedness to be immediately due and payable, whereupon all or such
portion of the Indebtedness shall so become due and payable, and Lender may enforce or avail itself of any or all rights or remedies provided in the Loan
Documents against Borrower and the Collateral (including all rights or remedies available at law or
in equity); provided, however, that, notwithstanding the foregoing, if an Event of
Default specified in paragraph 7.1(d) shall occur, then the Indebtedness shall immediately
become due and payable without the giving of any notice or other action by Lender. Any actions
taken by Lender shall be cumulative and concurrent and may be pursued independently, singly,
successively, together or otherwise, at such time and in such order as Lender may determine in its
sole discretion, to the fullest extent permitted by law, without impairing or otherwise affecting
the other rights and remedies of Lender permitted by law, equity or contract or as set forth in
this Agreement or in the other Loan Documents.

          (b) If Lender forecloses on the Property, Lender shall apply all net proceeds of such
foreclosure to repay the Indebtedness, the Indebtedness shall be reduced to the extent of such net
proceeds and the remaining portion of the Indebtedness shall remain outstanding and secured by the
Property and the other Loan Documents, it being understood and agreed by Borrower that Borrower is
liable for the repayment of all the Indebtedness; provided, however, that at the
election of Lender, the Notes shall be deemed to have been accelerated only to the

76

 

extent of the net proceeds actually received by Lender with respect to the Property and applied in reduction of
the Indebtedness.

          (c) During the continuance of any Event of Default (including an Event of Default resulting
from a failure to satisfy the insurance requirements specified herein), Lender may, but without any
obligation to do so and without notice to or demand on Borrower and without releasing Borrower from
any obligation hereunder, take any action to cure such Event of Default. Lender may enter upon any
or all of the Property upon reasonable notice to Borrower for such purposes or appear in, defend,
or bring any action or proceeding to protect its interest in the Collateral or to foreclose the
Mortgage or collect the Indebtedness. The costs and expenses incurred by Lender in exercising
rights under this Section (including reasonable attorneys’ fees), with interest at the Default Rate
for the period after notice from Lender that such costs or expenses were incurred to the date of
payment to Lender, shall constitute a portion of the Indebtedness, shall be secured by the Mortgage
and other Loan Documents and shall be due and payable to Lender upon demand therefor.

          (d) Interest shall accrue on any judgment obtained by Lender in connection with its
enforcement of the Loan at a rate of interest equal to the Default Rate.

          Section 7.3. No Waiver. No delay or omission to exercise any remedy, right or power
accruing upon an Event of Default shall impair any such remedy, right or power or shall be
construed as a waiver thereof, but any such remedy, right or power may be exercised from time to
time and as often as may be deemed by Lender to be expedient. A waiver of any Default or Event of
Default shall not be construed to be a waiver of any subsequent Default or Event of Default or to
impair any remedy, right or power consequent thereon.

          Section 7.4. Application of Payments after an Event of Default. Notwithstanding
anything to the contrary contained herein, during the continuance of an Event of Default, all amounts received by Lender in respect of the Loan shall be applied at Lender’s
sole discretion either toward the components of the Indebtedness (e.g., Lender’s expenses
in enforcing the Loan, interest, principal and other amounts payable hereunder) and the Notes in
such sequence as Lender shall elect in its sole discretion, or toward the payment of Property
expenses.

ARTICLE VIII

CONDITIONS PRECEDENT

          Section 8.1. Conditions Precedent to Closing. This Agreement shall become effective
on the date that all of the following conditions shall have been satisfied (or waived in accordance
with Section 9.3):

          (a) Loan Documents. Lender shall have received a duly executed copy of each Loan Document.
Each Loan Document that is to be recorded in the public records shall be in form suitable for
recording.

77

 

          (b) Collateral Accounts. Each of the Collateral Accounts shall have been
established with the Cash Management Bank and funded to the extent required under Article
III.

          (c) Opinions of Counsel. Lender shall have received, in each case in form and
substance satisfactory to Lender, (i) a New York legal opinion, (ii) a legal opinion with respect
to the laws of the state in which the Property is located, (iii) a bankruptcy nonconsolidation
opinion with respect to each Person owning at least a 49% direct or indirect equity interest in
Borrower, if applicable, any Single-Purpose Equityholder and any affiliated property manager, and
(iv) a Delaware legal opinion regarding matters related to Single Member LLC’s.

          (d) Organizational Documents. Lender shall have received all documents reasonably
requested by Lender relating to the existence of Sponsor, Borrower and Operating Lessee, the
validity of the Loan Documents and other matters relating thereto, in form and substance
satisfactory to Lender, including:

     (i) Authorizing Resolutions. A certified copy of the resolutions approving and
adopting the Loan Documents to be executed by Borrower, Operating Lessee and Sponsor and
authorizing the execution and delivery thereof.

     (ii) Organizational Documents. Certified copies of the organizational
documents of Sponsor, Borrower, Operating Lessee and, if applicable, any Single-Purpose
Equityholder (including any certificate of formation, certificate of limited partnership,
certificate of incorporation, operating agreement, limited partnership agreement or
by-laws), in each case together with all amendments thereto.

     (iii) Certificates of Good Standing or Existence. Certificates of good
standing or existence for Sponsor, Borrower, Operating Lessee and, if applicable, any
Single-Purpose Equityholder issued as of a recent date by its state of organization and by
the state in which the Property is located.

     (iv) Recycled Entity Certificate. A recycled entity certificate acceptable to
Lender, to the extent that Borrower was formed more than 60 days prior to the date hereof.

          (e) Lease; Material Agreements. Lender shall have received true, correct and complete
copies of all Leases and all Material Agreements.

          (f) Lien Search Reports. Lender shall have received satisfactory reports of Uniform
Commercial Code, tax lien, bankruptcy and judgment searches conducted by a search firm acceptable
to Lender with respect to the Property and Borrower, such searches to be conducted in such
locations as Lender shall have requested.

          (g) No Default or Event of Default. No Default or Event of Default shall have
occurred and be continuing on such date either before or after the execution and delivery of this
Agreement.

78

 

          (h) No Injunction. No Legal Requirement shall exist, and no litigation shall be
pending or threatened, which in the good faith judgment of Lender would enjoin, prohibit or
restrain, or impose or result in the imposition of any material adverse condition upon, the making
or repayment of the Loan or the consummation of the Transaction.

          (i) Representations. The representations in this Agreement and in the other Loan
Documents shall be true and correct in all respects on and as of the Closing Date with the same
effect as if made on such date.

          (j) [Intentionally Omitted].

          (k) No Material Adverse Effect. No event or series of events shall have occurred,
affecting Borrower, Operating Lessee, or Sponsor, that Lender reasonably believes has had or is
reasonably expected to result in a Material Adverse Effect.

          (l) Transaction Costs. Borrower shall have paid all transaction costs (or provided
for the direct payment of such transaction costs by Lender from the proceeds of the Loan).

          (m) Insurance. Lender shall have received certificates of insurance on ACORD Form 25
for liability insurance and ACORD Form 28 for casualty insurance demonstrating insurance coverage
in respect of the Property of types, in amounts, with insurers and otherwise in compliance with the
terms, provisions and conditions set forth in this Agreement. Such certificates shall indicate
that Lender and its successors and assigns are named as additional insured on each liability
policy, and that each casualty policy and rental interruption policy contains a loss payee and
mortgagee endorsement in favor of Lender, its successors and assigns.

          (n) Title. Lender shall have received a marked, signed commitment to issue, or a
signed pro-forma version of, a Qualified Title Insurance Policy in respect of the Property, listing
only such exceptions as are reasonably satisfactory to Lender. If the Qualified Title Insurance
Policy is to be issued by, or if disbursement of the proceeds of the Loan are to be made through,
an agent of the actual insurer under the Qualified Title Insurance Policy (as opposed to the
insurer itself), the actual insurer shall have issued to Lender for Lender’s benefit a so-called
“Insured Closing Letter.”

          (o) Zoning. Lender shall have received evidence reasonably satisfactory to Lender
that the Property is in compliance with all applicable zoning requirements (including a zoning
report, a zoning endorsement if obtainable and a letter from the applicable municipality if
obtainable).

          (p) Permits; Certificate of Occupancy. Lender shall have received a copy of all
Permits necessary for the use and operation of the Property and the certificate(s) of occupancy, if
required, for the Property, all of which shall be in form and substance reasonably satisfactory to
Lender.

79

 

          (q) Engineering Report. Lender shall have received a current Engineering Report
with respect to the Property, which report shall be in form and substance reasonably satisfactory
to Lender.

          (r) Environmental Report. Lender shall have received an Environmental Report (not
more than six months old) with respect to the Property that discloses no material environmental
contingencies with respect to the Property.

          (s) Qualified Survey. Lender shall have received a Qualified Survey with respect
to the Property in form and substance reasonably satisfactory to Lender.

          (t) Appraisal. Lender shall have obtained an Appraisal of the Property satisfactory
to Lender.

          (u) Consents, Licenses, Approvals, etc. Lender shall have received copies of all
consents, licenses and approvals, if any, required in connection with the execution, delivery and
performance by Borrower, Sponsor and Operating Lessee, and the validity and enforceability, of the
Loan Documents, and such consents, licenses and approvals shall be in full force and effect.

          (v) Financial Information. Lender shall have received financial information relating
to the Sponsor, Borrower and the Property that is satisfactory to Lender.

          (w) [Intentionally Omitted].

          (x) Know Your Customer Rules. At least 10 days prior to the Closing Date, the Lender
shall have received all documentation and other information required by bank regulatory authorities
under applicable “know-your-customer” and anti-money laundering rules and regulations, including
the PATRIOT Act.

          (y) Capital Plan. Lender shall have received and approved the Capital Plan.

          (z) Additional Matters. Lender shall have received such other certificates, opinions,
documents and instruments relating to the Loan as may have been reasonably requested by Lender.
All corporate and other proceedings, all other documents (including all documents referred to in
this Agreement and not appearing as exhibits to this Agreement) and all legal matters in connection
with the Loan shall be reasonably satisfactory in form and substance to Lender.

ARTICLE IX

MISCELLANEOUS

          Section 9.1. Successors. Except as otherwise provided in this Agreement, whenever in
this Agreement any of the parties to this Agreement is referred to, such reference shall be deemed
to include the successors and permitted assigns of such party. All covenants, promises and
agreements in this Agreement contained, by or on behalf of Borrower, shall inure to the benefit of
Lender and its successors and assigns.

80

 

          Section 9.2. GOVERNING LAW

     (A) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO CHOICE OF LAW RULES TO THE EXTENT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

     (B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER, BORROWER, OPERATING
LESSEE OR SPONSOR ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS (OTHER THAN ANY ACTION IN RESPECT OF THE CREATION, PERFECTION OR ENFORCEMENT OF A
LIEN OR SECURITY INTEREST CREATED PURSUANT TO ANY LOAN DOCUMENTS NOT GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK) SHALL BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW
YORK. BORROWER, OPERATING LESSEE AND SPONSOR HEREBY (i) IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM
THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM,
(ii) IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR
PROCEEDING, AND (iii) IRREVOCABLY CONSENT TO SERVICE OF PROCESS BY MAIL, PERSONAL SERVICE
OR IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW, AT THE ADDRESS SPECIFIED IN SECTION
9.4 (AND AGREES THAT SUCH SERVICE AT SUCH ADDRESS IS SUFFICIENT TO CONFER PERSONAL
JURISDICTION OVER ITSELF IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY SUCH COURT, AND
OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT).

          Section 9.3. Modification, Waiver in Writing. Neither this Agreement nor any other
Loan Document may be amended, changed, waived, discharged or terminated, nor shall any consent or
approval of Lender be granted hereunder, unless such amendment, change, waiver, discharge,
termination, consent or approval is in writing signed by Lender.

          Section 9.4. Notices. All notices, consents, approvals and requests required or
permitted hereunder or under any other Loan Document shall be given either (i) in writing by
expedited prepaid delivery service, either commercial or United States Postal Service, with proof
of delivery or attempted delivery, addressed as follows (or at such other address and person as
shall be designated from time to time by any party to this Agreement, as the case may be, in a
written notice to the other parties to this Agreement in the manner provided for in this Section)
or (ii) by email at the email addresses provided below, provided that such email notification is
followed by an additional written notice delivered in accordance with clause (i) of this paragraph,
provided, however, that no such additional notification shall be required in the
case of email notice of a payment default, as provided for in Section 7.1(a). A notice
shall be deemed to have been given when delivered or upon refusal to accept delivery.

81

 

If to Lender:

Goldman Sachs Commercial Mortgage Capital, L.P.

6011 Connection Drive, Suite 550

Irving, Texas 75039

Attention: Michael Forbes

Email: michael.forbes@archongroup.com

with copies to:

Goldman Sachs Mortgage Company

200 West Street

New York, New York 10282

Attention: Daniel Bennett and Rene J. Theriault

Email: daniel.bennett@gs.com and rene.theriault@gs.com

and

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, New York 10006

Attention: Michael Weinberger, Esq.

Email: mweinberger@cgsh.com

If to Borrower:

Orangemen Owner LLC

c/o Pebblebrook Hotel Trust

2 Bethesda Metro Center

Suite 1530

Bethesda, MD 20814

Attention: Raymond D. Martz

Email: rmartz@pebblebrookhotels.com

with a copy to:

Hunton & Williams LLP

1900 K Street, NW

Suite 1200

Washington, D.C. 20006

Attention: Thomas F. Kaufman

Email: tkaufman@hunton.com

          Section 9.5. TRIAL BY JURY. LENDER, BORROWER, OPERATING LESSEE AND SPONSOR, TO THE
FULLEST EXTENT THAT THEY MAY LAWFULLY DO SO, HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE
TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE

82

 

EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY
CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL
BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY LENDER, BORROWER, OPERATING LESSEE AND SPONSOR AND IS
INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. LENDER, BORROWER, OPERATING LESSEE AND/OR SPONSOR ARE HEREBY
AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER
BY BORROWER, OPERATING LESSEE AND SPONSOR.

          Section 9.6. Headings. The Article and Section headings in this Agreement are
included in this Agreement for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose.

          Section 9.7. Assignment and Participation.

          (a) Except as explicitly set forth in Sections 2.1 and 2.2, Borrower may not
sell, assign or transfer any interest in the Loan Documents or any portion thereof (including
Borrower’s rights, title, interests, remedies, powers and duties hereunder and thereunder).

          (b) Lender and each assignee of all or a portion of the Loan shall have the right from time to
time in its discretion to sell one or more of the Notes or any interest therein (an
“Assignment”) and/or sell a participation interest in one or more of the Notes (a
“Participation”). Borrower agrees to reasonably cooperate with Lender, at Lender’s
request, in order to effectuate any such Assignment or Participation, and Borrower shall promptly
provide such information, legal opinions and documents relating to Borrower, any Single-Purpose
Equityholder, Sponsor, the Property, the Approved Property Manager and any Tenants as Lender may
reasonably request in connection with such Assignment or Participation. In the case of an
Assignment, (i) each assignee shall have, to the extent of such Assignment, the rights, benefits
and obligations of the assigning Lender as a “Lender” hereunder and under the other Loan Documents,
(ii) the assigning Lender shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to an Assignment, relinquish its rights and be released from its
obligations under this Agreement, and (iii) one Lender shall serve as agent for all Lenders and
shall be the sole Lender to whom notices, requests and other communications shall be addressed and
the sole party authorized to grant or withhold consents hereunder on behalf of the Lenders
(subject, in each case, to appointment of a Servicer, pursuant to Section 9.22, to receive
such notices, requests and other communications and/or to grant or withhold consents, as the case
may be) and to be the sole Lender to designate the account to which payments shall be made by
Borrower to the Lenders hereunder. Goldman Sachs Mortgage Company or, upon the appointment of a
Servicer, such Servicer, shall maintain, or cause to be maintained, as agent for Borrower, a
register on which it shall enter the name or names of the registered owner or owners from time to
time of the Notes. Borrower agrees that upon effectiveness of any Assignment of any Note in part,
Borrower will promptly provide to the assignor and the assignee separate promissory notes in the
amount of their respective interests (but, if applicable, with a notation thereon that it is given
in substitution for and replacement of an original Note or any replacement thereof), and otherwise
in the form of such Note, upon return of the Note then being replaced. The assigning Lender

83

 

shall notify in writing each of the other Lenders of any Assignment. Each potential or actual
assignee, participant or investor in a Securitization, and each Rating Agency, shall be entitled to
receive all information received by Lender under this Agreement. After the effectiveness of any
Assignment, the party conveying the Assignment shall provide notice to Borrower and each Lender of
the identity and address of the assignee. Notwithstanding anything in this Agreement to the
contrary, after an Assignment, the assigning Lender (in addition to the assignee) shall continue to
have the benefits of any indemnifications contained in this Agreement that such assigning Lender
had prior to such assignment with respect to matters occurring prior to the date of such
assignment.

          (c) If, pursuant to this Section 9.7, any interest in this Agreement or any Note is
transferred to any transferee that is not a U.S. Person, the transferor Lender shall cause such
transferee, concurrently with the effectiveness of such transfer, (i) to furnish to the transferor
Lender either Form W-8BEN or Form W-8ECI or any other form in order to establish an exemption from,
or reduction in the rate of, U.S. withholding tax on all interest payments hereunder, and (ii) to
agree (for the benefit of Lender and Borrower) to provide the transferor Lender a new Form W-8BEN
or Form W-8ECI or any forms reasonably requested in order to establish an exemption from, or
reduction in the rate of, U.S. withholding tax upon the expiration or obsolescence of any
previously delivered form and comparable statements in accordance with applicable U.S. laws and
regulations and amendments duly executed and completed by such transferee, and to comply from time
to time with all applicable U.S. laws and regulations with regard to such withholding tax
exemption.

          Section 9.8. Severability. Wherever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.

          Section 9.9. Preferences; Waiver of Marshalling of Assets. Lender shall have no
obligation to marshal any assets in favor of Borrower or any other party or against or in payment
of any or all of the obligations of Borrower pursuant to this Agreement, the Notes or any other
Loan Document. Lender shall have the continuing and exclusive right to apply or reverse and
reapply any and all payments by Borrower to any portion of the obligations of Borrower hereunder
and under the Loan Documents. To the extent Borrower makes a payment or payments to Lender, which
payment or proceeds or any portion thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside or required to be repaid to a trustee, receiver or any other party under
any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of
such payment or proceeds received, the obligations hereunder or portion thereof intended to be
satisfied shall be revived and continue in full force and effect, as if such payment or proceeds
had not been received by Lender. To the fullest extent permitted by law, Borrower, for itself and
its permitted successors and assigns, waives all rights to a marshalling of the assets of Borrower,
and Borrower’s partners and others with interests in Borrower, or to a sale in inverse order of
alienation in the event of foreclosure of the Mortgage, and agrees not to assert any right under
any laws pertaining to the marshalling of assets, the sale in inverse order of alienation,
homestead exemption, the administration of estates of decedents, or any other matters whatsoever to
defeat, reduce or affect the right of Lender under the Loan

84

 

Documents to a sale of the Property for the collection of the Indebtedness without any prior or
different resort for collection or of the right of Lender to the payment of the Indebtedness out of
the net proceeds of the Properties in preference to every other claimant whatsoever. In addition,
to the fullest extent permitted by law, Borrower, for itself and its successors and assigns, waives
in the event of foreclosure of the Mortgage, any legal right otherwise available to Borrower that
would require the separate sale of any Collateral or require Lender to exhaust its remedies against
any Collateral before proceeding against any other Collateral; and further in the event of such
foreclosure, Borrower does hereby expressly consent to and authorize, at the option of Lender, the
foreclosure and sale either separately or together of any combination of the Collateral.

          Section 9.10. Remedies of Borrower. If a claim is made that Lender or its agents have
unreasonably delayed acting or acted unreasonably in any case where by law or under this Agreement,
the Notes, the Mortgage or the other Loan Documents, any of such Persons has an obligation to act
promptly or reasonably, Borrower agrees that no such Person shall be liable for any monetary
damages, and Borrower’s sole remedy shall be limited to commencing an action seeking specific
performance, injunctive relief and/or declaratory judgment. Without in any way limiting the
foregoing, Borrower shall not assert, and hereby waives, any claim against Lender and/or its
affiliates, directors, employees, attorneys, agents or sub-agents, on any theory of liability, for
direct, special, indirect, consequential or punitive damages (whether or not the claim therefor is
based on contract, tort or duty imposed by any applicable legal requirement) arising out of, as a
result of, or in any way related to, the Loan Agreement or any other Loan Document or any agreement
or instrument contemplated hereby or thereby or referred to herein or therein, the transactions
contemplated hereby or thereby, the Loan or the use of the proceeds thereof or any act or omission
or event occurring in connection therewith, and Borrower hereby waives, releases and agrees not to
sue upon any such claim for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.

          Section 9.11. Offsets, Counterclaims and Defenses. All payments made by Borrower
hereunder or under the other Loan Documents shall be made irrespective of, and without any
deduction for, any setoffs or counterclaims. Borrower waives the right to assert a counterclaim,
other than a mandatory or compulsory counterclaim, in any action or proceeding brought against it
by Lender arising out of or in any way connected with the Notes, this Agreement, the other Loan
Documents or the Indebtedness. Any assignee of Lender’s interest in the Loan shall take the same
free and clear of all offsets, counterclaims or defenses that are unrelated to the Loan.

          Section 9.12. No Joint Venture. Nothing in this Agreement is intended to create a
joint venture, partnership, tenancy-in-common, or joint tenancy relationship between Borrower and
Lender, nor to grant Lender any interest in the Property other than that of mortgagee or lender.

          Section 9.13. Conflict; Construction of Documents. In the event of any conflict
between the provisions of this Agreement and the provisions of the Notes, the Mortgage or any of
the other Loan Documents, the provisions of this Agreement shall prevail.

85

 

          Section 9.14. Brokers and Financial Advisors. Borrower and Sponsor each represent
that they have dealt with no financial advisors, brokers, underwriters, placement agents, agents or
finders in connection with the transactions contemplated by this Agreement. Borrower and Sponsor
each agree, jointly and severally, to indemnify and hold Lender harmless from and against any and
all claims, liabilities, costs and expenses of any kind in any way relating to or arising from a
claim by any Person that such Person acted on behalf of Borrower in connection with the
transactions contemplated in this Agreement. The provisions of this Section 9.14 shall
survive the expiration and termination of this Agreement and the repayment of the Indebtedness.

          Section 9.15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. Any counterpart delivered by facsimile, pdf
or other electronic means shall have the same import and effect as original counterparts and shall
be valid, enforceable and binding for the purposes of this Agreement.

          Section 9.16. Estoppel Certificates.

          (a) Borrower agrees at any time and from time to time, to execute, acknowledge and deliver to
Lender, within five days after receipt of Lender’s written request therefor, a statement in writing
setting forth (A) the Principal Indebtedness, (B) the date on which installments of interest and/or
principal were last paid, (C) any offsets or defenses to the payment of the Indebtedness, (D) that
the Notes, this Agreement, the Mortgage and the other Loan Documents are valid, legal and binding
obligations and have not been modified or if modified, giving particulars of such modification, (E)
that neither Borrower nor, to Borrower’s knowledge, Lender, is in default under the Loan Documents
(or specifying any such default), (F) that all Leases are in full force and effect and have not
been modified (except in accordance with the Loan Documents), (G) whether or not any of the Tenants
under the Leases are in material default under the Leases (setting forth the specific nature of any
such material defaults) and (H) such other matters as Lender may reasonably request. Any
prospective purchaser of any interest in a Loan shall be permitted to rely on such certificate.

          (b) Upon Lender’s written request, Borrower shall use commercially reasonable efforts to
obtain from each Tenant whose Lease requires such Tenant to execute and deliver an estoppel
certificate, and shall thereafter promptly deliver to Lender duly executed estoppel certificates
from any one or more Tenants under the Leases as requested by Lender, attesting to such facts
regarding the Leases as Lender may reasonably require, including, but not limited to, attestations
that each Lease covered thereby is in full force and effect with no material defaults thereunder on
the part of any party, that rent has not been paid more than one month in advance, except as
security, and that the Tenant claims no defense or offset against the full and timely performance
of its obligations under the Lease. Borrower shall not be required to deliver such certificates
more frequently than one time in any 12-month period, other than the 12-month period during which a
Securitization occurs or is attempted.

          Section 9.17. General Indemnity; Payment of Expenses; Mortgage Recording Taxes.

86

 

          (a) Borrower, at its sole cost and expense, shall protect, indemnify, reimburse, defend and
hold harmless Lender and its officers, partners, members, directors, trustees, advisors, employees,
agents, sub-agents, affiliates, successors, participants and assigns of any and all of the
foregoing (collectively, the “Indemnified Parties”) for, from and against, and shall be
responsible for, any and all Damages of any kind or nature whatsoever that may be imposed on,
incurred by, or asserted against any of the Indemnified Parties arising out of (i) any negligence
or tortious act or omission on the part of Borrower, Operating Lessee, Sponsor or any of their
respective agents, contractors, servants, employees, sublessees, licensees or invitees; (ii) any
accident, injury to or death of persons or loss of or damage to property occurring in, on or about
the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or
adjacent parking areas, streets or ways; (iii) any use, nonuse or condition in, on or about the
Property any part thereof or on adjoining sidewalks, curbs, adjacent property or adjacent parking
areas, streets or ways; (iv) any failure on the part of Borrower, Operating Lessee or Sponsor to
perform or comply with any of the terms of the Loan Documents; (v) performance of any labor or
services or the furnishing of any materials or other property in respect of the Property or any
part thereof; (vi) any failure of the Property, Borrower, Operating Lessee or Sponsor to comply
with any Legal Requirements; (vii) any claim by brokers, finders or similar persons claiming to be
entitled to a commission in connection with any lease or other transaction involving the Property
or any part thereof under any legal requirement or any liability asserted against any Indemnified
Party with respect thereto; and (viii) any and all claims and demands whatsoever that may be
asserted against any Indemnified Party by reason of any alleged obligations or undertakings on such
party’s part to perform or discharge any of the terms, covenants, or agreements contained in any
Lease, in each case, to the extent resulting, directly or indirectly, from any claim (including any
Environmental Claim) made (whether or not in connection with any legal action, suit, or proceeding)
by or on behalf of any Person; provided, however, that no Indemnified Party shall
have the right to be indemnified hereunder to the extent that such Damages have been found by a
final, non-appealable judgment of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnified Party.

          (b) If for any reason (including violation of law or public policy) the undertakings to
defend, indemnify, pay and hold harmless set forth in this Section 9.17 are unenforceable
in whole or in part or are otherwise unavailable to Lender or insufficient to hold it harmless,
then Borrower shall contribute to the amount paid or payable by Lender as a result of any Damages
the maximum amount Borrower is permitted to pay under Legal Requirements. The obligations of
Borrower under this Section 9.17 will be in addition to any liability that Borrower may
otherwise have hereunder and under the other Loan Documents, will extend upon the same terms and
conditions to any affiliate of Lender and the partners, members, directors, agents, employees and
controlling persons (if any), as the case may be, of Lender and any such affiliate, and will be
binding upon and inure to the benefit of any successors, assigns, heirs and personal
representatives of Borrower, Lender, any such affiliate and any such person.

          (c) At the option of the Indemnified Parties and in their sole discretion, upon written
request by any Indemnified Party, Borrower shall defend such Indemnified Party (if requested by any
Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals
reasonably approved by such Indemnified Party. Notwithstanding the foregoing, any Indemnified
Party may engage its own attorneys and other professionals to defend or assist it

87

 

(chosen at Lender’s sole discretion), and, at the option of such Indemnified Party, its attorneys
shall control the resolution of any claim or proceeding. Upon demand, Borrower shall pay or, in
the sole discretion of the Indemnified Parties, reimburse, the Indemnified Parties for the payment
of reasonable and actual fees and disbursements of attorneys, engineers, environmental consultants,
laboratories and other professionals in connection therewith.

          (d) Any amounts payable to Lender by reason of the application of this Section 9.17
shall be secured by the Mortgage and shall become immediately due and payable and shall bear
interest at the Default Rate from the date Damages are sustained by the Indemnified Parties until
paid.

          (e) The provisions of and undertakings and indemnification set forth in this Section
9.17 shall survive the satisfaction and payment in full of the Indebtedness and termination of
this Agreement.

          (f) Borrower shall reimburse Lender upon receipt of written notice from Lender for (i) all
out-of-pocket costs and expenses incurred by Lender (or any of its affiliates) in connection with
the Transaction and the origination of the Loan, including legal fees and disbursements, fees of
auditors and consultants, accounting fees, and the costs of the Appraisal, the Engineering Report,
the Qualified Title Insurance Policy, the Qualified Survey, the Environmental Report and any other
third-party diligence materials; (ii) all out-of-pocket costs and expenses incurred by Lender (or
any of its affiliates) in connection with (A) monitoring Borrower’s ongoing performance of and
compliance with Borrower’s agreements and covenants contained in this Agreement and the other Loan
Documents on its part to be performed or complied with after the Closing Date, including confirming
compliance with environmental and insurance requirements, (B) the negotiation, preparation,
execution, delivery and administration of any consents, amendments, waivers or other modifications
to this Agreement and the other Loan Documents and any other documents or matters requested by
Borrower or by Lender (including Leases, Material Agreements, and Permitted Encumbrances), (C)
filing, registration or recording fees and expenses and other similar expenses incurred in creating
and perfecting the Liens in favor of Lender pursuant to this Agreement and the other Loan Documents
(including the filing, registration or recording of any instrument of further assurance) and all
federal, state, county and municipal, taxes (including, if applicable, intangible taxes), search
fees, title insurance premiums, duties, imposts, assessments and charges arising out of or in
connection with the execution and delivery of the Loan Documents, any mortgage supplemental
thereto, any security instrument with respect to the Collateral or any instrument of further
assurance, (D) enforcing or preserving any rights, in response to third party claims or the
prosecuting or defending of any action or proceeding or other litigation, in each case against,
under or affecting Borrower, this Agreement, the other Loan Documents or any Collateral and (E) the
satisfaction of the Rating Condition required or requested by Borrower hereunder; and (iii) all
actual out-of-pocket costs and expenses (including attorney’s fees and, if the Loan has been
Securitized, special servicing fees) incurred by Lender (or any of its affiliates) in connection
with the enforcement of any obligations of Borrower, or a Default by Borrower, under the Loan
Documents, including any actual or attempted foreclosure, deed-in-lieu of foreclosure, refinancing,
restructuring, settlement or workout and any insolvency or bankruptcy proceedings (including any
applicable transfer taxes).

88

 

          Section 9.18. No Third-Party Beneficiaries. This Agreement and the other Loan
Documents are solely for the benefit of Lender and Borrower, and nothing contained in this
Agreement or the other Loan Documents shall be deemed to confer upon anyone other than Lender,
Borrower and Indemnified Parties any right to insist upon or to enforce the performance or
observance of any of the obligations contained herein or therein. All conditions to the
obligations of Lender to make the Loan hereunder are imposed solely and exclusively for the benefit
of Lender, and no other Person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Lender will refuse to make the Loan in
the absence of strict compliance with any or all thereof, and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of which may be freely
waived in whole or in part by Lender if, in Lender’s sole discretion, Lender deems it advisable or
desirable to do so.

          Section 9.19. Recourse.

          (a) Except for any indemnification by Borrower under this Agreement or any of the other Loan
Documents, the Loan shall not be recourse to Borrower and, subject to Section 9.19(c),
Lender’s recourse shall be solely to the Property and the Collateral, except as set forth below.
In addition, no recourse shall be had for the Loan against any other Person, including any
affiliate of Borrower or any officer, director, partner or equityholder of Borrower or any such
affiliate, unless expressly set forth in a Loan Document or other written agreement to which such
Person is a party.

          (b) Borrower shall indemnify Lender and hold Lender harmless from and against any and all
Damages to Lender (including the legal and other expenses of enforcing the obligations of Borrower
under this Section 9.19 and the Sponsor under the Guaranty) resulting from or arising out
of any of the following (the “Indemnified Liabilities”), which Indemnified Liabilities
shall be guaranteed by Sponsor pursuant to the Guaranty:

     (i) any intentional or grossly negligent physical Waste with respect to the Property or
FF&E committed or permitted by Borrower, Operating Lessee, the Sponsor or any of their
respective affiliates;

     (ii) any fraud or intentional misrepresentation committed by Borrower, Operating
Lessee, the Sponsor or any of their respective affiliates;

     (iii) any willful misconduct by Borrower, Operating Lessee, the Sponsor or any of their
respective affiliates in violation of the Loan Documents (including wrongful interference by
any such Person with the exercise of remedies by Lender during the continuance of an Event
of Default);

     (iv) the misappropriation or misapplication by Borrower, Operating Lessee, the Sponsor
or any of their respective affiliates of any funds in violation of the Loan Documents
(including misappropriation or misapplication of Revenues, security deposits and/or Loss
Proceeds and the violation of the last sentence of Section 5.7(d));

89

 

     (v) voluntary Debt prohibited hereunder, provided that, for the purpose of this clause
(v), Debt will be regarded as voluntary if such Debt is incurred voluntarily or incurred
involuntarily and not repaid despite the availability of sufficient cash flow from the
Property;

     (vi) any breach by Borrower, Operating Lessee or the Sponsor of any representation or
covenant regarding environmental matters contained in this Agreement or in the Environmental
Indemnity;

     (vii) the failure to pay or maintain the Policies or pay the amount of any deductible
required thereunder following a Casualty or other insurance claim, provided Lender permits
cash flow from the Property to be applied for such purpose;

     (viii) the failure of Borrower or Operating Lessee to be, and to at all times have
been, a Single-Purpose Entity;

     (ix) removal of personal property or FF&E from the Property during or in anticipation
of an Event of Default, unless replaced with personal property or FF&E, as applicable, of
the same utility and of the same or greater value and utility;

     (x) any fees or commissions paid by Borrower or Operating Lessee to any affiliate in
violation of the terms of the Loan Documents;

     (xi) any bankruptcy of Borrower or Operating Lessee, provided that, for the purpose of
this clause (xi) “Damages” shall be limited to the amount by which such costs and expenses
exceed the costs and expenses Lender would have incurred in an uncontested foreclosure on
the Property (for the avoidance of doubt, the recourse described in this clause shall be in
addition to the full recourse for bankruptcy described below);

     (xii) the failure of Borrower to maintain the required account balance in the
Borrower FF&E Account (it being agreed that Damages in such event shall include the amount
of any funds not deposited to the Borrower FF&E Account); and

     (xiii) any and all liabilities, contingent or otherwise, arising from or related to (x)
the actions, conduct and/or operating history of Borrower (or any Person merged into
Borrower) prior to the Closing Date and (y) Borrower’s ownership (or the ownership of any
Person merged into Borrower) of assets prior to the Closing Date that do not constitute a
portion of the Collateral; and

     (xiv) any breach by Borrower or Operating Lessee of any representation or covenant
contained in the Subordination of Operating Lease.

          In addition to the foregoing, the Loan shall be fully recourse to Borrower and Sponsor,
jointly and severally, upon (i) any unauthorized Transfer of the Property, unauthorized transfer of
any of the Collateral (including unauthorized Liens and encumbrances on the Collateral) or Change
of Control, in each case, in violation of the Loan Documents, (ii) the occurrence of any filing by
Borrower or Operating Lessee under the Bankruptcy Code or any joining or colluding

90

 

by Borrower, Operating Lessee or any of their respective affiliates (including Sponsor) in the
filing of an involuntary case in respect of Borrower or Operating Lessee under the Bankruptcy Code
(provided, however, that if such involuntary case is dismissed within 60 days of
such filing the Loan shall not be fully recourse to Borrower and Sponsor, however Borrower and
Sponsor shall indemnify Lender and hold Lender harmless from and against any and all Damages to
Lender arising from or related to the filing of such involuntary case) or (iii) the failure of
Borrower to be, and to at all times have been, a Single-Purpose Entity, which failure results in a
substantive consolidation of Borrower with any affiliate in a bankruptcy or similar proceeding (or
the filing of a motion for substantive consolidation in bankruptcy citing any such failure,
provided, however, that if such motion is dismissed within 60 days of filing the
Loan shall not be fully recourse to Borrower and Sponsor, however Borrower and Sponsor shall
indemnify Lender and hold Lender harmless from and against any and all Damages to Lender arising
from or related to such motion). The Loan shall be fully recourse to Sponsor in an amount equal to
its unpaid Guaranteed Obligations (as such term is defined in the Completion Guaranty) under the
Completion Guaranty.

          (c) The foregoing limitations on personal liability shall in no way impair or constitute a
waiver of the validity of the Notes, the Indebtedness secured by the Collateral, or the Liens on
the Collateral, or the right of Lender, as mortgagee or secured party, to foreclose and/or enforce
its rights with respect to the Collateral after an Event of Default. Nothing in this Agreement
shall be deemed to be a waiver of any right which Lender may have under the Bankruptcy Code to file
a claim for the full amount of the debt owing to Lender by Borrower or to require that all
Collateral shall continue to secure all of the Indebtedness owing to Lender in accordance with the
Loan Documents. Lender may seek a judgment on the Note (and, if necessary, name Borrower in such
suit) as part of judicial proceedings to foreclose under the Mortgage or to foreclose pursuant to
any other Loan Documents, or as a prerequisite to any such foreclosure or to confirm any
foreclosure or sale pursuant to power of sale thereunder, and in the event any suit is brought on
the Notes, or with respect to any Indebtedness or any judgment rendered in such judicial
proceedings, such judgment shall constitute a Lien on and will be and can be enforced on and
against the Collateral and the rents, profits, issues, products and proceeds thereof. Nothing in
this Agreement shall impair the right of Lender to accelerate the maturity of the Note upon the
occurrence of an Event of Default, nor shall anything in this Agreement impair or be construed to
impair the right of Lender to seek personal judgments, and to enforce all rights and remedies under
applicable law, jointly and severally against any guarantors to the extent allowed by any
applicable guarantees. The provisions set forth in this Section 9.19 are not intended as a
release or discharge of the obligations due under the Note or under any Loan Documents, but are
intended as a limitation, to the extent provided in this Section, on Lender’s right to sue for a
deficiency or seek a personal judgment against Borrower or Sponsor except as required in order to
realize on the Collateral.

          Section 9.20. Right of Set-Off. In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such rights, during the
continuance of an Event of Default, Lender may from time to time, without presentment, demand,
protest or other notice of any kind (all of such rights being hereby expressly waived), set-off and
appropriate and apply any and all deposits (general or special) and any other indebtedness at any
time held or owing by Lender (including branches, agencies or affiliates of Lender wherever
located) to or for the credit or the account of Borrower against the

91

 

obligations and liabilities of Borrower to Lender hereunder, under the Notes, the other Loan
Documents or otherwise, irrespective of whether Lender shall have made any demand hereunder and
although such obligations, liabilities or claims, or any of them, may be contingent or unmatured,
and any such set-off shall be deemed to have been made immediately upon the occurrence of an Event
of Default even though such charge is made or entered on the books of Lender subsequent thereto.

          Section 9.21. Exculpation of Lender. Lender neither undertakes nor assumes any
responsibility or duty to Borrower or any other party to select, review, inspect, examine,
supervise, pass judgment upon or inform Borrower or any third party of (a) the existence, quality,
adequacy or suitability of Appraisals of the Property or other Collateral, (b) any environmental
report, or (c) any other matters or items, including engineering, soils and seismic reports that
are contemplated in the Loan Documents. Any such selection, review, inspection, examination and
the like, and any other due diligence conducted by Lender, is solely for the purpose of protecting
Lender’s rights under the Loan Documents, and shall not render Lender liable to Borrower or any
third party for the existence, sufficiency, accuracy, completeness or legality thereof.

          Section 9.22. Servicer. Lender may delegate any and all rights and obligations of
Lender hereunder and under the other Loan Documents to the Servicer upon notice by Lender to
Borrower, whereupon any notice or consent from the Servicer to Borrower, and any action by Servicer
on Lender’s behalf, shall have the same force and effect as if Servicer were Lender.

          Section 9.23. No Fiduciary Duty.

          (a) Borrower acknowledges that, in connection with this Agreement, the other Loan Documents
and the Transaction, Lender has relied upon and assumed the accuracy and completeness of all of the
financial, legal, regulatory, accounting, tax and other information provided to, discussed with or
reviewed by Lender for such purposes, and Lender does not assume any liability therefor or
responsibility for the accuracy, completeness or independent verification thereof. Lender, its
affiliates and their respective stockholders and employees (for purposes of this Section, the
“Lending Parties”) have no obligation to conduct any independent evaluation or appraisal of
the assets or liabilities (including any contingent, derivative or off-balance sheet assets and
liabilities) of Sponsor, Borrower or any other Person or any of their respective affiliates or to
advise or opine on any related solvency or viability issues.

          (b) It is understood and agreed that (i) the Lending Parties shall act under this Agreement
and the other Loan Documents as an independent contractor, (ii) the Transaction is an arm’s-length
commercial transactions between the Lending Parties, on the one hand, and Borrower, on the other,
(iii) each Lending Party is acting solely as principal and not as the agent or fiduciary of
Borrower, Sponsor or their respective affiliates, stockholders, employees or creditors or any other
Person and (iv) nothing in this Agreement, the other Loan Documents, the Transaction or otherwise
shall be deemed to create (a) a fiduciary duty (or other implied duty) on the party of any Lending
Party to Sponsor, Borrower, any of their respective affiliates, stockholders, employees or
creditors, or any other Person or (b) a fiduciary or agency relationship between Sponsor, Borrower
or any of their respective affiliates, stockholders, employees or creditors, on the one hand, and
the Lending Parties, on the other. Borrower agrees

92

 

that neither it nor Sponsor nor any of their respective affiliates shall make, and hereby waives,
any claim against the Lending Parties based on an assertion that any Lending Party has rendered
advisory services of any nature or respect, or owes a fiduciary or similar duty to Borrower,
Sponsor of their respective affiliates, stockholders, employees or creditors. Nothing in this
Agreement or the other Loan Documents is intended to confer upon any other Person (including
affiliates, stockholders, employees or creditors of Borrower and Sponsor) any rights or remedies by
reason of any fiduciary or similar duty.

          (c) Borrower acknowledges that it has been advised that the Lending Parties are a full service
financial services firm engaged, either directly or through affiliates in various activities,
including securities trading, investment banking and financial advisory, investment management,
principal investment, hedging, financing and brokerage activities and financial planning and
benefits counseling for both companies and individuals. In the ordinary course of these
activities, the Lending Parties may make or hold a broad array of investments and actively trade
debt and equity securities (or related derivative securities) and/or financial instruments
(including loans) for their own account and for the accounts of their customers and may at any time
hold long and short positions in such securities and/or instruments. Such investment and other
activities may involve securities and instruments of affiliates of Borrower, including Sponsor, as
well as of other Persons that may (i) be involved in transactions arising from or relating to the
Transaction, (ii) be customers or competitors of Borrower, Sponsor and/or their respective
affiliates, or (iii) have other relationships with Borrower, Sponsor and/or their respective
affiliates. In addition, the Lending Parties may provide investment banking, underwriting and
financial advisory services to such other Persons. The Lending Parties may also co-invest with,
make direct investments in, and invest or co-invest client monies in or with funds or other
investment vehicles managed by other parties, and such funds or other investment vehicles may trade
or make investments in securities of affiliates of Borrower, including Sponsor, or such other
Persons. The Transaction may have a direct or indirect impact on the investments, securities or
instruments referred to in this paragraph. Although the Lending Parties in the course of such
other activities and relationships may acquire information about the Transaction or other Persons
that may be the subject of the Transaction, the Lending Parties shall have no obligation to
disclose such information, or the fact that the Lending Parties are in possession of such
information, to Borrower, Sponsor or any of their respective affiliates or to use such information
on behalf of Borrower, Sponsor or any of their respective affiliates.

          (d) Borrower acknowledges and agrees that Borrower has consulted its own legal and financial
advisors to the extent it deemed appropriate and that it is responsible for making its own
independent judgment with respect to this Agreement, the other Loan Documents, the Transaction and
the process leading thereto.

          Section 9.24. Borrower Information. Borrower shall make available to Lender all
information concerning its business and operations that Lender may reasonably request, provided
that disclosure of such information does not and will not violate any securities laws or violate
the terms of any confidentiality agreement between Borrower and/or any affiliate of Borrower on the
one hand, and any third party, on the other hand. Lender shall have the right to disclose any and
all information provided to Lender by Borrower or Sponsor regarding Borrower, Sponsor, the Loan and
the Property (i) to affiliates of Lender and to Lender’s agents and advisors, (ii) to any bona fide
or potential assignee, transferee or participant in connection

93

 

with the contemplated assignment, transfer, participation or Securitization of all or any portion
of the Loan or any participations therein or by any direct or indirect contractual counterparties
(or the professional advisors thereto) to any swap or derivative transaction relating to Borrower
and its obligations, in each case, to the extent reasonably required by such Person, (iii) to any
Rating Agency in connection with a Securitization or as otherwise required in connection with a
disposition of the Loan, (iv) to any Person necessary or desirable in connection with the exercise
of any remedies hereunder or under any other Loan Document, (v) to any governmental agency or
representative thereof or by the National Association of Insurance Commissioners or pursuant to
legal or judicial process and (vi) in any Disclosure Document (as defined in the Cooperation
Agreement). In addition, Lender may disclose the existence of this Agreement and the information
about this Agreement to market data collectors, similar services providers to the lending industry,
and service providers to Lender in connection with the administration and management of this
Agreement and the other Loan Documents. Each party hereto (and each of their respective
affiliates, employees, representatives or other agents) may disclose to any and all Persons,
without limitation of any kind, the tax treatment and tax structure of the Transaction and all
materials of any kind (including opinions and other tax analyses) that are provided to any such
party relating to such tax treatment and tax structure. For the purpose of this Section
9.24, “tax structure” means any facts relevant to the federal income tax treatment of the
Transaction but does not include information relating to the identity of any of the parties hereto
or any of their respective affiliates.

          Section 9.25. PATRIOT Act Records. Lender hereby notifies Borrower that pursuant to
the requirements of the PATRIOT Act, it is required to obtain, verify and record information that
identifies Borrower and Sponsor, which information includes the name and address of Borrower and
Sponsor and other information that will allow Lender to identify Borrower or Sponsor in accordance
with the PATRIOT Act.

          Section 9.26. Prior Agreements. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS CONTAIN
THE ENTIRE AGREEMENT OF THE PARTIES HERETO AND THERETO IN RESPECT OF THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY, AND ALL PRIOR AGREEMENTS AMONG OR BETWEEN SUCH PARTIES, WHETHER ORAL OR
WRITTEN, INCLUDING ANY TERM SHEETS, CONFIDENTIALITY AGREEMENTS AND COMMITMENT LETTERS, ARE
SUPERSEDED BY THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT THAT ANY ORIGINATION
FEE SPECIFIED IN ANY TERM SHEET, COMMITMENT LETTER OR FEE LETTER SHALL BE AN OBLIGATION OF BORROWER
AND SHALL BE PAID AT CLOSING, AND ANY INDEMNIFICATIONS, FLEX PROVISION, EXIT FEES AND THE LIKE
PROVIDED FOR THEREIN SHALL SURVIVE THE CLOSING).

          Section 9.27. Publicity. If the Loan is made, Lender may issue press releases,
advertisements and other promotional materials describing in general terms or in detail Lender’s
participation in such transaction, and may utilize photographs of the Property in such promotional
materials. Borrower shall not make any references to Lender in any press release, advertisement or
promotional material issued by Borrower or Sponsor, unless Lender shall have approved of the same
in writing prior to the issuance of such press release, advertisement or promotional material.

94

 

          Section 9.28. Delay Not a Waiver. Neither any failure nor any delay on the part of
Lender in insisting upon strict performance of any term, condition, covenant or agreement, or
exercising any right, power, remedy or privilege hereunder, or under the Note or under any other
Loan Document, or under any other instrument given as security therefor, shall operate as or
constitute a waiver thereof, nor shall a single or partial exercise thereof preclude any other
future exercise, or the exercise of any other right, power, remedy or privilege. In particular,
and not by way of limitation, by accepting payment after the due date of any amount payable under
this Agreement, the Note or any other Loan Document, Lender shall not be deemed to have waived any
right either to require prompt payment when due of all other amounts due under this Agreement, the
Note or the other Loan Documents, or to declare a default for failure to effect prompt payment of
any such other amount.

          Section 9.29. Schedules and Exhibits Incorporated. The Schedules and Exhibits annexed
hereto are hereby incorporated herein as a part of this Agreement with the same effect as if set
forth in the body hereof.

          Section 9.30. Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or would otherwise be within the
limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default
if such action is taken or condition exists.

95

 

          Lender and Borrower are executing this Agreement as of the date first above written.

	 	 	 	 	 
	 	LENDER:

GOLDMAN SACHS COMMERCIAL MORTGAGE CAPITAL, L.P., a Delaware limited
partnership

 	 
	 	By:  	/s/  Rene Theriault
 	 
	 	 	Name:  	Rene Theriault 	 
	 	 	Title:  	Director 	 
	 
	 	BORROWER:

ORANGEMEN OWNER LLC,

a Delaware limited liability company

 	 
	 	By:  	/s/ Raymond D. Martz
 	 
	 	 	Name:  	Raymond D. Martz 	 
	 	 	Title:  	President 	 
	 

96exv4w1

Exhibit 4.1

 

 

INDENTURE

between

HEARTWARE INTERNATIONAL, INC.,

as Issuer

and

WILMINGTON TRUST FSB,

as Trustee

 

Dated
as of December 15, 2010

 

Providing for the Issuance of Debt Securities in Series

 

 

 

 

HEARTWARE INTERNATIONAL, INC.

Reconciliation and tie between Trust Indenture Act

of 1939 and Indenture, dated as of December 15, 2010

	 	 	 	 	 	 	 
	Trust Indenture	 	 	 
	Act Section	 	Indenture Section
	 
	 	 	 	 	 	 
	Sec.
	 	310(a)(1)	 	607
	 
	 	(a)(2)	 	607
	 
	 	(b)	 	608
	Sec.
	 	312(c)	 	701
	Sec.
	 	314(a)	 	703
	 
	 	(a)(4)	 	1004
	 
	 	(c)(1)	 	102
	 
	 	(c)(2)	 	102
	 
	 	(e)	 	102
	Sec.
	 	315(b)	 	601
	Sec.
	 	316(a)(last sentence)	 	101 (“Outstanding”)
	 
	 	(a)(1)(A)	 	502, 512
	 
	 	(a)(1)(B)	 	513
	 
	 	(b)	 	508
	 
	 	(c)	 	104(c)
	Sec.
	 	317(a)(1)	 	503
	 
	 	(a)(2)	 	504
	 
	 	(b)	 	1003
	Sec.
	 	318(a)	 	111

 

			
	Note:	 	This reconciliation and tie shall not, for any purpose, be deemed to be a part of the
Indenture.

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	PARTIES
	 	 	1	 
	RECITALS OF THE COMPANY
	 	 	1	 

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

	 	 	 	 	 

	Section 101. Definitions
	 	 	1	 
	Section 102. Compliance Certificates and Opinions
	 	 	11	 
	Section 103. Form of Documents Delivered to Trustee
	 	 	11	 
	Section 104. Acts of Holders
	 	 	12	 
	Section 105. Notices, etc. to Trustee or the Company
	 	 	14	 
	Section 106. Notice to Holders; Waiver
	 	 	14	 
	Section 107. Effect of Headings and Table of Contents
	 	 	15	 
	Section 108. Successors and Assigns
	 	 	15	 
	Section 109. Separability Clause
	 	 	15	 
	Section 110. Benefits of Indenture
	 	 	15	 
	Section 111. Governing Law
	 	 	15	 
	Section 112. Legal Holidays
	 	 	15	 
	Section 113. No Recourse
	 	 	16	 
	Section 114. Incorporation by Reference of Trust Indenture Act
	 	 	16	 
	Section 115. Rules of Construction
	 	 	16	 
	Section 116. U.S.A. Patriot Act
	 	 	17	 

ARTICLE TWO

SECURITY FORMS

	 	 	 	 	 

	Section 201. Forms Generally
	 	 	17	 
	Section 202. Form of Trustee’s Certificate of Authentication
	 	 	18	 
	Section 203. Securities Issuable in Global Form
	 	 	18	 

ARTICLE THREE

THE SECURITIES

	 	 	 	 	 

	Section 301. Amount Unlimited; Issuable in Series
	 	 	19	 
	Section 302. Denominations
	 	 	23	 
	Section 303. Execution, Authentication, Delivery and Dating
	 	 	23	 
	Section 304. Temporary Securities
	 	 	25	 

 

			
	Note:	 	This table of contents shall not, for
any purpose, be deemed to be a part of the Indenture.

i

 

	 	 	 	 	 
	 	 	Page	 
	Section 305. Registration, Registration of Transfer and Exchange
	 	 	27	 
	Section 306. Mutilated, Destroyed, Lost and Stolen Securities
	 	 	31	 
	Section 307. Payment of Interest; Interest Rights Preserved; Optional Interest Reset
	 	 	32	 
	Section 308. [Reserved]
	 	 	35	 
	Section 309. Persons Deemed Owners
	 	 	35	 
	Section 310. Cancellation
	 	 	36	 
	Section 311. Computation of Interest
	 	 	36	 
	Section 312. Currency and Manner of Payments in Respect of Securities
	 	 	36	 
	Section 313. Appointment and Resignation of Successor Exchange Rate Agent
	 	 	39	 

ARTICLE FOUR

SATISFACTION AND DISCHARGE

	 	 	 	 	 

	Section 401. Satisfaction and Discharge of Indenture
	 	 	40	 
	Section 402. Application of Trust Money
	 	 	41	 

ARTICLE FIVE

REMEDIES

	 	 	 	 	 

	Section 501. Events of Default
	 	 	42	 
	Section 502. Acceleration of Maturity; Rescission and Annulment
	 	 	43	 
	Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee
	 	 	45	 
	Section 504. Trustee May File Proofs of Claim
	 	 	45	 
	Section 505. Trustee May Enforce Claims Without Possession of Securities
	 	 	46	 
	Section 506. Application of Money Collected
	 	 	46	 
	Section 507. Limitation on Suits
	 	 	47	 
	Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest
	 	 	47	 
	Section 509. Restoration of Rights and Remedies
	 	 	47	 
	Section 510. Rights and Remedies Cumulative
	 	 	48	 
	Section 511. Delay or Omission Not Waiver
	 	 	48	 
	Section 512. Control by Holders
	 	 	48	 
	Section 513. Waiver of Past Defaults
	 	 	48	 
	Section 514. Undertaking for Costs
	 	 	49	 
	Section 515. Waiver of Stay or Extension Laws
	 	 	49	 

ARTICLE SIX

THE TRUSTEE

	 	 	 	 	 

	Section 601. Notice of Defaults
	 	 	49	 
	Section 602. Certain Duties, Responsibilities and Rights of Trustee
	 	 	50	 
	Section 603. Trustee Not Responsible for Recitals or Issuance of Securities
	 	 	52	 
	Section 604. May Hold Securities
	 	 	52	 
	Section 605. Money Held in Trust
	 	 	53	 
	Section 606. Compensation and Reimbursement
	 	 	53	 

ii

 

	 	 	 	 	 
	 	 	Page	 
	Section 607. Corporate Trustee Required; Eligibility; Conflicting Interests; Disqualification
	 	 	54	 
	Section 608. Resignation and Removal; Appointment of Successor
	 	 	54	 
	Section 609. Acceptance of Appointment by Successor
	 	 	56	 
	Section 610. Merger, Conversion, Consolidation or Succession to Business
	 	 	57	 
	Section 611. Appointment of Authenticating Agent
	 	 	57	 

ARTICLE SEVEN

HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY

	 	 	 	 	 

	Section 701. Disclosure of Names and Addresses of Holders
	 	 	59	 
	Section 702. Reports by Trustee
	 	 	59	 
	Section 703. Reports by Company
	 	 	59	 

ARTICLE EIGHT

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

	 	 	 	 	 

	Section 801. Company May Consolidate, etc., Only on Certain Terms
	 	 	60	 
	Section 802. Successor Person Substituted
	 	 	61	 

ARTICLE NINE

SUPPLEMENTAL INDENTURES

	 	 	 	 	 

	Section 901. Supplemental Indentures Without Consent of Holders
	 	 	61	 
	Section 902. Supplemental Indentures with Consent of Holders
	 	 	62	 
	Section 903. Execution of Supplemental Indentures
	 	 	63	 
	Section 904. Effect of Supplemental Indentures
	 	 	64	 
	Section 905. Conformity with Trust Indenture Act
	 	 	64	 
	Section 906. Reference in Securities to Supplemental Indentures
	 	 	64	 
	Section 907. Notice of Supplemental Indentures
	 	 	64	 

ARTICLE TEN

COVENANTS

	 	 	 	 	 

	Section 1001. Payment of Principal, Premium, if Any, and Interest
	 	 	64	 
	Section 1002. Maintenance of Office or Agency
	 	 	64	 
	Section 1003. Money for Securities Payments to Be Held in Trust
	 	 	66	 
	Section 1004. Statement by Officers as to Default
	 	 	67	 
	Section 1005. Existence
	 	 	68	 
	Section 1006. Further Instruments and Acts
	 	 	68	 
	Section 1007. Calculation of Original Issue Discount
	 	 	68	 
	Section 1008. Additional Amounts
	 	 	68	 
	Section 1009. Waiver of Certain Covenants
	 	 	68	 

iii

 

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

	 	 	 	 	 
	 	 	Page	 
	Section 1101. Applicability of Article
	 	 	69	 
	Section 1102. Election to Redeem; Notice to Trustee
	 	 	69	 
	Section 1103. Selection by Trustee of Securities to Be Redeemed
	 	 	69	 
	Section 1104. Notice of Redemption
	 	 	69	 
	Section 1105. Deposit of Redemption Price
	 	 	71	 
	Section 1106. Securities Payable on Redemption Date
	 	 	71	 
	Section 1107. Securities Redeemed in Part
	 	 	72	 
	Section 1108. Optional Redemption Due to Changes in Tax Treatment
	 	 	72	 

ARTICLE TWELVE

SINKING FUNDS

	 	 	 	 	 

	Section 1201. Applicability of Article
	 	 	73	 
	Section 1202. Satisfaction of Sinking Fund Payments with Securities
	 	 	73	 
	Section 1203. Redemption of Securities for Sinking Fund
	 	 	73	 

ARTICLE THIRTEEN

REPAYMENT AT OPTION OF HOLDERS

	 	 	 	 	 

	Section 1301. Applicability of Article
	 	 	74	 
	Section 1302. Repayment of Securities
	 	 	75	 
	Section 1303. Exercise of Option
	 	 	75	 
	Section 1304. When Securities Presented for Repayment Become Due and Payable
	 	 	75	 
	Section 1305. Securities Repaid in Part
	 	 	76	 

ARTICLE FOURTEEN

DEFEASANCE AND COVENANT DEFEASANCE

	 	 	 	 	 

	Section 1401. Company’s Option to Effect Defeasance or Covenant Defeasance
	 	 	76	 
	Section 1402. Defeasance and Discharge
	 	 	77	 
	Section 1403. Covenant Defeasance
	 	 	77	 
	Section 1404. Conditions to Defeasance or Covenant Defeasance
	 	 	78	 
	Section 1405. Deposited Money and Government Obligations to Be Held in Trust;
Other Miscellaneous Provisions
	 	 	79	 
	Section 1406. Reinstatement
	 	 	80	 

iv

 

ARTICLE FIFTEEN

MEETINGS OF HOLDERS OF SECURITIES

	 	 	 	 	 
	 	 	Page	 
	Section 1501. Purposes for Which Meetings May Be Called
	 	 	80	 
	Section 1502. Call, Notice and Place of Meetings
	 	 	81	 
	Section 1503. Persons Entitled to Vote at Meetings
	 	 	81	 
	Section 1504. Quorum; Action
	 	 	81	 
	Section 1505. Determination of Voting Rights; Conduct and Adjournment of Meetings
	 	 	82	 
	Section 1506. Counting Votes and Recording Action of Meetings
	 	 	83	 
	 
	 	 	 	 
	EXHIBIT A
	 	 	A-1	 

v

 

INDENTURE,
dated as of December 15, 2010, between HEARTWARE INTERNATIONAL, INC., a Delaware
corporation, as Issuer (the “Company”), having its principal office at 205 Newbury Street,
Framingham, Massachusetts, USA 01701, and WILMINGTON TRUST FSB, a federal savings bank, as Trustee
(the “Trustee”).

RECITALS OF THE COMPANY

          WHEREAS, the Company has duly authorized the execution and delivery of this Indenture to
provide for the issuance from time to time of its unsecured senior or subordinated debentures,
notes or other evidences of indebtedness (the “Securities”), which may be convertible into or
exchangeable for any securities of any person (including the Company), to be issued in one or more
series as in this Indenture provided; and

          WHEREAS, this Indenture is subject to the provisions of the Trust Indenture Act of 1939, as
amended, that are required to be part of this Indenture, and shall be governed by such provisions;
provided that if any provision of this Indenture modifies any TIA (as defined herein)
provision that may be so modified, such TIA provision shall be deemed to apply to this Indenture as
so modified; provided further that if any provision of this Indenture excludes any
TIA provision that may be so excluded, such TIA provision shall be excluded from this Indenture;
and

          WHEREAS, all things necessary to make this Indenture a valid agreement of the Company, in
accordance with its terms, have been done.

          NOW, THEREFORE, THIS INDENTURE WITNESSETH:

          For and in consideration of the premises and the purchase of the Securities by the Holders (as
defined herein) thereof, it is mutually covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Securities or of series thereof and any coupons (as defined herein),
as follows:

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

          SECTION 101. Definitions. “Act”, when used with respect to any Holder, has the
meaning specified in Section 104.

          “Additional Amounts” has the meaning specified in Section 1008.

          “Affiliate” of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For
purposes of this definition, “control,” as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting securities, by

 

 

agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled
by” and “under common control with” shall have correlative meanings.

          “Authenticating Agent” means any Person appointed by the Trustee to act on behalf of the
Trustee pursuant to Section 611 to authenticate Securities.

          “Authorized Newspaper” means a newspaper, in the English language or in an official language
of the country of publication, customarily published on each Business Day, whether or not published
on Saturdays, Sundays or holidays, and of general circulation in each place in connection with
which the term is used or in the financial community of each such place. Where successive
publications are required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the foregoing requirements and
in each case on any Business Day.

          “Bankruptcy Law” means Title 11, U.S. Code or any similar U.S. federal or state law for the
relief of debtors.

          “Bearer Security” means any Security except a Registered Security.

          “Board of Directors” means (i) with respect to a corporation, the board of directors of the
corporation; (ii) with respect to a partnership, the board of directors of a corporate general
partner of the partnership; (iii) with respect to a limited liability company, the managing members
thereof; and (iv) with respect to any other Person, the board of directors or committee of such
Person serving a similar function.

          “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Company as the case may be, to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification, and delivered to the Trustee.

          “Business Day” means, when used with respect to any Place of Payment or any other particular
location referred to in this Indenture or in the Securities, unless otherwise specified with
respect to any Securities pursuant to Section 301, each Monday, Tuesday, Wednesday, Thursday and
Friday which (i) is not a day on which banking institutions in that Place of Payment or other
location are authorized or obligated by law or executive order to close and (ii) if a payment is to
be made in (or a rate is to be ascertained for) Euros, is also a day in which TARGET is open for
settlement of payments in Euros.

          “Clearstream” means Clearstream Banking, société anonyme, or its successor.

          “Code” means the United States Internal Revenue Code of 1986, as amended, and the regulations
thereunder.

          “Commission” or “SEC” means the U.S. Securities and Exchange Commission, as from time to time
constituted, created under the Exchange Act, or, if at any time after the execution of this
Indenture such Commission is not existing and performing the duties now assigned to it under the
Trust Indenture Act, then the body performing such duties at such time.

2

 

          “Commodity Agreement” means any forward contract, commodity swap, commodity option or other
financial agreement or arrangement relating to, or the value of which is dependent upon,
fluctuations in commodity prices.

          “Common Depositary” has the meaning specified in Section 304.

          “Company” means the Person named as the “Company” in the first paragraph of this Indenture
until a successor Person shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Company” shall mean such successor Person.

          “Company Request” or “Company Order” means a written request or order signed in the name of
the Company by an Officer of the Company and delivered to the Trustee.

          “Conversion Date” has the meaning specified in Section 312(d).

          “Conversion Event” means the cessation of use of a Foreign Currency both by the government of
one or more countries or by any recognized union, association or confederation of governments that
issued such Foreign Currency and by a central bank or other public institution of or within the
international banking community for the settlement of transactions in such Foreign Currency.

          “Corporate Trust Office of the Trustee” means the principal corporate trust office of the
Trustee, at which at any particular time its corporate trust business shall be administered, which
office on the date of execution of this Indenture is located at Wilmington Trust FSB, Corporate
Capital Markets, 50 South Sixth Street, Suite 1290, Minneapolis, Minnesota 55402-1544, Attention:
HeartWare Administrator, except that with respect to presentation of Securities for payment or for
registration of transfer or exchange, such term shall mean the office or agency of the Trustee at
which, at any particular time, its corporate agency business shall be conducted.

          “corporation” includes corporations, associations, companies and business or statutory trusts.

          “coupon” means any interest coupon appertaining to a Bearer Security.

          “Currency” means any currency, composite currency or currency unit and Foreign Currency issued
by the government of one or more countries or by any recognized union, confederation or association
of such governments.

          “Currency Agreement” means any foreign exchange contract, currency swap agreement or other
similar agreement with respect to currency values.

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

          “Defaulted Interest” has the meaning specified in Section 307.

3

 

          “Depositary” means, with respect to Registered Securities of any series for which the Company
shall determine that such Registered Securities will be issued in permanent global form, The
Depository Trust Company, New York, New York, another clearing agency, or any successor registered
as a clearing agency under the Exchange Act, or other applicable statute or regulations, which in
each case, shall be designated by the Company pursuant to Section 301.

          “Dollar” or “$” means a dollar or other equivalent unit in such coin or currency of the United
States of America as at the time shall be legal tender for the payment of public and private debts
therein.

          “Dollar Equivalent of the Currency Unit” has the meaning specified in Section 312(g).

          “Dollar Equivalent of the Foreign Currency” has the meaning specified in Section 312(f).

          “EDGAR” means the SEC’s Electronic Data Gathering and Retrieval System.

          “Election Date” has the meaning specified in Section 312(h).

          “Euroclear” means Euroclear Bank S.A./N.V. as operator of Euroclear System, and any successor
thereto.

          “Event of Default” has the meaning specified in Section 501.

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

          “Exchange Date” has the meaning specified in Section 304.

          “Exchange Rate Agent” means, with respect to Securities of or within any series, unless
otherwise specified with respect to any Securities pursuant to Section 301, a New York Clearing
House bank, designated pursuant to Section 301 or Section 313.

          “Exchange Rate Officer’s Certificate” means a certificate setting forth (i) the applicable
Market Exchange Rate and (ii) the Dollar or Foreign Currency amounts of principal (and premium, if
any) and interest, if any (on an aggregate basis and on the basis of a Security having the lowest
denomination principal amount determined in accordance with Section 302 in the relevant Currency),
payable with respect to a Security of any series on the basis of such Market Exchange Rate, signed
by any Officer of the Company.

          “Federal Bankruptcy Code” means the U.S. Bankruptcy Act of Title 11 of the United States Code,
as amended from time to time.

          “Foreign Currency” means any Currency other than Currency of the United States.

4

 

          “GAAP” means U.S. generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other successor entities as have been sanctioned and approved by the
Securities and Exchange Commission, approved by a significant segment of the accounting profession,
that are applicable at the date of any relevant calculation or determination.

          “Government Obligations” means, unless otherwise specified with respect to any series of
Securities pursuant to Section 301, securities which are (i) direct obligations of the government
which issued the Currency in which the Securities of a particular series are payable or (ii)
obligations of a Person controlled or supervised by and acting as an agency or instrumentality of
the government which issued the Currency in which the Securities of such series are payable, the
payment of which is unconditionally guaranteed by such government, which, in either case, are full
faith and credit obligations of such government payable in such Currency and are not callable or
redeemable at the option of the issuer thereof and shall also include a depository receipt issued
by a bank or trust company as custodian with respect to any such Government Obligation or a
specific payment of interest on or principal of any such Government Obligation held by such
custodian for the account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in respect of the
Government Obligation or the specific payment of interest on or principal of the Government
Obligation evidenced by such depository receipt.

          “guarantee” means a guarantee (other than by endorsement of negotiable instruments for
collection in the ordinary course of business), direct or indirect, in any manner (including,
without limitation, letters of credit and reimbursement agreements in respect thereof), of all or
any part of any Indebtedness or other obligations.

          “Holder” means, in the case of a Registered Security, the Person in whose name a Security is
registered in the Security Register and, in the case of a Bearer Security, the bearer thereof and,
when used with respect to any coupon, shall mean the bearer thereof.

          “Indebtedness” means any and all obligations of a Person for money borrowed which, in
accordance with GAAP, would be reflected on the balance sheet of such Person as a liability on the
date as of which Indebtedness is to be determined.

          “Indenture” means this instrument as originally executed and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof, and shall include the terms of particular series of Securities
established as contemplated by Section 301; provided, however, that, if at any time
more than one Person is acting as Trustee under this instrument, “Indenture” shall mean, with
respect to any one or more series of Securities for which such Person is Trustee, this instrument
as originally executed or as it may from time to time be supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall
include the terms of particular series of Securities for which such Person is Trustee established
as contemplated by Section 301, exclusive, however, of any provisions or terms

5

 

which relate solely to other series of Securities for which such Person is not Trustee,
regardless of when such terms or provisions were adopted, and exclusive of any provisions or terms
adopted by means of one or more indentures supplemental hereto executed and delivered after such
Person had become such Trustee but to which such Person, as such Trustee, was not a party.

          “Indexed Security” means a Security the terms of which provide that the principal amount
thereof payable at the Stated Maturity may be more or less than the principal amount thereof at
original issuance.

          “interest” means, when used with respect to an Original Issue Discount Security the rate
prescribed in such Original Issue Discount Security.

          “Interest Payment Date” means, when used with respect to any Security, the Maturity of an
installment of interest on such Security.

          “Interest Rate Agreement” means any interest rate swap agreement, interest rate cap agreement
or other financial agreement or arrangement with respect to exposure to interest rates.

          “Lien” or “lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether or not filed,
recorded or otherwise perfected under applicable law, including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other agreement to sell or give
a security interest in and any filing of or agreement to give any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

          “Market Exchange Rate” means, unless otherwise specified with respect to any Securities
pursuant to Section 301, (i) for any conversion involving a currency unit on the one hand and
Dollars or any Foreign Currency on the other, the exchange rate between the relevant currency unit
and Dollars or such Foreign Currency calculated by the method specified pursuant to Section 301 for
the Securities of the relevant series, (ii) for any conversion of Dollars into any Foreign
Currency, the noon (New York City time) buying rate for such Foreign Currency for cable transfers
quoted in New York City as certified for customs purposes by the Federal Reserve Bank of New York
and (iii) for any conversion of one Foreign Currency into Dollars or another Foreign Currency, the
spot rate at noon local time in the relevant market at which, in accordance with normal banking
procedures, the Dollars or Foreign Currency into which conversion is being made could be purchased
with the Foreign Currency from which conversion is being made from major banks located in either
New York City, London or any other principal market for Dollars or such purchased Foreign Currency,
in each case determined by the Exchange Rate Agent. Unless otherwise specified with respect to any
Securities pursuant to Section 301, in the event of the unavailability of any of the exchange rates
provided for in the foregoing clauses (i), (ii) and (iii), the Exchange Rate Agent shall use, in
its sole discretion and without liability on its part, such quotation of the Federal Reserve Bank
of New York as of the most recent available date, or quotations from one or more major banks in New
York City, London or another principal market for the Currency in question, or such other
quotations as the Exchange Rate Agent shall deem appropriate. Unless otherwise specified by the
Exchange Rate Agent, if there is more than one market for dealing in any Currency by reason of
foreign

6

 

exchange regulations or otherwise, the market to be used in respect of such Currency shall be
that upon which a non-resident issuer of securities designated in such Currency would purchase such
Currency in order to make payments in respect of such securities.

          “Maturity” means, when used with respect to any Security, the date on which the principal of
such Security or any installment of principal becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by acceleration, notice of redemption, notice of option
to elect repayment, notice of exchange or conversion, or otherwise.

          “Officer” means the President, any Vice President, the Chief Financial Officer, the Treasurer
or the Secretary.

          “Officer’s Certificate” means a certificate signed on behalf of the Company by one Officer of
the Company who must be the President, the Chief Financial Officer the Treasurer, or a Vice President of the Company, that
meets the requirements of Section 102.

          “Opinion of Counsel” means a written opinion of counsel, who may be counsel for the Company,
including an employee of the Company, and who shall be acceptable to the Trustee.

          “Original Issue Discount Security” means any Security which provides for an amount less than
the principal amount thereof to be due and payable upon an acceleration of the Maturity thereof
pursuant to Section 502.

          “Outstanding” means, when used with respect to Securities, as of the date of determination,
all Securities theretofore authenticated and delivered under this Indenture, except:

     (i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for
cancellation;

     (ii) Securities, or portions thereof, for whose payment or redemption or repayment at
the option of the Holder money in the necessary amount has been theretofore deposited with
the Trustee or any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own Paying Agent) for
the Holders of such Securities and any coupons appertaining thereto; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been made;

     (iii) Securities, except to the extent provided in Sections 1402 and 1403, with respect
to which the Company has effected defeasance and/or covenant defeasance as provided in
Article Fourteen;

     (iv) Securities which have been paid pursuant to Section 306 or in exchange for or in
lieu of which other Securities have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the Company; and

7

 

     (v) Securities that have been converted or exchanged for other securities pursuant to
Section 301;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or are present at a meeting of Holders for quorum
purposes, and for the purpose of making the calculations required by TIA Section 313, (i) the
principal amount of an Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such purpose shall be
equal to the amount of principal thereof that would be (or shall have been determined to be) due
and payable, at the time of such determination, upon an acceleration of the Maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security denominated in a Foreign
Currency that may be counted in making such determination or calculation and that shall be deemed
Outstanding for such purpose shall be equal to the Dollar equivalent, determined as of the date
such Security is originally issued by the Company as set forth in an Exchange Rate Officer’s
Certificate delivered to the Trustee, of the principal amount (or, in the case of an Original Issue
Discount Security, the Dollar equivalent as of such date of original issuance of the amount
determined as provided in clause (i) above) of such Security, (iii) the principal amount of any
Indexed Security that may be counted in making such determination or calculation and that shall be
deemed Outstanding for such purpose shall be equal to the principal amount of such Indexed Security
at original issuance, unless otherwise provided with respect to such Security pursuant to Section
301, and (iv) Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected in making such
determination or calculation or in conclusively relying upon any such request, demand,
authorization, direction, notice, consent or waiver or upon any such determination as to the
presence of a quorum, only Securities which a Responsible Officer of the Trustee actually knows to
be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company
or any other obligor upon the Securities or any Affiliate of the Company or such other obligor.

          “Paying Agent” means any Person (including the Company acting as Paying Agent) authorized by
the Company to pay the principal of (or premium, if any) or interest, if any, on any Securities on
behalf of the Company.

          “Person” means any individual, corporation, partnership, joint venture, trust, unincorporated
organization or government or any agency or political subdivision thereof.

          “Place of Payment” means, when used with respect to the Securities of or within any series,
the place or places (which, in the case of Bearer Securities, shall be outside the United States)
where the principal of (and premium, if any) and interest, if any, on such Securities are payable
as specified as contemplated by Sections 301 and 1002.

          “Redemption Date”, when used with respect to any Security to be redeemed, in whole or in part,
means the date fixed for such redemption pursuant to this Indenture.

8

 

          “Redemption Price” means, when used with respect to any Security to be redeemed, the price at
which it is to be redeemed pursuant to this Indenture.

          “Registered Security” means any Security registered in the Security Register.

          “Regular Record Date” for the interest payable on any Interest Payment Date on the Registered
Securities of or within any series means the date specified for that purpose as contemplated by
Section 301.

          “Repayment Date” means, when used with respect to any Security to be repaid at the option of
the Holder, the date fixed for such repayment pursuant to this Indenture.

          “Repayment Price” means, when used with respect to any Security to be repaid at the option of
the Holder, the price at which it is to be repaid pursuant to this Indenture.

          “Responsible Officer” means, when used with respect to the Trustee, any officer of the Trustee
within the Corporate Trust Office of the Trustee (or any successor group of the Trustee) who has
direct responsibility for administration of this Indenture and, for purposes of Section 601 (or
subparagraph (3)(b) of the first paragraph of Section 602 to the extent such expanded definition is
used), also includes any other officer to whom such matter is referred because of such officer’s
knowledge of and familiarity with the particular subject.

          “Security” or “Securities” has the meaning stated in the first recital of this Indenture and
more particularly means any Security or Securities authenticated and delivered under this
Indenture; provided, however, that if at any time there is more than one Person
acting as Trustee under this Indenture, “Securities” with respect to the Indenture as to which such
Person is Trustee shall have the meaning stated in the first recital of this Indenture and shall
more particularly mean Securities authenticated and delivered under this Indenture, exclusive,
however, of Securities of any series as to which such Person is not Trustee.

          “Security Register” and “Security Registrar” have the respective meanings specified in Section
305.

          “Significant Subsidiary” of any Person means any “significant subsidiary” of such Person
within the meaning of Article 1, Rule 1-02 of Regulation S-X promulgated under the Securities Act
of 1933, as amended.

          “Special Record Date” for the payment of any Defaulted Interest on the Registered Securities
of or within any series means a date fixed by the Trustee pursuant to Section 307.

          “Stated Maturity”, when used with respect to any Security or any installment of principal
thereof or interest thereon, means the date specified in such Security or a coupon representing
such installment of interest as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.

          “Subsidiary” means (1) any corporation of which at least a majority of the outstanding stock
having by the terms thereof ordinary voting power for the election of directors

9

 

of such corporation (irrespective of whether or not at the time stock of any other class or
classes of such corporation shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned by the Company or one or more other
Subsidiaries, or by the Company and one or more other Subsidiaries, and (2) any other Person in
which the Company or one or more other Subsidiaries, directly or indirectly, at the date of
determination, (x) own at least a majority of the outstanding ownership interests or (y) have the
power to elect or direct the election of, or to appoint or approve the appointment of, at least the
majority of the directors, trustees or managing members of, or other persons holding similar
positions with, such Person.

          “TARGET” means the Trans-European Automated Real-Time Gross Settlement Express Transfer
System.

          “Trade Payables” means accounts payable or any other Indebtedness or monetary obligations to
trade creditors created or assumed in the ordinary course of business in connection with the
obtaining of materials or services.

          “Trust Indenture Act” or “TIA” means the U.S. Trust Indenture Act of 1939 as in force at the
date as of which this Indenture was executed, except as provided in Section 905.

          “Trustee” means the Person named as the “Trustee” in the first paragraph of this Indenture
until a successor Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee
hereunder; provided, however, that if at any time there is more than one such
Person, “Trustee” as used with respect to the Securities of any series shall mean only the Trustee
with respect to Securities of that series.

          “United States” means, unless otherwise specified with respect to any Securities pursuant to
Section 301, the United States of America (including the states and the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction.

          “United States person” means, unless otherwise specified with respect to any Securities
pursuant to Section 301, an individual who is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under the laws of the United
States, an estate the income of which is subject to United States federal income taxation
regardless of its source or any trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United States persons have
the authority to control all substantial decisions of the trust.

          “Valuation Date” has the meaning specified in Section 312(c).

          “Vice President”, when used with respect to the Company or the Trustee, means any vice
president, whether or not designated by a number or a word or words added before or after the title
“vice president.”

          “Yield to Maturity” means the yield to maturity, computed at the time of issuance of a
Security (or, if applicable, at the most recent redetermination of interest on such Security)

10

 

and as set forth in such Security in accordance with generally accepted United States bond
yield computation principles.

          SECTION 102. Compliance Certificates and Opinions. Upon any application or request
by the Company to the Trustee to take any action under any provision of this Indenture, the Company
shall furnish to the Trustee an Officer’s Certificate stating that all conditions precedent, if
any, provided for in this Indenture (including any covenant or condition compliance with which
constitutes a condition precedent) relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if
any, have been complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or opinion need be
furnished.

          Every certificate or opinion with respect to compliance with a covenant or condition provided
for in this Indenture (other than pursuant to Section 1004) shall include:

     (1) a statement that each individual signing such certificate or opinion has read
such covenant or condition and the definitions herein relating thereto;

     (2) a brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion are based;

     (3) a statement that, in the opinion of each such individual, he has made such
examination or investigation as is necessary to enable him to express an informed opinion
as to whether or not such covenant or condition has been complied with; and

     (4) a statement as to whether, in the opinion of each such individual, such covenant
or condition has been complied with.

          SECTION 103. Form of Documents Delivered to Trustee. In any case where several
matters are required to be certified by, or covered by an opinion of, any specified Person, it is
not necessary that all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such matters in one or
several documents.

          Any certificate or opinion of an officer of the Company may be based, insofar as it relates to
legal matters, upon a certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which his certificate or opinion is based are
erroneous. Any Officer’s Certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by an Officer of the Company
stating that the information with respect to such factual matters is in the possession of the
Company unless such Officer or counsel knows, or in the exercise of reasonable care should

11

 

know, that the certificate or opinion or representations with respect to such matters are
erroneous.

          Where any Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this Indenture, they may,
but need not, be consolidated and form one instrument.

          SECTION 104. Acts of Holders. Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders
of the Outstanding Securities of all series or one or more series, as the case may be, may be
embodied in and evidenced by one or more instruments of substantially similar tenor signed by such
Holders in person or by agents duly appointed in writing. Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to be given or taken
by Holders of Securities of such series may, alternatively, be embodied in and evidenced by the
record of Holders of Securities of such series voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Securities of such series duly
called and held in accordance with the provisions of Article Fifteen, or a combination of such
instruments and any such record. Except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company or to all of them. Such instrument or
instruments and any such record (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the “Act” of the Holders signing such instrument or instruments or so
voting at any such meeting. Proof of execution of any such instrument or of a writing appointing
any such agent, or of the holding by any Person of a Security, shall be sufficient for any purpose
of this Indenture (subject to section 315 of the TIA) and conclusive in favor of the Trustee, the
Company and any agent of the Trustee or the Company, if made in the manner provided in this
Section. The record of any meeting of Holders of Securities shall be proved in the manner provided
in Section 1506.

          Without limiting the generality of this Section 104, unless otherwise provided in or pursuant
to this Indenture, a Holder, including a Depositary that is a Holder of a global Security
(including through its nominee), may make, give or take, by a proxy or proxies, duly appointed in
writing, any request, demand, authorization, direction, notice, consent, waiver or other Act
provided in or pursuant to this Indenture or Securities to be made, given or taken by the Holders,
and a Depositary that is a Holder of a global Security may provide its proxy or proxies to the
beneficial owners of interests in such global Security through such Depositary’s standing
instructions and customary practices.

          (a) The fact and date of the execution by any Person of any such instrument or writing may be
proved by the affidavit of a witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual capacity, such certificate
or affidavit shall also constitute sufficient proof of authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other reasonable manner that the Trustee deems sufficient.

12

 

          (b) The principal amount and serial numbers of Registered Securities held by any Person, and
the date of holding the same, shall be proved by the Security Register.

          (c) The principal amount and serial numbers of Bearer Securities held by any Person, and the
date of holding the same, may be proved by the production of such Bearer Securities or by a
certificate executed, as depositary, by any trust company, bank, banker or other depositary
reasonably acceptable to the Company, wherever situated, if such certificate shall be deemed by
the Trustee to be satisfactory, showing that at the date therein mentioned such Person had on
deposit with such depositary, or exhibited to it, the Bearer Securities therein described; or such
facts may be proved by the certificate or affidavit of the Person holding such Bearer Securities,
if such certificate or affidavit is deemed by the Trustee to be satisfactory. The Trustee and the
Company may assume that such ownership of any Bearer Security continues until (1) another
certificate or affidavit bearing a later date issued in respect of the same Bearer Security is
produced, or (2) such Bearer Security is produced to the Trustee by some other Person, or (3) such
Bearer Security is surrendered in exchange for a Registered Security, or (4) such Bearer Security
is no longer Outstanding. The principal amount and serial numbers of Bearer Securities held by
any Person, and the date of holding the same, may also be proved in any other reasonable manner
that the Trustee deems sufficient.

          (d) If the Company shall solicit from the Holders of Registered Securities any request,
demand, authorization, direction, notice, consent, waiver or other Act, the Company may, at its
option, in or pursuant to a Board Resolution, fix in advance a record date for the determination
of Holders entitled to give such request, demand, authorization, direction, notice, consent,
waiver or other Act, but the Company shall have no obligation to do so. Notwithstanding TIA
Section 316(c), such record date shall be the record date specified in or pursuant to such Board
Resolution, which shall be a date not earlier than the date 30 days prior to the first
solicitation of Holders generally in connection therewith and not later than the date such
solicitation is completed. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after such record date, but
only the Holders of record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Securities
shall be computed as of such record date; provided that no such authorization, agreement or
consent by the Holders on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than eleven months after the
record date.

          (e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of
the Holder of any Security shall bind every future Holder of the same Security and the Holder of
every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the Trustee, any Security
Registrar, any Paying Agent, any Authenticating Agent, the Company in reliance thereon, whether or
not notation of such Act is made upon such Security.

13

 

          SECTION 105. Notices, etc. to Trustee or the Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other documents provided or
permitted by this Indenture to be made upon, given or furnished to, or filed with,

     (1) the Trustee by any Holder or by the Company shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing (including telecopy to (612)
217-5651) to or with the Trustee at its Corporate Trust Office, Attention: HeartWare
Administrator, or

     (2) the Company by the Trustee or by any Holder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid or by overnight delivery service, to the Company addressed to
it at the address of the Company’s principal office specified in the first paragraph of
this Indenture, to the attention of its General Counsel, or at any other address
previously furnished in writing to the Trustee by the Company.

          SECTION 106. Notice to Holders; Waiver. Except as otherwise expressly provided
herein or otherwise specified with respect to any series of Securities pursuant to Section 301,
where this Indenture provides for notice of any event to Holders of Registered Securities by the
Company or the Trustee, such notice shall be sufficiently given if in writing and mailed,
first-class postage prepaid, to each such Holder affected by such event, at his address as it
appears in the Security Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to Holders of Registered
Securities is given by mail, neither the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to
other Holders of Registered Securities or the sufficiency of any notice to Holders of Bearer
Securities given as provided. Any notice mailed to a Holder in the manner herein prescribed shall
be conclusively deemed to have been received by such Holder, whether or not such Holder actually
receives such notice.

          In case, by reason of the suspension of or irregularities in regular mail service or by reason
of any other cause, it shall be impractical to mail notice of any event to Holders of Registered
Securities when such notice is required to be given pursuant to any provision of this Indenture,
then any manner of giving written notice as shall be satisfactory to the Trustee shall be deemed to
be sufficient giving of such notice for every purpose hereunder.

          Except as otherwise expressly provided herein or otherwise specified with respect to any
series of Securities pursuant to Section 301, where this Indenture provides for notice to Holders
of Bearer Securities of any event, such notice shall be sufficiently given to Holders of Bearer
Securities if published in an Authorized Newspaper in The City of New York and in such other city
or cities as may be specified in respect of such Securities on a Business Day at least twice, the
first such publication to be not earlier than the earliest date, and not later than the latest
date, prescribed for the giving of such notice. Any such notice shall be deemed to have been given
on the date of such publication or, if published more than once, on the date of the first such
publication.

14

 

          If by reason of the suspension of publication of any Authorized Newspaper or Authorized
Newspapers or by reason of any other cause, it shall be impracticable to publish any notice to
Holders of Bearer Securities as provided above, then such notification to Holders of Bearer
Securities as shall be given with the approval of the Trustee shall constitute sufficient written
notice to such Holders for every purpose hereunder. Neither the failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in any notice so
published, shall affect the sufficiency of such notice with respect to other Holders of Bearer
Securities or the sufficiency of any notice to Holders of Registered Securities given as provided
herein.

          Any request, demand, authorization, direction, notice, consent or waiver required or permitted
under this Indenture shall be in the English language, except that any published notice may be in
an official language of the country of publication.

          Where this Indenture provides for notice in any manner, such notice may be waived in writing
by the Person entitled to receive such notice, either before or after the event, and such waiver
shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.

          SECTION 107. Effect of Headings and Table of Contents. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not affect the
construction hereof.

          SECTION 108. Successors and Assigns. All covenants and agreements in this Indenture
by the Company shall bind its successors and assigns, whether so expressed or not.

          SECTION 109. Separability Clause. In case any provision in this Indenture or in any
Security or any coupon shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

          SECTION 110. Benefits of Indenture. Nothing in this Indenture or in the Securities
or coupons, express or implied, shall give to any Person, other than the parties hereto, any
Authenticating Agent, any Paying Agent, any Securities Registrar and their successors hereunder and
the Holders of Securities or coupons, any benefit or any legal or equitable right, remedy or claim
under this Indenture.

          SECTION 111. Governing Law. THIS INDENTURE AND THE SECURITIES AND COUPONS SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THIS INDENTURE IS
SUBJECT TO THE PROVISIONS OF THE TRUST INDENTURE ACT THAT ARE REQUIRED TO BE PART OF THIS INDENTURE
AND SHALL, TO THE EXTENT APPLICABLE, BE GOVERNED BY SUCH PROVISIONS.

          SECTION 112. Legal Holidays. Unless otherwise specified in or pursuant to this
Indenture or any Securities, in any case where any Interest Payment Date, Redemption Date,
Repayment Date, sinking fund payment date or Stated Maturity or Maturity of any Security shall not
be a Business Day at any Place of Payment, then payment of principal (or premium, if any)

15

 

or interest, if any, need not be made at such Place of Payment on such date, but may be made
on the next succeeding Business Day at such Place of Payment with the same force and effect as if
made on such Interest Payment Date, Redemption Date, Repayment Date, sinking fund payment date,
Stated Maturity or Maturity, as the case may be, provided that no interest shall accrue on the
amount so payable for the period from and after such Interest Payment Date, Redemption Date,
Repayment Date, sinking fund payment date, Stated Maturity or Maturity, as the case may be, to such
next succeeding Business Day.

          SECTION 113. No Recourse. No recourse for the payment of the principal of or
premium, if any, or interest on any Security or any coupons appertaining thereto, or for any claim
based thereon or otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in this Indenture or in any supplemental indenture, or in any
Security or any coupons appertaining thereto, or because of the creation of any indebtedness
represented thereby, shall be had against any director, officer, employee, or stockholder as such,
past, present or future, of the Company or any of its Affiliates or any successor Person of the
Company, either directly or through the Company or any of its Affiliates or any successor Person of
the Company, whether by virtue of any constitution, statute or rule of law, or by the enforcement
of any assessment or penalty or otherwise; it being expressly understood that all such liability is
hereby expressly waived and released as a condition of, and as a consideration for, the execution
of this Indenture and the issue of the Securities.

          SECTION 114. Incorporation by Reference of Trust Indenture Act. Whenever this
Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made
a part of this Indenture.

          The following TIA terms used in this Indenture have the following meanings:

	 	(i)	 	“indenture securities” means the Securities;
	 
	 	(ii)	 	“indenture security Holder” means a Holder of a Security;
	 
	 	(iii)	 	“indenture to be qualified” means this Indenture;
	 
	 	(iv)	 	“indenture trustee” or “institutional trustee” means the Trustee; and
	 
	 	(v)	 	“obligor” on the Securities means the Company and any successor
obligor upon the Securities.

          All other terms used in this Indenture that are defined by the TIA, defined by TIA reference
to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.

          SECTION 115. Rules of Construction. Unless the context otherwise requires:

	 	(i)	 	a term has the meaning assigned to it;
	 
	 	(ii)	 	an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;

16

 

	 	(iii)	 	“or” is not exclusive;
	 
	 	(iv)	 	words in the singular include the plural, and in the plural
include the singular; and
	 
	 	(v)	 	provisions apply to successive events and transactions.

          SECTION 116. U.S.A. Patriot Act. The parties hereto acknowledge that in accordance
with Section 326 of the U.S.A. Patriot Act Wilmington Trust FSB, like all financial institutions
and in order to help fight the funding of terrorism and money laundering, is required to obtain,
verify, and record information that identifies each person or legal entity that establishes a
relationship or opens an account. The parties to this Indenture agree that they will provide
Wilmington Trust FSB with such information as it may request in order for Wilmington Trust FSB to
satisfy the requirements of the U.S.A. Patriot Act.

ARTICLE TWO

SECURITY FORMS

          SECTION 201. Forms Generally. The Registered Securities, if any, of each series,
the Bearer Securities, if any, of each series and related coupons, the temporary global Securities
of each series, if any, and the permanent global Securities of each series, if any, shall be in
substantially the forms as shall be established by, or pursuant to a Board Resolution or, subject
to Section 303, set forth in, or determined in the manner provided in, an Officer’s Certificate
pursuant to a Board Resolution of the Company, or in one or more indentures supplemental hereto, in
each case with such appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be required to comply with
the rules of any securities exchange or as may, consistently herewith, be determined by the
officers of the Company executing such Securities or coupons as evidenced by their execution of
such Securities or coupons. If the forms of Securities or coupons of any series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall
be certified by the Secretary or Assistant Secretary of the Company, and delivered to the Trustee
at or prior to the delivery of the Company Order contemplated by Section 303 for the authentication
and delivery of such Securities or coupons. Any portion of the text of any Security may be set
forth on the reverse thereof, with an appropriate reference thereto on the face of the Security.

          Unless otherwise specified as contemplated by Section 301, Bearer Securities shall have
interest coupons attached.

          The Trustee’s certificate of authentication on all Securities shall be in substantially the
form set forth in this Article.

          The definitive Securities and coupons, if any, shall be printed, lithographed or engraved on
steel-engraved borders or may be produced in any other manner, all as determined

17

 

by the officers of the Company executing such Securities or coupons, as evidenced by their
execution of such Securities or coupons.

          SECTION 202. Form of Trustee’s Certificate of Authentication. Subject to Section
611, the Trustee’s certificate of authentication shall be in substantially the following form:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

          Dated: ____________________

          This is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.

	 	 	 	 	 
	 	Wilmington Trust FSB,

     as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 

          SECTION 203. Securities Issuable in Global Form. If Securities of or within a
series are issuable in global form, as specified as contemplated by Section 301, then,
notwithstanding clause (8) of Section 301, any such Security shall represent such of the
Outstanding Securities of such series as shall be specified therein and may provide that it shall
represent the aggregate amount of Outstanding Securities of such series from time to time endorsed
thereon and that the aggregate amount of Outstanding Securities of such series represented thereby
may from time to time be increased or decreased to reflect exchanges. Any endorsement of a
Security in global form to reflect the amount, or any increase or decrease in the amount, of
Outstanding Securities represented thereby shall be made by the Trustee in such manner and upon
instructions given by such Person or Persons as shall be specified therein or in the Company Order
to be delivered to the Trustee pursuant to Section 303 or Section 304. Subject to the provisions
of Section 303 and, if applicable, Section 304, the Trustee shall deliver and redeliver any
Security in permanent global form in the manner and upon instructions given by the Person or
Persons specified therein or in the applicable Company Order. If a Company Order pursuant to
Section 303 or Section 304 has been, or simultaneously is, delivered, any instructions by the
Company with respect to endorsement or delivery or redelivery of a Security in global form shall be
in writing but need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel.

          The provisions of the last sentence of Section 303 shall apply to any Security represented by
a Security in global form if such Security was never issued and sold by the Company and the Company
delivers to the Trustee the Security in global form together with written instructions (which need
not comply with Section 102 and need not be accompanied by an Opinion of Counsel) with regard to
the reduction in the principal amount of Securities represented thereby, together with the written
statement contemplated by the last sentence of Section 303.

18

 

          Notwithstanding any provisions of Section 307 to the contrary, unless otherwise specified as
contemplated by Section 301, payment of principal of (and premium, if any) and interest, if any, on
any Security in global form shall be made to the Person or Persons specified therein.

          Notwithstanding the provisions of Section 309 and except as provided in the preceding
paragraph, the Company, the Trustee and any agent of the Company or the Trustee shall treat as the
Holder of such principal amount of Outstanding Securities represented by a permanent global
Security (i), in the case of a global Registered Security, the Holder thereof, or (ii) in the case
of a global Bearer Security, Euroclear or Clearstream.

ARTICLE THREE

THE SECURITIES

          SECTION 301. Amount Unlimited; Issuable in Series. The aggregate principal amount
of Securities which may be authenticated and delivered under this Indenture is unlimited.

          The Securities may be issued in one or more series. There shall be established in one or more
Board Resolutions of the Company or pursuant to authority granted by one or more Board Resolutions
of the Company and, subject to Section 303, set forth in, or determined in the manner provided in,
an Officer’s Certificate, or established in one or more indentures supplemental hereto, prior to
the issuance of Securities of any series, any or all of the following, as applicable (each of which
(except for the matters set forth in clauses (1), (2) and (17) below), if so provided, may be
determined from time to time by the Company with respect to unissued Securities of the series and
set forth in such Securities of the series when issued from time to time):

     (1) title of the Securities of the series (which shall distinguish the Securities of
the series from all other series of Securities) and whether such Securities are senior or
subordinated;

     (2) any limit upon the aggregate principal amount of the Securities of the series
that may be authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Section 304, 305, 306, 906, 1107 or
1305);

     (3) the date or dates, or the method by which such date or dates will be determined
or extended, on which the principal of the Securities of the series is payable;

     (4) the rate or rates at which the Securities of the series shall bear interest, if
any, or the method by which such rate or rates shall be determined, the date or dates from
which any such interest shall accrue, or the method by which such date or dates shall be
determined, the Interest Payment Dates on which such interest shall be payable, the right,
if any, of the Company to defer or extend an Interest Payment Date, and the

19

 

Regular Record Date, if any, for the interest payable on any Registered Security on
any Interest Payment Date, or the method by which such date or dates shall be determined,
and the basis upon which interest shall be calculated if other than on the basis of a
360-day year of twelve 30-day months;

     (5) the place or places where the principal of (and premium, if any) and interest, if
any, on Securities of the series shall be payable (which in the case of Bearer Securities
shall be outside the United States), where any Registered Securities of the series may be
surrendered for registration of transfer, where Securities of the series may be
surrendered for exchange, where Securities of the series that are convertible or
exchangeable may be surrendered for conversion or exchange, as applicable, and, if
different than the location specified in Section 105, the place or places where notices or
demands to or upon the Company in respect of the Securities of the series and this
Indenture may be served;

     (6) the period or periods within which, the price or prices at which, the Currency in
which, and other terms and conditions upon which, Securities of the series may be
redeemed, in whole or in part, at the option of the Company, if the Company is to have
that option;

     (7) the obligation, if any, of the Company to redeem, repay or purchase Securities of
the series pursuant to any sinking fund or analogous provision or at the option of a
Holder thereof, and the period or periods within which or the date or dates on which, the
price or prices at which, the Currency in which, and other terms and conditions upon
which, Securities of the series shall be redeemed, repaid or purchased, in whole or in
part, pursuant to such obligation;

     (8) if other than minimum denominations of $1,000 and integral multiples of $1,000
above such minimum denomination, the denomination or denominations in which any Registered
Securities of the series shall be issuable and, if other than denominations of $5,000, the
denomination or denominations in which any Bearer Securities of the series shall be
issuable;

     (9) if other than the Trustee, the identity of each Security Registrar and/or Paying
Agent;

     (10) if other than the principal amount thereof, the portion of the principal amount
of Securities of the series that shall be payable upon an acceleration of the Maturity
thereof pursuant to Section 502, upon redemption of the Securities of the series which are
redeemable before their Stated Maturity, upon surrender for repayment at the option of the
Holder, or which the Trustee shall be entitled to claim pursuant to Section 504 or the
method by which such portion shall be determined;

     (11) if other than Dollar, the Currency or Currencies in which payment of the
principal of (or premium, if any) or interest, if any, on the Securities of the series
shall be made or in which the Securities of the series shall be denominated and the
particular

20

 

provisions applicable thereto in accordance with, in addition to or in lieu of any of
the provisions of Section 312;

     (12) whether the amount of payments of principal of (or premium, if any) or interest,
if any, on the Securities of the series may be determined with reference to an index,
formula or other method (which index, formula or method may be based, without limitation,
on one or more Currencies, commodities, equity indices or other indices), and the manner
in which such amounts shall be determined;

     (13) whether the principal of (or premium, if any) or interest, if any, on the
Securities of the series are to be payable, at the election of the Company or a Holder
thereof, in a Currency other than that in which such Securities are denominated or stated
to be payable, the period or periods within which (including the Election Date), and the
terms and conditions upon which, such election may be made, and the time and manner of
determining the exchange rate between the Currency in which such Securities are
denominated or stated to be payable and the Currency in which such Securities are to be so
paid, in each case in accordance with, in addition to or in lieu of any of the provisions
of Section 312;

     (14) the designation of the initial Exchange Rate Agent, if any, or any depositaries;

     (15) if Sections 1402 and/or 1403 are not applicable to the Securities of the series
and any provisions in modification of, in addition to or in lieu of any of the provisions
of Article Fourteen that shall be applicable to the Securities of the series;

     (16) provisions, if any, granting special rights to the Holders of Securities of the
series upon the occurrence of such events as may be specified;

     (17) any deletions from, modifications of or additions to the Events of Default or
covenants of the Company or with respect to Securities of the series, whether or not such
Events of Default or covenants are consistent with the Events of Default or covenants set
forth herein;

     (18) whether Securities of the series are to be issuable as Registered Securities,
Bearer Securities (with or without coupons) or both, any restrictions applicable to the
offer, sale or delivery of Bearer Securities, whether such Securities are to be issuable
initially in temporary global form, whether such Securities are to be issuable in
permanent global form with or without coupons and, if so, whether beneficial owners of
interests in any such permanent global Security may exchange such interests for definitive
Securities of the series and of like tenor of any authorized form and denomination and the
circumstances under which any such exchanges may occur, if other than in the manner
provided in Section 305, whether Registered Securities of the series may be exchanged for
Bearer Securities of the series (if permitted by applicable laws and regulations), and
the circumstances under which and the place or places where any such exchanges may be made
and if Securities of the series are to be issuable in global form, the identity of any
Depositary therefor;

21

 

     (19) the date as of which any Bearer Securities of the series and any temporary
global Security representing Outstanding Bearer Securities of the series shall be dated if
other than the date of original issuance of the first Security of the series to be issued;

     (20) the Person to whom any interest on any Registered Security of the series shall
be payable, if other than the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular Record Date
for such interest, the manner in which, or the Person to whom, any interest on any Bearer
Security of the series shall be payable, if otherwise than upon presentation and surrender
of the coupons appertaining thereto as they severally mature, and the extent to which, or
the manner in which, any interest payable on a temporary global Security on an Interest
Payment Date will be paid if other than in the manner provided in Section 304; and the
extent to which, or the manner in which, any interest payable on a permanent global
Security on an Interest Payment Date will be paid if other than in the manner provided in
Section 307;

     (21) if Securities of the series are to be issuable in definitive form (whether upon
original issue or upon exchange of a temporary Security of such series) only upon receipt
of certain certificates or other documents or satisfaction of other conditions, then the
form and/or terms of such certificates, documents or conditions;

     (22) if the Securities of the series are to be issued upon the exercise of warrants,
the time, manner and place for such Securities to be authenticated and delivered;

     (23) whether, under what circumstances and the Currency in which the Company will pay
Additional Amounts as contemplated by Section 1008 on the Securities of the series to any
Holder (including any modification to the definition of such term) in respect of any tax,
assessment or governmental charge and, if so, whether the Company will have the option to
redeem such Securities rather than pay such Additional Amounts (and the terms of any such
option);

     (24) if the Securities of the series are to be convertible into or exchangeable for
any securities of any Person (including the Company), the terms and conditions upon which
such Securities will be so convertible or exchangeable;

     (25) whether the Securities of the series are subject to subordination and, if so,
the terms of such subordination; and

     (26) any other terms, conditions, rights and preferences (or limitations on such
rights and preferences) relating to the series (which terms shall not be inconsistent with
the requirements of the Trust Indenture Act or the provisions of this Indenture).

          All Securities of any one series and the coupons appertaining to any Bearer Securities of such
series shall be substantially identical except, in the case of Registered Securities, as to
denomination and except as may otherwise be provided in or pursuant to such Board Resolution or
pursuant to authority granted by one or more Board Resolutions (subject to Section 303) and set
forth in such Officer’s Certificate or in any such indenture supplemental

22

 

hereto. Not all Securities of any one series need be issued at the same time, and, unless
otherwise provided, a series may be reopened, without the consent of the Holders, for issuances of
additional Securities of such series.

          If any of the terms of the Securities of any series are established by action taken pursuant
to one or more Board Resolutions or pursuant to authority granted by one or more Board Resolutions,
such Board Resolutions shall be delivered to the Trustee at or prior to the issuance of the first
Security of such series.

          SECTION 302. Denominations. The Securities of each series shall be issuable in such
denominations as shall be specified as contemplated by Section 301. With respect to Securities of
any series denominated in Dollars, in the absence of any such provisions with respect to the
Securities of such series, the Registered Securities of such series, other than Registered
Securities issued in global form (which may be of any denomination), shall be issuable in a minimum
denomination of $1,000 and integral multiples of $1,000 above such minimum denomination and the
Bearer Securities of such series, other than the Bearer Securities issued in global form (which may
be of any denomination), shall be issuable in the denomination of $5,000.

          SECTION 303. Execution, Authentication, Delivery and Dating. The Securities and any
coupons appertaining thereto shall be executed on behalf of the Company by an individual or
individuals duly authorized by the Board of Directors of the Company to execute the Securities and
the coupons. The signature of any of these authorized persons on the Securities or coupons may be
the manual or facsimile signatures of the present or any future such authorized person and may be
imprinted or otherwise reproduced on the Securities.

          Securities or coupons bearing the manual or facsimile signatures of individuals who were at
the time of such execution of the Securities or coupons the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not hold such offices at
the date of such Securities.

          At any time and from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities of any series, together with any coupons appertaining thereto, duly
executed by the Company, to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance with such Company
Order shall authenticate and deliver such Securities; provided, however, that, in
connection with its original issuance, no Bearer Security shall be mailed or otherwise delivered to
any location in the United States; and provided further that, unless otherwise
specified with respect to any series of Securities pursuant to Section 301, a Bearer Security may
be delivered in connection with its original issuance only if the Person entitled to receive such
Bearer Security shall have furnished a certificate in the form set forth in Exhibit A-1 to this
Indenture (or such other certificate as may be specified with respect to any series of Security
pursuant to Section 301), dated no earlier than 15 days prior to the earlier of the date on which
such Bearer Security is delivered and the date on which any temporary Security first becomes
exchangeable for such Bearer Security in accordance with the terms of such temporary Security and
this Indenture. If any Security shall be represented by a permanent global Bearer

23

 

Security, then, for purposes of this Section and Section 304, the notation of a beneficial
owner’s interest therein upon original issuance of such Security or upon exchange of a portion of a
temporary global Security shall be deemed to be delivery in connection with its original issuance
of such beneficial owner’s interest in such permanent global Security. Except as permitted by
Section 306, the Trustee shall not authenticate and deliver any Bearer Security unless all
appurtenant coupons for interest then matured have been detached and cancelled. If not all the
Securities of any series are to be issued at one time and if the Board Resolution, Officer’s
Certificate pursuant to a Board Resolution, or supplemental indenture establishing such series
shall so permit, such Company Order may set forth procedures acceptable to the Trustee for the
issuance of such Securities and determining terms of particular Securities of such series such as
interest rate or formula, maturity, any redemption or repayment provisions, date of issuance and
date from which interest shall accrue.

          In authenticating such Securities, and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall receive, and shall be fully protected
in conclusively relying upon, an Opinion of Counsel stating in effect (subject to customary
exceptions):

     (i) that the form or forms of such Securities and any coupons have been established in
conformity with the provisions of this Indenture;

     (ii) that the terms of such Securities and any coupons have been established in
conformity with the provisions of this Indenture;

     (iii) that such Securities and coupons, when completed by appropriate insertions and
executed and delivered by the Company to the Trustee for authentication in accordance with
this Indenture, authenticated and delivered by the Trustee in accordance with this Indenture
and issued in the manner and subject to any conditions specified in such Opinion of Counsel,
will be the legal, valid and binding obligations of the Company enforceable in accordance
with their terms, subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors’ rights generally
(including without limitation on all laws relating to fraudulent transfers) and to general
principles of equity;

     (iv) that all laws and requirements in respect of the execution and delivery by the
Company of such Securities, coupons, if any, and of the supplemental indentures, if any,
have been complied with and that authentication and delivery of such Securities and coupons,
if any, and the execution and delivery of the supplemental indenture, if any, by the Trustee
will not violate the terms of the Indenture;

     (v) that the Company has the corporate power to issue such Securities and any coupons
and has duly taken all necessary corporate action with respect to such issuance; and

     (vi) that the issuance of such Securities and coupons, if any, will not contravene the
articles of incorporation or by-laws of the Company or result in any

24

 

violation of any of the terms or provisions of any law or regulation or of any
indenture, mortgage or other agreement known to such Counsel by which the Company is bound.

          Notwithstanding the provisions of Section 301 and of the preceding two paragraphs, if not all
the Securities of any series are to be issued at one time, it shall not be necessary to deliver the
Officer’s Certificate otherwise required pursuant to Section 301 or the Company Order and Opinion
of Counsel otherwise required pursuant to the preceding two paragraphs prior to or at the time of
issuance of each Security, but such documents shall be delivered prior to or at the time of
issuance of the first Security of such series.

          The Trustee shall not be required to authenticate and deliver any such Securities if the issue
of such Securities pursuant to this Indenture is unlawful or will affect the Trustee’s own rights,
duties or immunities under the Securities and this Indenture or otherwise in a manner which is not
reasonably acceptable to the Trustee.

          Each Registered Security shall be dated the date of its authentication and each Bearer
Security shall be dated as of the date specified as contemplated by Section 301.

          No Security or coupon shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose unless there appears on such Security a certificate of authentication
substantially in the form provided for herein duly executed by the Trustee by manual signature of
an authorized signatory, and such certificate upon any Security shall be conclusive evidence, and
the only evidence, that such Security has been duly authenticated and delivered hereunder and is
entitled to the benefits of this Indenture.

          Notwithstanding the foregoing, if any Security shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall deliver such Security to
the Trustee for cancellation as provided in Section 310 together with a written statement (which
need not comply with Section 102 and need not be accompanied by an Opinion of Counsel) stating that
such Security has never been issued and sold by the Company, for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.

          SECTION 304. Temporary Securities. Pending the preparation of definitive Securities
of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued, in registered form or, if authorized, in bearer form
with one or more coupons or without coupons, and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities or coupons may
determine, as conclusively evidenced by their execution of such Securities or coupons, as the case
may be. Such temporary Securities may be in global form.

          Except in the case of temporary Securities in global form (which shall be exchanged in
accordance with the provisions of the following paragraphs), if temporary Securities of any series
are issued, the Company will cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of definitive Securities of such

25

 

series, the temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such series at the office
or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities of any series (accompanied by
any unmatured coupons appertaining thereto), the Company shall execute and the Trustee, upon
receipt of a written instruction, shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of the same series and of like tenor of authorized
denominations; provided, however, that no definitive Bearer Security shall be delivered in exchange
for a temporary Registered Security; and provided further that a definitive Bearer
Security shall be delivered in exchange for a temporary Bearer Security only in compliance with the
conditions set forth in Section 303. Until so exchanged the temporary Securities of any series
shall in all respects be entitled to the same benefits under this Indenture as definitive
Securities of such series.

          If temporary Securities of any series are issued in global form, any such temporary global
Security shall, unless otherwise provided therein, be delivered to the London office of a
depositary or common depositary (the “Common Depositary”), for the benefit of Euroclear and
Clearstream, for credit to the respective accounts of the beneficial owners of such Securities (or
to such other accounts as they may direct).

          Without unnecessary delay but in any event not later than the date specified in, or determined
pursuant to the terms of, any such temporary global Security (the “Exchange Date”), the Company
shall deliver to the Trustee definitive Securities of the same series executed by the Company, in
aggregate principal amount equal to the principal amount of such temporary global Security. On or
after the Exchange Date such temporary global Security shall be surrendered by the Common
Depositary to the Trustee, as the Company’s agent for such purpose, to be exchanged, in whole or
from time to time in part, for definitive Securities of the same series without charge and the
Trustee shall authenticate and deliver, in exchange for each portion of such temporary global
Security, an equal aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such temporary global Security to be
exchanged. The definitive Securities to be delivered in exchange for any such temporary global
Security shall be in bearer form, registered form, permanent global bearer form or permanent global
registered form, or any combination thereof, as specified as contemplated by Section 301, and, if
any combination thereof is so specified, as requested by the beneficial owner thereof, provided
that, unless otherwise specified in such temporary global Security, upon such presentation by the
Common Depositary, such temporary global Security is accompanied by a certificate dated the
Exchange Date or a subsequent date and signed by Euroclear as to the portion of such temporary
global Security held for its account then to be exchanged and a certificate dated the Exchange Date
or a subsequent date and signed by Clearstream as to the portion of such temporary global Security
held for its account then to be exchanged, each in the form set forth in Exhibit A-2 to this
Indenture (or in such other form as may be established pursuant to Section 301); and provided,
however, that definitive Bearer Securities shall be delivered in exchange for a portion of a
temporary global Security only in compliance with the requirements of Section 303.

          Unless otherwise specified in such temporary global Security, the interest of a beneficial
owner of a temporary global Security shall be exchanged for definitive Securities of

26

 

the same series and of like tenor following the Exchange Date when the account holder
instructs Euroclear or Clearstream, as the case may be, to request such exchange on his behalf and
delivers to Euroclear or Clearstream, as the case may be, a certificate in the form set forth in
Exhibit A-1 to this Indenture (or in such other form as may be established pursuant to Section
301), dated no earlier than 15 days prior to the Exchange Date, copies of which certificate shall
be available from the offices of Euroclear and Clearstream, the Trustee, any Authenticating Agent
appointed for such series of Securities and each Paying Agent. Unless otherwise specified in such
temporary global Security, any such exchange shall be made free of charge to the beneficial owners
of such temporary global Security, except that a Person receiving definitive Securities must bear
the cost of insurance, postage, transportation and the like in the event that such Person does not
take delivery of such definitive Securities in person at the offices of Euroclear or Clearstream.
Definitive Securities in bearer form to be delivered in exchange for any portion of a temporary
global Security shall be delivered only outside the United States.

          Until exchanged in full as hereinabove provided, the temporary Securities of any series shall
in all respects be entitled to the same benefits under this Indenture as definitive Securities of
the same series and of like tenor authenticated and delivered hereunder, except that, unless
otherwise specified as contemplated by Section 301, interest payable on a temporary global Security
on an Interest Payment Date for Securities of such series occurring prior to the applicable
Exchange Date shall be payable to Euroclear and Clearstream on such Interest Payment Date upon
delivery by Euroclear and Clearstream to the Trustee or the applicable Paying Agent of a
certificate or certificates in the form set forth in Exhibit A-2 to this Indenture (or in such
other form as may be established pursuant to Section 301), for credit without further interest
thereon on or after such Interest Payment Date to the respective accounts of the Persons who are
the beneficial owners of such temporary global Security on such Interest Payment Date and who have
each delivered to Euroclear or Clearstream, as the case may be, a certificate dated no earlier than
15 days prior to the Interest Payment Date occurring prior to such Exchange Date in the form set
forth in Exhibit A-1 to this Indenture (or in such other form as may be established pursuant to
Section 301). Notwithstanding anything to the contrary herein contained, the certifications made
pursuant to this paragraph shall satisfy the certification requirements of the preceding two
paragraphs of this Section and of the third paragraph of Section 303 of this Indenture and the
interests of the Persons who are the beneficial owners of the temporary global Security with
respect to which such certification was made will be exchanged for definitive Securities of the
same series and of like tenor on the Exchange Date or the date of certification if such date occurs
after the Exchange Date, without further act or deed by such beneficial owners. Except as
otherwise provided in this paragraph, no payments of principal (or premium, if any) or interest, if
any, owing with respect to a beneficial interest in a temporary global Security will be made unless
and until such interest in such temporary global Security shall have been exchanged for an interest
in a definitive Security. Any interest so received by Euroclear and Clearstream and not paid as
herein provided shall be returned to the Trustee or the applicable Paying Agent immediately prior
to the expiration of two years after such Interest Payment Date in order to be repaid to the
Company in accordance with (but otherwise subject to) Section 1003.

          SECTION 305. Registration, Registration of Transfer and Exchange. The Company or
the Trustee shall cause to be kept at the Corporate Trust Office of the Trustee a register for each
series of Securities (the registers maintained in the Corporate Trust Office of the Trustee and in
any other office or agency of the Company in a Place of Payment being herein

27

 

sometimes collectively referred to as the “Security Register”) in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the registration of
Registered Securities and of transfers of Registered Securities; provided, however, that there
shall be only one Security Register per series of Securities. The Security Register shall be in
written form or any other form capable of being converted into written form within a reasonable
time. At all reasonable times, the Security Register shall be open to inspection by the Trustee.
The Trustee is hereby initially appointed as security registrar (the “Security Registrar”) for the
purpose of registering Registered Securities and transfers of Registered Securities as herein
provided and for facilitating exchanges of temporary global Securities for permanent global
Securities or definitive Securities, or both, or of permanent global Securities for definitive
Securities, as herein provided.

          Upon surrender for registration of transfer of any Registered Security of any series at the
office or agency in a Place of Payment for that series, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee, one or more new
Registered Securities of the same series, of any authorized denominations and of a like aggregate
principal amount and tenor.

          At the option of the Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination and of a like aggregate
principal amount, upon surrender of the Registered Securities to be exchanged at such office or
agency. Whenever any Registered Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Registered Securities which the Holder
making the exchange is entitled to receive. Unless otherwise specified with respect to any series
of Securities as contemplated by Section 301, Bearer Securities may not be issued in exchange for
Registered Securities.

          If (but only if) expressly permitted in or pursuant to the applicable Board Resolution and
(subject to Section 303) set forth in the applicable Officer’s Certificate, or in any indenture
supplemental hereto, delivered as contemplated by Section 301, at the option of the Holder, Bearer
Securities of any series may be exchanged for Registered Securities of the same series of any
authorized denomination and of a like aggregate principal amount and tenor, upon surrender of the
Bearer Securities to be exchanged at any such office or agency, with all unmatured coupons and all
matured coupons in default thereto appertaining. If the Holder of a Bearer Security is unable to
produce any such unmatured coupon or coupons or matured coupon or coupons in default, any such
permitted exchange may be effected if the Bearer Securities are accompanied by payment in funds
acceptable to the Company in an amount equal to the face amount of such missing coupon or coupons,
or the surrender of such missing coupon or coupons may be waived by the Company and the Trustee if
there is furnished to them such security or indemnity as they may reasonably require to save each
of them and any Paying Agent harmless. If thereafter the Holder of such Security shall surrender
to any Paying Agent any such missing coupon in respect of which such a payment shall have been
made, such Holder shall be entitled to receive the amount of such payment; provided, however, that,
except as otherwise provided in Section 1002, interest represented by coupons shall be payable only
upon presentation and surrender of those coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series is surrendered at
any such office or agency in a permitted exchange for a Registered Security of the same series and
like

28

 

tenor after the close of business at such office or agency on (i) any Regular Record Date and
before the opening of business at such office or agency on the relevant Interest Payment Date, or
(ii) any Special Record Date and before the opening of business at such office or agency on the
related proposed date for payment of Defaulted Interest, such Bearer Security shall be surrendered
without the coupon relating to such Interest Payment Date or proposed date for payment, as the case
may be, and interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in respect of the
Registered Security issued in exchange for such Bearer Security, but will be payable only to the
Holder of such coupon when due in accordance with the provisions of this Indenture.

          Whenever any Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities that the Holder making the exchange is
entitled to receive.

          Notwithstanding the foregoing, except as otherwise specified as contemplated by Section 301,
any permanent global Security shall be exchangeable only as provided in this paragraph. Unless
otherwise specified pursuant to Section 301, all Bearer Securities issued in permanent global form,
upon request of the beneficial owner and in accordance with the following provisions, will be
exchangeable for definitive Bearer Securities. If any beneficial owner of an interest in a
permanent global Security is entitled to exchange such interest for Securities of such series and
of like tenor and principal amount of another authorized form and denomination, as specified as
contemplated by Section 301 and provided that any applicable notice provided in the permanent
global Security shall have been given, then without unnecessary delay but in any event not later
than the earliest date on which such interest may be so exchanged, the Company shall deliver to the
Trustee definitive Securities of that series in aggregate principal amount equal to the principal
amount of such beneficial owner’s interest in such permanent global Security, executed by the
Company. On or after the earliest date on which such interests may be so exchanged, such permanent
global Security shall be surrendered by the Common Depositary or such other depositary as shall be
specified in the Company Order with respect thereto to the Trustee, as the Company’s agent for such
purpose, to be exchanged, in whole or from time to time in part, for definitive Securities of the
same series without charge, and the Trustee shall authenticate and deliver, in exchange for each
portion of such permanent global Security, an equal aggregate principal amount of definitive
Securities of the same series of authorized denominations and of like tenor as the portion of such
permanent global Security to be exchanged which, unless the Securities of the series are not
issuable both as Bearer Securities and as Registered Securities, as specified as contemplated by
Section 301, shall be in the form of Bearer Securities or Registered Securities, or any combination
thereof, as shall be specified by the beneficial owner thereof; provided, however, that no such
exchanges may occur during a period beginning at the opening of business 15 days before any
selection of Securities to be redeemed and ending on the relevant Redemption Date if the Security
for which exchange is requested may be among those selected for redemption; and provided,
further, that no Bearer Security delivered in exchange for a portion of a permanent global
Security shall be mailed or otherwise delivered to any location in the United States. If a
definitive Registered Security is issued in exchange for any portion of a permanent global Security
after the close of business at the office or agency where such exchange occurs on (i) any Regular
Record Date and before the opening of business at such office or agency on the relevant Interest
Payment Date, or (ii) any

29

 

Special Record Date and before the opening of business at such office or agency on the related
proposed date for payment of Defaulted Interest, interest or Defaulted Interest, as the case may
be, will not be payable on such Interest Payment Date or proposed date for payment, as the case may
be, in respect of such definitive Registered Security, but will be payable on such Interest Payment
Date or proposed date for payment, as the case may be, only to the Person to whom interest in
respect of such portion of such permanent global Security is payable in accordance with the
provisions of this Indenture.

          All Securities issued upon any registration of transfer or exchange of Securities shall be the
valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Securities surrendered upon such registration of transfer or exchange.

          Every Registered Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Security Registrar) be duly endorsed, or be
accompanied by a written instrument of transfer, in form satisfactory to the Company and the
Security Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing.

          No service charge shall be made for any registration of transfer or exchange of Securities,
but the Company may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 906, 1107 or 1305 not involving any
transfer.

          If at any time the Depositary for any permanent global Registered Securities of any series
notifies the Company that it is unwilling or unable to continue as Depositary for such permanent
global Registered Securities or if at any time the Depositary for such permanent global Registered
Securities shall no longer be eligible to so continue under applicable law, the Company shall
appoint a successor Depositary eligible under applicable law with respect to such permanent global
Registered Securities. If a successor Depositary eligible under applicable law for such Registered
Global Securities is not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such ineligibility or if there has occurred and is continuing an Event
of Default with respect to the Securities of any series, the Company will execute, and the Trustee,
upon receipt of the Company Order for the authentication and delivery of definitive Registered
Securities of such series and tenor, will authenticate and deliver such definitive Registered
Securities of such series and tenor, in any authorized denominations, in an aggregate principal
amount equal to the principal amount of such permanent global Registered Securities, in exchange
for such permanent global Registered Securities.

          The Company may at any time and in its sole discretion determine that any permanent global
Registered Securities of any series shall no longer be maintained in global form. In such event
the Company will execute, and the Trustee, upon receipt of the Company’s order for the
authentication and delivery of definitive Registered Securities of such series and tenor, will
authenticate and deliver, definitive Registered Securities of such series and tenor in any
authorized denominations, in an aggregate principal amount equal to the principal amount of

30

 

such permanent global Registered Securities, in exchange for such permanent global Registered
Securities.

          The Company shall not be required (i) to issue, register the transfer of or exchange
Securities of any series during a period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of any Securities of that series that may be selected
for redemption under Section 1103 or 1203 and ending at the close of business on (A) if Securities
of the series are issuable only as Registered Securities, the day of the mailing of the relevant
notice of redemption and (B) if Securities of the series are issuable as Bearer Securities, the day
of the first publication of the relevant notice of redemption or, if Securities of the series are
also issuable as Registered Securities and there is no publication, the mailing of the relevant
notice of redemption, or (ii) to register the transfer of or exchange any Registered Security so
selected for redemption in whole or in part, except the unredeemed portion of any Security being
redeemed in part, or (iii) to exchange any Bearer Security so selected for redemption except that
such a Bearer Security may be exchanged for a Registered Security of that series and like tenor,
provided that such Registered Security shall be simultaneously surrendered for redemption, or (iv)
to issue, register the transfer of or exchange any Security which has been surrendered for
repayment at the option of the Holder, except the portion, if any, of such Security not to be so
repaid.

          The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer that may be imposed under this Indenture with respect to the
Securities of any series pursuant to the terms thereof established as contemplated by Section 301
or under applicable law with respect to any transfer of any interest in any such Security
(including any transfers between or among any depositary (including any Depositary or Common
Depositary), or its nominee, as a Holder of a Security issued in global form, any participants in
such depositary or owners or holders of beneficial interests in any such global Security) other
than to require delivery of such certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms of such Securities if and as
may be so established in respect of such Securities, and to examine the same to determine
substantial compliance as to form with the express requirements thereof.

          SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated
Security or a Security with a mutilated coupon appertaining to it is surrendered to the Trustee,
the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same series and of like tenor and principal amount and bearing a number not
contemporaneously Outstanding, with coupons corresponding to the coupons, if any, appertaining to
the surrendered Security.

          If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction
of the destruction, loss or theft of any Security or coupon and (ii) such security or indemnity as
may be required by them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security or coupon has been acquired by a
bona fide purchaser, the Company shall execute and upon Company Order the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Security or in exchange for
the Security to which a destroyed, lost or stolen coupon appertains (with all appurtenant coupons
not destroyed, lost or stolen), a new Security of the

31

 

same series and of like tenor and principal amount and bearing a number not contemporaneously
Outstanding, with coupons corresponding to the coupons, if any, appertaining to such destroyed,
lost or stolen Security or to the Security to which such destroyed, lost or stolen coupon
appertains.

          Notwithstanding the provisions of the previous two paragraphs, in case any such mutilated,
destroyed, lost or stolen Security or coupon has become or is about to become due and payable, the
Company in its discretion may, instead of issuing a new Security, with coupons corresponding to the
coupons, if any, appertaining to such mutilated, destroyed, lost or stolen Security or to the
Security to which such mutilated, destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium, if any) and interest, if any,
on Bearer Securities shall, except as otherwise provided in Section 1002, be payable only at an
office or agency located outside the United States and, unless otherwise specified as contemplated
by Section 301, any interest on Bearer Securities shall be payable only upon presentation and
surrender of the coupons appertaining thereto.

          Upon the issuance of any new Security under this Section, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee) connected
therewith.

          Every new Security of any series, with its coupons, if any, issued pursuant to this Section in
lieu of any mutilated, destroyed, lost or stolen Security, or in exchange for a Security to which a
mutilated, destroyed, lost or stolen coupon appertains, shall constitute an original additional
contractual obligation of the Company, whether or not the mutilated, destroyed, lost or stolen
Security and its coupons, if any, or the mutilated, destroyed, lost or stolen coupon shall be at
any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of that series and their coupons, if any,
duly issued hereunder.

          The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost
or stolen Securities or coupons.

          SECTION 307. Payment of Interest; Interest Rights Preserved; Optional Interest
Reset. (a) Unless otherwise provided as contemplated by Section 301 with respect to any
series of Securities, interest, if any, on any Registered Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name such Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest at the office or agency of the Company
maintained for such purpose pursuant to Section 1002; provided, however, that each installment of
interest, if any, on any Registered Security (other than a global Security) on an Interest Payment
Date may at the Company’s option be paid by (i) mailing a check for such interest, payable to or
upon the written order of the Person entitled thereto pursuant to Section 309, to the address of
such Person as it appears on the Security Register or (ii) transfer to an account located in the
United States maintained by the payee.

32

 

          Unless otherwise provided as contemplated by Section 301 with respect to the Securities
of any series, payment of interest, if any, may be made, in the case of a Bearer Security, by
transfer to an account located outside the United States maintained by the payee.

          Unless otherwise provided as contemplated by Section 301, every permanent global Security will
provide that interest, if any, payable on any Interest Payment Date will be paid to each of
Euroclear and Clearstream with respect to that portion of such permanent global Security held for
its account by the Common Depositary, for the purpose of permitting each of Euroclear and
Clearstream to credit the interest, if any, received by it in respect of such permanent global
Security to the accounts of the beneficial owners thereof.

          Any interest on any Registered Security of any series which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such Holder, and such defaulted
interest and, if applicable, interest on such defaulted interest (to the extent lawful) at the rate
or formula specified in the Securities of such series (such defaulted interest and, if applicable,
interest thereon herein collectively called “Defaulted Interest”) may be paid by the Company, at
its election in each case, as provided in clause (1) or (2) below:

     (1) The Company may elect to make payment of any Defaulted Interest to the Persons in
whose names the Registered Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Registered Security of such series and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee an amount of
money in the Currency in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 301 for the Securities of such series and except,
if applicable, as provided in Sections 312(b), 312(d) and 312(e)) equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit on or prior to the date of the
proposed payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such Defaulted Interest that
shall be not more than 15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date therefor to be
given in the manner provided in Section 106, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so given, such Defaulted Interest shall be paid to the
Persons in whose name the Registered Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following clause (2).

33

 

     (2) The Company may make payment of any Defaulted Interest on the Registered
Securities of any series in any other lawful manner not inconsistent with the requirements
of any securities exchange on which such Securities may be listed, and upon such notice as
may be required by such exchange, if, after notice given by the Company to the Trustee of
the proposed payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.

          (b) The provisions of this Section 307(b) may be made applicable to any series of Securities
pursuant to Section 301 (with such modifications, additions or substitutions as may be specified
pursuant to such Section 301). The interest rate (or the spread or spread multiplier used to
calculate such interest rate, if applicable) on any Security of such series may be reset by the
Company on the date or dates specified on the face of such Security (each an “Optional Reset
Date”). The Company may exercise such option with respect to such Security by notifying the
Trustee of such exercise at least 50 but not more than 60 days prior to an Optional Reset Date for
such Security. Not later than 40 days prior to each Optional Reset Date, the Trustee shall
transmit, in the manner provided for in Section 106, to the Holder of any such Security a notice
(the “Reset Notice”) indicating whether the Company has elected to reset the interest rate (or the
spread or spread multiplier used to calculate such interest rate, if applicable), and if so (i)
such new interest rate (or such new spread or spread multiplier, if applicable) and (ii) the
provisions, if any, for redemption during the period from such Optional Reset Date to the next
Optional Reset Date or if there is no such next Optional Reset Date, to the Stated Maturity of
such Security (each such period a “Subsequent Interest Period”), including the date or dates on
which or the period or periods during which and the price or prices at which such redemption may
occur during the Subsequent Interest Period.

          Notwithstanding the foregoing, not later than 20 days prior to the Optional Reset Date, the
Company may, at its option, revoke the interest rate (or the spread or spread multiplier used to
calculate such interest rate, if applicable) provided for in the Reset Notice and establish an
interest rate (or a spread or spread multiplier used to calculate such interest rate, if
applicable) that is higher than the interest rate (or the spread or spread multiplier, if
applicable) provided for in the Reset Notice, for the Subsequent Interest Period by causing the
Trustee to transmit, in the manner provided for in Section 106, notice of such higher interest rate
(or such higher spread or spread multiplier, if applicable) to the Holder of such Security. Such
notice shall be irrevocable. All Securities with respect to which the interest rate (or the spread
or spread multiplier used to calculate such interest rate, if applicable) is reset on an Optional
Reset Date, and with respect to which the Holders of such Securities have not tendered such
Securities for repayment (or have validly revoked any such tender) pursuant to the next succeeding
paragraph, will bear such higher interest rate (or such higher spread or spread multiplier, if
applicable).

          The Holder of any such Security will have the option to elect repayment by the Company of the
principal of such Security on each Optional Reset Date at a price equal to the principal amount
thereof plus interest accrued to such Optional Reset Date. In order to obtain repayment on an
Optional Reset Date, the Holder must follow the procedures set forth in Article Thirteen for
repayment at the option of Holders except that the period for delivery or notification to the
Trustee shall be at least 25 but not more than 35 days prior to such Optional Reset Date and except
that, if the Holder has tendered any Security for repayment pursuant to the

34

 

Reset Notice, the Holder may, by written notice to the Trustee, revoke such tender or repayment
until the close of business on the tenth day before such Optional Reset Date.

          Subject to the foregoing provisions of this Section and Section 305, each Security delivered
under this Indenture upon registration of transfer of or in exchange for or in lieu of any other
Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried
by such other Security.

          SECTION 308. [Reserved].

          SECTION 309. Persons Deemed Owners. Prior to due presentment of a Registered
Security for registration of transfer, the Company, the Trustee and any agent of the Company or the
Trustee shall treat the Person in whose name such Registered Security is registered as the absolute
owner of such Registered Security for the purpose of receiving payment of principal of (and
premium, if any) and (subject to Sections 305 and 307) interest, if any, on such Registered
Security and for all other purposes whatsoever, whether or not such Registered Security be overdue,
and none of the Company, the Trustee or any agent of the Company or the Trustee shall be affected
by notice to the contrary.

          Title to any Bearer Security and any coupons appertaining thereto shall pass by delivery. The
Company, the Trustee and any agent of the Company or the Trustee may treat the bearer of any Bearer
Security and the bearer of any coupon as the absolute owner of such Bearer Security or coupon for
the purpose of receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Bearer Security or coupons be overdue, and none of the Company, the
Trustee or any agent of the Company or the Trustee shall be affected by notice to the contrary.

          None of the Company, the Trustee, any Paying Agent or the Security Registrar shall have any
responsibility or liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests. The Company, the Trustee
and the Securities Registrar shall deal with any depositary (including any
Depositary or Common Depositary), and any nominee thereof, that is the Holder of any such global
Security for all purposes of this Indenture relating to such global Security (including the payment
of principal, premium, if any, and interest and Additional Amounts, if any, the giving of
instructions or directions by or to the owner or holder of a beneficial ownership interest in such
global Security) as the sole Holder of such global Security and shall have no obligations to the
beneficial owners thereof. None of the Company, the Trustee, any
Paying Agent and the Security
Registrar shall have any responsibility or liability for any acts or omissions of any such
depositary with respect to such global Security, for the records of any such depositary, including
records in respect of beneficial ownership interests in respect of any such global Security, for
any transactions between such depositary and any participant in such depositary or between or among
any such depositary, any such participant and/or any holder or owner of a beneficial interest in
such global Security or for any transfers of beneficial interests in any such global Security.

35

 

          Notwithstanding the foregoing, with respect to any global Security, nothing herein shall
prevent the Company, the Trustee, or any agent of the Company or the Trustee, from giving effect to
any written certification, proxy or other authorization furnished by any depositary (including any
Depositary or Common Depositary), as a Holder, with respect to such global Security or impair, as
between such depositary and owners of beneficial interests in such global Security, the operation
of customary practices governing the exercise of the rights of such depositary (or its nominee) as
Holder of such global Security.

          SECTION 310. Cancellation. All Securities and coupons surrendered for payment,
redemption, repayment at the option of the Holder, registration of transfer or exchange or for
credit against any current or future sinking fund payment shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee. All Securities and coupons so delivered to the
Trustee shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder which the Company may
have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which
the Company has not issued and sold, and all Securities so delivered shall be promptly cancelled by
the Trustee. If the Company shall so acquire any of the Securities, however, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness represented by such
Securities unless and until the same are surrendered to the Trustee for cancellation. No
Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section, except as expressly permitted by this Indenture. All cancelled
Securities and coupons held by the Trustee shall be disposed of by the Trustee in accordance with
its customary procedures and, if requested by the Company in writing, the Trustee shall provide
certification of their disposal to the Company, unless by Company Order the Company shall timely
direct that cancelled Securities be returned to it.

          SECTION 311. Computation of Interest. Except as otherwise specified as contemplated
by Section 301 with respect to Securities of any series, interest, if any, on the Securities of
each series shall be computed on the basis of a 360-day year of twelve 30-day months.

          SECTION 312. Currency and Manner of Payments in Respect of Securities. (a) Unless
otherwise specified with respect to any series of Securities pursuant to Section 301, with respect
to Registered Securities of any series not permitting the election provided for in paragraph (b)
below or the Holders of which have not made the election provided for in paragraph (b) below, and
with respect to Bearer Securities of any series, except as provided in paragraph (d) below, payment
of the principal of (and premium, if any) and interest, if any, on any Registered Security or
Bearer Security of such series will be made in the Currency in which such Registered Security or
Bearer Security, as the case may be, is payable. The provisions of this Section 312 may be
modified or superseded with respect to any Securities pursuant to Section 301.

          (b) It may be provided pursuant to Section 301 with respect to Registered Securities of any
series that Holders shall have the option, subject to paragraphs (d) and (e) below, to receive
payments of principal of (or premium, if any) or interest, if any, on such Registered Securities
in any of the Currencies which may be designated for such election by

36

 

delivering to the Trustee a written election with signature guarantees and in the applicable
form established pursuant to Section 301, not later than the close of business on the Election
Date immediately preceding the applicable payment date. If a Holder so elects to receive such
payments in any such Currency, such election will remain in effect for such Holder or any
transferee of such Holder until changed by such Holder or such transferee by written notice to the
Trustee (but any such change must be made not later than the close of business on the Election
Date immediately preceding the next payment date to be effective for the payment to be made on
such payment date and no such change of election may be made with respect to payments to be made
on any Registered Security of such series with respect to which an Event of Default has occurred
or with respect to which the Company has deposited funds pursuant to Article Four or Fourteen or
with respect to which a notice of redemption has been given by the Company or a notice of option
to elect repayment has been sent by such Holder or such transferee). Any Holder of any such
Registered Security who shall not have delivered any such election to the Trustee not later than
the close of business on the applicable Election Date will be paid the amount due on the
applicable payment date in the relevant Currency as provided in Section 312(a). The Trustee shall
notify the Exchange Rate Agent as soon as practicable after the Election Date of the aggregate
principal amount of Registered Securities for which Holders have made such written election.

          (c) Unless otherwise specified pursuant to Section 301, if the election referred to in
paragraph (b) above has been provided for pursuant to Section 301, then, unless otherwise
specified pursuant to Section 301, not later than the fourth Business Day after the Election Date
for each payment date for Registered Securities of any series, the Exchange Rate Agent will
deliver to the Company a written notice specifying the Currency in which Registered Securities of
such series are payable, the respective aggregate amounts of principal of (and premium, if any)
and interest, if any, on the Registered Securities to be paid on such payment date and the amounts
in such Currency so payable in respect of the Registered Securities as to which the Holders of
Registered Securities of such series shall have elected to be paid in another Currency as provided
in paragraph (b) above. If the election referred to in paragraph (b) above has been provided for
pursuant to Section 301 and if at least one Holder has made such election, then, unless otherwise
specified pursuant to Section 301, on the second Business Day preceding such payment date the
Company will deliver to the Trustee an Exchange Rate Officer’s Certificate in respect of the
Dollar or Foreign Currency payments to be made on such payment date. Unless otherwise specified
pursuant to Section 301, the Dollar or Foreign Currency amount receivable by Holders of Registered
Securities who have elected payment in a Currency as provided in paragraph (b) above shall be
determined by the Company on the basis of the applicable Market Exchange Rate in effect on the
third Business Day (the “Valuation Date”) immediately preceding each payment date, and such
determination shall be conclusive and binding for all purposes, absent manifest error.

          (d) If a Conversion Event occurs with respect to a Foreign Currency in which any of the
Securities are denominated or payable other than pursuant to an election provided for pursuant to
paragraph (b) above, then with respect to each date for the payment of principal of (and premium,
if any) and interest, if any, on the applicable Securities denominated or payable in such Foreign
Currency occurring after the last date on which such Foreign Currency was used (the “Conversion
Date”), the Dollar shall be the Currency of payment for use on each such payment date. Unless
otherwise specified pursuant to Section 301, the Dollar amount to

37

 

be paid by the Company to the Trustee and by the Trustee or any Paying Agent to the Holders
of such Securities with respect to such payment date shall be, in the case of a Foreign Currency
other than a currency unit, the Dollar Equivalent of the Foreign Currency or, in the case of a
currency unit, the Dollar Equivalent of the Currency Unit, in each case as determined by the
Exchange Rate Agent in the manner provided in paragraph (f) or (g) below.

          (e) Unless otherwise specified pursuant to Section 301, if the Holder of a Registered
Security denominated in any Currency shall have elected to be paid in another Currency as provided
in paragraph (b) above, and a Conversion Event occurs with respect to such elected Currency, such
Holder shall receive payment in the Currency in which payment would have been made in the absence
of such election; and if a Conversion Event occurs with respect to the Currency in which payment
would have been made in the absence of such election, such Holder shall receive payment in Dollars
as provided in paragraph (d) above.

          (f) The “Dollar Equivalent of the Foreign Currency” shall be determined by the Exchange Rate
Agent and shall be obtained for each subsequent payment date by converting the specified Foreign
Currency into Dollars at the Market Exchange Rate on the Conversion Date.

          (g) The “Dollar Equivalent of the Currency Unit” shall be determined by the Exchange Rate
Agent and subject to the provisions of paragraph (h) below shall be the sum of each amount
obtained by converting the Specified Amount of each Component Currency into Dollars at the Market
Exchange Rate for such Component Currency on the Valuation Date with respect to each payment.

          (h) For purposes of this Section 312 the following terms shall have the following meanings:

     A “Component Currency” shall mean any Currency which, on the Conversion Date, was a
component currency of the relevant currency unit.

     A “Specified Amount” of a Component Currency shall mean the number of units of such
Component Currency or fractions thereof which were represented in the relevant currency unit
on the Conversion Date. If after the Conversion Date the official unit of any Component
Currency is altered by way of combination or subdivision, the Specified Amount of such
Component Currency shall be divided or multiplied in the same proportion. If after the
Conversion Date two or more Component Currencies are consolidated into a single currency,
the respective Specified Amounts of such Component Currencies shall be replaced by an amount
in such single Currency equal to the sum of the respective Specified Amounts of such
consolidated Component Currencies expressed in such single Currency, and such amount shall
thereafter be a Specified Amount and such single Currency shall thereafter be a Component
Currency. If after the Conversion Date any Component Currency shall be divided into two or
more currencies, the Specified Amount of such Component Currency shall be replaced by
amounts of such two or more currencies, having an aggregate Dollar Equivalent value at the
Market Exchange Rate on the date of such replacement equal to the Dollar Equivalent value of
the Specified Amount of such former Component Currency at the Market Exchange Rate

38

 

immediately before such division and such amounts shall thereafter be Specified Amounts
and such currencies shall thereafter be Component Currencies. If, after the Conversion Date
of the relevant currency unit, a Conversion Event (other than any event referred to above in
this definition of “Specified Amount”) occurs with respect to any Component Currency of such
currency unit and is continuing on the applicable Valuation Date, the Specified Amount of
such Component Currency shall, for purposes of calculating the Dollar Equivalent of the
Currency Unit, be converted into Dollars at the Market Exchange Rate in effect on the
Conversion Date of such Component Currency.

     “Election Date” shall mean the date for any series of Registered Securities as
specified pursuant to clause (13) of Section 301 by which the written election referred to
in paragraph (b) above may be made.

          All decisions and determinations of the Exchange Rate Agent regarding the Dollar Equivalent of
the Foreign Currency, the Dollar Equivalent of the Currency Unit, the Market Exchange Rate and
changes in the Specified Amounts as specified above shall, in the absence of manifest error, be
conclusive for all purposes and irrevocably binding upon the Company, the Trustee and all Holders
of such Securities denominated or payable in the relevant Currency. The Exchange Rate Agent shall
promptly give written notice to the Company and the Trustee of any such decision or determination.

          In the event that the Company determines in good faith that a Conversion Event has occurred
with respect to a Foreign Currency, the Company will immediately give written notice thereof to the
Trustee and to the Exchange Rate Agent (and the Trustee will promptly thereafter give notice in the
manner provided for in Section 106 to the affected Holders) specifying the Conversion Date. In the
event the Company so determines that a Conversion Event has occurred with respect to any Foreign
Currency unit in which Securities are denominated or payable, the Company will immediately give
written notice thereof to the Trustee and to the Exchange Rate Agent (and the Trustee will promptly
thereafter give notice in the manner provided for in Section 106 to the affected Holders)
specifying the Conversion Date and the Specified Amount of each Component Currency on the
Conversion Date. In the event the Company determines in good faith that any subsequent change in
any Component Currency as set forth in the definition of Specified Amount above has occurred, the
Company will similarly give written notice to the Trustee and the Exchange Rate Agent. The Trustee
shall be fully justified and protected in conclusively relying and acting upon information received
by it from the Company and the Exchange Rate Agent and shall not otherwise have any duty or
obligation to determine the accuracy or validity of such information independent of the Company or
the Exchange Rate Agent.

          SECTION 313. Appointment and Resignation of Successor Exchange Rate Agent. (a)
Unless otherwise specified pursuant to Section 301, if and so long as the Securities of any series
(i) are denominated in a Foreign Currency or (ii) may be payable in a Foreign Currency, or so long
as it is required under any other provision of this Indenture, then the Company will maintain with
respect to each such series of Securities, or as so required, at least one Exchange Rate Agent.
The Company will cause the Exchange Rate Agent to make the necessary foreign exchange
determinations at the time and in the manner specified pursuant to Section 301 for the purpose of
determining the applicable rate of exchange and, if applicable, for

39

 

the purpose of converting the denominated Currency into the applicable payment Currency for
the payment of principal (and premium, if any) and interest, if any, pursuant to Section 312.

          (b) No resignation of the Exchange Rate Agent and no appointment of a successor Exchange Rate
Agent pursuant to this Section shall become effective until the acceptance of appointment by the
successor Exchange Rate Agent as evidenced by a written instrument delivered to the Company and
the Trustee.

          (c) If the Exchange Rate Agent shall resign, be removed or become incapable of acting, or if
a vacancy shall occur in the office of the Exchange Rate Agent for any cause with respect to the
Securities of one or more series, the Company, by or pursuant to a Board Resolution, shall
promptly appoint a successor Exchange Rate Agent or Exchange Rate Agents with respect to the
Securities of that or those series (it being understood that any such successor Exchange Rate
Agent may be appointed with respect to the Securities of one or more or all of such series and
that, unless otherwise specified pursuant to Section 301, at any time there shall only be one
Exchange Rate Agent with respect to the Securities of any particular series that are originally
issued by the Company on the same date and that are initially denominated and/or payable in the
same Currency).

ARTICLE FOUR

SATISFACTION AND DISCHARGE

          SECTION 401. Satisfaction and Discharge of Indenture. This Indenture shall upon
Company Request cease to be of further effect with respect to any series of Securities specified in
such Company Request (except as to any surviving rights of registration of transfer or exchange of
Securities of such series expressly provided for herein or pursuant hereto, and any right to
receive Additional Amounts, as contemplated by Section 1008) and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and discharge of this
Indenture as to such series when

     (1) either

     (A) all Securities of such series theretofore authenticated and delivered and
all coupons, if any, appertaining thereto (other than (i) coupons appertaining to
Bearer Securities surrendered for exchange for Registered Securities and maturing
after such exchange, whose surrender is not required or has been waived as provided
in Section 305, (ii) Securities and coupons of such series which have been
destroyed, lost or stolen and which have been replaced or paid as provided in
Section 306, (iii) coupons appertaining to Securities called for redemption and
maturing after the relevant Redemption Date, whose surrender has been waived as
provided in Section 1106, and (iv) Securities and coupons of such series for whose
payment money has theretofore been deposited in trust with the Trustee or any Paying
Agent or segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or

40

 

     (B) all Securities of such series and, in the case of (i) or (ii) below, any
coupons appertaining thereto not theretofore delivered to the Trustee for
cancellation

     (i) have become due and payable, or

     (ii) will become due and payable at their Stated Maturity within one
year, or

     (iii) if redeemable at the option of the Company, are to be called for
redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee in the name, and at
the expense, of the Company,

and the Company, in the case of (i), (ii) or (iii) above, has irrevocably deposited
or caused to be deposited with the Trustee as trust funds in trust for such purpose
an amount, in the Currency in which the Securities of such series are payable,
sufficient to pay and discharge the entire indebtedness on such Securities and such
coupons not theretofore delivered to the Trustee for cancellation, for principal
(and premium, if any) and interest, if any, to the date of such deposit (in the case
of Securities which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;

     (2) the Company has paid or caused to be paid all other sums payable hereunder or
under the Securities; and

     (3) the Company has delivered to the Trustee an Officer’s Certificate and an Opinion
of Counsel, each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture as to such series have been complied with.

          Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the
Company to the Trustee under Section 606 and, if money shall have been deposited with the Trustee
pursuant to subclause (B) of clause (1) of this Section, the obligations of the Trustee under
Section 402 and the last paragraph of Section 1003, the last sentence of Section 1011, and the
penultimate paragraph of Section 1405 shall survive.

          SECTION 402. Application of Trust Money. Subject to the provisions of the last
paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall be
held in trust and applied by it, in accordance with the provisions of the Securities, the coupons
and this Indenture, to the payment, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent) to the Persons entitled thereto, of the principal (and
premium, if any) and interest, if any, for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the extent required by
law. Money so held in trust is subject to the Trustee’s rights under Section 606.

41

 

ARTICLE FIVE

REMEDIES

          SECTION 501. Events of Default. “Event of Default,” wherever used herein with
respect to Securities of any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be effected by operation
of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):

     (1) default in the payment of any interest on any Security of that series, or any
related coupon, when such interest or coupon becomes due and payable, and continuance of
such default for a period of 30 days; or

     (2) default in the payment of the principal of (or premium, if any, on) any Security
of that series when due and payable; or

     (3) default in the deposit of any principal payment into the sinking fund, when and
as due by the terms of any Security of that series and Article Twelve; or

     (4) failure by the Company to comply with its obligations under Section 801 hereof;
or

     (5) default in the performance, or breach, of any covenant or agreement of the
Company in this Indenture which affects or is applicable to the Securities of that series
(other than a default in the performance or breach of a covenant or agreement that is
elsewhere in this Section specifically dealt with or which has expressly been included in
this Indenture solely for the benefit of other series of Securities), and continuance of
such default or breach for a period of 75 days after receipt of notice given, by
registered or certified mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in principal amount of all Outstanding Securities
of that series a written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a “Notice of Default” hereunder; or

     (6) default by the Company or any of its Subsidiaries with respect to any mortgage,
agreement or other instrument under which there may be outstanding, or by which there may
be secured or evidenced, any Indebtedness for money borrowed in excess of $25 million in
the aggregate of the Company and/or any such Subsidiary (it being
understood that the amount of any Indebtedness will be determined
after giving effect to any other repayment thereof), whether such Indebtedness now
exists or shall hereafter be created (i) resulting in such Indebtedness becoming or being
declared due and payable, if such declaration of acceleration is not rescinded or annulled
within 10 days after the Company has received notice of such acceleration or (ii)
constituting a failure to pay the principal or interest of any such debt in an amount in
excess of $25 million when due and payable at its stated maturity, upon required
repurchase, upon declaration of acceleration or otherwise, if such default is not cured or
waived within 10 days after the date when the payment was due; provided that, in the case
of clause (i), if such declaration of acceleration is annulled or rescinded or, in the
case of clause (ii), if such default is cured or waived,

42

 

the
related Event of Default with respect to the notes will be deemed to be cured for
purposes of this Indenture; or

     (7) the entry by a court having jurisdiction in the premises of (A) a decree or order
for relief in respect of the Company or any of its Significant Subsidiaries in an
involuntary case or proceeding under Bankruptcy Law or (B) a decree or order adjudging the
Company or any of its Significant Subsidiaries as bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company or a Significant Subsidiary, under any applicable federal
or state law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or a Significant Subsidiary or of
any substantial part of their property, or ordering the winding up or liquidation of their
affairs, and the continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 90 consecutive days; or

     (8) the commencement by the Company or a Significant Subsidiary of a voluntary case
or proceeding under Bankruptcy Law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by them to the entry of a decree or order for relief
in respect of the Company or a Significant Subsidiary is an involuntary case or proceeding
under Bankruptcy Law or to the commencement of any bankruptcy or insolvency case or
proceeding against them, or the filing by them of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or the consent by them
to the filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of
the Company or a Significant Subsidiary or of any substantial part of their property, or
the making by them of an assignment for the benefit of creditors, or the admission by them
in writing of their inability to pay their debts generally as they become due; or

     (9) a final judgment for the payment of $25 million or more (excluding any amounts
covered by insurance) rendered against the Company or any of its Subsidiaries, which
judgment is not discharged or stayed within 60 days after (i) the date on which the right
to appeal thereof has expired if no such appeal has commenced, or (ii) the date on which
all rights to appeal have been extinguished; or

     (10) there occurs any other Event of Default provided pursuant to Section 301 or 901
with respect to Securities of that series.

          SECTION 502. Acceleration of Maturity; Rescission and Annulment. If an Event of
Default described in clause (1), (2), (3), (4), (5), (6), (9) or (10) of Section 501 with respect
to Securities of any series at the time Outstanding occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the Securities of that series
are Original Issue Discount Securities or Indexed Securities, such portion of the principal amount
as may be specified in the terms of that series) of all of the Outstanding Securities of that
series and any accrued and unpaid cash interest through the date of such declaration, to be due and
payable

43

 

immediately, by a notice in writing to the Company (and to the Trustee if given by Holders),
and upon any such declaration such principal amount shall become immediately due and payable.

          At any time after such a declaration of acceleration with respect to Securities of any series
(or of all series, as the case may be) has been made and before a judgment or decree for payment of
the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders
of a majority in principal amount of the Outstanding Securities of that series (or of all series,
as the case may be) by written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if:

     (1) the Company has paid or deposited with the Trustee a sum sufficient to pay in the
Currency in which the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series and except, if applicable, as
provided in Sections 312(b), 312(d) and 312(e)),

     (A) all overdue interest, if any, on all Outstanding Securities of that series
(or of all series, as the case may be) and any related coupons,

     (B) all unpaid principal of (and premium, if any) any Outstanding Securities of
that series (or of all series, as the case may be) which has become due otherwise
than by such a declaration of acceleration, and interest on such unpaid principal
(or premium) at the rate or rates prescribed therefor in such Securities or, if no
such rate or rates are so prescribed, at the rate borne by the Securities during the
period of such default,

     (C) to the extent that payment of such interest is enforceable under applicable
law, interest upon overdue interest to the date of such payment or deposit at the
rate or rates prescribed therefor in such Securities or, if no such rate or rates
are so prescribed, at the rate borne by the Securities during the period of such
default, and

     (D) all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel; and

     (2) all Events of Default with respect to Securities of that series (or of all
series, as the case may be), other than the non-payment of the principal of (or premium,
if any, on) or interest, if any, on Securities of that series (or of all series, as the
case may be) which have become due solely by such an acceleration, have been cured or
waived as provided in Section 513.

If an Event of Default described in clause (7) or (8) with respect to the Company occurs and is
continuing, then the principal amounts (or, if the Securities of that series are Original Issue
Discount Securities or Indexed Securities, such portion of the principal amount as may be specified
in the terms of that series) of all the Securities then Outstanding, together with any accrued
interest through the occurrence of such Event of Default, shall become and be due and payable
immediately, without any declaration or other act by the Trustee or any other Holder.

44

 

          SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee. The
Company covenants that (1) in case default shall be made in the payment of any installment of
interest on any Security of any series and any related coupon, as and when the same shall become
due and payable, and such default shall have continued for a period of 30 days, or (2) in case
default shall be made in the payment of the principal (or premium, if any, on) any Security of any
series at its Maturity then, upon demand of the Trustee, the Company will pay to the Trustee (such
demand and payment in the case of Bearer Securities to occur only outside of the United States, for
the benefit of the Holders of Securities of such series and coupons, the whole amount that then
shall have become due and payable on such Securities and coupons of that series for principal and
any premium or interest, or both, as the case may be, with interest upon the overdue principal and
(to the extent that payment of such interest is enforceable under applicable law) upon overdue
installments of interest at the rate borne by or provided for in such Securities during the period
of such default, and, in addition thereto, such further amount as shall be sufficient to cover
reasonable compensation to the Trustee, its agents, attorneys and counsel, and all other expenses
and liabilities incurred, and all advances made, by the Trustee except as a result of its
negligence or bad faith.

          If an Event of Default with respect to Securities of any series (or of all series, as the case
may be) occurs and is continuing, the Trustee may proceed to protect and enforce its rights and the
rights of the Holders of Securities of such series (or of all series, as the case may be) and any
related coupons by such appropriate judicial proceedings necessary to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper remedy.

          SECTION 504. Trustee May File Proofs of Claim. In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company or any other obligor upon the
Securities of a series or the property of the Company or such other obligor or their creditors, the
Trustee, irrespective of whether the principal of the Securities of any series shall then be due
and payable as therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of any overdue principal,
premium, if any, or interest, shall be entitled and empowered, by intervention in such proceeding
or otherwise,

     (1) to file and prove a claim for the whole amount of principal (and premium, if any)
(or if the case of Original Issue Discount Securities or Indexed Securities, such portion
of the principal amount as may be specified in the terms of such series) and interest, if
any, owing and unpaid in respect of the Securities and to file such other papers or
documents as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding; and

     (2) to collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same (which distribution, in the case of Bearer
Securities or coupons appertaining thereto, shall occur only outside the United States);

45

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the agreed upon compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 606.

          Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or coupons or the rights of any Holder thereof or to authorize
the Trustee to vote in respect of the claim of any Holder in any such proceeding.

          SECTION 505. Trustee May Enforce Claims Without Possession of Securities. All
rights of action and claims under this Indenture or the Securities or coupons may be prosecuted and
enforced by the Trustee without the possession of any of the Securities or coupons or the
production thereof in any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name and as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the agreed upon compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities and coupons in respect of which such judgment has been recovered.

          SECTION 506. Application of Money Collected. Any money or property collected by the
Trustee pursuant to this Article shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such money on account of principal or any
premium and interest, upon presentation of the Securities or coupons, or both, as the case may be
(such presentation, in the case of Bearer Securities or coupons, to occur only outside the United
States) and the notation thereon of the payment if only partially paid and upon surrender thereof
if fully paid:

     First: To the payment of all amounts due the Trustee under Section 606;

     Second: To the payment (such payment, in the case of Bearer Securities or coupons, to
occur only outside the United States) of the amounts then due and unpaid for principal of
and any premium and interest on the Securities and coupons in respect of which or for the
benefit of which such money has been collected, ratably, without preference or priority of
any kind, according to the amounts due and payable on such Securities and coupons for
principal and any premium and interest, respectively; and

     Third: To the payment of the remainder, if any, to the Company, or as a court of
competent jurisdiction may direct in writing.

46

 

          SECTION 507. Limitation on Suits. No Holder of any Security of any series or any
related coupons shall have any right to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:

     (1) such Holder shall have previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;

     (2) the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee hereunder;

     (3) such Holder or Holders shall have offered to the Trustee reasonable indemnity
satisfactory to it against the costs, expenses and liabilities to be incurred in
compliance with such request;

     (4)
the Trustee for 75 days after its receipt of such notice, request and offer of
indemnity shall have failed to institute any such proceeding; and

     (5) no direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 512 during such 75-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;

it being understood and intended that no one or more of such Holders shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other Holders of Securities, or to obtain or to seek to obtain
priority or preference over any other of such Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable and common benefit of all of
such Holders of Securities (it being understood that the Trustee does not have an affirmative duty
to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders).

          SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest. Notwithstanding any other provision in this Indenture, the Holder of any Security
or coupon shall have the right, which is absolute and unconditional, to receive payment as provided
herein and in such Security of the principal and any premium and interest on such Security or
payment of any related coupon on the respective Stated Maturity or Maturities expressed in such
Security or coupon (or, in the case of redemption or repayment at the option of the Holder, on the
Redemption Date or Repayment Date, as the case may be) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of such Holder.

          SECTION 509. Restoration of Rights and Remedies. If the Trustee or any Holder has
instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding
has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee
or to such Holder, then and in every such case, subject to any determination in such proceeding,
the Company, the Trustee and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and

47

 

remedies of the Trustee and the Holders shall continue as though no such proceeding had been
instituted.

          SECTION 510. Rights and Remedies Cumulative. Except as otherwise provided with
respect to replacement or payment of mutilated, destroyed, lost or stolen Securities or coupons in
Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders
of Securities and coupons is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in addition to every
other right and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right or remedy.

          SECTION 511. Delay or Omission Not Waiver. No delay or omission of the Trustee or
of any Holder of any Security or coupon to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any such Event of Default
or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by the Holders of Securities or coupons, as the case may be.

          SECTION 512. Control by Holders. With respect to the Securities of any series, the
Holders of a majority in principal amount of the Outstanding Securities of such series shall have
the right to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to
Securities of such series; provided that

     (1) such direction shall not be in conflict with any rule of law or with this
Indenture,

     (2) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction,

     (3) with respect to actions relating to the Outstanding Securities of any one series,
such direction is not unduly prejudicial to the rights of Holders of Securities of such
series not taking part in such direction, and

     (4) such direction would not involve the Trustee in personal liability, as the
Trustee, upon being advised by counsel, shall reasonably determine.

          SECTION 513. Waiver of Past Defaults. Subject to Section 502, the Holders of a
majority in principal amount of Outstanding Securities of any series may on behalf of the Holders
of all the Securities of such series waive any past default with respect to such series and its
consequences, except, in each case, a default:

     (1) in respect of the payment of the principal of or any premium and interest on any
Security or any related coupon, or

48

 

     (2) in respect of a covenant or provision hereof which under Article Nine cannot be
modified or amended without the consent of the Holder of each Outstanding Security of such
series, or all series, as the case may be, affected.

          Upon any such waiver, any such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this Indenture, and the Company,
the Trustee and Holders shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.

          SECTION 514. Undertaking for Costs. All parties to this Indenture agree, and each
Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs, including reasonable
attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but the provisions of
this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities, or to any suit instituted by any Holder for the enforcement of the payment
of the principal of (or premium if any, on) or interest on any Securities on or after the Stated
Maturity or Maturities expressed in such Security (or, in the case of redemption or repayment, on
or after the Redemption Date or Repayment Date, as the case may be).

          SECTION 515. Waiver of Stay or Extension Laws. The Company covenants (to the extent
that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

ARTICLE SIX

THE TRUSTEE

          SECTION 601. Notice of Defaults. Within 90 days after the occurrence of any Default
hereunder actually known to a Responsible Officer of the Trustee with respect to the Securities of
any series, the Trustee shall transmit, in the manner and to the extent provided in TIA Section
313(c), notice of such default hereunder, unless such Default shall have been cured or waived;
provided, however, that, except in the case of a Default in the payment of the principal of (or
premium, if any) or interest, if any, on any Security of such series or in the payment of any
sinking fund installment with respect to Securities of such series, the Trustee shall be protected
in withholding such notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee

49

 

in good faith determine that the withholding of such notice is in the interest of the Holders
of Securities of such series and any related coupons; and, provided further, that
in the case of any default or breach of the character specified in Section 501(5) with respect to
Securities and coupons of such series, no such notice to Holders shall be given until at least 30
days after the occurrence thereof.

          SECTION 602. Certain Duties, Responsibilities and Rights of Trustee. Subject to the
provisions of TIA Sections 315(a) through 315(d):

     (1) except during the continuance of an Event of Default,

	 	(a)	 	the Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
	 
	 	(b)	 	in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Indenture, but shall not be required to verify the content thereof;

     (2) if any Event of Default has occurred and is continuing with respect to the
Securities of any series, the Trustee shall exercise such of the rights and powers vested
in it by this Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of such
person’s own affairs;

     (3) the Trustee may not be relieved from liabilities for its own negligent action,
its own negligent failure to act, or its own willful misconduct, except that:

	 	(a)	 	this subparagraph (3) does not limit the effect
of subparagraph (1) of this paragraph or the penultimate paragraph of
this Section 602;
	 
	 	(b)	 	the Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
	 
	 	(c)	 	the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with a direction received by it pursuant to Section 512;

50

 

     (4) the Trustee may conclusively rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;

     (5) any request or direction of the Company mentioned herein shall be sufficiently
evidenced by a Company Request or Company Order and any resolution of the Board of
Directors of the Company may be sufficiently evidenced by a Board Resolution of the
Company;

     (6) whenever in the administration of this Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or omitting
any action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, conclusively rely upon an
Officer’s Certificate;

     (7) the Trustee may consult with counsel of its selection and the advice or written
opinion of such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon;

     (8) the Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the Holders of
Securities of any series or any related coupons pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to
it against the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;

     (9) the Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Company personally or by agent or attorney;

     (10) the Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents, attorneys, custodians, or
nominees and the Trustee shall not be responsible for any misconduct or negligence on the
part of any agent, attorney, custodian, or nominee appointed with due care by it
hereunder;

     (11) the Trustee shall not be liable for any action taken, suffered or omitted by it
in good faith and believed by it to be authorized or within the rights or powers conferred
upon it by this Indenture;

51

 

     (12) in the event that the Trustee is also acting as Paying Agent, Security Registrar
or in any other capacity hereunder, the rights, privileges, protections, immunities and
benefits afforded to the Trustee pursuant to this Article Six, including, without
limitation, its right to be indemnified, shall also be afforded to the Trustee in its
capacity as such Paying Agent, Security Registrar or in such other capacity and each
agent, custodian and other Person employed to act hereunder;

     (13) other than in the case of an Event of Default described under clauses (1), (2)
or (3) of Section 501, the Trustee shall not be deemed to know or be charged with
knowledge of any Default or Event of Default with respect to the Securities of any series
for which it is acting as Trustee unless a Responsible Officer of the Trustee shall have
received written notice thereof at the Corporate Trust Office of the Trustee from the
Company or a Holder of such Securities and such notice references this Indenture and such
Securities;

     (14) the Trustee shall not be required to give any bond or surety in respect of the
performance of its powers and duties hereunder; and

     (15) in no event shall the Trustee be responsible or liable for special, indirect,
punitive or consequential loss or damage.

          Notwithstanding anything to the contrary provided in this Indenture, the Trustee shall not be
required to expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it
shall have reasonable grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.

          Whether or not therein expressly so provided, every provision of this Indenture relating to
the conduct or affecting the liability of or affording protection to the Trustee shall be subject
to the provisions of this Section 602.

          SECTION 603. Trustee Not Responsible for Recitals or Issuance of Securities. The
recitals contained herein and in the Securities, except for the Trustee’s certificates of
authentication, and in any coupons shall be taken as the statements of the Company and neither the
Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or of the Securities
or coupons, except that the Trustee represents that it is duly authorized to execute and deliver
this Indenture, authenticate the Securities and perform its obligations hereunder and that the
statements made by it in a Statement of Eligibility on Form T-1 supplied to the Company are true
and accurate, subject to the qualifications set forth therein. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the Company of Securities
or the proceeds thereof.

          SECTION 604. May Hold Securities. The Trustee, any Authenticating Agent, any Paying
Agent, any Security Registrar or any other agent of the Company or of the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities and coupons and,
subject to TIA Sections 310(b) and 311, may otherwise deal with the Company with the

52

 

same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.

          SECTION 605. Money Held in Trust. Money held by the Trustee in trust hereunder need
not be segregated from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as otherwise agreed in
writing with the Company.

          SECTION 606. Compensation and Reimbursement. The Company agrees:

     (1) to pay to the Trustee from time to time such compensation as shall be agreed in
writing between the Company and the Trustee for all services rendered by it hereunder
(which compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);

     (2) except as otherwise expressly provided herein, to reimburse the Trustee upon
its request for all reasonable expenses, disbursements and advances incurred or made by
the Trustee in accordance with any provision of this Indenture (including the reasonable
compensation and the reasonable expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its gross
negligence or willful misconduct; and

     (3) to indemnify the Trustee and any predecessor trustee and its and their
officers, directors, employees, and agents for, and to hold it or them harmless against,
any loss, liability or expense incurred without gross negligence or willful misconduct
on its or their part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and expenses
(including reasonable fees and expenses of counsel) of defending itself or themselves
against any claim or liability in connection with the exercise or performance of any of
its or their powers or duties hereunder.

          The obligations of the Company under this Section to compensate the Trustee, to pay or
reimburse the Trustee for expenses, disbursements and advances and to indemnify and hold harmless
the Trustee shall constitute additional indebtedness hereunder and shall survive the satisfaction
and discharge of this Indenture, the resignation or removal of the Trustee and the termination of
this Indenture for any reason. As security for the performance of such obligations of the Company,
the Trustee shall have a claim and lien prior to the Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the payment of principal of (or
premium, if any) or interest, if any, on particular Securities or any coupons.

          When the Trustee incurs expenses or renders services in connection with an Event of Default
specified in Section 501(7) or (8), the expenses (including reasonable charges and expenses of its
counsel) of and the compensation for such services are intended to constitute expenses of
administration under any applicable U.S. federal or state bankruptcy, insolvency or other similar
law.

53

 

          The provisions of this Section shall survive the satisfaction and discharge of this
Indenture, the termination of this Indenture for any reason and the earlier resignation or removal
of the Trustee.

          SECTION 607. Corporate Trustee Required; Eligibility; Conflicting Interests;
Disqualification. There shall be at all times a Trustee hereunder which shall be eligible to
act as Trustee under TIA Section 310(a)(1) and shall have a combined capital and surplus of at
least $50,000,000. If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of U.S. federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign immediately in the
manner and with the effect hereinafter specified in this Article. If the Trustee shall have or
acquire any conflicting interest within the meaning of the Trust Indenture Act, it shall either
eliminate such conflicting interest or resign to the extent, in the manner and with the effect, and
subject to the conditions, provided in the Trust Indenture Act and this Indenture. For purposes of
Section 310(b)(1) of the Trust Indenture Act and to the extent permitted thereby, the Trustee, in
its capacity as trustee in respect of the Securities of any series, shall not be deemed to have a
conflicting interest arising from its capacity as trustee in respect of the Securities of any other
series. Nothing contained herein shall prevent the Trustee from filing the application provided
for in the second to last sentence of Section 310(b) of the Trust Indenture Act.

          SECTION 608. Resignation and Removal; Appointment of Successor. No resignation or
removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Trustee in accordance with
the applicable requirements of Section 609 and any and all amounts then due and owing to the
Trustee hereunder have been paid in full.

          (a) The Trustee may resign at any time with respect to the Securities of one or more series
by giving written notice thereof to the Company. If the instrument of acceptance by a successor
Trustee required by Section 609 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition, at the expense of
the Company, any court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.

          (b) The Trustee may be removed at any time with respect to the Securities of any series by
Act of the Holders of a majority in principal amount of the Outstanding Securities of such series,
delivered to the Trustee and to the Company. If the instrument of acceptance by a successor
Trustee required by Section 609 shall not have been delivered to the Trustee within 60 days after
the giving of such notice of removal, the Trustee being removed may petition, at the expense of
the Company, any court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.

54

 

     (c) If at any time:

     (1) the Trustee shall fail to comply with the provisions of TIA Section 310(b) after
written request therefor by the Company or any Holder who has been a bona fide Holder of a
Security for at least six months, or

     (2) the Trustee shall cease to be eligible under Section 607 and shall fail to resign
after written request therefor by the Company or any Holder who has been a bona fide
Holder of a Security for at least six months, or

     (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or
insolvent or a receiver of the Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,

then, in any such case, (i) the Company, by a Board Resolution, may remove the Trustee with respect
to all Securities, or (ii) subject to TIA Section 315(e), any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the Trustee with respect
to all Securities and the appointment of a successor Trustee or Trustees.

          (d) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy
shall occur in the office of Trustee for any cause, with respect to the Securities of one or more
series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees
with respect to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more or all of such
series and that at any time there shall be only one Trustee with respect to the Securities of any
particular series). If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities
of such series delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the successor Trustee
appointed by the Company. If no successor Trustee with respect to the Securities of any series
shall have been so appointed by the Company or the Holders and accepted appointment in the manner
hereinafter provided, any Holder who has been a bona fide Holder of a Security of such series for
at least six months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.

          (e) The Company shall give written notice of each resignation and each removal of the Trustee
with respect to the Securities of any series and each appointment of a successor Trustee with
respect to the Securities of any series to the Holders of Securities of such series in the manner
provided for in Section 106. Each notice shall include the name of the successor Trustee with
respect to the Securities of such series and the address of its Corporate Trust Office.

55

 

          SECTION 609. Acceptance of Appointment by Successor. In case of the
appointment hereunder of a successor Trustee with respect to all Securities, every such successor
Trustee so appointed shall execute, acknowledge and deliver to the Company and the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring
Trustee; but, on the written request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder, subject nevertheless to its claim and lien provided for in Section 606.

          (a) In case of the appointment hereunder of a successor Trustee with respect to the
Securities of one or more (but not all) series, the Company, the retiring Trustee and each
successor Trustee with respect to the Securities of one or more series shall execute and deliver
an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and
which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm
to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each
such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates, subject nevertheless to its
claim and lien provided for in Section 606. Whenever there is a successor Trustee with respect to
one or more (but less than all) series of securities issued pursuant to this Indenture, the terms
“Indenture” and “Securities” shall have the meanings specified in the provisos to the respective
definitions of those terms in Section 101 which contemplate such situation.

          (b) Upon request of any such successor Trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such

56

 

successor Trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of
this Section, as the case may be.

          (c) No successor Trustee shall accept its appointment unless at the time of such acceptance
such successor Trustee shall be qualified and eligible under this Article. The Trustee shall have
no liability or responsibility for the action or inaction of any successor Trustee.

          SECTION 610. Merger, Conversion, Consolidation or Succession to Business. Any
corporation into which the Trustee may be merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case any Securities or
coupons shall have been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities or coupons so authenticated with the same effect as if
such successor Trustee had itself authenticated such Securities or coupons. In case any of the
Securities shall not have been authenticated by such predecessor Trustee, any successor Trustee may
authenticate and deliver such Securities or coupons either in the name of any predecessor hereunder
or in the name of the successor Trustee. In all such cases such certificates shall have the full
force and effect which this Indenture provides for the certificate of authentication of the
Trustee; provided, however, that the right to adopt the certificate of authentication of any
predecessor Trustee or to authenticate Securities in the name of any predecessor Trustee shall
apply only to its successor or successors by merger, conversion or consolidation.

          SECTION 611. Appointment of Authenticating Agent. At any time when any of the
Securities remain Outstanding, the Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series and the Trustee shall give written notice of such
appointment to all Holders of Securities of the series with respect to which such Authenticating
Agent will serve, in the manner provided for in Section 106. Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Any such appointment shall be evidenced by an instrument
in writing signed by a Responsible Officer of the Trustee, and a copy of such instrument shall be
promptly furnished to the Company. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee’s certificate of
authentication, such reference shall be deemed to include authentication and delivery on behalf of
the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business under the laws of the
United States of America, any state thereof or the District of Columbia, authorized under such laws
to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000
and subject to supervision or examination by U.S. federal or state authority. If such corporation
publishes reports of condition at least annually,

57

 

pursuant to law or to the requirements of said supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in the manner and with the effect
specified in this Section.

          Any corporation into which an Authenticating Agent may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion or consolidation to
which such Authenticating Agent shall be a party, or any corporation succeeding to all or
substantially all the corporate agency or corporate trust business of an Authenticating Agent,
shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further act on the part of
the Trustee or the Authenticating Agent.

          An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee
and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time such Authenticating
Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may
appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give
written notice of such appointment to all Holders of Securities of the series with respect to which
such Authenticating Agent will serve, in the manner provided for in Section 106. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as if originally named as
an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible
under the provisions of this Section. The Trustee shall have no liability or responsibility for
the action or inaction of any Authenticating Agent (that is not the Trustee).

          The Company agrees to pay to each Authenticating Agent from time to time reasonable
compensation for its services under this Section.

          If an appointment with respect to one or more series is made pursuant to this Section, the
Securities of such series may have endorsed thereon, in addition to the Trustee’s certificate of
authentication, an alternate certificate of authentication in the following form:

          Dated: ____________________

          This is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.

58

 

	 	 	 	 	 
	 	Wilmington Trust FSB,

as Trustee

 	 
	 	By  	 	 
	 	 	As Authenticating Agent 	 
	 	 	 	 
	 	 	 
	 	By  	
 	 
	 	 	Authorized Signatory 	 

ARTICLE SEVEN

HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY

          SECTION 701. Disclosure of Names and Addresses of Holders. Every Holder of
Securities or coupons, by receiving and holding the same, agrees with the Company and the Trustee
that neither of the Company, or the Trustee or any agent of either of them shall be held
accountable by reason of the disclosure of any such information as to the names and addresses of
the Holders in accordance with TIA Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under TIA Section 312(b).

          SECTION 702. Reports by Trustee. Within 60 days after May 15 of each year
commencing with the first May 15 after the first issuance of Securities pursuant to this Indenture,
the Trustee shall transmit to the Holders of Securities, in the manner and to the extent provided
in TIA Section 313(c), a brief report dated as of such May 15 if required by TIA Section 313(a).
The Company will promptly notify the Trustee in writing when any series of Securities are listed on
any stock exchange and of any delisting thereof.

          A copy of each such report shall, at the time of such transmission to Holders, be filed by the
Trustee with each stock exchange if any, upon which the Securities are listed and with the Company.

          SECTION 703. Reports by Company. The Company shall:

     (1) Unless available on EDGAR, file with the Trustee, within 15 days after the
Company, as the case may be, has filed the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company is no longer required
to file information, documents or reports pursuant to either of such Sections, then it
shall file with the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13 of the
Exchange Act in respect of a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and regulations;

59

 

     (2) file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such additional information,
documents and reports with respect to compliance by the Company with the conditions and
covenants of this Indenture as may be required from time to time by such rules and
regulations; and

     (3) transmit to all Holders, in the manner and to the extent provided in TIA Section
313(c), within 30 days after the filing thereof with the Trustee, such summaries of any
information, documents and reports required to be filed by the Company pursuant to
paragraphs (1) and (2) of this Section as may be required by rules and regulations
prescribed from time to time by the Commission.

          Delivery of such reports, information and documents to the Trustee, which if pursuant to an
EDGAR filing, the Trustee is not required to confirm, is for informational purposes only and the
Trustee’s receipt of such shall not constitute constructive notice of the filing of such a report,
its timeliness or any information contained therein or determinable from information contained
therein, including compliance by the Company with any of its covenants hereunder (as to which the
Trustee is entitled to conclusively rely exclusively on Officer’s Certificates).

ARTICLE EIGHT

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

          SECTION 801. Company May Consolidate, etc., Only on Certain Terms. The Company may
not consolidate with or merge into any other Person or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to any Person, unless:

     (1) The successor or transferee Person, if other than the Company formed by such
consolidation or into which the Company is merged or to which the Company’s properties and
assets are conveyed, transferred or leased as an entirety or substantially as an entirety
is organized and existing under the laws of the United States, any state thereof or the
District of Columbia and expressly assumes by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual
payment of the principal of (and premium, if any) and interest on each series of
Outstanding Securities and the performance of every covenant of this Indenture on the part
of the Company to be performed or observed by the Company;

     (2) immediately after giving effect to such transaction, no Event of Default and no
event which, after notice or lapse of time or both, would become an Event of Default shall
have occurred and be continuing; and

     (3) the Company has delivered to the Trustee an Officer’s Certificate and an Opinion
of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease as
an entirety or substantially as an entirety and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture complies

60

 

with this Article and that all conditions precedent herein provided for relating to
such transaction have been complied with.

          SECTION 802. Successor Person Substituted. Upon any consolidation by the Company
with or merger by the Company with or into any other Person or any conveyance, transfer or lease of
the properties and assets of the Company as an entirety or substantially as an entirety to any
Person in accordance with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, and be subject to every
obligation of, the Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein, and in the event of any such conveyance or transfer, the
Company (which terms shall for this purpose mean the Person named as the “Company” in the first
paragraph of this Indenture or any previous successor Person which had become such in the manner
described in Section 801), except in the case of a lease, shall be discharged of all obligations
and covenants under this Indenture and the Securities and any coupons appertaining thereto and may
be dissolved and liquidated.

ARTICLE NINE

SUPPLEMENTAL INDENTURES

          SECTION 901. Supplemental Indentures Without Consent of Holders. Without the
consent of any Holders, the Company when authorized by or pursuant to a Board Resolution, and the
Trustee, at any time and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:

     (1) to evidence the succession of another Person to the Company and the assumption by
any such successor of the covenants of the Company contained herein and in the Securities
and any related coupons in accordance with Article Eight; or

     (2) to add to the covenants of the Company for the benefit of the Holders of all or
any series of Securities and any related coupons (and if such covenants are to be for the
benefit of less than all series of Securities, stating that such covenants are being
included solely for the benefit of such series) or to surrender any right or power herein
conferred upon the Company; or

     (3) to add any additional Events of Default for the benefit of the Holders of all or
any series of Securities and any related coupons (and if such Events of Default are to be
for the benefit of less than all series of Securities, stating that such Events of Default
are being included solely for the benefit of such series); or

     (4) to add to or change any of the provisions of this Indenture to provide that
Bearer Securities may be registrable as to principal, to change or eliminate any
restrictions on the payment of principal of or any premium or interest on Bearer
Securities, to permit Bearer Securities to be issued in exchange for Registered
Securities, to permit Bearer Securities to be issued in exchange for Bearer Securities of
other authorized denominations or to permit or facilitate the issuance of Securities in

61

 

uncertificated form, provided that any such action shall not adversely affect the
interests of the Holders of Securities of any series or any related coupons in any
material respect; or

     (5) to change or eliminate any of the provisions of this Indenture; provided that any
such change or elimination shall become effective only when there is no Security
Outstanding of any series created prior to the execution of such supplemental indenture
which is entitled to the benefit of any such provision; or

     (6) to establish the form or terms of Securities of any series and any related
coupons as permitted by Sections 201 and 301, including the provisions and procedures
relating to Securities convertible into or exchangeable for any securities of any Person
(including the Company); or

     (7) to evidence and provide for the acceptance of appointment hereunder by a
successor Trustee with respect to the Securities of one or more series and to add to or
change any of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 609(b); or

     (8) to cure any ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions with respect
to matters or questions arising under this Indenture, provided such action shall not
adversely affect the interests of the Holders of Securities of any series and any related
coupons in any material respect; or

     (9) to supplement any of the provisions of this Indenture to such extent as shall be
necessary to permit or facilitate the defeasance and discharge of any series of Securities
pursuant to Sections 401, 1402 and 1403; provided that any such action shall not adversely
affect the interests of the Holders of Securities of such series and any related coupons
or any other series of Securities in any material respect; or

     (10) to comply with any requirements of the Commission in connection with the
qualification of this Indenture under the Trust Indenture Act; or

     (11) to conform the text of this Indenture or the Notes to any provision of the
 description of notes in the applicable prospectus supplement, prospectus or offering document.

          SECTION 902. Supplemental Indentures with Consent of Holders. With the consent of
the Holders of a majority in principal amount of all Outstanding Securities of each series affected
by such supplemental indenture (considered together as one class for this purpose), by Act of said
Holders delivered to the Company and the Trustee and the Company when authorized by or pursuant to
a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture which affect such Securities or of modifying in any manner the rights
of the Holders of such Securities under this

62

 

Indenture; provided, however, that no such supplemental indenture shall, without the consent
of the Holder of each Outstanding Security affected thereby,

     (1) change the Stated Maturity of the principal of (or premium, if any) or any
installment of principal of or interest on any Security; or the terms of any sinking fund
with respect to any Security; or reduce the principal amount thereof (or premium, if any)
or the rate of interest (or manner of calculating the rate of interest), if any, thereon,
or any premium payable upon the redemption thereof, or repayment thereof at the option of
the Holder, or the date(s) or period(s) for any redemption or repayment thereof, or change
any obligation of the Company to pay Additional Amounts contemplated by Section 1008
(except as contemplated by Section 801(1) and permitted by Section 901(1)), or reduce the
amount of the principal of an Original Issue Discount Security of such series that would
be due and payable upon an acceleration of the Maturity thereof pursuant to Section 502,
or upon the redemption thereof, or the amount thereof provable in bankruptcy pursuant to
Section 504, or adversely affect any right of repayment at the option of any Holder of any
Security of such series, or change any Place of Payment where, or the Currency in which,
any Security of such series or any premium or interest thereon is payable; or impair the
right to institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption or repayment at the option of the Holder,
on or after the Redemption Date or Repayment Date, as the case may be), or modify the
provisions of this Indenture with respect to the mandatory redemption of Securities or
repayment of the Securities at the option of the Holder in a manner adverse to any Holder
of any Securities or any coupons appertaining thereto, or adversely affect any right to
convert or exchange any Security as may be provided pursuant to Section 301 herein, or

     (2) reduce the percentage in principal amount of the Outstanding Securities of any
series the consent of whose Holders is required for any such supplemental indenture or for
any waiver of compliance with certain provisions of this Indenture which affect such
series or certain defaults applicable to such series hereunder and their consequences
provided for in this Indenture, or reduce the requirements of Section 1504 for quorum or
voting with respect to Securities of such series, or

     (3) modify any of the provisions of this Section or Section 513, except to increase
any such percentage or to provide that certain other provisions of this Indenture which
affect such series cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby.

          It shall not be necessary for any Act of Holders under this Section to approve the particular
form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve
the substance thereof.

          SECTION 903. Execution of Supplemental Indentures. In executing, or accepting the
additional trusts created by, any supplemental indenture permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the Trustee shall receive, and shall
be fully protected in conclusively relying upon, an Opinion of Counsel stating that the execution
of such supplemental indenture is authorized or permitted by this Indenture.

63

 

The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

          SECTION 904. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder and
of any coupon appertaining thereto shall be bound thereby.

          SECTION 905. Conformity with Trust Indenture Act. Every supplemental indenture
executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as
then in effect.

          SECTION 906. Reference in Securities to Supplemental Indentures. Securities of any
series authenticated and delivered after the execution of any supplemental indenture pursuant to
this Article may, and shall if required by the Trustee, bear a notation in form satisfactory to the
Trustee as to any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the opinion of the Trustee,
the Company to any such supplemental indenture may be prepared and executed by the Company, and
authenticated and delivered (which delivery, in the case of Bearer Securities, shall occur only
outside the United States) by the Trustee in exchange for Outstanding Securities of such series.

          SECTION 907. Notice of Supplemental Indentures. Promptly after the execution by the
Company and the Trustee of any supplemental indenture pursuant to the provisions of Section 902,
the Company shall give written notice thereof to the Holders of each Outstanding Security affected,
in the manner provided for in Section 106, setting forth in general terms the substance of such
supplemental indenture.

ARTICLE TEN

COVENANTS

          SECTION 1001. Payment of Principal, Premium, if Any, and Interest. The Company
covenants and agrees for the benefit of the Holders of each series of Securities and any related
coupons that it will duly and punctually pay the principal of and any premium and interest on the
Securities of that series in accordance with the terms of the Securities, any coupons appertaining
thereto and this Indenture. Principal of, and premium, if any, on the Securities shall be
considered paid on the date it is due if the Trustee holds by 11:00 a.m. New York City time on that
date Currency designated for and sufficient to pay all principal and premium, if any, then due.
Unless specified as contemplated by Section 301 with respect to any series of Securities, any
interest installments due on Bearer Securities on or before Maturity shall be payable only upon
presentation and surrender of the several coupons for such interest installments as are evidenced
thereby as they severally mature.

          SECTION 1002. Maintenance of Office or Agency. If Securities of a series are
issuable only as Registered Securities, the Company shall maintain in each Place of Payment for

64

 

any series of Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered for registration of
transfer or exchange, where Securities of that series that are convertible or exchangeable may be
surrendered for conversion or exchange, as applicable, and where notices and demands to or upon the
Company in respect of the Securities of that series and this Indenture may be served. If any
Securities of a series are issuable as Bearer Securities, the Company will maintain (A) an office
or agency where any Registered Securities of that series may be presented or surrendered for
payment, where any Registered Securities of that series may be surrendered for registration of
transfer, where Securities of that series may be surrendered for exchange, where Securities of that
series that are convertible or exchangeable may be surrendered for conversion or exchange, as
applicable, where notices and demands to or upon the Company in respect of the Securities of that
series and related coupons and this Indenture may be served and where Bearer Securities of that
series and related coupons may be presented or surrendered for payment in the circumstances
described in the following paragraph below (and not otherwise), (B) if Bearer Securities are
issued, subject to any laws or regulations applicable thereto, in a Place of Payment for that
series which is located outside the United States, an office or agency where Securities of that
series and related coupons may be presented and surrendered for payment; provided, however, that if
the Securities of that series are listed on any stock exchange located outside the United States
and such stock exchange shall so require, the Company will maintain a Paying Agent for the
Securities of that series in any required city located outside the United States, so long as the
Securities of that series are listed on such exchange, and (C) subject to any laws or regulations
applicable thereto, in a Place of Payment for that series located outside the United States, an
office or agency where any Registered Securities of that series may be surrendered for registration
of transfer, where Securities of that series may be surrendered for exchange, where Securities of
that series that are convertible or exchangeable may be surrendered for conversion or exchange, as
applicable, and where notices and demands to or upon the Company in respect of the Securities of
that series and related coupons and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location, of each such office
or agency. If at any time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Trust Office of the Trustee, except that Bearer
Securities of that series and the related coupons may be presented and surrendered for payment only
outside the United States, at the offices specified in the Security, and the Company hereby
appoints the Trustee as its agent to receive such respective presentations, surrenders, notices and
demands. Unless otherwise specified with respect to any Securities as contemplated by Section 301
with respect to a series of Securities, the Company hereby designates as a Place of Payment for
each series of Securities the Corporate Trust Office of the Trustee, and initially appoints the
Trustee at its Corporate Trust Office as Paying Agent in such city and as its agent to receive all
such presentations, surrenders, notices and demands.

          Unless otherwise specified with respect to any Securities pursuant to Section 301, no payment
of principal, premium or interest on Bearer Securities shall be made at any office or agency of the
Company in the United States or by check mailed to any address in the United States or by transfer
to an account maintained with a bank located in the United States; provided, however, that
notwithstanding anything to the contrary contained herein, if the Securities of a series are
payable in Dollars, payment of principal of (and premium, if any) and interest, if any, on any
Bearer Security shall be made at the office of the Paying Agent, if (but only if) payment

65

 

in Dollars of the full amount of such principal, premium or interest, as the case may be, at
all offices or agencies outside the United States maintained for such purpose by the Company in
accordance with this Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions.

          The Company may also from time to time designate one or more other offices or agencies where
the Securities of one or more series may be presented or surrendered for any or all of such
purposes, and may from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its obligation to maintain an
office or agency in accordance with the requirements set forth above for Securities of any series
for such purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other office or agency.
Unless otherwise specified with respect to any Securities pursuant to Section 301 with respect to a
series of Securities, subject to the immediately preceding paragraph, the Company hereby designates
as a Place of Payment for each series of Securities the Corporate Trust Office of the Trustee, and
initially appoints the Trustee at its Corporate Trust Office as Paying Agent in such city and as
its agent to receive all such presentations, surrenders, notices and demands.

          Unless otherwise specified with respect to any Securities pursuant to Section 301, if and so
long as the Securities of any series (i) are denominated in a Foreign Currency or (ii) may be
payable in a Foreign Currency, or so long as it is required under any other provision of the
Indenture, then the Company will maintain with respect to each such series of Securities, or as so
required, at least one Exchange Rate Agent. The Trustee shall have no liability or responsibility
for the action or inaction of any Paying Agent or Exchange Rate Agent (provided neither is the
Trustee).

          SECTION 1003. Money for Securities Payments to Be Held in Trust. If the Company
shall at any time act as its own Paying Agent with respect to any series of Securities and any
related coupons, it will, on or before each due date of the principal of or any premium and
interest on any of the Securities of that series, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum in the Currency in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the Securities of such series
and except, if applicable, as provided in Sections 312(b), 312(d) and 312(e)) sufficient to pay the
principal and any premium and interest on Securities of such series so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify
the Trustee in writing of its action or failure so to act.

          Whenever there shall be one or more Paying Agents other than the Company for any series of
Securities and any related coupons, it will, prior to each due date of the principal of or any
premium and interest on any Securities, deposit with a Paying Agent a sum (in the Currency
described in the preceding paragraph) sufficient to pay such amount so becoming due, such sum to be
held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.

          The Company will cause each Paying Agent for any series of Securities other than the Trustee
to execute and deliver to the Trustee an instrument in which such Paying Agent shall

66

 

agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will
(i) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and
(ii) during the continuance of any default by the Company (or any other obligor upon the
Securities) in the making of any payment in respect of the Securities, and upon written request of
the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment
in respect of the Securities.

          The Company may at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay,
to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such sums.

          Except as provided in the Securities of any series, and subject to any applicable abandoned
property laws, any money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of or any premium or interest on any Security of
any series, or any coupon appertaining thereto, and remaining unclaimed for two years after such
principal, premium and interest has become due and payable shall be paid to the Company on Company
Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of
such Security or coupon shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required to
make any such repayment, shall at the expense of the Company cause to be published once, in an
Authorized Newspaper in each Place of Payment, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid to the Company.

          SECTION 1004. Statement by Officers as to Default. The Company will deliver to the
Trustee, within 120 days after the end of each fiscal year of the Company ending after the date
hereof, an Officer’s Certificate, one of the signers of which shall be the principal executive
officer, principal financial officer or principal accounting officer of the Company stating whether
or not to the best knowledge of the signers thereof the Company is in default in the performance
and observance of any of the terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and status thereof of which they may have
knowledge.

          The Company shall, so long as any of Securities of any series are Outstanding, deliver to the
Trustee, forthwith, but in no event later than 30 Business Days, upon any Officer becoming aware of
any event which after notice or lapse of time would become a Default or Event of Default under
Section 501, a notice specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.

67

 

          SECTION 1005. Existence. Subject to Article Eight, the Company will do or cause to
be done all things necessary to preserve and keep in full force and effect its existence, rights
(charter and statutory) and franchises; provided, however, that the Company shall not be required
to preserve any such right or franchise if its Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of the Company and that
the loss thereof is not disadvantageous in any material respect to the Holders.

          SECTION 1006. Further Instruments and Acts. Upon request of the Trustee or as
otherwise necessary, the Company will execute and deliver such further instruments and do such
further acts or as otherwise necessary may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.

          SECTION 1007. Calculation of Original Issue Discount. The Company shall file with
the Trustee promptly at the end of each calendar year a written notice specifying the amount of
original issue discount (including daily rates and accrual periods), if any, accrued on Outstanding
Securities as of the end of such year.

          SECTION 1008. Additional Amounts. If any Securities of a series provide for the
payment of additional amounts to any Holder who is not a United States person in respect of any
tax, assessment or governmental charge (“Additional Amounts”), the Company will pay to the Holder
of any Security of such series or any coupon appertaining thereto such Additional Amounts as may be
specified as contemplated by Section 301. Whenever in this Indenture there is mentioned, in any
context, the payment of the principal of or any premium or interest on, or in respect of, any
Security of any series (or any payments pursuant to the Guarantee thereof) such mention shall be
deemed to include mention of the payment of Additional Amounts provided for in this Section to the
extent that, in such context, Additional Amounts are, were or would be payable in respect thereof
pursuant to the provisions of this Section and express mention of the payment of Additional Amounts
in any provisions hereof shall not be construed as excluding Additional Amounts in those provisions
hereof where such express mention is not made.

          SECTION 1009. Waiver of Certain Covenants. The Company may, with respect to any
series of Securities, omit in any particular instance to comply with any term, provision or
condition which affects such series as specified pursuant to Section 301(17) for Securities of such
series, in any covenants of the Company added to Article Ten pursuant to Section 301(17) in
connection with Securities of such series, if the Holders of a majority in principal amount of all
Outstanding Securities affected by such term, provision or condition, by Act of such Holders, waive
such compliance in such instance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Company and the duties of the
Trustee to Holders of Securities of such series in respect of any such term, provision or condition
shall remain in full force and effect.

68

 

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

          SECTION 1101. Applicability of Article. Securities of any series which are
redeemable before their Stated Maturity shall be redeemable in accordance with the terms of such
Securities and (except as otherwise specified as contemplated by Section 301 for Securities of any
series) in accordance with this Article.

          SECTION 1102. Election to Redeem; Notice to Trustee. The election of the Company to
redeem any Securities shall be evidenced by or pursuant to a Board Resolution. In case of any
redemption at the election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee in writing of such Redemption Date and of the principal amount of
Securities of such series to be redeemed and, in the case of a partial redemption, shall deliver to
the Trustee such documentation and records as shall enable the Trustee to select the Securities to
be redeemed pursuant to Section 1103. In the case of any redemption of Securities prior to the
expiration of any restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an Officer’s Certificate
evidencing compliance with such restriction.

          SECTION 1103. Selection by Trustee of Securities to Be Redeemed. If less than all
the Securities of any series with the same terms are to be redeemed, the particular Securities to
be redeemed shall be selected not more than 45 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such series with the same terms not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate, subject to applicable
law, and which may provide for the selection for redemption of portions of the principal of
Securities of such series; provided, however, that no such partial redemption shall reduce the
portion of the principal amount of a Security not redeemed to less than the minimum authorized
denomination for Securities of such series established pursuant to Section 301.

          The Trustee shall promptly notify the Company in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed.

          For all purposes of this Indenture, unless the context otherwise requires, all provisions
relating to the redemption of Securities shall relate, in the case of any Security redeemed or to
be redeemed only in part, to the portion of the principal amount of such Security which has been or
is to be redeemed.

          SECTION 1104. Notice of Redemption. Except as otherwise specified as contemplated
by Section 301 for Securities of any series, notice of redemption shall be given in the manner
provided for in Section 106 not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed.

69

 

          Except as otherwise specified as contemplated by Section 301 for Securities of any series, all
notices of redemption shall state:

     (1) the Redemption Date,

     (2) the Redemption Price (if known) or the formula pursuant to which the Redemption
Price is to be determined if the Redemption Price cannot be determined at the time the
notice is given, together with the amount of accrued interest, if any, to the Redemption
Date,

     (3) if less than all the Outstanding Securities of any series are to be redeemed, the
identification (and, in the case of partial redemption, the principal amounts) of the
particular Securities to be redeemed,

     (4) in case any Security is to be redeemed in part only, the notice which relates to
such Security shall state that on and after the Redemption Date, upon surrender of such
Security, the Holder will receive, without charge, a new Security or Securities of the
same series of like tenor of authorized denominations for the principal amount thereof
remaining unredeemed,

     (5) that on the Redemption Date, the Redemption Price and accrued interest, if any,
to the Redemption Date payable as provided in Section 1106 will become due and payable
upon each such Security, or the portion thereof, to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,

     (6) the Place or Places of Payment (which in the case of Bearer Securities shall be
outside the United States) where such Securities, together in the case of Bearer
Securities with all coupons appertaining thereto, if any, maturing on or after the
Redemption Date, are to be surrendered for payment of the Redemption Price and accrued
interest, if any,

     (7) that the redemption is for a sinking fund, if such is the case,

     (8) that, unless otherwise specified in such notice, Bearer Securities of any series,
if any, surrendered for redemption must be accompanied by all coupons maturing subsequent
to the Redemption Date or the amount of any such missing coupon or coupons will be
deducted from the Redemption Price unless security or indemnity satisfactory to the
Company, the Trustee and any Paying Agent is furnished,

     (9) if Bearer Securities of any series are to be redeemed and any Registered
Securities of such series are not to be redeemed, and if such Bearer Securities may be
exchanged for Registered Securities not subject to redemption on such Redemption Date
pursuant to Section 305 or otherwise, the last date, as determined by the Company, on
which such exchanges may be made,

     (10) the CUSIP, ISIN or other similar numbers, if any, assigned to such Securities;
provided, however, that such notice may state that no representation is made as to the
correctness of CUSIP, ISIN or other similar numbers, in which case none of

70

 

the Company, the Trustee or any agent of the Company or the Trustee shall have any
liability in respect of the use of any CUSIP, ISIN or other similar number or numbers on
such notices, and the redemption of such Securities shall not be affected by any defect in
or omission of such numbers,

     (11) the Euroclear or the Clearstream reference numbers of such Security, if any, and

     (12) such other matters as the Company shall deem desirable or appropriate.

          Notice of redemption of Securities to be redeemed at the election of the Company shall be
given by the Company or, at the Company’s written request, by the Trustee in the name and at the
expense of the Company.

          SECTION 1105. Deposit of Redemption Price. On or prior to 11:00 a.m. (New York City
time) on any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent
(or, if the Company is acting as its own Paying Agent, which it may not do in the case of a sinking
fund payment under Article Twelve, segregate and hold in trust as provided in Section 1003) an
amount of money in the Currency in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 301 for the Securities of such series and except, if
applicable, as provided in Sections 312(b), 312(d) and 312(e)) sufficient to pay on the Redemption
Date the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest, if any, on, all the Securities or portions thereof which are to be redeemed on
that date.

          SECTION 1106. Securities Payable on Redemption Date. Notice of redemption having
been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due
and payable at the Redemption Price therein specified in the Currency in which the Securities of
such series are payable (except as otherwise specified pursuant to Section 301 for the Securities
of such series and except, if applicable, as provided in Sections 312(b), 312(d) and 312(e))
(together with accrued interest, if any, to the Redemption Date), and from and after such date
(unless the Company shall default in the payment of the Redemption Price and accrued interest, if
any) such Securities shall, if the same were interest-bearing, cease to bear interest and the
coupons for such interest appertaining to any Bearer Securities so to be redeemed, except to the
extent provided below, shall be void. Upon surrender of any such Security for redemption in
accordance with said notice, together with all coupons, if any, appertaining thereto maturing after
the Redemption Date, such Security shall be paid by the Company at the Redemption Price, together
with accrued interest, if any, to the Redemption Date; provided, however, that installments of
interest on Bearer Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only at an office or agency located outside the United States (except as otherwise provided
in Section 1002) and, unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of coupons for such interest; and provided further that installments of
interest on Registered Securities whose Stated Maturity is on or prior to the Redemption Date shall
be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Regular Record Dates according to their terms and the
provisions of Section 307.

71

 

          If any Bearer Security surrendered for redemption shall not be accompanied by all appurtenant
coupons maturing after the Redemption Date, such Security may be paid after deducting from the
Redemption Price an amount equal to the face amount of all such missing coupons, or the surrender
of such missing coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall surrender to the Trustee or
any Paying Agent any such missing coupon in respect of which a deduction shall have been made from
the Redemption Price, such Holder shall be entitled to receive the amount so deducted; provided,
however, that interest represented by coupons shall be payable only at an office or agency located
outside the United States (except as otherwise provided in Section 1002) and, unless otherwise
specified as contemplated by Section 301, only upon presentation and surrender of those coupons.

          If any Security called for redemption shall not be so paid upon surrender thereof for
redemption, the principal (and premium, if any) shall, until paid, bear interest from the
Redemption Date at the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) set forth in or contemplated by such Security.

          SECTION 1107. Securities Redeemed in Part. Any Security which is to be redeemed
only in part (pursuant to the provisions of this Article or of Article Twelve) shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or such Holder’s attorney duly authorized in writing), and the
Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities of the same series and of like tenor,
of any authorized denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so surrendered.

          SECTION 1108. Optional Redemption Due to Changes in Tax Treatment. Each series of
Securities may be redeemed at the option of the Company (or its successor) in whole but not in
part at any time (except in the case of Securities that have a variable rate of interest, which may
be redeemed only on an Interest Payment Date) at a Redemption Price equal to the principal amount
thereof plus accrued interest to the date fixed for redemption (except in the case of Outstanding
Original Issue Discount Securities, which may be redeemed at the Redemption Price specified by the
terms of such series of Securities) if (i) the Company is or
would, under the terms of the relevant series of Securities, be required to pay Additional
Amounts as a result of any change in or amendment to the laws or any regulations or rulings
promulgated thereunder of the United States (or in the case of a successor,
of the jurisdiction in which such successor is organized) or any political subdivision or
taxing authority thereof or therein or (ii) any change in the official application or
interpretation of such laws, regulations or rulings, or any change in the official application or
interpretation of, or any execution of or amendment to, any treaty or treaties affecting taxation
to which the United States (or such other jurisdiction or political subdivision or taxing
authority) is a party, which change, execution or amendment becomes effective on or after the date
of issuance of such series pursuant to Section 301(23) (or in the case of a successor, the date on which such successor became such). Prior to the giving of notice of
redemption of such Securities pursuant to this Indenture, the Company will

72

 

deliver to the Trustee an Officer’s Certificate, stating that the Company is entitled to
effect such redemption and setting forth in reasonable detail a statement of circumstances showing
that the conditions precedent to the right of the Company to redeem such Securities pursuant to
this Section have been satisfied.

ARTICLE TWELVE

SINKING FUNDS

          SECTION 1201. Applicability of Article. Retirements of Securities of any series
pursuant to any sinking fund shall be made in accordance with the terms of such Securities and
(except as otherwise specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article.

          The minimum amount of any sinking fund payment provided for by the terms of Securities of any
series is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of
such minimum amount provided for by the terms of Securities of any series is herein referred to as
an “optional sinking fund payment.” If provided for by the terms of Securities of any series, the
cash amount of any mandatory sinking fund payment may be subject to reduction as provided in
Section 1202. Each sinking fund payment shall be applied to the redemption of Securities of any
series as provided for by the terms of Securities of such series.

          SECTION 1202. Satisfaction of Sinking Fund Payments with Securities. Subject to
Section 1203, in lieu of making all or any part of any mandatory sinking fund payment with respect
to any Securities of a series in cash, the Company may at its option (1) deliver to the Trustee
Outstanding Securities of a series (other than any previously called for redemption) theretofore
purchased or otherwise acquired by the Company, together, in the case of any Bearer Securities of
such series, with all unmatured coupons appertaining thereto, and/or (2) receive credit for the
principal amount of Securities of such series which have been previously delivered to the Trustee
by the Company or for Securities of such series which have been redeemed either at the election of
the Company pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any mandatory sinking fund payment with respect to the
Securities of the same series required to be made pursuant to the terms of such Securities as
provided for by the terms of such series; provided, however, that such Securities have not been
previously so credited. Such Securities shall be received and credited for such purpose by the
Trustee at the Redemption Price specified in such Securities for redemption through operation of
the sinking fund and the amount of such mandatory sinking fund payment shall be reduced
accordingly.

          SECTION 1203. Redemption of Securities for Sinking Fund. Not less than 60 days
prior to each sinking fund payment date for any series of Securities, the Company will deliver to
the Trustee an Officer’s Certificate specifying the amount of the next ensuing sinking fund payment
for that series pursuant to the terms of that series, the portion thereof, if any, which is to be
satisfied by payment of cash in the Currency in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of such series and
except, if applicable, as provided in Sections 312(b), 312(d) and 312(e)) and the portion

73

 

thereof, if any, which is to be satisfied by delivering or crediting Securities of that series
pursuant to Section 1202 (which Securities will, if not previously delivered, accompany such
certificate) and whether the Company intends to exercise its right to make a permitted optional
sinking fund payment with respect to such series. Such certificate shall be irrevocable and upon
its delivery the Company shall be obligated to make the cash payment or payments therein referred
to, if any, on or before the next succeeding sinking fund payment date. In the case of the failure
of the Company to deliver such certificate, the sinking fund payment due on the next succeeding
sinking fund payment date for that series shall be paid entirely in cash and shall be sufficient to
redeem the principal amount of such Securities subject to a mandatory sinking fund payment without
the option to deliver or credit Securities as provided in Section 1202 and without the right to
make any optional sinking fund payment, if any, with respect to such series.

          Not more than 60 days before each such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner specified in Section
1103 and cause notice of the redemption thereof to be given in the name of and at the expense of
the Company in the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.

          Prior to any sinking fund payment date, the Company shall pay to the Trustee or a Paying Agent
(or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003) in cash a sum equal to the principal (and premium, if any) and any interest that will
accrue to the date fixed for redemption of Securities or portions thereof to be redeemed on such
sinking fund payment date pursuant to this Section 1203.

          Notwithstanding the foregoing, with respect to a sinking fund for any series of Securities, if
at any time the amount of cash to be paid into such sinking fund on the next succeeding sinking
fund payment date, together with any unused balance of any preceding sinking fund payment or
payments for such series, does not exceed in the aggregate $100,000, the Trustee, unless requested
by the Company, shall not give the next succeeding notice of the redemption of Securities of such
series through the operation of the sinking fund. Any such unused balance of moneys deposited in
such sinking fund shall be added to the sinking fund payment for such series to be made in cash on
the next succeeding sinking fund payment date or, at the request of the Company, shall be applied
at any time or from time to time to the purchase of Securities of such series, by public or private
purchase, in the open market or otherwise, at a purchase price for such Securities (excluding
accrued interest and brokerage commissions, for which the Trustee or any Paying Agent will be
reimbursed by the Company) not in excess of the principal amount thereof.

ARTICLE THIRTEEN

REPAYMENT AT OPTION OF HOLDERS

          SECTION 1301. Applicability of Article. Repayment of Securities of any series
before their Stated Maturity at the option of Holders thereof shall be made in accordance with the
terms of such Securities and (except as otherwise specified as contemplated by Section 301 for
Securities of any series) in accordance with this Article.

74

 

          SECTION 1302. Repayment of Securities. Securities of any series subject to
repayment in whole or in part at the option of the Holders thereof will, unless otherwise provided
in the terms of such Securities, be repaid at the Repayment Price thereof, together with interest,
if any, thereon accrued to the Repayment Date specified in or pursuant to the terms of such
Securities. The Company covenants that on or before the Repayment Date it will deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and
hold in trust as provided in Section 1003) an amount of money in the Currency in which the
Securities of such series are payable (except as otherwise specified pursuant to Section 301 for
the Securities of such series and except, if applicable, as provided in Sections 312(b), 312(d) and
312(e)) sufficient to pay the Repayment Price of, and (except if the Repayment Date shall be an
Interest Payment Date) accrued interest, if any, on, all the Securities or portions thereof, as the
case may be, to be repaid on such date.

          SECTION 1303. Exercise of Option. Securities of any series subject to repayment at
the option of the Holders thereof will contain an “Option to Elect Repayment” form on the reverse
of such Securities. To be repaid at the option of the Holder, except as otherwise specified as
contemplated by Section 301 for Securities of such series, any Security so providing for such
repayment, with the “Option to Elect Repayment” form on the reverse of such Security duly completed
by the Holder (or by the Holder’s attorney duly authorized in writing), must be received by the
Company at the Place of Payment therefor specified in the terms of such Security (or at such other
place or places of which the Company shall from time to time notify the Holders of such Securities)
not earlier than 45 days nor later than 30 days prior to the Repayment Date. If less than the
entire Repayment Price of such Security is to be repaid in accordance with the terms of such
Security, the portion of the Repayment Price of such Security to be repaid, in increments of the
minimum denomination for Securities of such series, and the denomination or denominations of the
Security or Securities to be issued to the Holder for the portion of such Security surrendered that
is not to be repaid, must be specified. Any Security providing for repayment at the option of the
Holder thereof may not be repaid in part if, following such repayment, the unpaid principal amount
of such Security would be less than the minimum authorized denomination of Securities of the series
of which such Security to be repaid is a part. Except as otherwise may be provided by the terms of
any Security providing for repayment at the option of the Holder thereof, exercise of the repayment
option by the Holder shall be irrevocable unless waived by the Company.

          SECTION 1304. When Securities Presented for Repayment Become Due and Payable. If
Securities of any series providing for repayment at the option of the Holders thereof shall have
been surrendered as provided in this Article and as provided by or pursuant to the terms of such
Securities, such Securities or the portions thereof, as the case may be, to be repaid shall become
due and payable and shall be paid by the Company on the Repayment Date therein specified, and on
and after such Repayment Date (unless the Company shall default in the payment of such Securities
on such Repayment Date) such Securities shall, if the same were interest-bearing, cease to bear
interest and the coupons for such interest appertaining to any Bearer Securities so to be repaid,
except to the extent provided below, shall be void. Upon surrender of any such Security for
repayment in accordance with such provisions, together with all coupons, if any, appertaining
thereto maturing after the Repayment Date, the Repayment Price of such Security so to be repaid
shall be paid by the Company, together with accrued interest, if any, to the Repayment Date;
provided, however, that coupons whose Stated Maturity

75

 

is on or prior to the Repayment Date shall be payable only at an office or agency located
outside the United States (except as otherwise provided in Section 1002) and, unless otherwise
specified pursuant to Section 301, only upon presentation and surrender of such coupons; and
provided further that, in the case of Registered Securities, installments of interest, if any,
whose Stated Maturity is on or prior to the Repayment Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the close of business on
the relevant Regular Record Dates according to their terms and the provisions of Section 307.

          If any Bearer Security surrendered for repayment shall not be accompanied by all appurtenant
coupons maturing after the Repayment Date, such Security may be paid after deducting from the
amount payable therefor as provided in Section 1302 an amount equal to the face amount of all such
missing coupons, or the surrender of such missing coupon or coupons may be waived by the Company
and the Trustee if there be furnished to them such security or indemnity as they may require to
save each of them and any Paying Agent harmless. If thereafter the Holder of such Security shall
surrender to the Trustee or any Paying Agent any such missing coupon in respect of which a
deduction shall have been made as provided in the preceding sentence, such Holder shall be entitled
to receive the amount so deducted; provided, however, that interest represented by
coupons shall be payable only at an office or agency located outside the United States (except as
otherwise provided in Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of those coupons.

          If the principal amount of any Security surrendered for repayment shall not be so repaid upon
surrender thereof, such principal amount (together with interest, if any, thereon accrued to such
Repayment Date) shall, until paid, bear interest from the Repayment Date at the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Securities) set forth in or contemplated
by such Security.

          SECTION 1305. Securities Repaid in Part. Upon surrender of any Security which is to
be repaid in part only, the Company shall execute and the Trustee shall authenticate and deliver to
the Holder of such Security, without service charge and at the expense of the Company, a new
Security or Securities of the same series, and of like tenor, of any authorized denomination
specified by the Holder, in an aggregate principal amount equal to and in exchange for the portion
of the principal of such Security so surrendered which is not to be repaid.

ARTICLE FOURTEEN

DEFEASANCE AND COVENANT DEFEASANCE

          SECTION 1401. Company’s Option to Effect Defeasance or Covenant Defeasance. Except
as otherwise specified as contemplated by Section 301 for Securities of any series, the provisions
of this Article Fourteen shall apply to each series of Securities, and the Company may, at its
option, effect defeasance of the Securities of or within a series under Section 1402, or covenant
defeasance of or within a series under Section 1403 in accordance with the terms of such Securities
and in accordance with this Article.

76

 

          SECTION 1402. Defeasance and Discharge. Upon the Company’s exercise of the above
option applicable to this Section with respect to any Securities of or within a series, the Company
shall be deemed to have been discharged from its obligations with respect to such Outstanding
Securities and any related coupons on the date the conditions set forth in Section 1404 are
satisfied (hereinafter, “defeasance”). For this purpose, such defeasance means that the Company
shall be deemed to have paid and discharged the entire indebtedness represented by such Outstanding
Securities and any related coupons, which shall thereafter be deemed to be “Outstanding” only for
the purposes of Section 1405 and the other Sections of this Indenture referred to in (A) and (B)
below, and to have satisfied all its other obligations under such Securities and any related
coupons and this Indenture insofar as such Securities and any related coupons are concerned (and
the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of such Outstanding Securities and any related coupons to
receive, solely from the trust fund described in Section 1404 and as more fully set forth in such
Section, payments in respect of the principal of (and premium, if any) and interest, if any, on
such Securities and any related coupons when such payments are due, (B) the Company’s obligations
with respect to such Securities under Sections 304, 305, 306, 1002 and 1003 and with respect to the
payment of Additional Amounts, if any, on such Securities as contemplated by Section 1008 and such
obligations as shall be ancillary thereto, (C) the rights, powers, trusts, duties and immunities of
the Trustee hereunder including, without limitation, Section 606 and the penultimate paragraph of
Section 1405 and (D) this Article Fourteen. Subject to compliance with this Article Fourteen, the
Company may exercise its option under this Section 1402 notwithstanding the prior exercise of its
option under Section 1403 with respect to such Securities and any related coupons.

          SECTION 1403. Covenant Defeasance. Upon the Company’s exercise of the above option
applicable to this Section with respect to any Securities of or within a series, the Company shall
be released from its obligations under Sections 801 and 802, and, if specified pursuant to Section
301, its obligations under any other covenant, with respect to such Outstanding Securities and any
related coupons on and after the date the conditions set forth in Section 1404 are satisfied
(hereinafter, “covenant defeasance”), and such Securities and any related coupons shall thereafter
be deemed not to be “Outstanding” for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with such covenants, but
shall continue to be deemed “Outstanding” for all other purposes hereunder. For this purpose, such
covenant defeasance means that, with respect to such Outstanding Securities and any related
coupons, the Company may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or indirectly, by reason
of any reference elsewhere herein to any such covenant or by reason of reference in any such
covenant to any other provision herein or in any other document and such omission to comply shall
not constitute a Default or an Event of Default under Section 501(5) or Section 501(10) or
otherwise, as the case may be, but, except as specified above, the remainder of this Indenture and
such Securities and any related coupons shall be unaffected thereby.

77

 

          SECTION 1404. Conditions to Defeasance or Covenant Defeasance. The following shall
be the conditions to application of either Section 1402 or Section 1403 to any Outstanding
Securities of or within a series and any related coupons:

     (1) The Company shall irrevocably have deposited or caused to be deposited with the
Trustee (or another trustee satisfying the requirements of Section 607 who shall agree to
comply with the provisions of this Article Fourteen applicable to it) as trust funds in
trust for the purpose of making the following payments, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of such Securities and any
related coupons, (A) an amount (in such Currency in which such Securities and any related
coupons are then specified as payable at Stated Maturity), or (B) Government Obligations
applicable to such Securities (determined on the basis of the Currency in which such
Securities are then specified as payable at Stated Maturity) which through the scheduled
payment of principal and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment of principal of and
premium, if any, and interest, if any, under such Securities and any related coupons,
money in an amount, or (C) a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge, and which shall be
applied by the Trustee (or other qualifying trustee) to pay and discharge, (i) the
principal of (and premium, if any) and interest, if any, on such Outstanding Securities
and any related coupons on the Stated Maturity (or Redemption Date, if applicable) of such
principal (and premium, if any) or installment of interest, if any, and (ii) any mandatory
sinking fund payments or analogous payments applicable to such Outstanding Securities and
any related coupons on the day on which such payments are due and payable in accordance
with the terms of this Indenture and of such Securities and any related coupons;
provided that the Trustee shall have been irrevocably instructed to apply such
money or the proceeds of such Government Obligations to said payments with respect to such
Securities and any related coupons. Before such a deposit, the Company may give to the
Trustee, in accordance with Section 1102, a notice of its election to redeem all or any
portion of such Outstanding Securities at a future date in accordance with the terms of
the Securities of such series and Article Eleven, which notice shall be irrevocable. Such
irrevocable redemption notice, if given, shall be given effect in applying the foregoing.

     (2) No Default or Event of Default with respect to such Securities or any related
coupons shall have occurred and be continuing on the date of such deposit or, insofar as
paragraphs (6) and (7) of Section 501 are concerned, at any time during the period ending
on the 91st day after the date of such deposit (it being understood that this condition
shall not be deemed satisfied until the expiration of such period).

     (3) Such defeasance or covenant defeasance shall not result in a breach or violation
of, or constitute a default under, any material agreement or instrument (other than this
Indenture) to which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound.

78

 

     (4) In the case of an election under Section 1402, the Company shall have delivered
to the Trustee an Opinion of Counsel stating that (x) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling, or (y) since the date
of execution of this Indenture, there has been a change in the applicable federal income
tax law, in either case to the effect that, and based thereon such opinion shall confirm
that, the Holders of such Outstanding Securities and any related coupons will not
recognize income, gain or loss for federal income tax purposes as a result of the deposit
and such defeasance and will be subject to U.S. federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if the deposit and such
defeasance had not occurred.

     (5) In the case of an election under Section 1403, the Company shall have delivered
to the Trustee an Opinion of Counsel to the effect that the Holders of such Outstanding
Securities and any related coupons will not recognize income, gain or loss for federal
income tax purposes as a result of such covenant defeasance and will be subject to U.S.
federal income tax on the same amounts, in the same manner and at the same times as would
have been the case if the deposit and such covenant defeasance had not occurred.

     (6) Notwithstanding any other provisions of this Section, such defeasance or covenant
defeasance shall be effected in compliance with any additional or substitute terms,
conditions or limitations in connection therewith pursuant to Section 301.

     (7) The Company shall have delivered to the Trustee an Officer’s Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for relating to
either the defeasance under Section 1402 or the covenant defeasance under Section 1403 (as
the case may be) have been complied with.

          SECTION 1405. Deposited Money and Government Obligations to Be Held in Trust; Other
Miscellaneous Provisions. Subject to the provisions of the last paragraph of Section 1003, all
money and Government Obligations (or other property as may be provided pursuant to Section 301)
(including the proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this Section 1405, the “Trustee”) pursuant to Section 1404 in respect
of such Outstanding Securities and any related coupons shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and any related coupons and this
Indenture, to the payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities and
any related coupons of all sums due and to become due thereon in respect of principal (and premium,
if any) and interest, if any, but such money need not be segregated from other funds except to the
extent required by law.

          Unless otherwise specified with respect to any Security pursuant to Section 301, if, after a
deposit referred to in Section 1404(1) has been made, (a) the Holder of a Security in respect of
which such deposit was made is entitled to, and does, elect pursuant to Section 312(b) or the terms
of such Security to receive payment in a Currency other than that in which the deposit pursuant to
Section 1404(1) has been made in respect of such Security, or (b) a Conversion Event occurs as
contemplated in Section 312(d) or 312(e) or by the terms of any

79

 

Security in respect of which the deposit pursuant to Section 1404(1) has been made, the
indebtedness represented by such Security and any related coupons shall be deemed to have been, and
will be, fully discharged and satisfied through the payment of the principal of (and premium, if
any) and interest, if any, on such Security as they become due out of the proceeds yielded by
converting (from time to time as specified below in the case of any such election) the amount or
other property deposited in respect of such Security into the Currency in which such Security
becomes payable as a result of such election or Conversion Event based on the applicable Market
Exchange Rate for such Currency in effect on the third Business Day prior to each payment date,
except, with respect to a Conversion Event, for such Currency in effect (as nearly as feasible) at
the time of the Conversion Event.

          The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the cash or Government Obligations deposited pursuant to Section 1404 or the
principal and interest received in respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of such Outstanding Securities and any related
coupons. Notwithstanding anything to the contrary contained herein, the foregoing sentence shall
survive the termination of this Indenture and the earlier resignation or removal of the Trustee.

          Anything in this Article Fourteen to the contrary notwithstanding, the Trustee shall deliver
or pay to the Company from time to time upon Company Request any money or Government Obligations
(or other property and any proceeds therefrom) held by it as provided in Section 1404 which, in the
opinion of a nationally recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount thereof which would
then be required to be deposited to effect a defeasance or covenant defeasance, as applicable, in
accordance with this Article.

          SECTION 1406. Reinstatement. If the Trustee or any Paying Agent is unable to apply
any money in accordance with Section 1405 with respect to any Securities by reason of any order or
judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company’s obligations under this Indenture and such Securities and any
related coupons shall be revived and reinstated as though no deposit had occurred pursuant to
Section 1402 or 1403, as the case may be, until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 1405; provided, however, that if the
Company makes any payment of principal of (or premium, if any) or interest, if any, on any such
Security or any related coupon following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities and any related coupons to receive such
payment from the money held by the Trustee or Paying Agent.

ARTICLE FIFTEEN

MEETINGS OF HOLDERS OF SECURITIES

          SECTION 1501. Purposes for Which Meetings May Be Called. If Securities of a series
are issuable as Bearer Securities, a meeting of Holders of Securities of such series may be called
at any time and from time to time pursuant to this Article to make, give or take any

80

 

request, demand, authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such series.

          SECTION 1502. Call, Notice and Place of Meetings. The Trustee may at any time call
a meeting of Holders of Securities of any series for any purpose specified in Section 1501, to be
held at such time and at such place in The City of New York or in London as the Trustee shall
determine. Notice of every meeting of Holders of Securities of any series, setting forth the time
and the place of such meeting and in general terms the action proposed to be taken at such meeting,
shall be given, in the manner provided for in Section 106, not less than 21 nor more than 180 days
prior to the date fixed for the meeting.

          (a) In case at any time the Company, pursuant to a Board Resolution, or the Holders of at
least 10% in principal amount of the Outstanding Securities of any series shall have requested the
Trustee to call a meeting of the Holders of Securities of such series for any purpose specified in
Section 1501, by written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have made the first publication of the notice of
such meeting within 21 days after receipt of such request or shall not thereafter proceed to cause
the meeting to be held as provided herein, then the Company or the Holders of Securities of such
series in the amount above specified, as the case may be, may determine the time and the place in
The City of New York or in London for such meeting and may call such meeting for such purposes by
giving notice thereof as provided in paragraph (a) of this Section.

          SECTION 1503. Persons Entitled to Vote at Meetings. To be entitled to vote at any
meeting of Holders of Securities of any series, a Person shall be (1) a Holder of one or more
Outstanding Securities of such series, or (2) a Person appointed by an instrument in writing as
proxy for a Holder or Holders of one or more Outstanding Securities of such series by such Holder
of Holders. The only Persons who shall be entitled to be present or to speak at any meeting of
Holders of Securities of any series shall be the Person entitled to vote at such meeting and their
counsel, any representatives of the Trustee and its counsel and any representatives of the Company
and its counsel.

          SECTION 1504. Quorum; Action. The Persons entitled to vote a majority in principal
amount of the Outstanding Securities of a series shall constitute a quorum for a meeting of Holders
of Securities of such series; provided, however, that, if any action is to be taken at such meeting
with respect to a consent or waiver which this Indenture expressly provides may be given by the
Holders of not less than a specified percentage in principal amount of the Outstanding Securities
of a series, the Persons entitled to vote such specified percentage in principal amount of the
Outstanding Securities of such series shall constitute a quorum. In the absence of a quorum within
30 minutes of the time appointed for any such meeting, the meeting shall, if convened at the
request of Holders of Securities of such series, be dissolved. In any other case the meeting may
be adjourned for a period of not less than 10 days as determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such adjourned meeting.
Notice of the reconvening of any adjourned meeting shall be given as provided in Section 1502(a),
except that such notice need be given only once

81

 

not less than five days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of any adjourned meeting shall state expressly the percentage, as
provided above, of the principal amount of the Outstanding Securities of such series which shall
constitute a quorum.

          Except as limited by the proviso to Section 902, any resolution presented to a meeting or
adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted by the
affirmative vote of the Holders of a majority in principal amount of the Outstanding Securities of
such series; provided, however, that, except as limited by the proviso to Section
902, any resolution with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which this Indenture expressly provides may be made, given or taken by the
Holders of a specified percentage, which is less than a majority, in principal amount of the
Outstanding Securities of a series may be adopted at a meeting or an adjourned meeting duly
reconvened and at which a quorum is present as aforesaid by the affirmative vote of the Holders of
not less than such specified percentage in principal amount of the Outstanding Securities of such
series.

          Any resolution passed or decision taken at any meeting of Holders of Securities of any series
duly held in accordance with this Section shall be binding on all the Holders of Securities of such
series and the related coupons, whether or not present or represented at the meeting.

          Notwithstanding the foregoing provisions of this Section 1504, if any action is to be taken at
a meeting of Holders of Securities of any series with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action that this Indenture expressly
provides may be made, given or taken by the Holders of a specified percentage in principal amount
of all Outstanding Securities affected thereby, or of the Holders of such series and one or more
additional series:

     (i) there shall be no minimum quorum requirement for such meeting; and

     (ii) the principal amount of the Outstanding Securities of such series that vote in
favor of such request, demand, authorization, direction, notice, consent, waiver or other
action shall be taken into account in determining whether such request, demand,
authorization, direction, notice, consent, waiver or other action has been made, given or
taken under this Indenture.

          SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of Meetings.
Notwithstanding any provisions of this Indenture, the Trustee may make such reasonable regulations
as it may deem advisable for any meeting of Holders of Securities of a series in regard to proof of
the holding of Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters concerning the conduct
of the meeting as its shall deem appropriate. Except as otherwise permitted or required by any
such regulations, the holding of Securities shall be proved in the manner specified in Section 104
and the appointment of any proxy shall be proved in the manner specified in Section 104 or by
having the signature of the person executing the proxy witnessed

82

 

or guaranteed by any trust company, bank or banker authorized by Section 104 to certify to the
holding of Bearer Securities. Such regulations may provide that written instruments appointing
proxies, regular on their face, may be presumed valid and genuine without the proof specified in
Section 104 or other proof.

          (a) The Trustee shall, by an instrument in writing appoint a temporary chairman of the
meeting, unless the meeting shall have been called by the Company or by Holders of Securities as
provided in Section 1502(b), in which case the Company or the Holders of Securities of the series
calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by vote of the
Persons entitled to vote a majority in principal amount of the Outstanding Securities of such
series represented at the meeting.

          (b) At any meeting each Holder of a Security of such series or proxy shall be entitled to one
vote for each $1,000 principal amount of Outstanding Securities of such series held or represented
by him (determined as specified in the definition of “Outstanding” in Section 101);
provided, however, that no vote shall be cast or counted at any meeting in respect
of any Security challenged as not Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to vote, except as a Holder of a
Security of such series or proxy.

          (c) Any meeting of Holders of Securities of any series duly called pursuant to Section 1502
at which a quorum is present may be adjourned from time to time by Persons entitled to vote a
majority in principal amount of the Outstanding Securities of such series represented at the
meeting; and the meeting may be held as so adjourned without further notice.

          SECTION 1506. Counting Votes and Recording Action of Meetings. The vote upon any
resolution submitted to any meeting of Holders of Securities of any series shall be by written
ballots on which shall be subscribed the signatures of the Holders of Securities of such series or
of their representatives by proxy and the principal amounts and serial numbers of the Outstanding
Securities of such series held or represented by them. The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in duplicate, of the
proceedings of each meeting of Holders of Securities of any series shall be prepared by the
Secretary of the meeting and there shall be attached to said record the original reports of the
inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons
having knowledge of the facts setting forth a copy of the notice of the meeting and showing that
said notice was given as provided in Section 1502 and, if applicable, Section 1504. Each copy
shall be signed and verified by the affidavits of the permanent chairman and secretary of the
meeting and one such copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the matters therein stated.

83

 

          This Indenture may be executed in any number of counterparts, each of which so executed shall
be deemed to be an original, but all such counterparts shall together constitute but one and the
same Indenture.

84

 

          IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, as of
the day and year first above written.

	 	 	 	 	 
	 	HEARTWARE INTERNATIONAL, INC.,

as Issuer

 	 
	 	By:  	/s/ Jeffrey M. Held	 
	 	 	Name:  	Jeffrey M. Held	 
	 	 	Title:  	VP, General Counsel	 

	 	 	 	 	 

	 	 	 	 	 
	 	WILMINGTON TRUST FSB

as Trustee

 	 
	 	By:  	/s/ Jane Schweiger	 
	 	 	Name:  	Jane Schweiger	 
	 	 	Title:  	Vice President	 

 

	 	 	 	 	 

EXHIBIT A

FORMS OF CERTIFICATION

A-1

 

EXHIBIT A-1

FORM OF CERTIFICATE TO BE GIVEN BY

PERSON ENTITLED TO RECEIVE BEARER SECURITY

OR TO OBTAIN INTEREST PAYABLE PRIOR

TO THE EXCHANGE DATE

CERTIFICATE

[Insert title or sufficient description

of Securities to be delivered]

          This is to certify that as of the date hereof, and except as set forth below, the
above-captioned Securities held by you for our account (i) are owned by person(s) that are not
citizens or residents of the United States, domestic partnerships, domestic corporations, any
estate the income of which is subject to United States federal income taxation regardless of its
source or any trust if a court within the United States is able to exercise primary supervision
over the administration of the trust and one or more United States persons have the authority to
control all substantial decisions of the trust (“United States person(s)”), (ii) are owned by
United States person(s) that are (a) foreign branches of United States financial institutions
(financial institutions, as defined in United States Treasury Regulations Section 1.165-12(c)(1)(v)
are herein referred to as “financial institutions”) purchasing for their own account or for resale,
or (b) United States person(s) who acquired the Securities through foreign branches of United
States financial institutions and who hold the Securities through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such United States financial
institution hereby agrees, on its own behalf or through its agent, that you may advise HeartWare
International, Inc. or its agent that such financial institution will comply with the requirements
of Section 165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of 1986, as amended,
and the regulations thereunder), or (iii) are owned by United States or foreign financial
institution(s) for purposes of resale during the restricted period (as defined in United States
Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and, in addition, if the owner is a United
States or foreign financial institution described in clause (iii) above (whether or not also
described in clause (i) or (ii)), this is to further certify that such financial institution has
not acquired the Securities for purposes of resale directly or indirectly to a United States person
or to a person within the United States or its possessions.

          As used herein, “United States” means the United States of America (including the states and
the District of Columbia); and its “possessions” include Puerto Rico, the U.S. Virgin Islands,
Guam, American Samoa, Wake Island and the Northern Mariana Islands.

          We undertake to advise you promptly by tested telex on or prior to the date on which you
intend to submit your certification relating to the above-captioned Securities held by you for our
account in accordance with your Operating Procedures if any applicable statement herein is not
correct on such date, and in the absence of any such notification it may be assumed that this
certification applies as of such date.

A-1-1

 

          This certificate excepts and does not relate to [U.S.$]                     of such interest in the
above-captioned Securities in respect of which we are not able to certify and as to which we
understand an exchange for an interest in a permanent global Security or an exchange for and
delivery of definitive Securities (or, if relevant, collection of any interest) cannot be made
until we do so certify.

          We understand that this certificate may be required in connection with certain tax legislation
in the United States. If administrative or legal proceedings are commenced or threatened in
connection with which this certificate is or would be relevant, we irrevocably authorize you to
produce this certificate or a copy thereof to any interested party in such proceedings.

Dated:

	 	 	 	 	 
	[To be dated no earlier than the 15th day

prior to (i) the Exchange Date or (ii) the

relevant Interest Payment Date occurring

prior to the Exchange Date, as applicable]	

[Name of Person Making Certification]

 	 
	 	  	

 	 
	 	 	(Authorized Signatory) 	 
	 	 	Name: 	 
	 	 	Title: 	 

A-1-2

 

	 	 	 	 	 

EXHIBIT A-2

FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR

AND CLEARSTREAM IN

CONNECTION WITH THE EXCHANGE OF A PORTION OF A

TEMPORARY GLOBAL SECURITY OR TO OBTAIN INTEREST

PAYABLE PRIOR TO THE EXCHANGE DATE

CERTIFICATE

[Insert title or sufficient description

of Securities to be delivered]

          This is to certify that based solely on written certifications that we have received in
writing, by tested telex or by electronic transmission from each of the persons appearing in our
records as persons entitled to a portion of the principal amount set forth below (our “Member
Organizations”) substantially in the form attached hereto, as of the date hereof, [U.S.$]                    
principal amount of the above-captioned Securities (i) is owned by person(s) that are not citizens
or residents of the United States, domestic partnerships, domestic corporations or any estate the
income of which is subject to United States Federal income taxation regardless of its source or any
trust if a court within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the authority to control all
substantial decisions of the trust (“United States person(s)”), (ii) is owned by United States
person(s) that are (a) foreign branches of United States financial institutions (financial
institutions, as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v) are herein referred
to as “financial institutions”) purchasing for their own account or for resale, or (b) United
States person(s) who acquired the Securities through foreign branches of United States financial
institutions and who hold the Securities through such United States financial institutions on the
date hereof (and in either case (a) or (b), each such financial institution has agreed, on its own
behalf or through its agent, that we may advise HeartWare International, Inc. or its agent that
such financial institution will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of
the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) is owned
by United States or foreign financial institution(s) for purposes of resale during the restricted
period (as defined in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)) and, to
the further effect, that financial institutions described in clause (iii) above (whether or not
also described in clause (i) or (ii)) have certified that they have not acquired the Securities for
purposes of resale directly or indirectly to a United States person or to a person within the
United States or its possessions.

          As used herein, “United States” means the United States of America (including the states and
the District of Columbia); and its “possessions” include Puerto Rico, the U.S. Virgin Islands,
Guam, American Samoa, Wake Island and the Northern Mariana Islands.

          We further certify that (i) we are not making available herewith for exchange (or, if
relevant, collection of any interest) any portion of the temporary global Security representing

A-2-1

 

the above-captioned Securities excepted in the above-referenced certificates of Member
Organizations and (ii) as of the date hereof we have not received any notification from any of our
Member Organizations to the effect that the statements made by such Member Organizations with
respect to any portion of the part submitted herewith for exchange (or, if relevant, collection of
any interest) are no longer true and cannot be relied upon as of the date hereof.

          We understand that this certification is required in connection with certain tax legislation
in the United States. If administrative or legal proceedings are commenced or threatened in
connection with which this certificate is or would be relevant, we irrevocably authorize you to
produce this certificate or a copy thereof to any interested party in such proceedings.

Dated:

	 	 	 	 	 
	{To be dated no earlier than the Exchange

Date or the relevant Interest Payment

Date occurring prior to the Exchange Date,

as applicable}	

[EUROCLEAR BANK S.A./N.V.]

[CLEARSTREAM]

 	 
	 	 	 
	 	By 	 	 
	 	 	 	 
	 

A-2-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}]]